Pan African Resources PLC
("Pan African" or “the company" or “the group”)
(Incorporated and registered in England and Wales under Companies Act 1985 with registered
number 3937466 on 25 February
2000)
Share code on AIM: PAF
Share code on JSE: PAN
ISIN: GB0004300496
TRADING STATEMENT
FOR THE FINANCIAL YEAR ENDED 30 JUNE
2018, PRODUCTION UPDATE FOR 2019 FINANCIAL YEAR AND ELIKHULU
COMMISSIONING
Pan African CEO Cobus Loots commented:
“The group results for the 2018
financial year are reflective of both the incredibly challenging
operational environment and the specific issues that confronted the
group over the past year. These issues, as well as the
definitive remedial actions we implemented, were well disseminated
to the market. The operational update and the commissioning of the
Elikhulu plant demonstrates that we are well on track to deliver
into our 2019 targets and look forward to the year
ahead”.
TRADING STATEMENT
In terms of paragraph 3.4(b) of the Listings Requirements of the
JSE Limited, a listed company is required to publish a trading
statement as soon as it is satisfied that a reasonable degree of
certainty exists that the financial results for the period to be
reported upon next, will differ by at least 20% from those of the
previous corresponding period.
Pan African is incorporated in England and Wales and, accordingly, its presentation
currency is Pounds Sterling (“GBP”) with a functional currency in
South African Rands (“ZAR” or “R”).
The ZAR:GBP exchange rate affects the reporting of results in
GBP. For the reporting period ended 30 June
2018 (“current reporting period”), the average prevailing
ZAR:GBP exchange rate is used, and, in the event of material
transactions, the exchange rate on the date of the material
transaction is used to translate earnings from ZAR to
GBP.
For the reporting period ended 30 June
2017 (“prior reporting period”), the average ZAR:GBP
exchange rate was ZAR17.25:1. For the
current reporting period, the ZAR marginally depreciated against
the GBP to an average exchange rate of ZAR17.27:1. This 0.1% year-on-year depreciation
in the average exchange rate should be taken into account for the
purposes of a comparison with the prior reporting period.
The group records its revenue from precious metals sales in ZAR.
The strength in the value of the ZAR/USD exchange rate during the
current reporting period had an adverse impact on the USD revenue
received when translated into ZAR. In the current reporting period,
the average ZAR/USD exchange rate appreciated by 5.4% to R12.86:1
(2017: R13.59:1).
Due to the cessation of mining at Evander Gold Mining
Proprietary Limited (“Evander Mines”) underground operations which
includes 8 Shaft, 7 Shaft and the run-of-mine circuit in the
Kinross metallurgical plant,
the financial results from the Evander Mines’ underground
operations were classified as discontinued operations
(“discontinued operations”) during the current reporting period.
The prior reporting period’s figures have been re-presented to
differentiate between the discontinued operations and the results
from the remainder of the operational portfolio comprising the
continuing operations (“continuing operations”). The combined
results comprise the results of the continuing operations and
discontinued operations (“combined operations”). As result of the
cessation of Evander Mines’ underground operations, the group
recognised a once-off impairment charge of R1.78 billion
(GBP106.3 million) and incurred
retrenchments costs of R161 million (GBP9.3
million).
In the current reporting period, the group’s weighted average
number of shares in issue increased by 15.7% to 1,809,726,739
shares (2017: 1,564,346,115 shares). The increase in the weighted
average number of shares in issue is predominantly due to the
full-year impact of the issuance of new shares to fund the equity
component of the Elikhulu tailings retreatment project’s
(“Elikhulu”) construction late in the prior reporting period. The
disposal of 130-million Pan African shares held by PAR Gold
Proprietary Limited, which had a commensurate increase in the
weighted average number of shares in issue, as these shares had
previously been treated as treasury shares. The proceeds from the
disposal were partly utilised to fund the incorporation of existing
Evander tailing retreatment plant (“ETRP”) throughput into
Elikhulu’s processing capacity, which will result in an increased
capacity of 1.2-million tonnes per month from December 2018.
Pan African advises shareholders that its headline earnings per
share (“HEPS”) and earnings per share (“EPS”) in ZAR terms from its
continuing operations for the current reporting period are expected
to be between:
The group’s combined operations, EPS and HEPS in ZAR terms for
the current reporting period are expected to be between:
The HEPS and EPS in GBP terms from its continuing operations for
the current reporting period are expected to be between:
The group’s combined operations HEPS and EPS in GBP terms for
the current reporting period are expected to be between:
PRODUCTION UPDATE FOR THE 2019
FINANCIAL YEAR
Following the operational updates released during July 2018, Pan African is pleased to provide a
production update and guidance for quarter one of the 2019
financial year (“quarter one”), and further information on the
group’s prospects for the remainder of the new financial year.
Barberton Mines Proprietary Limited (“Barberton Mines”)
-
Barberton Mines is benefitting from increased underground mining
flexibility due to, inter alia, both the high-grade 272 and
358 platforms being available at Barberton Mines’ Fairview
operation. The Barberton tailings retreatment plant (“BTRP”) is
also benefiting from the installation of the regrind mill at the
end of the 2018 financial year.
-
Barberton Mines is forecast to produce approximately 26,000oz
for quarter one, with underground mining operations contributing
more than 20,500oz, and the BTRP more than 5,000oz. Barberton Mines
is therefore on track to deliver its annual production guidance of
approximately 100,000oz for the 2019 financial year.
-
Fairview commendably achieved one-million fatality free shifts
during July 2018.
-
The conclusion of a three-year wage agreement with the National
Union of Mineworkers and the United Association of South Africa, which was announced on
7 September 2018, is expected to
assist with operational stability and productivity at Barberton
Mines.
- As per the announcement of 6 September
2018, phase one and two of the Royal Sheba drilling
campaign, comprising 20 drill holes, has been completed with
excellent results confirming the extension of the Sheba orebody to
surface. An updated mineral reserve’s report on Royal Sheba is
expected by November 2018, and a
definitive feasibility study by February
2019.
Evander Mines
-
The ETRP and surface-source operations are expected to produce
approximately 4,000oz the first quarter. The ETRP and
surface-source production remains on track, despite production
being impacted by lower-quality surface sources being treated
during the quarter.
- The group is reviewing the merits of mining Evander Mines’ 8
Shaft pillar. Further information on this initiative will be
communicated in the near future.
ELIKHULU COMMISSIONING
-
The Elikhulu Project is progressing according to schedule with
all phases of the five-phase technical commissioning processes now
successfully completed. This commissioning includes the successful
completion of the “C5” or final contractual certificate dealing
with production requirements, in that the plant’s tonnage
throughput was achieved and the dissolved gold content in the final
leach tank has been met for a continuous period of 72 hours. In
line with previous guidance, Elikhulu is expected to produce at
steady-state from October 2018.
- The incorporation of the existing ETRP’s throughput into
Elikhulu’s processing capacity, which will result in an increased
capacity totalling 1.2-million tonnes per month, is in progress as
previously communicated.
The financial information contained in this announcement has
neither been reviewed nor audited by the company’s auditors. The
group’s audited year-end results for the year ended 30 June 2018 will be released on 19 September 2018.
For further information on Pan African, please visit the
company’s website at www.panafricanresources.com
14 September 2018
Contact information |
Corporate
Office
The Firs Office Building
2nd Floor, Office 201
Cnr. Cradock and Biermann Avenues
Rosebank, Johannesburg
South Africa
Office: + 27 (0) 11 243 2900
Facsimile: + 27 (0) 11 880 1240 |
Registered Office
Suite 31
Second Floor
107 Cheapside
London
EC2V 6DN
United Kingdom
Office: + 44 (0) 20 7796 8644
Facsimile: + 44 (0) 20 7796 8645 |
Cobus Loots
Pan African Resources PLC
Chief Executive Officer
Office: + 27 (0) 11 243 2900 |
Deon Louw
Pan African Resources PLC
Financial Director
Office: + 27 (0) 11 243 2900 |
Phil Dexter
St James's Corporate Services Limited
Company Secretary
Office: + 44 (0) 20 7796 8644 |
John Prior / Paul
Gillam
Numis Securities Limited
Nominated Adviser and Joint Broker
Office: +44 (0) 20 7260 1000 |
Sholto Simpson
One Capital
JSE Sponsor
Office: + 27 (0) 11 550 5009 |
Ross Allister/James
Bavister/David McKeown
Peel Hunt LLP
Joint Broker
Office: +44 (0) 20 7418 8900 |
Julian Gwillim
Aprio Strategic Communications
Public & Investor Relations SA
Office: +27 (0)11 880 0037 |
Jeffrey Couch/Neil
Haycock/Thomas Rider
BMO Capital Markets Limited
Joint Broker
Office: +44 (0) 20 7236 1010 |
Bobby Morse
Buchanan
Public & Investor Relations UK
Office: +44 (0)20 7466 5000
Email: PAF@buchanan.uk.com |
Website:
www.panafricanresources.com |