REG-Pan African Resources Plc: Completion of Mintails Project Funding

Pan African ResourcesAnnouncement

13/03/2023 07:15

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”)              Pan African Resources Funding Company Limited Incorporated in the Republic of South Africa with limited liability Registration number: 2012/021237/06 Alpha code: PARI  

 (Key features are reported in South African rand (ZAR) and United States
dollar (US$))

COMPLETION OF MINTAILS PROJECT FUNDING

Pan African is pleased to announce the completion of a ZAR400 million (US$21.6
million*) transaction (the Transaction) with Rand Merchant Bank a division of
FirstRand Bank Limited (RMB), as the final component to the funding package
for the Mintails Project’s construction.

Following the successful issue of the Group’s inaugural Domestic Medium Term
Note programme of ZAR800m (US$43.2 million*) in December 2022 (announced on
SENS on 9 December 2022), and receipt of a ZAR1.3bn (US$70.3 million*) credit
approved and underwritten term sheet from RMB for the senior debt tranche of
Mintails Project’s funding, the full upfront capital of ZAR2.5bn (US$135.1
million*) has been secured with the Transaction.

Under the terms of the Transaction, the Company will sell 4,846 ounces of gold
per month, for 24 months commencing March 2023, at a fixed price of ZAR
1,025,000/kg (US$1,723/oz*), and receive an upfront premium of US$21.6
million* (ZAR400 million). The effective price at which the Group sold the
3,617kg of gold, representing approximately 30%(#) of annual group production,
over the 24 months, is ZAR1,135,604/kg (US$1,909/oz*).

The Mintails Project senior debt facility, which is subject to the fulfilment
of conditions typical for transactions of this nature, is at drafting stage
and the intent is for it to become effective by April 2023.

Next steps and envisaged Mintails project execution timeline

Pan African is in the process of finalising detailed engineering optimisation
studies for the Mintails Project, with environmental authorisation and related
permitting expected within the next four months. Commencement of construction
is expected by June 2023, with steady state production forecast by December
2024.

The Mintails Project is being constructed by substantially the same internal
teams that successfully completed Pan African’s previous three tailings
retreatment projects.

Cobus Loots, Chief Executive Officer of Pan African Resources, said:

“We are pleased that Pan African has managed to capitalise on the current
attractive Rand gold price to secure the full funding package for Mintails,
without any dilution to our shareholders. The Group’s track record of
bringing tailings retreatment projects of this nature to fruition is
impressive. Mintails’ payback period, post commissioning, is approximately
three and a half years, at prevailing rand gold prices, and the operation will
significantly contribute towards Pan African’s future gold production over
its 20-year life-of-mine. We are excited to commence with the project’s
construction in the next months.”

(*)converted at an exchange rate of US$/ZAR: 18.50

(#)assuming annual production of 200 000 ounces

Certain information communicated in this announcement was, prior to its
publication, inside information for the purposes of Article 7 of Regulation
596/2014.

Rosebank

13 March 2023

For further information on Pan African, please visit the Company's website at

www.panafricanresources.com

 Corporate information                                                                                                                                                                                                                                                                                     
 Corporate office The Firs Office Building 2nd Floor, Office 204 Cnr. Cradock and Biermann Avenues Rosebank, Johannesburg South Africa Office: + 27 (0)11 243 2900 info@paf.co.za  Registered office 2 (nd)Floor 107 Cheapside London EC2V 6DN United Kingdom Office: + 44 (0)20 7796 8644 info@paf.co.za  
 Chief executive officer  Cobus Loots Office: + 27 (0)11 243 2900                                                                                                                  Financial director  Deon Louw Office: + 27 (0)11 243 2900                                                               
 Head: Investor relations Hethen Hira Tel: + 27 (0)11 243 2900 E-mail: hhira@paf.co.za                                                                                             Website: www.panafricanresources.com                                                                                    
 Company secretary Jane Kirton  St James's Corporate Services Limited Office: + 44 (0)20 7796 8644                                                                                 Nominated adviser and joint broker Ross Allister/David McKeown  Peel Hunt LLP Office: +44 (0)20 7418 8900               
 JSE Sponsor and JSE debt sponsor Ciska Kloppers  Questco Corporate Advisory Proprietary Limited Office: + 27 (0)11 011 9200                                                       Joint broker Thomas Rider/Nick Macann  BMO Capital Markets Limited Office: +44 (0)20 7236 1010                          
                                                                                                                                                                                   Joint broker Matthew Armitt/Jennifer Lee  Joh. Berenberg, Gossler & Co KG  Office: +44 (0)20 3207 7800                  



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