Wrap Text
Operational update for FY2022 - Record annual gold production and significant reduction in net senior debt
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 code: PAFRY
(“Pan African” or “the Company” or “the Group”)
OPERATIONAL UPDATE FOR THE YEAR ENDED 30 JUNE 2022 – RECORD ANNUAL GOLD PRODUCTION AND SIGNIFICANT REDUCTION IN NET SENIOR DEBT
Pan African is pleased to provide its shareholders with the gold production figures and a preliminary
operational update for the financial year ended 30 June 2022 (“Reporting Period”). The detailed report
of the Group’s operational and financial performance for the Reporting Period, and annual reporting
suite, will be released on 14 September 2022.
KEY HIGHLIGHTS
• Record annual gold production
o Production of 205,459oz of gold, an increase of ~2% on FY2021 gold production of
201,777oz
o Production was ~3% higher than the upwardly revised guidance of 200,000oz and ~5%
higher than initial guidance of 195,000oz, released at inception of the Reporting
Period
• Industry leading safety statistics – further improvements have been achieved
o Recordable injury frequency rate (“RIFR") improved to 0.35 per million man hours
(FY2021: 0.63)
o Lost time injury requency rate (“LTIFR") improved to 1.04 per million man hours
(FY2021: 1.41)
o COVID-19 vaccination rate of +80% achieved across the Group
• Significant decrease in the Group’s net senior debt
o Reduction of 71.5% to US$9.6 million (FY2021: US$33.7 million)
• Organic growth projects on track
o Barberton Mines
- Royal Sheba orebody intersected on schedule during June 2022, extraction of
10,000 ton bulk sample in progress
o Evander underground
- Refrigeration plant at Evander 8 Shaft 24 Level nearing completion for
commissioning during August 2022
- Development blasting on Evander 8 Shaft 24 Level completed in preparation
for mining
o Elikhulu surface tailings retreatment
- New Leslie/Bracken re-mining pump station and related infrastructure in
place for mining to commence during August 2022
• ESG highlights
o Commissioned 10MW solar PV renewable energy plant at Evander – the first of this
scale in the South African mining industry
o Barberton 8MW solar PV renewable energy plant site establishment has commenced
o First commercial harvest at Barberton’s blueberry project
o Commenced construction of a water retreatment plant at Evander Mines
- Capacity to recycle 3 megalitres per day and produce potable water,
substituting potable water from the local municipality
• Production guidance for FY2023
o Gold production is expected to be at a level similar that achieved in the Reporting
Period
Pan African CEO Cobus Loots commented:
“We are very pleased with the Group’s operational performance over the last year, and the record gold
production achieved by our teams during this period.
The Group has made meaningful progress with our production growth projects at Evander
underground and at Barberton’s Royal Sheba; both projects are on schedule to start delivering within
their anticipated production timeframes.
We have further strengthened our balance sheet over the last year, despite the payment of a record
dividend and incurring significant growth and sustaining capital expenditure.
A key focus area in the year ahead will be the smaller underground operations at Barberton, to ensure
that these assets perform to their full potential.
Significant milestones have also been achieved with progress on our ESG projects, including the
commissioning of our first solar PV renewable energy project at Elikhulu, the first of its scale in the
South African mining industry. We are also excited about the imminent commencement of construction
of Barberton’s solar PV plant. The Group plans to generate 30MW of solar PV renewable energy by
2024, with commensurate cost savings of approximately R100million or US$6,1million per year, and a
large reduction in carbon emissions. At Barberton, commercial harvesting of blueberries has
commenced and employment of seasonal labour is ramping up, as planned.
We look forward to presenting our 2022 year-end financial results in September, and to provide further
details and information on the impact of our initiatives and operations and the value created for our
stakeholders.”
GROUP ANNUAL PRODUCTION
Final Group gold production for the Reporting Period increased by ~2.0% to 205,459oz (2021:
201,777oz), exceeding the upwardly revised production guidance of 200,000oz referred to in the
interim financial results, announced on 16 February 2022. The gold production split per operation is
as follows:
Year ended 30 Year ended 30
June 2022* June 2021
Production ounce profile:
Fairview Mine 47,985 45,686
Sheba and Consort Mines 27,587 39,140
Barberton Tailings Retreatment Plant (BTRP) 19,560 18,239
Elikhulu 52,139 51,459
Evander Mines 58,187 47,252
Total ounces produced: 205,459 201,777
* Preliminary values subject to final refinery adjustments
Barberton Mines’ Fairview underground operations and the BTRP surface operations performed very
well during the Reporting Period. At Fairview Mine, this was again attributable to the increased
flexibility established at this mines high-grade Main Reef Complex (“MRC”) and Rossiter orebodies.
Performances from Barberton’s smaller Sheba and Consort underground operations were below
expections, and the Group is implementing improvement programmes to ensure that these assets
deliver to their full potential.
The Elikhulu tailings retreatment operation processed tonnages with volumes and head grade both in
excess of the mining plan, which improved gold production levels when compared to the previous
financial year. Notwithstanding, production levels were negatively impacted by adverse weather
conditions and lower than anticipated recoveries. Production is expected to improve as re-mining of
the Leslie/Bracken tailings facility commences during FY2023. Elikhulu remains one of the lowest-cost
gold mining operations in Southern Africa, with a remaining operational life of 11 years.
Evander’s 8 Shaft pillar significantly outperformed its planned gold output for the Reporting Period,
with a remaining life of just over a year. Evander Mines’ 24 Level project is currently in the construction
phase, while the refrigeration plant is expected to be commissioned during August 2022. Mining of
the 24 Level ore will extend the production profile of the underground mining at 8 Shaft, post
extraction of the 8 Shaft pillar, for an additional two and a half years, and maintain Evander Mines’
annual underground gold production.
As previously communicated, the Group is proceeding with plans to mine the down-dip extent of the
Evander orebody at 25 and 26 Levels using the 24 Level infrastructure, with an on-reef decline layout.
The mining of 25 and 26 Levels demonstrates a compelling business case and further extend Evander
Mines’ 8 Shaft’s production, post cessation of mining at the 8 Shaft pillar and 24 Level, for an additional
eight years, with average expected annual production of approximately 65,000oz. Dewatering on 25
Level commenced in the Reporting Period, and blasting of the development ends will commence in
the 2023 financial year, with mining of the first stope planned for the 2025 financial year.
These projects will increase the 8 Shaft life-of-mine to 13 years, with potential to increase further,
should the Inferred Mineral Resources be converted to Mineral Reserves. Evander Mines’ mining right
is valid until 2038.
SAFETY ACHIEVEMENTS
The Group has achieved an overall reduction in recordable injuries, following a number of safety
initiatives and interventions:
• The Group reported an improvement in the RIFR to 0.35 per million man hours for the
Reporting Period (2021: 0.63 per million man hours);
• The Group’s LTIFR also improved to 1.04 per million man hours for Reporting Period (2021:
1.41 per million man hours);
• Evander Mines achieved a 100% improvement in reportable injuries in the Reporting Period,
despite the increased number of crews deployed underground, including the 24, 25 and 26
Level development crews
Barberton Mines achieved 2 million fatality free shifts on 10 May 2022 and the combined
Evander/Elikhulu operations achieved 2.5 million fatality free shifts on 19 January 2022.
REDUCTION IN SENIOR DEBT
The Group materially reduced its net senior debt over the Reporting Period, with a year-on-year
decline of 71.5% to US$9.6 million (ZAR155.5 million at an exchange rate of US$/ZAR:16.28) from
US$33.7 million (ZAR481.3 million at an exchange rate of US$/ZAR:14.28) at 30 June 2021. In US$
terms, this represents a reduction in net senior debt of 59.8% relative to the debt levels at 31
December 2021 of US$23.9 million (ZAR382.4 million at an exchange rate of US$/ZAR:16:00).
OPERATIONAL AND GROWTH PROJECTS UPDATE
A detailed update on the Group’s operations and production growth projects will be included in the
Company’s annual final results and presentation, scheduled to be released on 14 September 2022.
PRODUCTION GUIDANCE FOR FY2023
The Group expects to maintain its 2023 financial year gold production at a level similar to that achieved
in the Reporting Period.
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
14 July 2022
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 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
Chief Executive Officer Financial Director
Cobus Loots Deon Louw
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
Phil Dexter/Jane Kirton Ross Allister/Alexander Allen
St James's Corporate Services Limited Peel Hunt LLP
Office: + 44 (0)20 7796 8644 Office: +44 (0)20 7418 8900
JSE Sponsor Joint Broker
Ciska Kloppers Thomas Rider/Nick Macann
Questco Corporate Advisory Proprietary Limited
BMO Capital Markets Limited
Office: + 27 (0)11 011 9200 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: 14-07-2022 10:57:00
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