Pan African Resources PLC Trading Statement

 
TIDMPAF 
 
Pan African Resources PLC 
 
("Pan African" or "the Company" or "the Group") 
 
(Incorporated and registered in England and Wales under Companies Act 1985 with 
registered number 3937466 on 25 February 2000) 
 
Share code on AIM: PAF 
 
Share code on JSE: PAN 
 
ISIN: GB0004300496 
 
TRADING STATEMENT AND OPERATIONAL UPDATE FOR THE SIX MONTHS REPORTING PERIOD 
ENDED 31 DECEMBER 2016 
 
TRADING STATEMENT 
 
In terms of paragraph 3.4(b) of the Listings Requirements of the JSE Limited, a 
listed company is required to publish a trading statement as soon as it is 
satisfied that a reasonable degree of certainty exists that the financial 
results for the period to be reported upon next, will differ by at least 
20 percent from those of the previous corresponding period. 
 
Pan African is incorporated in England and Wales under the Companies Act 1985 
and accordingly, its presentation currency is Pounds Sterling ("GBP"). 
 
The average ZAR:GBP exchange rate affect the reporting of Group results in GBP. 
For the six month's reporting period ended 31 December 2016 ("current reporting 
period"), the average prevailing ZAR:GBP exchange rate is used to translate 
earnings per share ("EPS") and headline earnings per share ("HEPS") from ZAR to 
GBP. 
 
For the reporting period ended 31 December 2015 ("prior reporting period"), the 
average ZAR:GBP exchange rate was ZAR20.83:1. For the current reporting period, 
the ZAR appreciated against the GBP, with an average exchange rate of ZAR17.88: 
1. This 14.2 percent period-on-period appreciation in the average exchange rate 
should be taken into account for the purposes of comparing results with the 
prior reporting period. 
 
Pan African advises shareholders that its EPS and HEPS for the current 
reporting period are expected to be between: 
 
 1. EPS in ZAR terms: 23 percent to 43 percent higher than the 12.43 cents EPS 
    for the prior reporting period (therefore estimated EPS of 15.34 cents to 
    17.82 cents). 
 
 2. HEPS in ZAR terms: 21 percent to 41 percent higher than the 12.43 cents 
    HEPS for the prior reporting period (therefore estimated HEPS of 15.08 
    cents to 17.56 cents). 
 
    Using the average ZAR:GBP 17.88:1 exchange rate that prevailed during the 
    current reporting period, the Group's EPS and HEPS in GBP terms for the 
    current reporting period are expected to be between: 
 
 3. EPS in GBP terms: 45 percent to 65 percent higher than the 0.60 pence EPS 
    for the prior reporting period (therefore estimated EPS of 0.87 pence to 
    0.99 pence). 
 
 4. HEPS in GBP terms: 42 percent to 62 percent higher than the 0.60 pence HEPS 
    for the prior reporting period (therefore estimated HEPS of 0.85 pence to 
    0.97 pence). 
 
The following items had a significant impact on the profit after taxation 
during the current reporting period: 
 
PAR Gold Proprietary Limited, previously known as Shanduka Gold Proprietary 
Limited, transaction ("PAR Gold transaction") 
 
The materially earnings accretive PAR Gold transaction was finalised on 7 June 
2016, which has resulted in the weighted average number of shares in issue 
reducing significantly by 17.7 percent period-on-period. Disclosed below is the 
Pan African share reconciliation, illustrating the effect of the PAR Gold 
transaction on the weighted average number of shares in issue, which is used to 
calculate the EPS and HEPS. 
 
Pan African Shares Reconciliation                      Shares 
 
Shares in issue at 31 December 2015                  1,831,494,763 
 
Issue of shares - 7 June 2016                          111,711,791 
 
Shares in issue at 31 December 2016                  1,943,206,554 
 
Elimination of shares held by PAR Gold               (436,358,058) 
 
Shares used to calculate the EPS and HEPS            1,506,848,496 
 
Net reduction in number of weighted average shares           17.7% 
 
Uitkomst Colliery 
 
The Uitkomst Colliery, acquired on the 31 March 2016, has performed well during 
the current reporting period, contributing approximately 8.5 percent of the 
Group's EPS and HEPS. If the current favourable coal price environment 
continues, the payback period for this acquisition is expected to be less than 
the four years previously forecast. 
 
Gold price hedge - fair value adjustment 
 
Barberton Mines entered into a short term strategic hedge ("the Cost Collar") 
in July 2015, when the prevailing spot gold price was ZAR440,000/kg, to protect 
its cash flows and the Group's annual dividend against severe adverse movements 
in the ZAR gold price. During the current reporting period, the Group recorded 
a pre-tax mark-to-market fair value gain of ZAR90 million on the Cost Collar 
(2015: pre-tax mark-to-market fair value loss of ZAR40.6 million). The 
mark-to-market fair value gain was due to a reduction in the gold price of 
ZAR625,000/kg at 30 June 2016 to ZAR505,000/kg at 31 December 2016. 
 
Increase in the average ZAR gold price received 
 
The average ZAR gold price received by the Group period-on-period increased by 
16.5 percent to R565,298/kg (2015: R485,215/kg), as a result of the weakening 
of the ZAR/USD exchange rate by 2.9 percent to R13.99:1 (2015: R13.60:1) and an 
increase in the USD gold price received by 13.2 percent to USD1,257/0z (2015: 
USD1,110/0z). 
 
OPERATIONAL UPDATE 
 
The Group previously informed shareholders on 5 December 2016 of its revised 
gold production guidance for the 2017 financial year of 195,000oz. The gold 
production in the second half of the financial year is forecasted to exceed the 
first half performance. 
 
Six months                       Mining and tailings operations 
ended 
31 December      Barberton Mines   Evander Mines     Uitkomst        Phoenix 
                  (Gold ounces)    (Gold ounces)     Colliery     Platinum (PGE 
                                                   (Coal tonnes)     ounces) 
 
2015                 56,447           45,350             -            4,493 
 
2016                 49,212           42,401          327,202         4,575 
 
Percentage           (12.8%)          (6.5%)           100%            1.8% 
 
For further information on Pan African, please visit the Company's website at 
www.panafricanresources.com 
 
27 January 2017 
 
Contact information 
 
Corporate Office                              Registered Office 
The Firs Office Building                      Suite 31 
1st Floor, Office 101                         Second Floor 
Cnr. Cradock and Biermann Avenues             107 Cheapside 
Rosebank, Johannesburg                        London 
South Africa                                  EC2V 6DN 
Office:   + 27 (0) 11 243 2900                United Kingdom 
Facsimile: + 27 (0) 11 880 1240               Office:   + 44 (0) 207 796 8644 
                                              Facsimile: + 44 (0) 207 796 8645 
 
Cobus Loots                                   Deon Louw 
Pan African Resources PLC                     Pan African Resources PLC 
Chief Executive Officer                       Financial Director 
Office: + 27 (0) 11 243                       Office: + 27 (0) 11 243 2900 
2900 
 
Phil Dexter                                   John Prior / Paul Gillam 
St James's Corporate Services Limited         Numis Securities Limited 
Company Secretary                             Nominated Adviser and Joint Broker 
Office: + 44 (0) 207 796 8644                 Office: [phone] 
 
Sholto Simpson                                Matthew Armitt / Ross Allister 
One Capital                                   Peel Hunt LLP 
JSE Sponsor                                   Joint Broker 
Office: + 27 (0) 11 550 5009                  Office: [phone] 
 
Julian Gwillim                                Jeffrey Couch/Neil Haycock/Thomas 
Aprio Strategic Communications                Rider 
Public & Investor Relations SA                BMO Capital Markets Limited 
Office: [phone]                    Joint Broker 
                                              Office: [phone] 
 
Website: www.panafricanresources.com 
 
 
 
END 
 

(END) Dow Jones Newswires

January 27, 2017 05:30 ET (10:30 GMT)