Wrap Text
Provisional audited results for the year ended 30 June 2018
Pan African Resources PLC
(Incorporated and registered in England and Wales, registration number 3937466)
Share code on AIM : PAF
Share code on JSE : PAN
ISIN : GB0004300496
("Pan African Resources" or the "company" or the "group")
Provisional audited results for the year ended 30 June 2018
Pan African Resources CEO Cobus Loots commented:
"Pan African Resources acted decisively during the year under review to reconfigure its operations for sustainable
profitability. Our cost base is now significantly lower, and efficiencies and stability improved due to the
restructuring we effected during the year. We are confident the group is now positioned as a lower-cost, long-life
gold miner, consistent with stakeholder expectations and our key strategic objectives. All our producing assets are
today generating positive cash flows through the production of low-cost gold ounces.
A key highlight of the year was the excellent progress made towards the completion of the Elikhulu tailings retreatment
plant. The project poured its first gold on 16 August 2018, ahead of schedule and within the projected budget. It is
expected to be a flagship operation within our low-cost, long-life asset base.
In terms of our existing operations, the regrind mill at the Barberton tailings retreatment plant was completed, which
alleviated past processing challenges. Barberton Mines' sub-vertical shaft project at Fairview, together with our
current programme of accelerated underground development, will facilitate improved access to the high-grade Fairview
11-block Main Reef Complex orebody in the future.
I am pleased to report an excellent improvement in group-wide on-mine safety and congratulate Barberton Mines on
achieving its one-million fatality- free shifts milestone during June 2018. Barberton Mines has also made good progress
in its stakeholder engagement efforts in order to minimise operational stoppages, and these initiatives will continue
across the group.
Our existing portfolio presents attractive opportunities to further the group's profitable production growth. The Royal
Sheba Project at Barberton Mines offers the potential to access low-cost near surface ounces and significantly boost
Barberton Mines' production in the short to medium term.
The Egoli Project at Evander Mines also remains an attractive opportunity as a standalone project, following the
difficult but necessary decision to cease large-scale underground mining activities at 8 Shaft.
Given all the difficulties we experienced in the past year, our board elected not to recommend a final dividend for the
2018 financial year. Even though this decision was expected by most shareholders, it remains disappointing, given our
group's excellent track record of sector-leading dividends. Our board is confident that at prevailing ZAR gold prices,
and as a result of the remedial measures implemented, Pan African Resources will be able to resume its attractive
dividends in the near future.
Pan African Resources has started the 2019 financial year well, and we are on track to achieving our production
guidance of approximately 170,000oz for the 2019 financial year. We will continue to focus on improving and expanding
our portfolio, on a sustainable and value-accretive basis, to the benefit of all stakeholders."
Key features reported in South African Rand ("ZAR" or "R") and Pound Sterling ("GBP")
Strategic repositioning of the group
- During the year ended 30 June 2018 ("current reporting period"), the group restructured operations to ensure the
long-term sustainability and profitability of its business.
- Large-scale underground mining at Evander Mines' underground operations, which includes 8 Shaft, 7 Shaft and the
run-of-mine circuit in the Kinross metallurgical plant, was discontinued on 31 May 2018. As a result, 1,635 employees
were retrenched at a cost of R161 million. Evander Mines' underground operations was a high-cost gold producer,
producing at an all-in cost of R963,882/kg or USD2,331/oz (2017: R959,976/kg or USD2,197/oz).
- With the final commissioning of Elikhulu concluded during September 2018, the group has established a material, safe,
low-cost and long-life tailings reprocessing business, comprising the following operations:
-- Barberton tailings retreatment plant ("BTRP"): Processing capacity of 100,000tpm @ ~1.4g/t
-- Elikhulu: Processing capacity of 1,000,000tpm @ ~0.3g/t
-- Evander tailings retreatment plant ("ETRP"): Processing capacity of 200,000tpm @ ~0.3g/t
- Barberton Mines' underground operations are forecast to produce approximately 80,000oz during the 2019 financial
year, an improvement of 9.4% from 73,125oz in the 2018 financial year. At Barberton Mines, the underground development
rates will be increased by approximately 60% and together with the new sub-vertical shaft, which is under construction
this will facilitate improved access to additional high-grade Fairview 11-block mining platforms. These initiatives will
assist in maintaining and increasing future gold production from this long-life asset.
- Recent exploration drilling at Barberton Mines' Royal Sheba Project has increased resources by 150% from 0.36Moz
(2.60Mt at 4.32g/t) to 0.9Moz (8.56Mt at 3.27g/t). The group expects to finalise a definitive feasibility study for
Royal Sheba by February 2019. The project has the potential to significantly increase gold production from Barberton Mines
in the next years.
- The group is now repositioned as a low-cost producer and is well placed for an improved performance in the next
financial year. The repositioning has reduced the unit cost of production and increased group profitability, with the
majority of its production ounces coming from low-cost and safe tailings retreatment operations.
Operational key features
- The group's gold production for the current reporting period reduced to 160,444oz (2017: 173,285oz), primarily
because of the cessation of mining at Evander Mines' underground operations on 31 May 2018.
- The Elikhulu Project, which achieved its inaugural gold pour on 16 August 2018, was fully commissioned during
September 2018, ahead of schedule. The project is still forecast to be completed within its original budget.
- Improved overall safety performances from Barberton Mines and Evander Mines.
- Barberton Mines' Royal Sheba Project presents an opportunity to expand Barberton Mines' production profile the short
to medium term. The drilling campaign conducted during the year increased the Royal Sheba gold resource by 150%,
0.36Moz to 0.9Moz.
- The feasibility study for Evander Mines' Egoli Project (previously referred to as the 2010 Pay Channel Project) has
been updated to cater for the cessation of mining at Evander Mines' underground operations and the construction of a
new run-of-mine metallurgical plant circuit. The project remains attractive and has a revised pre-taxation internal
rate of return of 34%, and a pre-taxation net present value of R1.04 billion.
- Reduced production from Barberton Mines of 90,629oz (2017: 98,508oz) due to:
-- lower head grades and processing difficulties at the BTRP, after encountering coarser fraction tailings, which
produced 9,241oz less compared to the prior reporting period. The BTRP completed the installation of a regrind mill in
May 2018, which has effectively dealt with these processing difficulties.
-- underground production for the current reporting period improved by 1,362oz, following the mining of higher grades
from Fairview's high-grade 272 and 358 platforms; and
-- Barberton Mines experienced approximately 58 lost production days due to industrial action and community unrest.
- The group's detailed operational and financial summaries, per entity, are disclosed on the Pan African Resources
website at http://www.panafricanresources.com/investors/financial-reports/.
Financial key features
- The profit after taxation from the group's continuing operations was R202.0 million (2017: R700.6 million). In GBP
terms, the profit after taxation from the group's continuing operations was GBP11.5 million (2017: GBP40.6 million).
- The group incurred a once-off impairment charge of R1.78 billion (GBP106.3 million) associated with the cessation of
Evander Mines' underground operations and the resultant retrenchment costs of R161 million (GBP9.3 million).
- As a result of the impairment charge and retrenchment costs the group's continued and discontinued operations
("combined operations") profit after taxation of R309.9 million (GBP17.9 million) in the prior reporting period reduced
to a loss after taxation of R1.56 billion (GBP93.3 million) in the current reporting period.
- Continuing operations' earnings per share ("EPS") decreased to 11.16 cents per share (2017: 44.78 cents per share),
while in GBP terms, continuing operations EPS decreased to a 0.63 pence per share (2017: 2.60 pence per share).
- The combined operations' EPS decreased to a loss of (86.03) cents per share (2017: 19.81 cents earnings per share),
while in GBP terms, the combined operations' EPS decreased to a loss of (5.15) pence per share (2017: 1.14 pence
earnings per share).
- Continuing operations' headline earnings per share ("HEPS") decreased to 18.71 cents per share (2017: 38.72 cents per
share). In GBP terms, continuing operations' HEPS decreased to 1.08 pence per share (2017: 2.24 pence per share). Refer
to note 3.
- The combined operations' HEPS decreased to 12.66 cents per share (2017: 20.17 cents per share). In GBP terms, HEPS
decreased to 0.73 pence per share (2017: 1.17 pence per share). Refer to note 3.
- Revenue from continuing operations decreased to R1,873.9 million (2017: R2,158.2 million) and, in GBP terms, group
revenue decreased to GBP108.5 million (2017: GBP125.1 million) as a result of a decrease in the average ZAR gold price
received and gold ounces sold.
- The group's earnings before interest taxation, depreciation and amortisation ("adjusted EBITDA") decreased to
R416.0 million (2017: R816.0 million), while in GBP terms it decreased to GBP24.2 million (2017: GBP47.3 million).
Refer to note 3.
- The average ZAR gold price received decreased to R538,100/kg (2017: R542,773/kg) and, in USD terms, it increased to
USD1,301/oz (2017: USD1,242/oz).
- The all-in sustaining cost per kilogramme of Barberton Mines' underground mining operation was well controlled and
only increased in ZAR terms to R507,130/kg (2017: R501,330/kg), and in USD terms the all-in sustaining cost per
ounce increased to USD1,227/oz (2017: USD1,147/oz).
- The all-in sustaining cost per kilogramme of the group's continuing tailings operations increased in ZAR terms to
R297,661/kg (2017: R208,590/kg) and in USD terms, the all-in sustaining cost per ounce increased to USD720/oz
(2017: USD477/oz).
- Due to the group's lower gold production, the group's all-in sustaining cost per kilogramme increased in ZAR terms to
R561,468/kg (2017: R514,435/kg) and in USD terms, the all-in sustaining cost per ounce increased to USD1,358/oz
(2017: USD1,177/oz). Refer to note 3.
- The group paid a final dividend of R185 million or GBP10.0 million (2016: R300 million or GBP17.1 million) on
21 December 2017, relating to the 2017 financial year. This dividend equated to R0.08279 per share or 0.44561 pence
per share (2016: R0.1544 per share or 0.87668 pence per share).
- The sale of Phoenix Platinum Mining Proprietary Limited ("Phoenix") to Sylvania Platinum Limited for R89 million or
GBP4.8 million was concluded on 7 November 2017.
- Net debt increased to R1,623.6 million or GBP89.8 million (2017: R67.6 million or GBP4 million) as the group's
facilities were drawn to fund the Elikhulu Project's capital expenditure and Evander Mines' retrenchment costs.
Refer to note 3.
For the For the For the For the
year ended year ended year ended year ended
30 June 30 June 30 June 30 June
2018 2017 Metric Salient features Metric 2017 2018
4,990 5,390 (Kilogrammes) Combined operations gold sold (Oz) 173,285 160,444
1,873.9 2,158.2 (R millions) Revenue – Continuing operations (GBP millions) 125.1 108.5
538,100 542,773 (R/kg) Average gold price received (USD/oz) 1,242 1,301
480,439 430,863 (R/kg) Cash costs (Note 3) (USD/oz) 986 1,162
561,468 514,435 (R/kg) All-in sustaining costs (Note 1) (USD/oz) 1,177 1,358
614,713 540,693 (R/kg) All-in costs (Note 3) (USD/oz) 1,237 1,487
416.0 816.0 (R millions) Adjusted EBITDA (Note 2) (GBP millions) 47.3 24.2
(1,556.9) 309.9 (R millions) Attributable earnings (GBP millions) 17.9 (93.3)
(Combined operations)
202.0 700.6 (R millions) Attributable earnings (GBP millions) 40.6 11.5
(Continuing operations)
229.1 315.6 (R millions) Headline earnings (GBP millions) 18.3 13.3
(Combined operations) (Note 3)
(86.03) 19.81 (cents) EPS (Combined operations) (pence) 1.14 (5.15)
12.66 20.17 (cents) HEPS (Combined operations) (Note 3) (pence) 1.17 0.73
1,623.6 67.6 (R millions) Net debt (Note 3) (GBP millions) 4.0 89.8
289.4 330.0 (R millions) Total sustaining capital expenditure (GBP millions) 19.1 16.8
1,650.2 613.1 (R millions) Total capital expenditure (GBP millions) 35.5 95.6
104.6 201.3 (cents) Net asset value per share (pence) 12.0 5.8
1,809.7 1,564.3 (millions) Weighted average number of (millions) 1,564.3 1,809.7
shares in issue
12.86 13.59 (R/USD) Average exchange rate (R/GBP) 17.25 17.27
13.71 13.04 (R/USD) Closing exchange rate (R/GBP) 16.96 18.09
Note 1: The all-in sustaining cost per kilogram and all-in cost per kilogram excludes the Elikhulu capital expenditure
as well as derivative fair value mark-to-market gains/expenses and relates directly to the current gold mining
operations. Refer to the alternative performance measure ("APM") summary report for the period ended 30 June 2018.
Note 2: Adjusted EBITDA is represented by earnings before interest, taxation, depreciation and amortisation,
profit/(loss) on asset held for sale, profit/(loss) on disposal of investments and (loss)/profit from discontinued
operations. Refer to the APM summary report for the year ended 30 June 2018.
Note 3: Refer to the APM summary report for the period ended 30 June 2018.
CEO statement
During the year under review, the group faced unprecedented challenges, which included falling ZAR gold prices,
volatile exchange rates, operational challenges at both our Barberton and Evander operations and a capricious
political, labour and community relations climate in South Africa. We are however pleased to report that these issues
have been decisively dealt with and the business repositioned to deliver sustainable value creation into the future.
Following the implementation of several initiatives, Pan African Resources' assets have been repositioned to be cash
flow generative through the production of low-cost gold ounces. This includes our most recent organic growth project,
Elikhulu, was fully commissioned during September 2018, ahead of time and within its project budget. Though our gold
production for the 2018 financial year was lower than in previous years, the restructuring has significantly decreased
our cost base and improved efficiencies and stability across all our operations.
The cessation of Evander Mines' underground operations and remedial actions at our other operations was the focus of
the board and management's attention during the year. With this exercise now largely completed, the leadership can
focus on growing the group's profitable ounce production profile in the future.
When a management team is confronted with circumstances that demand imminent action, it is imperative to be circumspect
in analysing the situation and then taking decisive and expeditious remedial action. A summary of the principal
challenges dealt with and opportunities realised by the group in the past financial year include:
Segment Challenge/Opportunity Management action Status
Evander Curtailment of the cash burn The curtailment of large-scale The retrenchment
Mines' at Evander Mines' underground underground mining operations at process was
underground operations, particularly given Evander Mines, and resultant retrenchment successfully concluded
operations the depressed ZAR gold price of 1,635 of our employees, was difficult on 31 May 2018.
environment. and regrettable, however our group had no The requirements of
viable alternative. S189 of South African
Labour Relations Act,
66 of 1995,
were complied with.
Opportunity to mine the The management team is currently The outcome of the
8 Shaft pillar and perform reviewing and assessing options to assessment to mine the
reclamation work. access and mine Evander Mines' Evander Mines' 8 Shaft
8 Shaft pillar. pillar will be communicated
in the near future.
Elikhulu Construction of the Elikhulu Construction commenced in August 2017, Elikhulu's inaugural gold
plant - ensuring the plant is with detailed planning and co- pour was on 16 August 2018,
completed on schedule and ordination to minimise potential delays within one year of
within budget. and cost overruns. inception of the
construction.
The plant was fully
commissioned during
September 2018.
Construction work on the
enlarged Kinross tailings
facility continues.
BTRP Unexpected coarse fraction Installation of a regrind mill The regrind mill was
material encountered, resulting to assist with material handling successfully commissioned
in reduced plant throughput and improved recoveries from the in May 2018, and the
and gold recoveries from Harper dump coarse fraction material. BTRP is again performing
the BTRP. Process of design and construction was in line with expectations.
fast tracked and completed in less than
six months.
Fairview Limited mining flexibility Development of two high-grade mining The 358 and 272 high-grade
underground within the Fairview platforms in the MRC orebody to mining platforms are
operations Main Reef Complex improve mining flexibility. This currently in production with
(“MRC”) orebody. development was completed during a commensurate increase in
January 2018. Barberton Mines' head grade
in the second half of the
Barberton Mines has increased its 2018 financial year. These
ongoing development rates in the platforms will be available
2019 financial year with the objective for the next two to three
of establishing a third high grade years, allowing sufficient
platform in the Fairview 11-block by time for development into
the end of June 2019. new mining areas.
Fairview mining operation is The Fairview sub-vertical shaft project The R105 million project
restricted by the hoisting will improve ore handling efficiencies is scheduled for completion
capacity of its No 3 Decline, and significantly reduce the time taken over the next two to three
which is also used by employees by employees to access high-grade years.
to access workings below mining platforms. The sub-vertical
42 Level and the high-grade shaft project is estimated to improve
11-block of the MRC. production by approximately 7,000oz-
10,000oz per annum.
Further Barberton Mines' Royal Sheba Engaged in a surface drilling campaign The drilling campaign has
organic Project presents an opportunity and appointed DRA Global to complete a been completed with
growth to expand Barberton Mines' feasilibity to mine the Royal Sheba excellent results confirming
production profile and access orebody as an open-cast mining operation the extension of the
low-cost near-surface minable and then in future an underground mining orebody to surface. We have
ounces over the short to medium operation. updated the market on the
term. We did not previously prospectivity of Royal
identify the near-surface Sheba and are now
opportunity at Royal Sheba and considering alternatives to
are exploring similar targets expidite 'first-gold'and
within our mining right area. a large steady-state
operation.
Labour Barberton Mines' wage agreements Engaged with representative unions Concluded a three-year
relations expired at the end of the in order to agree a multi-year agreement wage agreement with
current reporting period. to the benefit of all stakeholders. Barberton Mines'
representative unions.
Clearly, the challenges we faced during the period, which were well communicated to the market, have significantly
reduced our profitability for the 2018 financial year.
During the current reporting period, our team decisively dealt with the issues threatening the future sustainability of
the group. The group is now well positioned to deliver into a much-improved performance during the 2019 financial year.
Group safety
In terms of safety performances, significant progress was made over the past year, with on-mine safety improvement
campaigns contributing to these results. Further, Barberton Mines achieved its one-million fatality-free shift
milestone during June 2018. To ensure continued safety improvements, the group will continue to engage independent
safety experts to review each of the mining operations' safety systems and controls. The group experienced no
fatalities in the 2018 financial year (2017: three employees fatally injured). The group's lost-time injury frequency
rate remained stable at 3.73 (2017: 3.51), while the reportable injury frequency rate improved materially to 1.08
(2017: 1.53).
Evander Mines and ETRP
The decision to cease underground operations at 8 Shaft was difficult, given South Africa's prevailing socio-economic
environment, and the impact on the retrenched miners and their families. Retrenched employees were offered re-skilling
opportunities, which is continuing, and we have retrained and re-employed a number of these employees into the
Elikhulu Project. Environmental rehabilitation of the mine will provide further employment opportunities.
Evander Mines' underground operations produced 48,565oz (2017: 45,304oz) of gold during the reporting period.
Gold production at ETRP reduced to 21,250oz (2017: 29,473oz). In the prior reporting period the ETRP treated
incrementally more surface feedstock due to the additional milling capacity that became available because of the
7 Shaft infrastructure repairs, and the reduced production from the underground mining operation. The ETRP’s all-in
sustaining cost was R306,120/kg (2017: R242,260/kg) or USD740/oz (2017: USD554/oz).
Barberton Mines and BTRP
Barberton Mines' gold production reduced by 7,879oz to 90,629oz (2017: 98,508oz), predominantly due to the following:
- BTRP gold production reduced to 17,504oz (2017: 26,745oz) 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 2.3g/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 approximately 30% on the feedstock. Barberton Mines' underground mining production increased to
73,125oz (2017: 71,763oz). The underground tonnes milled decreased to 237,831t (2017: 246,915t), while the head grade
improved to 10.3g/t (2017: 9.8g/t).
- Gold production was adversely impacted by operational disruptions from pressure groups, community unrest and
unprotected strike action at the mine, which resulted in 58 lost production days. Barberton Mines has significantly
increased its community engagement efforts during the current reporting period, and operational disruptions have
decreased as a result of these efforts.
Mineral reserves and resources
The group's mineral resources and reserves, compliant with the South African Code for Reporting of Mineral Resources
and Mineral Reserves, 2016, are summarised as follows:
- Gold reserves of 11.2Moz (239.9Mt at 1.46g/t) (2017: 11.2Moz)
- Gold resources of 33.3Moz (331.2Mt at 3.13g/t) (2017: 34.4Moz)
In determining the group's reserves and resources, gold reserves were modelled at R525,000/kg and gold resources at
R600,000/kg. The competent person for Pan African Resources, Hendrik Pretorius, the group's Project Geologist, has
reviewed and approved the information contained in this announcement as it pertains to the mineral resources and
reserves. Mr Pretorius holds a BSc (Hons) in the field of geology and a Graduate Diploma in Mining Engineering
focussing on mineral resource management. He has more than 15 years' relevant experience, is registered with the South
African Council for Natural Scientific Professionals (400051/11) and is a member in good standing with the Geological
Society of South Africa.
Near- to medium-term growth projects
Elikhulu Project
Elikhulu, which is expected to produce some of the lowest-cost ounces in the South African gold mining industry, is
critical to Evander Mines' return to profitability and delivering into the group's strategic repositioning. Tailings,
which were deposited over the past 70 years of mining activity, will be re-mined in line with industry best practices
and consolidated into a single facility, which will mitigate environmental risks and make substantial surface areas
available for other land uses, including housing and/or agriculture.
From December 2018, Elikhulu's processing capacity will increase to 1.2-million tonnes per annum by incorporating the
existing ETRP throughput, in order to benefit from the new plant's improved efficiencies and economies of scale.
Elikhulu was constructed ahead of schedule, and was fully commissioned during September 2018. By 30 June 2018, capital
expenditure of R1,256.1 million (2017: R175.5 million) had been incurred on the project. Construction on the enlarged
Kinross tailings facility is continuing.
Barberton Mines' Royal Sheba Project
Barberton Mines' Royal Sheba Project is an opportunity to expand the operation's production profile and access low-cost
near-surface minable ounces over the short to medium term. Shareholders are referred to the announcement on 6 September
2018, detailing the exploration results from the Royal Sheba orebody.
Evander Mines' Egoli Project - Reassessed mining feasibility study
The Egoli Project is adjacent to the 7 Shaft infrastructure and extends from the boundary of Taung Gold International
Limited's 6 Shaft mining right.
Shareholders were informed on 1 February 2018 of the updated resource statement of the Egoli Project and subsequently
on 28 March 2018 that the group would reassess the mining feasibility study, conducted by DRA Global, into the
viability of the Egoli Project as a standalone project following the cessation of mining at Evander Mines'
underground operations. The project remains attractive, with more than one-million ounces of contained gold in
measured and indicated categories.
The results of an optimisation study based on the DRA Global feasibility study are:
- The mining operation is planned to ensure waste and reef are hoisted separately.
- The life-of-mine is expected to be 11 years.
- Average recoverable gold of approximately 23,500 ounces per annum during the initial four-year development phase,
and an average of approximately 79,000 ounces per annum for the remaining seven years thereafter is forecast.
- A new metallurgical plant would be constructed, and the existing Evander Mines' 7 Shaft infrastructure would be
used for hoisting.
- Peak funding requirement is forecast at approximately R870 million.
- An internal rate of return (real, pre-taxation) of 34%, 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 R547,000/kg.
- Project, pre-taxation, net present value is R1.04 billion at a 12.4% real discount rate.
- An incremental all-in sustaining cost per kilogramme of approximately R300,000/kg, or USD650/oz, on average,
over the life-of-mine.
- An average gold recovery rate of 95% and a mine call factor of 85%.
- The total resources remain at 9.4Mt @ 9.75g/t equating to 2.95Moz.
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 commenced the development required in preparation for the construction of the new sub-vertical
shaft. The project cost is forecast at approximately R105 million over two to three years. Following the commissioning
of this shaft, it is expected that productivity improvements will yield an additional 7,000oz - 10,000oz of gold per
annum due to the increased hoisting capacity.
Wage agreements
As announced on 7 September 2018, Barberton Mines successfully concluded a three-year wage agreement with the National
Union of Mineworkers ("NUM") and the United Association of South Africa ("UASA") ("the agreement"). NUM and UASA
represent the majority of employees at Barberton Mines. The Agreement provides for an average annual wage increase of
approximately 6.5% and 5.5% for NUM and UASA members, respectively, over the three years. The negotiations were
successfully concluded with no industrial action or work stoppages. The agreement should assist in providing certainty
and sustainability to all stakeholders in the coming years.
Outlook
Key focus areas for the 2019 financial year include:
- continuing to improve our safety performance, and environmental, social and governance compliance across operations;
- delivering into the gold production guidance of approximately 170,000oz;
- ensuring Elikhulu delivers to expectation and incorporating ETRP’s throughput into Elikhulu's processing capacity;
- increase the statement of financial position flexibility and capacity;
- focus on growth opportunities such as:
-- The Royal Sheba Project
-- Evander Mines' 8 Shaft pillar project
-- Evander Mines' Egoli Project
-- Barberton Mines' sub-vertical shaft
- Re-initiate dividend payments
The group continues to evaluate acquisitive opportunities, particularly within other African jurisdictions, in
accordance with its rigorous capital allocation criteria.
I would like to thank my fellow board members for their guidance, support and insight during the past financial year.
Further, a sincere thanks to the executive management team and all employees, who continued to show commitment and
dedication during this challenging period.
Finally, to our stakeholders, thank you for your ongoing support of Pan African Resources. While times may be marked by
turbulence and volatility, we believe the group, with its current strategic direction, is well positioned to maximise
value for our shareholders and our other stakeholders in the year ahead and well into the future.
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 transacted 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 United Kingdom ("UK") and South Africa.
During the current reporting period the average ZAR:GBP exchange rate was R17.27:1 (2017: R17.25:1) and the closing
ZAR:GBP exchange rate was R18.09:1 (2017: R16.96:1). The year-on-year change in the average and closing exchange rates
of 0.1% and 6.7%, respectively, must be taken into account for the purposes of translating and comparing year-on-year
results, and in the event of material transactions, the exchange rate on the date of the material transaction is used
to translate earnings from ZAR to GBP.
The group records its revenue from precious metals sales in ZAR and the strength in the value of the ZAR:USD exchange
rate during the current reporting period had a negative impact on the USD revenue received when translated into ZAR.
The average ZAR:USD exchange rate was 5.4% stronger at R12.86:1 (2017: R13.59:1).
The commentary below analyses the current and prior reporting 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 for continuing operations
1) Revenue
Gold sales from continuing operations declined year-on-year by 13.2% to R1,873.9 million (2017: R2,158.2 million)
mainly impacted by:
- The average ZAR gold price received decreasing by 0.9% to R538,100/kg (2017: R542,773/kg).
- Gold ounces sold from continuing operations decreasing by 12.6% to 111,879oz (2017: 127,981oz).
Revenue from Evander Mines' underground operations of R811.4 million (2017: R767.2 million) has been disclosed in
discontinued operations following the cessation of mining at this operation.
2) Cost of production
Cost of production (including realisation costs) for continuing operations increased by 4.4% to R1,376.7 million
(2017: R1,318.9 million).
The main cost contributors that impacted the year-on-year increase during the current reporting period are
summarised as follows:
- Salaries and wages (represents 38.9% of the gold cost of production) increased by 7.6% to R535.1 million
(2017: R497.1 million). Salaries and wage rates increased in line with the gold labour agreements signed at the
respective operations.
- Electricity costs (represents 9.6% of the gold cost of production) increased by 8.3% to R132.5 million
(2017: R122.3 million). The increase is higher than the National Energy Regulator of South Africa's approved
average national increase of 5.2% from 1 April 2018, because of higher electricity consumption associated with
the surface re-mining operation and Barberton Mines' new refrigeration plant installed at Fairview during July 2017.
- Mining and processing costs (represents 33.7% of gold cost of production) decreased by 6.7% to R463.3 million
(2017: R496.3 million). The decrease was due to less surface sources being processed at Evander Mines in the
current reporting period.
- Engineering and technical costs (represents 6.7% of gold cost of production) increased by 13.0% to R92.7 million
(2017: R82.0 million).
Cash cost per kilogramme from continuing operations increased by 19.6% to R387,194/kg (2017: R323,692/kg). The increase
was predominantly due to the group's gold sold decreasing by 12.6% to 111,879oz (2017: 127,981oz) and the cost of
production increasing by 4.4%.
3) Realisations costs
The group's realisation costs increased to R34.6 million (2017: R17.5 million). The realisation costs relate
predominantly to refining charges, paid to Gauteng Refinery for gold extracted and recovered from the Kinross plant
civil infrastructure.
4) Depreciation costs
Depreciation from continuing operations decreased by 10.3% to R85.1 million (2017: R94.9 million). The depreciation
charge is based on the available units of production over the life of the operations and the depreciation charge
reduced commensurate with the decrease in production.
5) Other expenditure and income
Other expenses increased to R74.0 million (2017: R4.1 million). The increase in other expenses is due to the group
realising a pre-tax gain of R94.7 million in the prior reporting period on the mark-to-market fair value adjustment of
a derivative instrument entered into to mitigate gold price risk.
6) Finance income and costs
Finance income increased to R25.7 million (2017: R4.4 million), following an increase in interest earned on the group's
rehabilitation funds. Finance costs increased to R54.3 million (2017: R48.4 million), due to an increase in group
debt during the current reporting period.
7) Taxation
The taxation charge of the group's continuing operations decreased to a credit of R36.3 million (2017: R72.5 million)
due to:
- An increase in the deferred tax credit of R63.6 million (2017: R7.9 million) because of the reduction in the
long-term taxation rate to 19.2% from 23.1% for the Evander Mines' surface operations.
- Decrease in the current taxation charge to R27.3 million (2017: R80.4 million).
Discontinued operations
In the current reporting period the group's discontinued operations comprised of:
- Phoenix; and
- Evander Mines' underground operations
In the prior reporting period the group's discontinued operations comprised of:
- Phoenix; and
- Uitkomst Colliery Proprietary Limited ("Uitkomst").
Phoenix, under discontinued operations, recorded a loss of R6.9 million in the current reporting period, for the period
1 July 2017 – 6 November 2017. This loss comprised of R2 million in operational losses and a R4.9 million loss on
asset held for sale.
Due to the cessation of mining at Evander Mines' underground operations, the financial results from this operation has
been classified as a discontinued operation in the current reporting period.
Losses from discontinued operations have increased to R1.76 billion (2017: R390.7 million), which includes an
impairment charge of R1.78 billion and retrenchment costs of R161 million, for the Evander Mines' underground
operations.
EPS and HEPS
The combined operations EPS in ZAR decreased to a loss of (86.03) cents per share (2017: 19.81 cents per share). The
combined operations HEPS in ZAR decreased to 12.66 cents per share (2017: 20.17 cents per share).
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 increased by 15.7% to 1,809.7-million shares
(2017: 1,564.3-million shares). The increase in shares was attributed to the additional 291.5-million shares issued in
the equity raise concluded on 12 April 2017 for the equity tranche of the Elikhulu Project, and the disposal of
130-million shares held by PAR Gold Proprietary Limited ("PAR Gold") on 30 May 2018.
Refer to the reconciliation of the earnings and headline earnings in the APM summary report for the period ended
30 June 2018.
Net debt
Total debt facilities utilised at 30 June 2018 increased to R1,636.6 million (2017: R227.8 million) and cash
holdings declined to R12.6 million (2017: R160.2 million), resulting in an increase in net debt to R1,623.6 billion
(2017: R67.6 million). The increase in net debt was predominantly due to the R1.26 billion capital expenditure incurred
on the Elikhulu Project, operational losses from Evander Mines' underground operations and retrenchment costs of
R161 million. Refer to the APM summary report for the period ended 30 June 2018.
Summary of the long-term debt liabilities:
Revolving credit Evander Mines Elikhulu term
facility gold loan facility Total
30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June
2018 2017 2018 2017 2018 2017 2018 2017
ZAR ZAR ZAR ZAR ZAR ZAR ZAR ZAR
(million) (million) (million) (million) (million) (million) (million) (million)
Non-current
portion 778.0 180.5 - - 770.0 - 1,548.0 180.5
Current
portion 88.2 20.7 - 26.6 - - 88.2 47.3
Total 866.2 201.2 - 26.6 770.0 - 1,636.2 227.8
The group's compliance to the revolving credit facility debt covenants are summarised below:
Covenant Measurement 30 June 2018 30 June 2017
Net-debt-to-equity ratio Must be less than 1:1 0.78 0.02
Net-debt-to-adjusted EBITDA ratio (note 1) Must be less than 2.5:1 3.73 0.08
Interest cover ratio (note 2) Must be greater than 4 times 4.61 19.32
Debt service cover ratio Must be greater than 1.3 times 3.84 9.11
Note 1: The net debt to EBTIDA covenant is only measurable on 31 December 2019 to cater for the construction of
Elikhulu and commensurate increase in cash flows for measurement purposes.
Note 2: The interest cover ratio covenant was reduced to 2.3 times until December 2018, where after it will increase
to 4 times.
Capital expenditure
Group capital expenditure for the current reporting period has been summarised per operation in the table below:
Barberton Mines Evander Mines Elikhulu Corporate Total
ZAR million ZAR million ZAR million ZAR million ZAR million
Development capital 68.1 48.4 - - 116.5
Maintenance capital 42.9 127.8 - 2.2 172.9
Sustaining capital total 111.0 176.2 - 2.2 289.4
Expansion capital 99.4 5.3 1,256.1 - 1,360.8
Total capital expenditure 210.4 181.5 1,256.1 2.2 1,650.2
Cash flow summary
Cash generated by operations (after dividends) decreased by R250.5 million to a deficit of R202.1 million
(2017: R48.4 million), due to the lower gold production, Evander Mines' operational losses and retrenchment costs of
R161 million. The 2017 financial year dividend payment (net of PAR Gold reciprocal dividends) of R148.9 million
(2016: R232.6 million) was paid on 21 December 2017.
The cash outflows from investing activities increased to R1,545.4 million (2017: R491.0 million), largely due to:
- capital expenditure incurred of R1,601.4 million (2017: R612.7 million);
- contributions to the rehabilitation trust of R26.2 million (2017: nil);and
- proceeds from the sale of Phoenix of R89.0 million (2017: R142.1 million proceeds from the disposal of
investments/subsidiaries and property plant and equipment).
Net cash inflows from financing activities increased to R1,599.9 million (2017: R551.1 million), largely due to the
utilisation of the group's debt facilities to fund operational and project capital expenditure, offset by proceeds on
the disposal of PAR Gold treasury shares of R149.8 million (2017: nil).
Commitments reported in ZAR and GBP
The group identified no material contingent liabilities in the current or prior reporting period.
The group had contracted outstanding open orders at period end of R434.3 million (2017: R1.22 billion), or
GBP24.0 million (2017: GBP72.0 million). Outstanding orders in the current reporting period related primarily to
the Elikhulu Project.
Authorised commitments for the new financial year, not yet contracted for, totalled R254.5 million
(2017: R328.7 million) or GBP14.1 million (2017: GBP19.4 million).
At 30 June 2018, the group had guarantees in place of R24.6 million (2017: R24.6 million) or GBP1.4 million
(2017: GBP1.4 million) in favour of Eskom Holdings SOC Limited, and R14.0 million (2017: R14.0 million) or
GBP0.8 million (2017: GBP0.8 million) in favour of the DMR.
Operating lease commitments, which fall due within the next financial year, amounted to R16.3 million
(2017: R2.7 million) or GBP0.9 million (2017: GBP0.16 million).
Fair value instruments
Financial instruments 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, which are observable
for the asset or liability.
Level 3: Fair value is determined on inputs not based on observable market data.
Level 1 financial instruments:
Pan African Resources holds 13,064,381 shares in MC Mining Limited (previously known as Coal of Africa Limited).
The investment was fair valued at R56.7 million or GBP3.1 million (2017: R127.6 million or GBP7.5 million), at the
reporting date. The fair value of the listed investment is treated as Level 1 of the fair value hierarchy, as the share
price is quoted on a stock exchange.
The group's rehabilitation funds are valued at R364.3 million (2017: R320.6 million) or GBP20.1 million
(2017: GBP18.9 million), which comprise of predominantly equity-linked notes and interest-bearing call accounts.
Level 2 financial instruments:
During the current and prior reporting period, the group had exposure to financial derivatives comprising a
cost-collar hedge. The mark-to-market value of this cost-collar asset at 30 June 2018 was R4.0 million or GBP0.2 million
(2017: nil)
The group's cash settled share option liability, which is valued on a mark-to-market basis according to the company's
quoted share price, amounted to R9.6 million or GBP0.5 million (2017: R46.4 million or GBP2.7 million).
Level 3 financial instruments:
The group's employee share ownership plan ("ESOP") liability is accounted for on a cash settled share option basis
and valued on a mark-to-market basis on the net present value of the discounted future cash flows applicable to the
beneficiaries of the schemes. The ESOP liability was R10.3 million or GBP0.6 million (2017: R1.9 million or
GBP0.11 million).
Dividends
Dividend paid and recommended
During the current reporting period the group paid a dividend of R185 million or GBP10.0 million (2016: R300 million or
GBP17.1 million), on 21 December 2017, relating to the 2017 financial year. This dividend equated to R0.08279 per share
or 0.44561 pence per share (2016: R0.15438 per share or 0.87668 pence per share). As result of the cessation of mining
at Evander Mines' underground operations and the associated retrenchment costs, the board has not recommended a dividend
for the current reporting period. With Pan African Resource's business being repositioned to secure sustainable
low-cost, higher-margin production, the group's prospect of reintroducing dividends will improve in the next year.
The group received reciprocal PAR Gold dividends of R36.1 million (2016: R67.4 million), resulting in a net dividend
paid of R148.9 million (2016: R232.6 million) to external shareholders.
Dividend policy
Pan African Resources aspires to pay a regular dividend to its 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 position, future prospects, satisfactory solvency and
liquidity assessments and other factors deemed relevant at the time. The board also allows itself flexibility to
deviate from the above policy, when deemed appropriate.
Basis of preparation of the financial statements and accounting policies
The provisional audited results announcement has been prepared using accounting policies that comply with the
International Financial Reporting Standards ("IFRS") adopted by the European Union and South Africa, which are
consistent with those applied in the financial statements for the prior year ended 30 June 2017.
The provisional audited results announcement is only a summary of the information in the Integrated Annual Report and
does not contain full or complete details. Any investment decision by investors and/or shareholders should be based on
consideration of the final Integrated Annual Report, as a whole, to be published on the company's website in due
course.
Alternative performance measure ("APM")
The provisional audited results announcement contains both statutory measures and alternative performance measures
which, in management's view, reflect the underlying performance of the business and provide a more meaningful
comparison of how the group's business is managed and measured on a day-to-day basis.
Alternative performance measures are non-GAAP (Generally Accepted Accounting Practice) measures and provide
supplementary information to assist with the understanding of the group's financial results and with the evaluation
of operating performance for all the periods presented. Alternative performance measures, however, are not a measure
of financial performance under IFRS as adopted by the European Union and South Africa and should not be considered
as a substitute for measures determined in accordance with IFRS. As the group's alternative performance measures
are not defined terms under IFRS they may therefore not be comparable with similarly titled measures reported by
other companies.
Refer to the APM summary report for the period ended 30 June 2018.
JSE Limited ("JSE") Listing
The company has a dual primary listing on the JSE in South Africa and the AIM market ("AIM") of the London Stock
Exchange.
This provisional audited results announcement has been prepared in accordance with the framework concepts and the
measurement and recognition requirements of IFRS and the SAICA Financial Reporting Guides as issued by the Accounting
Practice Committee, and the Financial Pronouncements as issued by the Financial Reporting Standards Council and
contains the minimum information as required by International Accounting Standard 34. The accounting policies are in
terms of IFRS and are consistent with those applied in the 2017 consolidated financial statements.
The group's South African external auditors, Deloitte & Touche, have issued their opinion on the consolidated financial
statements and the provisional summarised consolidated financial statements for the year ended 30 June 2018. The audits
for both the summarised and full set of financial statements conducted in accordance with International Standards on
Auditing. Deloitte & Touche have expressed unmodified opinions on the consolidated financial statements and the
provisional summarised consolidated financial statements. Copies of the audit reports are available for
inspection at the company's registered office. Any reference to future financial performance included in this
provisional audited results announcement has not been reviewed or reported on by the group's South African external
auditors.
The auditor's report does not report on the APMs (excluding headline earnings and HEPS) contained in this announcement.
Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor's
engagement they should obtain a copy of that report, together with the accompanying financial information, from the
company's registered office.
These provisional summarised consolidated financial statements are extracted from the audited consolidated financial
statements. The directors take full responsibility for the preparation of the provisional summarised audited results
and confirm the financial information and related commentary has been correctly extracted from the underlying group
consolidated financial statements.
AIM Listing
The financial information for the year ended 30 June 2018 does not constitute statutory accounts as defined in sections
435(1) and 435(2) of the UK Companies Act 2006 ("Companies Act 2006") but has been derived from those accounts.
Statutory accounts for the year ended 30 June 2017 have been delivered to the Registrar of Companies and those for 2018
will be delivered following the company's annual general meeting. Deloitte LLP, the external auditor registered in the
UK, has reported on these accounts for the year ended 30 June 2018.
Deloitte LLP's audit report for 30 June 2018 was unqualified, did not include a reference to any matters to which
auditors draw attention by way of emphasis of matter, and did not contain a statement under section 498(2) or 498(3) of
the Companies Act 2006. These statutory accounts have been prepared in accordance with IFRS and IFRS Interpretations
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
Current reporting period
No directorship changes took place during the period under review. However, the following director dealings in
securities took place:
Mr JAJ Loots participated in the following company shares transactions:
- On 22 February 2018, Mr JAJ Loots entered into a contract for difference derivative ("CFDs") for 200,000 shares at a
price of GBP0.08 per share.
- On 27 September 2017, Mr JAJ Loots purchased 108,000 shares at an average price of R2.35 per share.
- On 29 September 2017, Mr JAJ Loots entered into a CFD for 200,000 shares at average of GBP12.747p per share.
Mr JAJ Loots had 668,675 shares and 400,000 CFD's at period end, representing 0.05% of the total issued shares.
Mr GP Louw participated in the following company shares transactions:
- On 28 September 2017, Mr GP Louw purchased 45,000 shares at an average price of R2.35 per share.
- On 23 February 2018, Mr GP Louw purchased 75,000 shares at R1.30 per share.
Mr GP Louw had 257,450 shares at period end, representing 0.01% of the total issued shares.
Mr T Mosololi, on 6 October 2017, purchased 20,000 shares at R2.30. Mr T Mosololi had 50,000 shares outstanding at
period end, representing 0.01% of total issued shares.
Mr K Spencer had 3,000,000 shares at period end, representing 0.13% of the total issued shares.
No dealings in the securities by the directors of the company took place between the period end and the date of the
publication of this announcement.
Shares issued
No additional issuance of shares during the current reporting period.
Going concern
The group closely monitors and manages its liquidity risk by means of a centralised treasury function. Cash forecasts
are regularly produced, and sensitivities run for different scenarios including, but not limited to, changes in
commodity prices and different production profiles from the group's producing assets. The group had R485 million of
available debt facilities and R12.6 million of cash and cash equivalents at 30 June 2018. Based on the current status
of the group's finances, having considered going concern forecasts and reasonably possible downside scenarios,
including a ZAR gold price of R525,000/kg (USD1,270/oz at a prevailing ZAR:USD average exchange rate R12.86:1), and
reduced production volumes, the group's forecasts demonstrate it will have sufficient liquidity headroom to meet its
obligations in the ordinary course of business, and will comply with financial covenants for the 12 months from the
date of approval of the financial statements.
The board has a reasonable expectation that the company has adequate resources to continue in operational existence for
the foreseeable future. Accordingly, the group continues to adopt the going concern basis of accounting in preparation
of the 30 June 2018 financial statements.
Events after the reporting period
The group had no material events after the reporting period.
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 the following business segments:
Continuing operations:
- Barberton Mines (including BTRP), located in Barberton, South Africa;
- Evander Mines (ETRP and Elikhulu, excluding the 8 Shaft underground mining operation), located in Evander, South
Africa;
- Corporate, located in Johannesburg, South Africa; and
- Pan African Resources Funding Company Proprietary Limited ("Funding Company"), located in Johannesburg, South Africa.
Discontinued operations:
- Phoenix, located near Rustenburg, South Africa;
- Uitkomst Colliery, located in Newcastle, South Africa; and
- Evander Mines' underground operations (including 8 Shaft, 7 Shaft and the run-of-mine circuit in the Kinross
Metallurgical plant), located in Evander, South Africa.
The executive committee reviews the operations in accordance with the disclosures presented above.
Cobus Loots Deon Louw
Chief Executive Officer Financial Director
19 September 2018
Pan African Resources PLC
Summarised consolidated statement of profit or loss and other comprehensive income for the period ended 30 June 2018
30 June 2018 30 June 2017 30 June 2018 30 June 2017
(Audited) (Audited) (Unaudited) (Unaudited)
(Note 1) (Note 1)
Continuing operations GBP million GBP million ZAR million ZAR million
Revenue 108.5 125.1 1,873.9 2,158.2
Gold sales 108.5 125.1 1,873.9 2,158.2
Realisation costs (2.0) (1.0) (34.6) (17.5)
On-mine revenue 106.5 124.1 1,839.3 2,140.7
Gold cost of production (77.7) (75.4) (1,342.1) (1,301.4)
Mining depreciation (4.9) (5.5) (85.1) (94.9)
Mining profit 23.9 43.2 412.1 744.4
Other (expenses) (4.2) (0.3) (74.0) (4.1)
Profit on disposal of investment - 0.2 - 4.6
Profit on disposal of subsidiary - 5.4 - 91.3
Continuing operations - Impairment costs (8.2) - (136.6) -
Royalty costs (0.4) (1.1) (7.2) (19.2)
Net income before finance income and finance costs 11.1 47.4 194.3 817.0
Finance income 1.5 0.3 25.7 4.4
Finance costs (3.2) (2.8) (54.3) (48.4)
Profit before taxation 9.4 44.9 165.7 773.0
Taxation 2.1 (4.3) 36.3 (72.4)
Profit after taxation - continuing operations 11.5 40.6 202.0 700.6
Discontinued operations
Loss from discontinued operations (104.8) (22.7) (1,758.9) (390.7)
(Loss)/Profit after taxation (93.3) 17.9 (1,556.9) 309.9
Other comprehensive (loss)/income:
Items that have been or may subsequently be
reclassified to the statement of profit or
loss (net of tax):
Fair value movement on available for
sale investment (3.9) (0.1) (70.9) (1.7)
Taxation on fair value movement on
available for sale investment 0.9 - 15.9 -
Items that will not be reclassified to the
statement of profit or loss (net of tax):
Profit on disposal of available for
sale investment - (0.2) - (4.6)
Foreign currency translation differences (5.9) 21.7 - -
Total comprehensive (loss)/income for the year (102.2) 39.3 (1,611.9) 303.6
(Loss)/Profit attributable to:
Owners of the parent (93.3) 17.9 (1,556.9) 309.9
Total comprehensive (loss)/income attributable to:
Owners of the parent (102.2) 39.3 (1,611.9) 303.6
Earnings per share – combined operations (5.15) 1.14 (86.03) 19.81
Diluted earnings per share - combined operations (5.15) 1.14 (86.03) 19.80
Earnings per share - continuing operations 0.63 2.60 11.16 44.78
Diluted earnings per share - continuing operations 0.63 2.60 11.16 44.76
Note 1: The prior reporting period's figures have been represented in accordance with IFRS 5 non-current assets held
for sale and discontinued operations.
Summarised consolidated Statement of Financial Position as at 30 June 2018
30 June 2018 30 June 2017 30 June 2018 30 June 2017
(Audited) (Audited) (Unaudited) (Unaudited)
GBP million GBP million ZAR million ZAR million
Assets
Non-current assets
Property, plant and equipment
and mineral rights 192.8 224.7 3,488.3 3,810.7
Other intangible assets (Note 1) - 0.1 0.6 1.2
Deferred taxation 6.2 0.8 112.3 12.9
Long-term inventory 0.6 0.7 10.3 11.6
Long-term receivables 1.3 2.5 24.0 43.0
Goodwill 21.0 21.0 303.5 303.5
Investments 3.1 7.5 56.7 127.6
Rehabilitation funds 20.1 18.9 364.3 320.6
245.1 276.2 4,360.0 4,631.1
Current assets
Inventories 2.7 5.1 48.9 85.7
Current taxation asset 0.7 1.1 12.5 18.1
Trade and other receivables 14.8 13.7 268.6 233.1
Current portion of long-term receivables 0.9 - 17.2 -
Financial instruments assets(Note 1) 0.2 - 4.0 -
Cash and cash equivalents 0.7 9.4 12.6 160.2
20.0 29.3 363.8 497.1
Non-current assets held for sale - 5.6 - 95.2
Total assets 265.1 311.1 4,723.8 5,223.4
Equity and liabilities
Capital and reserves
Share capital 22.3 22.3 318.8 318.8
Share premium 144.6 145.4 2,247.4 2,261.4
Translation reserve (42.8) (36.8) - -
Share option reserve 1.7 1.2 24.6 17.2
Retained earnings 30.0 131.3 161.4 1,867.1
Realisation of equity reserve (10.7) (10.7) (140.6) (140.6)
Treasury capital reserve (15.6) (25.4) (385.2) (548.6)
Merger reserve (10.7) (10.7) (154.7) (154.7)
Other reserves (3.0) - (55.0) -
Equity attributable to owners of the parent 115.8 216.6 2,016.7 3,620.6
Total equity 115.8 216.6 2,016.7 3,620.6
Non-current liabilities
Long-term provisions 15.1 11.7 273.4 197.7
Long-term liabilities 86.5 12.3 1,565.0 208.4
Deferred taxation 14.3 38.9 259.5 660.5
115.9 62.9 2,097.9 1,066.6
Current liabilities
Trade and other payables 27.6 27.1 505.2 458.9
Current portion of long term liabilities 5.2 4.1 93.5 70.3
Current taxation liability (Note 1) 0.6 - 10.5 0.8
33.4 31.2 609.2 530.0
Liabilities directly associated with
non-current assets held for sale - 0.4 - 6.2
Total equity and liabilities 265.1 311.1 4,723.8 5,223.4
Note 1: Figures are presented in millions, and values less than GBP0.5 million or R0.5 million, have been rounded to
zero.
Summarised consolidated statement of cash flows for the year ended 30 June 2018
30 June 2018 30 June 2017 30 June 2018 30 June 2017
(Audited) (Audited) (Unaudited) (Unaudited)
GBP million GBP million ZAR million ZAR million
(Note 1) (Note 1) (Note 1) (Note 1)
Net cash (used in)/generated from
operations after taxation,
royalties and finance charges (3.3) 16.5 (53.2) 281.0
Dividends paid net of PAR Gold reciprocal
dividend (8.2) (13.3) (148.9) (232.6)
Net cash (used in)/generated from
operating activities (11.5) 3.2 (202.1) 48.4
Investing activities
Additions to property, plant and equipment
and mineral rights (92.7) (35.5) (1,601.4) (612.7)
Additions to other intangible assets - (0.1) (0.3) (0.4)
Rehabilitation funds contributions (1.5) - (26.2) -
Proceeds on disposals of Property plant
and equipment and mineral rights - 0.4 - 7.0
Increase in long term loans receivables (0.4) (1.2) (6.5) (20.0)
Proceeds from disposal of subsidiary,
net of cash - 6.6 - 111.7
Proceeds on disposals of investment 4.8 1.4 89.0 23.4
Net cash used in investing activities (89.8) (28.4) (1,545.4) (491.0)
Financing activities - - - -
Proceeds from borrowings 90.0 47.8 1,535.0 817.0
Borrowings repaid (5.8) (54.0) (100.0) (915.0)
Proceeds/(settlement) of financial instruments 0.9 (1.4) 15.5 (22.9)
Proceeds from disposal of treasury shares 8.9 - 149.4 -
Shares issued - 40.8 - 696.0
Share issue costs - (1.4) - (24.0)
Net cash from financing activities 94.0 31.8 1,599.9 551.1
Net (decrease)/increase in cash and
cash equivalents (7.3) 6.6 (147.6) 108.5
Cash and cash equivalents at the beginning
of the year 9.4 2.7 160.2 52.6
Cash and cash equivalents from
discontinued operations - (0.1) - (0.9)
Effect of foreign exchange rate changes (1.4) 0.2 - -
Cash and cash equivalents at the end of the year 0.7 9.4 12.6 160.2
Note 1: Figures are presented in millions, and values below GBP0.5 million or R0.5 million, have been rounded to zero.
Note 2: The cash settled share option costs have been represented in cash generated from operating activities from
financing activities in the current and prior reporting period.
Summarised audited consolidated segment report for the year ended 30 June 2018
30 June 2018
Continuing operations Discontinued operations
Evander
Evander Corporate Mines
Mines office (Dis-
(Continuing and continued Phoenix
Barberton operations) growth Funding operations) Platinum Reclassi-
Mines (Note 3) projects Company (Note 3) (Note 4) fication Group
GBP GBP GBP GBP ZAR GBP GBP GBP
million million million million million million million million
Revenue
Gold sales
(Note 1) 87.2 21.3 - - 47.0 - (47.0) 108.5
Platinum Sales - - - - - 1.4 (1.4) -
Coal sales - - - - - - - -
Realisation costs (0.4) (1.6) - - (0.7) - 0.7 (2.0)
On-mine revenue 86.8 19.7 - - 46.3 1.4 (47.7) 106.5
Gold cost
of production (65.9) (11.8) - - (59.5) - 59.5 (77.7)
Platinum cost of
production - - - - - (1.6) 1.6 -
Coal cost of production - - - - - - - -
Depreciation and
amortisation (4.2) (0.7) - - (6.1) - 6.1 (4.9)
Mining Profit 16.7 7.2 - - (19.3) (0.2) 19.5 23.9
Other (expenses)/
income (Note 2) (0.7) 0.9 (4.0) (0.4) (11.5) - 11.5 (4.2)
Loss from associate - - - - - - - -
Profit on disposal of
investment - - - - - - - -
Profit on disposal of
subsidiary - - - - - - - -
Continuing operations
- impairment costs
(Note 6) - (8.2) - - (98.1) - 98.1 (8.2)
Adjustment on sale of
asset held for sale - - - - - (0.3) 0.3 -
Royalty costs (0.4) - - - (0.2) - 0.2 (0.4)
Net income/(loss)
before finance income
and finance costs 15.6 (0.1) (4.0) (0.4) (129.1) (0.5) 129.6 11.1
Finance income 0.2 0.8 0.4 0.1 0.5 - (0.5) 1.5
Finance costs - 0.1 - (3.3) (0.2) - 0.2 (3.2)
Profit/(loss) before
taxation 15.8 0.8 (3.6) (3.6) (128.8) (0.5) 129.3 9.4
Taxation (2.3) 5.6 (1.2) - 24.4 0.1 (24.5) 2.1
Profit/(loss) after
taxation before
inter-company
charges 13.5 6.4 (4.8) (3.6) (104.4) (0.4) 104.8 11.5
Loss after taxation
from discontinued
operations - - - - - - (104.8) (104.8)
Profit/(loss) after
taxation before
inter-company
charges 13.5 6.4 (4.8) (3.6) (104.4) (0.4) - (93.3)
Inter-company
transactions
Management fees (2.0) (0.1) 1.8 (0.1) (0.2) 0.6 - -
Inter-company
interest charges (0.3) - (0.4) 3.6 (2.9) - - -
Profit/(loss) after
taxation after
inter-company
charges 11.2 6.3 (3.4) (0.1) (107.5) 0.2 - (93.3)
Segmental assets
(Total assets
excluding goodwill) 79.3 156.9 7.5 0.7 - - - 244.4
Segmental liabilities 26.9 30.7 1.6 90.5 - - - 149.7
Goodwill 21.0 - - - - - - 21.0
Net assets (excluding
goodwill) (Note 7) 52.4 126.2 5.9 (89.8) - - - 94.7
Capital Expenditure
(Note 8) 12.2 73.0 0.1 - - - - 85.3
Adjusted EBITDA
(Note 9) 19.8 8.8 (4.0) (0.4) (15.6) (0.2) 15.8 24.2
30 June 2017
Continuing operations Discontinued operations
Evander
Evander Corporate Mines
Mines office (Dis-
(Continuing and Uitkomst Phoenix continued
Barberton operations) growth Funding Colliery Platinum operations) Reclassi-
Mines (Note 3) projects Company (Note 5) (Note 4) (Note 3) fication Group
GBP GBP GBP GBP GBP GBP GBP GBP GBP
million million million million million million million million million
Revenue
Gold sales
(Note 1) 97.3 27.8 - - - - 44.5 (44.5) 125.1
Platinum Sales - - - - - 4.8 - (4.8) -
Coal sales - - - - 25.1 - - (25.1) -
Realisation costs (0.6) (0.4) - - - - (0.8) 0.8 (1.0)
On-mine revenue 96.7 27.4 - - 25.1 4.8 43.7 (73.6) 124.1
Gold cost of
production (61.2) (14.2) - - - - (58.6) 58.6 (75.4)
Platinum cost of
production - - - - - (5.0) - 5.0 -
Coal cost of
production - - - - (21.7) - - 21.7 -
Depreciation and
amortisation (4.7) (0.8) - - (0.7) (0.9) (5.0) 6.6 (5.5)
Mining Profit 30.8 12.4 - - 2.7 (1.1) (19.9) 18.3 43.2
Other (expenses)/
income (Note 2) 4.6 0.5 (5.5) 0.1 0.2 (0.1) (1.8) 1.7 (0.3)
Loss from associate - - - - - - - - -
Profit on disposal of
investment - - 0.2 - - - - - 0.2
Profit on disposal of
subsidiary - - 5.4 - - - - - 5.4
Continuing operations
- impairment costs
(Note 6) - - - - - (6.0) - 6.0 -
Adjustment on sale of
asset held for sale - - - - - - - - -
Royalty costs (1.0) (0.1) - - (0.1) - (0.2) 0.3 (1.1)
Net income/(loss)
before finance
income and finance
costs 34.4 12.8 0.1 0.1 2.8 (7.2) (21.9) 26.3 47.4
Finance income - - 0.1 0.2 0.1 - - (0.1) 0.3
Finance costs - - - (2.8) - - - - (2.8)
Profit/(loss) before
taxation 34.4 12.8 0.2 (2.5) 2.9 (7.2) (21.9) 26.2 44.9
Taxation (5.7) 2.0 (0.5) (0.1) (0.8) 0.3 4.0 (3.5) (4.3)
Profit/(loss) after
taxation before
inter-company
charges 28.7 14.8 (0.3) (2.6) 2.1 (6.9) (17.9) 22.7 40.6
Loss after
taxation from
discontinued
operations - - - - - - - (22.7) (22.7)
Profit/(loss) after
taxation before
inter-company
charges 28.7 14.8 (0.3) (2.6) 2.1 (6.9) (17.9) - 17.9
Inter-company
transactions
Management fees (2.8) (0.8) 5.7 (0.1) (0.4) (0.3) (1.3) - -
Inter-company
interest charge (0.8) - (0.6) 2.8 - 0.1 (1.5) - -
Profit/(loss) after
taxation after
inter-company
charges 25.1 14.0 4.8 0.1 1.7 (7.1) (20.7) - 17.9
Segmental assets
(Total assets
excluding
goodwill) 73.8 190.0 19.6 1.1 - 5.6 - - 290.1
Segmental
liabilities 25.2 52.5 4.6 11.9 - 0.4 - - 94.6
Goodwill 21.0 - - - - - - - 21.0
Net assets
(excluding
goodwill)
(Note 7) 48.6 137.5 15.0 (10.8) - 5.2 - - 195.5
Capital
Expenditure
(Note 8) 11.2 10.2 0.1 - 0.9 0.3 12.9 - 35.6
Adjusted
EBITDA
(Note 9) 39.1 13.6 (5.5) 0.1 3.5 (0.3) (16.9) 13.7 47.3
Figures are presented in millions, and values less than GBP0.5 million or R0.5 million, have been rounded to zero.
Note 1: All gold sales were made in the Republic of South Africa and the majority of revenue was generated from South
African financial institutions.
Note 2: Other (expenses)/income exclude inter-company management fees and dividends.
Note 3: During the current reporting period, Evander Mines underground operations ceased mining on 31 May 2018. The
ETRP buy-in operations remain as continuing operations.
Note 4: Phoenix was classified as held for sale and as a discontinued operation at 30 June 2017. The Phoenix disposal
was concluded on 6 November 2017.
Note 5: The disposal of Pan African Resources Coal Holdings Proprietary Limited and Uitkomst was completed on 30 June
2017 and this business was classified as a discontinued operation.
Note 6: Impairment costs associated with the continuing operations represent the carrying value of the Kinross and ETRP
metallurgical plant infrastructure.
Note 7: All assets are held within South Africa. The segmental assets and liabilities above, exclude inter-company
balances.
Note 8: Capital expenditure comprises of additions to property, plant and equipment and mineral rights and
intangible assets.
Note 9: Adjusted EBITDA is represented by earnings before interest, taxation, depreciation and amortisation,
impairments, discontinued operations and profit/(loss) on disposal of investments.
Summarised unaudited consolidated segment report for the year ended 30 June 2018
30 June 2018
Continuing operations Discontinued operations
Evander
Evander Corporate Mines
Mines office (Dis-
(Continuing and continued Phoenix
Barberton operations) growth Funding operations) Platinum Reclassi-
Mines (Note 3) projects Company (Note 3) (Note 4) fication Group
ZAR ZAR ZAR ZAR ZAR ZAR ZAR ZAR
million million million million million million million million
Revenue
Gold sales (Note 1) 1,506.5 367.4 - - 811.4 - (811.4) 1,873.9
Platinum Sales - - - - - 24.7 (24.7) -
Coal sales - - - - - - - -
Realisation costs (7.7) (26.9) - - (12.5) - 12.5 (34.6)
On-mine revenue 1,498.8 340.5 - - 798.9 24.7 (823.6) 1,839.3
Gold cost
of production (1,138.0) (204.1) - - (1,027.8) - 1,027.8 (1,342.1)
Platinum cost of
production - - - - - (28.2) 28.2 -
Coal cost
of production - - - - - - - -
Depreciation and
amortisation (72.8) (12.3) - - (106.1) - 106.1 (85.1)
Mining Profit 288.0 124.1 - - (335.0) (3.5) 338.5 412.1
Other (expenses)/
income (Note 2) (12.7) 14.9 (69.0) (7.2) (198.0) 0.7 197.3 (74.0)
Profit on
disposal of
investment - - - - - - - -
Profit on disposal
of subsidiary - - - - - - - -
Continuing operations
- impairment costs
(Note 6) - (136.6) - - (1,644.5) - 1,644.5 (136.6)
Adjustment on sale of
asset held for sale - - - - - (4.9) 4.9 -
Royalty costs (6.5) (0.7) - - (4.1) - 4.1 (7.2)
Net income/(loss)
before finance income
and finance costs 268.8 1.7 (69.0) (7.2) (2,181.6) (7.7) 2,189.3 194.3
Finance income 3.3 13.3 6.2 2.9 8.6 0.1 (8.7) 25.7
Finance costs - - (0.1) (54.2) - - - (54.3)
Profit/(loss) before
taxation 272.1 15.0 (62.9) (58.5) (2,173.0) (7.6) 2,180.6 165.7
Taxation (40.2) 95.9 (18.9) (0.5) 421.0 0.7 (421.7) 36.3
Profit/(loss) after
taxation before
inter-company
charges and
discontinued
operations 231.9 110.9 (81.9) (59.0) (1,752.0) (6.9) 1,758.9 202.0
Loss after taxation
from discontinued
operations - - - - - - (1,758.9) (1,758.9)
Profit/(loss) after
taxation before
inter-company
charges 231.9 110.9 (81.8) (59.0) (1,752.0) (6.9) - (1,556.9)
Inter-company
transactions
Management fees (34.0) (1.5) 41.0 (2.0) (3.5) - - -
Inter-company
interest charges (5.1) - (6.3) 62.3 (50.9) - - -
Profit/(loss) after
taxation after
inter-company
charges 192.8 109.4 (47.1) 1.3 (1,806.4) (6.9) - (1,556.9)
Segmental assets
(Total assets
excluding
goodwill) 1,434.0 2,838.4 135.9 12.8 - - - 4,420.1
Segmental liabilities 486.8 555.3 28.4 1,636.5 - - - 2,707.0
Goodwill 303.5 - - - - - - 303.5
Net assets (Excluding
goodwill) (Note 7) 947.2 2,283.1 106.5 (1,623.7) - - - 1,713.1
Capital expenditure
(Note 8) 210.4 1,261.4 2.2 - 176.1 - - 1,650.1
Adjusted EBITDA
(Note 9) 341.6 150.6 (69.0) (7.2) (270.0) (2.8) 272.8 416.0
30 June 2017
Continuing operations Discontinued operations
Evander
Evander Corporate Mines
Mines office (Dis-
(Continuing and Uitkomst Phoenix continued
Barberton operations) growth Funding Colliery Platinum operations) Reclassi-
Mines (Note 3) projects Company (Note 5) (Note 4) (Note 3) fication Group
ZAR ZAR ZAR ZAR ZAR ZAR ZAR ZAR ZAR
million million million million million million million million million
Revenue
Gold sales
(Note 1) 1,679.2 479.0 - - - - 767.2 (767.2) 2,158.2
Platinum Sales - - - - - 82.2 - (82.2) -
Coal sales - - - - 432.8 - - (432.8) -
Realisation costs (10.5) (7.0) - - - - (14.0) 14.0 (17.5)
On-mine revenue 1,668.7 472.0 - - 432.8 82.2 753.2 (1,268.2) 2,140.7
Gold cost
of production (1,056.2) (245.2) - - - - (1,010.2) 1,010.2 (1,301.4)
Platinum cost of
production - - - - - (86.4) - 86.4 -
Coal cost
of production - - - - (375.0) - - 375.0 -
Depreciation and
amortisation (81.9) (13.0) - - (12.2) (15.0) (86.2) 113.4 (94.9)
Mining Profit 530.6 213.8 - - 45.6 (19.2) (343.2) 316.8 744.4
Other (expenses)/
income (Note 2) 81.3 8.6 (95.6) 1.6 2.7 (2.0) (30.4) 29.7 (4.1)
Profit on
disposal of
investment - - 4.6 - - - - - 4.6
Profit on
disposal of
subsidiary - - 91.3 - - - - - 91.3
Continuing operations
- impairment costs
(Note 6) - - - - - (100.9) - 100.9 -
Adjustment on sale of
asset held for sale - - - - - - - - -
Royalty costs (17.5) (1.7) - - (1.2) - (3.8) 5.0 (19.2)
Net income/(loss)
before finance
income and
finance costs 594.4 220.7 0.3 1.6 47.1 (122.1) (377.4) 452.4 817.0
Finance income 0.1 0.3 0.9 3.1 1.8 - 0.6 (2.4) 4.4
Finance costs (0.4) - (0.2) (47.8) - - (0.2) 0.2 (48.4)
Profit/(loss)
before taxation 594.1 221.0 1.0 (43.1) 48.9 (122.1) (377.0) 450.2 773.0
Taxation (97.5) 35.4 (9.2) (1.1) (13.6) 4.8 68.3 (59.5) (72.4)
Profit/(loss)
after taxation
before inter-
company charges
and discontinued
operations 496.6 256.4 (8.2) (44.2) 35.3 (117.3) (308.7) 390.7 700.6
Loss after
taxation from
discontinued
operations - - - - - - - (390.7) (390.7)
Profit/(loss)
after taxation
before inter-
company charges 496.6 256.4 (8.2) (44.2) 35.3 (117.3) (308.7) - 309.9
Inter-company
transactions
Management fees (48.4) (14.1) 97.9 (1.6) (7.6) (4.5) (21.7) - -
Inter-company
interest charges (13.1) - (11.3) 47.9 0.5 2.1 (26.1) - -
Profit/(loss)
after taxation
after inter-
company charges 435.1 242.3 78.4 2.1 28.2 (119.7) (356.5) - 309.9
Segmental assets
(Total assets
excluding
goodwill) 1,251.0 3,222.6 332.6 18.5 - 95.2 - - 4,919.9
Segmental
liabilities 426.7 890.1 77.8 202.0 - 6.2 - - 1,602.8
Goodwill 303.5 - - - - - - - 303.5
Net assets
(Excluding
goodwill)
(Note 7) 824.3 2,332.5 254.8 (183.5) - 89.0 - - 3,317.1
Capital
expenditure
(Note 8) 193.5 222.2 1.4 - 15.1 5.4 175.5 - 613.1
Adjusted EBITDA
(Note 9) 676.3 233.7 (95.6) 1.6 59.3 (6.2) (291.2) 238.1 816.0
Figures are presented in millions, and values less than GBP0.5 million or R0.5 million, have been rounded to zero.
Note 1: All gold sales were made in the Republic of South Africa and the majority of revenue was generated from South
African financial institutions.
Note 2: Other (expenses)/income exclude inter-company management fees and dividends.
Note 3: During the current reporting period, Evander Mines underground operations ceased mining on 31 May 2018. The
ETRP buy-in operations remain as continuing operations.
Note 4: Phoenix was classified as held for sale and as a discontinued operation at 30 June 2017. The Phoenix disposal
was concluded on 6 November 2017.
Note 5: The disposal of Pan African Resources Coal Holdings Proprietary Limited and Uitkomst was completed on 30 June
2017 and this business was classified as a discontinued operation.
Note 6: Impairment costs associated with the continuing operations represent the carrying value of the Kinross and ETRP
metallurgical plant infrastructure.
Note 7: All assets are held within South Africa. The segmental assets and liabilities above, exclude inter-company
balances.
Note 8: Capital expenditure comprises of additions to property, plant and equipment and mineral rights and
intangible assets.
Note 9: Adjusted EBITDA is represented by earnings before interest, taxation, depreciation and amortisation,
impairments, discontinued operations and profit/(loss) on disposal of investments.
Summarised audited consolidated statement of changes in equity for the year ended 30 June 2018
Share Share Translation Share option Retained
capital premium reserve reserve earnings
GBP million GBP million GBP million GBP million GBP million
Balance at
30 June 2016 19.4 108.9 (58.6) 1.0 126.8
Issue of shares 2.9 37.9 - - -
Share issue costs - (1.4) - - -
Profit for the year - - - - 17.9
Total comprehensive
income - - 21.7 - -
Dividends paid - - - - (17.1)
Reciprocal dividends
- PAR Gold - - - - 3.8
Share based payment
- charge for the year - - - 0.2 -
Balance at 30 June 2017
(Note 1) 22.3 145.4 (36.9) 1.2 131.4
Disposal of treasury
shares - (0.8) - - -
Loss for the year - - - - (93.3)
Total comprehensive
loss - - (5.9) - -
Dividends paid - - - - (10.0)
Reciprocal dividends
- PAR Gold - - - - 1.9
Share based payment
- charge for the year - - - 0.5 -
Balance at 30 June 2018 22.3 144.6 (42.8) 1.7 30.0
Realisation Treasury
of equity capital Merger Other
reserve reserve reserve reserves Total
GBP million GBP million GBP million GBP million GBP million
Balance at
30 June 2016 (10.7) (25.4) (10.7) 0.3 151.0
Issue of shares - - - - 40.8
Share issue costs - - - - (1.4)
Profit for the year - - - - 17.9
Total comprehensive
income - - - (0.3) 21.4
Dividends paid - - - - (17.1)
Reciprocal dividends
- PAR Gold - - - - 3.8
Share based payment
- charge for the year - - - - 0.2
Balance at 30 June 2017
(Note 1) (10.7) (25.4) (10.7) - 216.6
Disposal of treasury
shares - 9.8 - - 9.0
Loss for the year - - - - (93.3)
Total comprehensive loss - - - (3.0) (8.9)
Dividends paid - - - - (10.0)
Reciprocal dividends
- PAR Gold - - - - 1.9
Share based payment
- charge for the year - - - - 0.5
Balance at 30 June 2018 (10.7) (15.6) (10.7) (3.0) 115.8
Note 1: Due to rounding in the statement of change in equity, the figures may differ to the summarised
consolidated statement of financial position.
Summarised unaudited consolidated statement of changes in equity for the year ended 30 June 2018
Share Share Translation Share option Retained
capital premium reserve reserve earnings
ZAR million ZAR million ZAR million ZAR million ZAR million
Balance at
30 June 2016 269.7 1,638.5 - 14.0 1,789.9
Issue of shares 49.1 646.9 - - -
Share issue costs - (24.0) - - -
Profit for the year - - - - 309.9
Total comprehensive income - - - - -
Dividends paid - - - - (300.0)
Reciprocal dividends
- PAR Gold - - - - 67.4
Share based payment
- charge for the year - - - 3.2 -
Balance at 30 June 2017
(Note 1) 318.8 2,261.4 - 17.2 1,867.2
Disposal of treasury shares - (14.0) - - -
Loss for the year - - - - (1,556.9)
Total comprehensive loss - - - - -
Dividends paid - - - - (185.0)
Reciprocal dividends
- PAR Gold - - - - 36.1
Share based payment
- charge for the year - - - 7.4 -
Balance at 30 June 2018 318.8 2,247.4 - 24.6 161.4
Realisation Treasury
of equity capital Merger Other
reserve reserve reserve reserves Total
ZAR million ZAR million ZAR million ZAR million ZAR million
Balance at
30 June 2016 (140.6) (548.6) (154.7) 6.3 2,874.5
Issue of shares - - - - 696.0
Share issue costs - - - - (24.0)
Profit for the year - - - - 309.9
Total comprehensive income - - - (6.3) (6.3)
Dividends paid - - - - (300.0)
Reciprocal dividends
- PAR Gold - - - - 67.4
Share based payment
- charge for the year - - - - 3.2
Balance at 30 June 2017
(Note 1) (140.6) (548.6) (154.7) - 3,620.7
Disposal of treasury shares - 163.4 - - 149.4
Loss for the year - - - - (1,556.9)
Total comprehensive loss - - - (55.0) (55.0)
Dividends paid - - - - (185.0)
Reciprocal dividends
- PAR Gold - - - - 36.1
Share based payment
- charge for the year - - - - 7.4
Balance at 30 June 2018 (140.6) (385.2) (154.7) (55.0) 2,016.7
Note 1: Due to rounding in the statement of change in equity, the figures may differ to the summarised
consolidated statement of financial position.
Unaudited alternative performance measures summary for the period ended 30 June 2018
30 June 2018 30 June 2017 Production cash cost, all-in sustaining 30 June 2017 30 June 2018
USD million USD million costs and all-in costs ZAR million ZAR million
186.5 170.9 Cash costs 2,322.3 2,397.5
184.3 170.1 Gold cost of production 2,311.6 2,369.9
3.7 2.3 Realisation costs 31.5 47.1
(1.5) (1.5) Care and maintenance costs (20.8) (19.5)
218.1 204.2 All-in sustaining costs 2,772.7 2,802.1
186.5 170.9 Cash costs 2,322.3 2,397.5
0.9 1.7 Royalties 23.0 11.3
1.1 1.7 Community costs related to gold operations 22.7 13.6
(0.1) (0.2) By-product credits (3.3) (1.9)
7.3 6.9 Corporate general and administrative costs 93.1 94.4
9.1 10.7 Development capital (sustaining) 145.4 116.5
13.3 12.5 Maintenance capital expenditure (sustaining) 169.5 170.7
238.7 214.6 All-in costs 2,914.3 3,067.8
218.1 204.2 All-in sustaining costs 2,772.7 2,802.1
8.1 7.4 Capital expenditure (non-sustaining) 100.8 104.7
12.5 3.0 Voluntary severance pay/retrenchment 40.8 161.0
costs (non-sustaining)
30 June 2018 30 June 2017 30 June 2017 30 June 2018
GBP million GBP million Summary of adjusted EBITDA ZAR million ZAR million
24.2 47.3 Adjusted EBITDA 816.0 416.0
(93.3) 17.9 Loss/profit after taxation 309.9 (1,556.9)
(2.1) 4.3 Taxation 72.4 (36.3)
3.2 2.8 Finance costs 48.4 54.3
(1.5) (0.3) Finance income (4.4) (25.7)
8.2 - Impairments - 136.6
- (5.4) Profit on disposal of subsidiary (91.3) -
- (0.2) Profit on disposal of investment (4.6) -
4.9 5.5 Mining depreciation and amortisation 94.9 85.1
104.8 22.7 Profit after tax on discontinued operations 390.7 1,758.9
30 June 2018 30 June 2017 Audited headline earnings and headline 30 June 2017 30 June 2018
GBP million GBP million earnings per share from combined operations ZAR million ZAR million
(93.3) 17.9 Basic earnings 309.9 (1,556.9)
- (0.2) Profit on disposal of investment (4.6) -
- - Taxation on profit on disposal of investment 1.0 -
- (5.4) Profit on disposal of subsidiary (91.3) -
0.3 - Adjustment on sale of asset held for sale - 4.9
- - Profit on disposal of property plant and equipment (0.4) -
- - Taxation on profit on disposal of property 0.1 -
plant and equipment
106.3 6.0 Impairment 100.9 1,781.1
13.3 18.3 Headline earnings 315.6 229.1
0.73 1.17 Headline earnings per share 20.17 12.66
0.73 1.17 Diluted headline earnings per share 20.17 12.66
Audited headline earnings and headline
30 June 2018 30 June 2017 earnings per share from continuing 30 June 2017 30 June 2018
GBP million GBP million operations ZAR million ZAR million
11.5 40.6 Basic earnings 700.6 202.0
- (0.2) Profit on disposal of Investment (4.6) -
- - Taxation on profit on disposal of Investment 1.0 -
- (5.4) Profit on disposal of subsidiary (91.3) -
- - Profit on disposal of property plant and equipment - -
- - Tax on profit on disposal of property - -
plant and equipment
8.2 - Impairment - 136.6
19.6 35.0 Headline earnings 605.7 338.6
1.08 2.24 Headline earnings per share 38.72 18.71
1.08 2.24 Diluted headline earnings per share 38.70 18.71
30 June 2018 30 June 2017 30 June 2017 30 June 2018
GBP million GBP million Net debt for the group ZAR million ZAR million
89.8 4.1 Net debt 67.6 1,623.6
47.9 11.9 Revolving credit facility 201.2 866.2
42.6 - Elikhulu term loan facility - 770.0
- 1.6 Gold loan 26.6 -
(0.7) (9.4) Cash and cash equivalents (160.2) (12.6)
Cash cost per
30 June 2018 30 June 2017 Metric ounce and kilogramme Metric 30 June 2017 30 June 2018
1,162 986 USD/oz Cash cost ZAR/kg 430,863 480,439
186.5 170.9 USD million Cash costs ZAR million 2,322.3 2,397.5
160,444 173,285 Oz Gold sold kg 5,390 4,990
All-in sustaining cost
per ounce and
30 June 2018 30 June 2017 Metric kilogramme Metric 30 June 2017 30 June 2018
1,358 1,177 USD/oz All-in sustaining cost ZAR/kg 514,435 561,468
218.1 204.2 USD million All-in sustaining costs ZAR million 2,772.7 2,802.1
160,444 173,285 oz Gold sold kg 5,390 4,990
All-in cost per ounce
30 June 2018 30 June 2017 Metric and kilogramme Metric 30 June 2017 30 June 2018
1,487 1,237 USD/oz All-in cost ZAR/kg 540,693 614,713
238.7 214.6 USD million All-in costs ZAR million 2,914.3 3,067.8
160,444 173,285 Oz Gold sold kg 5,390 4,990
Contact information
Corporate Office
The Firs Office Building
2nd Floor, Office 201
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/James Bavister/David McKeown
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/Thomas Rider
BMO Capital Markets Limited
Joint Broker
Office: +44 (0) 207 236 1010
Bobby Morse
Buchanan
Public & Investor Relations UK
Office: +44 (0)20 7466 5000
Email: PAF@buchanan.uk.com
Website: www.panafricanresources.com
Date: 19/09/2018 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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