PAN AFRICAN RESOURCES PLC - Pan African agrees to acquire an interest in Shanduka Gold

Pan African agrees to acquire an interest in Shanduka Gold

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
(“Pan African” or the “Company”)


PAN AFRICAN AGREES TO ACQUIRE AN INTEREST IN SHANDUKA GOLD

1.   INTRODUCTION

     Pan African shareholders (“Shareholders”) were previously advised through a SENS
     announcement, dated 9 June 2015, that following the merger between Shanduka Group
     Proprietary Limited and the Pembani Group Proprietary Limited (“Merger”), the direct
     shareholding in Shanduka Gold Proprietary Limited (“Shanduka Gold”) is held by the following
     entities:

     -     The Mabindu Business Development Trust (“Mabindu”) (49.5%);
     -     Jadeite Limited (33.6%), an investment vehicle of the China Investment Corporation; and
     -     The Standard Bank of South Africa Limited (16.9%) (“Sale Shares”).

     Pan African has today entered into a sale of shares agreement (“Agreement”) in terms of
     which it has agreed to acquire the Sale Shares (“Acquisition”). The value of the Sale Shares
     may be determined with reference to the Sale Share’s pro rata interest, net of liabilities, in the
     Pan African shares held by Shanduka Gold. This value is further augmented pursuant to a
     notional vendor financing arrangement attached to the Shanduka Gold shares held by Mabindu.

     The Acquisition purchase consideration will be settled in cash but remains, pursuant to the
     Agreement, confidential and will be disclosed and reported after the closing date. The
     Acquisition purchase consideration was agreed at a discount to the prevailing Pan African
     share price and considers valuation adjustments ordinary to a transaction of this nature.

     Funding for the Acquisition and related expenses shall be sourced from existing cash resources
     and facilities. The Acquisition will not affect the Company’s operations or its ability to continue
     paying dividends.

2.   BACKGROUND TO AND RATIONALE FOR THE ACQUISITION

     Shanduka Gold is Pan African’s primary black economic empowerment shareholder with its
     sole asset being a 23.8% interest in the issued share capital of Pan African. Following the
     Merger, Pan African engaged with the Shanduka Gold shareholders to establish a structure
     through which the existing relationship between the Company and Shanduka Gold may be
     preserved.

     The Acquisition represents a unique opportunity for Pan African to enhance Shareholder value
     by indirectly investing in its own shares via Shanduka Gold whilst pro-actively reducing the
     potential risk of future Shareholder value dilution that could arise if the existing Shanduka Gold
     structure were to be dissolved.

3.   OTHER SALIENT TERMS AND SUSPENSIVE CONDITIONS

     The Agreement remains subject to termination at the Company’s election until the fulfilment or
     waiver, as the case may be, of the suspensive conditions to the Agreement on or before
     15 April 2016.

     Although Pan African is actively pursuing the successful implementation of the Acquisition, the
     Company emphasises that fulfilment of the Acquisition’s suspensive conditions is highly
     dependent upon the successful negotiation and agreement of various matters with the
     Shanduka Gold shareholders.

4.   CATEGORISATION OF THE ACQUISITION

     Pursuant to the JSE Limited Listings Requirements, the Acquisition purchase consideration
     represents less than 5% of the Company’s current market capitalisation and the Acquisition is
     therefore not classified as a categorised transaction.


23 February 2016
Johannesburg

Corporate advisor and JSE sponsor to Pan African
One Capital

Legal advisor to Pan African
Webber Wentzel

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                             Deon Louw
Pan African Resources PLC               Pan African Resources PLC
Chief Executive Officer                 Financial Director
Office: + 27 (0)11 243 2900             Office: + 27 (0)11 243 2900

Phil Dexter                             John Prior / Paul Gillam / James Black
St James's Corporate Services Limited   Numis Securities Limited
Company Secretary                       Nominated Adviser & Joint Broker
Office: + 44 (0)207 796 8644            Office: +44 (0)207 260 1000

Sholto Simpson                          Matthew Armitt / Ross Allister
One Capital                             Peel Hunt LLP
Corporate Advisor and JSE Sponsor       Joint Broker
Office: + 27 (0)11 550 5009             Office: +44 (0)020 7418 8900

Julian Gwillim                          Daniel Thöle
Aprio Strategic Communications          Bell Pottinger PR
Public & Investor Relations SA          Public & Investor Relations UK
Office: +27 (0)11 880 0037              Office: + 44 (0)203 772 2500

www.panafricanresources.com

Date: 23/02/2016 10:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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