Pan African Resources Plc Significan progress on renewable energy developments

 
TIDMPAF 
 
Pan African    Pan African Resources Funding 
Resources PLC  Company Limited 
 
(Incorporated  Incorporated in the Republic of 
and            South Africa with limited 
registered in  liability 
England and 
Wales under    Registration number: 
the Companies  2012/021237/06 
Act 1985 with 
registered     Alpha code: PARI 
number 
3937466 on 25 
February 
2000) 
 
Share code on 
AIM: PAF 
 
Share code on 
JSE: PAN 
 
ISIN: 
GB0004300496 
 
ADR ticker 
code: PAFRY 
 
("Pan 
African" or 
the "Company" 
or the 
"Group") 
 
PAN AFRICAN ANNOUNCES SIGNIFICANT PROGRESS ON ITS RENEWABLE ENERGY DEVELOPMENTS 
 
Pan African is pleased to update shareholders on developments at the Group's 
8.75MWAC (10.465 MWP) Barberton Mines' Fairview solar facility and the 
conclusion of a Power Purchase Agreement (PPA) with Sturdee Energy (Pty) Ltd 
(Sturdee Energy) comprising a 40MW wheeled renewable energy solution. 
 
Highlights 
 
Barberton Mines' Fairview solar facility 
 
  · Engineering, procurement and construction (EPC) agreement entered into with 
JUWI Renewable Energies (JUWI), a leading solar, wind and hybrid project 
developer for the construction of an 8.75MWAC solar photovoltaic (PV) renewable 
energy facility (Fairview solar facility) at Barberton Mines' Fairview 
operation. The plant is expected to provide: 
    · cost savings of approximately ZAR26 million (US$1.4 million at a 
prevailing exchange rate of approximately US$/ZAR: 18.00) in year one with an 
average of R40 million per year (US$2.2 million) per year over the life of the 
plant 
    · a reduction in CO2 emissions of approximately 22,000t/year 
 
Sturdee Energy Power Purchase Agreement 
 
  · A PPA has been entered into for a 40MW wheeled renewable energy solution, 
with the generation capacity available to any of the Group's operations 
 
Other initiatives 
 
  · Pan African has also made significant progress in implementing its renewable 
energy strategy, which aims to achieve long-term sustainability by securing a 
stable energy supply, reducing CO2 emissions and realising all-in sustaining 
cost (AISC) savings through large scale renewable energy projects. The Group's 
ongoing projects include: 
    · A feasibility study being progressed to expand Evander Mines' 10MW solar 
PV renewable energy facility by at least an additional 12MW to secure additional 
capacity for Evander Mines' long-life 24, 25 and 26 Level projects 
    · A feasibility study has also commenced on a solar PV renewable energy 
facility for the Mogale Tailings Retreatment Plant 
 
  · Following the successful implementation of these projects, and based on 
preliminary feasibility studies, Pan African will generate approximately 28% of 
its power requirements through renewable energy, with a cumulative estimated 
reduction of 137,000t in CO2 emissions annually and projected annual cost 
savings of up to ZAR154 million (US$8.6 million) for the Group, at current 
estimated Eskom tariffs and projected future price increases. 
 
In May 2022, Pan African was the first South African mining company to 
successfully commission a utility-scale, grid-tied solar PV plant with Evander 
Mines' 10MWAC (12MWP) solar PV renewable energy facility (Evander solar 
facility). The EPC works for the project were also completed by JUWI. 
 
Fairview Solar PV renewable energy facility 
 
In early 2020, Pan African commenced studies for the development of the 8.75MWAC 
Fairview solar facility at its Barberton operations. This facility is now fully 
permitted, including its water use licence, environmental approvals and its 
registration with the National Energy Regulator of South Africa (NERSA). 
 
To accelerate the site work at the Fairview solar facility, an early works phase 
was undertaken by JUWI and is nearing completion. This phase included various 
activities such as the facility design and conducting specialist studies that 
are essential for completing the detailed design and cost estimation for the 
subsequent EPC work. 
 
The Fairview solar facility's plant is expected to generate approximately ZAR2.2 
million in monthly cost savings in year one. Assuming an estimated annual tariff 
increase rate, by Eskom, of 10% per year, a payback period of approximately 8 
years is estimated. Based on preliminary studies, Fairview's solar facility will 
reduce the Group's carbon emissions by some 22,000t of CO2 per annum. The solar 
facility is expected to have an economic life in excess of 25 years, which is 
sufficient for the mine's current 20-year life of mine, based on current Mineral 
Reserve estimates. 
 
JUWI is one of the world's leading renewable energy companies specialising in 
the development, EPC, operation and maintenance of private and public utility 
scale solar and wind energy projects. JUWI has successfully installed over 400 
MW of renewable power facilities in South Africa (5.5 GW globally) and has 
developed wind and solar sites across South Africa. Additionally, JUWI is listed 
in the top 10 solar EPC contractors globally and is the leading renewable energy 
specialist for mining companies. JUWI was also the EPC provider during the 
construction of Pan African's Evander solar facility. 
 
The construction of Fairview's solar facility will be financed on a ring-fenced 
debt basis similar to the Evander solar facility. Financing Proposals have been 
obtained from a number of interested parties and are expected to be finalised 
and available by June 2023. 
 
Sturdee Energy Power Purchase Agreement 
 
Pan African has also entered into a PPA with Sturdee Energy for a wheeled 
renewable energy solution of 40MW from its Bela-Bela Project (Bela) solar PV 
facility in Limpopo to any of the Group's operations. 
 
The initial PPA term is for 10 years, with the option to extend it for another 5 
years. The indicative tariffs over the extended 15-year period will be 
significantly lower than that expected from Eskom. The Bela solar PV facility is 
expected to provide approximately 112,399 MWh of renewable energy per annum to 
Pan African, resulting in an estimated ZAR646 million NPV10 savings over a 10 
-year period and ZAR884 million over a 15-year period. 
 
There may also be further tariff savings if this 40MW Bela project is scaled up 
to its permitted 75MW of solar power. The resultant economies of scale 
associated with the construction of such a larger project should result in an 
even lower tariff for Pan African. 
 
The Bela solar PV facility has already obtained the key permits required for 
construction. This includes environmental approvals, water use license, and 
rezoning approvals. The facility will be connected to the Eskom grid via a 132 
kV line in the area of Bela Bela. 
 
The PPA is subject to standard terms and conditions typical for agreements of 
this nature and will become effective following the construction of the Bela 
solar PV facility, estimated to take place during the 2025 calendar year. The 
Bela project will be funded by third party financial institutions with no 
upfront contribution from Pan African. 
 
Sturdee Energy is an African independent power producer with a track record of 
developing, owning and operating over 600MW of renewable energy projects in 
South Africa. Its vision is to deliver economic growth and socio-economic 
development to Africa through the production of reliable renewable energy. 
Further, Sturdee Energy's focus is delivering renewable energy to corporate and 
industrial customers on short and long term power purchase agreements through 
onsite or wheeled power. 
 
Pan African's renewable energy roadmap to decarbonisation 
 
Pan African has embarked on a renewable energy strategy that includes: 
 
  · The construction of its 10MWAC Evander solar PV facility, the first utility 
-scale, grid-tied solar PV plant to be commissioned in South Africa 
  · The construction of an 8.75 MWAC solar PV facility at Fairview Mines 
  · The entering into of the 40MWAC Sturdee Energy PPA for the provision of 
wheeled power over a period of up to 15 years 
  · The development and construction of a second solar PV facility with a 
minimum output of 12MWAC at Evander Mines 
  · The construction of a solar PV facility at its Mogale operations. 
 
Cobus Loots, Chief Executive Officer of Pan African Resources, commented: 
 
"Our solar PV renewable energy initiatives are key components in progressing Pan 
African's renewable energy strategy and in achieving our sustainability targets. 
In addition to measurably reducing the Group's carbon emissions, these projects 
will assist in stabilising the electricity supply to our operations, while also 
realising commensurate cost savings that will assist in reducing our overall 
AISC per ounce of production in the longer term." 
 
Certain information communicated in this announcement was, prior to its 
publication, inside information for the purposes of Article 7 of Regulation 
596/2014. 
 
Rosebank 
 
15 May 2023 
 
For further information on Pan African, please visit the Company's website at 
 
www.panafricanresources.com 
 
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|Corporate office                              |Registered office 
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|The Firs Office Building                      |2nd Floor 
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|2nd Floor, Office 204                         |107 Cheapside 
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|Cnr. Cradock and Biermann Avenues             |London 
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|Rosebank, Johannesburg                        |EC2V 6DN 
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|South Africa                                  |United Kingdom 
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|Office: + 27 (0)11 243 2900                   |Office: + 44 (0)20 7796 8644 
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|[e-mail]                                |[e-mail] 
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|Chief executive officer                       |Financial director 
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|Cobus Loots                                   |Deon Louw 
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|Office: + 27 (0)11 243                        |Office: + 27 (0)11 243 
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|2900 
|2900                                         | 
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|Head: Investor relations                      |Website: 
www.panafricanresources.com         | 
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|Hethen Hira                                   | 
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|Tel: + 27 (0)11 243 2900                      | 
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|E-mail: [e-mail]                       | 
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|Company secretary                             |Nominated adviser and joint 
broker           | 
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|Jane Kirton                                   |Ross Allister/David McKeown 
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|St James's Corporate Services Limited         |Peel Hunt LLP 
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|Office: + 44 (0)20 7796 8644                  |Office: [phone] 
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|JSE Sponsor and JSE debt sponsor              |Joint broker 
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|Ciska Kloppers                                |Thomas Rider/Nick Macann 
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|Questco Corporate Advisory Proprietary        |BMO Capital Markets Limited 
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|Limited                                       | 
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|Office: + 27 (0)11 011                        | 
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|9200 (https://www.google.co.za/search?q=questc| 
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|                                              |Joint broker 
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|                                              |Matthew Armitt/Jennifer Lee 
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|                                              |Joh. Berenberg, Gossler & Co KG 
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(END) Dow Jones Newswires

May 15, 2023 03:45 ET (07:45 GMT)