Pan African Resources Plc - Revised Production Guidance for the year ending 30 June 2024, Production Guidance for 2025 Financial Year and MTR Project Update

 

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

 

 

PanAfricanispleasedtoprovideshareholdersandnoteholderswithanupdateasfollows:

Groupproductionandcostguidance

 

• Production guidance for the year ending 30 June 2024 (current financial year) narrowed to between 186,000oz to 190,000oz (previously 180,000oz to 190,000oz)
  • In the second half of the financial year, the Group ceased processing of marginal surfacesourcesatEvanderGoldMines(EGM)duetothisbusiness,whichcontributed approximately 2,500oz in the first half of the current financial year, becoming uneconomical
  • If production from these sources was maintained in the second half of the financial year, Group production for the full financial year would have been in excess of 190,000oz
• GroupAISCguidanceforthecurrentfinancialyearmaintainedatbetween$1,325/ozto

$1,350/oz(assumedexchangerate:ZAR/US$:18.50)

• Productionguidanceforthe2025financialyearof215,000ozto225,000oz.

 

MTRProject(TheProject)

• The Project is on schedule for commissioning and steady state production during December 2024
• CapitalcostfortheProjectremainsonbudget,withnoexpenditureoverrunsexpected
• The Project's financial model, based on its definitive feasibility study (DFS), was updated to include the latest operating cost and production estimates, forecast ZAR/US$ exchange rate and US$ gold price. These updates are as follows:
  • Exchangerateandgoldpricerevisions:
    • ExchangerateofZAR/US$:19.00(initialDFSmodel: ZAR/US$:15.50)
    • GoldpriceofUS$2,200/oz(initialDFSmodel:US$1,750/oz)
  • The updated DFS financial model outputs (relative to the initial DFS model) are as follows:
    • The model Pre-tax NPV increased to US$183 million (initial DFS model: NPV of US$63 million)
    • TheungearedrealIRRincreasedto41.7%(initialDFSmodel: IRRof 20.1%)
    • Payback on upfront capital investment of ~US$135.1 million reduced to approximately 2 years (initial DFS model: 3.5 years), post commissioning.

 

Aninternalpre-feasibilitystudy(PFS)fortheSowetoclusterwasalsocompletedinMarch2024,based onthedrillresultsfromthe2L16and2L24tailingsstoragefacility(TSF).ThePFSconsiderednumerous options, with the most feasible being:

• Developmentofre-mining,overlandpipingandpumpinginfrastructureattheSowetocluster resource to process the material at the MTR plant
  • Using this option, the MTR plant's capacity can be expanded to process 1 million tonnes per month of feed material, compared to the current design capacity of 800ktpm, resulting ina life-of-mine(LOM) of21 yearsfor the combined Mogaleand Soweto cluster resources.The resultant tailingscan be deposited into the expanded Mogale TSF at the West Wits pit and 1L23-25 footprint.

 

TheoutcomesofthePFSareas follows:

• Processingofthe SowetoClusterhasthepotentialtoexpandtheMTR operation
• TheMTRplantinfrastructurecan beexpandedtotreat1milliontonnespermonth fromyear 6 of the MTR operation's LOM
• The addition of the 110 million tonne Soweto Cluster Mineral Resource has the potential to increase MTR production to approximately 60koz/year over a 21-year LOM
• Total additional capital requirement of US$113 million (approximately US$83 million would be incurred from year 4 to year 6 and US$29 million in year 10 of the MTR's operation)
• At US$2,200/oz and an exchange rate of ZAR/US$:19.00, the Pre-tax NPV combined for Mogale andthe Soweto Cluster isUS$283 million, representing anincreaseof US$96million, relative to Mogale's updated standalone financial model
• TherealungearedIRRincreasesto44.0%,relativetotheIRRof41.7%intheupdatedMogale financial model.

The Group willnow proceed with the necessarypermitting and servitudes required forthere-mining and processing of the Soweto Cluster, with a final investment decision in due course.

 

PanAfricanCEOCobusLoots commented:

"WearepleasedthatPanAfricanwillachievetheupper endofour fullyearproductionguidance,and would have exceeded guidance had we continued with the processing of surface material at Evander in the second half of the financial year.

 

Therobustproductionresults,combinedwithrecordRandgoldprices,shouldseetheGroupdeliveran excellent financial performance for the year.

 

Our MTR project remains on schedule and on budget, and we look forward to commissioning it later in 2024. We have now demonstrated that the addition of the Soweto Cluster resources further improves the economic attractiveness of this world class project."

 

Finalresultsforthetwelvemonthsended30June2024

 

PanAfricanwillannounceitsfinalresultsforthecurrentfinancialyearon11September2024.

TheinformationcontainedinthisupdateistheresponsibilityofthePanAfricanboardofdirectorsand has not been reviewed or reported on by the Group's external auditors.

Certain information communicated in this announcement was, prior to its publication, inside information for the purposes of Article 7 of Regulation 596/2014.

Rosebank

9May2024

ForfurtherinformationonPanAfrican,pleasevisittheCompany'swebsiteat www.panafricanresources.com

Corporateinformation
Corporateoffice	Registeredoffice
TheFirsBuilding	2ndFloor
2ndFloor,Office204	107 Cheapside
Cnr.CradockandBiermannAvenues	London
Rosebank,Johannesburg	EC2V6DN
SouthAfrica	UnitedKingdom
Office:[phone]	Office:[phone]
[e-mail]	[e-mail]
Chiefexecutiveofficer	Financialdirector
CobusLoots	DeonLouw
Office:[phone]	Office:[phone]
	2900
Head:Investorrelations HethenHira Tel:[phone] E-mail:[e-mail]	Website:www.panafricanresources.com
Companysecretary JaneKirton StJames'sCorporateServicesLimited Office:[phone]	Nominatedadviserandjointbroker Ross Allister/Georgia Langoulant Peel Hunt LLP Office:[phone]
JSESponsorandJSEdebtsponsor Ciska Kloppers QuestcoCorporateAdvisoryProprietaryLimited Office:[phone]	Jointbroker Thomas Rider/Nick Macann BMOCapitalMarketsLimited Office: [phone]
	Jointbroker Matthew Armitt/Jennifer Lee Joh.Berenberg,Gossler&CoKG Office: [phone]

 

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