Pan African Resources Plc - Operational Update and Completion of the Tennant Consolidated Mining Group Transaction
(Incorporated and registered in
under the Companies Act 1985 with registered
Incorporated in the
number 3937466 on
Share code on AIM: PAF Registration number: 2012/021237/06
Share code on JSE: PAN Alpha code: PARI
ISIN: GB0004300496
ADR code: PAFRY
(Pan African or the Company or the Group)
OPERATIONAL UPDATE AND COMPLETION OF THE TENNANT CONSOLIDATED MINING GROUP TRANSACTION
Pan African is pleased to provide its shareholders and noteholders with a preliminary operational update for the half year ending
Highlights
-- Completion of TCMG acquisition: The acquisition of Tennant Consolidated
Mining Group (TCMG) has been completed, with TCMG now a wholly owned
subsidiary of the Group.
-- Expect to deliver a significant increase in gold production for FY2025:
H1FY2025 production expected to be in line with H2FY2024 and FY2025
estimated at ~215,000oz (FY2024: 186,039oz), an increase of
approximately 16% from the prior year.
-- Increased FY2026 production guidance: Group FY2026 production (excluding
the TCMG operation in Australia ) estimated to further increase to
between 235,000oz and 250,000oz.
-- Balance sheet strength:Group expects to be materially unhedged by
February 2025 allowing increased benefit from the spot gold price. At
prevailing gold prices, it is anticipated that the Group will be fully
de-geared in the next 12 to 18 months.
GROUP GOLD PRODUCTION FOR THE SIX MONTHS ENDING
Gold production for the half year is expected to be in line with production achieved in H2FY2024 (H2FY2024: 87,581oz). Early production from the Mogale Tailings Retreatment (MTR) operation, where production to the end of
Production for the full year FY2025 is estimated at approximately 215,000oz (FY2024: 186,039oz), an increase of 16% from the prior year. Production for FY2026 is expected to increase significantly, as detailed below.
SURFACE OPERATIONS
-- Elikhulu Tailings Retreatment Plant production is forecast at
approximately 26,000oz for H1FY2025, on track to achieve 52,000oz or
more for the full financial year
o Phases 3 and 4 of the new tailings dam construction were completed
ahead of schedule and under budget
-- The Barberton Tailings Retreatment Plant (BTRP) is on track for
production of between 7,000oz and 8,000oz in H1FY2025, with the
life-of-mine (LoM) of the operation increased by a further six and a
half years, as previously reported
-- At the MTR operation, the plant’s upfront construction capital is
estimated at ZAR2,35 billion to ZAR2,4 billion (US$127 million to US$130
million ), versus the ZAR2,5 billion (US$135 million ) originally
budgeted, a saving of approximately ZAR100 million to ZAR150 million
(US$5 million to US$8 million ). Production ramp-up is ahead of schedule
with steady-state production to be achieved during December 2024 .
Further details are outlined below:
o Following the successful plant commissioning and first gold pour in
early October 2024 , production of ~9,000oz is expected by end December
2024 , with forecast FY2025 production of approximately 33,000oz
o FY2025 all-in sustaining costs (AISC) are estimated at below
US$1,000 /oz
o Studies are underway to increase annual production from 50,000oz to
~60,000oz in the next year through:
# the installation of additional reactors to further improve
recoveries
# the addition of two carbon-in-leach (CIL) tanks to increase
throughput from 800ktpm to 1mtpm, at a limited estimated capital
cost of ZAR70 million (US$3.8 million )
# a prefeasibility study to be concluded in the next three months on
the inclusion of a hard rock crushing circuit enabling the
processing of nearby remnant hard rock sources
o A Soweto Cluster feasibility study is to be completed by September
2025 , with the study focusing on:
# the option of constructing a new processing facility in closer
proximity to the Soweto Cluster tailings storage facilities (TSFs),
which would be a stand-alone operation also producing approximately
50,000oz per year
# the option to include additional proximal TSF resources that will
add to the LoM of the project
-- Construction work at TCMG’s Noble’s Project is proceeding on schedule.
UNDERGROUND OPERATIONS
-- Evander Mines’ underground production ramp-up delays from 24 to 25 Level
operations at 8 Shaft have now been resolved
o The sub-vertical hoisting shaft commissioning is being completed
during December, enabling its full 700t/day hoisting capacity to be
achieved
o A production loss of 7,000oz is now anticipated (compared to 5,000oz
previously communicated), resulting in production of approximately
12,000oz expected for H1FY2025 and 38,000oz for FY2025
o Underground mining operations with full crews continue on 24 Level as
planned
o Rapid recovery in the production run rate is anticipated in H2FY2025,
with mined ore transported to surface utilising the subvertical shaft
and related infrastructure
o Establishment of the 24 Level B-Line raise in Q3FY2025 further
improving face length and mining flexibility, with the average grade
expected to improve from 6.0g/t to 7.5g/t.
-- At the Egoli project, following the dewatering of Evander Mines’ 7
Shaft, long-inclined borehole reserve delineation drilling at 19 Level
has commenced, to further define the ore payshoot.
-- Barberton Mines
o Multiple Eskom transformer failures at Barberton Mines’ Fairview and
Sheba operations negatively impacted production for 10 days in
November (by approximately 2,250oz), with the Eskom power utility’s
back-up units also failing as a result of ageing infrastructure.
Further contingencies are being implemented to prevent the failures
from recurring, with additional spare transformers to be kept on site
in the future
o High-grade areas of the 262 Platform at Fairview Mine , indicated by
drill intersections of up to 80g/t gold, are anticipated to be
accessed by Q3FY2025 as development rates are accelerated
o At Consort Mine , underground sampling has confirmed high-grade Mineral
Reserve areas below 41 Level in the Prince Consort (PC) Shaft area.
Rehabilitation work on the shaft has now been largely completed,
allowing operations to recommence
o Production of approximately 32,000oz is expected for the Barberton
Mines underground operations in H1FY2025 (H2FY2024: 34,690oz), with
full year production of approximately 73,000oz (FY2024: 71,470oz),
excluding the BTRP.
FINANCIAL
-- Apart from the zero-cost collars previously reported, Pan African will
be materially unhedged by March 2025 , when the last tranche of the
synthetic forward sale is completed, following which the Group will
fully benefit from the spot gold price
-- At prevailing spot gold prices, it is anticipated that the Group will be
fully de-geared in the next 12 to 18 months.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE UPDATES
-- Barberton Mines’ 8.75MWAC Fairview solar plant reached full capacity
during October 2024 and produced 1.1GWh, equivalent to an emissions
reduction of 1 ktCO2e, resulting in initial cost savings of
approximately ZAR36 million (US$2,0 million ) per year
-- The 3ML/day underground water recycling plant at Evander Mines has
resulted in municipal water cost savings of approximately ZAR8.8 million
since operations commenced in November 2023 . The board has approved the
expansion of the plant capacity to 6ML/day, which will be completed
during 2026
-- At the MTR operation, environmental rehabilitation is ongoing, including
cleanup of historical spillages and removal of derelict pipelines,
eradication of alien vegetation and wetlands remediation, where some
122ha have been completed to date.
COMPLETION OF TCMG ACQUISITION
Following the approval of special resolutions by the requisite majority of shareholders at the Group’s annual general meeting on
FY2026 PRODUCTION GUIDANCE
It is estimated that the Group’s FY2026 production (excluding the TCMG operation in
“The performance of our MTR operation, completed ahead of schedule and under budget, has exceeded expectations, with a successful production ramp-up and the plant performing to specifications and at the same time maintaining an excellent safety record. In terms of our production base, the Group is now well diversified with both high-grade underground mining and high-margin surface operations. We are also excited about our ability to further expand our surface business in the short term to the benefit of all stakeholders.
We expect a much-improved performance for the Evander Mines underground operations in the second half of this financial year, with the large investment in infrastructure and optimisation over recent years benefitting this high-grade operation for more than a decade into the future.
We are poised to deliver a significant increase in gold production for the full financial year, and then again in FY2026. By
Pan African continues to excel in terms of our returns to shareholders, where the Group was ranked third in the Sunday
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
Rosebank
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___________________________________________________________________________ |Corporate information | |___________________________________________________________________________| |Corporate office |Registered office | | | | |The Firs Office Building |2nd Floor | | | | |2nd Floor, Office 204 |107 Cheapside | | | | |Corner Cradock and Biermann Avenues |London | | | | |Rosebank, Johannesburg |EC2V 6DN | | | | |South Africa |United Kingdom | | | | |Office: + 27 (0)11 243 2900 |Office: + 44 (0)20 3869 0706 | | | | |info@paf.co.za|info@paf.co.za | |______________________________________|____________________________________| |Chief Executive Officer |Financial Director | | | | |Cobus Loots |Marileen Kok | | | | |Office: + 27 (0)11 243 2900 |Office: + 27 (0)11 243 2900 | |______________________________________|____________________________________| |Head: Investor Relations | | | | | |Hethen Hira |Website: www.panafricanresources.com| |Tel: + 27 (0)11 243 2900 | | |E-mail: hhira@paf.co.za | | |______________________________________|____________________________________| |Company Secretary |Nominated Adviser and Joint Broker | | | | |Jane Kirton |Ross Allister/Georgia Langoulant | | | | |St James's Corporate Services Limited |Peel Hunt LLP | | | | |Office: + 44 (0)20 3869 0706 |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)63 482 3802 | | |______________________________________|____________________________________| | |Joint Broker | | | | | |Matthew Armitt/Jennifer Lee | | | | | |Joh. Berenberg, Gossler & Co KG | | |(Berenberg) | | | | | |Office: +44 (0)20 3207 7800 | |______________________________________|____________________________________|
