REG-Pan African Resources Plc: Operational Update

Pan African ResourcesAnnouncement

19/03/2018 14:16

Pan African Resources PLC

(Incorporated and registered in England and Wales under Companies Act 1985
with registered number 3937466 on 25 February 2000)

AIM Code: PAF

JSE Code: PAN

ISIN: GB0004300496

(“Pan African” or the “Company”)

OPERATIONAL UPDATE

Further to the operational update released on 1 February 2018, Pan African is
pleased to provide further information on progress at the Fairview 11-block
Main Reef Complex (“MRC”) orebody and the Barberton Tailings Retreatment
Plant (“BTRP”), as well as updated guidance on the commencement of
production from the Elikhulu Tailings Retreatment Plant (“Elikhulu”).

Barberton Mines - Fairview 11-block MRC orebody grades

The average head grade for the Barberton Mines complex, which includes the
Fairview, Sheba and Consort mines, has risen from an average of 8.7g/t during
July to December 2017 to 11.5g/t which was recorded in the February 2018
production month. This 32% increase in head grade is predominantly as a result
of mining high-grade ore at the 272 platform since January 2018. The latest
on-reef development samples taken in the 272 platform, recorded an average
grade of 99.2g/t (ranging from 2.2g/t to 1,320g/t) over a mineralised width of
3.36m along a strike length of 24m. This confirms that the high-grade areas of
this mining block are now in production. This high-grade core of the 11-block
MRC orebody is encapsulated within a 75m mineralised envelope with the
remainder of the mineralisation retrieving an average grade of 10.5g/t.

Furthermore, face sampling of the on-reef development, taken of the
mineralised 11-block MRC orebody at the 358 platform, resulted in an average
grade of 45.7g/t over a mineralised width of 2m, confirming that the on-reef
development has reached the high-grade section of this mining block. It is
envisaged that the strike length of the MRC orebody on the 358 platform will
be 75m with a high-grade core of 40m, extrapolated from the 272 platform
above.

These platforms underpin Fairview’s high-grade production and mining
flexibility, particularly for ore haulage, development waste disposal and
improving the mining face availability for the next two years, during which
development of the next platform below the 358 will be completed. Production
from 11-block MRC orebody will be further enhanced with the completion of the
sub-vertical shaft in two years’ time.

BTRP regrind mill construction update

The construction of the regrind mill is proceeding according to schedule with
commissioning anticipated in the last week of April 2018. On commissioning of
the regrind mill, production at the BTRP is expected to increase to
approximately 21,000 ounces per annum.

Elikhulu construction update

Construction is progressing ahead of schedule with first gold expected in
August 2018. Ramp up to full production of approximately 55,000 ounces per
annum is expected to take no longer than two months, after which Elikhulu is
estimated to produce gold at an all-in sustaining cost of production of below
$650/oz, at the prevailing USD:ZAR exchange rate. In conjunction with the
Evander Tailings Retreatment Plant, these two operations are expected to
produce more than 70,000 ounces per annum.

Evander Mines labour consultation process

As previously announced on 27 February 2018, Evander Mines is currently in a
consultation process with its labour in terms of section 189 of the South
African Labour Relations Act, 66 of 1995. Further announcements will be made
in due course.

Commenting on the operational update, Cobus Loots, CEO, stated:

“Pan African is focused on sustainable lower cost gold production from our
asset portfolio. After a challenging period at Barberton Mines we have
successfully dealt with the key underground challenges at Fairview’s
11-block and we are on track to re-establish BTRP’s production profile at
approximately 21,000 ounces per annum. Mining over the past two months at the
272 platform and the development into the 358 platform confirms the geological
continuity of Fairview’s 11-block high-grade orebody. These developments,
along with progress at the BTRP and Elikhulu, provide Pan African with far
greater certainty of high quality gold ounce production.”

The information contained in this announcement has not been reviewed or
reported on by Pan African’s auditors and is the responsibility of the
Directors of Pan African.

Johannesburg

2 March 2018

 Contact information                                                                                                                                                                                                                                                                                                                                      
 Corporate Office The Firs Office Building 1st Floor, Office 101 Cnr. Cradock and Biermann Avenues Rosebank, Johannesburg South Africa Office: + 27 (0) 11 243 2900 Facsimile: + 27 (0) 11 880 1240  Registered Office Suite 31 Second Floor 107 Cheapside London EC2V 6DN United Kingdom Office: + 44 (0) 207 796 8644 Facsimile: + 44 (0) 207 796 8645  
 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 St James's Corporate Services Limited Company Secretary Office: + 44 (0) 207 796 8644                                                                                                   John Prior / Paul Gillam Numis Securities Limited Nominated Adviser, Joint Broker Office: +44 (0) 20 7260 1000                                       
 Sholto Simpson One Capital JSE Sponsor Office: + 27 (0) 11 550 5009                                                                                                                                 Ross Allister / James Bavister Peel Hunt LLP Joint Broker Office: +44 (0) 207 418 8900                                                               
 Jeffrey Couch/Neil Haycock/Thomas Rider BMO Capital Markets Limited Joint Broker Office: +44 (0) 207 236 1010                                                                                       Bobby Morse/Chris Judd Buchanan Communications Public & Investor Relations UK Office: + 44 (0) 207 466 5000                                          
 Julian Gwillim Aprio Strategic Communications Public & Investor Relations SA Office: +27 (0)11 880 0037  www.panafricanresources.com                                                                                                                                                                                                                     



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