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PAN AFRICAN RESOURCES PLC - Operational Update, Record Half-Year Gold Production, Substantial Decrease in Group Gearing, Share Buyback Programme

Release Date: 11/06/2025 09:49
Code(s): PAN PARS01 PARS02 PARS03     PDF:  
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Operational Update, Record Half-Year Gold Production, Substantial Decrease in Group Gearing, Share Buyback Programme

Pan African Resources PLC                                 Pan African Resources Funding Company
(Incorporated and registered in England and Wales         Limited
under Companies Act 1985 with registered                  Incorporated in the Republic of South Africa
number 3937466 on 25 February 2000)                       with limited liability
Share code on AIM: PAF                                    Registration number: 2012/021237/06
Share code on JSE: PAN                                    Alpha code: PARI
ISIN: GB0004300496
ADR code: PAFRY
("Pan African" or "the Company" or "the Group")


OPERATIONAL UPDATE, RECORD HALF-YEAR GOLD PRODUCTION, SUBSTANTIAL DECREASE IN
GROUP GEARING AND SHARE BUYBACK PROGRAMME

Pan African is pleased to provide its shareholders and noteholders with an operational update for the
financial year ending 30 June 2025 (FY25).

KEY FEATURES

   • Regrettably, the Group suffered a fatal accident on 6 June 2025 at Barberton's Sheba Mine.
       The Group will continue its focus on various safety performance initiatives in order to improve
       safety statistics and strive for zero harm
   • Record half year gold production in FY25H2 and a substantial increase when compared to
       FY25H1. Production for FY25H2 estimated at approximately 112,000oz, representing an
       increase of approximately 32% when compared to FY25H1 (84,705oz).
   • Substantial reduction in Group gearing with net debt of approximately US$155 million
       expected as at 30 June 2025, a decrease of US$72 million or 32% compared to
       31 December 2024 (net debt of US$228.5 million) – the Group is expected to be fully degeared
       during FY26 at prevailing gold prices
   • Board approved share buyback programme to purchase up to ZAR200 million (approximately
       US$11.1 million) of ordinary shares in the market
   • Total full year production for FY25 expected to be approximately 197,000oz (FY24:
       186,039oz), an increase in production of approximately 6% compared to the prior financial
       year. Despite a significant increase in production in H2, full year production will therefore fall
       marginally below FY25 production guidance range of 205,000oz to 215,000oz as a result of:
           o Slower than expected ramp up of the Evander underground subvertical shaft project,
                which is now fully commissioned and operational
           o Delays encountered with the commissioning of the filter presses associated with the
                dry stack landforms (tailings section) of the Tennant Mines plant, resulting in a slower
                ramp up in production
   • Tennant Mines gold processing plant commissioned on budget and on schedule with steady
       state production of approximately 50,000oz per annum now expected during the first quarter
       of FY26
   • Group all-in sustaining costs (AISC) for FY25H2 estimated between US$1,525 and US$1,550
       (previous guidance of US$ 1,450/oz to US$1,500/oz) at an average exchange rate of
       US$/ZAR:18.50, primarily as a result of lower than expected production following the slower
       than anticipated ramp up in production at Evander underground and realised losses on the
       zero cost collar hedges of approximately US$25/oz
   • Group AISC for FY25 is expected to be between US$1,550/oz to US$1,575/oz at an average
       exchange rate of US$/ZAR:18.50 (previous guidance of US$1,450/oz to US$1,500/oz). This
       AISC includes the impact of zero cost collar detailed above
   • Production guidance for FY26 of between 275,000oz and 292,000oz, an increase of
       approximately 40% compared to expected FY25 production at an AISC of between US$1,475
       and $1,525

GROUP GOLD PRODUCTION FOR FY25

The notable increase in the Group's production in FY25H2 is as a result of the following:

    •   The successful ramp up at the Mogale Tailings Retreatment (MTR) operation
    •   Steady production at Elikhulu and Barberton Tailings Retreatment Plant (BTRP)
    •   Improved grades and tonnages following the commissioning of the Evander subvertical shaft
    •   Much improved production from all of the Barberton underground operations.

Production for FY25 is estimated at approximatley 197,000oz (FY24: 186,039oz), an increase of
approximately 6% from the prior financial year.
SURFACE OPERATIONS

•   Elikhulu production is estimated at approximately 26,000oz for FY25H2, and is on track for
    achieving production of more than 52,000oz for FY25 (FY24: 54,812 oz)
•   The MTR operation reached steady state production during December 2024
        o Production of approximately 21,000oz for FY25H2, with estimated production of
            approximately 30,000oz for FY25
        o The expansion of the plant from 800Ktpm to 1Mtpm, with the addition of two carbon-in-
            leach (CIL) tanks together with the installation of reactors to further improve recoveries,
            at a total expansion cost of US$6.5 million, is in progress. This will result in an increase in
            production from 50,000oz to approximately 60,000oz per annum, with the expansion
            project expected to be completed during FY26
        o MTR has successfully concluded a three-year wage agreement with its employees at an
            average wage increase of 5% per annum over the three-year period, providing stability to
            the operation
        o Soweto Cluster Feasibility Study (FS) is on track for completion by September 2025, with
            the study focusing on the option of constructing a new processing facility which would be
            a stand-alone operation also producing approximately 50,000oz per annum
•   BTRP is expected to achieve production of approximately 8,000oz in FY25H2, with full year
    production of approximately 15,500oz (FY24: 18,888). As previously reported, the remaining life-
    of-mine (LOM) of the BTRP has now been increased to six years from current surface sources
•   Construction work at Tennant Mines' Nobles operation, at a cost of US$36 million, was completed
    with successful hot commissioning during April 2025. An inaugural gold pour from this operation
    was achieved in May 2025. Production ramp up was slower than expected as a result of a delay in
    the commissioning of the filter presses associated with the dry stack landforms (tailings section)
    of the plant. Steady-state throughput at an annualised rate of circa 50,000oz is expected to be
    achieved during the first quarter of FY26.

UNDERGROUND OPERATIONS

•   The sub-vertical hoisting shaft commissioning at the Evander underground operation was
    completed during January 2025, with ramp-up to its expected hoisting capacity achieved during
    April 2025, enabling full production from 24-25 levels and production of approximately 27,000oz
    expected for FY25
        o Average production for the last two months of FY25 of approximately 3,850oz per month,
            confirming production capacity of ~50,000oz per annum going forward
•   Barberton Mines
        o The restructuring of the underground operations was successfully completed in May
            2025, with an approximate 20% reduction in the overall Barberton workforce
        o Excellent improvement in performance of all underground operations during FY25H2, as
            follows:
                •   Fairview Mine expected production of approximately 22,000oz (FY25H1:
                    19,096oz), an increase of 15%
                • Consort Mine production is expected to increase by 70% to approximately
                    5,500oz for FY25H2 (FY25H1: 3,242oz), with this operation now positively
                    contributing to cash flow
                • Sheba Mine production is expected to increase by 20% to approximately 10,600oz
                    (FY25H1: 8,805oz) as a result of access to higher grade mining areas and initiatives
                    to improve productivity.
        o   Production of approximately 38,000oz is expected for the Barberton Mines underground
            operations in FY25H2 (FY25H1: 31,142oz), with full year production of approximately
            69,000oz (FY24: 71,470oz).


FINANCIAL

• The Group is expected to be fully degeared (in terms of net debt) in the next 12 months at
  prevailing gold prices
• The Group will be unhedged from 1 July 2025, following the expiry of the last zero cost collars at
  the end of June 2025, and the synthetic forward that matured at the end of February 2025, allowing
  the Group to fully benefit from prevailing gold prices. Realised losses on these zero cost collars is
  estimated to have a negative impact on AISC of approximately US$25/oz for FY25H2
• The Group expects AISC for FY25H2 of between US$1,525/oz to US$1,550/oz at an exchange rate
  of ZAR18.50/US$. This represents a significant improvement from the US$1,675/oz for FY25H1,
  with full year AISC expected to be between US$1,550/oz and US$1,575/oz.
• AISC guidance for FY26 is between US$1,475 and $1,525, with the following contributing positively
  to the cost outlook for FY26:
            o Increase in the contribution to Group production from lower cost surface operations,
                with a full year of production from MTR and Tennant Mines
            o Increased production from Evander underground operations
            o Reduction in the labour cost for the Barberton underground operations, following the
                successful conclusion of the operation's restructuring programme
            o Savings arising from the extensive use of renewable energy projects
            o Ongoing efforts to contain costs and reinforcing a culture of cost consciousness.

FY26 PRODUCTION GUIDANCE

Group production for FY26 is expected to increase substantially, principally as a result of steady-state
production at the MTR operation, increased production from Evander underground (following
substantial investments in infrastructure and underground development over the last years), as well
as the production contribution from Tennant Mines, with production ramp up expected to be
completed in the first quarter of FY26.

Group production for FY26 is expected to be between 275,000oz and 292,000oz as outlined below:

 Operation                                  Production Range (oz)
 Elikhulu                                          49,000-51,000
 BTRP                                              13,000-15,000
 MTR                                               52,000-54,000
 Tennant Mines                                     46,000-50,000
 Evander underground                               46,000-50,000
 Barberton Mines underground                       69,000-72,000
 Total                                           275,000-292,000

SHARE BUYBACK PROGRAMME

Pan African is pleased to announce that the board of directors (Board) has approved a share buyback
programme to purchase up to ZAR200 million (approximately US$11.1 million) of ordinary shares of
£0.01 each in the Company (Shares), commencing on 17 June 2025 (the Programme). The Company's
profits available for distribution exceed the maximum amount proposed to be paid by the Company
in implementing the Programme.

The Board believes that at the current Share price, the Company's Shares offer significant value, given
the quality and profitability of the Group's existing operations and growth projects. The Board has
therefore taken the decision to implement the Programme as part of the Company's broader strategy
to deliver value to shareholders.

Purchases pursuant to the Programme will be made under the authority granted by shareholders at
the Company's 2024 annual general meeting (the Repurchase Authority) which enables the Company
to make market acquisitions of Shares in accordance with the Companies Act 2006. The Programme
will be conducted in accordance with the Market Abuse Regulation 596/2014 and the Commission
Delegated Regulation (EU) 2016/1052 (each as in force in the UK by virtue of the European Union
(Withdrawal) Act 2018 and as amended by the Market Abuse Regulation (Amendment) (EU Exit)
Regulations 2019) (MAR Buy-Back Regulation). The Company has been advised that in order to comply
with the UK Companies Act, it is likely that the Company will be required have to implement the
Programme exclusively by acquiring Shares on the AIM Market of the London Stock Exchange (LSE),
as the JSE is not a "Recognised Investment Exchange" of the Financial Conduct Authority in the UK.
The Company will be seeking a dispensation from the JSE to implement the Programme exclusively on
the AIM Market of the LSE before commencement of the Programme. However, in any event, all
shareholders registered on both the UK register and the South African register will benefit from the
implementation of any purchases pursuant to the Programme, as a result in the reduction in share
capital for the Company as a whole.

The Repurchase Authority permits the purchase of a maximum of 144,486,033 Shares at a maximum
price (excluding expenses) of 105 per cent of (i) the average closing price of a Share as derived from
the AIM Appendix to the London Stock Exchange Daily Official List for the five business days
immediately preceding the date of purchase.

Purchases pursuant to the Programme will take place on the London Stock Exchange (LSE) as
permitted by the Companies Act 2006 and in compliance with the MAR Buy Back Regulation. Pan
African has entered into agreements with Peel Hunt LLP ("Peel Hunt") to carry out on-market
purchases of its Shares. The agreement grants Peel Hunt the authority to enact purchases and make
trading decisions concerning the timing of the purchases under the Programme independently of and
uninfluenced by the Company during any closed period to which the Company is subject and/or if the
Company comes into possession of inside information.

Purchases pursuant to the Programme will be carried out in compliance with the relevant conditions
for trading, restrictions regarding time and volume, disclosure and reporting obligations, and price
conditions. The Shares will be repurchased at a price (excluding expenses) that does not exceed the
last independent trade or the highest current independent bid on the relevant trading platform. The
Company intends to cancel those Shares purchased.

Details of any purchases made under the Programme will be provided via SENS and RNS
announcements and published on the Company's website.
Cobus Loots, Pan African's CEO commented:

"We are saddened by the loss of a colleague following a fatal accident in a Sheba underground
workshop last week, with an auto electrician succumbing to injuries sustained whilst on duty. Our
thoughts and prayers are with the family and friends of the deceased, as we continue to work towards
our goal of zero harm.

The commissioning during May 2025 of the processing plant at Tennant Mines in Australia is a
significant achievement for the Group and maintains our track record of delivering new mining projects
on time and within budget. We have also now demonstrated our ability to commission large scale
projects outside of South Africa. In addition to a notable immediate increase in Pan African's
production capacity, our investment in Tennant also provides for exciting growth in a Tier-1 mining
jurisdiction, with some 1,700 square kilometres of prospective exploration ground, and our newly
established processing plant at Tennant Mines being the only such facility in the region.

The performance of our surface operations at Elikhulu, MTR and BTRP remained consistent and largely
unaffected by the excessive rainfall experienced throughout South Africa early in this calendar year,
with these world class assets on track to achieve full-year production guidance.

Additionally, steady progress has been made on our South African underground operations, with
improved operational performances achieved at all our mines in the second half of the financial year.
The restructuring of the Barberton operations has already yielded positive results and productivity
improvements, evidenced by increased gold production. Evander's underground is also now positioned
to deliver a notable production increase in the year ahead, following a period of large-scale investment
into this long-life asset.

I believe the Group has never been better positioned to take advantage of record gold prices, with
record second half gold production being testament to that achievement. Increased cashflow
generation and de-gearing is allowing our business to continue to invest and grow, whilst also
increasing cash returns to shareholders. The share buy back programme approved by our board
demonstrates our confidence in the Group and its prospects.

We look forward to reporting our final results for the year ended June 2025 on 10 September 2025,
where additional details on progress with our growth projects and sustainability initiatives will be
presented."

The information contained in this announcement is the responsibility of the Board and has not been
reviewed or reported on by the Group's external auditors.

The information contained within this announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this
announcement via Regulatory Information Service (RIS), this inside information is now considered to
be in the public domain.

Rosebank

11 June 2025



For further information on Pan African Resources, please visit the Company's website at

www.panafricanresources.com

Corporate information
Corporate Office                                 Registered Office
The Firs Building                                107 Cheapside, 2nd Floor
2nd Floor, Office 204                            London, EC2V 6DN
Corner Cradock and Biermann Avenues              United Kingdom
Rosebank, Johannesburg                           Office: + 44 (0)20 3869 0706
South Africa                                     jane.kirton@corpserv.co.uk
Office: + 27 (0)11 243 2900
info@paf.co.za

Chief Executive Officer                          Financial Director and debt officer
Cobus Loots                                      Marileen Kok
Office: + 27 (0)11 243 2900                      Office: + 27 (0)11 243 2900
Head: Investor Relations                         Website: www.panafricanresources.com

Hethen Hira
Tel: + 27 (0)11 243 2900
E-mail: hhira@paf.co.za

Company Secretary                                Nominated Adviser and Joint Broker
Jane Kirton                                      Ross Allister/Georgia Langoulant
St James's Corporate Services Limited            Peel Hunt LLP
Office: + 44 (0)20 3869 0706                     Office: +44 (0)20 7418 8900

JSE Sponsor & JSE Debt Sponsor                   Joint Broker
Ciska Kloppers                                   Thomas Rider/Nick Macann
Questco Corporate Advisory Proprietary Limited   BMO Capital Markets Limited
Office: + 27 (0) 63 482 3802                     Office: +44 (0)20 7236 1010
                                                 Joint Broker
                                                 Matthew Armitt/Jennifer Lee
                                                 Joh. Berenberg, Gossler & Co KG (Berenberg)
                                                 Office: +44 (0)20 3207 7800

Date: 11-06-2025 09:49:00
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