Pan African Resources Plc - Unaudited Interim Financial Results for the six months ended 31 December 2024
Pan African Resources PLC
(Incorporated and registered in England and Wales under the Companies Act 1985
with registration 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)
(Key features are reported in
UNaudited INTERIM FINANCIAL results for THE SIX Months ended
KEY FEATURES
Production
-- Group gold production for the six months ended 31 December 2024 (current
reporting period) of 84,705oz, a slight reduction of 3.3% relative to
the previous six months (H2FY2024: 87,581oz)
o As announced in the December 2024 operational update, Evander Mines’
underground production was impacted by the delay in commissioning of
the subvertical shaft for ore hoisting, which was partially offset by
early production from the Mogale Tailings Retreatment (MTR) operation
-- The Group is well positioned for much-improved production in H2FY2025,
with a further significant increase in production expected for FY2026.
Full-year guidance for FY2025 of approximately 215,000oz (FY2024:
186,039oz) is maintained, an increase of 16% from the prior year
o The subvertical hoisting shaft at Evander Mines was fully commissioned
during January 2025
o MTR production is now fully ramped up, ahead of schedule and with
final project capital below budget
o Full-year gold production (48,000oz to 60,000oz) from Tennant
Consolidated Mining Group (TCMG) in Australia is planned for FY2026.
Safety
-- Regrettably, the Group experienced one fatality during the reporting
period (FY2024: one), following an underground mud rush incident at
Evander Mines’ 7 Shaft on 30 December 2024
-- Improvement in lost-time injury frequency rate (LTIFR) to 1.55 per
million man hours (FY2024: 1.82) and reportable injury frequency rate
(RIFR) to 0.55 per million man hours (FY2024: 0.78)
-- Total reportable injury frequency rate (TRIFR) regressed to 8.25 per
million man hours (FY2024: 6.52), which is being addressed
-- The MTR operation achieved a 1.8 million fatality-free shift milestone
during the construction phase, with:
o over 1,600 employees and contractors on-site
o zero reportable injuries and only one lost-time injury.
Costs and cost outlook
-- All-in sustaining costs (AISC) for the reporting period of US$1,675 /oz
(H1FY2024: US$1,295 /oz) impacted by:
o a decrease in production from Evander Mines’ underground operations
for reasons previously highlighted
o multiple Eskom transformer failures at Barberton Mines, as flagged in
the operational update published on 12 December 2024 , negatively
impacting production from the operation. A number of mitigation
measures have been implemented to avoid a recurrence of this issue
o appreciation of the average exchange rate by 4.0% to US$/ZAR:17.95
(H1FY2024: US$/ZAR:18.69)
o once-off long-term employee incentive expenses to the value of US$4.3
million (US$53.3 /oz) included in the cost of production
-- AISC of US$1,466 /oz (FY2024: US$1,170 /oz) for our lower-cost operations
(Elikhulu Tailings Retreatment Plant, Barberton Tailings Retreatment
Plant, MTR operation, Evander Mines underground and Fairview Mine ),
which account for approximately 86% (FY2024: 84%) of annual production
-- AISC guidance for H2FY2025 is anticipated to be between US$1,450 /oz to
US$1,500 /oz, with the expected cost reduction versus H1FY2025 as a
result of improved performance from the underground operations and MTR
being in production for the full period.
Financial
-- Revenue remained robust at US$189.3 million (H1FY2024: restated US$191.1
million ) with only a slight decrease of 1% compared to the previous year
as a result of a 13% decrease in gold production and the impact of the
synthetic gold forward sale transaction of approximately US$17.4 million
on profits for the reporting period, offset by a 21% increase in the US$
gold price received
-- Profit for the reporting period increased by 10% to US$44.6 million
(H1FY2024: restated US$40.7 million ), and includes a gain on acquisition
relating to the TCMG transaction of US$25.2 million
-- Earnings per share (EPS) increased by 10.3% to US 2.35 cents per share
(H1FY2024: restated US 2.13 cents per share) and headline earnings per
share (HEPS) decreased by 43.7% to US 1.20 cents per share (H1FY2024:
restated US 2.13 cents per share). Included in EPS in the current
reporting period is a gain on acquisition relating to the TCMG
transaction. This gain is excluded from HEPS
-- Net cash used in operating activities of US$11.7 million (H1FY2024:
US$27.2 million ), negatively impacted by the opportunity cost of US$17.4
million that resulted from the abovementioned synthetic gold forward
sale transaction utilised to part fund MTR’s construction as well as
increased finance costs
-- Net debt increased to US$228.5 million (H1FY2024: US$64.3 million ),
primarily as a result of the construction of the MTR operation and the
consolidation of debt acquired as part of the TCMG acquisition
-- Available cash and undrawn facilities at period-end of US$32.3 million
(H1FY2024: US$117.7 million )
-- Net dividend of US$23.7 million paid to shareholders in December 2024
(FY2024 dividend).
Near-term growth projects
-- Mogale Tailings Retreatment operation
o Studies are underway to increase annual production from 50,000oz to
approximately 60,000oz in the next year, through:
o the installation of additional reactors to further improve recoveries
o the addition of two carbon-in-leach (CIL) tanks to increase throughput
from 800ktpm to 1Mtpm
o a prefeasibility study on the inclusion of a hard rock crushing
circuit enabling the processing of nearby remnant hard rock resources
o a full feasibility study on the Soweto Cluster tailings storage
facilities (TSFs) is underway and expected to be completed by
September 2025 , with the study focusing on:
o the possibility of constructing a new processing facility in closer
proximity to the Soweto Cluster TSFs, which would be a stand-alone
operation, also producing approximately 50,000oz per year
o the option to include additional proximal TSF resources that will
further add to the life- of-mine (LoM) of the project.
-- Barberton Tailings Retreatment Plant (BTRP)
o Construction of the pump station to reprocess the Bramber dormant TSF
at the BTRP is expected to commence in Q4FY2025, with commissioning
expected in Q3FY2026
o This will extend the LoM of the BTRP from two years to seven years
from current surface sources
-- TCMG project in Australia
-- transaction to acquire TCMG for US$54.2 million was completed in
December 2024 , as follows:
-- An initial cash investment of US$3.4 million for an 8%
shareholding in TCMG, with the all-scrip acquisition for the
remaining 92% of the business through the new issue of less than
6% of the Company’s shares valued at US$50.8m .
-- Production from TCMG is expected to initially add more than 20%
to annual Group production from current reserves, with
significant upside exploration potential in its asset portfolio
-- Construction of the Nobles Gold carbon in leach (CIL) processing plant
has been accelerated and is progressing ahead of schedule and within
budget. Commissioning of the plant and first gold is now expected in
Q4FY2025.
Expected FY2026 production forecast
The Group anticipates significant growth in production as outlined in the table below:
____________________________________________ |Operation |Production | | |range | |____________________________|_______________| |Elikhulu |48,000 |53,000 | |____________________________|_______|_______| |MTR |48,000 |53,000 | |____________________________|_______|_______| |BTRP |10,000 |12,000 | |____________________________|_______|_______| |TCMG |48,000 |60,000 | |____________________________|_______|_______| |Barberton Mines underground*|68,000 |75,000 | |____________________________|_______|_______| |Evander Mines underground |48,000 |55,000 | |____________________________|_______|_______| |Total |270,000|308,000| |____________________________|_______|_______|
*Assumes rightsizing of Barberton Mines’ underground operations as detailed in the operations section of the full announcement.
Group cash flow generation and dividends
The final settlement in terms of the synthetic gold forward sale transaction will be at the end of February
2025, after which the Group will fully benefit from the prevailing spot gold price of approximately
At prevailing gold prices and with increased high-margin production as outlined in this announcement, the Group is expected to be materially de-geared in the next 12 to 18 months. This will allow a review of the Group’s dividend policy after financial year-end, which could include instating interim dividend payments going forward.
Environmental, social and governance initiatives
-- The Group’s renewable energy initiatives provide a roadmap to
decarbonise an estimated 100MW of power through its renewable energy
projects by 2030
o The Evander Mines phase 1 and Fairview renewable energy plants are
performing exceptionally well, generating an estimated 21GWh of solar
power. This contributes approximately 10% of the Group's total energy,
realising a significant saving of US$2.1 million for the reporting
period, while avoiding nearly 19ktCO2e of Scope 2 emissions
o A feasibility study has been completed for a 20MW solar renewable
energy plant, with applications for environmental authorisations and
permitting currently in progress
-- The Group has embarked on several energy efficiency optimisation
projects at our operations, realising approximately US$0.3 million in
savings from these initiatives for the reporting period, with an
additional saving of 3 ktCO2e in emissions
-- Following a positive feasibility study, the Evander Mines’ water
treatment plant will be expanded to supply an estimated 4.5ML/day to
5.5ML/day from the current 3ML/day. Construction work to expand the
plant will commence during 2025
-- Rehabilitation at MTR’s Mogale and Soweto sites is in progress, with
several wetlands being restored since operations commenced. The Group is
on target to rehabilitate 85ha for FY2025, in accordance with the
targets set out for the Group’s Sustainability Bond
-- The Group’s closure liabilities are materially funded with a shortfall
of only US$5.2 million related to the MTR closure liability
This announcement contains inside information.
CHIEF EXECUTIVE OFFICER’S STATEMENT
“Pan African has established an excellent safety record over the years, and we remain committed to our goal of zero harm. We wish to again express our condolences to the family, friends and co-workers of our colleague who succumbed to his injuries following a mud rush incident at a loading box at Evander Mines’ 7 Shaft on
Overall, the Group has improved its safety performance in the period under review, and we continue to implement ongoing safety awareness and training programmes. We are especially proud of the safety achievements at the recently commissioned MTR operation, where we achieved 1.8 million fatality-free hours and zero reportable injuries during the construction phase, with over 1,600 employees and contractors on site.
In the past few years, we have made excellent progress in positioning Pan African as a safe, sustainable and growing high-margin producer. We have diversified our production base from predominantly older underground mines to a more balanced portfolio of surface and underground assets. During the reporting period, we successfully commissioned our MTR operation, ahead of schedule and with a saving of some
In terms of additional diversification and near-term production growth, we are delighted to have concluded the TCMG transaction in 
. In addition to near-term, low cost gold production from surface operations, the
Including production from TCMG, production from low cost surface sources in the Group will account for over 50% of the Group’s annual production in FY2026, estimated at between 270,000oz and 308,000oz per annum. These surface assets will assist in ensuring Pan African maintains a competitive AISC
profile, comparing favourably to the rest of the global industry.
Underground mining in
At Barberton Mines’ operations, production has normalised following the Eskom transformer issues previously reported. Contingencies are now in place to prevent these issues from recurring. We are pleased that our efforts at Consort have seen this smaller operation turn a corner and produce positive cash flows in the past months, with further improvements anticipated in the period ahead. To ensure the long-term sustainability of
We believe Pan African is in an excellent position to capitalise from record gold prices, with high margins, a stable and growing production profile, and the Group being materially unhedged from
DIRECTORS’ RESPONSIBILITY
The information in this announcement has been extracted from the unaudited interim financial results for the six months ended
Any investment decisions should be based on the full announcement and the Group’s detailed operational and financial summaries.
AVAILABILITY OF THE FULL ANNOUNCEMENT
The full announcement is accessible via the JSE link https://senspdf.jse.co.za/documents/2025/jse/isse/pan/INT2024.pdf
and via the Company’s website at https://www.panafricanresources.com/wp-content/uploads/Pan-African-Resources-interim-results-SENS-announcement-2025.pdf
Copies of the full announcement may also be requested by emailing ExecPA@paf.co.za and electronically via the sponsor (sponsor@questco.co.za) at no charge during business hours.
The Company has a dual primary listing on the JSE Limited in
For further information on Pan African, please visit the Company's website at www.panafricanresources.com
Rosebank
___________________________________________________________________________ |Corporate information | |___________________________________________________________________________| |Corporate Office | | | |Registered Office | |The Firs Building | | | |107 Cheapside | |2nd Floor, Office 204 | | | |2nd Floor | |Cnr 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 | | |______________________________________|____________________________________| |Chief executive officer |Financial director and debt officer | | | | |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 | | |Email: 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 | |______________________________________|____________________________________|
