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PAN AFRICAN RESOURCES PLC - Pan African Resources Egoli Project Feasibility Study Presentation

Release Date: 30/07/2020 10:00
Code(s): PAN     PDF:  
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Pan African Resources’ Egoli Project Feasibility Study Presentation

Pan African Resources PLC
(Incorporated and registered in England and Wales under Companies Act 1985 with registered number
3937466 on 25 February 2000)
Share code on AIM: PAF
Share code on JSE: PAN
ISIN: GB0004300496
ADR ticker code: PAFRY
(“Pan African” or "the Company")


PAN AFRICAN RESOURCES’ EGOLI PROJECT FEASIBILITY STUDY PRESENTATION

On 10 July 2020, Pan African released its operational update for the year ended 30 June 2020, wherein
shareholders were advised that an independent review had been completed on the feasibility study
at Evander Mine’s Egoli Project (“Egoli Project”). A copy of the presentation summarising the findings
of     this    study,      is     now       available     on      Pan      African’s   website      at
www.panafricanresources.com/investors/company-presentations/

The Egoli Project is a long life, low cost brownfield project, that will capitalise on the Evander mine’s
existing established infrastructure during its development and exploitation. This synergy has
materially reduced Egoli’s upfront capital investment, when benchmarked against other development
projects of similar scale, and contributed to its compelling and robust economic returns. The project
has an initial life of mine of 9 years, with annual gold production of approximately 72koz at an average
head grade of 6.61g/t (LOM gold production of 17,771 kg (c.570koz)). First gold is expected to be
produced approximately 20 months after construction commences, with ramp up to steady state
production over the following 16 months. Additional geological and operational upside exists when
the Inferred Resources are accessed as underground development proceeds, potentially increasing
LOM to 14 years.

The feasibility study demonstrates a compelling organic growth project, with the following salient
financial parameters:

    •   Peak funding: R1,05 billion (US$66m)
    •   Capital payback period: 3.8 years (from project inception)
    •   NPV10.71: R2,01 billion/USD 131,25 million, at a gold price of R850,000/kg (US$1,650/oz) and
        an exchange rate of ZAR/US$:16.00)
    •   IRR (post tax real): 50.1%
    •   AISC: R399,600/kg (US$777/oz)


Detailed project scheduling and planning is in progress and is expected to be completed in the first
quarter of the 2021 financial year. Non-dilutive funding options are currently being explored following
receipt of a number of financing offers from investors and institutions. Funding is expected to be
finalised in the second quarter of the 2021 financial year.

Inception of the Egoli project is scheduled to commence in the second quarter of the 2021 financial
year with the dewatering of the decline followed by re-quipping, standard footwall development,
further deeping of the decline and on-reef development.

Egoli is expected to directly employ approximately 1,200 people, mainly from the local communities
surrounding Evander and will provide additional economic and supplier development opportunities
for this region of the Mpumalanga Province.
The project has strong Environmental Social & Governance credentials, as it is already fully licenced
and empowered, the closure cost rehabiliation liability is fully funded and the Company intends to
utilise the existing TSF at Evander for the project, resulting in there being no additional environmental
footprint. The Evander solar plant, which will be completed in the next year, is expected to also
contribute to cost savings and reduced emissions at Evander’s operations.

The Mineral Reserves and Mineral Resources on which the feasibility study is based is shown in the
tables below:



Egoli Mineral Reserve Statement* (as at 30 November 2019)

Reserve Category        Mt                    Grade (g/t)          Tonnes gold           Ounces (Moz)


Proved                  0.45                  5.90                 2.64                  0.08


Probable                2.99                  6.72                 20.08                 0.65


Total Reserve           3.44                  6.61                 22.72                 0.73




Egoli Mineral Resource Statement* (as at 30 June 2019)

Resource Category         Mt                         Grade (g/t)           Tonnes gold          Ounces (Moz)


Measured                  0.44                       8.60                  3.80                 0.123


Indicated                 2.94                       9.85                  28.93                0.930


Inferred                  6.26                       9.68                  60.58                1,948


Total Resource            9.64                       9.69                  93.33                3.001

*Mineral Resources and Mineral Reserves are reported in accordance with the SAMREC Code

The Competent Person for Pan African, Mr Hendrik Pretorius, the Group Mineral Resource Manager,
has reviewed and approved the information contained in this announcement. Mr Pretorius is a
member of the South African Council for Natural Scientific Professions as well as a member in good
standing of the Geological Society of South Africa.

Rosebank

30 July 2020

For further information on Pan African, please visit the Company's website at
www.panafricanresources.com
Contact information

Corporate Office                                 Registered Office

The Firs Office Building                         Suite 31

2nd Floor, Office 204                            Second Floor

Cnr. Cradock and Biermann Avenues                107 Cheapside

Rosebank, Johannesburg                           London

South Africa                                     EC2V 6DN

Office: + 27 (0)11 243 2900                      United Kingdom

info@paf.co.za                                   Office: + 44 (0)20 7796 8644

Cobus Loots                                      Deon Louw

Pan African Resources PLC                        Pan African Resources PLC

Chief Executive Officer                          Financial Director

Office: + 27 (0)11 243 2900                      Office: + 27 (0)11 243 2900

Phil Dexter/Jane Kirton                          Paul Gillam

St James's Corporate Services Limited            Numis Securities Limited

Company Secretary                                Nominated Adviser and Joint Broker

Office: + 44 (0)20 7796 8644                     Office: +44 (0)20 7260 1000

Ciska Kloppers                                   Ross Allister/David McKeown

Questco Corporate Advisory Proprietary Limited   Peel Hunt LLP

JSE Sponsor                                      Joint Broker

Office: + 27 (0)11 011 9200                      Office: +44 (0)20 7418 8900

Hethen Hira                                      Thomas Rider/Neil Elliot
Pan African Resources PLC                        BMO Capital Markets Limited

Head : Investor Relations                        Joint Broker

Tel: + 27 (0)11 243 2900                         Office: +44 (0)20 7236 1010

E-mail: hhira@paf.co.za

Website: www.panafricanresources.com
 Glossary of Technical Terms

“AISC”                All In Sustaining Costs

"g/t"                 grammes per tonne, equivalent to parts per million
"Inferred Resource"   that part of a Mineral Resource for which tonnage, grade and mineral content
                      can be estimated with a low level of confidence. It is inferred from geological
                      evidence and assumed but not verified geological and/or grade continuity. It
                      is based on information gathered through appropriate techniques from
                      locations such as outcrops, trenches, pits, workings and drill holes which may
                      be limited or of uncertain quality and reliability
"Indicated            that part of a Mineral Resource for which tonnage, densities, shape, physical
Resource"             characteristics, grade and mineral content can be estimated with a reasonable
                      level of confidence. It is based on exploration, sampling and testing
                      information gathered through appropriate techniques from locations such as
                      outcrops, trenches, pits, workings and drill holes. The locations are too widely
                      or inappropriately spaced to confirm geological and/or grade continuity but
                      are spaced closely enough for continuity to be assumed
“kg”                  kilogram
"koz"                 thousand troy ounces of gold


"Measured             that part of a Mineral Resource for which tonnage, densities, shape, physical
Resource"             characteristics, grade and mineral content can be estimated with a high level
                      of confidence. It is based on detailed and reliable exploration, sampling and
                      testing information gathered through appropriate techniques from locations
                      such as outcrops, trenches, pits, workings and drill holes. The locations are
                      spaced closely enough to confirm geological and grade continuity
"Mineral Resource"    a concentration or occurrence of material of intrinsic economic interest in or
                      on the Earth's crust in such form, quality and quantity that there are reasonable
                      prospects for eventual economic extraction. The location, quantity, grade,
                      geological characteristics and continuity of a Mineral Resource are known,
                      estimated or interpreted from specific geological evidence and knowledge.
                      Mineral Resources are sub-divided, in order of increasing geological
                      confidence, into Inferred, Indicated and Measured categories when reporting
                      under JORC
"Mt"                  million tonnes
"oz"                  troy ounce (= 31.103477 grammes)
"Reserve"             the economically mineable part of a Measured and/or Indicated Mineral
                      Resource
"t"                   tonne (= 1 million grammes)

Date: 30-07-2020 10:00:00
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