Wrap Text
Summarised audited results for the year ended 30 June 2024
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.)
SUMMARISED AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2024 – SHORT FORM
ANNOUNCEMENT
KEY FEATURES
Production
• Group gold production increased by 6.2% to 186,039oz (2023: 175,209oz), in line with
guidance
• Operational enhancements and optimisation initiatives resulted in significant improvements at
Barberton Mines' underground and Elikhulu Tailings Retreatment Plant's (Elikhulu) surface
operations, resulting in annual increases of:
o Gold production from Fairview and Sheba Mines increased by 13.5% to 65,580oz
(2023: 57,778oz)
o Elikhulu's gold production increased by 8.4% to 54,812oz (2023: 50,573oz)
Safety
• Significant improvement in the Group's industry-leading safety statistics across all operations
Costs and cost outlook
• All-in sustaining costs (AISCAPM) for the current reporting period of US$1,354/oz (2023:
restated US$1,309/oz) at an average exchange rate of US$/ZAR: 18.71, marginally above
guidance of between US$1,325/oz to US$1,350/oz, with the delay in commissioning Evander
Mines' subvertical hoisting shaft negatively impacting unit costs
• AISC of US$1,170/oz (2023: restated US$1,132/oz) for our lower-cost operations, which
account for more than 84% (2023: 81%) of annual production
• 2025 AISC guidance of between US$1,350/oz and US$1,400/oz (assuming an exchange rate
of US$/ZAR:18.50), with the Mogale Tailings Retreatment project's (MTR project) low-cost
production offsetting inflationary pressures
Near-term growth projects
Surface remining operations
The MTR project's commissioning is in progress, with steady-state production expected by
latest December 2024. This US$135.1 million project is expected to be delivered under
budget and ahead of schedule. The Barberton Tailings Retreatment Plant's (BTRP) life-of-
mine has been extended to seven years (previously two years), following a successful
internal project to reassess feedstock sources, further enhancing the Group's high-margin,
long-life surface remining operations.
Underground operations
• Evander Mines' 8 Shaft 24 and 25 Level underground expansion project is now scheduled
to be completed by the end of September 2024, following delays in the equipping of the
ventilation shaft for hoisting
o Equipping the 17 to 24 Level subvertical hoisting shaft will significantly increase
efficiencies by reducing reliance on the current cumbersome conveyor belt
infrastructure for ore transport
o 24 Level's refrigeration plant will be commissioned in phases to facilitate mining at
depth
o 25 Level mining area access development has commenced
Production guidance
• 2025 financial year production guidance of 215,000oz to 225,000oz, with the expected
increase in production largely attributable to the contribution from the Group's new
MTR project, but potentially impacted by:
o The delay in the commissioning of Evander Mines' subvertical shaft, scheduled to
be completed during September 2024, could impact guidance by approximately
5,000oz
o Evander Mines' underground vamping operations and earlier production from the
MTR project may offset the impact of the above-mentioned delay
Financial
• Revenue increased by 16.8% to US$373.8 million (2023: restated US$319.9 million)
• Profit for the year increased by 30.2% to US$78.8 million (2023: restated US$60.5
million)
• Headline earningsAPM increased by 32.1% to US$79.5 million (2023: restated US$60.2
million)
• Earnings per share increased by 32.1% to US 4.14 cents per share (2023: restated US
3.18 cents per share) and headline earnings per shareAPM increased by 32.2% to US 4.15
cents per share (2023: restated US 3.14 cents per share)
• Net cash generated from operating activities declined by US$9.3million to US$90.8
million (2023: US$100.1 million)
• Net debtAPM increased to US$106.4 million, mainly as a result of the construction of the
MTR project (2023: US$22.0 million)
• Available cash and undrawn debt facilities at year-end of US$95.0 million (2023: US$84.7
million).
Proposed dividend
• Sector-leading final dividend of ZA 22.00000 cents per share (or US 1.20946 cents per share
at an exchange rate of US$/ZAR:18.19) proposed for approval at the upcoming annual general
meeting (AGM)
Environmental, social and governance (ESG) initiatives
• The Group continues to lead the way on renewable energy initiatives and establishing a
roadmap to decarbonisation
• Construction of Fairview Mine's solar facility completed at Barberton Mines in June 2024
and hot-commissioned in July 2024
• Renewed power purchase agreement with Sturdee Energy, subject to certain suspensive
conditions, with ground clearing for construction having commenced
• Evander Mines' 3ML/day water recycling plant capacity to be doubled in the next two
years
• Rehabilitation at the MTR project's Mogale and Soweto sites is in progress.
CHIEF EXECUTIVE OFFICER'S STATEMENT
Cobus Loots, Pan African's chief executive officer, commented:
"I am extremely pleased to report on Pan African's achievements and outstanding financial
results for the past year. Furthermore, the Group is now poised to deliver on our next phase
of value-accretive production growth at the MTR project, a testament to Pan African's ability
to continue to create value for all its stakeholders.
We find ourselves in a very favourable gold price environment, with the metal appreciating
by more than 20% in US$ terms in the past year, and generally positive sentiment on its near-
term prospects. However, we also recognise that, although fortuitous, the commodity price
tailwinds may not last indefinitely. We therefore have to use this opportunity to ensure our
business model remains robust, and continue to position our assets for long-term
sustainability.
The fact that gold equities continue to underperform the gold price, reflects investor concerns
pertaining to capital allocation and sustainable value creation in the sector. Certainly, the
recent escalations in AISC globally (now around US$1,400/oz on average) suggest that
producer margins and profits are being eroded by cost pressures and by a general
underinvestment in capital expenditure and mining development over many years.
Pan African can demonstrate a track record of sector-leading returns and dividends to
shareholders, despite occasional challenging operating conditions and the age of our
underground operations (Barberton Mines has been producing for almost 140 years). Our 3
enviable record is reflective of the quality of and optionality inherent in our portfolio, and also
of management's unrelenting focus on disciplined capital allocation and cost control.
With the additional production from the MTR project, our Group will be firmly positioned as a
mid-tier producer, with production growing by approximately 25% and a commensurate
reduction in the Group's unit costs of production - a feat that larger gold miners may find
difficult to emulate, given the scale of their operations.
This year marks the 10th time that I am reporting in my capacity as chief executive officer
and, in reflecting on the past and where the Group is now, I believe that Pan African has
attractive prospects and is well-positioned to continue "Mining for a Future".
THE LAST DECADE AND THE WORLD IN WHICH WE NOW OPERATE
Economically and politically, the world has been tumultuous and volatile during this time.
Economically, it had to deal with challenging financial cycles and the impact of COVID-19.
The pandemic and subsequent escalating geopolitical conflicts, especially in Ukraine and the
Middle East, have threatened lives and economies, while the impact of climate change
affects the planet and its inhabitants.
The South African economy faced the consequences of power curtailment, state capture and
low levels of investor confidence. Social upheaval reached a boiling point during the riots of
July 2021, the worst and most disruptive incident of violence that South Africa experienced
since the end of Apartheid. The global status quo is one of bi-polarity fragile financial
systems, ever-increasing sovereign debt levels, as well as concerns about the next economic
downturn.
GOLD REAFFIRMING ITS STATUS AS A SAFE-HAVEN ASSET
Gold has regained its safe-haven status amid ongoing higher-than-expected worldwide
inflation and anxiety over geopolitics, elections and monetary policy – all predictable reasons
for the value of gold to appreciate. Gold has historically been considered an inflation hedge,
however cooling inflation and the expected reduction in worldwide interest rates should also
support gold's investment case.
The perceived 'weaponisation' of the US$, following the outbreak of war in Ukraine, appears
to have expedited moves by central banks in many countries to accumulate gold reserves in
support of their respective economies and currencies. Gold has demonstrated its ability to
act as a strong hedge against uncertainty and as a currency to preserve real purchasing
power. Gold has a track-record of millennia in this regard, an attribute that sets it apart from
speculative cryptocurrency alternatives, such as Bitcoin.
We believe that investing in a gold equity such as Pan African has several advantages to a
direct gold holding. The Company provides its shareholders with a cash return in the form
of dividends, increased leverage to the gold price, substantial near-term production growth
and a number of internal growth opportunities, evidenced by our project pipeline.
A DECADE AS CHIEF EXECUTIVE OFFICER
In the early 2010s, Pan African was a single-asset company, holding only the Barberton
Mines underground operations.
Over the past 10 years, the Group has successfully diversified into a long-life, high-margin
operator, with multiple assets, improved flexibility and reduced volatility. We have also
increased profitable production and investor returns. Shareholders have received returns
through both compound capital growth of more than 10% per year over the past few years
and an increasing annual dividend. Pan African has regularly featured in the Top 10 of the
JSE's Top 100 performing companies over the past few years. More recently in 2024, it has
been the best-performing gold stock on the JSE year to date, with the share price increasing
by over 80% since the beginning of the calendar year and 100% year-on-year. The AIM
recorded a similar performance, where the share is also trading at all-time high levels.
Value-adding projects completed by the Group's incumbent management team and board
during the last ten years include:
• Securing, funding, construction and operation of transformative surfaces assets
• BTRP
• Evander Tailings Retreatment Plant
• Elikhulu
• The MTR project
• Evander Mines' underground restructuring
• 8 Shaft pillar mining
• Level 24 to 26 development
• Group renewable energy initiatives
• Evander Mines' solar plant
• Barberton Mines' solar plant
While South African gold mining is often seen as a sunset industry, we believe that the
country still presents attractive opportunities. In 2022, we acquired Mineral Resources from
Mogale Gold Proprietary Limited and Mintails SA Soweto Cluster Proprietary Limited (MSC)
for US$1.12/oz, and then applied our extensive surface tailings expertise to bring this project
to account. We have also accumulated considerable underground mining expertise, which
we are applying to exploit at Barberton Mines' and Evander Mines' underground assets.
Pan African is proud of our demonstrated record of delivering large projects on time and
within budget, in an industry where this is lacking at times.
The gold price is at an all-time high, and this trend is expected to continue in the foreseeable
future. Pan African has over 30Moz of SAMREC-compliant gold resources within its mining
rights, secured in Barberton and Evander to 2051 and 2038, respectively. The Group's
unique value proposition of surface and underground mining, high-margin long-life
production, blend of financial strength, growth potential, gold resource base, dividend track
record and unwavering dedication to ESG principles, makes it a compelling choice for
investors seeking to achieve sustainable returns while making a meaningful positive impact
on all stakeholders.
THIS YEAR'S FINANCIAL RESULTS
Pan African has delivered an outstanding set of operational and financial results for the 2024
financial year. Notably, revenue increased by 16.8%, supported by a 4.9% increase in gold
sales to 184,885oz (2023: restated 176,216oz) and an 11.3% increase in the average US$
gold price received during this period. The increased production and revenue demonstrate
that steps taken to improve operational efficiencies are yielding positive results.
The Group has made significant progress in advancing its growth projects, with the
development of Evander Mines' 24 to 25 Level project and the commissioning of the MTR
project being prioritised.
Total capital expenditure for the year amounted to US$172.4 million (2023: US$113.0 million),
which resulted in an increase in net debt to US$106.4 million, relative to net debt of US$22.0
million in the previous financial year.
AISC has increased marginally to US$1,354/oz (2023: restated US$1,309oz), resulting in an
AISC margin of 32.8% (2023: 27.7%) earned on the average 2024 financial year gold price of
US$2,015/oz (2023: US$1,811/oz).
Cash holdings declined to US$26.3 million (2023: US$34.8 million) due to project-specific
capital expenditure, while net cash from operating activities declined to US$90.7 million (2023:
US$100.1 million) as a result of the payment of increased income tax and finance costs.
Liquidity remains healthy, with access to immediately available cash and undrawn facilities at
financial year-end of US$95.0 million (2023: US$84.7 million).
These outstanding results are largely attributable to Pan African's culture of strict capital
allocation discipline and circumspect investment decisions.
PROPOSED DIVIDEND FOR THE FINANCIAL YEAR ENDED 30 JUNE 2024
The board has proposed a final dividend of ZAR489 million for the 2024 financial year (approximately
US$26.8 million), equal to ZA 22.00000 cents per share or approximately US1.20946 cents per share
(0.95611 pence per share). A dividend of ZA 18.00000 cents per share or approximately US 1.05820
cents per share (or 0.86915 pence per share) was paid for the 2023 financial year. The dividend is
subject to approval by shareholders at the AGM, which is to be convened for Thursday, 21 November
2024.
Assuming shareholders approve the final dividend, the following salient dates would apply:
Annual general meeting Thursday, 21 November 2024
Currency conversion date Thursday, 21 November 2024
Currency conversion announcement released by 11:00 (SA Friday, 22 November 2024
time)
Last date to trade on the JSE Tuesday, 26 November 2024
Last date to trade on the LSE Wednesday, 27 November 2024
Ex-dividend date on the JSE Wednesday, 27 November 2024
Ex-dividend date on the LSE Thursday, 28 November 2024
Record date on the JSE and LSE Friday, 29 November 2024
Payment date Tuesday, 10 December 2024
The British Pound (GBP) and US$ proposed final dividend were calculated based on a total of
2,222,862,046 shares in issue and an illustrative exchange rate of US$/ZAR:18.19 and GBP/ZAR: 23.01,
respectively.
No transfers between the Johannesburg and London registers, between the commencement of
trading on Wednesday, 27 November 2024 and close of business on Friday, 29 November 2024 will be
permitted.
No shares may be dematerialised or rematerialised between Wednesday, 27 November 2024 and
Friday, 29 November 2024, both days inclusive.
The South African dividends taxation rate is 20% per ordinary share for shareholders who are liable to
pay dividends taxation, resulting in a net dividend of ZA 17.60000 cents per share for these
shareholders. Foreign investors may qualify for a lower dividend taxation rate, subject to completing
a dividend taxation declaration and submitting it to Computershare Investor Services Proprietary
Limited or Link Asset Services, who manage the South African and UK registers, respectively. The
Company's South African income taxation reference number is 9154588173. The proposed dividend
will be paid out of the Company's retained earnings, without drawing on any other capital reserves.
AUDIT OPINION
The Group's external auditor, PricewaterhouseCoopers LLP (PwC), has issued their opinion on the
consolidated annual financial statements for the year ended 30 June 2024.
The audit of the consolidated annual financial statements was conducted in accordance with the
International Standards on Auditing. PwC has expressed an unmodified opinion on the consolidated
annual financial statements. A copy of the audited annual financial statements and the audit report is
available for inspection at the issuer's registered office. Any reference to future financial performance
included in this summarised audited results announcement has not been reviewed or reported on by
the Group's external auditor.
DIRECTORS' RESPONSIBILITY
The information in this announcement has been extracted from the summarised audited results for
the year ended 30 June 2024, but this short-form announcement itself has not been reviewed by the
Company's auditors. The summarised audited 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 and does
not contain full or complete details.
Any investment decisions should be based on the full announcement and the Group's detailed
operational and financial summaries.
AVAILABILITY OF ANNUAL FINANCIAL STATEMENTS AND SUMMARISED AUDITED RESULTS
The annual financial statements (together with PwC's audit opinion thereon) have been released on
SENS and is available for viewing via the JSE link at
https://senspdf.jse.co.za/documents/2024/jse/isse/pan/FYE2024.pdf
and via the Company's website at https://www.panafricanresources.com/wp-content/uploads/Pan-
African-Resources-integrated-annual-report-2024.pdf.
The summarised audited results for the year ended 30 June 2024 can be viewed via the Company's
website at https://www.panafricanresources.com/wp-content/uploads/Pan-African-Resources-year-
end-results-SENS-announcement-2024.pdf
Copies of the full announcement may also be requested by emailing ExecPA@paf.co.za
The Company has a dual primary listing on the JSE in South Africa and the AIM of the London Stock
Exchange as well as a sponsored Level 1 ADR programme in the USA through the Bank of New York
Mellon and a secondary listing on the A2X Markets.
For further information on Pan African, please visit the Company's website at
www.panafricanresources.com
Rosebank
11 September 2024
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 3869 0706
info@paf.co.za 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
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 3869 0706 Office: +44 (0)20 7418 8900
JSE Sponsor and JSE Debt 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: 11-09-2024 08:00:00
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