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Conditional Amendment To The Terms Of The Manica Gold Exploration Project Disposal Agreement
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”)
CONDITIONAL AMENDMENT TO THE TERMS OF THE MANICA GOLD EXPLORATION
PROJECT (“MANICA”) DISPOSAL AGREEMENT
1. INTRODUCTION
Pan African shareholders (“Shareholders”) are referred to the announcements published by the
Company on 29 August 2012 and 14 December 2012 (“Announcements”) regarding the disposal by
Pan African of Manica to a wholly-owned subsidiary of Auroch Minerals NL (“Auroch”)
(“Transaction”). Pan African and Auroch have agreed to amend the terms of the Transaction as
explained below.
Pursuant to the original Transaction agreement and amendments thereto (“Original Agreement”),
Pan African received 25 million shares in Auroch (“Consideration Shares”) and an AUD 2,000,000
cash payment is payable to Pan African within 18 months of completion of the Transaction
(“Transaction Purchase Consideration”). Pan African is also entitled to a deferred consideration
consisting of further shares and cash payments (“Future Consideration”). The Future Consideration
is subject to Auroch achieving certain future milestones, which at this stage is uncertain. A detailed
description of the terms of the Original Agreement is provided in the Announcements. The Company’s
carrying value for the Auroch investment is currently GBP1,182,606.
Pan African considers Manica as a non-core asset which will require considerable future development
capital. Currently Pan African’s shares in Australian Securities Exchange (“ASX”) quoted Auroch are
subject to an embargo arrangement with the ASX, whereby these shares may not be sold or
otherwise transferred until January 2015.
2. AMENDMENT
Pan African is intent to remain focused on operating assets and now wishes to expedite the
realisation of value pursuant to the Transaction. For this reason, Pan African entered into an
agreement with Auroch on 25 November 2013 (“Amendment”) in terms of which:
1. Auroch shall pay Pan African an amount of AUD 2,000,000 in cash, as full and final
settlement of the Transaction Purchase Consideration and Future Consideration (“Cash
Consideration”) as follows:
- Auroch shall pay Pan African AUD 150,000 of the Cash Consideration by no later than
30 November 2013; and
- Auroch shall settle the remaining portion of the Cash Consideration by 1 March 2014
(“Payment Date”), but may extend the Payment Date by a further 2 months by paying
Pan African an amount of AUD 50,000 per month of extension prior to the Payment
Date, as extended, and such payments shall serve as part payment of the Cash
Consideration; and
2. if Auroch settles the Cash Consideration in accordance with the Amendment, Pan African
shall allow Auroch to reacquire or cancel the Consideration Shares at no additional cost or
consideration.
In the event that Auroch fails to settle the Cash Consideration pursuant to the Amendment, the
Amendment will expire and the provisions of the Original Agreement will be restored. The Amendment
is not subject to any other conditions.
3. PRO FORMA FINANCIAL EFFECTS
As a result of the pro forma financial effects of the Transaction having previously being published in
the Announcements, the pro forma financial effects of the Amendment (“Financial Effects”) have
been set out in the table below. The Financial Effects have been prepared for illustrative purposes
only in order to provide information about how the Amendment might have affected Shareholders, had
the Amendment been implemented on the dates indicated in the notes below.
Due to their nature, the Financial Effects may not fairly present the financial position, changes in
equity, results of operations or cash flows of Pan African after the Amendment. The preparation of the
Financial Effects is the responsibility of Pan African’s directors.
The Financial Effects have been prepared using accounting policies that comply with International
Financial Reporting Standards (“IFRS”) and that are consistent with those applied in the published
audited results of Pan African for the year ended 30 June 2013.
The figures included in the “Before the Amendment” column of the Financial Effects have been
extracted from Pan African’s annual financial statements for the financial year ended 30 June 2013
(“2013 Financial Statements”), which accounted for the Transaction in accordance with the terms
and conditions of the Original Agreement. The Financial Effects are therefore presented after
accounting for the Transaction in the 2013 Financial Statements.
Before the After the Percentage
Amendment Amendment Change
(%)
Earnings per share (pence) 2.63 2.65 0.76
Diluted earnings per share (pence) 2.62 2.64 0.76
Headline earnings per share (pence) 2.17 2.17 -
Diluted headline earnings per share (pence) 2.16 2.16 -
Net asset value per share (pence) 9.45 9.45 -
Tangible net asset value per share (pence) 3.77 3.77 -
Weighted average number of shares in issue 1 619 756 902 1 619 756 902 -
Diluted weighted average number of shares in issue 1 625 933 891 1 625 933 891 -
Number of shares in issue 1 822 834 263 1 822 834 263 -
Notes:
1. The figures included in the “Before the Amendment” column have been extracted from the 2013 Financial Statements.
2. The Financial Effects have been prepared on the assumption that the Amendment was concluded on and all payments in
terms thereof received on 1 July 2012 for purposes of the Statement of Comprehensive Income and by 30 June 2013 for
purposes of the Statement of Financial Position.
3. The Financial Effects are prepared on the assumption that Pan African received the Cash Consideration amounting to
AUD 2,000,000 (GBP 1,162,791) as full and final settlement of the Transaction Purchase Consideration and Future
Consideration.
4. The Financial Effects have been prepared on the assumption that Pan African disposed of the Consideration Shares to
Auroch for no consideration.
5. The 2013 Financial Statements accounted for the impairment to nil value of all amounts due to, but not received by, Pan
African pursuant to the Transaction. Accordingly, as a result of the Amendment, those impairment charges pertaining to
the Cash Consideration of GBP 1,162,791 were reversed for purposes of preparing the Financial Effects.
6. None of the adjustments will have a continuing effect on Pan African.
7. For purposes of the Financial Effects, Australian Dollars have been converted to South African Rand at a rate of
AUD 1.00 : ZAR 8.73 and South African Rand have been converted to British Pounds using the relevant exchange rates
applicable in the 2013 Financial Statements.
Johannesburg
26 November 2013
JSE Sponsor
One Capital
PAN AFRICAN ENQUIRIES
South Africa UK
Pan African Resources Canaccord Genuity Limited
Ron Holding Nomad and Joint Broker
Chief Executive Officer Peter Stewart / Joe Weaving/Neil Elliot
+27 (0) 11 243 2900 +44 (0) 20 7523 8350
Vestor Investor Relations finnCap Limited
Louise Brugman Joint Broker
+27 (0) 11 787 3015 Elizabeth Johnson / Joanna Weaving
+27 83 504 1186 +44 (0) 20 7220 0500
One Capital St James’s Corporate Services Limited
Liezl Gildenhuys Phil Dexter
+27 (0) 11 550 5000 +44 (0) 20 7796 8647
Gable Communications
Justine James
+44 (0) 20 7193 7463 / +44 (0) 7525 324431
For further information on Pan African, please visit the website at www.panafricanresources.com
Date: 26/11/2013 09:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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