Pan African Resources Plc - Unaudited Interim financial results for the six months ended 31 december 2023
and registered in Pan African Resources PLC (IncorporatedEngland andWales under the Companies Act 1985 with registration number 3937466 on25 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
UNaudited INTERIM FINANCIAL results for THE SIX Months ended
KEY FEATURES
Production
-- Gold production of 98,458oz (2022: 92,307oz), an increase of 6.7% relative to the six months ended31 December 2022 (previous reporting period) -- The Group is well positioned to deliver into its 2024 financial year production guidance of between 180,000oz to 190,000oz of gold. Increased guidance may be considered in due course.
Safety
-- Improvement in overall safety rates with a total recordable injury frequency rate of 6.13 per million man hours for the year (2022: 8.54 per million man hours) -- Group surface operations reported no recordable injuries for the six months ended31 December 2023 (reporting period) (2022: 5.14 per million man hours) -- Barberton Mines achieved 4 million fatality-free shifts duringNovember 2023 .
Costs and cost outlook
-- Production costs were well managed, despite inflationary pressures, resulting in a reduction in all-in sustaining costs (AISC) per ounce for the reporting period toUS$1,287 /oz (2022:US$1,291 /oz) -- The Group’s operations, which account for more than 85% of the Group’s gold production, produced at an AISC per ounce ofUS$1,149 /oz (2022:US$1,139 /oz) -- The Group’s tailings retreatment operations (Elikhulu Tailings Retreatment Plant (Elikhulu) and Barberton Tailings Retreatment Plant (BTRP)) produced at an AISC ofUS$894 /oz (2022:US$887 /oz) -- Renewable energy generation and water recycling, together with other initiatives to increase the Group’s future gold production, are expected to contribute to a decline in future real AISC -- The AISC per ounce guidance range for the 2024 financial year reduced to betweenUS$1,325 /oz andUS$1,350 /oz (assuming an exchange rate of US$/ZAR:18.50).
Financial
-- Net cash from operating activities increased by 134.5% toUS$27.2 million (2022:US$11.6 million ) -- Profit for the period increased by 46.7% toUS$42.4 million (2022:US$28.9 million ) -- Headline earnings increased by 46.4% toUS$42.6 million (2022:US$29.1 million ) -- Earnings per share and headline earnings per share increased by 46.1% to US2.22 cents per share (2022: US1.52 cents per share) -- Payment of a net dividend ofUS$18.3 million (2022:US$20.0 million ) inDecember 2023 , equating to a dividend yield of 5.9% (2022: 4.6%), at the last traded price on30 June 2023 -- Robust financial position at the end of the reporting period, with net debt ofUS$64.3 million (2022:US$53.7 million ). The increase in net debt is primarily attributable to the capital expenditure ofUS$21.6 million incurred on the Mogale Tailings Retreatment project (MTR project) -- Liquidity remains healthy, with access to immediately available cash ofUS$31.3 million (2022:US$33.9 million ) and undrawn facilities ofUS$86.4 million (2022:US$52.1 million ) at the reporting period-end.
Growth projects
-- MTR project o Steady-state production expected byDecember 2024 o Capital expenditure in line with budget o Incremental annual production of approximately 50,000oz, at an expected AISC per ounce of approximatelyUS$900 /oz, over the 20-year life-of-mine (LoM) (including the Soweto Cluster tailings storage facilities) -- Evander Mines’ 8 Shaft 24, 25 and 26 Level underground expansion project is on track o Construction of phase 2 of the refrigeration plant on 24 Level is currently at an advanced stage, with completion anticipated during the 2024 financial year, as 25 Level mining operations commence o Equipping of the existing 17 Level underground ventilation shaft, with a hoisting capacity of up to 40,000 tonnes per month, is also expected to be completed during the 2024 financial year, improving efficiencies and eliminating the majority of the existing cumbersome conveyor system -- Dewatering of Evander Mines’ 7 Shaft Egoli project is ongoing and once dewatered to below 20 Level, reserve delineation drilling will commence during the first quarter of the 2025 financial year to further define the ore payshoot and its grade variability -- At Barberton Mines, the consolidatedRoyal Sheba and Western Cross projects (Sheba Fault project) are earmarked to provide sustainable ore feed for the BTRP once existing reserves are depleted. The BTRP’s current Mineral Reserves are adequate to maintain production for another two years albeit with a declining profile. A regional drilling campaign has also been initiated to identify other suitable material for processing.
Environmental, social and governance initiatives
-- Construction of Fairview Mine’s 8.75MW solar plant is progressing with plant commissioning expected duringJune 2024 -- Barberton Mines andEvander Mines handed over community Social and Labour Plan infrastructure development projects, including new classrooms and science and computer laboratories, that will benefit some 2,800 community learners annually -- Commenced environmental rehabilitation at the MTR project sites, which is already positively impacting the environment and local living conditions.
-- On-the-ground exploration activities included geological mapping and sampling and target generation for planned drilling activities, with drilling expected to commence during the last quarter of the 2024 financial year.
This announcement contains inside information.
CHIEF EXECUTIVE OFFICER’S STATEMENT
“Pan African delivered an excellent safety, production and financial performance for the reporting period, which positions the Group well to deliver on our production and cost guidance for the full financial year. We are deeply saddened by the fatality that occurred at Elikhulu after the reporting period, as outlined in the subsequent events section further in the announcement.
Despite inflationary pressures, the Group managed to curtail AISC, with unit costs benefiting from increased gold production, the Group’s cost-conscious culture and the weaker US$/ZAR exchange rate.
The higher US$ gold price, improved production and cost and capital discipline contributed to the much-improved cash generation of
The Group’s surface remining operations performed exceptionally well, with their sub
In addition to being a compelling investment proposition, large-scale tailings retreatment operations provide much-needed economic stimulus and employment in defunct mining regions with challenging socio-economic conditions. Our ‘beyond compliance’ community development strategy, in collaboration with other critical role players, has a tangible and meaningful positive impact in the areas where we operate.
The introduction of continuous operations at Barberton Mines’ Fairview and
The development of Evander Mines’ 24, 25 and 26 Level project is progressing well, with ramped-up mining operations at 24 Level already contributing to the replacement of ounces as mining from the 8 Shaft’s pillar nears completion. The significant capital expenditure already spent on this project to improve and optimise the infrastructure will enable consistent and sustainable production of an average of 65,000oz annually from this operation in the long term, and allow it to maintain its status as one of the lowest-cost underground gold mines in
Following the recommencement of our gold exploration activities in
In the short term, our priority is to deliver into the production guidance for the 2024 financial year and commission the MTR project on schedule and within budget, which will elevate Pan African into the next tier of global gold producers.
We are well positioned to deliver on our operational and strategic objectives for the 2024 financial year, and if the current gold price tailwinds persist, shareholders can look forward to a continuation of the reporting period’s excellent financial performance for the full financial year.”
DIRECTORS’ RESPONSIBILITY
The information in this announcement has been extracted from the unaudited interim financial results for the six months ended
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 is accessible via the JSE link at https://senspdf.jse.co.za/documents/2024/jse/isse/pan/INT2023.pdf
and via the Company’s website at https://www.panafricanresources.com/wp-content/uploads/Pan-African-Resources-interim-results-SENS-announcement-2024.pdf
Copies of the full announcement may also be requested by emailing ExecPA@paf.co.za and electronically via the sponsor (sponsor@questco.co.za) at no charge during business hours.
The Company has a dual primary listing on the JSE Limited in
For further information on Pan African, please visit the Company's website at www.panafricanresources.com
Rosebank
___________________________________________________________________________ |Corporate information | |___________________________________________________________________________| |Corporate Office | | | |Registered Office | |The Firs Building | | | |107 Cheapside | |2nd Floor, Office 204 | | | |2nd Floor | |Cnr Cradock and Biermann Avenues | | | |London | |Rosebank, Johannesburg | | | |EC2V 6DN | |South Africa | | | |United Kingdom | |Office: + 27 (0) 11 243 2900 | | | |Office: + 44 (0) 20 7796 8644 | |info@paf.co.za | | |______________________________________|____________________________________| |Chief executive officer |Financial director and debt officer | | | | |Cobus Loots |Deon Louw | | | | |Office: + 27 (0) 11 243 2900 |Office: + 27 (0) 11 243 2900 | |______________________________________|____________________________________| |Head: Investor relations | | | | | |Hethen Hira |Website: www.panafricanresources.com| |Tel: + 27 (0) 11 243 2900 | | |Email: hhira@paf.co.za | | |______________________________________|____________________________________| |Company secretary |Nominated adviser and joint broker | | | | |Jane Kirton |Ross Allister/Bhavesh Patel | | | | |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|BMO Capital Markets Limited | |Limited | | | |Office: +44 (0) 20 7236 1010 | |Office: + 27 (0) 11 011 9200 | | |______________________________________|____________________________________| | |Joint broker | | | | | |Matthew Armitt/Jennifer Lee | | | | | |Joh. Berenberg, Gossler & Co KG | | |(Berenberg) | | | | | |Office: +44 (0) 20 3207 7800 | |______________________________________|____________________________________|