Slide 1: Results Presentation for the year ended 30 June 2018
RESULTS PRESENTATION for the year ended 30 June 2018 PROFITABLE • SUSTAINABLE • STAKEHOLDERS • GROWTH
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 future financial performance, 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 an
Slide 4: Mission Statement
MISSION STATEMENT To be the safe, low-cost and sustainable mid-tier gold producer of choice 4
Slide 5: The African-Focused Gold Producer
THE AFRICAN-FOCUSED GOLD PRODUCER
Slide 6: Presentation Summary
PRESENTATION SUMMARY • 2018 challenges, remedial actions and results • Repositioned for sustainability › Asset portfolio » Long-life, low-cost tailings retreatment operations » Barberton Mines underground mining › ESG › Financial • Value-accretive growth • Key 2019 deliverables 6
Slide 7: 2018 Challenges, Remedial Actions & Results
2018 CHALLENGES, REMEDIAL ACTIONS & RESULTS Cobus Loots CEO
Slide 8: 2018 Challenges: USD and ZAR gold price
2018 CHALLENGES USD and ZAR gold price – flat gold price with increasing costs Relative performance rebased to 100 (USD and ZAR gold price as well as SA CPI) USD/ZAR Gold price and SA CPI+2% 160 150 140 130 120 110 100 90 80 70 60 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 SA CPI+2% USD gold price ZA
Slide 9: 2018 Challenges: Evander and BTRP operations
2018 CHALLENGES Evander 8 Shaft UG operations unsustainable BTRP production hampered by processing difficulties 80 000 3 500 900 000 3 000 60 000 2 500 ZAR/kg 700 000 Gold sold (Oz) 40 000 2 000 500 000 20 000 1 500 1 000 300 000 0 2014 2015 2016 2017 2018 500 Gold sold 76 566 63 558 73 496 45 304 4
Slide 10: 2018 Challenges: Pan African strategy
2018 CHALLENGES Pan African strategy • In early 2018, business was unsustainable given prevailing ZAR gold prices and SA deep level mining environment › Loss making Evander underground operations exponentially increased group risk profile • Key Pan African strength – ability to expedite decision mak
Slide 11: Remedial actions and results
2018 CHALLENGES Remedial actions and results Continued focus on safety ✔ Curtailed unprofitable ounces – Evander underground ✔ BTRP regrind mill commissioned ✔ Barberton Mines underground flexibility improved ✔ Elikhulu commissioned ✔ “Safer, more sustainable and much more profitable” 11
Slide 12: Repositioned for Sustainability
REPOSITIONED FOR SUSTAINABILITY
Slide 13: Geographical Map
GEOGRAPHICAL MAP Royal Sheba 13
Slide 14: Group Safety
GROUP SAFETY Industry leading safety record Per million man hours 6 Industry rates not 5 available yet 4 3 2 1 0 2014 2015 2016 2017 2018 PAR Group LTIFR 2.97 2.29 3.50 3.51 3.73 Industry LTIFR 4.27 4.67 5.22 4.44 - Barberton Mines LTIFR 1.85 1.87 1.86 2.05 1.93 Barberton Mines RIFR 0.46 0.62 0.62 0
Slide 15: Resources and Reserves
RESOURCES AND RESERVES Robust reserves and resources statement demonstrates ability to replace depleted ounces and increase production Resource reconciliation – gold ounce 40.0 1.51 0.54 0.18 35.0 0.16 30.0 3.17 25.0 Gold Ounces (Moz) Mineral Resource and Reporting Date 20.0 34.40 Decrease in Minera
Slide 16: Long-Life, Low-Cost Tailings Retreatment Operations
LONG-LIFE, LOW-COST TAILINGS RETREATMENT OPERATIONS
Slide 17: Barberton Tailings Retreatment Plant
LONG-LIFE, LOW-COST TAILINGS RETREATMENT OPERATIONS Gold tailings retreatment operations BTRP Operating Costs - Current Year Barberton Tailings Retreatment Plant 1.0% 10.6% 11.2% • Commissioned in July 2013, initial capital outlay of ZAR326 million (~USD37 million), paid back in 18 months Salary and
Slide 18: Elikhulu Tailings Retreatment Plant
LONG-LIFE, LOW-COST TAILINGS RETREATMENT OPERATIONS Gold tailings retreatment operations Elikhulu operating costs - forecast Elikhulu Tailings Retreatment Plant (Currently in final commissioning phase) 2% 1% Salary and wages 4% 9% • Capital of ZAR1.43 billion (~USD95 million) spent up to Mining cost
Slide 19: Barberton Mines
BARBERTON MINES High-quality and long-life
Slide 20: Barberton Mines – Underground
BARBERTON MINES – UNDERGROUND Background Gold from underground operations • Mining started in 1884 at Sheba Mine • Average underground head grade in excess of • Currently there are 3 underground operations: Sheba 10g/t Mine, New Consort Mine and Fairview Mine • LOM of 20 years • Approximately 22,000
Slide 21: Barberton Mines – Universe of opportunities
BARBERTON MINES – UNDERGROUND Universe of opportunities • Accelerated development plan to Rossiter reef increase the number of platforms, i.e. mining flexibility on the high grade MRC. • Sub-vertical shaft to improve logistics and material handling, freeing up 3 decline to hoist additional reef. • D
Slide 22: ESG
ESG
Slide 23: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE* Group environmental responsibility Group social responsibility • Fully funded rehabilitation fund of R364.3 million • Group spend on CSI and LED initiatives amounted to R13.6 million during FY18 • BIOX® technology developed at Barberton • Barberton Mines revampe
Slide 24: Financial Results
FINANCIAL RESULTS Deon Louw, Financial Director
Slide 25: Summarised consolidated results
PAN AFRICAN RESOURCES PLC Summarised consolidated results For the year For the year For the year For the year ended 30 ended 30 Metric Salient features Metric ended 30 ended 30 June 2018 June 2017 June 2017 June 2018 4,990 5,390 (Kilogrammes) Combined operations gold sold (Oz) 173,285 160,444 1,873.
Slide 26: Financial Summary – Group Results (AISC)
FINANCIAL SUMMARY – GROUP RESULTS Costs as defined by World Gold Council ZAR/kg 600 000 500 000 400 000 300 000 200 000 100 000 2015 2016 2017 2018 Barberton Mines U/G AISC 375 914 413 422 501 330 507 130 BTRP AISC 185 280 155 080 171 480 287 390 ETRP AISC 266 453 275 661 242 260 306 120 USD/oz 1 40
Slide 27: Financial Summary – Group Results (cash flows)
FINANCIAL SUMMARY – GROUP RESULTS For the year ended 30 June 2018 Allocation of cash flows ZAR GBP CASH FLOWS FROM OPERATING ACTIVITIES Net income before taxes from continuing operations 165,680,703 9,352,329 Net movement in non-cash flow items and discontinued operations (148,901,696) (7,454,558) O
Slide 28: Senior debt amortisation and repayment profiles
FINANCIAL SUMMARY – GROUP RESULTS Senior debt – Amortisation profile 1 200 1 000 800 ZAR’ million 600 400 200 - Jun-18 Oct-18 Feb-19 Jun-19 Oct-19 Feb-20 Jun-20 Oct-20 Feb-21 Jun-21 Oct-21 Feb-22 Jun-22 Oct-22 Feb-23 Jun-23 Oct-23 Feb-24 Jun-24 RCF - existing RCF-restructured Elikhulu Facility Senio
Slide 29: Impairment, ROE and dividend yield
FINANCIAL SUMMARY – GROUP RESULTS Impairment Impairment assessment (ZAR) 30 June 2018 Evander Mines asset base 4,075,567,591 Items excluded from the impairment (2,294,447,715) Elikhulu project (1,435,233,971) Land (33,042,445) ETRP pump station and Egoli project costs (24,886,864) Mining property (R
Slide 30: Value-Accretive Growth
VALUE-ACCRETIVE GROWTH
Slide 31: Barberton Mines – Sheba Mining Right
VALUE-ACCRETIVE GROWTH Barberton Mines – Sheba Mining Right within current mining right boundary A near-surface opportunity at the Royal Sheba operation was identified during the early stages of the Resource model construction, within the Sheba Mining Right, for the underground mining project Surfac
Slide 32: Royal Sheba – drill results
VALUE-ACCRETIVE GROWTH Royal Sheba – drill results Full composite Significant intersection Average Corrected Corrected grade Intersection depth Intersection depth intersected width Average grade intersected intersected Drillhole Number downhole (m) below collar (m) (m) intersected (g/t) width (m) (g
Slide 33: Egoli project overview
VALUE-ACCRETIVE GROWTH Egoli project overview Annual and cumulative free cash • An orebody adjacent to Evander’s No 7 Shaft infrastructure. The EGOLI BEA EBITDA PROJECT LIFE CYCLE R 5 000 Project will use the established No 7 Shaft and metallurgical facilities, EBITDA After CAPEX PER ANNUM which are
Slide 34: Focus for 2019
: PAN AFRICAN RESOURCES PLC
Slide 35: 2019 Key Deliverables
2019 KEY DELIVERABLES • Continuing to improve our safety performance, and ESG compliance across operations • Delivering into gold production guidance of 170,000oz plus • Ensuring Elikhulu delivers to expectations and incorporating ETRP’s throughput into Elikhulu’s processing capacity • Increasing ba
Slide 36: Thank you
AS PAN AFRICAN RESOURCES PLC