PAN AFRICAN RESOURCES PLC - Operational update

2018-07-12 09:30:00

PAN 201807120014A
Operational update

Pan African Resources PLC
(Incorporated and registered in England and Wales under Companies Act 1985 with registered
number 3937466 on 25 February 2000)
AIM Code: PAF
JSE Code: PAN
ISIN: GB0004300496
(“Pan African” or the “Company” or the “Group”)

OPERATIONAL UPDATE

Following the operational updates released in March and May 2018, Pan African is pleased to provide
preliminary production results for the financial year ended 30 June 2018, production guidance for the
2019 financial year and further information on the Group’s operations and organic growth projects.

Key highlights are summarised as follows:

    •   Improved safety performance year-on-year with no fatalities (2017: three fatalities).
        Barberton Mines commendably achieved one million fatality free shifts during June 2018.
    •   Group gold production of 160,421oz in the 2018 financial year, ahead of its most recent
        production guidance of 157,000oz - 160,000oz.
             - Barberton Mines produced 90,628oz for the 2018 financial year, within its production
                 guidance of 90,000oz - 91,000oz. During the second half of the financial year,
                 Barberton Mines produced 50,017oz of gold, a 23% increase on its first half production.
             - Evander Mines produced 69,793oz for the 2018 financial year, exceeding its production
                 guidance of 67,000oz - 69,000oz.
    •   Construction of the Elikhulu Tailings Retreatment Plant (“Elikhulu”) remains on track and within
        budget for first gold in August 2018, with construction now entering the commissioning phases
        of the project.
    •   The Royal Sheba Project feasibility study at Barberton Mines is expected to conclude during
        September 2018.
    •   Production guidance for the 2019 financial year is approximately 170,000oz, excluding any
        production from Evander’s underground operations. With the previous high cost ounces from
        the Evander underground now replaced by production from low cost surface remining
        operations, production costs are also expected to demonstrate a significant improvement.

Pan African Resources CEO Cobus Loots commented:

“The 2018 financial year was extremely challenging for the Group, both financially and operationally.
However, during the past six months, we have successfully addressed key deliverables that were critical
to the future sustainability of Pan African Resources. We are now re-positioned as a lower-cost, long-
life gold miner, consistent with stakeholder expectations.”

Group safety

The Group experienced no fatalities in the 2018 financial year (2017: three employees fatally injured).
The Group’s lost-time injury frequency rate remained stable at 3.73 (2017: 3.51), while the reportable
injury frequency rate improved materially to 1.08 (2017: 1.53). In terms of safety performances,
significant progress was made over the past year with on-mine safety improvement campaigns
contributing to these results. Further, Barberton Mines achieved its one million fatality free shifts
milestone during June 2018. To ensure continued safety improvements, the Group will be engaging
independent safety experts to review each of the mining operations’ safety systems and controls.

Barberton Mines

Barberton Mines produced 90,628oz of gold for the 2018 financial year, comfortably within the
production guidance of 90,000oz - 91,000oz. The operation successfully produced 50,017oz during the
second half of the 2018 financial year, which was an increase of 23% from gold produced during the
first half. Barberton Mines’ production performance during the second half of the 2018 financial year
was underpinned by Fairview Mine’s 11-block MRC 272 and 358 platforms.

Evander Mines

Evander Mines ceased its underground mining operations and concluded its retrenchment process at
the end of May 2018. Evander Mines produced 69,793oz of gold for the 2018 financial year, above the
production guidance of 67,000oz - 69,000oz.

The Evander Tailings Retreatment Plant (“ETRP”) and surface sources produced 19,874oz, marginally
below the production guidance of between 20,000oz - 21,000oz.

Evander Mines’ underground mining operation concluded the 2018 financial year with 49,919oz of gold
produced, exceeding the guidance provided of 46,000oz.

Elikhulu construction

As previously communicated, construction at Elikhulu is progressing ahead of schedule with first gold
expected in August 2018. The construction teams are now entering the commissioning phases of the
project, in anticipation of a two month ramp-up period to full production. The Elikhulu project is expected
to produce approximately 55,000oz of gold per annum, at an all-in sustaining production cost of between
US$650/oz and US$700/oz.

The transfer of the ETRP processing capacity into Elikhulu is on track and scheduled for December
2018. Elikhulu, in conjunction with the ETRP, is expected to produce approximately 70,000oz per
annum.

Royal Sheba project

The Royal Sheba orebody at Barberton Mines has the potential to deliver approximately 30,000oz per
annum. The Company mandated DRA Global to undertake a life-of-mine technical feasibility study on
the orebody and the study is expected to be concluded during September 2018.


The information contained in this announcement has not been reviewed or reported on by Pan
African’s auditors and is the responsibility of the directors of Pan African.

Certain information contained in this announcement would have constituted inside information (as
defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.

For further information on Pan African, please visit the Company’s website at
www.panafricanresources.com


12 July 2018

Contact information

Corporate Office                        Registered Office
The Firs Office Building                Suite 31
2nd Floor, Office 204                   Second Floor
Cnr. Cradock and Biermann Avenues       107 Cheapside
Rosebank, Johannesburg                  London
South Africa                            EC2V 6DN
Office: + 27 (0) 11 243 2900            United Kingdom
Facsimile: + 27 (0) 11 880 1240         Office: + 44 (0) 207 796 8644
                                        Facsimile: + 44 (0) 207 796 8645

Cobus Loots                             Deon Louw
Pan African Resources PLC               Pan African Resources PLC
Chief Executive Officer                 Financial Director
Office: + 27 (0) 11 243 2900            Office: + 27 (0) 11 243 2900

Phil Dexter                             John Prior / Paul Gillam
St James's Corporate Services Limited   Numis Securities Limited
Company Secretary                       Nominated Adviser and Joint Broker
Office: + 44 (0) 207 796 8644           Office: +44 (0) 20 7260 1000

Sholto Simpson                          Ross Allister/James Bavister/David McKeown
One Capital                             Peel Hunt LLP
JSE Sponsor                             Joint Broker
Office: + 27 (0) 11 550 5009            Office: +44 (0) 207 418 8900

Julian Gwillim                          Jeffrey Couch/Neil Haycock/Thomas Rider
Aprio Strategic Communications          BMO Capital Markets Limited
Public & Investor Relations SA          Joint Broker
Office: +27 (0)11 880 0037              Office: +44 (0) 207 236 1010

Bobby Morse
Buchanan
Public & Investor Relations UK
Office: +44 (0)20 7466 5000
Email: PAF@buchanan.uk.com

Website: www.panafricanresources.com

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