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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Pan African Resources Plc | LSE:PAF | London | Ordinary Share | GB0004300496 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.50 | -2.05% | 23.90 | 23.90 | 24.15 | 25.50 | 23.55 | 25.50 | 4,955,882 | 16:25:48 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Gold Ores | 321.61M | 60.74M | 0.0317 | 7.54 | 458.04M |
Hot Features
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TIDMPAF
Pan African Resources PLC
('Pan African Resources' or the 'company' or the 'group')
(Incorporated and registered on 25 February 2000 in England and Wales under the
Companies Act 1985, registration number 3937466)
Share code on AIM : PAF
Share code on JSE : PAN
ISIN : GB0004300496
Provisional audited results for the year ended 30 June 2017 and proposed final
dividend announcement
Cobus Loots, CEO of Pan African Resources commented: "The 2017 financial year
was operationally challenging. The remedial actions successfully implemented by
management are however delivering the expected results. We have appropriately
addressed critical shaft infrastructure repairs at Evander Mines, and the
operation's cost base is now leaner, without compromising the safety or
sustainability of the business. Pan African Resources looks forward to a much
improved performance from Evander Mines in the 2018 financial year, with a
substantial increase in expected gold production. Despite mining flexibility
challenges, Barberton Mines, our flagship long-life cash flow producer, is
currently mining high-grade panels in its Fairview 11-block and is poised to
contribute substantially to our production guidance of 190,000oz for the 2018
financial year. The Elikhulu Project is on schedule, with environmental
approvals now in place, and is expected to produce first gold in the final
quarter of the 2018 calendar year. Additionally, we are excited about the
prospects for Evander Mines' 2010 Pay Channel project and our team has
commenced a feasibility study on this project.
The disposal of the Uitkomst Colliery on 30 June 2017 to Coal of Africa
realised a profit of R91.3 million, demonstrating the value created over the 15
months of our ownership. The recently announced disposal of Phoenix Platinum to
Sylvania reaffirms our focus on core operations and the cash consideration will
further strengthen our financial position. The benefits of the PAR Gold
transaction, completed in the prior financial year, has the accounting effect
of reducing the issued share capital by 436.4-million shares in the 2017
financial year, equating to 19.53% of the issued share capital of the company.
The board is proposing a final dividend of R185 million, or GBP10.9 million,
which again results in an attractive cash return to our shareholders."
Key features reported in South African Rand ('ZAR' or 'R') and Pound Sterling
('GBP')
Financial key features
* Group revenue from continuing operations decreased by 15.5% to R2,925.3
million (2016: R3,460.1 million). In GBP terms, group revenue increased by
5.1% to GBP169.6 million (2016: GBP161.3 million), the GBP percentage
movement was positive due to the appreciation of the ZAR/GBP exchange rate.
* In ZAR terms, group profit after taxation decreased by 43.3% to R309.9
million (2016: R547.0 million), while in GBP terms, group profit after
taxation decreased by 29.8% to GBP17.9 million (2016: GBP25.5 million).
Profits were adversely impacted by reduced gold production and a flat rand
gold price during the year.
* Earnings per share ('EPS') decreased by 34.4% to 19.81 cents per share
(2016: 30.20 cents per share), while in GBP terms, EPS decreased by 19.1%
to 1.14 pence per share (2016: 1.41 pence per share).
* Gold production and realisation costs were well contained, increasing by
only 7.7% to R2,343.1 million (2016: R2,176.0 million).
* The Pan African Resources board of directors (the 'board') approved the
R1.74 billion Elikhulu tailings retreatment project ('Elikhulu Project')
during the 2017 financial year. The project is now fully funded with all
environmental approvals in place and construction commenced in August 2017.
* Uitkomst Colliery Proprietary Limited ('Uitkomst Colliery') performed well
and contributed R35.4 million (2016: R12.7 million), or 11.4%, to group
profit after taxation, before its disposal to Coal of Africa Limited ('Coal
of Africa') on 30 June 2017. The disposal of Uitkomst Colliery to Coal of
Africa realised a profit on sale of R91.3 million. (Note 1)
* The statement of financial position is robust with net debt reducing to
R67.6 million (2016: R339.6 million) at year end.
* The board has proposed a final dividend of R185 million, or approximately
GBP10.9 million (2016: R300 million or GBP17.1 million), equating to
R0.08279 per share, or approximately 0.48697 pence per share (2016: R0.1544
per share or 0.88 pence per share) for the 2017 financial year. This
dividend is subject to shareholder approval at the annual general meeting
('AGM'), which will take place on Tuesday, 21 November 2017. (Note 2)
* Post year end, Pan African Resources concluded a sale agreement to dispose
of Phoenix Platinum Proprietary Limited ('Phoenix Platinum') to Sylvania
Platinum Limited ('Sylvania') for a cash consideration of R89 million. This
transaction remains subject only to Competition Commission approval. The
transaction resulted in an impairment of Phoenix Platinum by R100.9 million
at year end.
Operational key features
* Following a challenging operational year, group gold production decreased
by 15.4% to 173,285oz (2016: 204,928oz).
* Effective ZAR gold price received remained unchanged at R542,773/kg (2016:
R542,850/kg), with the average ZAR/USD exchange rate being 6.3% stronger at
R13.59:1 (2016: R14.51:1) and the USD gold price increasing by only 6.7% to
USD1,242/oz (2016: USD1,164/oz).
* Cash cost per kilogramme increased in ZAR terms to R430,863/kg (2016:
R338,242/kg) and, in USD terms, cash costs per ounce increased to USD986/oz
(2016: USD725/oz), predominantly due to lower gold production.
* All-in sustaining cost per kilogramme increased in ZAR terms to R514,435/kg
(2016: R405,847/kg) and, in USD terms, all-in sustaining cost per ounce
increased to USD1,177/oz (2016: USD870/oz).
* Pan African Resources advised shareholders on 25 August 2017 that the
Integrated Water Use Licence for the Elikhulu Project had been granted by
the Department of Water and Sanitation, for a period of 20 years.
Furthermore, the Integrated Environmental Authorisation was also issued in
terms of the National Environmental Management Act 107 of 1998. All
environmental regulatory permits are therefore in place for the group to
commence construction and operation of the Elikhulu Project, which will add
approximately 56,000oz per annum to the group's production profile from the
last quarter of the 2018 calendar year.
* At 30 June 2017, group gold resources were relatively unchanged at 34.4Moz
(30 June 2016: 34.9Moz).
* The group unfortunately had three employees fatally injured in the current
financial year (2016: one employee fatally injured), and remains focused on
reducing the severity of accidents. The group's lost-time injury frequency
rate ('LTIFR') remained stable at 3.51 (2016: 3.50) whilst the reportable
injury frequency rate ('RIFR') improved to 1.53 (2016: 2.04). Significant
progress has been made on ensuring the on-mine safety management teams are
appropriately staffed and skilled to drive our safety improvement
campaigns. The safety performance at Barberton Mines Proprietary Limited
('Barberton Mines') and Evander Gold Mines Limited
('Evander Mines') is better than the average industry safety rates, and the
focus remains on improving safety year-on-year.
* Uitkomst Colliery produced and sold 326,744 tonnes of coal (2016: 87,538t)
from the underground mining operations, and 343,466 tonnes of coal (2016:
48,564t) acquired from third parties for blending and processing, prior to
the conclusion of the sale to Coal of Africa.
* Tonnes processed by Phoenix Platinum increased by 13.7% to 283,067t (2016:
248,981t), and platinum group elements ('PGEs') sold increased by 4.4% to
8,709oz (2016: 8,339oz). The plant recoveries improved by 20.9% to 52.0%
(2016: 43.0%) following the installation of high-energy cells, but this was
offset by the head grade reducing by 21.1% to 2.43g/t (2016:3.08g/t).
* The group's detailed operational and financial summaries per entity are
disclosed on the Pan African Resources website at http://
www.panafricanresources.com/investors/financial-reports/.
Movement For the For the Unit Salient Features Unit For the For the Movement
year year year year
ended ended ended ended
30 June 30 June 30 June 30 June
2017 2016 2016 2017
(15.4%) 5,390 6,374 (Kilogrammes) Gold sold (Oz) 204,928 173,285 (15.4%)
(15.5%) 2,925.3 3,460.1 (R millions) Revenue (GBP 161.3 169.6 5.1%
millions)
0.0% 542,773 542,850 (R/kg) Average gold price (USD/oz) 1,164 1,242 6.7%
received
27.4% 430,863 338,242 (R/kg) Cash costs (USD/oz) 725 986 36.0%
26.8% 514,435 405,847 (R/kg) All-in sustaining costs (USD/oz) 870 1,177 35.3%
31.8% 540,693 410,206 (R/kg) All-in costs (USD/oz) 879 1,237 40.7%
(45.6%) 524.6 963.5 (R millions) Adjusted EBITDA (Note 3) (GBP 44.9 30.4 (32.3%)
millions)
(43.3%) 309.9 547.0 (R millions) Attributable earnings (GBP 25.5 17.9 (29.8%)
millions)
(42.3%) 315.6 547.1 (R millions) Headline earnings (GBP 25.5 18.3 (28.2%)
millions)
(34.4%) 19.81 30.20 (cents) Earnings per share ('EPS') (pence) 1.41 1.14 (19.1%)
(33.2%) 20.17 30.20 (cents) Headline earnings per (pence) 1.41 1.17 (17.0%)
share ('HEPS')
(80.1%) 67.6 339.6 (R millions) Net debt (GBP 17.2 4.0 (76.8%)
millions)
24.2% 330.0 265.7 (R millions) Total sustaining capital (GBP 12.4 19.1 54.3%
expenditure millions)
102.7% 613.1 302.4 (R millions) Total capital expenditure (GBP 14.0 35.5 153.6%
(Note 4) millions)
5.5% 201.3 190.8 (cents) Net asset value per share (pence) 10.0 12.0 20.0%
(13.6%) 1,564.3 1,811.4 (millions) Weighted average number of (millions) 1,811.4 1,564.3 (13.6%)
shares in issue
(6.3%) 13.59 14.51 (R/USD) Average exchange rate (R/GBP) 21.45 17.25 (19.6%)
(11.8%) 13.04 14.78 (R/USD) Closing exchange rate (R/GBP) 19.78 16.96 (14.3%)
Note 1: The Uitkomst Colliery contribution excludes corporate management fees
and inter-company interest on-charged to the operation during year.
Note 2: The GBP proposed final dividend was calculated based on 2,234,687,537
total shares in issue and an illustrative exchange rate of R17:1. Shareholders
on the United Kingdom register are to note that a revised exchange rate will be
communicated prior to approval of the final dividend at the AGM.
Note 3: Adjusted EBITDA is represented by earnings before interest, taxation,
depreciation and amortisation, impairments, discontinued operations and profit/
(loss) on disposal of investments.
Note 4: The Elikhulu Project incurred R175.5 million in capital expenditure to
30 June 2017 on civil engineering works and the procurement of long-lead-time
items, such as the tower crane and the carbon-in-leach tanks, which are
critical to ensuring construction deadlines are met.
CEO STATEMENT
Pan African Resources experienced a difficult year operationally, with lower
gold production and a flat ZAR gold price environment. Regrettably three
employees were fatally injured while on duty underground. We have conducted
internal assessments to take procedural learnings from each fatal incident.
Despite the severe setback related to the employee fatalities, our safety
performance rates relative to prior years have improved, with our LTIFR
stabilising and the RIFR improving year-on-year. The improvement in the group's
overall safety performance is encouraging and we continue to strive towards a
zero-harm environment. Gold production was lower than expected as Evander Mines
suspended production for 55 days to carry out critical refurbishments to its
shaft infrastructure, and production at Barberton Mines was below target due to
logistical and flexibility constraints at Fairview, compounded by community
unrest in the Barberton Mines area and Department of Mineral Resources ('DMR')
safety stoppages ('Section 54 regulatory notices') during the first half of the
financial year.
Evander Mines restructured its operations during the reporting period, which
has resulted in improved operational efficiencies and a leaner and more
sustainable cost base. The shaft failure at Evander Mines, as reported in
February 2017, prompted a review of the mine's engineering functions to ensure
similar problems are detected timeously in future. Evander Mines' shaft
infrastructure has also been subject to a number of internal and external
engineering reviews and we believe the risk of another failure is materially
reduced. Our engineering reviews have identified further infrastructural
issues, which are being addressed to ensure the risk associated with the mine's
infrastructure is further reduced.
These challenges, which were well flagged during the year, impacted the group's
results, with gold revenues decreasing by 15.5% to R2,925.3 million (2016:
R3,460.1 million), mostly due to the 15.4% decrease in gold production. The
average ZAR gold price received remained relatively unchanged at R542,773/kg
(2016: R542,850/kg) in a particularly volatile environment, and the ZAR ended
the financial year stronger against the US dollar at R13.59, compared to R14.51
at the prior year end. Looking ahead, the outlook for the ZAR is predominantly
negative due to ongoing political, economic and social uncertainties facing
South Africa.
Despite the challenges and setbacks, at the end of the 2017 financial year the
group has emerged stronger, with reduced debt levels, and a renewed focus on
core operations and its strategic growth path. Developments at our Evander
Mines include the approval and commencement of construction (after year end) of
the Elikhulu Project and improvements to the reliability of mine
infrastructure, with the completion of critical structural and engineering
refurbishments at Evander Mines' No 7 Shaft during March and April 2017. The
exploration programme at Evander Mines' 2010 Pay Channel has commenced, and if
this area is proven to be a viable mining proposition, the orebody will be
mined from the existing No 7 Shaft, thereby saving the cost of sinking another
deep-level shaft. Work is progressing well at Barberton Mines' Fairview shaft,
with the development of a sub-vertical shaft to improve access capacity in
mining the 11-block high-grade and long-life orebody.
The sale of Uitkomst Colliery in KwaZulu-Natal to Coal of Africa realised a
profit on sale of R91.3 million and further boosted the group's already strong
financial position. The group announced on 31 July 2017 that it will dispose of
all of its shares and loan accounts in Phoenix Platinum to Sylvania for a total
cash consideration of R89 million. The transaction remains subject only to
Competition Commission approval. The results for Uitkomst Colliery and Phoenix
Platinum were reclassified to discontinued operations in the current and prior
financial year on the statement of comprehensive income.
An important development during the financial year under review was the
gazetting of the revised Mining Charter by the Minister of Mineral Resources in
June 2017, amid controversies surrounding the lack of consultation between the
government and other stakeholders, including the labour and mining industry, as
well as concerns about specific impositions in this new charter. The revised
Mining Charter was subsequently suspended in July 2017, and is now the subject
of discussions as well as legal actions by industry stakeholders. Pan African
Resources is supportive of constructive engagement that results in a Mining
Charter geared to the revitalisation of the mining industry and which underpins
job creation and much-needed economic growth. While we closely monitor
developments regarding the revised Mining Charter, we are proud of the progress
made in our transformation during the past years, which include our involvement
in the communities in which we operate, and the establishment of employee
ownership structures at all our gold operations.
In the 2017 financial year, the group's gold production decreased by 15.4% to
173,285oz (2016: 204,928oz), primarily due to the following challenges:
* The suspension of production for 55 days at Evander Mines to complete the
refurbishment of critical shaft infrastructure at No 7 Shaft. The
consistent review and inspection of critical infrastructure to manage and
ensure limited loss of production going forward is progressing well.
* Loss of production shifts due to frequent instances of community unrest in
the Barberton Mines area as a result of service delivery protests,
compounded by Section 54 regulatory notices issued at both Barberton Mines
and Evander Mines during the first half of the financial year. The group
continues to engage with all stakeholders to ensure its operations can
function in a stable and consistent manner.
* Barberton Mines experienced flexibility issues at Fairview, specifically at
its high-grade 11-block, which resulted in lower grades being mined. Work
is underway to develop additional production platforms to expose further
high-grade panels to increase mining grades and flexibility.
Uitkomst Colliery produced and sold 326,744 tonnes of coal from its underground
mining operations, and 343,466 tonnes of third-party coal acquired for blending
and processing, during the current reporting period. The operation contributed
to profitability during the 2017 financial year prior to the conclusion of its
sale to Coal of Africa on 30 June 2017.
Phoenix Platinum's production increased by 4.4% to 8,709oz (2016: 8,339oz), and
its recoveries increased significantly to 52% from 43%, following the
implementation of high-energy agitation cells in the plant. Production in the
current reporting period was however negatively affected by a reduction in the
head grade achieved on the tailings processed from the Kroondal and Elandskraal
tailings.
Mineral reserves and resources
The group's mineral resources and reserves in compliance with the South African
Code for Reporting of Mineral Resources and Mineral Reserves (the SAMREC Code)
are summarised as follows:
* Gold resources of 34.4Moz (2016: 34.9Moz)
- Gold reserves of 11.2Moz (2016: 10.0Moz)
* PGE resources of 0.6Moz (2016: 0.6Moz)
- PGE reserves of 0.2Moz (2016: 0.2Moz)
In determining our reserves and resources in the 2017 financial year, gold
reserves were modelled at R550,000/kg and gold resources at R600,000/kg. During
the current year the group's mineral resources and reserves were independently
reviewed by SRK Consulting (South Africa) (Pty) Ltd.
Near- to medium-term growth projects
Elikhulu Project
Following the successful R696 million equity raise in April 2017, Pan African
Resources commenced capital expenditure on the project's civil engineering
works and the procurement of long-lead-time items, such as the tower crane and
the carbon-in-leach tanks, which are critical to ensuring project deadlines are
met. The Elikhulu Project is progressing according to schedule and is on
budget. As announced on 25 August 2017, all environmental regulatory approvals
have been received, allowing construction to begin, with project completion and
first gold expected in the last quarter of the 2018 calendar year.
Capital expenditure of R175.5 million was incurred on the Elikhulu Project
during the current reporting period, and capital spend remains on track
relative to the total initial forecast capital expenditure of R1.74 billion,
which includes contingencies of R200 million.
The R1 billion term debt facility agreement, which was underwritten by Rand
Merchant Bank, a division of FirstRand Bank Limited, has also become effective
and was successfully syndicated, with an over-subscription of more than 50%.
Together with the group's existing R1 billion revolving credit facility, these
facilities comprise the core debt instruments for funding the group's capital
expenditure programmes. The low-cost, long-life Elikhulu Project is expected to
increase the group's annual gold production by 56,000oz per annum in the
initial eight years and substantially reduce the group's weighted average
all-in cost of production.
Evander Mines' 2010 Pay Channel
The 2010 Pay Channel resource is adjacent to the No 7 Shaft infrastructure and
extends from the boundary of Taung Gold International Limited's No 6 Shaft
project and mining rights. The Resources for this project are summarised in the
table below:
No 7 Shaft: No 3 Decline and 2010 Pay Channel
resources
Category Tonnes Grade Contained gold
Million g/t Tonnes Moz
Measured 0.45 8.94 4.0 0.13
Indicated 0.70 7.11 5.0 0.16
Inferred 4.13 8.93 36.9 1.19
Total 5.28 8.69 45.9 1.48
As previously reported, Evander Mines embarked on an exploration programme to
drill a further exploration borehole from surface. During 2017, the exploration
borehole successfully intersected the Kimberley reef at a depth of
approximately two kilometres. Refer below to the table highlighting reef
intersections and deflections. The previous borehole into the 2010 Pay Channel
yielded a reef intersection with a 49cm width at 36.0g/t.
2010 Pay Channel exploration borehole results
Detail Intersection Depth Core width Grades
(metres) (centimetres)
g/t cmg/t
Original 1 2059.3 49 36.0 1,766
Intersection 2 2014.6 5.7 36.8 210
Deflection 1 3 2014.9 5.7 33.2 189
Deflection 2 4 2014.8 4.8 144.7 694
Harmony Gold Mining Company Limited ('Harmony') previously started development
from the No 7 Shaft mine workings towards the 2010 Pay Channel. Due to
financial constraints and a reassessment of capital expenditure priorities,
Harmony halted all development on the Evander Mines' shafts (other than No 8
Shaft) in 2009, resulting in the controlled flooding of the development ends
and No 7 Shaft's No 3 Decline, from 21 Level up to 18 Level. Following
dewatering, only standard footwall and on-reef development would need to be
completed by Evander Mines, with the associated engineering infrastructure,
before mining can commence.
The 2010 Pay Channel is approximately 4.5 kilometres in tramming distance from
No 7 Shaft, which is currently used by Evander Mines for hoisting to the
Kinross metallurgical plant. This compares favourably with the No 8 Shaft
mining areas, which are approximately 12 kilometres in tramming distances from
No 7 Shaft.
The group's project team has commenced a feasibility study on No 7 Shaft's No 3
Decline and 2010 Pay Channel resource, which will address the following
critical issues:
* Collation of geological data from the drill-hole intersection and
deflections.
* The cost and timing of dewatering and re-equipping the No 7 Shaft's No 3
Decline from 18 Level to 21 Level.
* The development cost and timing to access the 2010 Pay Channel.
* The economic viability of the project.
The 2010 Pay Channel can potentially increase Evander Mines' underground gold
production significantly at a relatively low capital cost, using Evander Mines'
established shaft and metallurgical facilities. The feasibility study for the
project is expected to be completed during the first quarter of the 2018
financial year.
Barberton Mines' sub-vertical shaft project at Fairview
The Fairview mining operation is currently restricted by the hoisting capacity
of its No 3 Decline, which is used to access workings below 42 Level. This
decline is currently used to transport employees and material and for rock
hoisting. The 11-block of the main reef complex orebody has an average grade
of 31.3 g/t and current life-of-mine of 20 years. With no intervention, future
mining at depth will result in increased travelling distance, reduce employee
face time, and cause a lack of capacity to ensure both ore replacement and
exploration development.
Pan African Resources, with the assistance of DRA Projects SA Proprietary
Limited ('DRA'), has completed a feasibility study on the construction of a
raise-bored, sub-vertical shaft from Fairview's 42 Level to 64 Level, with the
potential of continuing the vertical shaft to 68 Level in future. This
sub-vertical shaft will be used to transport employees and material to the
working areas, which will allow the No 3 Decline to be used exclusively for
rock hoisting, increasing overall capacity and production from this mining
area.
DRA has reviewed the technical and commercial aspects of the project and the
supporting feasibility study has yielded very positive results. The estimated
capital expenditure for the project, including contingencies, is approximately
R105 million, to be incurred over a two-year period. The productivity
improvements for Fairview are estimated to yield an additional 7,000oz of gold
per annum, which can be optimised further to more than 10,000oz per annum.
Outlook
In the 2018 financial year, the key focus areas for the group, from an
operational perspective, include:
* Continuing to improve our safety and regulatory compliance across all
operations.
* Achieving its gold production guidance of 190,000oz for the 2018 financial
year.
* Ensuring construction of the Elikhulu Project progresses according to the
original schedule and budget.
* Completing the drilling programme deflections on the Evander Mines 2010 Pay
Channel and finalising the technical and economic evaluation of the
project.
* Commencing construction of the Barberton Mines' sub-vertical shaft project
at Fairview.
* Ensuring sustainable and optimal operating performance at our gold mining
operations.
* Further improving stakeholder engagement to minimise operational stoppages.
* Concluding the R89 million disposal of Phoenix Platinum to Sylvania.
The group continues to evaluate acquisitive opportunities, particularly within
other African jurisdictions, in accordance with the group's rigorous capital
allocation criteria.
We extend our appreciation to our management teams and all other staff for
their hard work and persistence during this challenging period. Their
commitment and perseverance has enabled Pan African Resources to continue
operating successfully. We also thank our fellow directors for their support
and guidance.
FINANCIAL PERFORMANCE
When assessing and discussing Pan African Resources reported financial
performance, financial position and cash flows, management refers to
Alternative Performance Measures ('APMs') of historical or future financial
performance, financial position or cash flows that are not defined or specified
under International Financial Reporting Standards ('IFRS'). Examples of APMs
are headline earnings and adjusted EBITDA and net debt. These APMs have been
described and reconciled in accordance with the respective listing requirements
for this announcement. The Integrated Annual Report which will be published
prior to the AGM and will have all the APMs reconciled to the closest IFRS
term.
Exchange rates and their impact on results
All of the group's subsidiaries are incorporated in South Africa and their
functional currency is ZAR. The group's business is conducted in ZAR and the
accounting records are maintained in this same currency, with the exception of
precious metal product sales, which are conducted in USD prior to conversion
into ZAR. The ongoing review of the operational results by executive management
and the board is also performed in ZAR.
The group's presentation currency is GBP due to its ultimate holding company,
Pan African Resources, being incorporated in England and Wales and being
dual-listed in the United Kingdom ('UK') and South Africa.
During the period under review the average ZAR/GBP exchange rate was R17.25:1
(2016: R21.45:1) and the closing ZAR/GBP exchange rate was R16.96:1 (2016:
R19.78:1). The year-on-year change in the average and closing exchange rates of
19.6% and 14.3%, respectively, must be taken into account for the purposes of
translating and comparing year-on-year results.
The group records its revenue from precious metals sales in ZAR and the
strength in the value of the ZAR/USD exchange rate during the period under
review had a negative impact on the USD revenue received when translated into
ZAR. The average ZAR/USD exchange rate was 6.3% stronger at R13.59:1 (2016:
R14.51:1).
The commentary below analyses the current and prior comparative period's
results. Key aspects of the group's ZAR results appear in the body of this
commentary and have been used as the basis against which its financial
performance is measured. The gross GBP equivalent figures can be calculated by
applying the exchange rates as detailed above.
Analysing the group's financial performance
Revenue
The group's total revenue from continuing and discontinued operations,
year-on-year, decreased in ZAR terms by 5.3% to R3,440.4 million (2016:
R3,632.8 million) and in GBP terms increased by 17.7% to GBP199.4 million
(2016: GBP169.4 million). Group revenue was mainly impacted by:
1. The average ZAR gold price received decreased marginally to R542,773/kg
(2016: R542,850/kg), as a result of the average ZAR/USD exchange rate
strengthening by 6.3% to R13.59:1 (2016: R14.51:1) and the USD gold price
received increasing by 6.7% to USD1,242/oz (2016: USD1,164/oz). The GBP
revenue figures were positively impacted by the ZAR/GBP average exchange
rate strengthening by 19.6% year-on-year.
2. Gold ounces sold decreased by 15.4% to 173,285oz (2016: 204,928oz), as
result of the operational challenges highlighted.
3. Uitkomst Colliery revenue of R432.8 million (2016: R98.0 million), or
GBP25.1 million (2016: GBP4.6 million), disclosed in discontinued
operations, following the conclusion of the disposal to Coal of Africa on
30 June 2017.
4. Phoenix Platinum revenue of R82.2 million (2016: R74.7 million) or GBP4.8
million (2016: GBP3.5 million) disclosed in discontinued operations,
following its classification as an asset held for sale ahead of the signing
of a disposal agreement with Sylvania.
Cost of production
Gold operations cost of production
The group's total cost of production (including realisation costs) for gold
operations was well controlled and increased by 7.7% to R2,343.1 million (2016:
R2,176.0 million).
Pan African Resources' gold cost of production (excluding realisation costs),
per the statement of comprehensive income, increased by 7.2% to R2,311.6
million (2016: R2,155.5 million). The main cost contributors that impacted the
year-on-year cost increase during the current reporting period are summarised
as follows:
* Group gold operations' salaries and wages (represents 43.1% of the total
gold cost of production) increased by 4.5% to R1,010.8 million (2016:
R967.7 million). Salaries and wages increased in line with the gold labour
agreements signed in the 2016 financial year, but this was off-set by the
reduction in labour costs at Evander Mines due to the retrenchment of 628
employees at the operation.
* The group's electricity costs (represents 13.8% of the total gold cost of
production) increased by 2.1% to R324.0 million (2016: R317.3 million). The
National Energy Regulator of South Africa approved an increase of 7.9% for
the period 1 July 2016 to 31 March 2017, and 2.2% from 1 April 2017.
Production challenges detailed previously also contributed to lower power
consumption, specifically at Evander Mines during the 55-day suspension of
underground operations.
* The group's mining and processing costs (represents 28.3% of total gold
cost of production) increased by 18.0% to R662.6 million (2016: R561.3
million), mainly due to the following material expenses:
+ The Evander Tailings Retreatment Plant's ('ETRP') processing costs
increased by R60.4 million or 44.2% due to treating additional surface
feedstock material. The tonnes of surface feedstock processed increased
by 17.8% to 467,610 tonnes (2016: 396,942 tonnes) and this contributed
an additional R33.4 million to the group's adjusted EBITDA.
+ Maintenance of Evander Mines' No 7 Shaft infrastructure resulted in an
additional R4.5 million expenditure being incurred.
* In the comparative reporting period the gold operations recorded an
inventory adjustment in operational costs of R4.6 million, due to releasing
gold inventory at 30 June 2016, whilst in the current financial year the
gold inventory adjustment was a R12.7 million credit to costs due to
holding more gold inventory at financial year end.
The group's gold cost of production per kilogramme increased by 27.4% to
R430,863/kg (2016: R338,242/kg). The increase is attributed to:
* Gold sold decreasing by 15.4% to 173,285oz (2016: 204,928oz).
* The 7.7% increase in gold production and realisation costs as a result of
the reasons highlighted above.
The group's all-in sustaining cost of production per kilogramme of gold
(including direct cost of production, royalties, associated corporate costs and
overheads, and sustaining capital expenditure, excluding cost-collar
mark-to-market expenses) increased by 26.8% to R514,435/kg (2016: R405,847/kg).
In USD terms the all-in sustaining cost per ounce increased to USD1,177/oz
(2016: USD870/oz). The group's all-in sustaining costs were primarily impacted
by an increase in gold production costs and a decrease in gold sold.
The all-in gold cost per kilogramme (sustaining cost of production and once-off
expansion capital, but excluding the Elikhulu Project capital) increased by
31.8% to R540,693/kg (2016: R410,206/kg), due to the increase in once-off
capital expansion costs to R100.8 million (2016: R27.8 million), which related
mostly to the construction of the Barberton Tailings Retreatment Plant's
('BTRPs') cyanide detoxification plant of R17.8 million and Fairview's
ventilation refrigeration and infrastructure of R41.5 million. In USD terms,
the all-in cost per ounce increased to USD1,237/oz (2016: USD879/oz).
PGE cost of production
Phoenix Platinum's cost of production is disclosed within discontinued
operations on the statement of comprehensive income, following the announcement
on 31 July 2017 that a sale agreement, for R89 million cash consideration, was
signed with Sylvania, and now remains subject to Competition Commission
approval. Phoenix Platinum is classified as an asset held for sale on the
statement of financial position in the current reporting period, as Pan African
Resources' intent is to dispose of the operation within the next 12 months.
The PGE cost of production increased by 16.6% to R86.4 million (2016: R74.1
million), largely due to refining and processing costs increasing by 18.2% to
R57.1 million (2016: R48.3 million). Higher refining costs were incurred due to
higher chrome prevalence in the tailings processed from the Elandskraal/
Kroondal tailings prior to entering into a new refining agreement effective in
December 2016. Additional transport costs were also incurred to deliver
tailings material from the more distant Elandskraal/Kroondal tailings sites.
Coal cost of production
The Uitkomst Colliery's production cost in the current financial year of R375
million (2016: R91.8 million) is disclosed within the discontinued line item on
the statement of comprehensive income while, in the comparative period,
production costs was only for three months from 1 April 2016 to 30 June 2016.
Realisations costs
The group's realisation costs increased to R31.5 million (2016: R20.5 million)
due to an additional R15.4 million in refining costs associated with the
extraction and recovery of gold from various sections of the Evander Mines'
processing plant by a contractor. This initiative contributed 160.5kg
(5,160.9oz) of gold to Evander Mines' production over the life of the project.
Depreciation costs
Depreciation from continuing operations decreased by 15.6% to R181.0 million
(2016: R214.4 million). The depreciation charge is based on the available units
of production over the life of the operations and, with the reduced mining
tonnages and gold production for the reasons mentioned in the CEO statement,
the gold operations' depreciation reduced commensurately. The depreciation was
further reduced by an adjustment to residual values of property, plant and
equipment on the gold operations.
Other expenditure and income
The group had no outstanding short-term hedges at 30 June 2017. In July 2015,
Barberton Mines entered in a cost collar, when the prevailing spot gold price
was R440,000/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 realised mark-to-market
fair-value gain of R94.7 million on this cost collar (2016: pre-tax realised
cost-collar derivative fair-value loss of R113.8 million). This gain resulted
from a reversal of the prior financial year's cost-collar mark-to-market
liability, which was valued at a R625,000/kg gold price, which regressed to an
average gold price received of R542,773/kg in the current financial year.
The fair-value adjustment of the group's rehabilitation liability resulted in
an increase of R0.4 million (2016: R38.2 million decrease in liability). The
rehabilitation investment decreased by R0.9 million (2016: R9.2 million
increase in the investment) due to movements in the market values of the
underlying investments.
Finance costs increased to R48.6 million (2016: R31.1 million), following
increased revolving credit facility utilisation during the period under review.
During December 2016, the group disposed of an investment in a listed entity.
The investment represented 1,750,850 shares, which were sold for R23.4 million,
and resulted in a profit of R4.6 million being recognised in the statement of
comprehensive income during the period under review. Dividends received for the
period under review, prior to disposal, amounted to R0.6 million (2016: R1.0
million).
Taxation
The group's total taxation charge decreased to R4.2 million (2016: R184
million).
The taxation charge comprised of:
* A decrease in the current taxation charge by 60.1% to R80.4 million (2016:
R203.9 million).
* An increase in the deferred taxation credit to R76.2 million (2016:
deferred taxation credit of R19.9 million), predominantly due to the
deferred taxation associated with the pre-tax realised mark-to-market
fair-value gain of R94.7 million, and a reduction of the long-term deferred
taxation rate to 23.1% from 28% and 25.5% for Barberton Mines and Evander
Mines, respectively.
EPS and HEPS
The group's EPS in ZAR decreased by 34.4% to 19.81 cents (2016: 30.20 cents).
The group's HEPS in ZAR decreased by 33.2% to 20.17 cents (2016: 30.20 cents).
The difference between the EPS and HEPS has been reconciled below.
The EPS and HEPS are calculated by applying the group's weighted average number
of shares in issue to the attributable and headline earnings. The weighted
average number of shares in issue decreased by 13.6% to 1,564.3 million shares
(2016: 1,811.4 million shares). The decrease in shares was attributed to
eliminating the PAR Gold Proprietary Limited ('PAR Gold') shares held in Pan
African Resources, whilst including the additional 291.5 million shares issued
in the equity raise concluded on 12 April 2017.
The weighted average number of shares in issued for calculating earnings per
share is reconciled below:
30 June 30 June
2017 2016
Shares in issue at beginning of year 1,943.2 1,831.5
Issue of 291,5 million shares - vendor placement (date 12 57.5 -
April 2017) (Note 1)
Issue of 111.7 million shares - vendor placement (date 3 June - 8.5
2016)
Elimination of shares held by PAR Gold (Note 2) ( 436.4) (28.6)
Weighted average shares in issue at end of year 1,564.3 1,811.4
Note 1: On 12 April 2017 the group issued 291,480,983 ordinary shares to fund
the equity component of the Elikhulu Project's construction.
Note 2: The PAR Gold shares were acquired on 7 June 2016 and, in the current
reporting period, the group benefitted from a full year exclusion of these
shares in the calculation of the weighted average number of shares compared to
the period of less than a month in the corresponding results.
Total headline earnings per share is calculated as follows:
30 June 30 June 30 June 30 June
2017 2016 2017 2016
GBP GBP ZAR ZAR
million million million million
Basic earnings 17.9 25.5 309.9 547.0
Adjustments:
Profit on disposal of investment (0.2) - (4.6) -
Taxation on profit realised on disposal of 0.1 - 1.0 -
investment
Profit on disposal of Uitkomst Colliery (5.4) - (91.3) -
Profit on disposal of property plant and (0.1) - (0.4) -
equipment
Taxation on profit realised on property - - 0.1 -
plant and equipment sale
Impairment of Phoenix Platinum 6.0 - 100.9 -
Headline earnings 18.3 25.5 315.6 547.0
Headline earnings per share 1.17 1.41 20.17 30.20
Diluted headline earnings per share 1.17 1.41 20.17 30.19
Continuing operations headline earnings per share is calculated as follows:
30 June 30 June 30 June 30 June
2017 2016 2017 2016
GBP GBP ZAR ZAR
million million million million
Basic earnings for continuing operations 22.8 25.3 391.9 543.3
Adjustments:
Profit on disposal of Investment (0.2) - (4.6) -
Taxation on profit on disposal of - - 1.0 -
Investment
Profit on disposal of subsidiary (5.4) - (91.3) -
Profit on disposal of property plant and - - - 0.1
equipment
Headline earnings for continuing operations 17.2 25.3 297.0 543.4
Headline earnings per share for continuing 1.10 1.40 18.98 30.00
operations
Diluted headline earnings per share for 1.10 1.40 18.97 29.99
continuing operations
Historical dividends paid
The group paid a final dividend of R300 million or GBP17.1 million on
22 December 2016, relating to the 2016 financial year. This dividend equated to
R0.1544 per share, or 0.88 pence per share.
Following the PAR Gold transaction, the company received 22.46% or R67.4
million of the R300 million dividend, resulting in a net dividend of R232.6
million paid to external shareholders.
Dividend policy
Pan African Resources aspires to pay a regular dividend to its shareholders. In
balancing this cash return to shareholders with the group's strategy of generic
and acquisitive growth, Pan African Resources believes a target pay-out ratio
of 40% of net cash generated from operating activities - after allowing for the
cash flow impact of sustaining capital, contractual debt repayments and the
cash flow impact of once-off items - is appropriate. This measure aligns
dividend distributions with the cash generation potential of the business. In
proposing a dividend, the board will also take into account the company's
financial position, future prospects, satisfactory solvency and liquidity
assessments and other factors deemed relevant at the time. The board also
allows itself flexibility to deviate from the above policy, when deemed
appropriate.
Although cash generated by operating activities for the period were below
expectations, the cash flow generated by the sale of Uitkomst Colliery and
other investments amounted to R148.4 million and largely constitutes the return
to shareholders of the profits realised on the original investments. Whilst
this is a deviation from the group's stated dividend policy, the board
considered that the exceptional circumstances warrant the proposed dividend as
the Elikhulu Project debt facility has been closed and sustaining capital can
be funded from operational cash flows at the prevailing gold price.
Net debt
Total debt facilities utilised at 30 June 2017 amounted to R227.8 million
(2016: R392.2 million), and cash holdings were R160.2 million (2016: R52.6
million), resulting in a decrease in net debt to R67.6 million (2016: R339.6
million).
The decrease in net debt was predominantly as a result of the gross proceeds
received from the R696 million equity raised on 12 April 2017.
Summary of the long-term debt liabilities:
Revolving credit Evander Mines Total
facility gold loan
30 June 30 June 30 June 30 June 30 June 30 June
2017 2016 2017 2016 2017 2016
ZAR ZAR ZAR ZAR ZAR ZAR
millions millions millions millions millions millions
Non-current 180.5 279.3 - 26.6 180.5 305.9
portion
Current portion 20.7 31.1 26.6 55.2 47.3 86.3
Total 201.2 310.4 26.6 81.8 227.8 392.2
The group's performance against the revolving credit facility debt covenant
limits are summarised below:
Measurement 30 30 Description
June June
2017 2016
Net-debt-to-equity Must be less 0.01 0.11 Improvement
ratio than 1:1
Net-debt-to-adjusted Must be less 0.05 0.38 Improvement
EBITDA ratio than 2.5:1
Interest cover ratio Must be 10 26 Regression due to reduced
greater than profits and higher interest
4 times expense
Capital expenditure
Group capital expenditure for the 2017 financial year has been summarised per
operation in the table below:
Continuing Operations Discontinued Group
Operations Total
Barberton Evander Elikhulu Corporate Phoenix Uitkomst
Mines Mines Platinum Colliery
(Note 1) (Note
2)
ZAR ZAR ZAR ZAR ZAR ZAR ZAR
million million million million million million million
Development capital 65.7 79.8 - - 7.0 152.5
Maintenance capital 50.8 118.6 - 1.4 3.4 3.3 177.5
Sustaining capital 116.5 198.4 - 1.4 3.4 10.3 330.0
total
Expansion capital 77.0 23.8 175.5 - 2.0 4.8 283.1
Total capital 193.5 222.2 175.5 1.4 5.4 15.1 613.1
expenditure
Note 1: The R77 million once-off expansion capital related to the
construction of the BTRP detoxification plant for R17.1 million and the
acquisition of additional tailings resources for R5 million. Barberton Mines
incurred R41.5 million for the construction of the installation of
refrigeration at Fairview, and R13.4 million on development of Royal Sheba.
Note 2: Evander Mines incurred R15.8 million on 25 A Block and 26 Level
decline development, and R8 million on the 2010 Pay Channel project drilling
programme. Evander Mines also incurred an additional R42 million in relation to
maintenance capital following the refurbishment of No 7 Shaft infrastructure.
Cash flow summary
Cash generated by operations before dividends decreased by R452.4 million to
R339.0 million (2016: R791.4 million), due to lower gold production following
the operational disruptions and challenges noted previously. Cash generated by
operations after taking into account net dividends paid to shareholders of
R232.6 million (2016: R210 million), decreased to R106.5 million (2016: R581.4
million).
The cash outflows from investing activities was R491 million (2016: R969
million), predominantly due to:
* Capital expenditure incurred increased to R613.1 million (2016: R302.4
million), due to the Elikhulu Project and higher once-off capital
expenditure predominantly due to the construction of the BTRP cyanide
detoxification plant and Fairview's ventilation refrigeration and
infrastructure.
* Proceeds on the sale of a listed investment of R23.4 million, and proceeds
on the sale of property plant and equipment of R7 million at Uitkomst
Colliery.
* Inflow of funds of R125 million following the sale of Uitkomst Colliery,
with net proceeds of the disposal being R111.7 million, net of the cash
transferred within the business.
Net cash inflows from financing activities was R493 million (2016: R375.9
million outflow), predominantly due to:
* The utilisation of the revolving credit facility to fund operational
capital expenditure.
* Share issues resulting in gross proceeds of R696 million, and R672 million
net of share issue costs.
Evander Mines incurred cash outflows of R345.2 million during the financial
year, following the refurbishment of critical shaft infrastructure which
resulted in lower gold production.
The R345.2 million cash outflows is summarised as follows:
* Cash outflows of Evander Mines operations of R116.3 million;
* Cash outflows from investing activities in capital expenditure (excluding
the Elikhulu Project) of R222.2 million, of which R42 million related to
the refurbishment of critical No 7 Shaft's infrastructure and R180.2
million was normalised operational capital expenditure;
* Cash outflows from financing activities of R6.7 million.
COMMITMENTS REPORTED IN ZAR AND GBP
The group identified no contingent liabilities in the current or prior
financial period.
The group had outstanding open orders contracted for at period end of R1.22
billion (2016: R12.7 million), or GBP72 million (2016: GBP0.6 million).
Outstanding orders in the current reporting period related mostly to the
Elikhulu Project.
Authorised commitments for the 2018 financial period, not yet contracted for,
totalled R328.7 million (2016: R345.9 million) or GBP19.4 million (2016:
GBP17.5 million).
At 30 June 2017, the group had guarantees in place of R24.6 million (2016:
R24.6 million) or GBP1.4 million (2016: GBP1.2 million) in favour of Eskom
Holdings SOC Limited and R14.0 million (2016: R14.0 million) or GBP0.8 million
(2016: GBP1.0 million) in favour of the DMR.
Operating lease commitments, which fall due within the next financial year,
amounted to R2.7 million (2016: R2.9 million) or GBP0.16 million (2016: GBP0.16
million).
FAIR VALUE INSTRUMENTS
Financial instruments measured at fair value are grouped into levels 1 to 3
based on the extent to which fair value is observable.
The levels are classified as follows:
Level 1 - fair value is based on quoted prices in active markets for identical
financial assets or liabilities.
Level 2 - fair value is determined using inputs other than quoted prices
included within level 1 that are observable for the asset or liability.
Level 3 - fair value is determined on inputs not based on observable market
data.
Level 1 financial instruments:
Pan African Resources hold 261,287,625 shares in Coal of Africa (9.3%
shareholding), which is fair valued at R127.6 million (GBP7.5 million). The
fair value of the listed investment is treated as Level 1 of the fair value
hierarchy, as the share price is quoted on a stock exchange.
The group's rehabilitation trust funds are valued at R320.6 million (2016:
R321.5 million) or GBP18.9 million (2016: GBP16.2 million), which comprise
investments in guaranteed equity-linked notes, bonds and interest-bearing call
accounts.
Level 2 financial instruments:
During the financial year under review, the cost collar referred to earlier was
settled, resulting in no financial exposure to be fair valued on a
mark-to-market basis, whilst in the prior financial year the cost-collar
mark-to-market liability was R117.6 million.
The group's cash settled share option liability, which is valued on a
mark-to-market basis according to the Pan African Resources quoted share price,
amounted to R46.4 million (2016: R104 million).
Level 3 financial instruments:
The group's employee share ownership plan ('ESOP') liability is accounted for
on a cash settled share option basis and valued on a mark-to-market basis on
the net present value of the discounted future cash flows applicable to the
beneficiaries of the schemes. The ESOP liability was R1.9 million (2016: R5.6
million).
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS AND ACCOUNTING POLICIES
Investors should consider non-Generally Accepted Accounting Principles
('non-GAAP') financial measures shown in this provisional announcement in
addition to, and not as a substitute for or as superior to, measures of
financial performance reported in accordance with International Financial
Reporting Standards ('IFRS'). The IFRS results reflect all items that affect
reported performance and therefore it is important to consider the IFRS
measures alongside the non-GAAP measures.
The provisional announcement has been prepared using accounting policies that
comply with the IFRS adopted by the European Union and South Africa, which are
consistent with those applied in the financial statements for the prior years
ended 30 June 2016 and 30 June 2015.
The provisional audited results announcement is only a summary of the
information in the Integrated Annual Report and does not contain full or
complete details. Any investment decision by investors and/or shareholders
should be based on consideration of the final Integrated Annual Report to be
published on the company's website as a whole.
JSE LIMITED ('JSE') LISTING
The company has a dual primary listing on the JSE in South Africa and the AIM
market ('AIM') of the London Stock Exchange ('LSE').
This provisional announcement has been prepared in accordance with the
framework concepts and the measurement and recognition requirements of IFRS and
SAICA Financial Reporting Guides as issued by the Accounting Practice
Committee, and the Financial Pronouncements as issued by the Financial
Reporting Standards Council, and the minimum information as required by
International Accounting Standards 34: Interim Financial Reporting. The
accounting policies are in terms of IFRS and are consistent with those applied
in the 2016 consolidated financial statements.
The group's South African external auditors, Deloitte & Touche, have issued
their opinions on the consolidated financial statements and the provisional
summarised consolidated financial statements for the year ended 30 June 2017.
The audits were for both the summarised and full set of financial statements
conducted in accordance with International Standards on Auditing. Deloitte &
Touche have expressed unmodified opinions on the consolidated financial
statements and the provisional summarised consolidated financial statements.
Copies of their audit reports are available for inspection at the company's
registered office. Any reference to future financial performance included in
this provisional report has not been reviewed or reported on by the group's
South African external auditors.
The auditor's report does not necessarily report on all of the information
contained in this announcement/financial results. Shareholders are therefore
advised that in order to obtain a full understanding of the nature of the
auditor's engagement they should obtain a copy of that report, together with
the accompanying financial information, from the company's registered office.
These provisional summarised consolidated financial statements are extracted
from the audited consolidated financial statements. The directors take full
responsibility for the preparation of the provisional summarised audited
results and confirm the financial information and related commentary has been
correctly extracted from the underlying group consolidated financial
statements.
AIM LISTING
The financial information for the year ended 30 June 2017 does not constitute
statutory accounts as defined in sections 435(1) and 435(2) of the UK Companies
Act 2006 ('Companies Act 2006') but has been derived from those accounts.
Statutory accounts for the year ended 30 June 2016 have been delivered to the
Registrar of Companies and those for 2017 will be delivered following the
company's AGM. Deloitte LLP, the external auditor registered in the UK, has
reported on these accounts for the year ended 30 June 2017.
Deloitte LLP's report was unqualified, did not include a reference to any
matters to which auditors draw attention by way of emphasis of matter, and did
not contain a statement under section 498(2) or 498(3) of the Companies Act
2006. These statutory accounts have been prepared in accordance with IFRS and
IFRS Interpretations Committee interpretations adopted for use by the EU, with
those parts of the Companies Act 2006 applicable to companies reporting under
IFRS.
DIRECTORSHIP CHANGES AND DEALINGS
No directorship changes took place during the period under review. However, the
following director dealings in securities took place:
During the period under review Mr JAJ Loots participated in the following
company shares transactions:
* On 27 September 2016, purchased 20,000 shares and 200,000 shares at R3.57
per share and R3.58 per share, respectively.
* On 28 September 2016, purchased 28,609 shares at R3.48 per share.
* On 29 September 2016, purchased 491 shares at R3.59 per share.
* On 30 September 2016, purchased 25,000 shares at R3.70 per share.
* On 3 October 2016, purchased 25,000 shares at R3.78 per share.
* On 5 October 2016, purchased 30,000 shares at R3.55 per share.
Mr JAJ Loots had 560,675 shares outstanding at period end, representing 0.03%
of total issued shares.
During the year under review Mr GP Louw participated in the following company
shares transactions.
On 27 September 2016, purchased the following shares:
* 4,300 shares at R3.57 per share.
* 3,150 shares at R3.58 per share.
* 35,000 shares at R3.62 per share.
* 40,000 shares at R3.64 per share.
* 12,836 shares at R3.66 per share.
* 42,164 shares at R3.67 per share.
Mr GP Louw had 137,450 shares outstanding at period end, representing 0.01% of
total issued shares.
SHARES ISSUED
On 12 April 2017, Pan African Resources issued 291,480,983 new ordinary shares
of 1 pence each at an issue price of 14 pence per share or R2.39 per share,
raising gross proceeds of R696 million (GBP40.8 million).
GOING CONCERN
The group closely monitors and manages its liquidity risk by means of a
centralised treasury function. Cash forecasts are regularly produced and
sensitivities run for different scenarios including, but not limited to,
changes in commodity prices and different production profiles from the group's
producing assets. The group had R800 million of available debt liquidity
headroom and R160.2 million in cash and cash equivalents at 30 June 2017, and
has also secured a further R1 billion committed term facility to fund the
Elikhulu Project. Based on the current status of the group's finances, having
considered going concern forecasts and reasonably possible downside scenarios
after considering the principal risks associated with the business, and in
particular relating to gold prices and production volumes, the group's
forecasts show it will have sufficient liquidity headroom for the 12 months
from the date of approval of the financial statements to meet all its
obligations in the ordinary course of business.
The board has a reasonable expectation that the company has adequate resources
to continue in operational existence for the foreseeable future. Accordingly
the group continues to adopt the going concern basis of accounting in
preparation of the 30 June 2017 financial statements.
EVENTS AFTER THE REPORTING PERIOD
The group announced on 31 July 2017 that it will dispose of all of its shares
and loan accounts in Phoenix Platinum Mining to Sylvania for a total cash
consideration of R89 million. The transaction remains subject only to
Competition Commission approval.
SEGMENT REPORTING
A segment is a distinguishable component of the group engaged in providing
products or services in a particular business sector or segment, which is
subject to risks and rewards different from those of other segments. The
group's business activities were conducted through the following business
segments:
Continuing operations:
- Barberton Mines (including BTRP), located in Barberton, South Africa;
- Evander Mines (including ETRP), located in Evander, South Africa;
- Corporate; and
- Pan African Resources Funding Company Proprietary Limited ('Funding
Company').
Discontinued operations:
- Uitkomst Colliery, located in Newcastle, South Africa; and
- Phoenix Platinum, located near Rustenburg, South Africa.
The executive committee reviews the operations in accordance with the
disclosures presented above.
PROPOSED DIVID FOR APPROVAL AT THE AGM
The board has analysed the group performance and dividend policy and has
proposed a final dividend of R185 million or approximately GBP10.9 million,
equating to R0.08279 per share or approximately 0.48697 pence per share. This
dividend is subject to approval at the AGM, which will take place on Tuesday,
21 November 2017.
Assuming the final dividend is approved by shareholders, the following salient
dates would apply:
Currency conversion date Tuesday, 21 November 2017
Last date to trade on the exchanges Tuesday, 5 December 2017
Ex-dividend date on the JSE Wednesday, 6 December
2017
Ex-dividend date on the LSE Thursday, 7 December 2017
Record date Friday, 8 December 2017
Payment date Thursday, 21 December
2017
The GBP proposed final dividend was calculated based on 2,234,687,537 total
shares in issue and an illustrative exchange rate of R17:1. Shareholders on the
London register should note that a revised exchange rate will be communicated
prior to approval at the AGM.
No transfers between the Johannesburg and London registers between the
commencement of trading on Monday, 4 December 2017 and close of business on
Friday, 8 December 2017 will be permitted.
No shares may be dematerialised or rematerialised between Wednesday, 6 December
2017 and Friday, 8 December 2017, both days inclusive.
The South African dividends tax rate is 20% per ordinary share for shareholders
who are liable to pay the dividends tax, resulting in a net dividend of
R0.06623 per share for these shareholders. Foreign investors may qualify for a
lower dividend tax rate, subject to completing a dividend tax declaration and
submitting it to Computershare Investor Services Proprietary Limited or Capita
Plc who manage the SA and UK register, respectively. The company's South
African income tax reference number is 9154588173 and it has 2,234,687,537
shares currently in issue.
Cobus Loots Deon Louw
Chief Executive Officer Financial Director
20 September 2017
Contact details:
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) 20 7796 8644
www.panafricanresources.com Facsimile: + 44 (0) 20 7796 8645
Cobus Loots Deon Louw
Pan African Resources PLC Pan African Resources PLC
Chief Executive Officer Financial Director
Office: + 27 (0) 11 243 2900 Office: + 27 (0) 11 243 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) 20 7796 8644 Office: +44 (0) 20 7260 1000
Sholto Simpson Ross Allister
One Capital Peel Hunt LLP
JSE Sponsor Joint Broker
Office: + 27 (0) 11 550 5009 Office: +44 (0) 20 7418 8900
Julian Gwillim Jeffrey Couch / Neil Haycock / Thomas Rider
Aprio Strategic Communications BMO Capital Markets Limited
Public & Investor Relations SA Joint Broker
Office: +27 (0)11 880 0037 Office: +44 (0) 20 7236 1010
Bobby Morse / Chris Judd
Buchanan Communications
Public & Investor Relations UK
Office: +44 (0) 207 466 5000
Pan African Resources PLC
Summarised consolidated statement of profit or loss and other comprehensive
income for the period ended 30 June 2017
30 June 2017 30 June 2016 30 June 2017 30 June 2016
(Audited) (Audited) (Unaudited) (Unaudited)
Continuing operations GBP GBP ZAR ZAR
Gold sales 169,584,586 161,312,220 2,925,334,113 3,460,147,123
Realisation costs (1,826,043) (956,709) (31,499,250) (20,521,416)
On-mine revenue 167,758,543 160,355,511 2,893,834,863 3,439,625,707
Gold cost of production (134,006,583) (100,487,340) (2,311,613,568) (2,155,453,481)
Mining depreciation (10,493,064) (9,995,526) (181,005,351) (214,404,023)
Mining profit 23,258,896 49,872,645 401,215,944 1,069,768,203
Other expenses (2,002,545) (12,167,011) (34,543,908) (260,982,390)
Profit on disposal of investment 222,571 - 4,582,844 -
Profit on disposal of subsidiary 5,385,915 - 91,345,123 -
Royalty costs (1,335,031) (2,783,423) (23,029,288) (59,704,418)
Net income before finance income and finance costs 25,529,806 34,922,211 439,570,715 749,081,395
Finance income 291,912 433,344 5,035,474 9,295,228
Finance costs (2,815,223) (1,448,248) (48,562,604) (31,064,929)
Profit before taxation 23,006,495 33,907,307 396,043,585 727,311,694
Taxation (242,942) (8,578,135) (4,190,728) (184,000,970)
Profit after taxation from continuing operations 22,763,553 25,329,172 391,852,857 543,310,724
Discontinued operations
(Loss)/profit for the period from discontinued (4,853,517) 172,645 (81,997,446) 3,703,294
operations (including impairments)
Profit after taxation 17,910,036 25,501,817 309,855,411 547,014,018
Other comprehensive income:
Fair-value movement on available-for-sale investment (94,938) 388,188 (1,697,487) 7,644,429
Recycling of gain on available-for-sale investment (222,571) - (4,582,845) -
Foreign currency translation differences 21,681,108 (2,181,333) - -
Total comprehensive income for the year 39,273,635 23,708,672 303,575,079 554,658,447
Profit attributable to:
Owners of the parent 17,910,036 25,501,817 309,855,411 547,014,018
Total comprehensive income attributable to:
Owners of the parent 39,273,635 23,708,672 303,575,079 554,658,447
Earnings per share 1.14 1.41 19.81 30.20
Diluted earnings per share 1.14 1.41 19.80 30.09
Weighted average number of shares in issue 1,564,346,115 1,811,427,377 1,564,346,115 1,811,427,377
Diluted number of shares in issue 1,565,075,434 1,811,916,935 1,565,075,434 1,811,916,935
Pan African Resources PLC
Summarised consolidated statement of profit or loss and other comprehensive
income for the period ended 30 June 2017
30 June 2017 30 June 2016 30 June 2017 30 June 2016
(Audited) (Audited) (Unaudited) (Unaudited)
Continuing operations GBP GBP ZAR ZAR
Gold sales 169,584,586 161,312,220 2,925,334,113 3,460,147,123
Realisation costs (1,826,043) (956,709) (31,499,250) (20,521,416)
On-mine revenue 167,758,543 160,355,511 2,893,834,863 3,439,625,707
Gold cost of production (134,006,583) (100,487,340) (2,311,613,568) (2,155,453,481)
Mining depreciation (10,493,064) (9,995,526) (181,005,351) (214,404,023)
Mining profit 23,258,896 49,872,645 401,215,944 1,069,768,203
Other expenses (2,002,545) (12,167,011) (34,543,908) (260,982,390)
Profit on disposal of investment 222,571 - 4,582,844 -
Profit on disposal of subsidiary 5,385,915 - 91,345,123 -
Royalty costs (1,335,031) (2,783,423) (23,029,288) (59,704,418)
Net income before finance income and finance costs 25,529,806 34,922,211 439,570,715 749,081,395
Finance income 291,912 433,344 5,035,474 9,295,228
Finance costs (2,815,223) (1,448,248) (48,562,604) (31,064,929)
Profit before taxation 23,006,495 33,907,307 396,043,585 727,311,694
Taxation (242,942) (8,578,135) (4,190,728) (184,000,970)
Profit after taxation from continuing operations 22,763,553 25,329,172 391,852,857 543,310,724
Discontinued operations
(Loss)/profit for the period from discontinued (4,853,517) 172,645 (81,997,446) 3,703,294
operations (including impairments)
Profit after taxation 17,910,036 25,501,817 309,855,411 547,014,018
Other comprehensive income:
Fair-value movement on available-for-sale investment (94,938) 388,188 (1,697,487) 7,644,429
Recycling of gain on available-for-sale investment (222,571) - (4,582,845) -
Foreign currency translation differences 21,681,108 (2,181,333) - -
Total comprehensive income for the year 39,273,635 23,708,672 303,575,079 554,658,447
Profit attributable to:
Owners of the parent 17,910,036 25,501,817 309,855,411 547,014,018
Total comprehensive income attributable to:
Owners of the parent 39,273,635 23,708,672 303,575,079 554,658,447
Earnings per share 1.14 1.41 19.81 30.20
Diluted earnings per share 1.14 1.41 19.80 30.09
Weighted average number of shares in issue 1,564,346,115 1,811,427,377 1,564,346,115 1,811,427,377
Diluted number of shares in issue 1,565,075,434 1,811,916,935 1,565,075,434 1,811,916,935
Summarised consolidated statement of financial position as at 30 June 2017
30 June 2017 30 June 2016 30 June 2017 30 June 2016
(Audited) (Audited) (Unaudited) (Unaudited)
GBP GBP ZAR ZAR
ASSETS
Non-current assets
Property, plant and 224,687,447 190,725,199 3,810,699,097 3,772,544,439
equipment and mineral
rights
Other intangible assets 72,426 123,235 1,228,340 2,437,592
Deferred taxation 762,503 1,117,092 12,932,051 22,096,084
Long-term inventory 684,432 186,861 11,607,974 3,696,114
Long-term receivables 2,535,378 - 43,000,000 -
Goodwill 21,000,714 21,000,714 303,491,812 303,491,812
Investments 7,522,632 1,269,228 127,583,839 25,105,331
Rehabilitation trust 18,904,554 16,253,708 320,621,235 321,498,339
fund
276,170,086 230,676,037 4,631,164,348 4,450,869,711
Current assets
Inventories 5,047,416 4,398,813 85,604,171 87,008,537
Current tax asset 1,068,496 848,946 18,121,694 16,792,156
Trade and other 13,744,108 14,042,357 233,100,052 277,757,811
receivables
Cash and cash 9,447,144 2,658,947 160,223,562 52,593,979
equivalents
29,307,164 21,949,063 497,049,479 434,152,483
Assets held-for-sale 5,610,475 66,873 95,153,662 1,322,750
TOTAL ASSETS 311,087,725 252,691,973 5,223,367,489 4,886,344,944
EQUITY AND LIABILITIES
Capital and reserves
Share capital 22,346,875 19,432,065 318,766,602 269,660,040
Share premium 145,400,890 108,936,082 2,261,421,031 1,638,563,371
Translation reserve (36,902,740) (58,583,848) - -
Share option reserve 1,221,395 1,035,888 17,157,178 13,957,178
Retained earnings 131,297,799 126,620,650 1,867,141,585 1,789,877,978
Realisation of equity (10,701,093) (10,701,093) (140,624,131) (140,624,130)
reserve
Treasury capital (25,376,743) (25,376,743) (548,619,802) (548,619,802)
reserve
Merger reserve (10,705,308) (10,705,308) (154,707,759) (154,707,759)
Other reserves - 317,509 - 6,280,332
Equity attributable to 216,581,075 150,975,202 3,620,534,704 2,874,387,208
owners of the parent
Total equity 216,581,075 150,975,202 3,620,534,704 2,874,387,208
Non-current liabilities
Long-term provisions 11,655,325 10,432,986 197,674,310 206,364,460
Long-term liabilities 12,290,302 18,456,309 208,443,509 362,640,753
Deferred taxation 38,947,226 40,616,337 660,544,960 803,391,140
62,892,853 69,505,632 1,066,662,779 1,372,396,353
Current liabilities
Trade and other 27,056,598 18,743,235 458,879,917 370,741,187
payables
Financial instrument - 5,945,399 - 117,600,000
liabilities
Current portion of 4,145,679 6,980,711 70,310,720 140,503,506
long-term liabilities
Current tax liability 48,686 541,794 825,707 10,716,690
31,250,963 32,211,139 530,016,344 639,561,383
Liabilities directly 362,834 - 6,153,662 -
associated with assets
held-for-sale
TOTAL EQUITY AND 311,087,725 252,691,973 5,223,367,489 4,886,344,944
LIABILITIES
Summarised unaudited consolidated statement of changes in equity for the year
ended 30 June 2017
GROUP Share Share Translation Share Retained
capital premium reserve option earnings
reserve
GBP GBP GBP GBP GBP
Balance at 30 June 2015 18,314,947 94,846,046 (56,402,515) 1,035,888 110,850,201
Issue of shares 1,117,118 15,011,206 - - -
Share issue costs - (921,170) - - -
Profit for the year - - - - 25,501,817
Total other - - (2,181,333) - -
comprehensive income
Dividends paid - - - - (9,731,368)
Share buyback - - - - -
Balance at 30 June 2016 19,432,065 108,936,082 (58,583,848) 1,035,888 126,620,650
Issue of shares 2,914,810 37,892,528 - - -
Share issue costs - (1,427,720) - - -
Profit for the year - - - - 17,910,036
Total other - - 21,681,108 - -
comprehensive income
Dividends paid - - - - (17,067,953)
Reciprocal dividends - - - - 3,835,066
Share based payment - - - - 185,507 -
charge for the year
Balance at 30 June 2017 22,346,875 145,400,890 (36,902,740) 1,221,395 131,297,799
Summarised unaudited consolidated statement of changes in equity for the year
ended 30 June 2017
Group Share Share Translation Share Retained
Capital Premium reserve option earnings
reserve
ZAR ZAR ZAR ZAR ZAR
Balance at 30 June 2015 244,752,779 1,323,632,626 - 13,957,178 1,452,863,960
Issue of shares 24,907,261 334,689,839 - - -
Share issue costs - (19,759,094) - - -
Profit for the year - - - - 547,014,018
Total other - - - - -
comprehensive income
Dividends paid - - - - (210,000,000)
Share buyback - - - - -
Balance at 30 June 2016 269,660,040 1,638,563,371 - 13,957,178 1,789,877,978
Issue of shares 49,106,562 646,861,194 - - -
Share issue costs - (24,003,534) - - -
Profit for the year - - - - 309,855,411
Total other - - - - -
comprehensive income
Dividends paid - - - - (300,000,000)
Reciprocal dividends - - - - 67,408,196
Share based payment - - - - 3,200,000 -
charge for the year
Balance at 30 June 2017 318,766,602 2,261,421,031 - 17,157,178 1,867,141,585
GROUP Realisation Treasury Merger Other Total
of equity capital reserve reserves
reserve reserve
GBP GBP GBP GBP GBP
Balance at 30 June 2015 (10,701,093) - (10,705,308) (70,679) 147,167,487
Issue of shares - - - - 16,128,324
Share issue costs - - - - (921,170)
Profit for the year - - - - 25,501,817
Total other - - - 388,188 (1,793,145)
comprehensive income
Dividends paid - - - - (9,731,368)
Share buyback - (25,376,743) - - (25,376,743)
Balance at 30 June 2016 (10,701,093) (25,376,743) (10,705,308) 317,509 150,975,202
Issue of shares - - - - 40,807,338
Share issue costs - - - - (1,427,720)
Profit for the year - - - - 17,910,036
Total other - - - (317,509) 21,363,599
comprehensive income
Dividends paid - - - - (17,067,953)
Reciprocal dividends - - - - 3,835,066
Share based payment - - - - - 185,507
charge for the year
Balance at 30 June 2017 (10,701,093) (25,376,743) (10,705,308) - 216,581,075
Summarised unaudited consolidated statement of changes in equity for the year
ended 30 June 2017
Group Realisation Treasury Merger Other Total
of equity capital reserve reserves
reserve reserve
ZAR ZAR ZAR ZAR ZAR
Balance at 30 June 2015 (140,624,130) - (154,707,759) (1,364,097) 2,738,510,557
Issue of shares - - - - 359,597,100
Share issue costs - - - - (19,759,094)
Profit for the year - - - - 547,014,018
Total other - - - 7,644,429 7,644,429
comprehensive income
Dividends paid - - - - (210,000,000)
Share buyback - (548,619,802) - - (548,619,802)
Balance at 30 June 2016 (140,624,130) (548,619,802) (154,707,759) 6,280,332 2,874,387,208
Issue of shares - - - - 695,967,756
Share issue costs - - - - (24,003,534)
Profit for the year - - - - 309,855,411
Total other - - - (6,280,332) (6,280,332)
comprehensive income
Dividends paid - - - - (300,000,000)
Reciprocal dividends - - - - 67,408,196
Share based payment - - - - - 3,200,000
charge for the year
Balance at 30 June 2017 (140,624,130) (548,619,802) (154,707,759) - 3,620,534,705
Summarised consolidated statement of cash flows for the year ended 30
June 2017
30 June 2017 30 June 2016 30 June 2017 30 June 2016
(Audited) (Audited) (Unaudited) (Unaudited)
GBP GBP ZAR ZAR
NET CASH GENERATED FROM OPERATIONS 29,945,218 51,056,970 516,393,818 1,082,923,023
Income taxes paid (6,324,864) (9,998,969) (105,790,084) (208,209,553)
Royalties paid (1,678,474) (2,916,283) (28,283,550) (61,423,325)
Net finance costs (2,141,151) (652,680) (43,272,552) (21,866,695)
NET CASH GENERATED FROM OPERATIONS AFTER TAX, ROYALTIES 19,800,729 37,489,038 339,047,632 791,423,450
AND FINANCE COSTS
Dividends paid net of PAR Gold reciprocal dividend (13,290,429) (9,024,833) (232,591,804) (210,000,000)
NET CASH GENERATED FROM OPERATING ACTIVITIES 6,510,300 28,464,205 106,455,828 581,423,450
INVESTING ACTIVITIES
Additions to property, plant and equipment and mineral (35,518,177) (14,079,918) (612,688,544) (302,014,225)
rights
Additions to other intangible assets (22,817) (17,248) (393,593) (369,970)
Proceeds on disposal of investment 1,381,005 - 23,407,843 -
Proceeds on disposal of property, plant and equipment 396,604 14,620 7,000,000 313,600
Proceeds on disposal of Uitkomst Colliery net of cash 6,586,262 - 111,702,967 -
Acquisition of Uitkomst Colliery - (5,700,402) - (120,013,429)
Shanduka Gold Proprietary Limited transaction - (25,299,095) - (546,941,145)
Increase in long term-loans receivable (1,207,492) - (20,000,000) -
NET CASH USED IN INVESTING ACTIVITIES (28,384,615) (45,082,043) (490,971,327) (969,025,169)
FINANCING ACTIVITIES
Proceeds from borrowings 47,750,265 38,061,147 817,000,000 840,000,000
Borrowings repaid (53,964,004) (38,131,957) (915,000,000) (803,889,110)
Settlement of cash settled share option costs (3,299,545) - (58,013,879) -
Shares issued 40,807,338 16,128,324 695,967,756 359,597,100
Share issue costs (1,427,720) (921,170) (24,003,534) (19,759,094)
Repayment of financial instruments (1,389,720) - (22,924,978) -
NET CASH FROM FINANCING ACTIVITIES 28,476,614 15,136,344 493,025,365 375,948,896
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 6,602,297 (1,481,494) 108,509,866 (11,652,823)
Cash and cash equivalents at the beginning of the year 2,658,947 3,328,850 52,593,979 64,246,802
Cash and cash equivalents attributed to discontinued (51,903) - (880,283) -
operations
Effect of foreign exchange rate changes 237,801 811,591 - -
CASH AND CASH EQUIVALENTS AT THE OF THE YEAR 9,447,144 2,658,947 160,223,562 52,593,979
Summarised audited consolidated segment report for the year ended 30 June 2017
30 June 2017
Continuing operations Discontinued operations
Barberton Evander Corporate Funding Uitkomst Phoenix Reclass Group
Mines Mines Company Colliery Platinum journal
(Note 3) (Note 4)
GBP GBP GBP GBP GBP GBP GBP GBP
Revenue
Gold sales 97,343,927 72,240,659 - - - - - 169,584,586
(Note 1)
Platinum - - - - - 4,766,689 (4,766,689) -
sales
Coal sales - - - - 25,089,705 - (25,089,705) -
Realisation (606,367) (1,219,676) - - - - - (1,826,043)
costs
On - mine 96,737,560 71,020,983 - - 25,089,705 4,766,689 (29,856,394) 167,758,543
revenue
Gold cost of (61,229,000) (72,777,583) - - - - - (134,006,583)
production
Platinum cost - - - - - (5,007,705) 5,007,705 -
of production
Coal cost of - - - - (21,741,484) - 21,741,484 -
production
Depreciation (4,749,422) (5,743,642) - - (706,407) (870,020) 1,576,427 (10,493,064)
Mining profit 30,759,138 (7,500,242) - - 2,641,814 (1,111,036) (1,530,778) 23,258,896
Other income/ 4,705,042 (1,255,689) (5,542,295) 90,397 156,333 (117,318) (39,015) (2,002,545)
(expenses)
(Note 2)
Profit on - - 222,571 - - - - 222,571
disposal of
investment
Profit on - - 5,385,915 - - - - 5,385,915
disposal of
subsidiary
Impairment - - - - - (5,950,757) 5,950,757 -
costs
Royalty costs (1,015,352) (319,679) - - (70,218) - 70,218 (1,335,031)
Net income / 34,448,828 (9,075,610) 66,191 90,397 2,727,929 (7,179,111) 4,451,182 25,529,806
(loss) before
finance
income and
finance costs
Finance 9,949 51,811 51,496 178,656 102,850 180.0 (103,030) 291,912
income
Finance costs (18,652) (12,244) (14,202) (2,770,125) - - - (2,815,223)
Profit / 34,440,125 (9,036,043) 103,485 (2,501,072) 2,830,779 (7,178,931) 4,348,152 23,006,495
(loss) before
taxation and
inter-company
charges from
continuing
operations
Taxation (5,654,821) 6,006,087 (531,248) (62,960) (782,022) 276,657 505,365 (242,942)
Profit / 28,785,304 (3,029,956) (427,763) (2,564,032) 2,048,757 (6,902,274) 4,853,517 22,763,553
(loss) after
taxation from
continuing
operations
before
inter-company
charges
Loss/(profit) - - - - - - (4,853,517) (4,853,517)
after
taxation from
discontinued
operations
Profit / 28,785,304 (3,029,956) (427,763) (2,564,032) 2,048,757 (6,902,274) - 17,910,036
(loss) after
taxation
before
inter-company
charges after
discontinued
operations
Inter-company
transactions
Management (2,805,797) (2,075,362) 5,673,540 (92,522) (438,989) (260,870) - -
fees
inter-company (760,141) (1,513,938) (654,122) 2,778,372 28,225 121,604 - -
interest
charges
Profit / 25,219,366 (6,619,256) 4,591,655 121,818 1,637,993 (7,041,540) - 17,910,036
(loss) after
taxation
after
inter-company
charges after
discontinued
operations
Segmental 73,762,949 190,009,717 19,611,819 1,092,051 - 5,610,475 - 290,087,011
assets (total
assets
excluding
goodwill)
Segmental 25,157,858 52,481,513 4,589,589 11,914,856 - 362,834 - 94,506,650
liabilities
Goodwill 21,000,714 - - - - - - 21,000,714
Net assets 48,605,091 137,528,204 15,022,230 (10,822,805) - 5,247,641 - 195,580,361
(excluding
goodwill)
Capital 11,216,853 23,054,756 79,285 - 875,298 314,802 - 35,540,994
expenditure
Adjusted 39,198,250 (3,331,968) (5,542,295) 90,397 3,434,336 (358,334) (3,076,002) 30,414,384
EBITDA
Note 1: All gold sales were made in the Republic of South Africa and the
majority of revenue was generated from selling gold to South African
institutions through the group's Funding Company.
Note 2: Other expenses exclude inter-management fees and dividend received.
Note 3: Uitkomst Colliery disposal was effective on 30 June 2017. The disposal
of Pan African Resources Coal Holdings Proprietary Limited and Uitkomst
Colliery was completed on 30 June 2017 and this business was classified as a
discontinued operation.
Note 4: Phoenix Platinum was classified as held for sale and as a discontinued
operation at 30 June 2017.
30 June 2016
Continuing operations Discontinued operations
Group Barberton Evander Corporate Funding Phoenix Uitkomst Reclass Group
Mines Mines Company Platinum Colliery journal
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Revenue
Gold sales 169,584,586 89,596,245 71,715,975 - - - - - 161,312,220
(Note 1)
Platinum - - - - - 3,480,338 - (3,480,338) -
sales
Coal sales - - - - - - 4,567,974 (4,567,974) -
Realisation (1,826,043) (398,937) (557,772) - - - - - (956,709)
costs
On - mine 167,758,543 89,197,308 71,158,203 - - 3,480,338 4,567,974 (8,048,312) 160,355,511
revenue
Gold cost of (134,006,583) (45,461,824) (55,025,516) - - - - - (100,487,340)
production
Platinum cost - - - - - (3,456,007) - 3,456,007 -
of production
Coal cost of - - - - - - (4,279,735) 4,279,735 -
production
Depreciation (10,493,064) (3,562,121) (6,433,405) - - (311,870) (148,733) 460,603 (9,995,526)
Mining profit 23,258,896 40,173,363 9,699,282 - - (287,539) 139,506 148,033 49,872,645
Other income/ (2,002,545) (7,253,912) 873,481 (5,867,355) 80,775 (249,773) 233,889 15,884 (12,167,011)
(expenses)
(Note 2)
Profit on 222,571 - - - - - - - -
disposal of
investment
Profit on 5,385,915 - - - - - - - -
disposal of
subsidiary
Impairment - - - - - - - - -
costs
Royalty costs (1,335,031) (2,450,505) (332,918) - - - (16,524) 16,524 (2,783,423)
Net income / 25,529,806 30,468,946 10,239,845 (5,867,355) 80,775 (537,312) 356,871 180,441 34,922,211
(loss) before
finance
income and
finance costs
Finance 291,912 13,380 27,840 79,754 312,370 448 8,824 (9,272) 433,344
income
Finance costs (2,815,223) (6,048) (7,383) (7) (1,434,811) (489) - 489 (1,448,249)
Profit / 23,006,495 30,476,278 10,260,302 (5,787,608) (1,041,666) (537,353) 365,695 171,658 33,907,306
(loss) before
taxation and
inter-company
charges from
continuing
operations
Taxation (242,942) (8,492,721) (757,683) 701,414 (29,144) 118,266 226,037 (344,303) (8,578,134)
Profit / 22,763,553 21,983,557 9,502,619 (5,086,194) (1,070,810) (419,087) 591,732 (172,645) 25,329,172
(loss) after
taxation from
continuing
operations
before
inter-company
charges
Loss/(profit) (4,853,517) - - - - - - 172,645 172,645
after
taxation from
discontinued
operations
Profit / 17,910,036 21,983,557 9,502,619 (5,086,194) (29,144) (419,087) 591,732 - 25,501,817
(loss) after
taxation
before
inter-company
charges after
discontinued
operations
Inter-company
transactions
Management - (1,439,394) (1,137,529) 2,749,883 - (107,226) (65,734) - -
fees
inter-company - (331,029) (750,800) (135,868) 1,130,359 79,849 7,489 - -
interest
charges
Profit / 17,910,036 20,213,134 7,614,290 (2,472,194) 59,549 (446,464) 533,502 - 25,501,817
(loss) after
taxation
after
inter-company
charges after
discontinued
operations
Segmental 290,087,011 56,651,503 146,201,423 3,180,048 632,954 9,991,120 15,034,211 - 231,691,259
assets (total
assets
excluding
goodwill)
Segmental 94,506,650 27,035,796 48,372,120 5,154,888 15,725,303 883,249 4,545,415 - 101,716,771
liabilities
Goodwill 21,000,714 21,000,714 - - - - - - 21,000,714
Net assets 195,580,361 29,615,707 97,829,303 (1,974,840) (15,092,349) 9,107,871 10,488,796 - 129,974,488
(excluding
goodwill)
Capital 35,540,994 6,513,408 7,179,831 46,950 - 316,726 40,251 - 14,097,166
expenditure
Adjusted 30,414,384 34,031,067 16,673,250 (5,867,355) 80,775 (225,442) 505,604 (280,162) 44,917,737
EBITDA
Note 2: Other expenses exclude inter-management fees and dividend received.
Note 3: Uitkomst Colliery disposal was effective on 30 June 2017. The disposal
of Pan African Resources Coal Holdings Proprietary Limited and Uitkomst
Colliery was completed on 30 June 2017 and this business was classified as a
discontinued operation.
Note 4: Phoenix Platinum was classified as held for sale and as a discontinued
operation at 30 June 2017.
Summarised unaudited consolidated ZAR segment report for the year ended 30 June
2017
30 June 2017
Continuing operations Discontinued operations
Barberton Evander Corporate Funding Uitkomst Phoenix Reclass Group
Mines Mines Company Colliery Platinum journal
(Note 3) (Note 4)
ZAR ZAR ZAR ZAR ZAR ZAR ZAR ZAR
million million million million million million million million
Revenue
Gold sales 1,679.2 1,246.1 - - - - - 2,925.3
(Note 1)
Platinum - - - - - 82.2 (82.2) -
sales
Coal sales - - - - 432.8 (432.8) -
Realisation (10.5) (21.0) - - - - - (31.5)
costs
On - mine 1,668.7 1,225.1 - - 432.8 82.2 (515.0) 2,893.8
revenue
Gold cost of (1,056.2) (1,255.4) - - - - - (2,311.6)
production
Platinum cost - - - - (86.4) 86.4 -
of production
Coal cost of - - - - (375.0) - 375.0 -
production
Depreciation (81.9) (99.1) - - (12.2) (15.0) 27.2 (181.0)
Mining Profit 530.6 (129.4) - - 45.6 (19.2) (26.4) 401.2
Other income/ 81.3 (21.8) (95.6) 1.6 2.7 (2.0) (0.7) (34.5)
(expenses)
(Note 2)
Profit on - - 4.6 - - - - 4.6
disposal of
investment
Profit on - - 91.3 - - - 91.3
disposal of
subsidiary
Impairment - - - - - (100.9) 100.9 -
costs
Royalty costs (17.5) (5.5) - - (1.2) - 1.2 (23.0)
Net income / 594.4 (156.7) 0.3 1.6 47.1 (122.1) 75.0 439.6
(loss) before
finance
income and
finance costs
Finance 0.1 0.9 0.9 3.1 1.8 - (1.8) 5.0
income
Finance costs (0.4) (0.2) (0.2) (47.8) - - - (48.6)
Profit / 594.1 (156.0) 1.0 (43.1) 48.9 (122.1) 73.2 396.0
(loss) before
taxation and
inter-company
charges
Taxation (97.5) 103.6 (9.2) (1.1) (13.5) 4.8 8.7 (4.2)
Profit / 496.6 (52.4) (8.2) (44.2) 35.4 (117.3) 81.9 391.8
(loss) after
taxation
before
inter-company
charges
(Loss)/profit - - - - - - (81.9) (81.9)
after
taxation from
discontinued
operations
Profit / 496.6 (52.4) (8.2) (44.2) 35.4 (117.3) - 309.9
(loss) after
taxation
before
inter-company
charges after
discontinued
operations
Inter-company
transactions
Management (48.4) (35.8) 97.9 (1.6) (7.6) (4.5) - -
fees
inter-company (13.1) (26.1) (11.3) 47.9 0.5 2.1 - -
interest
charges
Profit / 435.1 (114.3) 78.4 2.1 28.3 (119.7) - 309.9
(loss) after
taxation
after
inter-company
charges after
discontinued
operations
Segmental 1,251.0 3,222.6 332.6 18.5 - 95.2 - 4,919.9
assets (total
assets
excluding
goodwill)
Segmental 426.7 890.1 77.8 202.0 - 6.2 - 1,602.8
liabilities
Goodwill 303.5 - - - - - - 303.5
Net assets 824.3 2,332.5 254.8 (183.5) - 89.0 - 3,317.1
(excluding
goodwill)
Capital 193.5 397.7 1.4 - 15.1 5.4 - 613.1
expenditure
Adjusted 676.2 (57.6) (95.6) 1.6 59.3 (6.2) (53.1) 524.6
EBITDA
Note 1: All gold sales were made in the Republic of South Africa and the
majority of revenue was generated from selling gold to South African
institutions through the group's Funding Compan
Note 2: Other expenses exclude inter-management fees and dividend received. y.
Note 3: Uitkomst Colliery disposal was effective on 30 June 2017. The disposal
of Pan African Resources Coal Holdings Proprietary Limited and Uitkomst
Colliery was completed on 30 June 2017 and this business was classified as a
discontinued operation.
Note 4: Phoenix Platinum was classified as held for sale and as a discontinued
operation at 30 June 2017.
Summarised unaudited consolidated ZAR segment report for the year ended 30 June
2017
30 June 2016
Continuing operations Discontinued
operations
Barberton Evander Corporate Funding Phoenix Uitkomst Reclass Group
Mines Mines Company Platinum Colliery journal
ZAR ZAR ZAR ZAR ZAR ZAR ZAR ZAR
million million million million million million million million
Revenue
Gold sales 1,921.8 1,538.3 - - - - - 3,460.1
(Note 1)
Platinum - - - - 74.7 - (74.7) -
sales
Coal sales - - - - - 98.0 (98.0) -
Realisation (8.6) (11.9) - - - - - (20.5)
costs
On - mine 1,913.2 1,526.4 - - 74.7 98.0 (172.7) 3,439.6
revenue
Gold cost of (975.2) (1,180.3) - - - - - (2,155.5)
production
Platinum cost - - - - (74.1) - 74.1 -
of production
Coal cost of - - - - - (91.8) 91.8 -
production
Depreciation (76.4) (138.0) - - (6.7) (3.2) 9.9 (214.4)
Mining Profit 861.6 208.1 - - (6.1) 3.0 3.1 1,069.7
Other income/ (155.6) 18.7 (125.7) 1.7 (5.4) 5.0 0.4 (260.9)
(expenses)
(Note 2)
Profit on - - - - - - - -
disposal of
investment
Profit on - -
disposal of
subsidiary
Impairment - - - - - - - - costs Royalty costs (52.6) (7.1) - - - (0.4) 0.4 (59.7) Net income / 653.4 219.7 (125.7) 1.7 (11.5) 7.6 3.9 749.1 (loss) before finance income and finance costs Finance 0.3 0.6 1.7 6.7 - 0.2 (0.2) 9.3 income Finance costs (0.1) (0.2) - (30.8) - - - (31.1) Profit / 653.6 220.1 (124.0) (22.4) (11.5) 7.8 3.7 727.3 (loss) before taxation and inter-company charges Taxation (182.2) (16.3) 15.1 (0.6) 2.5 4.9 (7.4) (184.0) Profit / 471.4 203.8 (108.9) (23.0) (9.0) 12.7 (3.7) 543.3 (loss) after taxation before inter-company charges (Loss)/profit - - - - - - 3.7 3.7 after taxation from discontinued operations Profit / 471.4 203.8 (108.9) (23.0) (9.0) 12.7 - 547.0 (loss) after taxation before inter-company charges after discontinued operations Inter-company transactions Management (30.9) (24.4) 59.0 - (2.3) (1.4) - - fees inter-company (7.1) (16.1) (2.8) 24.2 1.7 0.1 - - interest charges Profit / 433.4 163.3 (52.7) 1.2 (9.6) 11.4 - 547.0 (loss) after taxation after inter-company charges after discontinued operations Segmental 1,120.6 2,891.9 61.6 12.5 198.6 297.4 - 4,582.6 assets (total assets excluding goodwill) Segmental 534.8 956.8 98.9 311.0 17.5 92.9 - 2,011.9 liabilities Goodwill 303.5 - - - - - - 303.5 Net assets 585.8 1,935.1 (37.3) (298.5) 181.1 204.5 - 2,570.7 (excluding goodwill) Capital 139.7 154.0 1.0 - 6.8 0.9 - 302.4 expenditure Adjusted 729.8 357.7 (125.7) 1.7 (4.8) 10.8 (6.0) 963.5 EBITDA Note 1: All gold sales were made in the Republic of South Africa and the majority of revenue was generated from selling gold to South African institutions through the group's Funding Compan Note 2: Other expenses exclude inter-management fees and dividend received. Note 3: Uitkomst Colliery disposal was effective on 30 June 2017. The disposal of Pan African Resources Coal Holdings Proprietary Limited and Uitkomst Colliery was completed on 30 June 2017 and this business was classified as a discontinued operation. Note 4: Phoenix Platinum was classified as held for sale and as a discontinued operation at 30 June 2017. END
(END) Dow Jones Newswires
September 20, 2017 02:00 ET (06:00 GMT)
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