Pan African Resources Plc Summarised audited results for the y/e 30 June 2022
14 Setembro 2022 - 3:00AM
UK Regulatory
TIDMPAF
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 United States (US) dollar (US$) and South African
rand (ZAR))
Provisional summarised audited results for the year ended 30 June 2022 - SHORT
FORM ANNOUNCEMENT
HIGHLIGHTS
* Excellent safety record maintained
* Record gold production, with production increasing by 1.9% to 205,688oz
(2021: 201,777oz)
* All-in sustaining costs (AISCAPM) for the financial year ended 30 June 2022
(current financial year) of US$1,284/oz (US$1,261/oz), a marginal increase
of 1.8% when compared to the financial year ended 30 June 2021 (previous
financial year)
* When higher cost operations are excluded, the AISCAPM for 87% of the
Group's gold production was US$1,145/oz
* Net cash from operating activities increased by 45.1% to US$110.0 million
(2021: US$75.8 million)
* Profit after tax of US$75.0 million (2021: US$74.7 million) and headline
earnings of US$75.6 million (2021: US$74.7 million)
* Earnings per share (EPS) increased to US 3.90 cents per share (2021: US
3.87 cents per share) and headline earnings per share (HEPSAPM) increased
to US 3.93 cents per share (2021: US 3.87 cents per share)
* Net debt reduced by 66.7% to US$13.0 million (2021: US$39.0 million)
* Final dividend of ZA 18.00000 cents per share or US 1.04046 cents per share
at the prevailing exchange rate, proposed for approval at the upcoming
Annual General Meeting (AGM)
* Evander Mines' underground life-of-mine (LoM) extended to 14 years, with
increased expected gold production and development capital internally
funded
* Transaction to acquire Mintails tailings retreatment assets expected to be
concluded by 30 September 2022
* First phase of share buy-back programme of US$3.2 million (2021: US$ 0
million) completed
* 9.9MW solar photovoltaic (PV) renewable energy plant at Evander fully
commissioned
* First commercial harvest at Barberton's Blueberry project in progress
CHIEF EXECUTIVE OFFICER'S STATEMENT
Overview
"Over the past year the Group has again made meaningful progress with our
operational performance and growth projects. Our teams achieved record gold
production of 205,688oz from what is now a better diversified portfolio of
assets. The organic growth projects at the Evander Mines' underground
operations are on schedule to commence delivering within their anticipated
production timeframes.
Importantly, the outstanding production performance was achieved without
compromising our industry leading safety record, where we have moved closer to
our goal of a zero-harm working environment.
A key focus for the year ahead will be the smaller underground operations at
Barberton Mines, to ensure that these high-grade assets perform to their full
potential.
We have further strengthened our statement of financial position relative to
the previous financial year, notwithstanding the payment of a record dividend
and incurring significant growth and sustaining capital expenditure. In
proposing the final dividend for the current financial year, the board
considered all capital allocation priorities, carefully balancing opportunities
for increased production and diversification with returning cash to
shareholders.
Financial Performance
The Group's AISC increased marginally by 1.8% to US$1,284/oz (2021: US$1,261/
oz). Group operations (excluding Consort and Sheba Mines), which account for
87% of the Group's total production, achieved an AISC of US$1,145/oz, resulting
in an AISC margin of 37.2% on the average gold price of US$1,824/oz earned by
the Group from these operations.
The Group has embarked on a number of initiatives to reduce its cost of
production in real terms, with future cost savings expected from solar PV
renewable energy projects. Savings at the commissioned Evander solar PV
facility currently averages approximately US$250 thousand a month during the
winter months, following full commissioning in May 2022. Construction has
commenced at Barberton Mines' 8MW solar PV plant, with completion expected
during the fourth quarter of the 2023 calendar year. The Group plans to
generate 30MW of solar PV renewable energy by 2024, with meaningful cost
savings and a large reduction in carbon emissions.
The relatively high rand gold price, together with an excellent operational
performance, has enabled the Group to significantly reduce Group net debt by
66.7% to US$13.0 million (2021: US$39.0 million).
Health and safety and COVID-19
The health and safety of our employees remains our number one priority and we
have again achieved an overall improvement in recordable injuries across the
Group. All our operations achieved excellent safety rates during the current
financial year. Improvements in safety protocols and operating procedures are
ongoing, with the Group implementing innovative practices to continue to
encourage safe behaviour.
Our COVID-19 precautions and safety measures remain in place and our
vaccination drives and awareness programmes have resulted in over 80% of our
employees being fully vaccinated, a far higher percentage than the country's
overall vaccination rates.
Operational overview
The Group's record gold production of 205,688oz (2021: 201,777oz) exceeded our
revised production guidance of 200,000oz.
Barberton Mines retained its improved ?exibility at the Fairview operation
during the past year through accelerated underground development programmes at
the high-grade MRC and Rossiter orebodies.
The BTRP produced 19,560oz (2021: 18,239oz) for the 2022 ?nancial year at an
AISC of US$891/oz (2021: US$946/oz). The BTRP's remaining LoM from current
tailings sources is estimated at two years. Additional feed sources are being
investigated, including the possible conversion of the BTRP to a hard rock
operation with supplemented ore from Barberton Mines' Royal Sheba orebody,
where extraction of a 10,000t bulk sample is currently in progress.
Elikhulu is one of the lowest-cost gold mining operations in Southern Africa,
producing 52,220oz (2021: 51,459oz) at an AISC of US$1,003/oz (2021: US$846/
oz), with a remaining operational life of 11 years. The plant processes
approximately 1.2Mt of historical tailings per month from the three tailings
storage facilities (TSFs) at Kinross, Leslie/Bracken and Winkelhaak.
Reprocessing results in the residues being re-deposited to a single TSF site,
reducing our environmental footprint.
At the end of the 2022 financial year, the Evander Mines' 8 Shaft pillar had a
remaining life of approximately one year. Mining of the 8 Shaft pillar has been
a great success, with simpli?ed logistics, modern underground mining support
and favourable working conditions.
Growth projects overview
The Group constantly evaluates opportunities to bring its large reserve base to
account with the work at Evander Mines' 8 Shaft being testament to these
efforts. This operation has been given a new lease of life, transformed from a
high-cost and marginal mine in a cash generative and long-life asset with the
inclusion of 24, 25 and 26 Levels, which extends its LoM to 14 years.
Our work on the Mintails Mogale's assets has demonstrated a compelling project
and we look forward to concluding the acquisition and progressing the
development of this mine in the year ahead.
Environmental, social and governance (ESG)
Our 'beyond compliance' approach to ESG continues, with our projects making a
meaningful and positive difference for many of our stakeholders.
We achieved significant milestones during the year, including the commissioning
of the 9.9MW solar PV renewable energy project at Elikhulu, the first of its
scale in the South African mining industry. We have since completed a
feasibility study for expanding this facility by a further 12MW, with the
additional capacity allocated to our long-life underground projects. At
Barberton Mines, site establishment has commenced on an 8MW solar PV renewable
energy plant.
Commercial harvesting of blueberries is underway at the Barberton Blueberries
project and employment of seasonal labour is ramping up, as planned. Workers
from the surrounding communities now receive a steady income and the project is
providing a much needed economic opportunity to communities surrounding our
Barberton operations.
We are investigating other local economic development projects at Barberton,
including initiatives that will preserve the biodiversity of the area while
creating employment for local communities. Apart from our contribution to rhino
conservation, we aim to further strengthen our collaborative approach to assist
with the sustainability of the Barberton Mountainland area. In the current
financial year approximately US$1.7 million of our Barberton Mines' security
spend also assisted in safeguarding parts of the nature reserve.
Outlook for the 2023 financial year
The Group expects its production for the 2023 financial year to be in line with
production achieved in the 2022 financial year. We are positioned for further
growth as we move closer to commissioning our organic projects and seek to
imminently conclude the Mintails transaction."
PROPOSED DIVID FOR THE FINANCIAL YEARED 30 JUNE 2022
The board has proposed a final dividend of ZAR400.1 million for the 2022
financial year (approximately US$23.1 million), equal to ZA 18.00000 cents per
share or approximately US 1.04046 cents per share (0.90452 pence per share). A
dividend of ZA 18.00000 cents per share or approximately US 1.13924 cents per
share (or 0.84654 pence per share) was paid for the 2021 financial year. The
dividend is subject to approval by shareholders at the AGM, which is to be
convened for Thursday, 24 November 2022.
In light of the robust current financial year results, the board has applied
its discretion and has proposed a dividend in line with the Company's dividend
policy's guidelines.
Assuming shareholders approve the final dividend, the following salient dates
would apply:
Annual General Meeting Thursday, 24 November 2022
Currency conversion date Thursday, 24 November 2022
Currency conversion announcement released by Friday, 25 November 2022
11:00 (SA time)
Last date to trade on the JSE Tuesday, 29 November 2022
Last date to trade on the LSE Wednesday, 30 November 2022
Ex-dividend date on the JSE Wednesday, 30 November 2022
Ex-dividend date on the LSE Thursday, 1 December 2022
Record date on the JSE and LSE Friday, 2 December 2022
Payment date Tuesday, 13 December 2022
The pound sterling (GBP) and US$ 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:17.30 and GBP/ZAR: 19.90, respectively.
No transfers between the Johannesburg and London registers, between the
commencement of trading on Wednesday, 30 November 2022 and close of business on
Friday, 2 December 2022 will be permitted.
No shares may be dematerialised or rematerialised between Wednesday, 30
November 2022 and Friday, 2 December 2022, 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 2022.
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 Carrying value of investments in
subsidiaries and receivables from Group companies - 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-2022.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 2022, 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 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/2022/jse/isse/pan/
FYE2022.pdf
and via the Company's website at https://www.panafricanresources.com/wp-content
/uploads/Pan-African-Resources-year-end-results-SENS-announcement-2022.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 and a secondary
listing on the A2X markets.
For further information on Pan African, please visit the Company's website at
www.panafricanresources.com
Corporate information
Corporate Office Registered Office
The Firs Office Building 2nd floor
2nd Floor, Office 204 107 Cheapside
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 info@paf.co.za
Chief Executive Officer Financial Director
Cobus Loots Deon Louw
Office: + 27 (0)11 243 Office: + 27 (0)11 243
2900 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/David McKeown
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
END
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