Wrap Text
Operational update and trading statement for the six month reporting period ended 31 December 2017
Pan African Resources PLC
(Incorporated and registered in England and Wales under
Companies Act 1985 with registered number 3937466 on 25 February 2000)
Share code on AIM: PAF
Share code on JSE: PAN
ISIN: GB0004300496
("Pan African Resources" or "the Company" or "the Group")
Operational update and trading statement for the six month reporting
period ended 31 December 2017
Operational update
Key features
- Improved safety performance from both Barberton Mines and Evander
Mines.
- The Group's gold production for the six months ended 31 December 2017
("current reporting period") reduced by 6,331oz to 85,282oz (2016:
91,613oz), primarily as a result of operational challenges at Barberton
Mines.
- Improved overall operational and financial performance from Evander
Mines.
- The Elikhulu tailings retreatment plant ("Elikhulu") project remains on
track for commissioning early in the 2019 financial year or third quarter
of the 2018 calendar year ahead of schedule and below budget.
- The reduced production from Barberton Mines was as a result of:
* processing challenges at the Barberton Tailings Retreatment Plant
("BTRP"), which produced 6,289oz less compared to the corresponding period;
and
* underground production impacted by delays in developing into Fairview's
high-grade 272 and 358 platforms, as well as 11 production days lost
(equivalent to 3,000oz of gold) due to industrial action by employees and
protests directed by community pressure groups.
- Conclusion of the sale of Phoenix Platinum Mining Proprietary Limited
to Sylvania Platinum Limited on 7 November 2017 for R89 million.
- The group's production guidance for 2018 financial year will now be
177,000oz to 181,000oz.
Pan African Resources CEO Cobus Loots commented:
"The past 12 months have been a watershed
period, during which we reassessed the sustainability of all our operations
and dealt with the issues causing operational disruptions. While we still
have some work to do, we are confident our operations are being positioned
to deliver into our objective of mining relatively low-cost, high-margin
and sustainable gold ounces. In light of the prevailing low ZAR gold price,
the Group is reviewing its cost base and the strategic merits of our
portfolio. We expect to deliver improved production results and cost
savings in the next reporting period.
We also look forward to commissioning the Elikhulu Project below budget
and ahead of schedule in the coming months. In terms of medium- to
long-term gold production growth, we believe feasibility studies for the
Royal Sheba Project at Barberton Mines, and Evander Mines’ Egoli Project
(previously called the 2010 Pay Channel), will demonstrate robust economic
returns in a relatively low risk mining environment."
Operational production summary
Period Underground operations
ended Barberton Evander
31 December Units Mines Mines
Tonnes milled -
underground 2017 (t) 124,969 174,233
2016 (t) 123,168 161,872
Tonnes processed -
tailings 2017 (t) - -
2016 (t) - -
Tonnes processed -
surface feedstock 2017 (t) - -
2016 (t) - -
Tonnes processed -
total tailings and
surface feedstock 2017 (t) - -
2016 (t) - -
Tonnes milled and
processed - total 2017 (t) 124,969 174,233
2016 (t) 123,168 161,872
Head grade -
underground 2017 (g/t) 8.7 6.1
2016 (g/t) 9.4 5.4
Head grade - total
underground and
surface 2017 (g/t) 8.7 6.1
2016 (g/t) 9.4 5.4
Head grade - tailings 2017 (g/t) - -
2016 (g/t) - -
Head grade - surface
feedstock 2017 (g/t) - -
2016 (g/t) - -
Head grade - total
tailings and surface
feedstock 2017 (g/t) - -
2016 (g/t) - -
Head grade - total 2017 (g/t) 8.7 6.1
2016 (g/t) 9.4 5.4
Recovered grade 2017 (g/t) 8.0 5.8
2016 (g/t) 8.7 5.1
Overall recovery -
underground 2017 (%) 93% 96%
2016 (%) 93% 94%
Overall recovery -
tailings 2017 (%) - -
2016 (%) - -
Gold sold -
underground 2017 (oz) 32,159 32,734
2016 (oz) 34,471 26,477
Gold sold - tailings 2017 (oz) - -
2016 (oz) - -
Gold sold - surface
feedstock 2017 (oz) - -
2016 (oz) - -
Gold sold - total 2017 (oz) 32,159 32,734
2016 (oz) 34,471 26,477
Period
ended Tailings operations
31 December Units BTRP ETRP
Tonnes milled -
underground 2017 (t) - -
2016 (t) - -
Tonnes processed -
tailings 2017 (t) 458,779 907,969
2016 (t) 388,905 940,489
Tonnes processed -
surface feedstock 2017 (t) - 184,161
2016 (t) - 240,495
Tonnes processed -
total tailings
and surface feedstock 2017 (t) 458,779 1,092,130
2016 (t) 388,905 1,180,984
Tonnes milled and
processed - total 2017 (t) 458,779 1,092,130
2016 (t) 388,905 1,180,984
Head grade - underground 2017 (g/t) - -
2016 (g/t) - -
Head grade - total
underground and surface 2017 (g/t) - -
2016 (g/t) - -
Head grade - tailings 2017 (g/t) 1.4 0.3
2016 (g/t) 2.2 0.3
Head grade - surface
feedstock 2017 (g/t) - 2.0
2016 (g/t) - 1.9
Head grade - total tailings
and surface feedstock 2017 (g/t) 1.4 0.6
2016 (g/t) 2.2 0.6
Head grade - total 2017 (g/t) 1.4 0.6
2016 (g/t) 2.2 0.6
Recovered grade 2017 (g/t) 0.6 0.3
2016 (g/t) 1.2 0.4
Overall recovery -
underground 2017 % - -
2016 % - -
Overall recovery -
tailings 2017 % 41% 56%
2016 % 55% 65%
Gold sold - underground 2017 (oz) - -
2016 (oz) - -
Gold sold - tailings 2017 (oz) 8,452 3,248
2016 (oz) 14,741 4,444
Gold sold - surface
feedstock 2017 (oz) - 8,689
2016 (oz) - 11,480
Gold sold - total 2017 (oz) 8,452 11,937
2016 (oz) 14,741 15,924
Total continuing operations
Period Barberton Evander
ended Mines Mines Group
31 December Units Total Total Total
Tonnes milled -
underground 2017 (t) 124,969 174,233 299,202
2016 (t) 123,168 161,872 285,040
Tonnes processed -
tailings 2017 (t) 458,779 907,969 1,366,748
2016 (t) 388,905 940,489 1,329,394
Tonnes processed -
surface feedstock 2017 (t) - 184,161 184,161
2016 (t) - 240,495 240,495
Tonnes processed -
total tailings and
surface feedstock 2017 (t) 458,779 1,092,130 1,550,909
2016 (t) 388,905 1,180,984 1,569,889
Tonnes milled and
processed - total 2017 (t) 583,748 1,266,363 1,850,111
2016 (t) 512,073 1,342,856 1,854,929
Head grade -
underground 2017 (g/t) 8.7 6.1 7.2
2016 (g/t) 9.4 5.4 7.1
Head grade - total
underground and
surface 2017 (g/t) 8.7 6.1 7.2
2016 (g/t) 9.4 5.4 7.1
Head grade - tailings 2017 (g/t) 1.4 0.3 0.7
2016 (g/t) 2.2 0.3 0.9
Head grade - surface
feedstock 2017 (g/t) - 2.0 2.0
2016 (g/t) - 1.9 1.9
Head grade - total
tailings and surface
feedstock 2017 (g/t) 1.4 0.6 0.8
2016 (g/t) 2.2 0.6 1.0
Head grade - total 2017 (g/t) 2.9 1.4 1.9
2016 (g/t) 3.9 1.2 2.0
Recovered grade 2017 (g/t) 2.2 1.1 1.4
2016 (g/t) 3.0 1.0 1.5
Overall recovery -
underground 2017 % 93% 96% 94%
2016 % 93% 94% 93%
Overall recovery -
tailings 2017 % 41% 56% 49%
2016 % 55% 65% 60%
Gold sold -
underground 2017 (oz) 32,159 32,734 64,893
2016 (oz) 34,471 26,477 60,948
Gold sold - tailings 2017 (oz) 8,452 3,248 11,700
2016 (oz) 14,741 4,444 19,185
Gold sold - surface
feedstock 2017 (oz) - 8,689 8,689
2016 (oz) - 11,480 11,480
Gold sold - total 2017 (oz) 40,611 44,671 85,282
2016 (oz) 49,212 42,401 91,613
Group safety
We are pleased to report an improved group safety performance across all
operations, with no fatalities in the current or prior reporting periods.
The reportable injury frequency rate improved significantly to 0.62
(2016: 1.61) and the lost-time injury frequency rate increased marginally
to 4.05 (2016: 3.96). The Group's total recordable injury frequency rate
reduced to 14.42 (2016: 14.81).
A notable achievement is the group-wide reduction in the number of
Department of Mineral Resources ("DMR") safety stoppages ("Section 54
regulatory notices") during the current reporting period, evidencing the
management team's focus on addressing previously highlighted risks and the
constructive relationship with the DMR.
Barberton Mines
Barberton Mines' gold production reduced by 8,601oz to 40,611oz (2016:
49,212oz), predominantly due to the following, with mitigating actions
addressed separately:
- BTRP gold production reduced to 8,452oz (2016: 14,741oz) due to the
re-mining operation moving to the lower-grade Harper dump following
depletion of the Bramber dump, and the head grade reducing from 2.2g/t to
1.4g/t. The Harper dump material has a larger coarse fraction, which
resulted in processing problems and a reduction in plant recoveries to
41% (2016: 55%). A regrind mill is being installed to assist with improving
recoveries from treating the Harper dump material.
- Barberton Mines' underground mining production reduced to 32,159oz
(2016: 34,471oz) due to a lack of grade flexibility in the Fairview MRC
orebody, which curtailed the mineable tonnes at the targeted head grade.
The underground tonnes milled increased to 124,969t (2016: 123,168t),
while the head grade reduced to 8.7g/t (2016: 9.4g/t).
- Gold production was adversely impacted by disruptions from pressure
groups, community unrest and protected and unprotected strike action at
Barberton Mines, which resulted in 11 lost production days, equivalent to
approximately 3,000oz of gold. The source of the frustration from these
stakeholders is driven by issues unrelated to the mine and is symptomatic
of the general dissatisfaction with service delivery, inter-union conflict,
and unemployment - issues that currently characterise the South African
mining and other sectors.
A summary of the status of remedial actions taken by management at
Barberton Mines is as follows:
Segment: BTRP
Challenge: Unexpected coarse fraction material mined, resulting in
reduced throughput, gold recoveries and gold production from the BTRP.
Remedial action: Installation of a regrind mill to assist with
improving recoveries from treating the Harper dump coarse fraction
material.
Status: The regrind mill will be commissioned by April 2018.
Segment: Fairview underground mining flexibility
Challenge: Limited grade flexibility within the Fairview MRC orebody,
with development into new platforms delayed. Two high-grade platforms
are however now available. In addition, a portion of the high-grade 101
platform was sterilised as a result of an unanticipated geological roll.
Remedial action: Initial production make-up strategy was to mine
pillars in previously mined high-grade platforms
(116 and 195 platforms). Unfortunately gold production from these
platforms was less than anticipated.
Development of two high-grade mining platforms in the MRC orebody to
improve grade flexibility. This development is now complete.
Status: The 358 and 272 high-grade mining platforms are available to
mine in the second half of the financial year. These platforms will
be available for the next two to three years, allowing sufficient
time to ensure development into new mining areas is on schedule.
Segment: Fairview underground mining flexibility
Challenge: Fairview mining operation is restricted by the hoisting capacity
of its No 3 Decline, which is also used by employees to access workings
below 42 Level and its high-grade 11-block of the MRC.
Remedial action: The Fairview sub-vertical shaft project will improve ore
handling efficiencies and significantly reduce the time taken by employees
to access high-grade mining platforms. The sub-vertical shaft project is
estimated to improve production by approximately 7,000oz - 10,000oz per
annum.
Status: The R105 million project is scheduled for completion over the
next 24 months.
Segment: Barberton Mines
Challenge: Community unrest and protected and unprotected strikes,
resulting in lost production shifts.
Remedial action: Barberton Mines obtained court interdicts:
- To halt the communities from blocking road access to the mining
operations.
- To halt the union's unprotected strikes.
- National Union of Mineworkers formally put on terms in terms of allowing
unprotected and illegal strike action.
- Section 189 process in terms of the Labour Relations Act has commenced
at Barberton Mines. Management is resolute that in the current difficult
operating environment, further disruptions to operations may lead to
material loss in employment.
Status: We continue to engage with all stakeholders to limit disruptions
of this nature in the future.
Evander Mines
Evander Mines' return to profitability is encouraging and resulted from
the remedial action taken to address the critical shaft infrastructure
and the cost base of this operation. The 5.4% increase in gold production,
and the lower cost base, were the primary contributors to improved
operational performance.
Evander Mines' underground gold operations delivered an improved
performance, with gold sold increasing to 32,734oz (2016: 26,477oz) due
to tonnages milled from underground mining increasing by 7.6% to
174,233t (2016: 161,872t), with the head grade increasing by 13.0% to
6.1g/t (2016: 5.4g/t).
The existing 8 Shaft pump column, however, still experienced a number of
water bursts, which contributed to lost production. This pump column
will be reliable once the refurbishment programme is completed in
April 2018. As a result of the 2017 refurbishment programme, 7 Shaft
pumping and other infrastructure performed well in the current reporting
period.
Development of the new high-grade "D raise" is being accelerated with the
intent of it being available for mining in March 2018. This raise will
contribute to increased mining flexibility and access to higher- grade
areas of the 8 Shaft orebody.
Gold production at the Evander Tailings Retreatment Plant ("ETRP") reduced
to 11,937oz (2016: 15,924oz). Compared to the previous reporting period
the ETRP treated more surface feedstock tonnages with additional milling
capacity allocated for surface material due to the 7 Shaft infrastructure
repairs during October 2016 and the resultant reduced production from
underground.
Growth projects
Elikhulu
Capital expenditure of R671.4 million (excluding capitalised borrowing
costs) has been incurred on the Elikhulu Project to date. The project
remains on track for commissioning early in the 2019 financial year,
which is ahead of schedule and below budget.
Although the Elikhulu Project experienced community protests during the
current reporting period, the project remains ahead of plan and all capital
has been contracted, which materially reduces the risk of cost overruns
due to price escalations.
The re-mining contract for the project was awarded to Fraser Alexander
("Fraser"). The contract incentivises Fraser to deliver more than
one-million tonnes per month.
Barberton Mines' sub-vertical shaft project at Fairview
Shareholders were previously advised that the Fairview mining operation is
restricted by the hoisting capacity of its No 3 Decline, which is used to
access workings below 42 Level and the high-grade 11-block of the MRC.
During the period under review, Fairview started constructing a new
sub-vertical shaft at a cost of approximately R105 million over a
two-year period. Following the commissioning of this shaft, it is expected
that productivity improvements will yield an additional 7,000oz - 10,000oz
of gold per annum.
Evander Egoli Project – Results from mining feasibility study
The Egoli Project is adjacent to the No 7 Shaft infrastructure and extends
from the boundary of Taung Gold International Limited's No 6 Shaft mining
right.
Shareholders were informed on 20 September 2017 that the Group had
initiated a mining feasibility study, conducted by DRA Global, into the
viability of the Egoli Project.
The available resource of the Egoli Project orebody has increased
materially and this, together with the study's findings, are summarised
as follows:
Updated resource statement Egoli Project
Contained
Tonnes Grade gold
Category Million g/t Moz
Measured 0.36 8.97 0.10
Indicated 2.92 9.87 0.93
Inferred 6.12 9.74 1.92
Total 9.40 9.75 2.95
Previous resource statement Egoli Project
Contained
Tonnes Grade gold
Category Million g/t Moz
Measured 0.45 8.94 0.13
Indicated 0.70 7.11 0.16
Inferred 4.13 8.93 1.19
Total 5.28 8.69 1.48
Mineral resources are reported in accordance with the South African Code
for the Reporting of Exploration Results, Mineral Resources and Mineral
Reserves guidelines. Cut-off values are reported applying a gold price
of ZAR600,000/kg (US$ 1,370/oz and ZAR:US$ 13.62:1). Mineral resources are
reported inclusive of mineral reserves. All mineral resources reported
exclude geological structures, regional pillars, middling pillars, safety
pillars and shaft pillars. Mineral resources are reported as in-situ tonnes.
Any discrepancies in totals are due to rounding. Mr HP Pretorius, of an
independent Geological Consultant (Shango Solutions Pty Ltd), and
registered with the South African Council of Natural Scientific
Professionals (400051/11) was appointed as the Competent Person for the
mineral resource report. Mr HP Pretorius has reviewed and approved the
scientific and technical disclosures contained in this announcement.
The Egoli Project has more than one-million ounces of contained gold in
measured and indicated categories. The mining feasibility highlights for
the Egoli Project are:
- Initial de-watering of the declines is expected to commence during
the 2018 calendar year.
- The mining operation will be planned to ensure waste and reef are hoisted
separately.
- The life-of-mine is expected to be 14 years.
- Average recoverable gold of approximately 13,000 ounces per annum during
the initial four-year development phase, and an average of approximately
65,000 ounces per annum for the remaining ten years thereafter is
forecasted.
- Existing available plant and shaft capacity will be used to treat the
ore mined.
- Peak funding requirement is forecast at approximately ZAR572 million.
- An internal rate of return (real, pre-taxation) of 46%, with a payback
period of two years following the initial four-year development period
is forecast. This projection is based on an assumed gold price of
US$1,287/oz and exchange rate ZAR:US$ 12.50:1, equating to ZAR517,194/kg.
- Project pre-taxation net present value is ZAR1.74 billion (US$139.4 million)
at a 10% real discount rate.
- An incremental all-in sustaining cost per kilogramme of approximately
ZAR275,000/kg, or US$684/oz, on average over the life of the mine.
- An average gold recovery rate of 95% and a mine call factor of 85%.
Royal Sheba
The Royal Sheba orebody forms part of the Barberton Mine complex and was
historically mined on a small scale (approximately 2,000 tonnes per month)
to a depth of 340 metres below surface. Due to poor economic returns
resulting from the low tonnage profile, and the prevailing low gold price
at that time, it was closed during 1996.
Since its closure, a concept study was completed in 2010 with the aim of
re-opening the mine as a larger, mechanised, standalone operation. The
study found it was a viable proposition, but required a significant amount
of capital expenditure for a new shaft system to be sunk from surface and
the construction of a new gold plant.
Since the 2010 study was completed, several synergies have been identified
at the Barberton Mines complex, which indicates that the Royal Sheba
orebody could be a viable economic proposition with materially lower
capital investment than that envisaged in the 2010 study. These synergies
include:
1) Proposed new mining method
The orebody is conducive to sub-level open stoping, a massive mechanised
mining method, which can be used to extract the entire orebody at lower
grades but with significantly more volumes and better efficiencies.
Using this mining method, production volumes of approximately 30,000 -
40,000 tonnes per month can be mined.
2) Underground access
A development drive is currently being developed from the Sheba mine on
23 Level (600 metres underground) towards the Royal Sheba orebody, which
obviates the need for the new shaft system identified in the 2010 study.
A further 800 meters of development is required to access the orebody
and multi-blasting is being investigated to reduce the development period
from 36 months to 18 months.
3) BTRP processing
The existing BTRP plant can be expanded to treat Royal Sheba's ore,
resulting in a substantial capital saving.
These infrastructure synergies should contribute to progressing the Royal
Sheba project as an attractive prospect. It presents the Group with an
opportunity to increase its production in the medium term by approximately
30,000oz at a low capital cost.
To improve confidence in the Royal Sheba project, a development strategy
is being pursued, which entails a drilling programme of 14 surface holes
totalling 12,000m, and a feasibility study, which is expected to be
completed by the end of this financial year.
Mineral resources of Royal Sheba as at 30 June 2017
Royal Sheba Resource
Category Tonnes g/t kg (Au) oz
Measured 385,450 4.15 1,599 51,421
Indicated 1,354,240 4.35 5,891 189,398
Inferred 856,470 4.40 3,726 119,782
Total Resource 2,596,160 4.32 11,216 360,601
Trading statement
In terms of paragraph 3.4(b) of the Listings Requirements of the JSE
Limited, a listed company is required to publish a trading statement as
soon as it is satisfied that a reasonable degree of certainty exists
that the financial results for the period to be reported upon next, will
differ by at least 20 percent from those of the previous corresponding
period.
Exchange rates and gold price
Pan African Resources is incorporated in England and Wales under the
Companies Act 1985 and, accordingly, its presentation currency is pounds
sterling ("GBP").
The average ZAR:GBP exchange rate affects the reporting of Group results
in GBP. For the current reporting period the average prevailing ZAR:GBP
exchange rate is used to translate earnings per share ("EPS") and headline
earnings per share ("HEPS") from ZAR to GBP.
For the reporting period of six months ended 31 December 2016 ("prior
reporting period"), the average ZAR:GBP exchange rate was ZAR17.88:1. For
the current reporting period, the ZAR appreciated against the GBP, with an
average exchange rate of ZAR17.65:1. This 1.3% period-on-period
appreciation in the average exchange rate should be taken into account for
the purposes of comparing results with the prior reporting period.
The Group records its revenue from precious metals sales in ZAR and the
strengthening of the value of the ZAR:US$ exchange rate during the current
reporting period had a negative impact on the US$ metals revenue received.
The average ZAR:US$ exchange rate was 4.3% stronger at R13.39:1
(2016: R13.99:1).
The average ZAR gold price received by the Group decreased by 2.4% to
ZAR551,506/kg (2016: ZAR565,298/kg) as a result of appreciation of the
ZAR:US$ exchange rate, and the US$ gold price received increased by 1.9%
to US$1,281/oz (2016: US$1,257/oz). The reduced average ZAR gold price
received therefore had a negative impact on the Group's gold revenues
for the current reporting period, further compounded by lower gold
production.
Weighted average number of shares
In the current reporting period the Group's weighted average number of
shares in issue used to calculate the EPS and HEPS increased by 19.3% to
1,798.3 million shares, from 1,506.8 million shares in the prior reporting
period. The 19.3% increase in the weighted average number of shares was
due to issuing 291.5 million new shares during April 2017 to fund the
equity component of the construction of the Elikhulu Project, the benefits
of which will only accrue in the first half of the 2019 financial year.
The 19.3% increase in the weighted average number of shares should be
considered when comparing the EPS and HEPS period-on- period expected
ranges.
EPS and HEPS
Pan African Resources advises shareholders that its EPS and HEPS for the
current reporting period are expected to be between:
1) EPS in ZAR terms: 90% to 70% lower than the 16.58 cents EPS for the prior
reporting period (therefore estimated EPS of 1.58 cents to 4.90 cents).
2) HEPS in ZAR terms: 88% to 68% lower than the 16.32 cents HEPS for the prior
reporting period (therefore estimated HEPS of 1.88 cents to 5.14 cents).
Using the average ZAR:GBP 17.65:1 exchange rate that prevailed during the
current reporting period, the Group's EPS and HEPS in GBP terms for the
current reporting period are expected to be between:
1) EPS in GBP terms: 90% to 70% lower than the 0.93 pence EPS for the prior
reporting period (therefore estimated EPS of 0.09 pence to 0.28 pence).
2) HEPS in GBP terms: 88% to 68% lower than the 0.91 pence HEPS for the prior
reporting period (therefore estimated HEPS of 0.11 pence to 0.29 pence).
The financial information contained in this trading statement has neither
been reviewed nor audited by the Company's auditors. The Group's interim
unaudited results for the six months ended 31 December 2017, will be
released on 13 February 2018.
For further information on Pan African Resources, please visit the
Company's website at www.panafricanresources.com
1 February 2018
Contact information
Corporate Office
The Firs Office Building
1st Floor, Office 101
Cnr. Cradock and Biermann Avenues
Rosebank, Johannesburg
South Africa
Office: + 27 (0) 11 243 2900
Facsimile: + 27 (0) 11 880 1240
Registered Office
Suite 31
Second Floor
107 Cheapside
London
EC2V 6DN
United Kingdom
Office: + 44 (0) 207 796 8644
Facsimile: + 44 (0) 207 796 8645
Cobus Loots
Pan African Resources PLC
Chief Executive Officer
Office: + 27 (0) 11 243 2900
Deon Louw
Pan African Resources PLC
Financial Director
Office: + 27 (0) 11 243 2900
Phil Dexter
St James's Corporate Services Limited
Company Secretary
Office: + 44 (0) 207 796 8644
John Prior / Paul Gillam
Numis Securities Limited
Nominated Adviser and Joint Broker
Office: +44 (0) 20 7260 1000
Sholto Simpson
One Capital
JSE Sponsor
Office: + 27 (0) 11 550 5009
Ross Allister
Peel Hunt LLP
Joint Broker
Office: +44 (0) 207 418 8900
Julian Gwillim
Aprio Strategic Communications
Public & Investor Relations SA
Office: +27 (0)11 880 0037
Jeffrey Couch/Neil Haycock/Thomas Rider
BMO Capital Markets Limited
Joint Broker
Office: +44 (0) 207 236 1010
Website: www.panafricanresources.com
Glossary of technical terms:
Au: Chemical symbol for gold
Cut-off Grade: The lowest grade value that is included in a resource statement
Grade: The proportion of a mineral within a rock or other material. For
gold mineralisation this is usually reported as grams of gold per tonne of
rock (g/t)
g/t: Grammes per tonne
Indicated Mineral Resource: That part of a mineral resource for which
tonnage, densities, shape, physical characteristics, grade and mineral
content can be estimated with a reasonable level of confidence. It is
based on exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are too widely or inappropriately
spaced to confirm geological and/or grade continuity but are spaced
closely enough for continuity to be assumed
Inferred Mineral Resource: That part of a mineral resource for which
tonnage, grade and mineral content can be estimated with a low level of
confidence. It is inferred from geological evidence and assumed but not
verified geological and/or grade continuity. It is based on information
gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that may be limited, or of
uncertain quality and reliability
Life of Mine: The time in which, through the employment of the available
capital, the ore reserves - or such reasonable extension of the ore reserves
as conservative geological analysis may justify - will be extracted.
m: metre
Mineral Resource: A concentration or occurrence of material of economic
interest in or on the Earth's crust in such a form, quality, and quantity
that there are reasonable and realistic prospects for eventual
economic extraction. The location, quantity, grade, continuity and other
geological characteristics of a Mineral Resource are known, estimated from
specific geological knowledge, or interpreted from a well constrained and
portrayed geological model.
Measured Resource: That part of a Mineral Resource for which tonnage,
densities, shape, physical characteristics, grade and mineral content can
be estimated with a high level of confidence. It is based on detailed and
reliable exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes. The locations are spaced closely enough to
confirm geological and grade continuity.
Moz: Million troy ounces
Orebody: Mining term to define a solid mass of mineralised rock which can
be mined profitably under current or immediately foreseeable economic
conditions "ore" a mineral deposit that can be extracted and marketed
profitably.
Ore Reserves: The economically mineable part of a Measured or Indicated
Mineral Resource demonstrated by at least a Preliminary Feasibility Study.
This Study must include adequate information on mining, processing,
metallurgical, economic and other relevant factors that demonstrate, at
the time of reporting, that economic extraction can be justified. A Mineral
Reserve includes diluting materials and allowances for losses that may
occur when the material is mined.
Ounce / oz: Troy ounce, equivalent to 31.103477 grams
Probable Mineral Reserve: The economically mineable part of an Indicated
and, in some circumstances, a Measured Mineral Resource demonstrated by
at least a Preliminary Feasibility Study. This Study must include adequate
information on mining, processing, metallurgical, economic, and other
relevant factors that demonstrate, at the time of reporting, that economic
extraction can be justified.
Proven Mineral Reserve: The economically mineable part of a Measured
Mineral Resource demonstrated by at least a Preliminary Feasibility Study.
This Study must include adequate information on mining, processing,
metallurgical, economic, and other relevant factors that demonstrate, at
the time of reporting, that economic extraction is justified.
t: Tonne (1 million grams)
Date: 01/02/2018 10:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
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