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2016 abridged mineral resource and mineral reserve report
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 Resources" or the "Company" or the "Group")
2016 Abridged Mineral Resource & Mineral Reserve Report
Pan African Resources, the African-focused precious metals producer, is pleased to announce that the 2016
Abridged Mineral Resource and Mineral Reserve Report ("MR&MR") has been released and is available on
the Company's website at www.panafricanresources.com. A summary of the report, including the Group
Mineral Resource and Mineral Reserve statement as at 30 June 2016, has been provided below.
Overview
- 3.0 million ounces (“Moz”) or 9.4% gross annual increase in Group gold resources to 34.9Moz
(2015: 31.9Moz).
- 0.4Moz or 3.8% gross annual decrease in Group gold reserves to 10.0Moz (2015: 10.4Moz).
- No material change in Group platinum group elements (“PGE”) resource, 0.6Moz (2015: 0.6Moz).
- 0.3 Moz or 60% gross annual decrease in Group PGE reserves to 0.2Moz (2015: 0.5Moz).
Following International Ferro Metals Limited (“IFM”) being placed in business rescue, the PGE
mineral reserves at Phoenix Platinum declined year-on-year by 0.3Moz.
- 23.3 million tonnes (“Mt”) of mineable tonnage in situ coal from Uitkomst Colliery.
- Down dip extension of the high grade 11 Block of the main reef complex (“MRC”) orebody by a
further 70 metres. This extension to the MRC orebody resulted in additional mineral reserves at
Fairview Mine, thereby extending the life-of-mine (“LOM”) of Barberton Mines to 22 years.
- Positive grade/tonnage profile for the 25-26 levels at Evander No. 8 Shaft, thereby maintaining the
LOM of Evander Mines to 16 years.
- Surface exploration drilling commenced at Evander Mines targeting the 2010 payshoot.
- Positive pre-feasibility study (“PFS”) of the Elikhulu tailings retreatment project (“Elikhulu
Project”), the Company mandated DRA Projects (Pty) Limited (“DRA Projects”) to conduct a
definitive feasibility study (“DFS”) on the project. This study will be completed by November 2016.
Gold
Group Gold Mineral Resources
The Group's attributable gold Mineral Resources increased from 31.9Moz in June 2015 to 34.9Moz in June
2016, equating to an annual increase of 3.0Moz, or 9.4%. This increase can be attributed to additional
resources estimated for the Elikhulu Project at Evander Mines and a higher gold price used for the
declaration of the Group’s gold Mineral Resource.
As at 30 June 2016
Tonnes Grade Contained Gold
Category (million) (g/t) Tonnes Moz
Mineral Resource Measured 6.6 10.27 67.8 2.2
Indicated 261.3 2.42 633.5 20.4
Inferred 69.4 5.56 386.0 12.3
Pan African Resources Total 337.3 3.22 1 087.3 34.9
Group Gold Mineral Reserves
The Group's gold attributable Mineral Reserves decreased from 10.4Moz in June 2015 to 10.0Moz in June
2016 - an annual decrease of 0.4Moz, or 3.8%.
As at 30 June 2016
Tonnes Grade Contained Gold
Category (million) (g/t) Tonnes Moz
Mineral Reserve Proved 5.0 7.78 38.8 1.3
Probable 77.3 3.51 271.8 8.7
Pan African Resources Total 82.3 3.71 310.6 10.0
The decrease in the Group’s gold Mineral Reserve can be attributed to mining depletion for the year under
review.
Platinum Group Elements
Group PGE Mineral Resources
The Group's attributable PGE Mineral Resources did not change materially for the year under review.
As at 30 June 2016
Tonnes Grade Contained PGE’s
Category (million) (g/t) Tonnes Moz
Mineral Resource Measured 1.4 2.43 3.4 0.1
Indicated 1.3 2.65 3.4 0.1
Inferred 3.5 3.65 12.6 0.4
Pan African Resources Total 6.2 3.16 19.0 0.6
Group PGE Mineral Reserves
The Group's attributable PGE Mineral Reserves decreased from 0.5Moz in June 2015 to 0.2Moz in June
2016 - an annual decrease of 0.3Moz or 60%. This decrease is attributed to the exclusion of the mineral
reserves from the Lesedi Mine, current arisings. Following IFM being placed in business rescue, the PGE
mineral reserve at Phoenix Platinum declined year on year.
As at June 2016 Tonnes Grade Contained PGE’s
Category (million) (g/t) Tonnes Moz
Mineral Reserve Proved 1.4 2.43 3.4 0.1
Probable 1.3 2.65 3.4 0.1
Pan African Resources Total 2.7 2.54 6.8 0.2
Coal
Group Coal Mineral Resources
The Group's attributable coal mineral resource was declared as 23.3Mt as at June 2016.
Resources Raw Coal Qualities (ad)
Class MTIS (Mt) RD IM(%) Ash(%) VM(%) FC(%) CV(MJ/kg) TS (%)
Measured 15.0 1.50 2.5 23.5 24.3 49.8 24.75 1.23
Indicated 4.3 1.51 2.5 23.8 23.9 49.8 24.62 1.14
Inferred 4.0 1.50 2.4 23.4 23.4 50.9 25.02 1.03
Total 23.3
Resources 12% Ash Product
Class MTIS (Mt) Yield (%) IM (%) Ash (%) VM (%) FC(%) CV(MJ/kg) TS (%)
Measured 15.0 73.9 2.7 12.0 28.0 57.3 28.96 0.96
Indicated 4.3 76.2 2.8 12.0 27.5 57.8 29.00 0.97
Inferred 4.0 80.1 2.6 12.0 26.6 58.9 29.22 0.92
Total 23.3
The abbreviations used in the above table are as follows:
MTIS: mineable tonnes in situ; RD: relative density; IM: inherent moisture; VM: volumetric moisture;
FC: fixed carbon; CV: calorific value; and TS: total sulphur.
Group organic growth
Current exploration drilling as well as accessing and developing of our orebodies were maintained during the
year. The strategy of converting Mineral Resource to Mineral Reserve was progressed by moving organic
projects further up the mining value chain towards commissioning. The tables below reflect the progress of
near-mine growth projects that have contributed ounces to the Mineral Resource for the year.
Group: Exploring the orebody - exploration drilling
Operation Total No. of Average No. of Average Total
metres boreholes channel intersections grade expenditure
width above cut-off (g/t) (Rm)
(cm)
Barberton Mines 9 916 118 146 50 17.46 7.0
Evander Mines 567 9 27 1 16.20 0.6
Exploration drilling projects at Barberton Mines yielded positive results on all three operations (see table
below).
At Fairview Mine, exploration drilling confirmed a further 70m down dip extension of the MRC orebody
with a high-grade intersection of 125.80g/t over 680cm.
Recent borehole results are detailed below:
Channel
width Grade
Borehole number cm g/t
Fairview Bh 5951 680 125.80
Sheba Bh SWR 15 100 28.90
New Consort Bh 14L19 100 22.80
New Consort Bh 33C2 100 17.00
Group: Accessing the orebody - on-reef development
Operation Total on-reef development (m) Average grade (g/t)
Barberton Mines 926 4.41
Evander Mines 330 41.59
Barberton Mines: Developing the orebody - capital ore reserve projects
Y/E 30 June 2016 Y/E 30 June 2015 Y/E 30 June 2014 Potential resource
Project
(m) (m) (m) (oz)
Sheba – pillar 540 824 351 23 599
development
Sheba – Edwin
Bray to Thomas and 27 5 171 13 246
Joe’s Luck area
Fairview – 11 Level 0 (equipping old 0 (equipping old 0 17 000
Royal Reef main shaft) main shaft)
Fairview – 1# ore 131 84 154 14 821
reserve openin
Fairview – No. 3 64 26 0 1 600
Shaft deepening
Fairview – 64-68 581 447 295 860 766
Level
Sheba Western Cross 133 295 71 32 022
Royal Sheba 189 165 0 206 750
Consort – 33-45PC 387 258 193 10 000
Consort – MMR 0 0 173 (new target area)
pillar development
17 327 253 900
8-3 #
Evander Mines: Developing the orebody - capital ore reserve projects
Y/E 30 June 2016 Y/E 30 June 2015 Y/E 30 June 2014 Potential resource
Project
(m) (m) (m) (oz)
2 Decline 24–25 Level 356 904 686
1 200 000
25 A block ventilation 87 10 925
Group growth projects
Elikhulu
Following receipt of a positive PFS for the Elikhulu Project, the Company mandated DRA Projects to
conduct a DFS on the project. The study will be available by November 2016, after which shareholders will
be appraised.
In March 2016, SRK Consulting (South Africa) (Pty) Limited independently estimated the mineral resource
of the Elikhulu Project at 178.7Mt @ 0.29g/t (1.7Moz).
2010 Payshoot
A surface exploration drilling programme was initiated during the year to define additional mineral resources
for the 2010 payshoot. The 2010 payshoot is a secondary payshoot originating from the main Kinross
payshoot and can be accessed from the No. 3 Decline at Evander No. 7 Shaft. Previous surface holes in this
area delivered results up to 36.04g/t over a Kimberley reef width of 49cm. The potential mineral resource of
the 2010 payshoot is estimated at 6.3Mt @ 10.82g/t (2.2Moz).
The Company’s current generic growth projects are summarised hereunder:
Evander Mine Category Tonnes Grade Ounces Depth below surface
Projects (million) (g/t) (Moz) (m)
Elikhulu Project Resource 178.7 0.29 1.7 on surface
2010 Payshoot Resource 6.3 10.82 2.2 1 800 – 2 500
Reporting in compliance with SAMREC Code
To meet the requirement of the South African Code for the Reporting of Exploration Results, Mineral
Resources and Mineral Reserves ("SAMREC Code") that the material reported as a Mineral Resource
should have "reasonable and realistic prospects for eventual economic extraction", Pan African Resources
has determined an appropriate cut-off grade which has been applied to the quantified mineralised body. In
determining the cut-off grade, Pan African Resources uses a gold price of R550 000/kg. At our underground
mines, the optimal cut-off is defined as the lowest grade at which an orebody can be mined to maximise total
profits, under a specified set of mining parameters. The Mineral Resource optimiser tool accordingly
developed in-house was applied to the Mineral Resource inventory.
The optimiser programme requires the following inputs to convert the Mineral Resource to the Mineral
Reserve:
- the on-mine database inventory of all mineral resource blocks;
- an assumed gold price - ZAR450 000/kg;
- planned production rates for each mine;
- mine call factor;
- plant recovery factors; and
- historical cash operating costs and other efficiency factors.
The Mineral Reserves represent that portion of the Measured and Indicated Mineral Resources above cut-off
in the LOM plan and have been estimated after considering the modifying factors affecting extraction. A
range of disciplines has been involved at each mine in the LOM planning process including geology,
surveying, planning, mining engineering, rock engineering, metallurgy, financial management, human
resources management and environmental management.
Note: Mineral Resources are inclusive of the Mineral Reserve, unless otherwise stated.
Rounding of numbers contained in this announcement may result in minor computational discrepancies.
Competent Person
The competent person for Pan African Resources, Mr Barry Naicker, the group Mineral Resource Manager,
signs off the MR&MR for the Group and has reviewed and approved the information contained in this
announcement in writing. He is a member of the South African Council for Scientific Professions
(400234/10). Mr Naicker has 15 years of experience in economic geology and mineral resource
management.
He is based at 1st Floor, The Firs, cnr. Cradock and Biermann Avenues, Rosebank, 2196, Gauteng.
Johannesburg
21 September 2016
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
JSE Sponsor Joint Broker
Office: + 27 (0)11 550 5009 Office: +44 (0)020 7418 8900
Jeffrey Couch / Neil Haycock / Thomas Rider
BMO Capital Markets Limited
Joint Broker
Office: +44 (0)20 7236 1010
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
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