Pan African and International Ferro Metals have signed an exclusivity deal on the siting and construction of a chrome tailings retreatment plant.

The agreement allows Pan African and its wholly-owned subsidiary Phoenix Platinum Mining to negotiate exclusively with IFM for a 12 month period over the exact CTRP site location on IFM property and also to resolve technical issues relating to the required services and associated facilities and utilities.

The exclusivity period may be extended by a further six months by mutual agreement.

The agreement also stipulates the terms under which Phoenix may acquire IFM's 25% net profit interest and fixes the total consideration for the CTRP site location and acquisition of the NPI at ZAR80m, payable in cash.

A non-refundable exclusivity fee of ZAR2m was paid by Phoenix to IFM on the effective date.

Pan African chief executive Jan Nelson said: "The signature of this agreement marks a significant milestone in advancing our Phoenix project to production.

"Final plant design engineering work is expected to be completed within four months after the conclusion of a formal CTRP and NPI agreement, whereupon the CTRP construction will commence.

"We expect that the CTRP should be commissioned within 12 months from commencement of earthworks, which means that H1 of 2012 is a realistic production start-up date."