Pan African Resources Plc Operational Update for the 6 months ended 31 Dec 2020

 
TIDMPAF 
 
Pan African Resources PLC 
 
(Incorporated and registered in England and Wales under Companies Act 1985 with 
registered number 3937466 on 25 February 2000) 
 
Share code on AIM: PAF 
 
Share code on JSE: PAN 
 
ISIN: GB0004300496 
 
ADR ticker code: PAFRY 
 
(Pan African or the Company or the Group) 
 
OPERATIONAL UPDATE FOR THE SIX MONTHSED 31 DECEMBER 2020 
 
Pan African is pleased to provide shareholders with an operational update for 
the six months ended 31 December 2020 (Current Reporting Period). 
 
Key Operational Results for the Current Reporting Period 
 
  * Industry leading safety performance maintained with improvements in 
    reportable rates across all Group operations 
  * Group gold production increased by 5.9% to 98,386oz (2019: 92,941oz) 
  * Gold production from Barberton Mines for the period was 52,354oz, while 
    Elikhulu and Evander Mines produced 26,863oz and 19,169oz respectively 
  * Operations have continued to implement and maintain stringent policies and 
    protocols to mitigate the effects of the ongoing COVID-19 pandemic on 
    employees and production 
  * ESG projects, including the 10MW renewable energy solar photovoltaic plant 
    at Evander Mines and large-scale agriculture projects in Barberton Mines, 
    are on track for commissioning in Q3 2021 
  * Group net debt decreased by 47.3% to US$65.2 million (2019: 
    US$123.7million) 
  * Pan African is on track to deliver its full year production guidance of 
    approximately 190,000oz 
 
Pan African CEO Cobus Loots commented: 
 
 "Pan African's financial results and increase in gold production for the first 
six months of the year demonstrates a commendable operational and safety 
performance, amidst the challenges of the ongoing COVID-19 pandemic. 
 
Barberton Mine's gold production of 52,354oz for the Current Reporting Period 
deserves recognition and demonstrates the excellent progress that this flagship 
asset and its operating team have made in reserve development and 
infrastructure optimisation. 
 
Group net debt decreased by 47.3% to US$65.2 million relative to the six months 
ended 31 December 2019 (Corresponding Reporting Period), notwithstanding a 
record final Rand dividend distribution for the June 2020 financial year, paid 
in December 2020. 
 
We expect operations at the Evander Mines' 8 Shaft pillar to deliver a 
much-improved performance during the remainder of the 2021 financial year, as 
the pillar mining activities gather momentum. 
 
We have now commenced with early preparation work and limited capital 
expenditure for the execution phase of the Egoli project. We expect to finalise 
the debt funding package within the first quarter of the 2021 calendar year. 
This organic growth project will contribute considerably to our future gold 
production. 
 
The construction of the solar photovoltaic plant at Evander Mines will commence 
during the first quarter of the 2021 calendar year, with first power expected 
to be generated during the third quarter of the 2021 calendar year. This plant 
will be one of the first of its kind in the South African mining sector and 
demonstrates our commitment to ESG initiatives. In conjunction with several 
other projects, it also underpins the Group's profitability and sustainability. 
 
The Group remains on track to produce 190,000 oz of gold for the financial year 
ending 30 June 2021, and we are committed to continue creating value for our 
stakeholders by positioning Pan African as a sustainable, safe, high-margin and 
long-life gold producer. We look forward to presenting our interim results on 
16 February 2021." 
 
Safety 
 
The Group continued to maintain an industry-leading safety performance with a 
focus on new safety initiatives and interventions in its pursuit of a zero-harm 
working environment. 
 
  * The lost-time injury frequency rate ('LTIFR') improved to 1.64 (2019: 1.69) 
    per million man hours 
  * The reportable injury frequency rate ('RIFR') improved to 0.65 (2019: 0.85) 
    per million man hours 
  * Regrettably, the Group experienced one fatality at Barberton Mines (2019: 
    Zero) during July 2020. The details of the fatal accident were discussed in 
    the year end results announcement released on 16 September 2020 
  * Evander Gold Mine achieved an excellent RIFR of 1.01 (2019:3.71) per 
    million man hours 
  * Elikhulu experienced no lost-time and reportable injuries during the past 6 
    months, contributing to the Group's commendable safety performance 
 
Barberton Mines 
 
Barberton Mines' production increased by 10.6% to 52,354oz (2019: 47,356oz) for 
the Current Reporting Period. Underground production increased by 15.3% to 
42,350oz (2019: 36,737oz) and Barberton Tailings Retreatment Plant (BTRP) 
production remained stable at 10,004oz (2019: 10,619oz) for the Current 
Reporting Period. 
 
The increased production from Barberton Mines is principally due to: 
 
  * Improved mining flexibility and available face length with the 
    establishment of three high grade platforms at the Fairview mine, as well 
    as the extension of the strike length on the 256 and 257 platforms through 
    active delineation drilling and systematic development. Fairview mine has 
    now established concurrent multiple platform availability. 
  * Improved recoveries at BTRP following the implementation of an oxygen 
    Carbon-in-leach (CIL) addition project, resulting in the feed sources 
    achieving a higher recovery than previously estimated. 
  * The high-grade section at New Consort's Prince Consort (PC) Shaft 42 Level 
    being successfully extracted, this orebody remains continuous along the 
    planned strike length and up-dip to 41 Level. 
 
Elikhulu tailings retreatment plant (Elikhulu) 
 
Gold production from Elikhulu decreased by 8.3% to 26,863oz (2019: 29,301oz) 
during the Current Reporting Period, as a result of: 
 
  * Lower gold recoveries from the re-mining activities on Kinross Dam 1 and 2 
    during the Current Reporting Period. As per the mine plan, re-mining 
    activities have subsequently moved to Kinross Dam 3, and Kinross Dam 3's 
    material indicates an improvement in recoveries of approximately 5-10%, 
    albeit at a lower head grade, relative to Dam 1 and 2 recoveries. 
  * Plant throughput was constrained by preventative maintenance and 
    improvement work to sections of the lower Elikhulu tailings storage 
    facility compartment and the installation of elevated drains. This work 
    will be complete in February 2021, where after tonnage throughput will 
    again be increased. 
 
Gold production from Elikhulu is expected to increase in the second half of the 
2021 financial year. 
 
Evander Mines' 8 Shaft Pillar project (8 Shaft Pillar) and surface sources 
 
Production from the Evander Mines operations increased by 17.7% to 19,169oz 
(2019: 16,284oz). 
 
Underground production increased by 9.1% to 12,607oz (2019: 11,553oz). The 
ramp-up in production of the 8 Shaft Pillar was slower than expected during the 
Current Reporting Period, as a result of: 
 
  * Difficulties encountered with the initial installation of underground 
    support pseudo-packs, which have now been resolved following the 
    introduction of dry tailings and additional grout ranges for filler use. 
  * Production delays due to fracturing of the shaft lining following the 
    establishment of the pillar mining in the vicinity of the shaft. 
 
Production from the 8 Shaft Pillar is expected to further improve during the 
second half of the 2021 financial year. 
 
The increased production from surface sources of 6,562oz (2019: 4,731oz) also 
contributed positively to the Group's production for the Current Reporting 
Period. 
 
Evander Mines Egoli Project (Egoli) 
 
Early works and preparation for the execution phase of the Egoli project has 
commenced. Finalisation of the legal agreements for the implementation of 
Egoli's debt funding package is also currently underway. Inception of the 
project's construction is expected in the next month, with phase -1 
construction and development expected to be completed in 18 months, followed by 
phase-2 development and equipping in the next 18 months thereafter.  First gold 
is expected to be produced within 20 months from the project's inception. 
 
Group net debt 
 
The Group's net debt decreased by 47.3% to US$65.2 million (2019: US$123.7 
million). Relative to the 30 June 2020 financial year-end, Group net debt 
decreased by 14.7% from US$76.4 million to US$65.2 million. The Group's debt is 
denominated in South African Rand and, in US Dollar terms, the decline in net 
debt compared to the 30 June 2020 financial year-end, was impacted by the 
strengthening of the Rand relative to the US Dollar at a closing rate of US$/ 
ZAR14.70 compared to US$/ZAR17.33 as at 30 June 2020. 
 
The reduction in the net debt was achieved notwithstanding the cash outflow 
associated with the record net Rand dividend payment to shareholders in 
December 2020 of US$18.4 million (2019: US$2.9 million). 
 
Interim results for the six months ended 31 December 2020 
 
Pan African will announce its interim results on 16 February 2021. 
 
The information contained in this update is the responsibility of the Pan 
African board of directors and has not been reviewed or reported on by the 
Group's external auditors. 
 
Rosebank 
 
22 January 2021 
 
This announcement contains inside information. 
 
For further information on Pan African and its ESG initiatives, please visit 
the Company's website at www.panafricanresources.com 
 
Contact information 
 
Corporate Office                               Registered Office 
The Firs Office Building                       Suite 31 
2nd Floor, Office 204                          Second Floor 
Cnr. Cradock and Biermann Avenues              107 Cheapside 
Rosebank, Johannesburg                         London 
South Africa                                   EC2V 6DN 
Office:   + 27 (0)11 243 2900                  United Kingdom 
[e-mail]                                 Office: + 44 (0)20 7796 8644 
 

Cobus Loots                                    Deon Louw 
Pan African Resources PLC                      Pan African Resources PLC 
Chief Executive Officer                        Financial Director 
Office: + 27 (0)11 243                         Office: + 27 (0)11 243 2900 
2900 
 
Phil Dexter/Jane Kirton                        Ross Allister/David McKeown 
St James's Corporate Services Limited          Peel Hunt LLP 
Company Secretary                              Nominated Adviser and Joint Broker 
Office: + 44 (0)20 7796 8644                   Office: [phone] 
 
Ciska Kloppers                                 Thomas Rider 
Questco Corporate Advisory Proprietary Limited BMO Capital Markets Limited 
JSE Sponsor                                    Joint Broker 
Office: + 27 (0)11 011 9200                    Office: [phone] 
 
Hethen Hira                                    Website: www.panafricanresources.com 
Pan African Resources PLC 
Head: Investor Relations 
Tel: + 27 (0)11 243 2900 
E-mail: [e-mail] 
 
 
 
END 
 
 

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January 22, 2021 02:01 ET (07:01 GMT)