REG-Pan African Resources Plc: Interim Unaudited Results to 31 December 2019

Pan African ResourcesAnnouncement

18/02/2020 07:05

Pan African Resources PLC

(Incorporated and registered in England and Wales

under Companies Act 1985 with registered number

3937466 on 25 February 2000)

Share code on AIM: PAF

Share code on JSE: PAN

ISIN: GB0004300496

(Pan African Resources or the Company or the Group)

Short Form Announcement – Condensed Consolidated Interim Unaudited Results
for the six months ended 31 December 2019

Chief executive officer's statement

Pan African Resources CEO Cobus Loots commented:

“Our business strategy of delivering safe, sustainable and high-margin gold
production has yielded improved operational, financial and safety results for
the six months ended 31 December 2019 (“the current reporting period”).

In the current reporting period, our team delivered a robust operational
performance, with gold sales volumes increasing by 13.6% to 90,602oz.

Despite the increase in the Group’s overall AISC for the current reporting
period, all-in sustaining costs (“AISC”), at our tailings businesses
operated at exceptional margins, with Elikhulu producing at an AISC of
USD708/oz and our Barberton Tailings Retreatment Plant reporting an AISC of
USD643/oz. We are pleased to maintain our previous guidance of gold production
of 185,000oz, at an AISC below USD1,000/oz, for the full 2020 financial
year. 

Previously, we committed to increasing margins at our higher-cost underground
operations and are encouraged by progress made in achieving this objective. 
Evander Mine’s 8 Shaft pillar (8 Shaft pillar) project, where all
development milestones were achieved on-schedule and on-budget, will reach
commercial production in the next few weeks, adding further high-margin
production from our operations in the second half of this year.  At
Barberton’s New Consort Mine, we will also commence mining the PC Shaft
pillar in March, adding incremental gold production and considerably reducing
the unit cost of production from this operation.  Critically, we are
conducting pillar mining activities in a way that does not sterilise the
longer-term future of the operations.

We have successfully completed the mining feasibility study on Evander
Mines’ Egoli project, which demonstrates its technical viability and
compelling economic returns.  This study is currently subject to an
independent technical review. The Group is exploring several non-dilutive
funding options for Egoli, which will enable Pan African Resources to continue
its strategy of de-gearing its balance sheet and increasing dividends.  To
this end, we are engaging with several financial institutions who have
expressed an interest in the continued financing of the Group’s organic
growth projects.  Our attractive pipeline of near- to medium-term growth
projects, including the Egoli project and Barberton Mines’ Royal Sheba
project, have the potential to significantly boost Group production in the
coming years.

Despite some of challenges, including electricity supply constraints and
illegal mining, Pan African Resources has demonstrated the ability to operate
successfully in South Africa.  We will continue to use our experience and
resources to improve the lives of all our stakeholders and grow shareholder
value.

Management’s key focus for the remainder of the 2020 financial year includes
further improving the safety performance, delivering on production guidance,
reducing operational costs, managing cash flow generation and strengthening
the Group’s financial position by reducing senior debt.”

Key features
* Total gold sold increased by 13.6% to 90,602oz (2018: 79,765oz) due to an
increase in production by Evander Mines
* Gold produced by the Group increased by 14.7% to 92,941oz (2018: 81,014oz)
* Group profit after taxation increased by 125.8% to USD21.9 million (2018:
USD9.7 million), due to the improved production performance at Evander Mines
and the prevailing robust USD and rand gold price. Group adjusted earnings
before interest, taxation, depreciation, amortisation, impairment reversals
and fair value adjustments on derivative financial assets and liabilities
(adjusted EBITDA) increased considerably by 83.4% to USD44.2 million (2018:
USD24.1 million)
* Group revenue increased by 36.2% to USD132.8 million (2018: USD97.5
million), due to an increase in gold sales by Evander Mines, following a full
six-month contribution from Elikhulu to the Group’s production profile and
also the increase in production from remnant mining and surface sources
* Earnings per share more than doubled to USD1.14 cents per share (2018:
USD0.50 cents per share)
* Headline earnings per share increased to USD1.13 cents per share (2018:
USD0.50 cents per share)
* No dividend declared for this six-month period
The Company has a dual primary listing on the JSE main board in South Africa
and the AIM of the London Stock Exchange.

The information in this announcement has been extracted from the Unaudited
Interim Results for the six months ended 31 December 2019. The short-form
announcement has not been reviewed by the Company’s auditors.

This short form announcement is the responsibility of the directors and is
only a summary of the information contained in the full announcement which was
released on SENS on 18 February 2020.

Copies of the full announcement are available on request by emailing
ExecPA@paf.co.za.

Any investment decisions should be based on the full announcement and the
Group’s detailed operational and financial summaries which are disclosed on
the Pan African website at

http://www.panafricanresources.com/investors/financial-reports/ and
https://senspdf.jse.co.za/documents/2020/jse/isse/pan/Int2019.pdf

18 February 2020

 Contact 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 Suite 31 Second Floor 107 Cheapside London EC2V 6DN United Kingdom Office: + 44 (0)20 7796 8644  
 Cobus Loots Pan African Resources PLC Chief Executive Officer Office: + 27 (0)11 243 2900                                                                                         Deon Louw Pan African Resources PLC Financial Director Office: + 27 (0)11 243 2900                                 
 Phil Dexter/Jane Kirton St James's Corporate Services Limited Company Secretary Office: + 44 (0)20 7796 8644                                                                      John Prior Numis Securities Limited Nominated Adviser and Joint Broker Office: +44 (0)20 7260 1000                 
 Ciska Kloppers Questco Corporate Advisory Proprietary Limited JSE Sponsor Office: + 27 (0)11 011 9200                                                                             Ross Allister/David McKeown Peel Hunt LLP Joint Broker Office: +44 (0)20 7418 8900                                 
 Julian Gwillim Aprio Strategic Communications Public & Investor Relations SA Office: +27 (0)11 880 0037                                                                           Thomas Rider/Neil Elliot BMO Capital Markets Limited Joint Broker Office: +44 (0)20 7236 1010                      
 Bobby Morse/Chris Judd Buchanan Public and Investor Relations UK Office: +44 (0)20 7466 5000 paf@buchanan.uk.com                                                                  Website: www.panafricanresources.com                                                                               



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