Pan African Resources PLC
(Incorporated and registered in England and Wales under the 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 or the Group)
(Key features are reported in US dollar (US$) and South African
rand (ZAR))
Provisional summarised audited results
for the year ended 30 June 2020 –
SHORT FORM ANNOUNCEMENT
KEY FEATURES
- The Group responded swiftly in implementing stringent policies
and protocols to mitigate the impact of the COVID-19 pandemic on
its employees and operations
- Gold production increased by 4.1% to 179,457oz after final
refinery adjustments (2019: 172,442oz), exceeding the revised
full-year production guidance of 176,000 oz
- Industry-leading safety performance, both in terms of lost-time
injury and reportable injury frequency rates
- Revenue increased by 25.9% to US$273.7
million (2019: US$217.4
million)
- Profit after taxation increased by 16.6% to US$44.3 million (2019: US$38.0 million)
- Headline earnings increased by 93.0% to US$44.2 million (2019: US$22.9 million)
- Headline earnings per share increased by 92.4% to US
2.29 cents per share (2019: US
1.19 cents per share)
- Earnings per share increased by 16.8% to US 2.30 cents per share (2019: US 1.97 cents per share)
- Net cash generated by operating activities increased by 42.7%
to US$53.8 million (2019:
US$37.7 million)
- Net senior debt* decreased by 51.9% to US$62.0 million (2019: US$129.0 million)
- Improved net debt to net adjusted EBITDA ratio of 0.7 (2019:
2.2)
- Low-cost operations (including Elikhulu, BTRP and Barberton
Mines’ Fairview Mine) achieved an AISC of US$826/oz for the Reporting Period
- The development of Evander Mines’ Egoli project has commenced.
The project’s payback is estimated at less than five years from
inception of construction, with funding provided on a non-dilutive
basis by means of a dedicated debt facility
- Production guidance increased to 190,000oz for the year ending
30 June 2021
- The board has proposed a record final dividend of ZAR 312.9 million or approximately US$18.7 million, at prevailing exchange rates,
subject to approval by shareholders at the annual general meeting
(AGM)
(*Net senior debt includes senior
interest-bearing debt and the outstanding gold loan balance, net of
available cash)
CHIEF EXECUTIVE OFFICER’S
STATEMENT
"Over the past year, our Group's operations demonstrated their
resilience, with gold production in excess of the revised guidance
for the year ended 30 June 2020
(Reporting Period). This operational performance was achieved
despite the impact of the COVID-19 pandemic and the resultant
restrictions imposed to curb the spread of the virus – a testament
to the robustness and operational flexibility of our diversified
portfolio of assets.
Gold production from Elikhulu and the Barberton Tailings
Retreatment Plant (BTRP), our low-cost surface retreatment
operations, have contributed significantly to the profitability of
the Group and demonstrated the benefit of multiple producing
operations.
We are pleased to confirm that we remain firmly on track to
deliver into our guided gold production of 190,000oz for the year
ending 30 June 2021, a substantial
increase compared to the revised production guidance of 176,000oz
for the Reporting Period.
We successfully levered the Group's operational execution
capability to bring Evander Mines' 8
Shaft (8 Shaft) pillar project and the Prince Consort (PC) Shaft's
Level 42 development at Barberton Mines’ New Consort Mine into
steady-state production, and these operations are now an integral
part of our strategy to further reduce costs and increase margins
at our underground mines.
Our Group's safety performance during the Reporting Period is
commendable and we will remain unrelenting in the pursuit of our
ultimate goal of zero harm in the years ahead. We are deeply
saddened by the fatality that occurred after the Reporting Period,
as outlined in the subsequent events section further in the
announcement.
Pan African’s earnings for the Reporting Period were adversely
affected by COVID-19. This impact was however largely offset by the
robust gold price and by our ability to expeditiously ramp up gold
production, in line with government directives, post the initial
hard lockdown period. Despite the impact of COVID-19, we are
pleased to report increased earnings for the Group this year.
We reduced net debt during the Reporting Period by 41.2% to
US$76.4 million (2019: US$129.9 million), which resulted in a
significantly improved net debt to net adjusted EBITDA
ratioAPM of 0.7 (2019: 2.2).
Group all-in sustaining costs (AISC) of US$1,147/oz includes realised hedge losses of
US$12.0 million. Excluding these
realised losses, the Group’s AISC decreased to US$1,078/oz (2019: US$988/oz), which is more reflective of the
actual operational costs and in line with the Group’s targeted AISC
of US$1,000/oz. The AISC for the
Group’s low-cost operations, comprising Elikhulu, BTRP and
Barberton Mines’ Fairview Mine, was US$826/oz for the Reporting Period. We believe
the Group is well on track to produce at an AISC of below
US$1,000/oz for the 2021 financial
year.
Our robust operational and financial performance over the past
year, together with a positive outlook for the year ahead, has
enabled the board to recommend a record dividend of ZAR312.9 million, or US 0.83582 cents per share, for approval by
shareholders at the upcoming AGM.
The Group will continue to invest in our compelling organic
growth projects, most notably the recently announced long-life
Egoli project, which capitalises on the substantial existing shaft
and plant infrastructure, and is also fully licenced and
'shovel-ready'. We are pleased to announce that following the
successful completion of the feasibility study, the Group has
obtained credit approval from Rand Merchant
Bank for the full debt funding of the project’s capital
expenditure. Additional detail on the Egoli project’s development
and funding is provided further in the announcement.
We have prioritised our environmental, social and governance
initiatives, as evidenced by the level of rehabilitation spend for
the Reporting Period, and board approval for the implementation of
a number of significant and sustainable development projects. These
include the 10MW renewable energy solar photovoltaic plant at
Elikhulu and a large-scale agriculture project at Barberton Mines.
The merits of a similar solar photovoltaic plant are also
being considered for Barberton Mines, as well as new agriculture
projects on rehabilitated land at Evander Mines.
We are acutely conscious of the ongoing impact of the COVID-19
pandemic and will continue to implement stringent preventative and
precautionary measures to limit incidences of infection among our
employees and in our host communities, and minimise the potential
adverse impact of the pandemic on the Group 's operations.
In the year ahead, aligned to our strategy of delivering safe,
sustainable and high-margin gold production, we will continue to
direct our focus on creating shareholder value by optimising our
operations, further de-gearing our balance sheet and increasing
dividend distributions. Furthermore, we will also continue
investing in our host communities to improve the living conditions
of these critical stakeholders.
My sincere thanks and gratitude to all of the management and
employees of Pan African for their contribution to the Group
through this difficult time and for ensuring the sustainability of
our operations, now and into the future."
PROPOSED DIVIDEND FOR THE FINANCIAL
YEAR ENDED 30 JUNE 2020
The board has proposed a final dividend of ZAR312.9 million for the 2020 financial year
(approximately US$18.7 million),
equal to ZA 14.00000 cents per share
or approximately US 0.83582 cents per
share (0.65451 pence per share). The
dividend is subject to approval by shareholders at the AGM, which
is convened for Thursday, 26 November
2020.
In light of the robust results for the Reporting Period and the
favourable financial prospects for the operations in the 2021
financial year, the board has applied its discretion and has
proposed a dividend in excess of the Company’s dividend policy’s
guidelines, which provide for a 40% payout ratio of net cash
generated from operating activities.
Assuming shareholders approve the final dividend, the following
salient dates would apply:
Currency conversion
date |
Thursday,
26 November 2020 |
Annual General
Meeting |
Thursday,
26 November 2020 |
Currency conversion
announcement released by 11:00 (SA time) |
Friday,
27 November 2020 |
Last date to trade on the JSE |
Tuesday, 1 December
2020 |
Last date to trade on the LSE |
Wednesday, 2 December
2020 |
Ex-dividend date on the
JSE |
Wednesday, 2 December
2020 |
Ex-dividend date on the
LSE |
Thursday, 3 December
2020 |
Record date on the JSE and LSE |
Friday, 4 December
2020 |
Payment date |
Tuesday, 15 December
2020 |
The pound sterling (GBP) and US$ 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:16.75 and GBP/ZAR:21.39,
respectively. Shareholders on the London register should note that a revised
exchange rate will be communicated before approval at the AGM.
No transfers between the Johannesburg and London registers, between the commencement of
trading on Wednesday, 2 December 2020
and close of business on Friday, 4 December
2020 will be permitted.
No shares may be dematerialised or rematerialised between
Wednesday, 2 December 2020 and Friday, 4 December 2020,
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 11.20000
cents per share. 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 2020.
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-2020.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 2020, 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 FULL ANNOUNCEMENT
The full announcement is accessible via the JSE link at
https://senspdf.jse.co.za/documents/2020/jse/isse/pan/FYE2020.pdf
and via the Company’s website at
https://www.panafricanresources.com/wp-content/uploads/Pan-African-Resources-year-end-results-SENS-announcement-2020.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 in South Africa
and the AIM market of the London Stock Exchange (AIM) as well as a
sponsored level 1 ADR programme in the USA 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
The Firs Office Building
2nd Floor, Office 204
Cnr. Cradock and Biermann Avenues
Rosebank, Johannesburg
South Africa
Office: + 27 (0)11 243 2900
info@paf.co.za |
Registered Office
Suite 31
Second Floor
107 Cheapside
London
EC2V 6DN
United Kingdom
Office: + 44 (0)20 7796 8644 |
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/Jane
Kirton
St James's Corporate Services Limited
Company Secretary
Office: + 44 (0)20 7796 8644 |
Ross Allister/David
McKeown
Peel Hunt LLP
Nominated Adviser and Joint Broker
Office: +44 (0)20 7418 8900 |
Ciska Kloppers
Questco Corporate Advisory Proprietary Limited
JSE Sponsor
Office: + 27 (0)11 011 9200 |
Thomas Rider/Neil
Elliot
BMO Capital Markets Limited
Joint Broker
Office: +44 (0)20 7236 1010 |
Hethen Hira
Pan African Resources PLC
Head: Investor Relations
Tel: + 27 (0)11 243 2900
E-mail: hhira@paf.co.za |
Website:
www.panafricanresources.com |