REG-Pan African Resources Plc: Operational Update - 31 Dec 2021

Pan African ResourcesAnnouncement

19/01/2022 07:05

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”)

OPERATIONAL UPDATE FOR THE SIX MONTHS ENDED 31 DECEMBER 2021

Pan African is pleased to provide shareholders with an operational update for
the six months ended 31 December 2021 (“Current Reporting Period”).

 Key Operational Results for the Current Reporting Period
* Excellent safety record maintained
* Group gold production increased by 9.9% to a record half-year production of
108,085oz (2020: 98,386oz)
* Gold production from Barberton Mines for the period was 49,117oz (2020:
52,354oz), while Elikhulu and Evander Mines produced 25,900oz (2020: 26,863oz)
and 33,068oz (2020: 19,169oz) respectively
* Group has achieved a vaccination rate of 77% and continues to implement and
maintain stringent policies and protocols to mitigate the effects of the
ongoing COVID-19 pandemic on employees and production
* Group net senior debt decreased by 60.1% to US$23.9 million (2020: US$59.9
million) after payment of a record net dividend of US$21.6 million (2020:
US$17.8 million) in December 2021
* ESG projects, including the 10MW renewable energy solar photovoltaic (PV)
plant at Evander Mines and large-scale agriculture projects at Barberton Mines
are on track for commissioning before the 30 June 2022 financial year-end
* Pan African is increasing its full year production guidance to approximately
200,000oz
Pan African CEO Cobus Loots commented:

“Pan African has again delivered an excellent operational performance,
achieving record gold production in excess of 108,000oz for the Current
Reporting Period. This exceeded the expected 105,000oz announced in the
Group’s December 2021 production update and was achieved while continuing to
manage the impact of the COVID-19 pandemic and maintaining an excellent safety
record.

The reduction in the Group’s net senior debt to US$23.9 million represents a
60.1% decrease relative to the outstanding net senior debt at 31 December
2020, notwithstanding the payment of a record final Rand dividend for the June
2021 financial year.

Barberton Mines’ gold production of 49,117oz for the Current Reporting
Period decreased by 6.2%, we are however still forecasting that the operation
will achieve full year production guidance of approximately 100,000oz.  

At Elikhulu, production was down marginally by 3.6% to 25,900oz, mainly as a
result of inclement weather conditions experienced during November and
December 2021.

Evander Mines’ 8 Shaft pillar delivered an excellent performance during the
Current Reporting Period, demonstrating the potential of this operation.
Elevated grades and improved mining rates, as a result of improved face
availability, increased production from the pillar and surface sources by
72.5% to 33,068oz for the Current Reporting Period.

Following the reprioritised capital programme, as announced in the Group’s
2021 final results presentation, work continues in preparation for the
inception of mining Evander’s 8 Shaft No.2 Decline at 24 Level. Mining from
this level is anticipated to commence in the 2023 financial year, as the
existing pillar mining reaches completion. Studies to access the 25 and 26
Level Mineral Resources at 8 Shaft are also at an advanced stage. Our organic
growth projects have the potential to increase Evander’s operating life by
an estimated 20 years.  

The 10MW solar PV plant at Evander Mines is on track to be commissioned late
in February 2022, following delays due to port disruptions and inclement
weather.  A feasibility study to expand the solar PV plant to 26MW is
underway, with the additional capacity designated for Evander’s underground
growth projects, with renewable energy expected to further improve the
profitability and sustainability of this operation.  

At the end of last year the Group announced the conditional acquisition of one
of the last remaining large-scale gold tailings resources available in South
Africa, the Blyvoor Gold TSF dumps (Blyvoor Assets). This opportunity could
further build on the Company’s track record of successfully bringing
tailings retreatment operations to fruition.  An independent fatal flaw
assessment and gap analysis has commenced on the Blyvoor Assets, with this
work expected to be completed by April 2022.

At Mintails, the definitive feasibility study (DFS) on Mogale Gold’s tailing
storage facilities (TSFs) is being finalised.

The Group is on track to produce 200,000oz of gold for the financial year
ending 30 June 2022, and we are committed to continue creating value for our
stakeholders by positioning Pan African as a sustainable, safe, high-margin
and long-life gold producer with an attractive pipeline of growth projects. We
look forward to presenting our interim results on 16 February 2022.”

Safety

The Group continued to maintain an industry-leading safety performance, with a
focus on new safety initiatives in its pursuit of a zero-harm working
environment.
* The Group’s lost-time injury frequency rate (‘LTIFR’) improved to 0.98
(2020: 1.64) per million man hours
* The Group’s reportable injury frequency rate (‘RIFR’) improved to 0.28
(2020: 0.65) per million man hours
* Barberton Gold Mines achieved an excellent RIFR of 0.20 (2020: 0.67) per
million man hours
* Elikhulu unfortunately experienced one reportable injury, which caused a
regression in LTIFR to 1.50 (2020: 0.00) per million man hours
* Evander Gold Mining achieved an excellent RIFR of 0.00 (2020: 1.01) per
million man hours
Group Production

Group production for the current reporting period increased by 9.9% to
108,085oz (2020: 98,386oz). The gold production split per operation is as
follows:

 Operation                                          Six months ended 31 December 2021  Six months ended 31 December 2020  
 Barberton Mines – Underground                                    39,991                             42,350               
 Barberton Tailings Retreatment Plant (BTRP)                      9,126                              10,004               
 Elikhulu                                                         25,900                             26,863               
 Evander Mines – Underground and surface sources                  33,068                             19,169               
 Total ounces produced                                           108,085                             98,386               

Barberton Mines

Barberton Mines’ production decreased by 6.2% to 49,117oz (2020: 52,354oz)
for the Current Reporting Period, consistent with the mine plan. Work during
the Current Reporting Period included accelerating the waste development to
the new 259 platform in the high-grade Main Reef Complex (MRC) orebody.
Underground production decreased by 5.6% to 39,991oz (2020: 42,350oz) and the
BTRP’s production decreased by 8.8% to 9,126oz (2020: 10,004oz) for the
Current Reporting Period. Barberton Mines is still on track to deliver
approximately 100,000oz for the year ending 30 June 2022.

Elikhulu tailings retreatment plant (Elikhulu)

Gold production from Elikhulu decreased marginally by 3.6% to 25,900oz (2020:
26,863oz) during the Current Reporting Period. Production was adversely
impacted by inclement weather conditions during November and December 2021.

Gold production from Elikhulu is expected to increase in the second half of
the 2022 financial year, consistent with the mining plan which, forecasts
production of approximately 55,000oz for the year ending 30 June 2022.

Evander Mines’ 8 Shaft Pillar project (8 Shaft Pillar) and surface sources

Production from the Evander Mines’ increased by 72.5% to 33,068oz (2020:
19,169oz).

Underground production increased by 116.6% to 27,312oz (2020: 12,607oz). The
increase in the 8 Shaft Pillar’s production during the Current Reporting
Period was a result of:
* Elevated mining face grades of 13g/t (2020: 8g/t), relative to planned
grades.
* Improved mining rates post the extraction of the core around the 8 Shaft
barrel, with increased mining face availability.
Gold production from the 8 Shaft Pillar is expected to normalise during the
second half of the 2022 financial year as a result of planned mining in areas
with anticipated grades of approximately 8g/t.

Group net senior debt

The Group’s net senior debt (comprising secured, interest-bearing debt, net
of available cash) decreased by 60.1% to US$23.9 million (2020: US$59.9
million). Relative to the 30 June 2021 financial year-end, Group net debt
decreased by 29.1% to US$24.1 million.

The reduction in the net debt was achieved notwithstanding the cash outflow of
US$21.6 million (2020: US$17.8 million), associated with the record net Rand
dividend paid to shareholders in December 2021.

Progress update on Blyvoor and Mintails conditional acquisitions

Blyvoor

Shareholders are referred to the announcement of 15 December 2021, containing
the details of the proposed transaction to acquire the Blyvoor Gold’s TSFs.
 Subsequent to the announcement, the Group has engaged independent
consultants to conduct a fatal flaw assessment and gap analysis as part of the
initial due diligence. These studies will be completed by April 2022,
consistent with the timelines of the staged acquisition process.

Mintails

During November 2020, the Group announced the conditional acquisition of
Mintails’ SA Mogale Gold and the Soweto Cluster’s (MSC) TSFs, with
combined Mineral Resources of 243Mt with an in-situ grade of 0.30g/t, for an
estimated gold content of 2.36Moz.

A pre-feasibility study (PFS) was completed on Mogale Gold’s TSFs during
July 2021. The MSC TSFs were excluded from the study’s scope as additional
technical and due diligence analysis is required, which will be addressed in
forthcoming studies. Average production of between 40-50koz/yr over an 11-year
life-of-mine was projected by the PFS.  

Following the positive PFS findings, the Group is currently finalising a DFS,
led by DRA Global (DRA), which is scheduled to be completed in Q1 of the 2022
calendar year. A concept study on the Soweto Cluster is also progressing under
the auspices of DRA.

Subsequent to the judgement finding that Mintails will remain in provisional
liquidation, the Group has engaged with the provisional liquidator to progress
the transaction and are working on the finalisation of the DFS.

Further details on the Group’s organic growth projects will be provided
together with the Group’s interim financial results for the Current
Reporting Period.

Interim results for the six months ended 31 December 2021

Pan African will announce its interim results on 16 February 2022.

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

19 January 2022

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

www.panafricanresources.com

 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                                                                      Ross Allister/Alexander Allen Peel Hunt LLP Nominated Adviser and Joint Broker Office: +44 (0)20 7418 8900         
 Ciska Kloppers Questco Corporate Advisory Proprietary Limited JSE Sponsor Office: + 27 (0)11 011 9200                                                                             Thomas Rider/Nick Macann BMO Capital Markets Limited Joint Broker Office: +44 (0)20 7236 1010                      
 Hethen Hira Pan African Resources PLC Head: Investor Relations Tel: + 27 (0)11 243 2900 E-mail: hhira@paf.co.za                                                                   Website: www.panafricanresources.com                                                                               



Copyright (c) 2022 PR Newswire Association,LLC. All Rights Reserved