investor presentation | august 2020...overview of presentation • company information • operating...
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INVESTOR PRESENTATION | AUGUST 2020
2
DISCLAIMER The name 'Presenter' refers to Pan African Resources PLC and its advisors, subsidiaries or affiliated companies.
This presentation has not been filed, lodged, registered or approved in any jurisdiction and recipients of this document should keep themselves informed of and comply with and observe all applicablelegal and regulatory requirements.
Statements or assumptions in this presentation as to future matters may prove to be incorrect. The Presenter makes no representation or warranty as to the accuracy of such statements orassumptions. Circumstances may change and the contents of this presentation may become outdated as a result, and the Presenter has no obligation to update the presentation or correct anyinaccuracies or omissions in this presentation.
This presentation may not be reproduced in whole or in part, nor may any of its contents be divulged to any third party without the prior consent in writing of the Presenter.
The recipient acknowledges that neither it nor the Presenter intends that the Presenter act or be responsible as a fiduciary to the recipient, its management, stockholders, creditors or any other person.Each of the recipient and the Presenter, by accepting and providing this presentation respectively, expressly disclaims any fiduciary relationship and agrees that the recipient is responsible for makingits own independent judgments with respect to any transaction and any other matters regarding this presentation.
Furthermore, the information contained in this presentation may also qualify as “inside information” as defined in the Financial Markets Act (Act No. 19 of 2012) (‘FMA’). In terms of the FMAit is a criminal offence for a person who knows that he or she has inside information to:• deal directly or indirectly or through an agent for his or her own account, or for the account of another person, in listed securities to which the inside information relates;• disclose the inside information to another other than in the proper course of a person’s employment, profession or duties; and• encourage or cause another person to deal or discourage or stop another person from dealing in the listed securities to which the inside information relates.
The Presenter shall not have any liability for any loss suffered due to reliance being placed on this presentation the information contained herein or the oral presentations referred to. This presentation isfor informational purposes only and is not intended to provide legal, tax, financial, investment or other advice. You must make your own examination of the tax, legal, financial and other consequencesof this proposal and you should not treat the contents of this presentation as advice in relation to any such matters. If you are in any doubt as to what action you should take, you are recommended toseek your own advice from your stockbroker, bank manager, solicitor, accountant, fund manager or other appropriate independent financial adviser duly authorised under the Financial Services andMarkets Act 2000 and who is qualified and experienced to advise on such matters if you are in the UK, or from another appropriately authorised independent financial adviser if you are in a territoryoutside the UK.
Furthermore, the information contained in this presentation may also qualify as “inside information” as defined in the Market Abuse Regulation (“MAR”). It is a breach of MAR where a person possessesinside information and:• uses that information by acquiring or disposing of, for its own account or for the account of a third party, directly or indirectly, financial instruments to which that information relates; or• discloses that information to any other person, except where the disclosure is made in the normal exercise of an employment, a profession or duties.
This presentation is for information purposes only and does not constitute an offer or invitation to subscribe for or purchase any securities, and neither this presentation nor anything contained thereinnor the fact of its distribution shall form the basis or be relied on in connection with or act as any inducement to enter into any contract or commitment whatsoever.
Some or all of the information contained in these slides and this presentation (and any other information which may be provided) may be inside information relating to the securities of the Presenterwithin the meaning of the Criminal Justice Act 1993 and the Market Abuse Regulation (EU/596/2014) (“MAR”). Recipients of this information shall not disclose any of this information to another personor use this information or any other information to deal, or to recommend or induce another person to deal in the securities of the Presenter (or attempt to do so). Recipients of this information shallensure that they comply or any person to whom they disclose any of this information complies with this paragraph and also with MAR. The term “deal” is to be construed in accordance with the CriminalJustice Act 1993 and with MAR. Recipients of these slides and the presentation should not therefore deal in any way in ordinary shares in the capital of the Presenter (“Ordinary Shares”) until the dateof a formal announcement by the Presenter in connection with the preliminary results of the Presenter for the six months ended 31 December 2019. Dealing in Ordinary Shares in advance of this datemay result in civil and/or criminal liability.
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FORWARD LOOKING STATEMENTSStatements in this presentation that address exploration activities, mining potential and future plans and objectives of Pan African Resources are forward-looking statements and forward-lookinginformation that involve various risks, assumptions and uncertainties and are not statements of fact.
The directors and management of Pan African Resources believe that the expectations expressed in such forward-looking statements or forward-looking information are based on reasonableassumptions, expectations, estimates and projections. However, these statements should not be construed as being guarantees or warranties (whether expressed or implied) of futureperformance.
There can be no assurance that such statements will prove to be accurate and actual values, results and future events could differ materially from those anticipated in these statements.Important factors that could cause actual results to differ materially from statements expressed in this presentation include among others, the actual results of exploration activities, technicalanalysis, the lack of availability to Pan African Resources of necessary capital on acceptable terms, general economic, business and financial market conditions, political risks, industry trends,competition, changes in government regulations, delays in obtaining governmental approvals, interest rate fluctuations, currency fluctuations, changes in business strategy or development plansand other risks.
Although Pan African Resources has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be asanticipated, estimated or intended. Pan African Resources is not obliged to publicly update any forward-looking statements included in this presentation, or revise any changes in events,conditions or circumstances on which any such statements are based, occurring after the publication date of this presentation, other than as required by regulation.
SAFE, HIGH-MARGIN AND LONG-LIFE SOUTH AFRICAN-FOCUSED GOLD PRODUCER
5
OVERVIEW OF PRESENTATION
• Company information
• Operating in South Africa
• Overview of our operations
• Key features - Financial
• Environmental, Social and Governance (ESG)
• Impact of COVID-19
• Asset optimisation
• Near-term organic growth – Egoli Project
• Where to next – FY21 and beyond
COMPANY INFORMATION
7
COMPANY INFORMATIONSHARE PRICE AND MARKET CAPITALISATION AS AT 7 AUGUST 2020
• JSE (PAN) ZAR 605cps
• AIM (PAF) GBP 27,3p
• 12 month change +290%
• ADR (PAFRY) 20:1 USD 7,11
• Market Capitalisation USD 768 m
• Shares Outstanding 2,235 m
• Treasury Shares 306 m
• Shares in market 1,929 m
• Cash USD 33,5 m
• Net Debt USD 62,5 m
MAJOR SHAREHOLDERS
• Allan Gray IM (SA) 28%
• PAR Gold (SA) 14%
• Ninety One (Investec) (SA) 6%
• Ruffer (UK) 5%
• PIC (SA) 5%
Source: Peel Hunt
50
75
100
125
150
175
200
08/19 09/19 10/19 11/19 12/19 01/20 02/20 03/20 04/20 05/20 06/20 07/20
Share price performance vs relevant indices Last 12 months
Pan African Resources AIM All Share AIM Basic Resources
S&P 500 Metals & Mining Philadelphia Index NYSE Gold Bugs
Pri
ce p
erfo
rma
nce
(reb
ase
d to
10
0)
8
COMPANY INFORMATION
Keith Spencer
Chairman
Appointed: 8 October 2007
Experience
Technical and operational
Risk management
Environmental and sustainability
Business and strategy
Leadership
Yvonne Themba
Non Executive Director
Appointed: 17 July 2019
Experience
Technical and operational
Risk management
Governance and regulation
Environmental and sustainability
Business and strategy
Leadership
Charles Needham
Non Executive Director
Appointed: 17 July 2019
Experience
Technical and operational
Risk management
Governance and regulation
Environmental and sustainability
Business and strategy
Leadership
Cobus Loots
Chief Executive Officer
Appointed: 26 August 2009
Experience
Technical and operational
Finance and accounting
Business and strategy
Leadership
Technology
Taxation
Deon Louw
Financial Director
Appointed: 1 March 2015
Experience
Finance and accounting
Risk management
Business and strategy
Leadership
Technology
Taxation
Hester Hickey
Non Executive Director
Appointed: 12 April 2012
Experience
Finance and accounting
Risk management
Governance and regulation
Business and strategy
Leadership
Taxation
Thabo Mosololi
Non Executive Director
Appointed: 9 December 2013
Experience
Finance and accounting
Governance and regulation
Business and strategy
Leadership
BOARD AND EXECUTIVES
OPERATING IN SOUTH AFRICA
10
0 10 20 30 40 50 60 70 80 90
Tanzania*
Zambia*
Democratic Republic of Congo (DRC)*
Mali*
Zimbabwe*
Namibia*
Burkina Faso
Botswana*
South Africa
Guinea (Conakry)*
Fraser Institute Annual Survey of Mining Companies 2019Investment attractiveness index - Africa
OPERATING IN SOUTH AFRICA
SOUTH AFRICA RANKED 2ND FOR INVESTMENT ATTRACTIVENESS IN AFRICA IN 2019
*Between 5 and 9 responses
11
OPERATING IN SOUTH AFRICA
PAN AFRICAN RESOURCES HAS A LONG TRACK RECORD OF SUCCESSFULLY OPERATING IN SOUTH AFRICA
Electricity
• Reduced instances of supply disruptions, power grid stable
• Barberton and tailings operations – less exposed than deep-level miners
• Completed bankable feasibility study for 10MW solar plant at Evander – can be replicated at Barberton operations
Mining tenure
• Evander mining rights valid until 2038
• Submitted renewal application for Barberton mining rights - renewal in process
Security
• Integrated multifaceted security strategy plan for the group
• Modernisation of crime prevention security technology at all facilities
Stakeholder engagement
• Multi-facetted engagements with all stakeholders, including with our communities
• COVID-19 awareness and relief programmes for employees and communities
ESG
• Increased focus on rehabilitation and alternate land use
• Independent audits on environmental and legal compliance
OVERVIEW OF OUR OPERATIONS
13
OVERVIEW OF OUR OPERATIONS
KurumanTaung
Zeerust
Klerksdorp
Potchefstroom
Rustenburg
Johannesburg
Pretoria
Ermelo
Elikhulu
WitbankEvander Mines
Royal Sheba
Barberton Mines
Richards Bay
St. Lucia
Hluhuwe
Dolphin Cost
Pietermaritzburg
Lady Smith
Vryheli
BarbertonMiddelburg
Free State
Gauteng
KwaZulu-Natal
Mpumalanga
North West
A UNIQUE COMBINATION OF UNDERGROUND AND SURFACE MINING OPERATIONS
Operating assetsProduction
(oz/annum)
Reserve
Moz
(‘000
Tonnes)
Tonnes
(Mt)
Reserve
grade
(g/t)
AISC
(USD/oz)Status LOM
Barberton Mines (underground operations)
Profitable, long life, high-grade
operation comprising three
underground mines: Fairview,
Sheba and New Consort
c.80,0001.6
(50.1)9.2 6.3 c.1,150 Production 20yrs
Barberton Tailings Retreatment Plant
Gold tailings retreatment plant,
commenced construction in April
2012, was completed on schedule
and within budget, and achieved its
inaugural gold pour in June 2013
c.20,0000.6
(16.9)12.6 c.1.4 c.700 Production
3 to
9yrs
Elikhulu Tailings Retreatment Plant
USD120m tailings retreatment
project which exploits historically
generated gold tailings deposited
on Kinross, Leslie/Bracken and
Winkelhaak TSFs. Commenced
production in 2018
c.65,0001.5
(46.2)170.6 0.3 c.640 Production 12 yrs
8 Shaft Pillar (Evander)
Feasibility study completed to mine
the Evander 8 Shaft pillar and high
grade areas in proximity to the
pillar, first gold smelted in August
2019
c.30,0000.1
(3.2)0.4 c.9.0 c.1000 Production 3 yrs
Egoli
Standalone underground project
with low capital cost to use
Evander Mines’ established shaft
and metallurgical facilities
>70,0000.73
(22.7)3.4 c.6.6 c.777 Feasibility
9 to
14 yrs
14
0
50000
100000
150000
200000
250000
300000
2018 2019 2020 2021 2022 2023 2024 2025
Au Ounces Pan African Resources - Gold Production Profile Egoli
Elikhulu
Evander 8#Pillar
BTRP
Barberton
OVERVIEW OF OUR OPERATIONS
Actual Projected
179,457ozc. 190,000oz
STRONG PRODUCTION PROFILE
15
OVERVIEW OF OUR OPERATIONS INDUSTRY LEADING GROUP SAFETY PERFORMANCE
“Notwithstanding the fact that injury rates are well below industry average, we continuously strive to improve our safetyperformance and achieve our aim of zero harm to our employees” – Cobus Loots, CEOBarberton Mines achieved 3 million fatality free shifts during June 2020
4,01 3,96 4,05
1,77 1,692,08
1,61
0,62 0,530,85
4,675,22
4,44
3,60
0
1
2
3
4
5
6
H1 2016 H1 2017 H1 2018 H1 2019 H1 2020*
LTIFR RIFR Industry LTIFR
----
----
----
--R
ate
s p
er
mill
ion
man
ho
urs
---
----
-
*Industry rates not available yet
16
OVERVIEW OF OUR OPERATIONS
Source: Individual company websites and presentations
-
200
400
600
800
1 000
1 200
1 400
AISC
Average USD 987/oz
ALL-IN-SUSTAINING-COSTS
*Targeted FY21 AISC
*
KEY FEATURES – FINANCIAL
18
KEY FEATURES-FINANCIAL
0,0
10,0
20,0
30,0
40,0
50,0
60,0
FY2016 FY2017 FY2018 FY2019
Adjusted EBITDA USD m
US
D’ m
illio
n
Source: PAR Annual Reports
EBITDA
19
KEY FEATURES - FINANCIALILLUSTRATIVE DE-GEARING – ASSUMING FORECAST ASSUMPTIONS ARE ACHIEVED
-
10 000
20 000
30 000
40 000
50 000
Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24
RCF- balance USD Elikhulu-outstanding balance USD
USD
’00
0
*Assumptions:• R730,000/kg gold price up to 30 June 2020 with a 5% annual escalation from 1 July 2020• Guided ounces• H1 FY20 actual costs with anticipated cost increases• Converted ZAR to USD at a rate of 1USD:14.08ZAR
Unhedged post Dec 2020
Senior debt repayment profile
-
20 000
40 000
60 000
80 000
100 000
120 000
140 000
160 000
Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24
Forecasted repayment profile* Principle repayment profile
US
D’0
00
20
KEY FEATURES – FINANCIAL HISTORIC DIVIDEND YIELD – DIVIDENDS REINSTATED
0%
1%
2%
3%
4%
5%
6%
7%
June 14 June 15 June 16 June 17 June 18* June 19
PAR dividend yield 5,60% 6,30% 5,10% 5,00% 0,00% 1,00%
* Dividend suspended due to cessation of large-scale deep level underground mining at Evander 8 Shaft and construction of the Elikhulu Tailings Retreatment Plant
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
22
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
Pan African Resources is committed to doing business, as guided by the group’s values and code of ethics.
We recognise that we are an integral part of the societies in which we operate, and are therefore obligated morally and legally, to act in accordance with what is good for our societies, the environment and the organisation.
Our employees, regulators and investors increasingly expect us to ensure that our business activities deliver sustainably whilst positively impacting on society, the economy and the environment.
23
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
COMMENCED CONSTRUCTION OF HEALTHCARE INFRASTRUCTURE PROJECT - BARBERTON MINES COMMUNITY - TO BE COMPLETED IN 2021
DONATED 4 MOBILE LIBRARIES AND IMPROVEMENTS TO SCHOOLS SURROUNDING EVANDER MINES
ONGOING INVESTMENT IN SKILLS AND DEVELOPMENT TRAINING OF EMPLOYEES
ONGOING INVESTMENT ON COMMUNITY BURSARIES7 LOCAL BURSARY STUDENTS IN SKILLED EMPLOYMENT AT BARBERTON IN 2020
ESG HIGHLIGHTS
SPENT USD0.9 MILLION ON REHABILITATION OF OLD SHAFTS AND INFRASTRUCTURE
ELIKHULU 10MW SOLAR PV PLANT- REDUCED CARBON
FOOTPRINT- ENSURES STABILITY
OF SUPPLY AND COST REDUCTION
BARBERTON BLUEBERRIES- EMPLOYMENT FOR
LOCAL COMMUNITIES
- OPTIMISE USE OF LAND AND WATER RESOURCES
TOTAL REHABILITATION TRUST FUND USD25.6 MILLION, CLOSURE LIABILITIES FULLY FUNDED
IMPACT OF COVID-19
25
IMPACT OF COVID-19
EFFECTS OF RESTRICTIONS DURING NATIONAL LOCKDOWN AND RESUMPTION OF FULL SCALE PRODUCTION• Timeline
• 23 March 2020: 21-Day Lockdown announced by SA government effective 27 March 2020
• All non-essential businesses and activities suspended, essential services at mines such as processing plants and care and maintenance allowed
• 30 March 2020: Group response to shareholders and suspension of FY2020 guidance
• Liquidity position is robust and carefully managed, with access to additional facilities for the longer term if required
• Group surface operations operating at 70% of normal capacity, limited underground mining at Barberton to feed BIOX® process plant
• 11 May 2020: New FY2020 Production guidance and update on Group debt reduction
• Annual production guidance revised down by only 5% to 176,000oz (from original 185,000oz)
• Group remained cashflow positive during the lockdown period, senior interest-bearing debt reduced by 23% relative to 31 December 2019
• Rollout of relief and assistance programmes for employees and host communities
• 1 June 2020: Lockdown at Level 4 – All mining operations can resume at 100% subject to strict compliance measures
• All underground employees recalled to work
26
IMPACT OF COVID-19 OPERATIONAL PREVENTION MEASURES AND COMMUNITY AND EMPLOYEE RELIEF INITIATIVES
PROACTIVELY MANAGING THE RISKS ASSOCIATED WITH THE PANDEMIC
BARBERTON OPERATIONS: FOOD AND HYGIENE HAMPERS TO FAMILIES IN HOST COMMUNITIES, PROVISION OF WATER TANKERS
FINANCIAL IMPACT: COST OF IMPLEMENTING PREVENTION MEASURES TO DATE: USD0,6M (ZAR8,8M)COMMUNITY INITIATIVES:USD0,3M (ZAR4,9M)
EVANDER OPERATIONS:FOOD AND HYGIENE HAMPERS TO FAMILIES IN HOST COMMUNITIES
ASSET OPTIMISATION
28
ASSET OPTIMISATIONGROWTH PORTFOLIO – ROBUST PROJECT PIPELINE
36.0Mz (335.8Mt @ 3.33g/t)
Tonnes (Mt) Grade (g/t) Gold (t) Gold (Moz)
Underground combined 110.4 9.35 1 032.1 33.2Surface combined 225.4 0.38 86.5 2.8Total 335.8 3.33 1 118.5 36.0
9%
57%
34%
Measured Indicated Inferred
Group Resources 10.9Moz (216.6Mt @ 1.57g/t)
Tonnes (Mt)
Grade (g/t)
Gold (t) Gold (Moz)
Underground combined 35.9 7.72 276.8 8.9Surface combined 180.7 0.35 63.0 2.0Total 216.6 1.57 339.8 10.9
13%
87%
Proved Probable
Group Reserves
29
CONSORT OPERATIONS – LOM OF 6 YEARS• Extraction of Prince Consort (‘PC’) Shaft pillar
• PC Shaft pillar - Mineral Resource of 48,820t @ 25.54g/t for 40Koz
• Development to PC Shaft pillar completed in May 2020 – first target block with proved Mineral Reserve of 5,000 tons at av. grade of 25g/t
• Forecast production of ~3,900oz to 7,800oz per annum from PC shaft pillar at steady-state
• Life of project forecasted at 3 years
• Targeting all-in sustaining cost of ~USD1,200/oz
• Maximise Consort plant capacity
• Process additional surface source material at Consort plant to maximise plant capacity
• Exploration
• 36 exploration targets have been identified at New Consort and will be explored during the 3 years of PC Shaft pillar mining
Initial sampling revealed grades in excess of 300g/t , containing large amounts of visible gold
ASSET OPTIMISATION
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SHEBA OPERATIONS – LOM OF 9 YEARS (19 YEARS INCLUDING ROYAL SHEBA)• Project Dibanisa
• Forecasted to be completed during FY21
• Optimised usage of infrastructure expected to reduce all-in sustaining cost - targeting ~USD1,000/oz
• Additional available shaft-time to assist with development and mining of Royal Sheba
• Sheba plant available for the processing of surface material and Royal Sheba uppers in the near future
• Royal Sheba Uppers
• Mining of Royal Sheba uppers identified to assist with increased production at Sheba Mine
• Process additional surface source material at Sheba plant to maximise plant capacity
• Exploration
• Embark on exploration exercise to identify possible new high-grade mining areas to mine
ASSET OPTIMISATION
Phase 2 Mining
Royal Sheba orebody and
historical workings
Phase 1 Mining
Royal Sheba Mineral Resources
Tonnes (Mt) Grade (g/t) Gold (t) Gold (Koz)
Phase 1 1.44 3.60 5.18 167
Phase 2 4.15 3.62 14.99 482
Total 5.58 3.61 20.17 649
NEAR-TERM ORGANIC GROWTH EGOLI PROJECT
32
NEAR-TERM ORGANIC GROWTH - EGOLI PROJECT HISTORY & BACKGROUND• Harmony Gold previously exploited Evander Mines’ No.7 Shaft
orebody, with development towards the Egoli orebody
> In 2009, due to economic constraints and capital re-prioritisation,
all development on Evander Mines’ shafts were halted, other than
the producing No.8 Shaft
> This resulted in the controlled flooding of No.7 Shaft’s 3 Decline
from 22 Level up to 18 Level
• PAR acquired Egoli as part of Evander Mines acquisition from
Harmony in May 2013, and directed the following:
Reserves and Resources*
28O55’E 29O00’E 29O05’E 29O10’E
0 4kmScale
26O35
’S26
O30
’S26
O25
’S
Evander 8Shaft (E8)
Evander 7Shaft (E7)
EGM Evander Gold Assets
Evander Gold Mining Operation
Evander Gold Underground Projects
Evander Gold Tailings Projects
Operational Shafts
Old shafts
Egoli Payshoot
> Internal project due diligence study in 2018
> Independent DRA feasibility study (FS) in 2019
> Review of DRA FS by The Mineral Corporation, measured
against SAMREC reporting standards
Egoli’s development will give rise to virgin underground production at a relatively low capital and operating cost, using established infrastructure
Egoli Mineral Reserve Statement as at 30 November 2019
Reserve Category Mt
Grade(g/t)
Tonnesgold
Ounces (Moz)
Proved 0.45 5.90 2.64 0.08
Probable 2.99 6.72 20.08 0.65
Total Reserve 3.44 6.61 22.72 0.73
Egoli Mineral Resource Statement as at 30 June 2019
Resource Category Mt Grade (g/t)
Tonnesgold
Ounces (Moz)
Measured 0.44 8.60 3.80 0.123
Indicated 2.94 9.85 28.93 0.930
Inferred 6.26 9.68 60.58 1,948
Total Resource 9.64 9.69 93.33 3.001
LOCATION
33
• Long-life, low cost brownfields asset, capitalising on established infrastructure
• Initial Life of Mine (LOM) of 9 years - annual gold production of approximately 72,000 ounces at an
average head grade of 6,61g/t - based on current Measured and Indicated (M&I) Resources only.
• Potential increase in LOM to 14 years by converting Inferred Resources into the M&I category
• Time to first gold : 20 months – steady state production in 16 months thereafter
• Low development risk – access requires 560 meters of underground development from existing No.3
Decline, utilising well established and proven mining methodology
• Experienced operational mining and management team in place
• Low geological risk – orebody models well understood from adjacent operations
• Significant geological and operational upside - Inferred Resources to be accessed as underground
development proceeds, with substantial increase in LOM
• ESG
• Rehabilitation liability fully funded
• Utilising existing TSF – no increase in environmental footprint
• Evander solar plant to contribute to cost savings and reduced emissions
• Existing mining licence – Evander mining right valid until 2038
HIGHLIGHTS
NEAR-TERM ORGANIC GROWTH - EGOLI PROJECT
34
FINANCIAL MATRIX
• Materially lower capital investment when benchmarked
against other development projects of similar scale
• Compelling and robust economic returns:
> Payback period from project inception – 3,8 years
> NPV10,71 - R2,010 million ($131,25 million)
> Project IRR (post tax) : 50,1%
• Economic assumptions:
> Gold price – R850 000/kg ~ (USD1650/oz)*
> Peak funding – R1,05 million ~ (USD66 million)
> Recovered grade – 5.21g/ton
> AISC (post tax) – R399,600/kg (USD777/oz)#
> LOM gold produced – 17,771 kg ~ (570,000 oz)
> ~1,200 employees
# As per DRA FS
*USD1=ZAR16.00
• The Egoli orebody is approximately 1,75 km in tramming distance from
No.7 Shaft
> No.7 Shaft is currently utilised for hoisting run-of-mine material from
No. 8 Shaft Pillar mining to the Kinross metallurgical plant
• Once dewatered, re-equipping will commence, followed by standard
footwall development, further deepening of the decline and on-reef
development
• Associated engineering infrastructure and underground mining equipment
to follow prior to commencement of mining and ore hoisting to plant
NEAR-TERM ORGANIC GROWTH - EGOLI PROJECT
35
• Upgrades to:
• Change house and laundry
• Offices and workshop
• Refurbishment of:
• Ventilation fan
• Compressors
• Lamp room
• MV consumer substation
• Security, fencing and access control
Kinross Plant 7 Shaft Complex Access Roads
CAPITALISING ON EXISTING INFRASTRUCTURE
NEAR-TERM ORGANIC GROWTH - EGOLI PROJECT
36
• Development plan
• Detailed project scheduling and planning – to be completed: Q1 FY21
• No.7 Shaft and Kinross Plant infrastructure:
• Dewatering to commence: Q1 FY21
• Preliminary refurbishment: Q1 FY21
• Placing orders for long-lead equipment: Q2 FY21
• Commence with underground equipping: Q3 FY21
• Financing Package:
• Non-dilutive funding options currently being explored – to be finalised: Q2 FY21
WAY FORWARD
NEAR-TERM ORGANIC GROWTH - EGOLI PROJECT
WHERE TO NEXT – FY21 AND BEYOND
38
WHERE TO NEXT – FY21 AND BEYOND
• Continue to produce safely and sustainably into FY2021 group production guidance
• Increase focus on ESG project implementation
• Reduce group all-in sustaining costs
• Deleverage balance sheet and increase dividends
• Focus on asset optimization and organic growth
THANK YOU
www.panafricanresources.com
CONTACT US
Hethen Hira
Head: Investor Relations
+27 11 243 2900
JSE:PAN
AIM:PAF
ADR:PAFRY