PAF Pan African Resources Plc

 
TIDMPAF 
 
Pan African Resources PLC 
 
(Incorporated and registered in England and Wales under the UK Companies Act 
2006 with registration 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" or the "Group") 
 
(Key features are reported in United States (US) dollar (US$) and South African 
(SA) rand (ZAR)) 
 
Provisional summarised audited results for the year ended 30 June 2021 - SHORT 
FORM ANNOUNCEMENT 
 
HIGHLIGHTS* 
 
  * 12.4% increase in Group gold production to 201,777oz 
  * 36.0% increase in operating profit to US$128.0 million 
  * 14% improvement in all-in sustaining cost (AISC) margin to 30.9% 
  * Record profit after tax of US$74.7 million 
  * 68.3% increase in earnings per share (EPS) to US 3.87 cents per share and 
    69.0% increase in headline earnings per share (HEPS) 
  * 28.5% increase in final proposed dividend of ZAR402.2 million (or 
    US$28.3million at the prevailing exchange rate) 
  * 45.6% decrease in net senior debt to US$33.7 million (2020: US$62.0 
    million) 
 
* compared to the prior corresponding period. 
 
CHIEF EXECUTIVE OFFICER'S STATEMENT 
 
Overview 
 
"We are, once again, pleased to report major positive strides in Pan African's 
operational and financial performance, despite the challenges of the ongoing 
COVID-19 pandemic. The operational flexibility afforded by our multiple 
producing assets has enabled the Group to improve margins, achieve record 
profits and realise our second-highest annual gold production. We are also 
proposing our highest-ever dividend for approval at the upcoming annual general 
meeting (AGM). 
 
Financial performance 
 
Our excellent financial performance has improved HEPS by 69.0% and enabled a 
45.6% reduction in Group net senior debt. We remain on track with our forecast 
degearing, while continuing to invest in our assets and increasing dividends to 
shareholders. 
 
Above-inflation increases in electricity tariffs and the marginal strengthening 
of the South African rand have resulted in Group AISC increasing by 9.9% to 
US$1,261/oz (2020: US$1,147). Included in the current financial year, AISC is a 
realised hedge loss of US$7.2 million which, if excluded, reduces the Group's 
AISC to US$1,226/oz. The Group's low-cost operations (Barberton Mines' 
underground, Elikhulu and the Barberton Tailings Retreatment Plant), which 
account for more than 75% of the Group's total production, achieved an AISC of 
US$1,151/oz, resulting in an AISC margin of 37.0% on the average gold price of 
US$1,826/oz earned by the Group from these operations. 
 
Health and safety and COVID-19 
 
The health and safety of our employees remains our overriding priority and we 
have again achieved an overall reduction in recordable injuries across the 
Group. Especially commendable was the safety performance at Evander Mines, 
where safety rates improved despite an increase in the number of underground 
crews deployed. The ongoing and targeted safety campaigns and incentives to 
encourage and reward safe practices support our ultimate goal of achieving zero 
harm. The Group has prioritised the challenges posed by the COVID-19 pandemic, 
with enhancements to our operating protocols that are targeted at mitigating 
the constantly evolving characteristics of the virus. As we manage the impacts 
of the pandemic, our operations have partnered with nearby healthcare 
facilities to support the national roll-out of COVID-19 vaccines. 
 
Operational and growth projects overview 
 
Operationally, the Group has performed exceptionally well, particularly at our 
underground operations, as a result of the development initiatives and 
innovations implemented over the past years. 
 
The availability, for the first time, of four high-grade mining platforms and 
expanded footprints in the mining areas at Fairview Mine have contributed to in 
an increase of 29.4% in annual production from Barberton Mines' underground 
operations. Ramp up of production at Evander Mines' 8 Shaft pillar operation 
highlights the potential of this high-grade underground orebody, with 
production now in line with mining plans. The AISC at the 8 Shaft pillar 
decreased substantially to US$995/oz in the second half of the financial year, 
after we resolved the production difficulties experienced in the first half of 
the financial year. The sub-US$1,000/oz AISC achieved in the second half of the 
current financial year is indicative of the expected mining cost for the 
remainder of the 8 Shaft pillar's life-of-mine (LoM). 
 
The renewal of Barberton Mines' mining rights by the Department of Mineral 
Resources and Energy for a further 30 years endorses our technical work and the 
long-term LoM plans submitted for these Mineral Resources. 
 
Earlier this year, we announced the reassessment of our organic growth 
opportunities and resultant reprioritisation of capital expenditure. This gave 
rise to a reschedule of the Egoli project's development timelines, as well as a 
re-evaluation of existing underground mining opportunities at Evander Mines' 8 
Shaft 24, 25 and 26 Levels, post cessation of mining at the 8 Shaft pillar. 
Independent reviews have confirmed that no fatal flaws exist in the Group's 
internal technical and economic studies, which indicate compelling recovered 
grades and gold production from these areas. Mining at the Egoli project and 25 
and 26 Levels will now be phased in, following the cessation of underground 
operations at 24 Level. The capital expenditure on these projects will be 
funded from internal sources, subject to the current gold price environment 
prevailing. 
 
At Barberton Mines, steady progress has been made with underground development 
at Project Dibanisa, which connects Sheba Mine to Fairview Mine at the top of 
the Main Reef Complex Shaft. The extraction of a 10,000t bulk sample is also 
currently in progress at the Royal Sheba project. These projects are expected 
to improve Barberton Mines' production profile in the coming years, and 
together with other initiatives, reduce the operation's AISC. 
 
Environmental, social and governance 
 
Our focus on environmental, social and governance (ESG) initiatives has 
intensified over the past years, with good progress on all fronts in pursuit of 
a 'beyond compliance' ESG approach, through collaboration and partnerships with 
specialists in community, conservation and sustainability initiatives. This 
year, Pan African will publish its first environmental, social and governance 
report, where details of our initiatives and ESG approach are reported in line 
with global ESG reporting standards. 
 
Progress at the Blueberries project in Barberton has received widespread 
attention from the media and from other stakeholders. Approximately 96,000 
plants have been delivered to site as part of phase 1, from which first 
production is expected by June 2022. Social benefits of this project in the 
surrounding communities are already evident with the creation of employment and 
increased trading opportunities for local small businesses. Also in Barberton, 
we have partnered with the Barberton Nature Reserve and conservation agencies 
to protect and preserve the biodiversity and natural resources of the region, 
including funding the care of orphaned rhinos. 
 
At Evander Mines, the construction of the 9.975MW solar photovoltaic renewable 
energy plant is advancing on schedule for commissioning by November 2021. A 
feasibility study on an extension of this facility to an estimated capacity of 
26MW has also commenced, where the additional 16MW will be utilised by Evander 
Mines' underground operations. A feasibility study for a 10MW solar 
photovoltaic renewable energy plant at Barberton Mines is also being conducted. 
These renewable energy initiatives will contribute to meaningful reductions in 
greenhouse gas emissions for the Group. At Evander Mines, a bankable 
feasibility study on a reverse osmosis water retreatment plant that will 
produce potable water for daily consumption from recycled underground mine 
water was completed, with substantial anticipated cost savings and a positive 
environmental impact. We expect to complete the construction of this plant 
within the next financial year. 
 
Outlook for the 2022 financial year 
 
The Group remains on track to produce a minimum of 195,000oz of gold for the 
financial year ending 30 June 2022, which is in line with existing planned 
production profiles, until the growth projects currently being progressed are 
brought into production. 
 
The Pan African board has approved the initiation of a share buy-back programme 
(Buy-back programme). The Buy-back programme will be executed in accordance 
with the Company's general authority to make on-market purchases which was 
approved by shareholders at the Company's AGM on 26 November 2020. The Company 
will make further announcements in due course. 
 
We are committed to continuing to create value for our stakeholders with an 
increased focus on ESG through our 'beyond compliance' philosophy, while 
maintaining our track record as a sustainable, safe, high-margin and long-life 
gold producer with excellent growth potential through exploration, organic 
growth and acquisition initiatives." 
 
PROPOSED DIVID FOR THE FINANCIAL YEARED 30 JUNE 2021 
 
The board has proposed a final dividend of ZAR402.2 million for the 2021 
financial year (approximately US$28.3 million), equal to ZA 18.00000 cents per 
share or approximately US 1.26671 cents per share (0.91556 pence per share). 
The dividend is subject to approval by shareholders at the AGM, which is to be 
convened for Thursday, 25 November 2021. 
 
In light of the robust current financial year results and the favourable 
financial prospects for the next financial year, the board has applied its 
discretion and has proposed a dividend in excess of the Company's dividend 
policy guidelines, which provide for a 40% payout ratio of net cash generated 
from operating activities. 
 

Assuming shareholders approve the final dividend, the following salient dates 
would apply: 
 
Annual general meeting                        Thursday, 25 November 2021 
 
Currency conversion date                      Thursday, 25 November 2021 
 
Currency conversion announcement released by  Friday, 26 November 2021 
11:00 (SA time) 
 
Last date to trade on the JSE                 Tuesday, 30 November 2021 
 
Last date to trade on the LSE                 Wednesday, 1 December 2021 
 
Ex-dividend date on the JSE                   Wednesday, 1 December 2021 
 
Ex-dividend date on the LSE                   Thursday, 2 December 2021 
 
Record date on the JSE and LSE                Friday, 3 December 2021 
 
Payment date                                  Tuesday, 14 December 2021 
 
The pound sterling (GBP) and US$ proposed final dividend was calculated based 
on a total of 2,234,687,537 shares in issue and an illustrative exchange rate 
of US$/ZAR:14.21 and GBP/ZAR:19.66, respectively. 
 
No transfers between the Johannesburg and London registers, between the 
commencement of trading on Wednesday, 1 December 2021 and close of business on 
Friday, 3 December 2021 will be permitted. 
 
No shares may be dematerialised or rematerialised between Wednesday, 1 December 
2021 and Friday, 3 December 2021, both days inclusive. 
 
The South African dividends taxation rate is 20% per ordinary share for 
shareholders who are liable to pay dividends taxation, resulting in a net 
dividend of ZA 14.40000 cents per share for these shareholders. Foreign 
investors may qualify for a lower dividend taxation rate, subject to completing 
a dividend taxation declaration and submitting it to Computershare Investor 
Services Proprietary Limited or Link Asset Services, who manage the South 
African and UK registers, respectively. The Company's South African income 
taxation reference number is 9154588173. The proposed dividend will be paid out 
of the Company's retained earnings, without drawing on any other capital 
reserves. 
 
AUDIT OPINION 
 
The Group's external auditor, PricewaterhouseCoopers LLP (PwC), have issued 
their opinion on the consolidated annual financial statements for the year 
ended 30 June 2021. 
 
There have been two key audit matters identified by PwC which relate to the 
Impairment assessments of goodwill, intangible assets and property, plant and 
equipment and mineral rights - Group, and the Impact of COVID-19 - Group and 
Parent Company. Further details on these key audit matters can be found in the 
full auditor's report which is available on the Company's website https:// 
www.panafricanresources.com/wp-content/uploads/ 
Pan-African-Resources-integrated-annual-report-2021.pdf. 
 
The audit of the consolidated annual financial statements was conducted in 
accordance with the International Standards on Auditing. PwC has expressed an 
unmodified opinion on the consolidated annual financial statements. A copy of 
the audited annual financial statements and the audit report is available for 
inspection at the issuer's registered office. Any reference to future financial 
performance included in this provisional summarised audited results 
announcement has not been reviewed or reported on by the Group's external 
auditor. 
 
DIRECTORS' RESPONSIBILITY 
 
The information in this announcement has been extracted from the provisional 
summarised audited results for the year ended 30 June 2021, but this short-form 
announcement itself has not been reviewed by the Company's auditors. The 
provisional summarised audited results have been prepared under the supervision 
of the financial director, Deon Louw. This short-form announcement is the 
responsibility of the directors of Pan African and is only a summary of the 
information contained in the full announcement. 
 
Any investment decisions should be based on the full announcement and the 
Group's detailed operational and financial summaries. 
 
AVAILABILITY OF THE FULL ANNOUNCEMENT 
 
The full announcement has been released on SENS and is available for viewing 
via the JSE link at https://senspdf.jse.co.za/documents/2021/jse/isse/pan/ 
FYE2021.pdf 
 
and via the Company's website at https://www.panafricanresources.com/wp-content 
/uploads/Pan-African-Resources-year-end-results-SENS-announcement-2021.pdf 
 
Copies of the full announcement may also be requested by emailing 
ExecPA@paf.co.za. 
 
The Company has a dual primary listing on the JSE Limited (JSE) in South Africa 
and the Alternative Investment Market (AIM) market of the London Stock Exchange 
(LSE) as well as a sponsored Level 1 American Depository Receipt (ADR) 
programme in the US through the Bank of New York Mellon 
 
For further information on Pan African, please visit the Company's website at 
 
www.panafricanresources.com 
 
Contact information 
 
Corporate office                               Registered office 
The Firs Building                              Suite 31 
2nd Floor, Office 204                          2nd Floor 
Corner 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                         Office: + 27 (0)11 243 2900 
2900 
 
Hethen Hira                                    Ross Allister/David McKeown 
Pan African Resources PLC                      Peel Hunt LLP 
Head: Investor relations                       Nominated adviser and joint broker 
Tel: + 27 (0)11 243 2900                       Office: +44 (0)20 7418 8900 
Email: hhira@paf.co.za 
 
Phil Dexter/Jane Kirton                        Thomas Rider/Nick Macann 
St James's Corporate Services Limited          BMO Capital Markets Limited 
Company secretary                              Joint broker 
Office: + 44 (0)20 7796 8644                   Office: +44 (0)20 7236 1010 
 
Ciska Kloppers                                 Website: www.panafricanresources.com 
Questco Corporate Advisory Proprietary Limited 
JSE sponsor 
Office: + 27 (0)11 011 9200 
 
 
 
END 
 
 

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September 15, 2021 02:00 ET (06:00 GMT)

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