Pan
African Resources PLC
(Incorporated
and registered in England and Wales under the Companies Act 1985
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)
|
Pan
African Resources Funding Company Limited
Incorporated
in the Republic of South Africa with limited liability
Registration
number: 2012/021237/06
Alpha
code: PARI
(Funding
Company)
|
(Key
features are reported in United
States dollar (US$) or South African rand (ZAR), to the
extent relevant.)
Provisional summarised audited results for the year ended
30 June 2023 – SHORT FORM
ANNOUNCEMENT
KEY FEATURES
Production
-
Gold
production of 175,209oz (2022: 205,688oz), in line with revised
guidance
-
Increased
production outlook for the 2024 financial year – guidance of
178,000oz to 190,000oz
Safety
-
As
previously announced, a fatal accident occurred at Evander Mines in
March 2023, following 1 million
fatality-free shifts at the operation prior to the
accident
-
Improvement
in overall safety rates compared to the previous financial year,
with a total recordable injury frequency rate of 7.96 per million
man hours for the year (2022: 8.95 per million man
hours)
-
Focused
initiatives implemented to further enhance safety
performance
Costs
and cost outlook
-
All-in
sustaining costs (AISCAPM)
for the current financial year of US$1,327/oz, a sub-US$ inflation increase of 3.3%
(US$1,284/oz for the financial year
ended 30 June
-
AISC in
line with revised guidance for 2023 of between US$1,325/oz to US$1,350/oz
-
AISC of
US$1,152/oz (2022: US$1,145/oz) for our lower-cost operations,
comprising all operations, excluding Sheba Mine and Consort Mine,
which account for more than 81%
(2022:
87%) of annual production
-
Remedial
measures implemented to reduce real AISC at high-cost operations
(Sheba and Consort Mines)
-
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
-
2024 AISC
guidance of US$1,350/oz (assuming an
exchange rate of US$/ZAR:18.50)
Financial
-
Net cash
generated from operating activities of US$100.1 million (2022: US$110.0 million)
-
Profit for
the year of US$60.7 million (2022:
US$75.0 million)
-
Headline
earningsAPM
of
US$60.4 million (2022: US$75.6 million)
-
Earnings
per share of US 3.19 cents per share
(2022: US 3.90 cents per share) and
headline earnings per shareAPM
of US
3.15 cents per share (2022: US
3.93 cents per share)
-
Robust
financial position at year-end, with net debtAPM
of
US$22.0 million (2022: US$13.0 million)
-
Liquidity
remains healthy, with access to immediately available cash and
undrawn facilities of US$84.7 million
(2022: US$69.4 million) at financial
year-end. Post the current financial year, the Company also closed
the dedicated Mogale Tailings Retreatment project (MTR project)
senior debt facility of US$70.3
million
Proposed
dividend
-
Sector-leading
final dividend of ZA 18.00000 cents
per share (or US 0.95592 cents per
share at an exchange rate of US$/ZAR:18.83) proposed for approval
at the upcoming annual general meeting (AGM)
Growth
projects
-
The MTR
project construction commenced in July
2023 with steady-state production expected by December 2024
-
Evander
Mines’ 8 Shaft 24, 25 and 26 Level underground expansion project is
on track
-
Refrigeration
plant at 24 Level commissioned in phases to facilitate mining at
depth
-
Development
to access the 25 and 26 Level mining areas has
commenced
-
Equipping
of an existing underground ventilation shaft for rock hoisting
capacity of up to 40,000tpm is planned to be completed during the
third quarter of the 2024 financial year, improving efficiencies
and eliminating the cumbersome and labour-intensive conveyor
system
Environmental,
social and governance (ESG) initiatives
-
Established
a renewable energy roadmap to decarbonisation – construction of
Fairview Mine’s solar facility commenced at Barberton
Mines
-
Commissioned
Evander Mines’ water recycling plant to reduce potable water
requirements and lower costs
Sudan exploration
-
Exploration activities resumed post the reporting period, following
a detailed risk assessment of the in-country operating environment
in the exploration area
CHIEF
EXECUTIVE OFFICER’S STATEMENT
Cobus Loots, Pan African’s chief executive officer,
commented:
“Pan
African delivered a resilient financial performance for the current
financial year, with a much-improved rand gold price compensating
for lower production from our underground
operations.
We are
confident that the measures we are implementing, specifically at
Barberton Mines’ underground operations, will result in higher
production in the future, with production guidance increased for
the 2024 financial year. If the current rand gold price tailwinds
persist, we can look forward to another robust financial
performance from Pan African in the year ahead.
Our
surface remining operations, the Elikhulu Tailings Retreatment
Plant (Elikhulu) and the Barberton Tailings Retreatment Plant,
performed in line with expectations during the past financial year,
contributing significantly to the Group’s production, cash flows
and profits. The consistent performance of these low-cost and, in
the case of Elikhulu, long-life assets, demonstrates their
importance in our portfolio and reinforces our decision to develop
the MTR project.
Pan
African has an outstanding track record in the development and
operation of tailings retreatment operations. Full-scale
construction of the MTR plant commenced on schedule in July this
year, with commissioning anticipated within the next 18 months. The
MTR project’s incremental production of approximately 50,000oz per
year will contribute to almost 50% of the Group’s annual gold
output being sourced from low-cost, safe, surface remining
operations. In addition to being a compelling investment,
large-scale tailings retreatment operations of this nature
rehabilitate and restore the environment, while also providing
much-needed employment and economic opportunities.
The
development of Evander Mines’ 24 Level project is progressing well,
with crews being redeployed to the 24 Level area as the 8 Shaft’s
pillar mining nears completion. Improved mining flexibility,
together with other initiatives being implemented to ensure that
infrastructure availability is optimised, will ensure sustainable
production from this long-life underground
operation.
We are
grateful that after year-end we managed to resume our gold
exploration activities in Sudan.
The decision to recommence operations was only made after a
comprehensive risk assessment of the in-country operating
environment in the exploration area, and we will continue to
closely monitor the political situation.
Globally,
gold producers have experienced severe cost inflation in recent
years.
Despite
inflationary pressures on input costs with, specifically, reagents
used in processing and electricity costs being subject to large
increases, the financial results for the year benefited from Pan
African’s culture of cost control.
AISC
increased by only 3.3% in US$ to US$1,327/oz, with the depreciation of the rand
relative to the US$ providing an offset to the higher rand unit
costs.
We
ended the financial year in a strong financial position with net
debt of only US$22.0 million, despite
a substantial capital investment programme and the payment of an
attractive dividend to shareholders in the past year. The fact that
we are able to maintain this dividend in rand terms, while
undertaking the MTR project’s construction, our largest capital
project ever, is a testament to the quality of our
portfolio.
Excellent
progress was also made with our ESG initiatives, with an increased
focus on renewable energy projects. In May
2023, construction of the Group’s second solar plant
commenced at Barberton Mines. This plant, with a capacity of
8.75MW, will supply most of the daytime power requirements for the
Fairview Mine. The Group has also signed a third-party power
purchase agreement for the off-site provision of 40MW of wheeled
power over a period of up to 15 years. Along with Evander Mines’
operating solar plant, these projects are expected to reduce our
carbon emissions by up to 30% (by 2030), as well as deliver
associated cost benefits, as the price of grid power continues to
increase at above-inflation rates. Evander Mines’ water recycling
plant is also expected to generate attractive cost savings as
underground water can now be used as process water, reducing our
reliance on municipal resources.
Reflecting
on the past year, we wish to again express our condolences to the
family, friends and co-workers of our colleague, Mr Sahlukaniso,
who was fatally injured in a fall of ground accident at our Evander
Mines’ underground mine in March
2023. Pan African remains steadfast in its resolve to
achieve a zero-harm working environment in the coming
years.
In
terms of the outlook for the year ahead, we will continue to
balance safe, sustainable gold production, the successful delivery
of our transformational growth projects, cash returns to
shareholders and all our other initiatives to the benefit of our
stakeholders. We are well positioned to exceed the production
achieved in the current financial year, with estimated production
of between 178,000oz and 190,000oz forecast for the 2024 financial
year.”
PROPOSED
DIVIDEND FOR THE FINANCIAL YEAR ENDED 30
JUNE 2023
The board
has proposed a final dividend of ZAR400.1
million for the 2023 financial year (approximately
US$21.2 million), equal to ZA
18.00000 cents per share or
approximately US 0.95592 cents per
share (0.75219 pence per share). A
dividend of ZA 18.00000 cents per
share or approximately US 1.05820
cents per share (or 0.86915
pence per share) was paid for the 2022 financial year. The
dividend is subject to approval by shareholders at the AGM, which
is to be convened on Thursday, 23 November
2023.
Assuming
shareholders approve the final dividend, the following salient
dates would apply:
Annual
general meeting
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Thursday,
23 November 2023
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Currency
conversion date
|
Thursday,
23 November 2023
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Currency
conversion announcement released by 11:00 (SA time)
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Friday, 24
November 2023
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Last date
to trade on the JSE
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Tuesday,
28 November 2023
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Last date
to trade on the LSE
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Wednesday,
29 November 2023
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Ex-dividend
date on the JSE
|
Wednesday,
29 November 2023
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Ex-dividend
date on the LSE
|
Thursday,
30 November 2023
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Record
date on the JSE and LSE
|
Friday, 1
December 2023
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Payment
date
|
Tuesday,
12 December 2023
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The
British pound (GBP) and US$ proposed final dividend was calculated
based on a total of 2,222,862,046 shares in issue and an
illustrative exchange rate of US$/ZAR:18.83 and GBP/ZAR:23.93,
respectively.
No
transfers between the Johannesburg
and London registers, between the
commencement of trading on Wednesday, 29
November 2023 and close of business on Friday, 1 December 2023 will be permitted.
No shares
may be dematerialised or rematerialised between Wednesday,
29 November 2023 and Friday,
1 December
2023, both days inclusive.
The South
African dividend taxation rate is 20% per ordinary share for
shareholders who are liable to pay dividend 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), has
issued their opinion on the consolidated annual financial
statements for the year ended 30 June
2023.
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 2023, 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 and does not contain full or complete
details.
Any
investment decisions should be based on the full announcement and
the Group’s detailed operational and financial
summaries.
AVAILABILITY
OF THE ANNUAL FINANCIAL STATEMENTS AND PROVISIONAL SUMMARISED
AUDITED RESULTS
The annual
financial statements (together with PwC’s audit opinion thereon)
have been released on SENS and are available for viewing via the
JSE Limited (JSE) link at
https://senspdf.jse.co.za/documents/2023/jse/isse/pan/FYE2023.pdf
and via
the Company’s website at
https://www.panafricanresources.com/wp-content/uploads/Pan-African-Resources-integrated-annual-report-2023.pdf.
The
provisional summarised audited results for the year ended
30 June 2023 can be viewed via the
Company’s website at
https://www.panafricanresources.com/wp-content/uploads/Pan-African-Resources-year-end-results-SENS-announcement-2023.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 Alternative Investments
Market (AIM) of the London Stock Exchange (LSE) as well as a
sponsored Level 1 ADR programme in the USA through the Bank of New York Mellon and a
secondary listing on the A2X Market.
For
further information on Pan African, please visit the Company's
website at
www.panafricanresources.com
Rosebank
13 September 2023
Corporate
information
|
Corporate
office
The Firs
Building
2nd Floor,
Office 204
Corner
Cradock and Biermann Avenues
Rosebank,
Johannesburg
South
Africa
Office: +
27 (0) 11 243 2900
info@paf.co.za
|
Registered
office
2nd
Floor
107
Cheapside
London
EC2V
6DN
United
Kingdom
Office: +
44 (0) 20 7796 8644
info@paf.co.za
|
Chief
executive officer
Cobus
Loots
Office: +
27 (0) 11 243 2900
|
Financial
director and debt officer
Deon
Louw
Office: +
27 (0) 11 243 2900
|
Head
investor relations
Hethen
Hira
Tel: + 27
(0) 11 243 2900
Email:
hhira@paf.co.za
|
Website:
www.panafricanresources.com
|
Company
secretary
Jane
Kirton
St
James's Corporate Services Limited
Office: +
44 (0) 20 7796 8644
|
Nominated
adviser and joint broker
Ross
Allister/David McKeown
Peel
Hunt LLP
Office:
+44 (0) 20 7418 8900
|
JSE
sponsor
Ciska
Kloppers
Questco
Corporate Advisory Proprietary Limited
Office: +
27 (0)
11 011 9200
|
Joint
broker
Thomas
Rider/Nick Macann
BMO
Capital Markets Limited
Office:
+44 (0) 20 7236 1010
|
|
Joint
broker
Matthew
Armitt/Jennifer Lee
Joh.
Berenberg, Gossler & Co KG
Office:
+44 (0) 20 3207 7800
|