Wrap Text
Revised production guidance for the year ending 30 June 2024, production guidance for FY 2025 and MTR Project update
Pan African Resources PLC Pan African Resources Funding Company
(Incorporated and registered in England and Wales Limited
under the Companies Act 1985 with registered Incorporated in the Republic of South Africa
number 3937466 on 25 February 2000) with limited liability
Share code on AIM: PAF Registration number: 2012/021237/06
Share code on JSE: PAN Alpha code: PARI
ISIN: GB0004300496
ADR ticker code: PAFRY
("Pan African" or the "Company" or the "Group")
REVISED PRODUCTION GUIDANCE FOR THE YEAR ENDING 30 JUNE 2024, PRODUCTION GUIDANCE
FOR 2025 FINANCIAL YEAR AND MTR PROJECT UPDATE
Pan African is pleased to provide shareholders and noteholders with an update as follows:
Group production and cost guidance
- Production guidance for the year ending 30 June 2024 (current financial year) narrowed to
between 186,000oz to 190,000oz (previously 180,000oz to 190,000oz)
o In the second half of the financial year, the Group ceased processing of marginal
surface sources at Evander Gold Mines (EGM) due to this business, which contributed
approximately 2,500oz in the first half of the current financial year, becoming
uneconomical
o If production from these sources was maintained in the second half of the financial
year, Group production for the full financial year would have been in excess of
190,000oz
- Group AISC guidance for the current financial year maintained at between $1,325/oz to
$1,350/oz (assumed exchange rate: ZAR/US$:18.50)
- Production guidance for the 2025 financial year of 215,000oz to 225,000oz.
MTR Project (The Project)
- The Project is on schedule for commissioning and steady state production during December
2024
- Capital cost for the Project remains on budget, with no expenditure overruns expected
- The Project's financial model, based on its definitive feasibility study (DFS), was updated to
include the latest operating cost and production estimates, forecast ZAR/US$ exchange rate
and US$ gold price. These updates are as follows:
o Exchange rate and gold price revisions:
- Exchange rate of ZAR/US$:19.00 (initial DFS model: ZAR/US$:15.50)
- Gold price of US$2,200/oz (initial DFS model: US$1,750/oz)
o The updated DFS financial model outputs (relative to the initial DFS model) are as
follows:
- The model Pre-tax NPV increased to US$183 million (initial DFS model: NPV
of US$63 million)
- The ungeared real IRR increased to 41.7% (initial DFS model: IRR of 20.1%)
- Payback on upfront capital investment of ~US$135.1 million reduced to
approximately 2 years (initial DFS model: 3.5 years), post commissioning.
An internal pre-feasibility study (PFS) for the Soweto cluster was also completed in March 2024, based
on the drill results from the 2L16 and 2L24 tailings storage facility (TSF). The PFS considered numerous
options, with the most feasible being:
- Development of re-mining, overland piping and pumping infrastructure at the Soweto cluster
resource to process the material at the MTR plant
o Using this option, the MTR plant's capacity can be expanded to process 1 million
tonnes per month of feed material, compared to the current design capacity of
800ktpm, resulting in a life-of-mine (LOM) of 21 years for the combined Mogale and
Soweto cluster resources. The resultant tailings can be deposited into the expanded
Mogale TSF at the West Wits pit and 1L23-25 footprint.
The outcomes of the PFS are as follows:
- Processing of the Soweto Cluster has the potential to expand the MTR operation
- The MTR plant infrastructure can be expanded to treat 1 million tonnes per month from year
6 of the MTR operation's LOM
- The addition of the 110 million tonne Soweto Cluster Mineral Resource has the potential to
increase MTR production to approximately 60koz/year over a 21-year LOM
- Total additional capital requirement of US$113 million (approximately US$83 million would
be incurred from year 4 to year 6 and US$29 million in year 10 of the MTR's operation)
- At US$2,200/oz and an exchange rate of ZAR/US$:19.00, the Pre-tax NPV combined for
Mogale and the Soweto Cluster is US$283 million, representing an increase of US$96 million,
relative to Mogale's updated standalone financial model
- The real ungeared IRR increases to 44.0%, relative to the IRR of 41.7% in the updated Mogale
financial model.
The Group will now proceed with the necessary permitting and servitudes required for the re-mining
and processing of the Soweto Cluster, with a final investment decision in due course.
Pan African CEO Cobus Loots commented:
"We are pleased that Pan African will achieve the upper end of our full year production guidance, and
would have exceeded guidance had we continued with the processing of surface material at Evander
in the second half of the financial year.
The robust production results, combined with record Rand gold prices, should see the Group deliver an
excellent financial performance for the year.
Our MTR project remains on schedule and on budget, and we look forward to commissioning it later
in 2024. We have now demonstrated that the addition of the Soweto Cluster resources further
improves the economic attractiveness of this world class project."
Final results for the twelve months ended 30 June 2024
Pan African will announce its final results for the current financial year on 11 September 2024.
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
9 May 2024
For further information on Pan African, please visit the Company's website at
www.panafricanresources.com
Corporate information
Corporate office Registered office
The Firs 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
info@paf.co.za info@paf.co.za
Chief executive officer Financial director
Cobus Loots Deon Louw
Office: + 27 (0)11 243 2900 Office: + 27 (0)11 243
2900
Head: Investor relations Website: www.panafricanresources.com
Hethen Hira
Tel: + 27 (0)11 243 2900
E-mail: hhira@paf.co.za
Company secretary Nominated adviser and joint broker
Jane Kirton Ross Allister/Georgia Langoulant
St James's Corporate Services Limited Peel Hunt LLP
Office: + 44 (0)20 7796 8644 Office: +44 (0)20 7418 8900
JSE Sponsor and JSE debt sponsor Joint broker
Ciska Kloppers Thomas Rider/Nick Macann
Questco Corporate Advisory Proprietary Limited BMO Capital Markets Limited
Office: + 27 (0)11 011 9200 Office: +44 (0)20 7236 1010
Joint broker
Matthew Armitt/Jennifer Lee
Joh. Berenberg, Gossler & Co KG
Office: +44 (0)20 3207 7800
Date: 09-05-2024 08:00:00
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