REG-Pan African Resources Plc: Operational Update for the Half Year ended 31 December 2023 (H1 FY2024)

Pan African ResourcesAnnouncement

22/01/2024 07:15

Pan African Resources PLC    Pan African Resources Funding Company

(Incorporated and registered in England and Wales Limited

under Companies Act 1985 with registered  Incorporated in the Republic of
South Africa

number 3937466 on 25 February 2000)   with limited liability

Share code on AIM: PAF     Registration number: 2012/021237/06

Share code on JSE: PAN     Alpha code: PARI

ISIN: GB0004300496

ADR code: PAFRY

(“Pan African” or “the Company” or “the Group”)

 

OPERATIONAL UPDATE FOR THE HALF YEAR ENDED DECEMBER 2023 (H1 FY2024)

Pan African is pleased to provide its shareholders and noteholders with a
production update for the half year ended 31 December 2023 (Reporting Period)
and information on progress being made with the construction of the processing
plant at the Mogale Tailings Retreatment project (MTR Project).

 

KEY FEATURES
* Improvement in overall Group safety performance 
* Gold price received of US$1,961/oz (2022: US$1,725/oz), an increase of 13,7%
relative to the six months ended 31 December 2022 (Previous Reporting Period)
* Excellent operational results, with gold production of 98,458oz (2022:
92,307oz), an increase of 6.7% relative to the Previous Reporting Period 
* Production costs were well managed despite inflationary pressures, with
Group all-in sustaining costs (AISC) expected to be approximately US$1,300/oz
at an average exchange rate of US$/ZAR18.69, below the FY2024 guidance of
US$1,350/oz (at an assumed exchange rate of US$/ZAR18.50)
* MTR Project construction on time and within budget, with commissioning
expected in the latter half of the 2024 calendar year
* Commissioning of further renewable energy generating capacity is on
schedule.
 

SAFETY AND GROUP GOLD PRODUCTION FOR SIX MONTHS ENDING DECEMBER 2023
* The Group continues to implement initiatives in pursuit of its ‘Zero
Harm’ goal 	* Group safety rates remain industry leading:		* Total
recordable injury frequency rate (TIFR) declined to 6.13 per million man hours
(FY2022: 8.54), a notable improvement 
		
	
* Operations performed in line, or better than expected, with production
forecast for the Reporting Period, as follows:	* Barberton Mines underground:
36,779oz* (2022: 32,022oz). The implementation of continuous operations at
Barberton Mines contributed to increases in mined tonnages and grades, when
compared to the Previous Reporting Period
* Evander Mines underground: 21,307oz (2022: 19,173oz). The ramping up of
mining operations at Evander Mines’ 24 Level underground operations
contributed to the increased gold production, successfully replacing the
depletion of the 8 Shaft pillar ore resources, consistent with the mine plan
* Elikhulu tailings retreatment: 28,106oz (2022: 25,830oz), with operations
benefitting from improved metallurgical recoveries
* Barberton tailings retreatment plant (BTRP): 9,864oz (2022: 10,012oz)*
* Evander Mines’ surface sources: 2,401oz (2022: 5,270oz).
* Surface sources from Fairview Mine included in BTRP production

 

 

PRODUCTION GUIDANCE
* Production guidance for the full 2024 year is maintained at between
180,000oz to 190,000oz (FY2023: 175,209oz). However, given the excellent
production performance in the Reporting Period, revised guidance may be
considered in due course. Production for FY2025 is expected to be
significantly higher, following commissioning of the MTR project, which will
add approximately 50,000oz/yr to Group production, increasing annual output by
some 25%.
 

FINANCIAL RESULTS
* The Group’s AISC for the Reporting Period is expected to be approximately
US$1,300/oz, at an average exchange rate of US$/ZAR18.69	* The AISC reduction
resulted from excellent cost control, improved gold production, as well as the
weaker US$/ZAR exchange rate that prevailed during the Reporting Period 
	
* Group net senior debt increased to US$60.0 million (June 2023: US$18.9
million), primarily as a result of the capital expenditure of US$23.2 million
incurred on the MTR Project and the dividend of US$22.1 million paid to
shareholders in December 2023. 
 

MTR PROJECT
* As previously communicated, significant progress has been made with the
construction of the MTR Project’s processing plant, with commissioning being
on track for the latter half of the 2024 calendar year and steady state
production expected by December 2024:	* Construction is progressing on time
and capital expenditure is in line with the project’s budget
* Construction highlights include completion of the laying of foundations for
the nine CIL tanks and the tower crane’s construction.  
 

UPDATE ON THE ORGANIC GROWTH PROJECTS
* Progress at Evander Gold Mine’s 24 to 26 Level underground expansion
project remains on track, with the following notable achievements:	*
Construction of Phase 2 of the refrigeration plant on 24 Level at Evander
Mines’ 8 Shaft is currently at an advanced stage, with completion
anticipated during the 2024 financial year, as 25 Level mining operations
commence 
* Development to access 25 and 26 Level mining areas has commenced
* Equipping of the existing 17 Level underground ventilation shaft, with a
hoisting capacity of up to 40,000 tpm, is expected to be completed during
FY2024, improving efficiencies and eliminating the existing cumbersome
conveyor system
	
* Dewatering of Evander’s 7 Shaft Egoli project is ongoing. Once dewatered
to below 20 Level, reserve delineation drilling will commence to further
define the ore payshoot and its grade variability.
 

ESG UPDATES
* Construction of Fairview Mine’s 8.75MW solar energy plant is progressing
according to plan, with commissioning expected during June 2024 
* Community social and labour plan projects:	* Barberton Mines completed the
construction and refurbishment of two local schools, benefitting over 1,600
learners 
* Evander Mines constructed and fully equipped science and computer
laboratories at two local schools, benefitting over 1,200 learners  
	
* MTR Project:	* Community engagement structures and social initiatives have
commenced with host communities and small local businesses
* Environmental rehabilitation is ongoing, including cleanup of historical
spillages and removal of derelict pipelines, eradication of alien vegetation
and wetlands remediation, which positively impacts local living conditions.
 

Cobus Loots, Pan African’s CEO commented:

“We are pleased with the Group’s excellent safety, production and cost
performance for the Reporting Period which positions us well  to deliver on
our guidance for the full financial year. Commissioning of the world-class
processing plant at the MTR Project towards the end of this calendar year will
further increase the Group’s production with approximately 50,000 oz per
year of high margin ounces.

The commissioning of Barberton’s solar PV plant will contribute to further
cost savings in the next financial year, adding to the benefits already being
realised from Evander’s PV solar plant. We are also excited by the positive
and tangible impact the Group’s ESG projects have made on improving
relationships with our host communities and contributing to the sustainability
of these areas.”

 

INTERIM RESULTS PRESENTATION, OPERATIONAL AND GROWTH PROJECTS UPDATE

A detailed update on the Group’s operations and capital projects will be
included in the Company’s interim results presentation, scheduled for
release on 14 February 2024.

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018. Upon the publication of this
announcement via Regulatory Information Service (RIS), this inside information
is now considered to be in the public domain.

Rosebank

22 January 2024

 

For further information on Pan African Resources, 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 107 Cheapside Second Floor London EC2V 6DN United Kingdom Office: + 44 (0)20 7796 8644          
 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                                                                                                                                              Website: www.panafricanresources.com                                                                              
  Tel: + 27 (0)11 243 2900                                                                                                                                                                                                                                                                           
  E-mail: hhira@paf.co.za                                                                                                                                                                                                                                                                            
 Company Secretary Jane Kirton St James's Corporate Services Limited Office: + 44 (0)20 7796 8644                                                                                  Nominated Adviser and Joint Broker Ross Allister/Bhavesh Patel Peel Hunt LLP Office: +44 (0)20 7418 8900          
 JSE 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 (Berenberg) Office: +44 (0)20 3207 7800  

 



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