Pan African Resources Plc · LSE:PAF
Pan African Resources — Non-Deal Roadshow (June 2020)
36 slides from Pan African Resources's roadshow presentation, June 2020
Slide 1: Investor Presentation June 2020
Investor Presentation June 2020
Slide 2: Disclaimer
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
Slide 3: Forward Looking Statements
FORWARD LOOKING STATEMENTS Statements in this report that address exploration activities, mining potential and future plans and objectives of Pan African Resources are forward-looking statements and forward-looking information that involve various risks, assumptions and uncertainties and are not sta
Slide 4: Overview of Presentation
OVERVIEW OF PRESENTATION • Operating in South Africa • Company information • Overview of our operations • H1 FY20 – Highlights and key focus areas • Key features - Financial • Environmental, Social and Governance (ESG) • Impact of COVID-19 • Near-term organic growth projects • Where to next – FY20 a
Slide 5: Operating in South Africa
PAN AFRICAN RESOU aT OPERATING IN SOUTH AFRICA
Slide 6: Operating in South Africa
OPERATING IN SOUTH AFRICA Pan African Resources has a long track record of successfully operating in South Africa Electricity • Reduced instances of load-shedding, power grid stable • Barberton and tailings operations – less exposed than deep-level miners • Completed bankable feasibility study for 1
Slide 7: Shareholder Information
PAN AFRICAN RESOU aT SHAREHOLDER INFORMATION
Slide 8: Company Information
COMPANY INFORMATION Share price and market capitalisation as at 19 June 2020 • AIM 17.90p • 12 month change +69% • Market Capitalisation US$ 495 m • Shares Outstanding 2,235 m • Treasury Shares 306 m • Shares in market 1,929 m Major shareholders • Allan Gray IM (SA) 28% • PAR Gold (SA) 14% • Investe
Slide 9: CEO quote on strategy
“Our strategy for Pan African is simple but powerful: Position ourselves as a sustainable, safe, high-margin and long-life gold producer. We are proud to say that during this year we have taken significant steps towards realising this strategy” COBUS LOOTS Chief executive officer 9
Slide 10: Overview of Our Operations
OVERVIEW OF OUR OPERATIONS Pan African’s business represents a unique combination of underground mining and surface remining Barberton Mines Underground Annual Production ~ 80,000 oz AISC~ USD1,159/oz to USD2,046/oz Evander 8 Shaft Pillar BTRP Annual Production Annual Production ~ 30,000 oz ~ 20,000
Slide 11: Overview of Our Operations: Group Production
OVERVIEW OF OUR OPERATIONS Group production – solid performance and on track to meet guidance • Gold sold increased by 13.6% to 90,602oz (2018: 79,765oz) • Group AISC of ZAR526,150/kg (2018: ZAR444,946/kg), or USD1,113/oz (2018: USD975/oz) • Low risk, high-margin tailings business has increased to 4
Slide 12: Overview of Our Operations: Group Summary
OVERVIEW OF OUR OPERATIONS Group Summary BARBERTON MINES BTRP ELIKHULU EVANDER 8 SHAFT PILLAR • The birthplace of BIOX® and our • Successfully commissioned in 2013 • Elikhulu was constructed within • Maximising the value of our own flagship operation, together with • Designed to treat 100,000 tonnes
Slide 13: H1 FY20 – Highlights and Key Focus Areas
Safe, high-margin and long-life South African- focused gold producer H1 FY20 – Highlights and key focus areas
Slide 14: Group Safety
H1 FY20 – HIGHLIGHTS AND KEY FOCUS AREAS Group safety “Notwithstanding the fact that injury rates are well below industry average, we continuously strive to improve our safety performance and achieve our aim of zero harm to our employees” – Cobus Loots, CEO Barberton Mines achieved 3 million fatalit
Slide 15: Reducing Group All-in Sustaining Cost
H1 FY20 – HIGHLIGHTS AND KEY FOCUS AREAS Reducing group all-in sustaining cost Total operations Group excl. Consort Total underground Total Tailings/ surface Group Total and Evander U/G All-in sustaining cost per (ZAR/kg) 684,342 363,352 526,150 460,924 All-in sustaining cost ( USD/oz) 1,448 769 1,1
Slide 16: Evander Shaft Pillar Project
H1 FY20 – HIGHLIGHTS AND KEY FOCUS AREAS Evander 8 Shaft Pillar project • Pillar access development completed, secondary development and ledging operations ongoing • Build up to 9 stoping crews by Q4 FY 20 • Pillar to be mined at a rate of 11.5ktpm during steady state • Estimated ongoing AISC of sub
Slide 17: Consort Operations – LOM of 6 Years
H1 FY20 – HIGHLIGHTS AND KEY FOCUS AREAS 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 on track for completion during April 2020 • Forecast production of ~3,90
Slide 18: Sheba Operations – LOM of 9 Years
H1 FY20 – HIGHLIGHTS AND KEY FOCUS AREAS 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-ti
Slide 19: Pan African Resources vs SA and Global Producers
H1 FY20 – HIGHLIGHTS AND KEY FOCUS AREAS Pan African Resources vs SA producers and global producers 1 500 1 400 1 300 1 200 H1 FY20 actual 1 100 2019 Forcasting sub USD1,000/oz Global 1 000 average ~ USD1,000/oz** 900 800 700 600 500 PAR full year Sibanye Goldfields Anglogold Ashanti DRD Gold PAR H1
Slide 20: Key Features – Financial
Key features – Financial Group cash flow generation and debt redemption
Slide 21: Adjusted EBITDA Generation
KEY FEATURES – FINANCIAL GROUP CASH FLOW GENERATION AND DEBT REDEMPTION Adjusted EBITDA generation 700 50 649,4 600 40 500 400 30 USD’ million 333,1 342,4 ZAR’ million 300 20 205,1 200 137,2 145,1 87,6 97,9 100 82,7 10 64,9 11,1 0 Evander surface sources* Evander U/G BTRP Barberton U/G Elikhulu Corp
Slide 22: Illustrative De-gearing
KEY FEATURES – FINANCIAL GROUP CASH FLOW GENERATION AND DEBT REDEMPTION Illustrative de-gearing – assuming forecast assumptions are achieved 160 000 140 000 120 000 100 000 USD’000 80 000 60 000 40 000 20 000 - 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-2
Slide 23: Historic Dividend Yield – Dividends Reinstated
KEY FEATURES – FINANCIAL GROUP CASH FLOW GENERATION AND DEBT REDEMPTION Historic dividend yield – dividends reinstated 7% 6% 5% 4% 3% 2% 1% 0% 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
Slide 24: Hedging Summary – Zero Cost Collars
KEY FEATURES – FINANCIAL GROUP CASH FLOW GENERATION AND DEBT REDEMPTION Hedging summary – zero cost collars 950 000 R925,000/kg ($1665/oz)* 900 000 850 000 800 000 750 000 R708,000/kg ($1273/oz)* 700 000 650 000 600 000 50,460oz in H2 of FY20 50,000oz in H1 of FY21 550 000 500 000 Jan-20 Feb-20 Mar-
Slide 25: Environmental, Social and Governance (ESG)
Environmental, Social and Governance (ESG)
Slide 26: Environmental, Social and Governance (ESG)
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 w
Slide 27: H1 FY20 ESG Highlights
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) H1 FY20 ESG Highlights COMMENCED CONSTRUCTION OF DONATED 4 MOBILE HEALTHCARE LIBRARIES TO SCHOOLS INFRASTRUCTURE SURROUNDING PROJECT - BARBERTON EVANDER MINES MINES COMMUNITY - TO BE COMPLETED IN 2021 INVESTED USD0.04 INVESTED USD0.8 MILLION ON BURSARIES MI
Slide 28: H1 FY20 ESG Highlights: Rehabilitation, Solar and Agriculture
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) H1 FY20 ESG Highlights TOTAL REHABILITATION SPENT USD0.9 MILLION TRUST FUND USD25.6 ON REHABILITATION OF MILLION, CLOSURE OLD SHAFTS AND LIABILITIES FULLY INFRASTRUCTURE FUNDED Board approval following positive feasibility studies for solar PV and agricultu
Slide 29: Impact of COVID-19
PAN AFRICAN RESOU aT IMPACT of COVID-19
Slide 30: Impact of COVID-19
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 proces
Slide 31: COVID-19 Compliance Measures and Relief Programmes
COVID-19 COMPLIANCE MEASURES AND RELIEF PROGRAMMES Operational prevention measures and Community and Employee Relief initiatives BARBERTON OPERATIONS: PROACTIVELY FOOD AND HYGIENE MANAGING THE RISKS HAMPERS TO FAMILIES ASSOCIATED WITH THE IN HOST COMMUNITIES, PANDEMIC PROVISION OF WATER TANKERS FINA
Slide 32: Near-term organic growth
PAN AFRICAN@ RESOURCES ) —— Near-term organic growth
Slide 33: Near-term Organic Growth: Evander's Egoli Project
NEAR-TERM ORGANIC GROWTH Evander’s Egoli Project • The Egoli project is an orebody within 3km tramming distance from 7 Shaft > 7 Shaft is currently operational and used to hoist ROM material to the Kinross metallurgical plant • Historical development at 7 Shaft has made ready access to the orebody p
Slide 34: Where to next – FY20 and beyond
Where to next – FY20 and beyond
Slide 35: Where to Next – FY20 and Beyond
WHERE TO NEXT – FY20 AND BEYOND • Continue to produce safely and sustainably into FY2020 group production guidance • Increase gold production in FY2021 • Reduce group all-in sustaining costs • Deleverage balance sheet and increase dividends • Focus on organic growth and asset optimisation 35
Slide 36: Thank You
PAN AFRICA RESOU aT Thank You
Pan African Resources — Non-Deal Roadshow (June 2020) on 6ix