Pan African Resources Plc Interim Financial Results to 31 Dec 2022

 
TIDMPAF 
 
Pan African Resources PLC                 Pan African Resources Funding 
(Incorporated and registered in England   Company Limited 
and Wales under the Companies Act 1985    Incorporated in the Republic of 
with registered number 3937466 on 25      South Africa with limited 
February 2000)                            liability 
Share code on AIM: PAF                    Registration number: 2012/021237/ 
Share code on JSE: PAN                    06 
ISIN: GB0004300496                        Alpha code: PARI 
ADR ticker code: PAFRY                    (PAR Funding Company) 
("Pan African" or the "Company" or the 
"Group") 
 
 (Key features are reported in United States dollar (US$) or South African rand 
(ZAR) where relevant) 
 
UNaudited INTERIM FINANCIAL results for PAN AFRICAN FOR THE SIX MONTHS ended 31 
DECEMBER 2022 - SHORT-FORM ANNOUNCEMENT 
 
Key features 
 
  * Gold production of 92,307oz (2021: 108,085oz), with increased production 
    forecast for the second half of the 2023 financial year as Barberton Mines' 
    continuous operating cycle and other optimisation initiatives are 
    implemented 
  * Full-year production guidance maintained between 195,000oz and 205,000oz 
  * Refocused health and safety initiatives to address the regression in 
    underground mining safety rates 
  * All-in sustaining costs (AISC) for the six months ended 31 December 2022 
    (current reporting period) of US$1,291/oz (2021: US$1,173/oz) 
  * Group operations (excluding Consort and Sheba Mines), which account for 
    more than 85% of gold output, produced at an AISC of US$1,139/oz (2021: 
    US$1,052/oz) 
  * Profit after tax of US$28.9 million (2021: US$46.1 million) and headline 
    earnings of US$29.1 million (2021: US$46.1 million) 
  * Earnings per share and headline earnings per share decreased to US 1.52 
    cents per share (2021: US 2.39 cents per share) 
  * Inaugural sustainability-linked bond issued for US$47.3 million during 
    December 2022 to fund growth projects 
  * Cash returned to shareholders with a net dividend of US$20.0 million (2021: 
    US$21.6 million) 
  * Mintails project construction is planned to commence by June 2023 subject 
    to finalisation of the funding package and permitting 
  * Site clearance completed for Barberton Mines' 8.5MWac solar photovoltaic 
    (PV) renewable energy plant, with construction scheduled to commence by 
    June 2023 
 
This announcement contains inside information. 
 
Cobus Loots, Pan African's chief executive officer, commented: 
 
Overview 
 
"Reduced gold production over the past six months can primarily be attributed 
to the performance of Barberton Mines' underground operations. We believe that 
the tangible measures being implemented at these operations, as detailed in 
this announcement, will result in a significant improvement in production 
during the second half of the financial year and in the years ahead. The 
balance of our portfolio delivered in line with expectations, despite 
disruptions to our electricity supply and inclement weather conditions 
adversely impacting operations. 
 
At our Evander Mines operation alone, electricity issues adversely impacted 
production by approximately 5%, reinforcing our strategic objective to expand 
our renewable energy portfolio in the years ahead.  Given the increased 
production performance expected in the second half of the 2023 financial year, 
we will maintain production guidance of 195,000oz to 205,000oz for the full 
year subject to consistency in Eskom's electricity supply. 
 
Pan African is committed in its resolve to continued value creation for its 
stakeholders by positioning the Group as a sustainable, safe, high-margin and 
long-life gold producer with an attractive pipeline of growth projects. 
 
Health and safety 
 
Regrettably, the Group has seen a regression in its safety performance during 
the current reporting period at its underground operations, following the 
excellent safety records achieved in prior years. The Group has implemented a 
number of programmes to address the identified safety performance shortcomings 
at these underground operations. 
 
Operational overview 
 
Group production for the current reporting period decreased by 14.6% to 
92,307oz (2021: 108,085oz) following the record gold production achieved in the 
previous reporting period. 
 
The decrease in production, mainly attributable to Barberton Mines' underground 
operations, will be addressed by reconfiguring Fairview and Sheba Mines' shift 
cycles to continuous (24-hour) operations and converting Consort Mine to a 
contract mining model. These restructuring plans, together with other 
initiatives to increase mining flexibility, will ensure the sustainability of 
these operations in the future. 
 
The Barberton Tailings Retreatment Plant produced 10,012oz (2021: 9,126oz) for 
the current reporting period at an AISC of US$725/oz (2021: US$814/oz). Gold 
production from Elikhulu, also one of the lowest-cost gold mining operations in 
Southern Africa, remained steady at 25,830oz (2021: 25,900oz) at an AISC of 
US$947/oz (2021: US$937/oz), despite electricity supply disruptions and 
inclement weather conditions during the November and December rainy season. 
Gold production from Elikhulu is expected to increase marginally in the second 
half of the 2023 financial year, as material from the Leslie/Bracken tailings 
storage facility (TSF) is re-treated, following the installation of the 6km 
pipeline and successful commissioning of its pump station in September 2022. 
 
Evander Mines' underground production decreased by 29.8% to 19,173oz (2021: 
27,312oz), despite an increase in processed tonnes by 6.0% to 73,946t (2021: 
69,790t) due to the normalisation of mining face grades in line with planned 
grades and limited mining rates in accordance with geotechnical parameters for 
the shaft pillar's safe extraction. 
 
Financial performance 
 
The Group's AISC increased by 10.1% to US$1,291/oz (2021: US$1,173/oz). 
Importantly, operations which account for over 85% of the Group's total 
production achieved an AISC of US$1,139/oz, resulting in an AISC margin of 
34.0% on the average gold price of US$1,725/oz earned by the Group during the 
current reporting period from these operations. Post the current reporting 
period, spot gold prices have continued to increase. If this increase is 
maintained, it should further benefit operational margins in the second half of 
the financial year. 
 
Despite the current reporting period's decline in production, relative to the 
record production of the previous reporting period, the Group generated profit 
after tax of US$28.9 million (2021: US$46.1 million), which is identical to the 
US$28.9 million profit generated during the second half of the 2022 financial 
year. 
 
The Group has embarked on a number of restructuring initiatives to reduce its 
production cost in real terms, which combined with the electricity cost savings 
from large-scale solar PV renewable energy projects and anticipated increased 
production during the remainder of the 2023 financial year, is expected to 
contribute to reducing unit production cost in the future. Savings at Evander 
Mines' solar PV renewable energy plant currently average approximately 
US$145,000 a month following its full commissioning in May 2022.  We have now 
convincingly demonstrated the business case for renewable energy in the South 
African mining industry and will maintain our strategic objective to expand 
this footprint significantly in the coming years. 
 
Growth projects overview 
 
We are encouraged by the progress made in relation to the Group's growth 
projects. The development of the 24, 25 and 26 Level project at Evander Mines 
is on track, with equipping of the existing ventilation shaft from 17 to 24 
Levels underway.  Hoisting of ore via this vertical shaft will significantly 
streamline ore handling and reduce dependency on the current conveyor belt 
system. 
 
Following the positive definitive feasibility study results for the remining of 
Mogale Gold Proprietary Limited's (Mogale Gold's) TSFs, the Group is in the 
process of completing optimisation and value engineering activities in 
preparation for the construction of the tailings retreatment plant (the 
Mintails project), which is expected to commence by June 2023, subject to 
permitting and finalisation of funding (expected in April 2023) for the 
project's construction. Concept engineering works for the Soweto Cluster's TSFs 
are also underway. This operation is expected to increase current Group gold 
production by up to 25%, or 50,000oz per year, post commissioning. 
 
Processing of the 10,000t bulk sample from the Royal Sheba project at the Sheba 
and Consort metallurgical plants was completed, with recovered grades of 1.22g/ 
t in excess of the planned grade of 0.5g/t, and with recoveries in line with 
expectations. Preliminary mine design work has been completed with further 
optimisation work currently in progress. The Royal Sheba orebody has a Mineral 
Resource of 17.2Mt, with initial mining anticipated to achieve head grades of 
up to 3.13g/t. 
 
Environmental, social and governance 
 
Pan African continues to pioneer and pursue its sustainability commitment 
through adherence to its 'beyond compliance' ESG approach. The Group's 
collaboration and partnerships with numerous specialists in local community 
development, climate change and energy management, biodiversity conservation, 
agriculture, water stewardship and tailings management have positioned the 
Company and its stakeholders as impactful ESG role players in the gold mining 
industry. Pan African's ESG approach has recently been recognised through 
awards in the ESG field. 
 
Outlook for the 2023 financial year 
 
The Group expects its production for the full 2023 financial year to be in line 
with the production achieved in the 2022 financial year. We are positioned for 
further growth as we progress the development of our organic projects and seek 
to commence with the full-scale construction of the Mintails project." 
 
DIRECTORS' RESPONSIBILITY 
 

The information in this announcement has been extracted from the unaudited 
interim financial results for the six months ended 31 December 2022. The 
short-form announcement has not been reviewed by the Company's auditors. The 
unaudited interim financial results have been prepared under the supervision of 
the financial director, Deon Louw. This short-form announcement is the 
responsibility of the directors of Pan African and is only a summary of the 
information contained in the full announcement which was released on SENS on 15 
February 2023. 
 
Any investment decisions should be based on the full announcement and the 
Group's detailed operational and financial summaries. 
 
AVAILABILITY OF FULL ANNOUNCEMENT 
 
The full announcement is accessible via the JSE link at https:// 
senspdf.jse.co.za/documents/2023/jse/isse/pan/INT2022.pdf 
 
and via the Company's website at https://www.panafricanresources.com/wp-content 
/uploads/Pan-African-Resources-interim-results-SENS-announcement-2023.pdf 
 
Copies of the full announcement may also be requested by emailing 
[e-mail] and electronically via the sponsor ([e-mail]) at 
no charge during business hours. 
 
The Company has a dual primary listing on the JSE in South Africa and the AIM 
market of the London Stock Exchange, a secondary listing on the A2X Markets as 
well as a sponsored Level 1 ADR programme in the USA through the Bank of New 
York Mellon. 
 
For further information on Pan African, please visit the Company's website at 
 
www.panafricanresources.com 
 
Rosebank 
 
15 February 2023 
 
Corporate information 
 
Corporate office                              Registered office 
The Firs Office Building                      2nd Floor 
2nd Floor, Office 204                         107 Cheapside 
Cnr. Cradock and Biermann Avenues             London 
Rosebank, Johannesburg                        EC2V 6DN 
South Africa                                  United Kingdom 
Office: + 27 (0)11 243 2900                   Office: + 44 (0)20 7796 8644 
[e-mail]                                [e-mail] 
 
Chief executive officer                       Financial director 
Cobus Loots                                   Deon Louw 
Office: + 27 (0)11 243                        Office: + 27 (0)11 243 
2900                                          2900 
 
Head: investor relations                      Website: www.panafricanresources.com 
Hethen Hira 
Tel: + 27 (0)11 243 2900 
E-mail: [e-mail] 
 
Company secretary                             Nominated adviser and joint broker 
Jane Kirton                                   Ross Allister/David McKeown 
St James's Corporate Services Limited         Peel Hunt LLP 
Office: + 44 (0)20 7796 8644                  Office: [phone] 
 
JSE Sponsor and JSE debt sponsor              Joint broker 
Ciska Kloppers                                Thomas Rider/Nick Macann 
Questco Corporate Advisory Proprietary        BMO Capital Markets Limited 
Limited                                       Office: [phone] 
Office: + 27 (0)11 011 9200 
 
                                              Joint broker 
                                              Matthew Armitt/Jennifer Lee 
                                              Joh. Berenberg, Gossler & Co KG 
                                              Office: [phone] 
 
 
 
END 
 
 

(END) Dow Jones Newswires

February 15, 2023 02:00 ET (07:00 GMT)