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PAN AFRICAN RESOURCES PLC - Update on Evander Mines refurbishment and cost optimisation programme and progress on Elikhulu financing

Release Date: 10/03/2017 17:50
Code(s): PAN     PDF:  
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Update on Evander Mines refurbishment and cost optimisation programme and progress on Elikhulu financing

Pan African Resources PLC
(Incorporated and registered in England and Wales under
Companies Act 1985 with registered number 3937466 on 25 February 2000)
AIM Code: PAF
JSE Code: PAN
ISIN: GB0004300496
(“Pan African Resources” or “group” or “company”)


UPDATE ON EVANDER GOLD MINING PROPRIETARY LIMITED (“EVANDER MINES”) REFURBISHMENT AND
COST OPTIMISATION PROGRAMME AND PROGRESS ON ELIKHULU TAILING RETREATMENT PLANT
(“ELIKHULU”) FINANCING

Update on the Evander shaft refurbishment programme and cost optimisation programme


Shareholders are referred to the announcement of 20 February 2017, in which the company communicated
the suspension of the Evander Mines underground mining operations to allow for critical refurbishment and
maintenance on no. 7 and no. 8 shaft infrastructure. The company is pleased to report that these repairs are
progressing on schedule and are still expected to be completed within the 55 day period previously
communicated. During the suspension of the underground mining operations the processing and tailings
retreatment plants have utilised available plant capacity to continue processing tailings and additional surface
sources.

In conjunction with the refurbishment, Evander Mines management has implemented a number of initiatives
to reduce the Evander Mines underground operation’s fixed cost base, once mining recommences.

Following a productivity and human capital assessment, initiated some time ago, Evander Mines has concluded
a retrenchment agreement (the “agreement”) with the National Union of Mineworkers on 10 March 2017,
with the facilitation of the South African Commission for Conciliation, Mediation and Arbitration. In terms of
this agreement, approximately 30 percent of Evander Mines employees will be retrenched at an estimated
cost of approximately R54 million (US$4.1 million). These personnel were designated as redundant for
Evander Mines to meet production targets. Pan African Resources wishes to express its gratitude to the parties
involved for the responsible manner in which the retrenchment agreement was concluded.

In order to minimise the number of job losses, Evander Mines will seek to re-engage a number of retrenched
employees when site activities for Elikhulu commences.


Progress on Elikhulu financing


On 9 February 2017, the company confirmed the approval by shareholders to disapply statutory pre-emption
rights to allow the company to carry out a general issue of ordinary shares for cash. Proceeds from any
general issue may or maybe not be used for the construction of Elikhulu. The company can confirm that it has
been seeking out investor support for raising equity to fund the remaining portion of capital required for the
Elikhulu construction.
The company is pleased with the interest it has had from investors and has built a book of demand that is in
excess of the 291,480,983 shares it was given authority to issue at its shareholder meeting. In terms of the JSE
Limited Listings Requirements, a company cannot issue shares at a price that is in excess of a 10% discount to
the 30 day volume weighted average price, which is currently at a premium to the current share price in South
African rand terms. Given current market conditions and market volatility, the company has elected not to
complete an equity issuance at this time. The company will however continue to progress the Elikhulu
development from cash and banking facilities, until the final Elikhulu funding package is secured.


Johannesburg
10 March 2017


Contact information

Corporate Office                        Registered Office
The Firs Office Building                Suite 31, Second Floor
1st Floor, Office 101                   107 Cheapside
Cnr. Cradock and Biermann Avenues       London
Rosebank, Johannesburg                  EC2V 6DN
South Africa                            United Kingdom
Office: + 27 (0) 11 243 2900            Office: + 44 (0) 207 796 8644
Facsimile: + 27 (0) 11 880 1240         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
St James's Corporate Services Limited   Numis Securities Limited
Company Secretary                       Nominated Adviser and Joint Broker
Office: + 44 (0) 207 796 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) 207 418 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) 207 236 1010

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


www.panafricanresources.com

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