REG-Pan African Resources Plc: Transaction closed to acquire Mintails SA Assets

Pan African ResourcesAnnouncement

06/10/2022 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 CLOSES TRANSACTION TO ACQUIRE MINTAILS SA ASSETS  

Pan African is pleased to inform shareholders that the Company has closed the
transaction to acquire the total share capital and claims of Mogale Gold
Proprietary Limited (Mogale Gold) and Mintails SA Soweto Cluster Proprietary
Limited (MSC), (collectively, the Sale Transaction). Both Mogale Gold and MSC
are 100% owned by Mintails Mining SA Proprietary Limited (Mintails SA), which
was placed in provisional liquidation during 2018.

The Sale Transaction aggregate cash consideration of ZAR50.0 million
(approximately US$2.8 million at an exchange rate of US$/ZAR:18.00) was
settled on closing.

The details of the Sale Transaction, Mineral Resources potential and strategic
rationale for the acquisition were outlined in the Company’s announcement of
6 November 2020.

Pan African completed a definitive feasibility study (DFS) on the Mogale Gold
tailings storage facilities (TSFs) (the Project) and announced the results of
this study on 30 June 2022 (the Study). The Study demonstrated compelling
economics and the potential to significantly increase Group gold production
(an increase in excess of 25% compared to current Group annual production)
over an initial life of mine (LOM) of 13 years.  Re-mining of the MSC TSFs
has the potential to add further production upside and extend the LOM to 21
years.

Envisaged Project financing

The Group has agreed a credit approved and underwritten term sheet with
FirstRand Bank Limited, acting through its Rand Merchant Bank division, for
US$80 million of senior debt for part funding of the Project’s construction.
The Group is in the process of evaluating a number of additional funding
options for the balance of the capital budget requirement.

Way forward and envisaged Project execution timeline

Following the completion of the DFS, Pan African commenced detailed
engineering optimisation studies and the impact assessments required for the
environmental authorisation process, stakeholder engagements and permitting.
Commencement of construction is currently anticipated in 2023 with an
estimated Project timeline as per below.

Activity                                                         
Estimated date

Detailed engineering optimisation                September 2022
– March 2023

Funding package
finalised                              March 2023

Environmental
approvals                               March
2023

Construction
commences                              April 2023

Commissioning                                              
July 2024 – December 2024

Cobus Loots, CEO of Pan African, commented: “Pan African is pleased to have
finally closed the Sale Transaction. Our studies have demonstrated robust
operational and financial economics, with the Project having the potential to
further increase our high-margin, long-life production from tailings
retreatment operations.

The area where Mintails is situated presents a number of environmental and
social challenges. We will require the assistance of the government and all
the other legitimate stakeholders to successfully address those challenges,
remediate the site and develop a world-class project. We look forward to
continue to work with those stakeholders in this regard.”

Rosebank

6 October 2022

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 2nd Floor 107 Cheapside 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 Tel: + 27 (0)11 243 2900 E-mail: hhira@paf.co.za                                                                                             Website: www.panafricanresources.com                                                                                
 Company Secretary Phil Dexter/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 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  



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