May 30, 2012 / 4:42 PM / in 5 years

UPDATE 1-Harmony sells Evander mine to Pan African

* Pan African to pay $176 million for Evander mine

* Deal to help Pan African double annual output (Adds details)

JOHANNESBURG, May 30 (Reuters) - South Africa’s No.3 gold miner, Harmony Gold, has agreed to sell its Evander mine to Africa-focused Pan African Resources for 1.5 billion rand ($176 million), the companies said on Wednesday.

Pan African initially planned to buy the mine jointly with Witwatersrand Consolidated Gold Resources (Wits Gold) but Harmony said they could not jointly meet the conditions of the deal.

By buying Evander, Pan African will double its annual gold output to 200,000 ounces per year. Evander, located in the eastern part of South Africa, has the potential to yield up to 100,000 ounces a year for a decade.

The mine reported a net profit of 269 million rand for the 6 months ended December 2011 with a net asset value of 1.2 billion rand as at the end of December.

The transaction is part of Harmony’s strategy to reduce its dependence on its South African base as it turns attention to developing mines elsewhere, including Papua New Guinea. ($1 = 8.5000 South African rand) (Reporting by Tiisetso Motsoeneng, Editing by Ed Cropley)

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