Wrap Text
Unaudited interim financial results for the six months ended 31 December 2023
Pan African Resources PLC
(Incorporated and registered in England and
Wales under the Companies Act 1985 with
registration 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)
(Key features are reported in United States dollar (US$) or South African rand (ZAR), to the extent
relevant.)
UNAUDITED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2023
KEY FEATURES
Production
• Gold production of 98,458oz (2022: 92,307oz), an increase of 6.7% relative to the six months
ended 31 December 2022 (previous reporting period)
• The Group is well positioned to deliver into its 2024 financial year production guidance of between
180,000oz to 190,000oz of gold. Increased guidance may be considered in due course.
Safety
• Improvement in overall safety rates with a total recordable injury frequency rate of 6.13 per million
man hours for the year (2022: 8.54 per million man hours)
• Group surface operations reported no recordable injuries for the six months ended 31 December
2023 (reporting period) (2022: 5.14 per million man hours)
• Barberton Mines achieved 4 million fatality-free shifts during November 2023.
Costs and cost outlook
• Production costs were well managed, despite inflationary pressures, resulting in a reduction in all-
in sustaining costs (AISC) per ounce for the reporting period to US$1,287/oz (2022: US$1,291/oz)
• The Group's operations, which account for more than 85% of the Group's gold production,
produced at an AISC per ounce of US$1,149/oz (2022: US$1,139/oz)
• The Group's tailings retreatment operations (Elikhulu Tailings Retreatment Plant (Elikhulu) and
Barberton Tailings Retreatment Plant (BTRP)) produced at an AISC of US$894/oz (2022:
US$887/oz)
• Renewable energy generation and water recycling, together with other initiatives to increase the
Group's future gold production, are expected to contribute to a decline in future real AISC
• The AISC per ounce guidance range for the 2024 financial year reduced to between US$1,325/oz
and US$1,350/oz (assuming an exchange rate of US$/ZAR:18.50).
Financial
• Net cash from operating activities increased by 134.5% to US$27.2 million (2022: US$11.6 million)
• Profit for the period increased by 46.7% to US$42.4 million (2022: US$28.9 million)
• Headline earnings increased by 46.4% to US$42.6 million (2022: US$29.1 million)
• Earnings per share and headline earnings per share increased by 46.1% to US 2.22 cents per
share (2022: US 1.52 cents per share)
• Payment of a net dividend of US$18.3 million (2022: US$20.0 million) in December 2023, equating
to a dividend yield of 5.9% (2022: 4.6%), at the last traded price on 30 June 2023
• Robust financial position at the end of the reporting period, with net debt of US$64.3 million (2022:
US$53.7 million). The increase in net debt is primarily attributable to the capital expenditure of
US$21.6 million incurred on the Mogale Tailings Retreatment project (MTR project)
• Liquidity remains healthy, with access to immediately available cash of US$31.3 million (2022:
US$33.9 million) and undrawn facilities of US$86.4 million (2022: US$52.1 million) at the reporting
period-end.
Growth projects
• MTR project
o Steady-state production expected by December 2024
o Capital expenditure in line with budget
o Incremental annual production of approximately 50,000oz, at an expected AISC per ounce
of approximately US$900/oz, over the 20-year life-of-mine (LoM) (including the Soweto
Cluster tailings storage facilities)
• Evander Mines' 8 Shaft 24, 25 and 26 Level underground expansion project is on track
o Construction of phase 2 of the refrigeration plant on 24 Level is currently at an advanced
stage, with completion anticipated during the 2024 financial year, as 25 Level mining
operations commence
o Equipping of the existing 17 Level underground ventilation shaft, with a hoisting capacity of
up to 40,000 tonnes per month, is also expected to be completed during the 2024 financial
year, improving efficiencies and eliminating the majority of the existing cumbersome
conveyor system
• Dewatering of Evander Mines' 7 Shaft Egoli project is ongoing and once dewatered to below 20
Level, reserve delineation drilling will commence during the first quarter of the 2025 financial year
to further define the ore payshoot and its grade variability
• At Barberton Mines, the consolidated Royal Sheba and Western Cross projects (Sheba Fault
project) are earmarked to provide sustainable ore feed for the BTRP once existing reserves are
depleted. The BTRP's current Mineral Reserves are adequate to maintain production for another
two years albeit with a declining profile. A regional drilling campaign has also been initiated to
identify other suitable material for processing.
Environmental, social and governance initiatives
• Construction of Fairview Mine's 8.75MW solar plant is progressing with plant commissioning
expected during June 2024
• Barberton Mines and Evander Mines handed over community Social and Labour Plan infrastructure
development projects, including new classrooms and science and computer laboratories, that will
benefit some 2,800 community learners annually
• Commenced environmental rehabilitation at the MTR project sites, which is already positively
impacting the environment and local living conditions.
Sudan exploration
• On-the-ground exploration activities included geological mapping and sampling and target
generation for planned drilling activities, with drilling expected to commence during the last quarter
of the 2024 financial year.
This announcement contains inside information.
CHIEF EXECUTIVE OFFICER'S STATEMENT
Cobus Loots, Pan African's chief executive officer, commented:
"Pan African delivered an excellent safety, production and financial performance for the reporting period,
which positions the Group well to deliver on our production and cost guidance for the full financial year.
We are deeply saddened by the fatality that occurred at Elikhulu after the reporting period, as outlined in
the subsequent events section further in the announcement.
Despite inflationary pressures, the Group managed to curtail AISC, with unit costs benefiting from
increased gold production, the Group's cost-conscious culture and the weaker US$/ZAR exchange rate.
The higher US$ gold price, improved production and cost and capital discipline contributed to the much-
improved cash generation of US$27.2 million, an increase of more than 130% when compared to the
previous reporting period. This cash flow generation has resulted in the Group's robust financial position,
even after taking into account the MTR project's capital expenditure and the net dividend of US$18.3
million paid to shareholders in December 2023.
The Group's surface remining operations performed exceptionally well, with their sub US$900/oz AISC
contributing significantly to Group production, cash flows and profits. The BTRP benefited from
operational enhancements and the optimisation of the carbon-in-leach process, which reduced AISC by
over 10% to US$650/oz, making it one of the world's lowest-cost gold producers. Our long-life MTR
project, once commissioned later this calendar year, will also add meaningfully to the Group's surface
production portfolio and its valuation. With the MTR project's incremental production of approximately
50,000oz per year, almost 50% of the Group's annual gold production will be sourced from low-cost, long
life surface remining operations.
In addition to being a compelling investment proposition, large-scale tailings retreatment operations
provide much-needed economic stimulus and employment in defunct mining regions with challenging
socio-economic conditions. Our 'beyond compliance' community development strategy, in collaboration
with other critical role players, has a tangible and meaningful positive impact in the areas where we
operate.
The introduction of continuous operations at Barberton Mines' Fairview and Sheba Mines has made a
positive impact on production and further improvements will become evident once optimisation of the
underground infrastructure is fully implemented. While Consort Mine has experienced geotechnical
challenges, we believe that the contractor operating model is appropriate for the scale of this operation
going forward. We are excited by the initial exploration results from drilling programmes being
undertaken, using the latest geological software to unlock the seemingly unlimited potential of
Barberton's orebodies, which have been continuously mined for almost 140 years.
The development of Evander Mines' 24, 25 and 26 Level project is progressing well, with ramped-up
mining operations at 24 Level already contributing to the replacement of ounces as mining from the 8
Shaft's pillar nears completion. The significant capital expenditure already spent on this project to
improve and optimise the infrastructure will enable consistent and sustainable production of an average
of 65,000oz annually from this operation in the long term, and allow it to maintain its status as one of the
lowest-cost underground gold mines in Southern Africa.
Following the recommencement of our gold exploration activities in Sudan, steady progress has been
made by our in-country team, with the mapping and sampling activities of shallow orebodies for the
prioritisation of initial drill targets.
In the short term, our priority is to deliver into the production guidance for the 2024 financial year and
commission the MTR project on schedule and within budget, which will elevate Pan African into the next
tier of global gold producers.
We are well positioned to deliver on our operational and strategic objectives for the 2024 financial year,
and if the current gold price tailwinds persist, shareholders can look forward to a continuation of the
reporting period's excellent financial performance for the full financial year."
DIRECTORS' RESPONSIBILITY
The information in this announcement has been extracted from the unaudited interim financial results for
the six months ended 31 December 2023. 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 14 February 2024.
Any investment decisions should be based on the full announcement and the Group's detailed operational
and financial summaries.
AVAILABILITY OF THE FULL ANNOUNCEMENT
The full announcement is accessible via the JSE link at
https://senspdf.jse.co.za/documents/2024/jse/isse/pan/INT2023.pdf
and via the Company's website at https://www.panafricanresources.com/wp-content/uploads/Pan-
African-Resources-interim-results-SENS-announcement-2024.pdf
Copies of the full announcement may also be requested by emailing ExecPA@paf.co.za and electronically
via the sponsor (sponsor@questco.co.za) at no charge during business hours.
The Company has a dual primary listing on the JSE Limited in South Africa and the Alternative Investment
Market of the London Stock Exchange, a secondary listing on the A2X Market as well as a sponsored
Level 1 American Depository Receipt programme in the United States of America through the Bank of
New York Mellon.
For further information on Pan African, please visit the Company's website at
www.panafricanresources.com
Rosebank
14 February 2024
Corporate information
Corporate Office Registered Office
The Firs Building 107 Cheapside
2nd Floor, Office 204 2nd Floor
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
Chief executive officer Financial director and debt officer
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
Email: hhira@paf.co.za
Company secretary Nominated adviser and joint broker
Jane Kirton Ross Allister/Bhavesh Patel
St James's Corporate Services Limited Peel Hunt LLP
Office: + 44 (0) 20 7796 8644 Office: +44 (0) 20 7418 8900
JSE sponsor Joint broker
Ciska Kloppers Thomas Rider/Nick Macann
Questco Corporate Advisory Proprietary BMO Capital Markets Limited
Limited Office: +44 (0) 20 7236 1010
Office: + 27 (0) 11 011 9200
Joint broker
Matthew Armitt/Jennifer Lee
Joh. Berenberg, Gossler & Co KG
(Berenberg)
Office: +44 (0) 20 3207 7800
Date: 14-02-2024 09:00:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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