REG-Pan African Resources Plc: Operational Update for the year ended 30 June 2024 and Board Change

Pan African ResourcesAnnouncement

29/07/2024 07:15

 

 Pan African Resources PLC (Incorporated and registered in England and Wales under Companies Act 1985 with registered number 3937466 on 25 February 2000) Share code on AIM: PAF Share code on JSE: PAN ISIN: GB0004300496 ADR code: PAFRY (“Pan African” or “the Company” or “the Group”)              Pan African Resources Funding Company Limited Incorporated in the Republic of South Africa with limited liability Registration number: 2012/021237/06 Alpha code: PARI  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

 

 

OPERATIONAL UPDATE FOR THE YEAR ENDED 30 JUNE 2024 AND BOARD CHANGE

Pan African is pleased to provide its shareholders and noteholders with a
preliminary operational update for the financial year ended 30 June 2024
(“Reporting Period”), an update on the Mogale Tailings Retreatment project
(MTR Project) commissioning and information on progress with its renewable
energy projects. Group full year production of 186,039oz was within guidance
and increased by 6.2% year-on-year. The average achieved gold price for the
Reporting Period was US$2,021/oz (R1,215,827/kg at an exchange rate of
US$/ZAR18:71), and will be the highest on record for the Group. 

 

KEY FEATURES
* Significant improvement in the Group’s already industry leading safety
statistics across all operations, as follows:	* the total reportable injury
frequency rate reduced to 5.47 per million man hours (FY2023: 8.13)
* the lost time injury frequency rate improved to 1.62 per million man hours
(FY2023: 2.54) 
* the reportable injury frequency rate improved to 0.70 per million man hours
(FY2023: 1.29)
	
* Gold production increased by 6.2% to 186,039oz (FY2023: 175,209oz), in line
with the revised guidance previously announced, with operations performing
consistent with expectations: (FY2023 figures in brackets)
 * Barberton Mines:                              71,470oz (64,586oz)  
 * Evander Mines underground:                    40,869oz (40,175oz)  
 * Elikhulu:                                     54,812oz (50,573oz)  
 * Barberton Tailings Retreatment Plant (BTRP):  18,888oz (19,875oz)  
* The Group’s all-in sustaining costs (AISC) for the Reporting Period is
expected to be approximately US$1,350/oz, at an average exchange rate of
US$/ZAR: 18.71 
* A delay in commissioning the ventilation shaft for hoisting at Evander 8
underground operations adversely impacted production in the last two months of
the Reporting Period, resulting in the Group not achieving the higher end of
production guidance and also negatively impacted unit costs. Work is now
scheduled to be completed in the coming weeks, after which the full benefits
of the improved ore flow will achieve the planned increased production
profile     
* Exceptional progress has been made with the MTR Project’s construction,
which is nearing its final stages. Plant commissioning and first gold
production is anticipated ahead of schedule in October 2024, with steady state
production expected during December 2024. Furthermore, the project is expected
to be completed below budget	* Including the Soweto Cluster Mineral Resources,
as per the internal pre-feasibility study outcomes reported in May 2024, MTR
is expected to produce approximately 60koz/year over a 21-year life of mine,
at a forecast AISC of less than US$900/oz  
	
* Previously announced FY2025 production guidance reiterated at between
215,000oz and 225,000oz
* Net debt at the end of the Reporting Period increased to US$106.4 million
(FY2023: US$22.0 million), mainly attributable to construction costs at the
MTR Project (US$71.5 million for the year), expansion capital expenditure in
respect of Evander 8 Shaft 25-26 Level development and Elikhulu’s new
tailings storage facility extension (US$23.8 million) and Fairview solar plant
expenditure (US$9.9 million)
* Construction of the Fairview Mine’s 8.75MW solar photovoltaic plant has
been completed, with final commissioning in the coming weeks
 

BOARD CHANGE

The Group’s financial director, Deon Louw, informed the Company of his
intention to retire with effect from 30 September 2024. He will however,
continue as a consultant to the Group. Deon was appointed in this role in
March 2015 and has contributed significantly to Pan African’s operations and
growth throughout his tenure. Marileen Kok will succeed Deon Louw as Group
financial director and, subject to completion of standard director due
diligence, will be appointed to the Company’s board of directors. Marileen
joined Pan African Resources as Group Financial Manager in January 2020 and
has extensive experience in financial reporting, corporate finance, governance
and regulatory compliance.

PROGRESS WITH RENEWABLE ENERGY PROJECTS AND FUNDING

Construction and mechanical assembly, including installation of the solar
trackers, for Fairview Mine’s 8.75MW solar photovoltaic generating plant was
completed at the end of June 2024, enabling the commencement of the required
test work to ensure that the facility complies with operating standards and
regulatory requirements. First power generation is anticipated in the next
month. 

This solar plant is expected to provide 15% of Barberton Mines’ energy
requirements, with annual electricity cost savings of approximately USD2.4*
million, at current Eskom tariffs.

 

Independent feasibility studies are in progress to expand Evander Mines’
current 9.975MW solar facility and also for a new solar plant at the Mogale
Tailings Retreatment operation. These studies are anticipated to be completed
in the third quarter of the 2024 calendar year.

 

Evander Mines’ and Barberton Mines’ solar photovoltaic generating plants
are now funded by means of a US$19.4 million*, 5-year Green Loan facility
which became effective in June 2024. This facility also provides for an
accordion option of US$13.9 million* to provide for the Group’s future
renewable energy funding requirements.

*ZAR amounts converted at an exchange rate of US$/ZAR18:00

Pan African CEO Cobus Loots commented:

“We are pleased that the Group has again delivered into its production
guidance, while further improving safety rates and maintaining its industry
leading safety performance during the 2024 financial year.

The surface tailings retreatment operations at Elikhulu and the BTRP performed
exceptionally well, with some of the lowest all-in sustaining production costs
in Southern Africa. The Group is poised to deliver another world class
tailings retreatment operation ahead of schedule and below budget in the
coming months with the MTR Project.

Barberton Mines has seen a steady improvement in gold production, with planned
optimisation initiatives to increase ore tonnages expected to further bolster
gold production in the next financial year. Commissioning of the ventilation
shaft hoisting system at Evander underground during the start of the 2025
financial year, will substantially improve efficiencies and reduce reliance on
the cumbersome conveyor system currently in use, vastly improving this
operation’s production profile and facilitate the 25-26 Level project’s
development.

We would like to thank Deon for his commitment and the significant
contribution he has made to the Group over the years. We wish him all the best
in his retirement and look forward to continue working with him on various
projects. We would like to extend our congratulations to Marileen Kok who will
be taking over from Deon as Group financial director, and trust in her
seamless transition into the role.

We look forward to presenting our 2024 year-end financial results in
September, and to provide further details on developments at our operations
and exciting pipeline of growth projects that will significantly increase the
Group’s total annual gold production in FY2025.”

 

FINANCIAL RESULTS PRESENTATION, OPERATIONAL AND GROWTH PROJECTS UPDATE

 

A detailed update on the Group’s operations and production growth projects
will be included in the Company’s annual final results presentation and 2024
financial year annual reporting suite, scheduled to be released on 11
September 2024.

 

The information contained in this update is the responsibility of Pan
African’s 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

29 July 2024

 

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

www.panafricanresources.com

 

 Corporate information                                                                                                                                                                                                                                                                              
 Corporate Office The Firs Building 2 nd Floor, Office 204 Cnr. Cradock and Biermann Avenues Rosebank, Johannesburg South Africa Office: + 27 (0)11 243 2900 info@paf.co.za  Registered Office 2 nd Floor 107 Cheapside London EC2V 6DN United Kingdom Office: + 44 (0)20 3869 0706 info@paf.co.za  
 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 3869 0706                                                                            Nominated Adviser and Joint Broker Ross Allister/Georgia Langoulant 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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