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”)
|
Pan
African Resources Funding Company Limited
Incorporated
in the Republic of South Africa with limited liability
Registration
number: 2012/021237/06
Alpha
code: PARI
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PAN
AFRICAN ANNOUNCES SIGNIFICANT PROGRESS ON ITS RENEWABLE ENERGY
DEVELOPMENTS
Pan
African is pleased to update shareholders on developments at the
Group’s 8.75MWAC
(10.465
MWP)
Barberton Mines’ Fairview solar facility and the conclusion of a
Power Purchase Agreement (PPA) with Sturdee Energy (Pty) Ltd
(Sturdee Energy) comprising a 40MW wheeled renewable energy
solution.
Highlights
Barberton
Mines’ Fairview solar facility
-
Engineering,
procurement and construction (EPC) agreement entered into with JUWI
Renewable Energies (JUWI), a leading solar, wind and hybrid project
developer for the construction of an 8.75MWAC
solar
photovoltaic (PV) renewable energy facility (Fairview solar
facility) at Barberton Mines’ Fairview operation. The plant is
expected to provide:
- cost
savings of approximately ZAR26
million (US$1.4 million at a
prevailing exchange rate of approximately US$/ZAR: 18.00) in year
one with an average of R40 million per year (US$2.2 million) per year over the life of the
plant
- a
reduction in CO2
emissions
of approximately 22,000t/year
Sturdee
Energy Power Purchase Agreement
-
A PPA has
been entered into for a 40MW wheeled renewable energy solution,
with the generation capacity available to any of the Group's
operations
Other
initiatives
-
Pan
African has also made significant progress in implementing its
renewable energy strategy, which aims to achieve long-term
sustainability by securing a stable energy supply, reducing
CO2
emissions
and realising all-in sustaining cost (AISC) savings through large
scale renewable energy projects. The Group’s ongoing projects
include:
- A
feasibility study being progressed to expand Evander Mines’ 10MW
solar PV renewable energy facility by at least an additional 12MW
to secure additional capacity for Evander Mines’ long-life 24, 25
and 26 Level projects
- A
feasibility study has also commenced on a solar PV renewable energy
facility for the Mogale Tailings Retreatment Plant
-
Following
the successful implementation of these projects, and based on
preliminary feasibility studies, Pan African will generate
approximately 28% of its power requirements through renewable
energy, with a cumulative estimated reduction of 137,000t in
CO2
emissions
annually and projected annual cost savings of up to ZAR154 million (US$8.6
million) for the Group, at current estimated Eskom tariffs
and projected future price increases.
In
May 2022, Pan African was the first
South African mining company to successfully commission a
utility-scale, grid-tied solar PV plant with Evander Mines’
10MWAC
(12MWP)
solar PV renewable energy facility (Evander solar facility). The
EPC works for the project were also completed by JUWI.
Fairview
Solar PV renewable energy facility
In early
2020, Pan African commenced studies for the development of the
8.75MWAC
Fairview
solar facility at its Barberton operations. This facility is now
fully permitted, including its water use licence, environmental
approvals and its registration with the National Energy Regulator
of South Africa
(NERSA).
To
accelerate the site work at the Fairview solar facility, an early
works phase was undertaken by JUWI and is nearing completion. This
phase included various activities such as the facility design and
conducting specialist studies that are essential for completing the
detailed design and cost estimation for the subsequent EPC
work.
The
Fairview solar facility’s plant is expected to generate
approximately ZAR2.2 million in
monthly cost savings in year one. Assuming an estimated annual
tariff increase rate, by Eskom, of 10% per year, a payback period
of approximately 8 years is estimated. Based on preliminary
studies, Fairview’s solar facility will reduce the Group’s carbon
emissions by some 22,000t of CO2
per annum.
The solar facility is expected to have an economic life in excess
of 25 years, which is sufficient for the mine’s current 20-year
life of mine, based on current Mineral Reserve
estimates.
JUWI is
one of the world’s leading renewable energy companies specialising
in the development, EPC, operation and maintenance of private and
public utility scale solar and wind energy projects. JUWI has
successfully installed over 400 MW of renewable power facilities in
South Africa (5.5 GW globally) and
has developed wind and solar sites across South Africa. Additionally, JUWI is listed in
the top 10 solar EPC contractors globally and is the leading
renewable energy specialist for mining companies. JUWI was also the
EPC provider during the construction of Pan African’s Evander solar
facility.
The
construction of Fairview’s solar facility will be financed on a
ring-fenced debt basis similar to the Evander solar facility.
Financing Proposals have been obtained from a number of interested
parties and are expected to be finalised and available by
June 2023.
Sturdee
Energy Power Purchase Agreement
Pan
African has also entered into a PPA with Sturdee Energy for a
wheeled renewable energy solution of 40MW from its Bela-Bela
Project (Bela) solar PV facility in Limpopo to any of the Group’s
operations.
The
initial PPA term is for 10 years, with the option to extend it for
another 5 years. The indicative tariffs over the extended 15-year
period will be significantly lower than that expected from Eskom.
The Bela solar PV facility is expected to provide
approximately 112,399
MWh of
renewable energy per annum to Pan African, resulting in an
estimated ZAR646 million
NPV10
savings
over a 10-year period and ZAR884
million over a 15-year period.
There may
also be further tariff savings if this 40MW Bela project is scaled
up to its permitted 75MW of solar power. The resultant economies of
scale associated with the construction of such a larger project
should result in an even lower tariff for Pan African.
The Bela
solar PV facility has already obtained the key permits required for
construction. This includes environmental approvals, water use
license, and rezoning approvals. The
facility will be connected to the Eskom grid via a 132 kV line in
the area of Bela Bela.
The PPA is
subject to standard terms and conditions typical for agreements of
this nature and will become effective following the construction of
the Bela solar PV facility, estimated to take place during the 2025
calendar year. The Bela project will be funded by third party
financial institutions with no upfront contribution from Pan
African.
Sturdee
Energy is an African independent power producer with a track record
of developing, owning and operating over 600MW of renewable energy
projects in South Africa. Its
vision is to deliver economic growth and socio-economic development
to Africa through the production
of reliable renewable energy. Further, Sturdee Energy’s focus is
delivering renewable energy to corporate and industrial customers
on short and long term power purchase agreements through onsite or
wheeled power.
Pan
African’s renewable energy roadmap to
decarbonisation
Pan
African has embarked on a renewable energy strategy that
includes:
-
The
construction of its 10MWAC
Evander
solar PV facility, the first utility-scale, grid-tied solar PV
plant to be commissioned in South
Africa
-
The
construction of an 8.75 MWAC
solar PV
facility at Fairview Mines
-
The
entering into of the 40MWAC Sturdee Energy PPA for the provision of
wheeled power over a period of up to 15 years
-
The
development and construction of a second solar PV facility with a
minimum output of 12MWAC
at Evander
Mines
-
The
construction of a solar PV facility at its Mogale
operations.
Cobus Loots, Chief
Executive Officer of Pan African Resources,
commented:
“Our
solar PV renewable energy initiatives are key components in
progressing Pan African’s renewable energy strategy and in
achieving our sustainability targets. In addition to measurably
reducing the Group’s carbon emissions, these projects will assist
in stabilising the electricity supply to our operations, while also
realising commensurate cost savings that will assist in reducing
our overall AISC per ounce of production in the longer
term.”
Certain
information communicated in this announcement was, prior to its
publication, inside information for the purposes of Article 7 of
Regulation 596/2014.
Rosebank
15 May 2023
For
further information on Pan African, please visit the Company's
website at
www.panafricanresources.com
Corporate
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
2nd
Floor
107
Cheapside
London
EC2V
6DN
United
Kingdom
Office: +
44 (0)20 7796 8644
info@paf.co.za
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Chief
executive officer
Cobus
Loots
Office: +
27 (0)11 243 2900
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Financial
director
Deon
Louw
Office: +
27 (0)11 243 2900
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Head:
Investor relations
Hethen
Hira
Tel: + 27
(0)11 243 2900
E-mail:
hhira@paf.co.za
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Website:
www.panafricanresources.com
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Company
secretary
Jane
Kirton
St
James's Corporate Services Limited
Office: +
44 (0)20 7796 8644
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Nominated
adviser and joint broker
Ross
Allister/David McKeown
Peel
Hunt LLP
Office:
+44 (0)20 7418 8900
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JSE
Sponsor and JSE debt sponsor
Ciska
Kloppers
Questco
Corporate Advisory Proprietary Limited
Office: +
27 (0)11
011 9200
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Joint
broker
Thomas
Rider/Nick Macann
BMO
Capital Markets Limited
Office:
+44 (0)20 7236 1010
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Joint
broker
Matthew
Armitt/Jennifer Lee
Joh.
Berenberg, Gossler & Co KG
Office:
+44 (0)20 3207 7800
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