| Wed 19 Jan 2022, 8:57 | | PAN AFRICAN RESOURCES PLC - Operational update for the six months ended 31 December 2021 |
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Operational update for the six months ended 31 December 2021
Pan African Resources PLC
(Incorporated and registered in England and Wales under the 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 MONTHS ENDED 31 DECEMBER 2021
Pan African is pleased to provide shareholders with an operational update for the six months ended
31 December 2021 (“Current Reporting Period”).
Key Operational Results for the Current Reporting Period
• Excellent safety record maintained
• Group gold production increased by 9.9% to a record half-year production of 108,085oz (2020:
98,386oz)
• Gold production from Barberton Mines for the period was 49,117oz (2020: 52,354oz), while
Elikhulu and Evander Mines produced 25,900oz (2020: 26,863oz) and 33,068oz (2020:
19,169oz) respectively
• Group has achieved a vaccination rate of 77% and continues to implement and maintain
stringent policies and protocols to mitigate the effects of the ongoing COVID-19 pandemic on
employees and production
• Group net senior debt decreased by 60.1% to US$23.9 million (2020: US$59.9 million) after
payment of a record net dividend of US$21.6 million (2020: US$17.8 million) in December
2021
• ESG projects, including the 10MW renewable energy solar photovoltaic (PV) plant at Evander
Mines and large-scale agriculture projects at Barberton Mines are on track for commissioning
before the 30 June 2022 financial year-end
• Pan African is increasing its full year production guidance to approximately 200,000oz
Pan African CEO Cobus Loots commented:
“Pan African has again delivered an excellent operational performance, achieving record gold
production in excess of 108,000oz for the Current Reporting Period. This exceeded the expected
105,000oz announced in the Group’s December 2021 production update and was achieved while
continuing to manage the impact of the COVID-19 pandemic and maintaining an excellent safety
record.
The reduction in the Group’s net senior debt to US$23.9 million represents a 60.1% decrease relative
to the outstanding net senior debt at 31 December 2020, notwithstanding the payment of a record
final Rand dividend for the June 2021 financial year.
Barberton Mines’ gold production of 49,117oz for the Current Reporting Period decreased by 6.2%,
we are however still forecasting that the operation will achieve full year production guidance of
approximately 100,000oz.
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At Elikhulu, production was down marginally by 3.6% to 25,900oz, mainly as a result of inclement
weather conditions experienced during November and December 2021.
Evander Mines’ 8 Shaft pillar delivered an excellent performance during the Current Reporting Period,
demonstrating the potential of this operation. Elevated grades and improved mining rates, as a result
of improved face availability, increased production from the pillar and surface sources by 72.5% to
33,068oz for the Current Reporting Period.
Following the reprioritised capital programme, as announced in the Group’s 2021 final results
presentation, work continues in preparation for the inception of mining Evander’s 8 Shaft No.2 Decline
at 24 Level. Mining from this level is anticipated to commence in the 2023 financial year, as the existing
pillar mining reaches completion. Studies to access the 25 and 26 Level Mineral Resources at 8 Shaft
are also at an advanced stage. Our organic growth projects have the potential to increase Evander’s
operating life by an estimated 20 years.
The 10MW solar PV plant at Evander Mines is on track to be commissioned late in February 2022,
following delays due to port disruptions and inclement weather. A feasibility study to expand the solar
PV plant to 26MW is underway, with the additional capacity designated for Evander’s underground
growth projects, with renewable energy expected to further improve the profitability and
sustainability of this operation.
At the end of last year the Group announced the conditional acquisition of one of the last remaining
large-scale gold tailings resources available in South Africa, the Blyvoor Gold TSF dumps (Blyvoor
Assets). This opportunity could further build on the Company’s track record of successfully bringing
tailings retreatment operations to fruition. An independent fatal flaw assessment and gap analysis
has commenced on the Blyvoor Assets, with this work expected to be completed by April 2022.
At Mintails, the definitive feasibility study (DFS) on Mogale Gold’s tailing storage facilities (TSFs) is
being finalised.
The Group is on track to produce 200,000oz of gold for the financial year ending 30 June 2022, 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 with an attractive pipeline of growth
projects. We look forward to presenting our interim results on 16 February 2022.”
Safety
The Group continued to maintain an industry-leading safety performance, with a focus on new safety
initiatives in its pursuit of a zero-harm working environment.
• The Group’s lost-time injury frequency rate (‘LTIFR’) improved to 0.98 (2020: 1.64) per million
man hours
• The Group’s reportable injury frequency rate (‘RIFR’) improved to 0.28 (2020: 0.65) per million
man hours
• Barberton Gold Mines achieved an excellent RIFR of 0.20 (2020: 0.67) per million man hours
• Elikhulu unfortunately experienced one reportable injury, which caused a regression in LTIFR
to 1.50 (2020: 0.00) per million man hours
• Evander Gold Mining achieved an excellent RIFR of 0.00 (2020: 1.01) per million man hours
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Group Production
Group production for the current reporting period increased by 9.9% to 108,085oz (2020: 98,386oz).
The gold production split per operation is as follows:
Six months ended 31 Six months ended 31
Operation December 2021 December 2020
Barberton Mines – 39,991 42,350
Underground
Barberton Tailings 9,126 10,004
Retreatment Plant (BTRP)
Elikhulu 25,900 26,863
Evander Mines – Underground 33,068 19,169
and surface sources
Total ounces produced 108,085 98,386
Barberton Mines
Barberton Mines’ production decreased by 6.2% to 49,117oz (2020: 52,354oz) for the Current
Reporting Period, consistent with the mine plan. Work during the Current Reporting Period included
accelerating the waste development to the new 259 platform in the high-grade Main Reef Complex
(MRC) orebody. Underground production decreased by 5.6% to 39,991oz (2020: 42,350oz) and the
BTRP’s production decreased by 8.8% to 9,126oz (2020: 10,004oz) for the Current Reporting Period.
Barberton Mines is still on track to deliver approximately 100,000oz for the year ending 30 June 2022.
Elikhulu tailings retreatment plant (Elikhulu)
Gold production from Elikhulu decreased marginally by 3.6% to 25,900oz (2020: 26,863oz) during the
Current Reporting Period. Production was adversely impacted by inclement weather conditions during
November and December 2021.
Gold production from Elikhulu is expected to increase in the second half of the 2022 financial year,
consistent with the mining plan which, forecasts production of approximately 55,000oz for the year
ending 30 June 2022.
Evander Mines’ 8 Shaft Pillar project (8 Shaft Pillar) and surface sources
Production from the Evander Mines’ increased by 72.5% to 33,068oz (2020: 19,169oz).
Underground production increased by 116.6% to 27,312oz (2020: 12,607oz). The increase in the 8
Shaft Pillar’s production during the Current Reporting Period was a result of:
• Elevated mining face grades of 13g/t (2020: 8g/t), relative to planned grades.
• Improved mining rates post the extraction of the core around the 8 Shaft barrel, with
increased mining face availability.
Gold production from the 8 Shaft Pillar is expected to normalise during the second half of the 2022
financial year as a result of planned mining in areas with anticipated grades of approximately 8g/t.
Group net senior debt
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The Group’s net senior debt (comprising secured, interest-bearing debt, net of available cash)
decreased by 60.1% to US$23.9 million (2020: US$59.9 million). Relative to the 30 June 2021 financial
year-end, Group net debt decreased by 29.1% to US$24.1 million.
The reduction in the net debt was achieved notwithstanding the cash outflow of US$21.6 million
(2020: US$17.8 million), associated with the record net Rand dividend paid to shareholders in
December 2021.
Progress update on Blyvoor and Mintails conditional acquisitions
Blyvoor
Shareholders are referred to the announcement of 15 December 2021, containing the details of the
proposed transaction to acquire the Blyvoor Gold’s TSFs. Subsequent to the announcement, the
Group has engaged independent consultants to conduct a fatal flaw assessment and gap analysis as
part of the initial due diligence. These studies will be completed by April 2022, consistent with the
timelines of the staged acquisition process.
Mintails
During November 2020, the Group announced the conditional acquisition of Mintails’ SA Mogale Gold
and the Soweto Cluster’s (MSC) TSFs, with combined Mineral Resources of 243Mt with an in-situ
grade of 0.30g/t, for an estimated gold content of 2.36Moz.
A pre-feasibility study (PFS) was completed on Mogale Gold’s TSFs during July 2021. The MSC TSFs
were excluded from the study’s scope as additional technical and due diligence analysis is required,
which will be addressed in forthcoming studies. Average production of between 40-50koz/yr over an
11-year life-of-mine was projected by the PFS.
Following the positive PFS findings, the Group is currently finalising a DFS, led by DRA Global (DRA),
which is scheduled to be completed in Q1 of the 2022 calendar year. A concept study on the Soweto
Cluster is also progressing under the auspices of DRA.
Subsequent to the judgement finding that Mintails will remain in provisional liquidation, the Group
has engaged with the provisional liquidator to progress the transaction and are working on the
finalisation of the DFS.
Further details on the Group’s organic growth projects will be provided together with the Group’s
interim financial results for the Current Reporting Period.
Interim results for the six months ended 31 December 2021
Pan African will announce its interim results on 16 February 2022.
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.
Certain information communicated in this announcement was, prior to its publication, inside
information for the purposes of Article 7 of Regulation 596/2014.
Rosebank
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19 January 2022
For further information on Pan African, 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
info@paf.co.za 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 2900 Office: + 27 (0)11 243 2900
Phil Dexter/Jane Kirton Ross Allister/Alexander Allen
St James's Corporate Services Limited Peel Hunt LLP
Company Secretary Nominated Adviser and Joint Broker
Office: + 44 (0)20 7796 8644 Office: +44 (0)20 7418 8900
Ciska Kloppers Thomas Rider/Nick Macann
Questco Corporate Advisory Proprietary Limited BMO Capital Markets Limited
JSE Sponsor Joint Broker
Office: + 27 (0)11 011 9200 Office: +44 (0)20 7236 1010
Hethen Hira Website: www.panafricanresources.com
Pan African Resources PLC
Head: Investor Relations
Tel: + 27 (0)11 243 2900
E-mail: hhira@paf.co.za
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Date: 19-01-2022 08:57:00
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