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PAN AFRICAN RESOURCES PLC - Interim unaudited results for the six months ended 31 December 2016

Release Date: 22/02/2017 09:00
Code(s): PAN     PDF:  
Wrap Text
Interim unaudited results for the six months ended 31 December 2016

Pan African Resources PLC
(‘Pan African Resources’ or the ‘company’ or the ‘group’) 
(Incorporated and registered on 25 February 2000 in England and Wales under the Companies Act 1985, 
registration number 3937466)
Share code on AIM: PAF
Share code on JSE: PAN 
ISIN: GB0004300496

Interim unaudited results for the six months ended 31 December 2016

Cobus Loots, CEO of Pan African Resources commented:

“Pan African Resources generated higher earnings, revenues and a record dividend pay-out of R300 million 
(GBP17.1 million), despite lower production from our gold operations. The Elikhulu Tailings Retreatment 
Project ('Elikhulu'), which was approved by the Pan African Resources Board during the period under review, 
will provide organic production growth of approximately 56,000oz of gold per annum, and also reduce the 
overall cost profile of our operations. Elikhulu reflects Pan African Resource’s strategy of delivering 
long-life, low cost quality production ounces, with the focus of generating attractive returns for 
our shareholders.”

“Transactions completed in the prior financial year have positively impacted results in the current 
reporting period and have been extremely value accretive. The PAR Gold Proprietary Limited ('PAR Gold') 
acquisition enhanced earnings per share by 17.7%. Uitkomst Colliery contributed R21.3 million, or 8.5%, 
towards the group’s profit after taxation.”

“Our immediate focus is to recommence the Evander Mines underground mining operations, following the 
temporary suspension of mining to refurbish critical infrastructure, and to finalise the Elikhulu 
funding package.”

Key features reported in South African Rand (‘ZAR or R’) and Pound Sterling (‘GBP’) 
Financial key features
- The group's profit after taxation in ZAR terms increased by 9.8% to R249.8 million 
(2015: R227.6 million), while in GBP terms, the group's profit after taxation increased by 28.4% 
to GBP14.0 million (2015: GBP10.9 million).
- Earnings per share (‘EPS’) increased by 33.4% to 16.58 cents per share (2015: 12.43 cents per share), 
while in GBP terms, EPS increased by 55.0% to 0.93 pence per share (2015: 0.60 pence per share).
- Group revenue increased by 19.2% to R1,878.2 million (2015: R1,575.4 million) and, in GBP terms, 
group revenue increased by 38.9% to GBP105.0 million (2015: GBP75.6 million). This increase was due 
to an increase in the ZAR gold price received and the inclusion of Uitkomst Colliery’s revenue of 
R225 million (GBP12.6 million), in the current period (2015: Nil).
- The group paid a final dividend of R300 million or GBP17.1 million (2015: R210 million or 
GBP9.7 million) on 22 December 2016, relating to the 2016 financial year. This dividend equated to 
R0.1544 per share or 0.88 pence per share (2015: R0.1147 per share or 0.53 pence per share).
- The Pan African board of directors (the “board”) approved the Elikhulu project, subject to 
certainty on the funding of the project.
- The Uitkomst Colliery performed well and contributed R21.3 million (2015: Nil), or 8.5%, to the 
group's profit after taxation.
- The PAR Gold transaction (previously named the Shanduka Gold transaction) contributed an additional 
17.7% to the group’s EPS.

Operational key features
- Group gold production decreased by 10.0% to 91,613oz (2015: 101,797oz).
- Effective rand gold price received increased by 16.5% to R565,298/kg (2015: R485,215/kg) and, 
in USD terms, it increased by 13.2% to USD1,257/oz (2015:USD1,110/oz).
- Due to the lower gold production, all-in sustaining cost per kilogramme increased in ZAR terms to 
R456,187/kg (2015: R396,819/kg) and, in USD terms, all-in sustaining cost per ounce increased to 
USD1,014/oz (2015:USD908/oz).
- Uitkomst Colliery produced and sold 127,605 tonnes of coal from the underground mining operations 
and 199,597 tonnes of coal acquired from third parties for blending and processing.
- Phoenix Platinum Mining Proprietary Limited ('Phoenix Platinum') increased platinum group elements 
('PGE') production by 1.8% to 4,574oz (2015: 4,493oz).
- Group gold resources remained similar relative to the prior financial year ending 30 June 2016 at 
34.9Moz (30 June 2015: 31.9Moz).
- The group is pleased to report no fatalities in the reporting period (2015: no fatalities) and an 
improved overall group safety performance.

          For the  For the                                                   For the  For the
              six      six                                                       six      six
           months   months                                                    months   months
            ended    ended                                                     ended    ended
               31       31                                                        31       31
   Move- December December                                                  December December  Move-
    ment     2016     2015  Metric       Salient features      Metric           2015     2016    ment
  (10.0%) 2,849.5  3,166.2 (Kilogrammes) Gold sold             (Oz)          101,797   91,613  (10.0%)
   19.2%  1,878.2  1,575.4 (R millions)  Revenue               (GBP millions)   75.6    105.0   38.9%
                                         Average gold price 
   16.5%  565,298  485,215 (R/kg)        received              (USD/oz)        1,110    1,257   13.2%
   29.4%  418,764  323,730 (R/kg)        Cash costs            (USD/oz)          740      931   25.8%
                                         All-in sustaining 
   15.0%  456,187  396,819 (R/kg)        costs                 (USD/oz)          908    1,014   11.6%
   20.3%  478,332  397,692 (R/kg)        All-in costs          (USD/oz)          910    1,063   16.8%
                                         Adjusted EBITDA
   13.8%    476.5    418.7 (R millions)  (note 1)              (GBP millions)   20.1     26.6   32.3%
    9.8%    249.8    227.6 (R millions)  Attributable earnings (GBP millions)   10.9     14.0   28.4%
    8.1%    246.0    227.6 (R millions)  Headline earnings     (GBP millions)   10.9     13.8   26.6%
   33.4%    16.58    12.43 (cents)       EPS                   (pence)          0.60     0.93   55.0%
                                         Headline earnings 
   31.3%    16.32    12.43 (cents)       per share (‘HEPS’)    (pence)          0.60     0.91   51.7%
   43.7%    497.0    345.8 (R millions)  Net debt              (GBP millions)   15.0     29.4   96.0% 
                                         Total sustaining 
   40.4%    140.5    100.1 (R millions)  capital expenditure   (GBP millions)    4.8      7.9   64.6%
   57.9%    203.5    128.9 (R millions)  Total capital 
                                         expenditure           (GBP millions)    6.2     11.5   85.5%
                                         Net asset value 
   27.5%    191.7    150.4 (cents)       per share             (pence)           7.0     11.5   64.3%
                                         Weighted average 
                                         number of shares
  (17.7%)  1,506.8 1,831.5 (millions)    in issue              (millions)    1,831.5  1,506.8  (17.7%)
    2.9%     13.99   13.60 (R/USD)       Average exchange rate (R/GBP)         20.83    17.88  (14.2%) 
  (11.8%)    13.70   15.53 (R/USD)       Closing exchange rate (R/GBP)         22.99    16.90  (26.5%)

Note 1: Adjusted EBITDA is represented by earnings before interest, taxation, depreciation and 
amortisation, impairments and profit/(loss) on disposal of investments.

CEO STATEMENT
Despite a period of lower gold production and normal inflationary cost pressures, the group improved 
its profitability and paid a record dividend of R300 million (GBP17.1 million) to shareholders. We 
benefitted from higher commodity prices and have capitalised on the Uitkomst Colliery and PAR Gold 
transactions to significantly improve the group’s EPS and HEPS, when this set of results is compared 
to the comparative period.

The Board approved the construction of Elikhulu, which is a further significant step towards realising 
shareholder value from our organic growth projects. The decision to commence construction of the 
project remains subject to finalising the most appropriate financing package, with funding tailored 
to maximise returns for our shareholders on a risk adjusted basis. On commissioning, currently planned 
for the last quarter of the 2018 calendar year, the group will be on track to achieve 250,000 ounces 
of annual gold production from our current portfolio of assets and infrastructure. Elikhulu demonstrates 
the group’s commitment to remaining focused on our core business of low cost gold mining.

Following a challenging operational start to the 2017 financial year, our mining operations remain 
focused on improving gold production. During the period under review, the group's gold production 
decreased by 10% to 91,613oz (2015: 101,797oz). The decrease in gold production can, as previously 
reported, be attributed to:
- Loss of production shifts due to frequent instances of community unrest in the Barberton Mines area 
as a result of service delivery protests targeting government, compounded by Department of Mineral 
Resources ('DMR') safety stoppages ('Section 54 regulatory notices') issued at both Barberton and 
Evander operations. The group continues to engage with all stakeholders to ensure our operations can 
function in a stable and consistent manner.
- The shaft accident at Evander Mines' 7 Shaft, which resulted in a reduction of rock hoisting 
speeds whilst repair work is carried out.
- Barberton Mines experienced flexibility issues at its Fairview Mine, specifically at its high 
grade 11-block which resulted in lower grades being mined. Work is underway to develop additional 
production platforms to expose additional high-grade panels to increase mining grades and flexibility.

Uitkomst Colliery produced and sold 127,605 tonnes of coal from its underground mining operations and 
199,597 tonnes of third party coal acquired for blending and processing during the current reporting 
period. The newly-acquired operation has contributed to profitability and its management team is 
reviewing the viability of expanding and increasing production to 900,000 run-of-mine tonnes per 
annum from the underground mining operation.

Phoenix Platinum production increased by 1.8% to 4,574oz (2015: 4,493oz) and its recoveries increased 
significantly to 57% from 39%, following the implementation of high energy agitation cells in the 
plant. Production in the current reporting period was negatively affected by water shortages as a 
result of the current drought, which curtailed the re-mining of tailings.

Safety
Safety remains a focus at all operations and we endeavour to ensure the group’s culture, behaviour 
and values align to our ultimate safety objective of zero harm.

The group is pleased to announce an improved overall safety performance and no fatalities for the 
period under review (2015: no fatalities). The lost time injury frequency rate ('LTIFR') improved 
to 3.96 (2015: 4.01) and the reportable injury frequency rate ('RIFR') improved significantly to 
1.61 (2015: 2.08). The group’s total recordable injury frequency rate ('TRIFR') regressed marginally 
to 14.81 (2015: 14.71).

Mineral reserves and resources
There has been no adjustment to the group's mineral reserves and resources statement of 30 June 2016 
and the mineral reserves and resources are summarised as follows:
- Gold reserves of 10.0Moz (30 June 2015: 10.4Moz)
- Gold resources of 34.9Moz (30 June 2015: 31.9Moz)
- PGE reserves of 0.2Moz (30 June 2015: 0.5Moz)
- PGE resources of 0.6Moz (30 June 2015: 0.6Moz)
- Coal resources were 23.3Mt

In determining our reserves and resources, we use what we believe is a conservative ZAR gold price 
estimate. In the current year, gold reserves were modelled at R450,000/kg and gold resources 
at R550,000/kg.

Elikhulu
As announced on 5 December 2016, the Board approved the construction of the Elikhulu project, subject 
to finalisation of the project financing package. The definitive feasibility study ('DFS') was 
undertaken by DRA Projects SA Proprietary Limited, who will also be appointed as engineering 
processing and construction contractors to the project.

DFS highlights and key assumptions:
- First gold forecast for the final quarter of the 2018 calendar year and full commissioning in 
December 2018.
- Annual recoverable gold production of approximately 56,000 ounces for its initial eight years 
of operation, and 45,000 ounces of gold for the remaining five years thereafter.
- Current arisings and inferred gold resource could extend project life beyond the DFS estimated 
life of thirteen years.
- Optimal plant capacity for the project allows 12-million tonnes per annum throughput.
- The project is expected to add approximately 25% to the group's current gold ounce production 
profile and reduce the group's all-in sustaining cost profile.
- All-in sustaining cost of USD523/oz over the life of the project.
- Initial capital cost is forecast at approximately R1.74 billion (GBP103.0 million), which includes 
a contingency of approximately R200 million (or 11.5% contingency).
- The project has an internal rate of return (real, post-tax) of 23.1% (30.6% nominal) with a 
payback period of less than four years, based on an assumed gold price of USD1,180/oz (R17,110/oz).
- Return on equity (real, post-tax) of 34.3% (42.5% nominal).
- Project net present value ('NPV') of R1.1 billion (GBP65.1 million).
- Cash outflow per ounce over the life of the operation is sub USD650/oz, excluding debt servicing, 
and amounts to approximately USD805/oz, including of debt servicing, over the five-year debt 
redemption term.
- Average gold recovery rate over the life of the project of 47.8%.
- Environmental Impact Assessment and Water Usage Licence processes are underway, with both 
approvals expected by late 2017.

DFS economic assumptions:
- Gold price assumption: USD1,180/oz.
- ZAR:USD exchange rate: 14.50:1.
- NPV discount rate: 9% real (16% nominal).
- Debt-to-equity ratio: 115%, debt-to-total-capital ratio of 53%.
- Long-term South African inflation rate of 6.1%.

Rand Merchant Bank, a division of First Rand Bank Limited, has provided Pan African Resources with 
a conditional R1 billion underwritten five-year debt facility on competitive terms ('RMB facility'). 
This facility will be dedicated to funding the project's development and will be repaid from the 
project's cash flows, generated during the initial five years of production. This facility is in 
addition to the group´s current revolving credit facility ('RCF') of R800 million (GBP47.3 million), 
which can be extended to R1.1 billion (GBP65.1 million), conditional on approval from the RCF lenders. 
The group is evaluating a number of proposals to fund the balance of the initial project capital and, 
given its strong financial position and track record of successfully constructing and operating 
tailings plants, we do not foresee difficulty in securing the balance of the funding on competitive 
terms. The RMB facility´s repayment profile is matched to the project´s cash flow generation and is 
not expected to impact Pan African Resources´ existing dividend policy.

Uitkomst Colliery BEE deal concluded
In September 2016, the Uitkomst Colliery finalised a black economic empowerment ('BEE') ownership 
transaction for 9% of its issued share capital, through a vendor financed structure. This BEE 
transaction is similar in nature to the current employee share ownership schemes at our gold operations, 
with tenure of ten years and the following three BEE participants:
- Mcijo Trust 5% ownership
- Employees Trust 2% ownership
- Community Trust 2% ownership

Evander 2010 pay channel
The Evander 2010 pay channel is a potentially attractive orebody that runs parallel to the Kinross pay 
channel and is accessible via Evander Mines' 7 Shaft. Harmony Gold Mining Company Limited historically 
developed towards the orebody before halting all mining operations on 7 Shaft and allowing flooding of 
the infrastructure from 21 level to 18 level. The Evander 2010 pay channel resources are classified 
in an inferred category and surface drilling is underway to improve confidence in the resource. The
initial results of the drilling programme have been delayed due to poor rock conditions as well as 
due to the intersection of water on various instances. The first reef intersection is now expected 
during April 2017. The 2010 pay channel may offer Evander Mines the possibility of establishing a 
new underground mining area without the cost of sinking a new vertical shaft from surface.

Outlook
In the second half of the financial year, the key focus areas for the group, from an operational 
perspective, includes:
- Continuing to improve our safety and compliance across all operations.
- Resume underground mining operations at Evander Mines, following the temporary suspension of mining 
to refurbish critical infrastructure.
- Improving the operating performance from underground gold mining operations, to ensure full year 
production guidance.
- Further improving stakeholder relations to minimise stoppages, particularly with the communities 
in which we operate, following the unrest experienced at Barberton Mines. This will be achieved by 
continuously engaging with the communities around our operations to find amicable solutions to their 
concerns.
- Ensuring Evander Mines' 7 Shaft returns to normal hoisting speeds to improve hoisting capacity.
- Finalising the Elikhulu financing arrangements and progressing towards construction and full-scale 
production.
- Finalising the current drilling programme on the Evander 2010 pay channel and assessing the results 
of this campaign.
- Uitkomst Colliery will focus on ensuring stable production is maintained and will review the 
possibility of expanding run-of-mine production.
- Phoenix Platinum aims to improve and capitalise on its increased production capacity and recoveries, 
and grow production even further following the installation of the high energy agitation cells.

The group continues to evaluate acquisitive opportunities, particularly within Africa. Any acquisition 
considered will, however, be subject to the group's stringent capital allocation and low cost 
production criteria, delivering the requisite returns to our shareholders within a short- to 
medium-term timeframe.

We extend our appreciation to our management team, our mine management and all staff for their 
hard work and persistence during a challenging period. Their commitment and perseverance has 
enabled Pan African Resources to continue to operate successfully. We also thank our fellow 
directors for their support and guidance.

FINANCIAL PERFORMANCE
Exchange rates and their impact on results
All of the group's subsidiaries are incorporated in South Africa and their functional currency is 
ZAR. The group's business is conducted in ZAR and the accounting records are maintained in this 
same currency, with the exception of precious metal product sales, which are conducted in USD 
prior to conversion into ZAR. The ongoing review of the operational results by executive management 
and the board is also performed in ZAR.

The group's presentation currency is GBP due to its ultimate holding company, Pan African Resources, 
being incorporated in England and Wales and being dual-listed in the UK and South Africa.

During the period under review the average ZAR/GBP exchange rate was R17.88:1 (2015: R20.83:1) and 
the closing ZAR/GBP exchange rate was R16.90:1 (2015: R22.99:1). The period-on-period change in the 
average and closing exchange rates of 14.2% and 26.5%, respectively, must be taken into account for 
the purposes of translating and comparing period-on-period results.

The group records its revenue from precious metals sales in ZAR and the marginal deterioration in
the value of the ZAR/USD exchange rate during the period under review had a positive contribution 
on the USD metals revenue received. The average ZAR/USD exchange rate was 2.9% weaker at R13.99:1 
(2015: R13.60:1).

The commentary below analyses the current and prior comparative period's results. Key aspects 
of the group's ZAR results appear in the body of this commentary and have been used as the basis 
against which its financial performance is measured. The gross GBP equivalent figures can be 
calculated by applying the exchange rates as detailed above.

Analysing the group's financial performance
Revenue
The group's revenue, period-on-period, increased by 19.2% to R1,878.2 million 
(2015: R1,575.4 million) mainly impacted by:
1) The consolidation of the Uitkomst Colliery revenue of R225.0 million (2015: nil), which 
contributed 14.3% of the increase in the revenue period-on-period. Uitkomst Colliery was acquired 
and consolidated with effect from 1 April 2016.
2) The average ZAR gold price received by the group increased by 16.5% to R565,298/kg 
(2015: R485,215/kg), as a result of the ZAR/USD exchange rate weakening by 2.9% to R13.99:1 
(2015: R13.60:1) and the USD gold price received increasing by 13.2% to USD1,257/oz 
(2015: USD1,110/oz).
3) Gold ounces sold decreased by 10.0% to 91,613oz (2015: 101,797oz).

Cost of production and realisation costs
The group's total cost of production increased by 32.5% to R1,395.7 million 
(2015: R1,053.7 million). The group's cost of production incorporates the full half year's 
coal production costs from Uitkomst Colliery of R189.0 million (2015: nil).

Pan African Resources' gold cost of production (excluding realisation costs), per the statement 
of comprehensive income, increased by 14.4% to R1,165.6 million (2015: R1,019.3 million), 
predominately due to:
- The group's gold operations salaries and wages increasing by 8.3% to R515.5 million 
(2015: R476.0 million) in line with the gold labour agreements signed in the 2016 financial year.
- The group's electricity costs increasing by 8.9% to R183.0 million (2015: R168.1 million). The 
National Energy Regulator of South Africa approved an increase applied to electricity consumption 
of 9.5% for the period under review, effective from 1 April 2016. Production challenges detailed 
previously resulted in less power consumed.
- The group's mining and processing costs increased by 27.4% to R339.1 million 
(2015: R266.2 million), mainly due to the following material expenses:
- The Evander Tailings Retreatment Plant ('ETRP') processing costs increased by R31.5 million 
due to treating additional surface feedstock material. Tonnes processed for surface feedstock 
increased by 49.3% to 240,495 tonnes (2015: 161,090). This contributed an additional 
R30.3 million to the group's EBITDA.
- Maintenance of Evander Mines' 7 Shaft infrastructure resulted in an additional R4.2 million 
expenditure being incurred.
- In the comparative reporting period Barberton Mines recorded an inventory credit adjustment 
in its operational costs of R23.5 million, due to holding gold inventory at 31 December 2015, 
while in the current period no gold inventory was held.

The Group's gold cost of production, as detailed above, excluding the inventory adjustments
and additional surface feedstock material costs, increased by 8.7% to R1,134.1 million 
(2015: R1,042.8 million).

The group's gold cost of production per kilogramme increased by 29.4% to R418,764/kg 
(2015: R323,730/kg). The increase is attributed to:
- Gold sold decreasing by 10% to 91,613oz (2015: 101,797oz).
- A 14.4% increase in production costs as a result of the reasons highlighted above.

The group's all-in sustaining cost of production per kilogramme of gold (including direct 
cost of production, royalties, cost collar mark-to-market fair value adjustments, associated 
corporate costs and overheads and sustaining capital expenditure) increased by 15.0% to 
R456,187/kg (2015: R396,819/kg). The group’s all-in sustaining costs were primarily impacted 
by an increase in gold production costs and a decrease in other costs, compared to the 
comparative period. The group's all-in sustaining cost of production per kilogramme 
(excluding cost collar mark-to-market fair value adjustments) would have been R487,765/kg 
(2015: R383,944/kg).

The all-in gold cost per kilogramme (sustaining cost of production and once-off expansion capital) 
increased by 20.3% to R478,332/kg (2015: R397,692/kg), due to the increase in once-off capital 
expansion costs to R62.9 million (2015: R2.8 million). The increase in once-off capital 
expenditure related predominately to the construction of the Barberton Tailings Retreatment Plant 
('BTRP') cyanide detoxification plant and Fairview’s ventilation refrigeration and infrastructure. 
The group's all-in cost per kilogramme (excluding cost collar mark-to-market fair value adjustments) 
would have been R509,909/kg (2015: R384,867/kg).

The PGE cost of production increased by 19.5% to R41.1 million (2015: R34.4 million), predominantly 
due to refining and processing costs increasing by 49.6% to R18.7 million (2015: R12.5 million). 
Higher refining costs were incurred due to higher chrome prevalence in the tailings processed 
from the Elandskraal/Kroondal tailings. Additional transport costs were also incurred to deliver 
tailings material from the more distant Elandskraal/Kroondal tailings sites.

The Uitkomst Colliery features for the first time in the group’s half year results (as it was 
acquired on 31 March 2016), reporting a coal production cost contribution of R189.0 million.

The group's realisation costs increased to R27.7 million (2015: R5.7 million) due to an additional 
R20.1 million in refining costs associated with the extraction and recovery of gold from various 
sections of the Evander Mines' processing plant by a third party. This initiative contributed 
149.2kg (4,796.9oz) of gold to Evander Mines’ production. 

Depreciation increased by 4.9% to R115.3 million (2015: R109.9 million), following the 
consolidation of Uitkomst Colliery's depreciation for the full six-month period and a 
reassessment of the group's residual values on property plant and equipment.

Other expenditure and income
Barberton Mines entered into a short-term strategic hedge ('the cost collar') in July 2015, when 
the prevailing spot gold price was R440,000/kg, to protect its cash flows and the group's annual 
dividend against severe adverse movements in the ZAR gold price. During the current reporting 
period, the group recorded a pre-tax unrealised mark-to-market fair value gain of R90.0 million 
on the cost collar (2015: pre-tax realised cost collar derivative fair value loss of R40.6 million). 
The mark-to-market fair value adjustment gain was due to a reduction in the gold price 
from R625,000/kg at 30 June 2016 to R507,500/kg at 31 December 2016.

The fair value adjustment of the group's rehabilitation liability resulted in it decreasing by 
R0.5 million (2015: R0.3 million increase in the liability). The rehabilitation investment 
decreased by R2.0 million (2015: R9.6 million increase in the investment).

Finance costs increased to R19.3 million (2015: R11.6 million), following increased RCF 
facility utilisation during the period under review. Net debt at 31 December 2016 increased to 
R497.0 million (30 June 2016: R339.6 million and 31 December 2015: R345.8 million), following 
increased capital expenditure and lower gold production.

During December 2016, the group disposed of an investment in a listed entity. The investment 
represented 1,750,850 shares, which were sold for R23.4 million and resulted in a profit of 
R4.6 million being recognised in the statement of comprehensive income during the period under 
review. Dividends received for the period under review, before disposal, amounted to 
R0.6 million (2015: R0.3 million).

Taxation
The group's total taxation charge increased by 35.0% to R97.9 million (2015: R72.5 million).

The taxation charge comprised of:
- A decrease in the current taxation charge by 12.0% to R67.0 million (2015: R76.1 million).
- An increase in the deferred taxation expense to R30.9 million (2015: deferred taxation 
income of R3.6 million), predominantly due to the deferred taxation associated with the 
pre-tax unrealised mark-to-market fair value gain of R90.0 million (2014: pre-tax realised 
cost collar derivative fair value loss of R40.6 million).

EPS and HEPS
The group's EPS in ZAR increased by 33.4% to 16.58 cents (2015: 12.43 cents). The group's HEPS 
in ZAR increased by 31.3% to 16.32 cents (2015: 12.43 cents). The difference between the EPS 
and HEPS resulted from adjusting the profit after taxation for the profit on the disposal of 
the investment referred to above and the disposal of fixed property plant and equipment. 
Refer to the statement of comprehensive income for the reconciliation between EPS and HEPS.

The EPS and HEPS are calculated by applying the group's weighted average number of shares in 
issue to the attributable and headline earnings. The weighted average number of shares in 
issue decreased by 17.7% to 1,506.8 million shares (2015: 1,831.5 million shares). The decrease 
in shares was attributed to eliminating the PAR Gold shares held in Pan African Resources with 
effect from 7 June 2016.

Headline earnings per share is calculated as follows:

                                          31 December    31 December    31 December    31 December
                                                 2016           2015           2016           2015
                                                  GBP            GBP            ZAR            ZAR
Basic earnings                             13,970,416     10,924,843    249,791,035    227,564,499
Adjustments:
Profit on disposal of investment             (256,311)             -     (4,582,844)             -
Taxation on profit realised on 
disposal of investment                         57,414              -      1,026,557              -
Profit on disposal of property, 
plant and equipment                           (21,151)             -       (378,180)             -
Taxation on profit realised on property,
plant and equipment sale                        5,922              -        105,890              -
Headline earnings                          13,756,290     10,924,843    245,962,458    227,564,499
Headline earnings per share                      0.91           0.60          16.32          12.43
Diluted headline earnings per share              0.91           0.60          16.31          12.42

Dividends paid and dividend policy
The group paid a final dividend of R300 million or GBP17.1 million (2015: R210 million or 
GBP9.7 million) on 22 December 2016, relating to the 2016 financial year. This dividend equated to 
R0.1544 per share or 0.88 pence per share (2015: R0.1147 per share or 0.53 pence per share).

Following the PAR Gold transaction, the entity will receive 22.46% or R67.4 million of the 
R300 million dividend, resulting in a net dividend of R232.6 million paid to external shareholders.

Pan African Resources aspires to pay a regular dividend to shareholders. In balancing this cash 
return to shareholders with the group's strategy of generic and acquisitive growth, Pan African 
Resources believes a target pay-out ratio of 40% of net cash generated from operating activities - 
after allowing for the cash flow impact of sustaining capital, contractual debt repayments and the 
cash flow impact of once-off items - is appropriate. This measure aligns dividend distributions with 
the cash generation potential of the business. In proposing a dividend, the board will also take into 
account the company's financial condition, future prospects, satisfactory solvency and liquidity 
assessments and other factors deemed by the board to be relevant at the time.

Net debt
Total debt facilities utilised at 31 December 2016 amounted to R565.4 million (30 June 2016: 
R392.2 million) and cash holdings were R68.4 million (30 June 2016: R52.6 million), resulting in an 
increase in net debt by R157.4 million to R497.0 million (30 June 2016: R339.6 million). The increase 
in net debt was mainly as a result of capital expenditure incurred increasing to R203.5 million 
(2015: R129.0 million) and lower production following the operational challenges experienced 
during the period under review.

Summary of the long-term debt liabilities:
                    Revolving credit facility    Evander Mines gold loan             Total
                   31 December        30 June    31 December     30 June    31 December     30 June
                          2016           2016           2016        2016           2016        2016
                           ZAR            ZAR            ZAR         ZAR            ZAR         ZAR
                     (millions)     (millions)     (millions)  (millions)     (millions)  (millions)
Non-current portion      458.7          279.3              -        26.6          458.7       305.9
Current portion           52.8           31.1           53.9        55.2          106.7        86.3
Total                    511.5          310.4           53.9        81.8          565.4       392.2

The group’s RCF debt covenants per the applicable periods are summarised below:
Measurement                                         31 December 2016  30 June 2016  31 December 2015
Net-debt-to-equity ratio   Must be less than 1:1              0.17:1        0.35:1            0.50:1
Net-debt-to-EBITDA ratio   Must be less than 2.5:1            0.48:1        0.12:1            0.13:1
Interest cover ratio       Must be greater than 4 times        21.99         23.98             18.08

Cash flow summary
Cash generated by operations decreased by R11.3 million to R372.0 million (2015: R383.3 million), 
due to lower gold production.

The cash outflows from investing activities increased to R173.1 million (2015: 129.0 million), 
predominantly due to:
- Capital expenditure incurred increasing to R203.5 million (2015: R128.9 million).
- Proceeds on the sale of a listed investment of R23.4 million and proceeds on the sale of property, 
plant and equipment of R7.0 million.

Net cash inflows from financing activities increased to R145.2 million (2015: R20 million outflow), 
predominantly due to the utilisation of the RCF to fund operational capital expenditure.

OPERATIONAL PERFORMANCE
The group’s operational and production summaries are disclosed on the Pan African Resources website at
http://www.panafricanresources.com/investors/financial-reports/

Review of Barberton Mines
Safety
- The operation reported no fatalities (2015: no fatalities).
- LTIFR improved to 2.07 (2015: 2.47).
- RIFR improved to 0.59 (2015: 0.62).
- TRIFR improved to 12.40 (2015: 14.81).

Operational performance
- Average mining head grade achieved reduced to 9.4g/t (2015: 10.6g/t). Fairview Mine experienced 
flexibility issues resulting from temporary lower grade face values, specifically at its high grade 11-block. 
Work is underway to develop additional production platforms to expose additional high-grade panels to 
increase mining grades and flexibility.
- Gold sold decreased by 12.8% to 49,212oz (2015: 56,447oz), as a result of the underground gold sold 
decreasing to 34,471oz (2015: 43,617oz).
- The BTRP gold sold increased to 14,741oz (2015: 12,830oz), supported by higher grades of 2.2g/t 
(2015: 1.3g/t) being achieved. The BTRP tonnages processed decreased to 388,905t (2015: 464,179t), this 
was due to re-mining the base of the Bramber tailings dam therefore limiting and reducing the tonnages 
processed by the BTRP.
- Three separate incidents of community unrest, targeting government service delivery, interrupted 
production as these protests prevented employees from reporting to work. Together, these incidents 
resulted in six days of lost production.
- Six Section 54 regulatory notices resulted in eight lost production days (2015: one Section 54 
regulatory notice resulting in three lost production days).
- Revenue marginally increased by 2.2% to R872.9 million (2015: R854.3 million) as a result of a higher 
effective ZAR gold price, offset by the decrease in gold sold.
- Cash cost per kilogramme increased to R347,667/kg (2015: R266,690/kg) and, in USD terms, the cash cost 
per ounce increased to USD773/oz (2015: USD610/oz). The increase was predominately as a result of our gold 
production decreasing by 12.8% to 49,212oz (2015: 56,447oz).
- All-in sustaining cost per kilogramme decreased by 2.2% to R341,600/kg (2015: R349,218/kg) and, in USD 
terms, the all-in sustaining cost per ounce decreased to USD759/oz (2015: USD799/oz). Excluding the cost 
collar mark-to-market fair value adjustments, the all-in sustaining cost per kilogramme is R400,385/kg 
(2015: R326,089/kg) and, in USD terms, the all-in sustaining cost per kilogramme, excluding the cost 
collar mark-to-market fair value adjustments, was USD890/oz (2015: USD746/oz).
- All-in cost per kilogramme increased by 4.6% to R365,934/kg (2015: R349,739/kg) and, in USD terms, the 
all-in cost per ounce increased to USD814/oz (2015: USD800/oz).
- Adjusted EBITDA increased to R407.8 million (2015: R310.1 million).
- Capital expenditure increased to R83.5 million (2015: R55.9 million) summarised in the 
following categories:
– Sustaining development capital expenditure was R30.2 million (2015: R25.0 million).
– Sustaining maintenance capital expenditure was R16.0 million (2015: R30.0 million).
– Once-off expansion capital was R37.3 million (2015 R0.9 million), which related to the construction of 
the BTRP cyanide detoxification plant and Fairview ventilation refrigeration and infrastructure.
- Effective from 1 July 2016 the life-of-mine of the respective operations at Barberton Mines is:
– Fairview Mine              22 years (2015: 20 years)
– Sheba Mine                 18 years (2015: 20 years)
– New Consort Mine            5 years (2015:  7 years)
– BTRP                       14 years (2015: 15 years)

Review of Evander Mines
Safety
- The operation reported no fatalities (2015: no fatalities).
- LTIFR regressed to 5.83 (2015: 5.44).
- RIFR improved to 2.62 (2015: 3.44).
- TRIFR regressed to 17.19 (2015: 14.61).

Operational performance
- Average mining head grade achieved of 5.4g/t (2015: 5.8g/t).
- Due to Section 54 stoppages and a reduction in hoisting speed at 7 Shaft during the period under review, 
Evander Mines gold sold decreased by 6.5% to 42,401oz (2015: 45,350oz).
- Revenue increased by 8.2% to R737.9 million (2015: R682.0 million) due to an increase in the effective 
ZAR gold price achieved, which was off-set by a reduction in the gold sold.
- ETRP produced 15,924oz (2015: 8,980oz), following an increase in gold produced from surface feedstock to 
11,480oz (2015: 5,272oz) and tailings contributing 4,444oz (2015: 3,708oz).
- Evander Mines’ 7 Shaft, which is used to hoist ore from underground mining operations to surface for 
processing, is undergoing critical infrastructure repairs and maintenance and requires a suspension of 
the underground mining operations for a period of up to 55 days effective 20 February 2017.
- Evander Mines experienced a material increase in DMR-initiated safety stoppages during the past six 
months. The operation was issued with four Section 54 regulatory notices, which resulted in 13 lost 
production days (2015: three Section 54 regulatory notices resulting in two lost production days). 
The majority of the lost production days related to the 7 Shaft incident.
- Cash costs per kilogramme increased by 28.0% to R501,281/kg (2015: R394,730/kg) and, in USD terms, 
the cash cost per ounce increased to USD1,114/oz (2015: USD 903/oz).
- All-in sustaining cost per kilogramme increased by 29.2% to R589,181/kg (2015: R456,070/kg) and, in USD 
terms, the all-in sustaining cost per ounce increased to USD1,310/oz (2015: USD1,043/oz), in line with the 
increase in cash costs.
- All-in cost per kilogramme increased by 33.1% to R608,783/kg (2015: R457,380/kg) and, in USD terms, the 
all-in cost per ounce increased to USD1,353/oz (2015:USD1,046/oz).
- Adjusted EBITDA decreased to R63.8 million (2015: R124.2 million).
- Capital expenditure increased to R111.8 million (2015: R71.9 million) summarised in the 
following categories:
– Sustaining development capital expenditure was R48.8 million (2015: R39.4 million).
– Sustaining maintenance capital expenditure was R37.4 million (2015: R30.6 million).
– Once-off expansion capital expenditure was R25.6 million (2015: R1.9 million), relating to costs 
associated with 8 Shaft’s 25 and 26 decline and A Block development.
- Effective from 1 July 2016, the life-of-mine of 8 Shaft and the ETRP was 16 years (2015: 16 years).

Review of Phoenix Platinum
Safety
Phoenix Platinum maintained its excellent safety record, with no injuries.

Operational performance
- Tonnes processed increased by 3.9% to 122,024 tonnes (2015: 117,461 tonnes). In July 2016 the 
operation commissioned a scrubber, which increased the production capacity by 25%, but unfortunately 
re-mining was limited by the recent drought during October 2016.
- The head grade achieved decreased by 31.2% to 2.2g/t (2015: 3.2g/t), due to re-mining from the lower-grade 
Elandskraal/Kroondal tailings facility, while in the comparable period re-mining occurred at Samancor's 
Buffelsfontein tailings facility.
- PGE production increased by 1.8% to 4,574oz (2015: 4,493oz).
- Recoveries increased to 57% from 39% following the installation of high energy agitation cells in 
the plant.
- Revenue increased by 8.4% to R42.5 million (2015: R39.2 million) due to a marginal increase in 
production and an increase in the effective PGE net revenue price received of 6.5% to R9,284/oz 
(2015: R8,716/oz).
- The average PGE net revenue price received increased by 6.5% to R9,284/oz (2015: R8,716/oz) and, in 
USD terms, the average PGE net revenue per ounce increased to USD664/oz (2015: USD641/oz).
- Cost per tonne increased by 15.0% to R337/t (2015: R293/t), mainly due to the higher cost of production 
associated with transporting the Elandskraal/Kroondal tailings to the plant and high refinery charges 
incurred during the period under review.
- Cost per ounce of production increased by 17.5% to R8,991/oz (2015: R7,653/oz) and, in USD terms, the 
cost per ounce increased to USD643/oz (2015: USD563/oz).
- Adjusted EBITDA decreased to R2.8 million (2015: R2.9 million).
- Capital expenditure incurred was R2.9 million (2015: R0.8 million).
- Effective from 1 July 2016 the life-of-operation decreased to nine years (2015 financial year: 28 years) 
as a result of the cessation of mining operations at Lesedi Mine following the International Ferro Metals 
business rescue plan. In the event the Lesedi mining operation is reopened, the life-of-operation will be 
reassessed and adjusted as the right to the PGE’s in the Lesedi resource remains contractually secured 
by Phoenix Platinum.

Review of Uitkomst Colliery
Pan African Resources completed the acquisition of the Uitkomst Colliery from Oakleaf Investments Holding 
109 Proprietary Limited and Shanduka Resources Proprietary Limited for a cash consideration of 
R148 million on 31 March 2016.

Safety
- The operation reported no fatalities.
- LTIFR per 200,000 man hours was 2.15 (2015: 2.65).
- RIFR per 200,000 man hours was 2.15 (2015: 1.06).
- TRIFR per 200,000 man hours was 4.73 (2015: 7.42).

Operational performance
- Profit after taxation for the period was R21.3 million.
- The operation produced and sold 327,202 tonnes of coal, of which 127,605 tonnes was from the 
underground mining operations and 199,597 tonnes was acquired from third parties for blending 
and processing.
- Revenue amounted to R225.0 million.
- Cost of production of R189.0 million.
- The average revenue per tonne received was R688/t or USD49/t, of which R881/t or USD63/t was related 
to the underground mined coal and R552/t or USD39/t related to the coal acquired for blending 
and processing.
- Cost per tonne averaged at R578/t or USD41/t.
- All-in sustaining costs and all-in costs per tonnes were R587/t or USD42/t. The all-in sustaining 
costs and all-in costs were marginally lower than the direct cost per tonne as a result of other 
income earned by the logistics department.
- Adjusted EBITDA was R38.0 million.
- Capital expenditure incurred was R5.0 million.
- Effective from 1 July 2016 the life-of-operation was 22 years for a run-of-mine coal production 
profile of 600,000t per annum.

COMMITMENTS REPORTED IN RAND AND GBP
The group identified no contingent liabilities in the current or prior financial period.

The group had outstanding open orders contracted for at period end of R106.3 million 
(2015: R48.3 million) or GBP6.3 million (2015: GBP2.1 million).

Authorised commitments for the new financial period, not yet contracted for, totalled 
R169.9 million (2015: R162.5 million) or GBP10.1 million (2015: GBP7.1 million).

At 31 December 2016, the group had guarantees in place of R24.6 million (2015: R24.6 million) or 
GBP1.4 million (2015: GBP1.1 million) in favour of Eskom, R33.5 million (2014: R14.0 million) or 
GBP2.0 million (2015: GBP0.6 million) in favour of the DMR, and R6.6 million (2015: Nil) or 
GBP0.4 million (2015: Nil) in favour of Transnet SOC Limited.

Operating lease commitments, which fall due within the next year, amounted to R3.7 million 
(2015: R2.3 million) or GBP0.2 million(2015: GBP0.1 million).

FAIR VALUE INSTRUMENTS
Financial instruments that are measured at fair value are grouped into levels 1 to 3 based on the 
extent to which fair value is observable.

The levels are classified as follows:
Level 1 - fair value is based on quoted prices in active markets for identical financial assets or 
liabilities;
Level 2 - fair value is determined using inputs other than quoted prices included within level 1 
that are observable for the asset or liability; and
Level 3 - fair value is determined on inputs not based on observable market data.

Level 1 financial instruments:
The group’s rehabilitation trust funds are valued at R319.5 million (2015: R321.9 million) or 
GBP18.9 million (2015: GBP14.0 million), which comprise investments in guaranteed equity-linked notes, 
government bonds and equities, according to quoted prices in an active market.

Level 2 financial instruments:
At the end of the period under review the cost collar, referred to earlier, was not settled, therefore 
resulting in a financial exposure to be fair value on a mark-to-market basis. The financial instrument 
was valued according to quoted prices in an active market resulting in a cost collar mark-to-market 
liability of R20.2 million (30 June 2016: R117.6 million and 31 December 2015: R40.6 million).

The group’s cash settled share option liability, which is valued on a mark-to-market basis according 
to the Pan African Resources quoted share price amounted to R57.8 million (2015: R21.8 million).

Level 3 financial instruments:
The group’s ESOP liability is accounted on a cash settled share option basis and valued on a 
mark-to-market on the net present value of the discounted future cash flows applicable to the 
beneficiaries of the schemes. The ESOP liability was R5.6 million (2015: R2.7 million).

BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS AND ACCOUNTING POLICIES
The accounting policies applied in compiling the interim results are in terms of International 
Financial Reporting Standards ('IFRS') adopted by the European Union and South Africa, which are 
consistent with those applied in preparing the group's annual financial statements for the year 
ended 30 June 2016.

The financial information set out in this announcement does not constitute the company's 
statutory accounts for the period ended 31 December 2016.

The interim results have been prepared and presented in accordance with, and containing the 
information required by IAS 34: Interim Financial Reporting, as well as the SAICA Financial Reporting 
Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by 
Financial Reporting Standards Council.

The interim results have not been reviewed or reported on by the company's external auditors. 

JSE LIMITED LISTING
The company has a dual primary listing on the main board of the JSE Limited ('JSE') and the 
Alternative Investment Market ('AIM') of the London Stock Exchange.

The preliminary announcement has been prepared in accordance with the framework concepts and the 
measurement and recognition requirements of IFRS, the AC 500 standards as issued by the Accounting 
Practices Board and the information as required by IAS 34: Interim Financial Reporting.

AIM LISTING
The financial information for the period ended 31 December 2016 does not constitute statutory 
accounts as defined in sections 435 (1) and (2) of the Companies Act 2006.

The group’s announcement has been prepared in accordance with IFRS and International Financial 
Reporting Interpretation Committee interpretations adopted for use by the European Union, with 
those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

DIRECTORSHIP CHANGES AND DEALINGS
No directorship changes took place during the period under review. However, the following director 
dealings in securities took place:

During the period under review Mr JAJ Loots participated in the following company shares transactions:
- On 27 September 2016, purchased 20,000 shares and 200,000 shares at R3.57 per share and 
R3.58 per share, respectively.
- On 28 September 2016, purchased 28,609 shares at R3.48 per share.
- On 29 September 2016, purchased 491 shares at R3.59 per share.
- On 30 September 2016, purchased 25,000 shares at R3.70 per share.
- On 3 October 2016, purchased 25,000 shares at R3.78 per share.
- On 5 October 2016, purchased 30,000 shares at R3.55 per share.

Mr JAJ Loots had 560,675 shares outstanding at period end, representing 0.03% of total issued shares. 
During the year under review Mr GP Louw participated in the following company shares transactions.

On 27 September 2016, purchased the following shares:
- 4,300 shares at R3.57 per share.
- 3,150 shares at R3.58 per share.
- 35,000 shares at R3.62 per share.
- 40,000 shares at R3.64 per share.
- 12,836 shares at R3.66 per share.
- 42,164 shares at R3.67 per share.

Mr GP Louw had 137,450 shares outstanding at period end, representing 0.01% of total issued shares. 

SHARES ISSUED
No shares were issued during the current or comparable period under review.

GOING CONCERN
The board confirms that the business is a going concern and that it has reviewed the group's working 
capital requirements in conjunction with its future funding capabilities for at least the next twelve months 
and has found them to be adequate. The group has a R800 million revolving credit facility from a consortium 
of South African banks (and an accordion option, subject to the RCF consortium’s approval, for an 
additional R300-million facility), as well as access to general banking facilities of R146.5 million. 
At 31 December 2016, the group had borrowing capacity on the revolving credit facility of R290 million 
(GBP20.1 million) to assist in funding working capital requirements. On 1 July 2016 the group finalised 
the general banking facility of R85 million (GBP4.3 million) for Uitkomst Colliery.  Management is not 
aware of any material uncertainties which may cast significant doubt on the group’s ability to continue 
as a going concern. Should the need arise, the group can cease discretionary exploration and certain 
capital expenditure activities to conserve cash on the short to medium term.

EVENTS AFTER THE REPORTING PERIOD 
Fatality
It is with deep regret that Pan African Resources reports that a mining accident occurred at the Evander 
Mines 7 shaft complex on 15 February 2017. Mr Velile Chaplin Kapa (54), an Engineering Assistant employed 
by the operation, sustained a fatal head injury when a section of the main shaft pump column failed whilst 
he was working in the shaft bottom area. Pan African's management and board express their sincere 
condolences to the family, friends and colleagues of Mr Kapa.

Shaft Refurbishment Programme
In conjunction with the 7A shaft refurbishment programme, Evander’s management initiated a number of 
independent and internal engineering studies to assess the condition of Evander’s underground mining 
infrastructure (both Evander Mines 7 and 8 shafts). These studies identified critical infrastructure 
issues requiring remedial action, to ensure safe and sustainable operation of these shafts.

The nature of these refurbishments require a suspension of Evander Mines underground mining operations 
for a period of up to 55 days, effective from 20 February 2017, during which critical infrastructure 
issues will be addressed. Evander Mines tailings and surface operations will be unaffected by the 
underground mining suspension.

The cost of the shaft refurbishment programmes is expected to be approximately R40 million, which will 
be funded from the group's existing banking facilities.

SEGMENT REPORTING
A segment is a distinguishable component of the group engaged in providing products or services in a 
particular business sector or segment, which is subject to risks and rewards different from those of 
other segments. The group's business activities were conducted through six business segments:
- Barberton Mines (including BTRP), located in Barberton, South Africa;
- Evander Mines (including ETRP), located in Evander, South Africa;
- Uitkomst Colliery, located in Newcastle, South Africa;
- Phoenix Platinum, located near Rustenburg, South Africa;
- Corporate and growth projects; and
- Pan African Resources Funding Company Proprietary Limited ('Funding Company').

The executive committee reviews the operations in accordance with the disclosures presented above. 

Cobus Loots                               Deon Louw
Chief Executive Officer                   Financial Director

22 February 2017


Financial statements: Condensed financial information

Consolidated statement of financial position as at 31 December 2016
                        31 December      30 Jun   31 December    31 December        30 June    31 December
                               2016         2016         2015           2016           2016           2015
                         (Unaudited)    (Audited)  (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)
                                GBP          GBP          GBP            ZAR            ZAR            ZAR
Assets
Non-current assets
Property, plant and 
equipment and
mineral rights          228,033,741   190,725,199  153,180,433  3,854,043,857  3,772,544,439  3,521,618,148
Other intangible 
assets                      119,331       123,235      197,598      2,016,834      2,437,592      4,542,773
Deferred taxation         1,601,335     1,117,092      118,419     27,064,491     22,096,084      2,722,464
Long-term inventory         218,689       186,861            -      3,696,114      3,696,114              -
Goodwill                 21,000,714    21,000,714   21,000,714    303,491,812    303,491,812    303,491,812
Investments                       -     1,269,228      678,909              -     25,105,331     15,608,118
Rehabilitation trust 
fund                     18,906,056    16,253,708   14,002,928    319,535,037    321,498,339    321,927,319
                        269,879,866   230,676,037  189,179,001  4,509,848,145  4,450,869,711  4,169,910,634
Current assets
Inventories               6,233,723     4,398,813    4,062,142    105,357,405     87,008,537     93,388,634
Current tax asset           884,153       848,946      657,849     14,943,239     16,792,156     15,123,957
Trade and other 
receivables              16,379,366    14,042,357    7,085,421    276,830,935    277,757,811    162,893,843
Cash and cash 
equivalents               4,047,271     2,658,947            -     68,403,735     52,593,979              -
                         27,544,513    21,949,063   11,805,412    465,535,314    434,152,483    271,406,434
Non-current assets 
held for sale                78,264       66,873             -      1,322,750      1,322,750              -
Total assets            297,502,643  252,691,973   200,984,413  4,976,706,209  4,886,344,944  4,441,317,068
Equity and liabilities
Capital and reserves
Share capital            19,432,065   19,432,065    18,314,947    269,660,040    269,660,040    244,752,779
Share premium           108,936,082  108,936,082    94,846,046  1,638,563,371  1,638,563,371  1,323,632,626
Translation reserve     (36,208,761) (58,583,848)  (77,093,671)             -              -              -
Share option reserve      1,214,859    1,035,888     1,035,888     17,157,178     13,957,178     13,957,178
Retained earnings       127,358,179  126,620,650   112,043,676  1,807,077,209  1,789,877,978  1,470,428,459
Realisation of 
equity reserve          (10,701,093) (10,701,093)  (10,701,093)  (140,624,130)  (140,624,130)  (140,624,130)
Treasury capital 
reserve                 (25,376,743) (25,376,743)            -   (548,619,802)  (548,619,802)             -
Merger reserve          (10,705,308) (10,705,308)  (10,705,308)  (154,707,759)  (154,707,759)  (154,707,759)
Other reserves                    -      317,509      (140,016)             -      6,280,332     (3,218,975)
Equity attributable 
to owners of 
the parent              173,949,280  150,975,202   127,600,469   2,888,506,107  2,874,387,208  2,754,220,178
Total equity            173,949,280  150,975,202   127,600,469   2,888,506,107  2,874,387,208  2,754,220,178
Non-current liabilities
Long-term provisions     12,178,362   10,432,986    10,271,027     205,828,928    206,364,460    236,130,911
Long term liabilities    29,575,681   18,456,309    11,495,041     499,864,488    362,640,753    264,270,992
Deferred taxation        49,659,486   40,616,337    32,667,521     839,304,908    803,391,140    751,026,310
                         91,413,529   69,505,632    54,433,589   1,544,998,324  1,372,396,353  1,251,428,213
Current liabilities
Trade and other 
payables                 21,637,419   18,743,235    13,014,779     365,698,348    370,741,187    299,209,765
Financial instrument 
liabilities               1,195,181    5,945,399             -      20,200,000    117,600,000              -
Current portion of 
long term liabilities     7,694,263    6,980,711     4,247,021     130,042,281    140,503,506     97,639,018
Bank overdraft                    -            -       443,171               -              -     10,188,509
Current tax liability     1,612,971      541,794     1,245,384      27,261,149     10,716,690     28,631,385
                         32,139,834   32,211,139    18,950,355     543,201,778    639,561,383    435,668,677
Total equity and 
liabilities             297,502,643  252,691,973   200,984,413   4,976,706,209  4,886,344,944  4,441,317,068

Consolidated statement of profit or loss and other comprehensive income 
for the period ended 31 December 2016
                                  31 December         31 December         31 December          31 December
                                         2016                2015                2016                 2015
                                   (Unaudited)         (Unaudited)         (Unaudited)          (Unaudited)
                                          GBP                 GBP                 ZAR                  ZAR
Revenue                           105,046,160          75,632,034       1,878,225,336        1,575,415,260
Gold sales                         90,088,444          73,752,127       1,610,781,384        1,536,256,799
Platinum sales                      2,374,978           1,879,907          42,464,600           39,158,461
Coal sales                         12,582,738                   -         224,979,352                    -
Realisation costs                  (1,548,366)           (269,483)        (27,684,793)          (5,613,341)
On-mine revenue                   103,497,794          75,362,551       1,850,540,543        1,569,801,919
Gold cost of production           (65,188,472)        (48,935,400)     (1,165,569,862)      (1,019,324,382)
Platinum cost of production        (2,300,055)         (1,650,617)        (41,125,002)         (34,382,330)
Coal cost of production           (10,567,754)                  -        (188,951,438)                   -
Mining depreciation                (6,449,740)         (5,276,624)       (115,321,349)        (109,912,069)
Mining profit                      18,991,773          19,499,910         339,572,892          406,183,138
Other income/(expenses)             2,175,078          (3,486,324)         38,890,388          (72,620,137)
Profit on disposal of 
investment                            256,311                   -           4,582,844                    -
Royalty costs                        (968,130)         (1,194,397)        (17,310,168)         (24,879,297)
Net income before finance 
income and finance costs           20,455,032          14,819,189         365,735,956          308,683,704
Finance income                         69,912             143,584           1,250,024            2,990,864
Finance costs                      (1,079,361)           (557,976)        (19,298,977)         (11,622,650)
Profit before taxation             19,445,583          14,404,797         347,687,003          300,051,918
Taxation                           (5,475,167)         (3,479,954)        (97,895,968)         (72,487,419)
Profit after taxation              13,970,416          10,924,843         249,791,035          227,564,499
Other comprehensive income:
Fair value movement on available 
for sale investment                  (317,509)            (69,337)         (6,280,332)          (1,854,878)
Foreign currency translation 
differences                        22,375,087         (20,691,156)                  -                    -
Total comprehensive income 
for the year                       36,027,994          (9,835,650)        243,510,703          225,709,621
Profit attributable to:
Owners of the parent               13,970,416          10,924,843         249,791,035          227,564,499
Total comprehensive income 
attributable to:
Owners of the parent               36,027,994          (9,835,650)        243,510,703          225,709,621
Earnings per share                       0.93                0.60               16.58                12.43
Diluted earnings per share               0.93                0.60               16.57                12.42
Weighted average number of 
shares in issue                 1,506,848,496       1,831,494,763       1,506,848,496        1,831,494,763
Diluted number of shares 
in issue                        1,507,616,769       1,831,712,087       1,507,616,769        1,831,712,087
Headline earnings per 
share is calculated:
Basic earnings                     13,970,416          10,924,843         249,791,035          227,564,499
Adjustments:
Profit on disposal of investment     (198,897)                  -          (3,556,287)                   -
Profit on disposal of property,
plant, mineral right and equipment    (15,229)                149            (272,290)               2,679
Headline earnings                  13,756,290          10,924,992         245,962,458          227,567,178
Headline earnings per share              0.91                0.60               16.32                12.43
Diluted headline earnings per share      0.91                0.60               16.31                12.42


Condensed consolidated statement of changes in equity for the period ended 31 December 2016
                             Six months ended    Six months ended    Six months ended     Six months ended
                                  31 December         31 December         31 December          31 December
                                         2016                2015                2016                 2015
                                   (Unaudited)         (Unaudited)         (Unaudited)          (Unaudited)
                                          GBP                 GBP                 ZAR                  ZAR
Shareholder's equity as 
start of period                   150,975,202         147,167,487       2,874,387,208        2,738,510,557
Share option reserve                  178,971                   -           3,200,000                    -
Other comprehensive income         22,057,578         (20,760,493)         (6,280,332)          (1,854,878)
Profit for the year                13,970,416          10,924,843         249,791,035          227,564,499
Dividends paid                    (17,067,953)         (9,731,368)       (300,000,000)        (210,000,000)
Reciprocal dividend PAR 
Gold Pty Ltd                        3,835,066                   -          67,408,196                    -
Total equity                      173,949,280         127,600,469       2,888,506,107        2,754,220,178


Condensed consolidated cash flow statement for the period ended 31 December 2016
                             Six months ended    Six months ended    Six months ended     Six months ended
                                  31 December         31 December         31 December          31 December
                                         2016                2015                2016                 2015
                                   (Unaudited)         (Unaudited)         (Unaudited)          (Unaudited)
                                          GBP                 GBP                 ZAR                  ZAR
Profits before tax                 19,445,583          14,404,797         347,687,003          300,051,918
Summary of adjustments
Royalties                             968,130           1,194,397          17,310,168           24,879,297
Depreciation                        6,479,618           5,294,975         115,855,561          110,294,337
Gold loan deliveries               (1,592,171)         (1,404,589)        (27,925,865)         (29,257,585)
Fair value adjustments and other   (4,995,440)           (434,881)        (89,318,476)          (9,058,577)
Net finance costs                   1,009,449             414,392          18,048,953            8,631,786
Operating profit before 
working capital changes            21,315,169          19,469,091         381,657,344          405,541,176
(Increase)/decrease in trade 
and other receivables              (2,337,009)          1,036,728             926,876           21,595,047
Increase in net inventory          (1,834,910)         (1,238,072)        (18,348,868)         (25,789,050)
Increase in accounts payable        3,349,251            (864,687)          7,360,658          (18,011,434)
Non-cash items                       (259,954)                  -                   -                    -
Cash Generated by operations       20,232,547          18,403,060         371,596,010          383,335,739
Taxation paid                      (3,532,719)         (2,794,359)        (59,523,813)         (64,242,313)
Royalty paid                       (1,116,250)         (1,040,133)        (18,747,082)         (23,912,650)
Dividends paid                    (17,142,171)         (9,349,072)       (300,000,000)        (210,000,000)
Reciprocal dividend PAR 
Gold Pty Ltd                        3,902,970                   -          67,408,196                    -
Net finance expense                  (963,654)           (511,354)        (17,015,660)         (10,651,502)
Cash inflow from 
operating activities                1,380,723           4,708,142          43,717,651           74,529,274
Cash outflow from investing 
activities                         (9,551,117)         (6,191,291)       (173,142,545)        (128,964,585)
Cash inflow/(outflow) from 
financing activities                8,852,696            (960,154)        145,234,650          (20,000,000)
Net increase/(decrease) in 
cash equivalents                      682,302          (2,443,303)         15,809,756          (74,435,311)
Cash at the beginning of period     2,658,947           3,328,850          52,593,979           64,246,802
Effect of foreign currency 
rate changes                          706,022          (1,328,718)                  -                    -
Cash at end of year                 4,047,271            (443,171)         68,403,735          (10,188,509)


Consolidated segment report for the period ended 31 December 2016

                                                      31 December 2016
                                                                     Corporate
                                                                           and
                 Barberton      Evander      Phoenix     Uitkomst       growth      Funding
                     Mines        Mines     Platinum    Colliery3     projects      Company         Group
                       GBP          GBP          GBP          GBP          GBP          GBP           GBP
Revenue
Gold sales1      48,817,087  41,271,357            -            -            -            -    90,088,444
Platinum sales            -           -    2,374,978            -            -            -     2,374,978
Coal sales                -           -            -   12,582,738            -            -    12,582,738
Realisation costs  (337,118) (1,211,248)           -            -            -            -    (1,548,366)
On-mine revenu   48,479,969  40,060,109    2,374,978   12,582,738            -            -   103,497,794
Gold cost of 
production      (29,425,710 (35,762,762)           -            -            -            -   (65,188,472)
Platinum cost 
of production             -           -   (2,300,055)           -            -            -   (2,300,055)
Coal cost of 
production                -           -            -  (10,567,754)           -            -   (10,567,754)

Depreciation     (2,471,578) (3,204,747)    (428,693)    (344,722)           -            -    (6,449,740)
Mining Profit    16,582,681   1,092,600     (353,770)   1,670,262            -            -     18,991,773
Other expenses    4,482,179    (517,813)      78,045      147,856   (2,034,620)      19,431      2,175,078
Profit on disposal 
of investment             -           -            -            -      256,311            -        256,311
Royalty costs      (729,367)   (206,563)           -      (32,200)           -            -       (968,130)
Net income/(loss) 
before finance 
income and 
finance costs    20,335,493     368,224     (275,725)    1,785,918  (1,778,309)       19,431    20,455,032
Finance income      (13,155)      3,869           80         7,938      18,486        52,694        69,912
Finance costs          (219)          -            -       (15,063)        (43)   (1,064,036)   (1,079,361)
Profit/(loss)
before taxation  20,322,119     372,093     (275,645)    1,778,793  (1,759,866)     (991,911)   19,445,583
Taxation         (5,357,045)     83,819       51,875      (473,542)    219,726             -    (5,475,167)
Profit/(loss) 
after taxation
before inter-
company charges  14,965,074     455,912     (223,770)    1,305,251  (1,540,140)     (991,911)   13,970,416
Inter-company 
transactions
Management fees    (646,041)   (572,065)     (68,248)     (100,671)   1,387,025            -             -
Inter-company 
interest charges    (40,268)   (323,770)      45,638      (191,667)           -      510,067             -
Profit/(loss) 
after taxation
after inter-
company charges  14,278,765    (439,923)    (246,380)    1,012,913     (153,115)    (481,844)   13,970,416
Segmental assets 
(total assets 
excluding 
goodwill)        69,363,021 174,037,650   11,396,001    16,169,145    7,900,059   (2,363,947)  276,501,929
Segmental 
liabilities      28,160,761  56,972,786      671,264     4,572,881    2,879,983   30,295,688   123,553,363
Goodwill         21,000,714           -            -             -            -            -    21,000,714
Net assets 
(excluding
goodwill)        41,202,259 117,064,864   10,724,737             -    5,020,076  (32,659,635)  152,948,566
Capital 
Expenditure       4,670,022   6,252,796      162,192       279,642       16,779            -    11,381,431

1 All gold sales were made in the Republic of South Africa and the majority of revenue was generated 
from selling gold to South African institutions through the group's Funding Company
2 Other expenses exclude inter-management fees and dividend received
3 Uitkomst Colliery was consolidated into the group from 1 April 2016


                                                      31 December 2015
                                                                   Corporate
                                                                         and
                           Barberton        Evander      Phoenix      growth      Funding
                               Mines          Mines     Platinum    projects      Company         Group
                                 GBP            GBP          GBP         GBP          GBP           GBP
Revenue
Gold sales1               41,011,076     32,741,051            -            -           -    73,752,127
Platinum sales                     -              -    1,879,907            -           -     1,879,907
Coal sales                         -              -            -            -           -             -
Realisation costs           (156,470)      (113,013)           -            -           -      (269,483)
On-mine revenue           40,854,606     32,628,038    1,879,907            -           -    75,362,551
Gold cost 
of production            (22,321,903)   (26,613,497)           -            -           -   (48,935,400)
Platinum cost 
of production                      -              -   (1,650,617)           -           -    (1,650,617)
Coal cost of production            -              -            -            -           -             -
Depreciation              (1,805,175)    (3,312,213)    (159,236)           -           -    (5,276,624)
Mining Profit             16,727,528      2,702,328       70,054            -           -    19,499,910
Other expenses2           (2,614,480)       115,024      (92,565)    (907,176)      12,873   (3,486,324)
Profit on disposal
of investment                      -              -            -            -            -            -
Royalty costs             (1,030,528)      (163,869)           -            -            -   (1,194,397)
Net income/(loss) 
before finance
income and finance cost   13,082,520      2,653,483      (22,511)    (907,176)      12,873   14,819,189
Finance income                59,038         11,964          370       46,287       25,925      143,584
Finance costs                 14,621        (14,314)       8,570           (5)    (566,848)    (557,976)
Profit/(loss) 
before taxation           13,156,179      2,651,133      (13,571)    (860,894)    (528,050)  14,404,797
Taxation                  (3,294,804)        (7,836)      14,408     (191,722)           -   (3,479,954)
Profit/(loss) after 
taxation before 
inter-company charge       9,861,375      2,643,297          837   (1,052,616)    (528,050)  10,924,843
Inter-company 
transaction
Management fees             (685,079)      (447,904)     (64,809)    1,197,792           -            -  
Inter-company 
interest charges                   -       (522,381)           -             -     522,381            -
Profit/(loss) after 
taxation after inter-
company charges            9,176,296       1,673,012     (63,972)      145,176      (5,669)  10,924,843
Segmental assets 
(total assets
excluding goodwill)       47,452,876     122,245,331   8,497,626     1,576,239      211,627  179,983,699
Segmental liabilities     19,134,430      41,981,878     570,515        62,80    11,634,315   73,383,944
Goodwill                  21,000,714               -           -            -             -   21,000,714
Net assets (excluding 
goodwill)                 28,318,446      80,263,453   7,927,111    1,513,433   (11,422,688) 106,599,755
Capital expenditure        2,683,629       3,451,752      38,406       14,402             -    6,188,189

1 All gold sales were made in the Republic of South Africa and the majority of revenue was generated 
from selling gold to South African institutions through the group's Funding Company
2 Other expenses exclude inter-management fees and dividend received
3 Uitkomst Colliery was consolidated into the group from 1 April 2016


Consolidated segment report for the period ended 31 December 2016

                                                      31 December 2016
                                                                     Corporate
                                                                           and
                 Barberton      Evander      Phoenix     Uitkomst       growth      Funding
                     Mines        Mines     Platinum    Colliery3     projects      Company         Group
                       ZAR          ZAR          ZAR          ZAR          ZAR          ZAR           ZAR
                   million      million      million      million      million      million       million
Revenue
Gold sales1          872.9        737.9            -            -            -            -       1,610.8
Platinum sales           -            -         42.5            -            -            -          42.5
Coal sales               -            -            -        225.0            -            -         225.0
Realisation costs     (6.0)       (21.7)           -            -            -            -         (27.7)
On-mine revenue      866.9        716.2         42.5        225.0            -            -       1,850.6
Gold cost of 
production          (526.2)      (639.4)           -            -            -            -      (1,165.6)
Platinum cost 
of production            -            -        (41.1)           -            -            -         (41.1)
Coal cost 
of production            -            -            -       (189.0)           -            -        (189.0)
Depreciation         (44.1)       (57.3)        (7.7)        (6.2)           -            -        (115.3)
Mining profit        296.6         19.5         (6.3)        29.8            -            -         339.6
Other expenses2       80.1         (9.3)         1.4         2.6         (36.4)         0.5          38.9
Profit on disposal 
of investment             -            -            -           -           4.6            -          4.6
Royalty costs        (13.0)        (3.7)           -        (0.6)            -            -         (17.3)
Net income/(loss) 
before finance
income and finance 
costs                363.7          6.5         (4.9)       31.8         (31.8)         0.5         365.8
Finance income        (0.2)         0.1            -         0.1           0.3          0.9           1.2
Finance costs            -            -            -        (0.3)            -        (19.0)        (19.3)
Profit/(loss) 
before taxation      363.5          6.6         (4.9)       31.6         (31.5)       (17.6)        347.7
Taxation             (95.8)         1.5          0.9        (8.5)          4.0            -         (97.9)
Profit/(loss) 
after taxation       267.7          8.1         (4.0)       23.1         (27.5)       (17.6)        249.8
Inter-company 
transactions
Management fees      (11.6)       (10.2)        (1.2)       (1.8)         24.8            -             -
Inter-company 
interest charges      (0.7)        (5.8)         0.8           -          (3.4)         9.1             -
Profit/(loss) 
after taxation
after inter-
company charges      255.4         (7.9)        (4.4)       21.3          (6.1)        (8.5)        249.8
Segmental assets 
(total assets
excluding 
goodwill)          1,172.3      2,941.4        192.6       273.3          133.1        (40.0)     4,672.7
Segmental 
liabilities          476.0        962.9         11.3        79.3           47.0         512.0     2,088.5
Goodwill             303.5            -            -           -              -             -       303.5
Net assets 
(excluding goodwill  696.3      1,978.5        181.3       194.0           86.1        (552.0)    2,584.2
Capital expenditure   83.5        111.8          2.9         5.0            0.3             -      203.5
EBITDA               407.8         63.8          2.8        38.0          (36.4)          0.5      476.5

1 All gold sales were made in the Republic of South Africa and the majority of revenue was generated 
from selling gold to South African institutions through the group's Funding Company
2 Other expenses exclude inter-management fees and dividend received
3 Uitkomst Colliery was consolidated into the group from 1 April 2016

                                                      31 December 2015
                                                                   Corporate
                                                                         and
                           Barberton        Evander      Phoenix      growth      Funding
                               Mines          Mines     Platinum    projects      Company         Group
                                 ZAR            ZAR          ZAR         ZAR          ZAR           ZAR
                             million        million      million     million      million       million  
Revenue
Gold sales1                    854.3          682.0            -           -            -       1,536.3
Platinum sales                     -              -         39.2           -            -          39.2
Coal sales                         -              -            -           -            -             - 
Realisation costs               (3.3)          (2.4)           -           -            -          (5.7)
On-mine revenue                851.0          679.6         39.2           -            -       1,569.8
Gold cost of production       (464.9)        (554.4)           -           -            -      (1,019.3)
Platinum cost of production        -              -        (34.4)          -            -         (34.4)
Coal cost of production            -              -            -           -            -             -
Depreciation                   (37.6)         (69.0)        (3.3)          -            -        (109.9)
Mining profit                  348.5           56.2          1.5           -            -         406.2
Other expenses2                (54.5)           2.4         (1.9)      (18.8)         0.3         (72.5)
Profit on disposal of 
investment                         -              -            -           -            -             - 
Royalty costs                  (21.5)          (3.4)           -           -            -         (24.9)
Net income/(loss) before 
finance income and
finance costs                  272.5           55.2         (0.4)       (18.8)        0.3         308.8
Finance income                   1.2            0.2            -          1.0         0.5           2.9
Finance costs                    0.3           (0.3)         0.2            -       (11.8)        (11.6)
Profit/(loss) 
before taxation                274.0           55.1         (0.2)       (17.8)      (11.0)        300.1
Taxation                       (68.6)          (0.2)         0.3         (4.0)          -         (72.5)
Profit/(loss) 
after taxation                 205.4           54.9          0.1        (21.8)      (11.0)        227.6
Inter-company transactions
Management fees                (14.3)          (9.3)        (1.4)        25.0           -             -
Inter-company 
interest charges                   -          (10.9)           -            -        10.9             - 
Profit/(loss) after 
taxation after inter-
company charges                191.1           34.7         (1.3)         3.2        (0.1)        227.6
Segmental assets (total 
assets excluding goodwill)   1,090.9        2,810.4        195.4         36.2         4.9       4,137.8
Segmental liabilities          439.9          965.2         13.1          1.4       267.5       1,687.1
Goodwill                       303.5              -            -            -           -         303.5
Net assets (excluding 
goodwill)                      651.0        1,845.2        182.3         34.8      (262.6)      2,450.7
Capital expenditure             55.9           71.9          0.8          0.3           -         128.9
EBITDA                         310.1          124.2          2.9        (18.8)        0.3         418.7

1 All gold sales were made in the Republic of South Africa and the majority of revenue was generated 
from selling gold to South African institutions through the group's Funding Company
2 Other expenses exclude inter-management fees and dividend received
3 Uitkomst Colliery was consolidated into the group from 1 April 2016


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) 20 7796 8644
Facsimile: + 44 (0) 20 7796 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
St James's Corporate Services Limited                    Numis Securities Limited
Company Secretary                                        Nominated Adviser and Joint Broker
Office: + 44 (0) 20 7796 8644                            Office: +44 (0) 20 7260 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) 20 7418 8900

Julian Gwillim                                           Jeffrey Couch/Neil Haycock/Thomas Rider
Aprio Strategic Communications                           BMO Capital Markets Limited
Public & Investor Relations SA                           Joint Broker
Office: +27 (0)11 880 0037                               Office: +44 (0) 20 7236 1010

Bobby Morse/Chris Judd
Buchanan Communications
Public & Investor Relations UK 
Office: +44 (0) 207 466 5000


www.panafricanresources.com

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