REG-Pan African Resources Plc: Unaudited Interim Results for 6m to 31 Dec 2021

Pan African ResourcesAnnouncement

16/02/2022 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)

(Key features are reported in US dollar (US$) and South African rand (ZAR))

UNAUDITED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2021
– SHORT-FORM ANNOUNCEMENT

highlights
* Excellent safety record maintained, and 81% COVID-19 vaccination rate
achieved by the Group
* Group gold production increased by 9.9% to a record half-year production of
108,085oz (2020: 98,386oz)
* All-in sustaining costs (AISC) for the six months ended 31 December 2021
(Current Reporting Period) of US$1,173/oz, an improvement of 6.3% when
compared to US$1,252/oz for the six months ended 31 December 2020
* Full-year production guidance increased to approximately 200,000oz
* Net cash generated by operating activities increased by 54.4% to US$43.4
million (2020: US$28.1 million)
* Profit after taxation and headline earnings of US$46.1 million (2020:
US$40.8 million)
* Earnings per share (EPS) and headline earnings per share (HEPS) increased by
13.3% to US 2.39 cents per share (2020: US 2.11 cents per share)
* Record net rand dividend payment in December 2021, converted to presentation
currency of US$21.6 million (2020: US$17.8 million)
* Net debt reduced by 56.7%
* Evander Mines’ underground life-of-mine (LoM) extended to 13 years, with
increased expected gold production and development capital internally funded
* Agreement for the evaluation of the Mintails tailings retreatment
opportunity extended
* Environmental, social and governance (ESG) initiatives, including renewable
energy and large-scale agriculture projects, on track
* Share buy-back platform established for future implementation
This announcement contains inside information.

Cobus Loots, Pan African’s Chief Executive Officer, commented:

“Pan African has again delivered an excellent operational performance,
achieving record gold production in excess of 108,000oz for the Current
Reporting Period, and exceeding our previous guidance.

Safety remains our number-one priority, with targeted safety campaigns and
incentives to encourage and reward safe practices in pursuit of our ultimate
goal of achieving zero harm. The Group has maintained its commendable safety
performance, with improvements in both the Group’s lost-time injury
frequency rate and reportable injury frequency rate. The Group has achieved a
COVID-19 vaccination rate of 81% and continues to implement and maintain
stringent policies and protocols to mitigate the adverse impact of the ongoing
COVID-19 pandemic on employees and production.

Group AISC was US$1,173/oz for the Current Reporting Period, which is in line
with our target AISC of approximately US$1,200/oz for the year ending 30 June
2022.

Net cash generated by operating activities increased by 54.4%, together with a
13.3% increase in EPS and HEPS.

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 produced 49,117oz of gold for the Current Reporting Period,
and is on track to achieve full-year production guidance of approximately
100,000oz. We are expecting an improved performance from the Elikhulu Tailings
Retreatment Plant during the second half of the financial year, where
production was adversely impacted as a result of inclement weather conditions
experienced during November and December 2021.

Evander Mines’ 8 Shaft (8 Shaft) pillar delivered an excellent performance
during the Current Reporting Period, again 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, work continues in preparation for the commencement of
mining 8 Shaft’s 2 Decline on 24 Level. Mining from this level is
anticipated to commence in the 2023 financial year, as the current pillar
mining reaches completion. The board has now also approved the development
capital for Evander Mines’ 25 and 26 Level project, which is expected to
increase the LoM for 8 Shaft to 13 years, with expected annual production from
these levels of approximately 65,000oz.

At Barberton Mines’ Royal Sheba project, development work is ongoing.
Project Dibanisa, which effectively connects the underground workings of the
Fairview and Sheba Mines, is also progressing on schedule and will reduce the
operational cost of underground operations.

At Mintails, the definitive feasibility study on Mogale Gold’s tailings
storage facilities (TSFs) is being finalised, and we look forward to
communicating the results of this study in due course.

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 TSFs (Blyvoor assets). This acquisition has the
potential of further building on the Group’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 study expected to be completed by April 2022.

The 9.975MW solar photovoltaic (PV) renewable energy plant at Evander Mines is
on track to be commissioned in March 2022, following minor delays due to port
disruptions and inclement weather. This plant, which will be delivered on
budget, will be one of the first of its kind in the South African mining
sector and demonstrates our commitment to sustainable energy solutions, with
the benefits of cost savings and certainty of power supply. A feasibility
study to expand the solar PV renewable energy plant to 21.98MW is underway,
with the additional capacity designated for Evander Mines’ underground
growth projects. A feasibility study for a similar-size solar PV renewable
energy plant at Barberton Mines has been completed, with environmental
permitting and detailed engineering design work progressing to plan and, in
conjunction with several other advanced ESG projects, these plants will
contribute to underpinning the Group’s profitability and sustainability in
the longer term.

The Group is on track to produce approximately 200,000oz of gold for the
financial year ending 30 June 2022, in line with our increased production
guidance. We are committed to continuing to create 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.”

DIRECTORS’ RESPONSIBILITY

The information in this announcement has been extracted from the unaudited
interim financial results for the six months ended 31 December 2021. The
short-form announcement has not been reviewed by the Company’s auditors. The
unaudited interim financial results have been prepared under the supervision
of the financial director, Deon Louw. This short-form announcement is the
responsibility of the directors of Pan African and is only a summary of the
information contained in the full announcement which was released on SENS on
16 February 2022.

Any investment decisions should be based on the full announcement and the
Group’s detailed operational and financial summaries.

AVAILABILITY OF FULL ANNOUNCEMENT

The full announcement is accessible via the JSE link at
https://senspdf.jse.co.za/documents/2022/jse/isse/pan/INT2021.pdf

and via the Company’s website at
https://www.panafricanresources.com/wp-content/uploads/Pan-African-Resources-interim-results-SENS-announcement-2021.pdf

Copies of the full announcement may also be requested by emailing
ExecPA@paf.co.za and electronically via the sponsor (sponsor@questco.co.za) at
no charge during business hours.

The Company has a dual primary listing on the JSE in South Africa and the AIM
market of the London Stock Exchange, a secondary listing on the A2X Markets as
well as a sponsored Level 1 ADR programme in the USA through the Bank of New
York Mellon.

Rosebank

16 February 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 Corner 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  
 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/Alexander Allen  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                     



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