Pan African Resources Plc · LSE:PAF
Pan African Resources — FY2021 Earnings Presentation
49 slides from Pan African Resources's earnings presentation, Sep 15, 2021
Slide 1: Annual Results Presentation for the year ended 30 June 2021
ANNUAL RESULTS PRESENTATION for the year ended 30 June 2021
Slide 2: Disclaimer
XXX 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
Slide 3: Forward Looking Statements
XXX FORWARD LOOKING STATEMENTS Statements in this presentation 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 a
Slide 4: Overview of Presentation
XXX OVERVIEW OF PRESENTATION Health and safety FY 2021 – Highlights Overview of our operations Successfully operating in South Africa Operational performance by asset Further reducing Group AISC Group capital expenditure ESG – Our “Beyond compliance” approach FY2021 financials – Record profits and d
Slide 5: Health and Safety
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Slide 6: Health and Safety
HEALTH XXX AND SAFETY HEALTH AND SAFETY COVID-19 IMPACT AND MITIGATION SAFETY PERFORMANCE Pan African COVID-19 dashboard as at 30 June 2021 % 6 Positive Active Quarantine Deaths Hospital Recovery 4,62 5 Barberton 3,73 3,60 180 8 7 1 1 95 4 3,51 Mines 3 2,68 Evander 1,70 58 2 4 1 0 95 2 1,53 1,62 1,4
Slide 7: FY2021 – Highlights
Nite) OUR Sea aN FY2021 — HIGHLIGHTS
Slide 8: Group Key Performance Highlights vs FY2020
FY2021 XXX – HIGHLIGHTS GROUP KEY PERFORMANCE HIGHLIGHTS VS FY2020 EXCELLENT OPERATIONAL AND FINANCIAL PERFORMANCE PRODUCTION PERFORMANCE • Group gold production 12.4% to 201,777oz • Barberton Mines’ u/g gold production 29.4% to 82,694oz • Evander 8 Shaft Pillar production 74.2% to 36,016oz •
Slide 9: Group Key Performance Highlights vs FY2020
FY2021 XXX – HIGHLIGHTS GROUP KEY PERFORMANCE HIGHLIGHTS VS FY2020 EXCELLENT OPERATIONAL AND FINANCIAL PERFORMANCE FINANCIAL PERFORMANCE • Revenue 34.6% to US$368.9m; Operating profit to US$128.0m • Net cash generated by operating activities 52.8% to US$82.2m • Record profit after tax 68.6%
Slide 10: Overview of Our Operations
OVERVIEW OF OUR OPERATIONS 10
Slide 11: Successfully Operating in South Africa
OVERVIEW XXX OF OUR OPERATIONS OVERVIEW OF OUR OPERATIONS SUCCESSFULLY OPERATING IN SOUTH AFRICA ELECTRICITY MINING TENURE • DMRE announced lifting of private generation • Renewal application for Barberton Mines’ mining rights licensing threshold to 100 MW, which should supplement granted for 30 yea
Slide 12: Unique Combination of Underground Mining and Surface ReTailings
OVERVIEW XXX OF OUR OPERATIONS OVERVIEW OF OUR OPERATIONS A UNIQUE COMBINATION OF UNDERGROUND MINING AND SURFACE REMINING – WITH INCREASING PRODUCTION PROFILE PAR Group gold production profile 250 000 c.210,000oz c.210,000oz >195,000oz 200 000 150 000 100 000 50 000 0 2018 2019 2020 2021 2022 2023 2
Slide 13: Overview of Our Operations – Key Features
OVERVIEW XXX OF OUR OPERATIONS OVERVIEW OF OUR OPERATIONS – KEY FEATURES GOLD PRODUCTION 12.4% TO 201,777OZ (2020: 179,457OZ) BARBERTON MINES EVANDER 8 ELIKHULU BTRP Underground SHAFT PILLAR • US$120m tailings • Capacity of 100,000 tpm – • Mining commenced over 130 • Benefit of historic sunk retre
Slide 14: Operational Performance by Asset
OPERATIONAL PERFORMANCE BY ASSET 14
Slide 15: Tailings Operations – Elikhulu
OPERATIONAL XXX PERFORMANCE BY ASSET OPERATIONAL PERFORMANCE BY ASSET TAILINGS OPERATIONS – ELIKHULU Elikhulu LOM production profile* • Production 15.8% to 51,459oz (2020: 59,616oz) - AISC of US$846/oz 80 000 Actual Forecast (2020: US$614/oz) 70 000 • Lower recoveries and constrained plant through
Slide 16: Tailings Operations – Elikhulu Production
OPERATIONAL XXX PERFORMANCE BY ASSET OPERATIONAL PERFORMANCE BY ASSET TAILINGS OPERATIONS – ELIKHULU Production in FY2021/22 1 400 000 6 000 4,926oz 4,918oz 4,928oz 1 200 000 4,751oz 5 000 4,641oz 4,720oz 4,615oz 4,353oz 4,276oz 1 000 000 3,942oz 3,999oz 3,908oz 3,685oz 4 000 3,446oz 800 000 Gold (o
Slide 17: Tailings Operations – BTRP
OPERATIONAL XXX PERFORMANCE BY ASSET OPERATIONAL PERFORMANCE BY ASSET TAILINGS OPERATIONS – BTRP BTRP LOM production profile* • Production reduced as per mine plan at 18,239oz (2020: 20,135oz) – AISC 30 000 of US$946/oz (2020: US$795/oz) 25 000 • LOM 3 years for current surface resources, to increas
Slide 18: Royal Sheba Project
OPERATIONAL XXX PERFORMANCE BY ASSET OPERATIONAL PERFORMANCE BY ASSET TAILINGS OPERATIONS – BTRP ROYAL SHEBA Project 832m strike length • Increased BTRP LOM through incorporation of Royal Sheba Orebody 5m – 20m thickness • Extraction of a 20,000t bulk sample commenced – to further define expected gr
Slide 19: Barberton Underground
OPERATIONAL XXX PERFORMANCE BY ASSET OPERATIONAL PERFORMANCE BY ASSET BARBERTON UNDERGROUND FAIRVIEW Mine • Accelerated underground development improves mining flexibility – available high-grade face lengths in excess of 200m, with mining widths > 15m • Improved geological models and predictability
Slide 20: Fairview Mine – Increased Mining Platform Footprints
OPERATIONAL XXX PERFORMANCE BY ASSET OPERATIONAL PERFORMANCE FAIRVIEW MINE – INCREASED MINING PLATFORM FOOTPRINTS 358 Platform Current footprint = 680 m² 257 Platform Current footprint = 514 m² Average grade @14.74g/t gold Average grade @35.76g/t gold Original footprint = 327 m² Original footprint =
Slide 21: Barberton Underground – Project Dibanisa
OPERATIONAL XXX PERFORMANCE BY ASSET OPERATIONAL PERFORMANCE BY ASSET BARBERTON UNDERGROUND Project DIBANISA Barberton Mines historic production profile • Development aimed at optimising costs and efficiencies 100 000 through the connection of underground infrastructure of ~85,000oz Fairview and She
Slide 22: Evander Underground – 8 Shaft Pillar
OPERATIONAL XXX PERFORMANCE BY ASSET OPERATIONAL PERFORMANCE BY ASSET EVANDER UNDERGROUND EVANDER 8 SHAFT Pillar • Production delays due to issues experienced and reported in H1FY21 resolved • Pillar mining ramped up in H2FY21, consistent with feasibility study mine plan • AISC decreased substantial
Slide 23: Further Reducing Group AISC
FURTHER REDUCING GROUP AISC 23
Slide 24: Targeting AISC below US$1,200/oz in FY2022
FURTHER XXX REDUCING GROUP AISC FURTHER REDUCING GROUP AISC TARGETING AISC BELOW US$1,200/oz IN FY2022 Lower cost operations Total lower Barberton Mines cost % PAR Group underground* BTRP Elikhulu operations Production AISC per kg (ZAR/kg) 683,203 468,383 419,041 569,876 77% AISC per oz ( US$/oz) 1,
Slide 25: FY2021 AISC Outlook vs Peers
US$/oz 1 000 1 200 1 600 1 800 0 200 600 800 400 1 400 B2Gold Corp Endeavour Mining Caledonia FY 2021 AISC OUTLOOK West African Res Source: Individual company websites and presentations Perseus Mining Newmont Barrick Gold Fields Golden Star Hummingbird PAR lower cost FURTHER REDUCING GROUP AISC oper
Slide 26: Group Capital Expenditure (ZAR)
GROUP CAPITAL EXPENDITURE (ZAR) 26
Slide 27: Significant Re-investment into Long-life Assets
GROUP XXX CAPITAL EXPENDITURE (ZAR) GROUP CAPITAL EXPENDITURE (ZAR) SIGNIFICANT RE-INVESTMENT INTO LONG-LIFE ASSETS 2 000 1 800 1 600 1 400 1 200 1 000 ZARm 800 600 400 200 0 2017 2018 2019 2020 2021 2022 FC 2023 FC Elikhulu 1 256 535 9 64 300 120 Evander 262 342 38 328 195 450 # 100 BML Expansion 7
Slide 28: Environmental, Social and Governance (ESG)
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) 28
Slide 29: ESG – Beyond Compliance Approach
ENVIRONMENTAL, SOCIAL XXX AND GOVERNANCE (ESG) ESG “BEYOND COMPLIANCE” APPROACH ENVIRONMENT: ENVIRONMENT: SOCIAL: SOCIAL: RENEWABLE ENERGY BIODIVERSITY & CONSERVATION LEAVING A LEGACY SUSTAINABLE COMMUNITIES Elikhulu 9,975MW solar PV plant Collaboration with state and conservation Socio-economic dev
Slide 30: FY2021 Financials
FY2021 FINANCIALS 30
Slide 31: Summarised Consolidated Financial Results
FY2021 XXX FINANCIALS FY2021 FINANCIALS SUMMARISED CONSOLIDATED FINANCIAL RESULTS Year ended Year ended 30 June 2021 30 June 2020 Movement Salient features Units (current financial year) (prior financial year) % Gold produced Oz 201,777 179,457 12.4 Gold sold1 Oz 201,777 173,864 16.1 Revenue and oth
Slide 32: Gold Price and Margins
FY2021 XXX FINANCIALS GOLD PRICE AND MARGINS ZAR AND US$/KG FY2021 R1 400 000 ZAR1,16m/kg US$35,9k/kg R1 200 000 R1 000 000 ZAR812k/kg ZAR Gold Price/KG ZAR970k/kg US$25,2k/kg US$30,2k/kg R800 000 R600 000 Net cash generated by operating activities: Net cash generated by operating activities: R400 0
Slide 33: Senior Debt Repayment Profile / New RCF and DMTN Capacity
FY2021 XXX FINANCIALS FY2021 FINANCIALS HISTORICAL/FORECAST SENIOR DEBT REPAYMENT PROFILE / NEW RCF AND DMTN CAPACITY 325 000 140 000 120 000 100 000 3,6% Margin* 80 000 US$ ‘000 2,75% Margin* 60 000 40 000 20 000 0 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun
Slide 34: Capital Allocation Priorities
FY2021 XXX FINANCIALS FY2021 FINANCIALS CAPITAL ALLOCATION PRIORITIES Sustaining and • Sustaining US$44 million • and growth capital expenditure growing our operations • Prioritised principal debt repayment US$43 million • To fully repay by September 2022 Debt repayment • Cash reserves US$35 million
Slide 35: Net Debt to Net Adjusted EBITDA
FY2021 XXX FINANCIALS FY2021 FINANCIALS NET DEBT TO NET ADJUSTED EBITDA* 4,0 3,7 3,5 3,0 2,5 2,2 2,0 1,5 1,0 0,7 0,5 0,4 0,3 0,1 0,0 June 16 June 17 June 18 June 19 June 20 June 21 * Net adjusted EBITDA is represented by earnings before interest, taxes, mining depreciation, and amortisation, impairm
Slide 36: Historic Dividend Yield and Record Dividend Proposed for FY2021
FY2021 XXX FINANCIALS FY2021 FINANCIALS HISTORIC DIVIDEND YIELD AND RECORD DIVIDEND PROPOSED FOR FY2021 7% 6,3% 6% 5,6% 5,3% 5,1% 5,0% 5% 4% 3,8% 3% 2% 1,0% 1% 0,0% 0% June 14 June 15 June 16 June 17 June 18* June 19 June 20 June 21# * Dividend suspended due to cessation of large-scale deep level un
Slide 37: Near Term Organic Growth
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Slide 38: Near Term Organic Growth – Evander Underground
NEAR TERM XXX ORGANIC GROWTH NEAR TERM ORGANIC GROWTH EVANDER UNDERGROUND Reprioritised capital programme • Completion of internal feasibility study on mining the No. 2 Decline at 24 Level (Phase-1) - excellent recovered grades and production profile with limited capex Phased approach for Egoli to b
Slide 39: Near Term Organic Growth – Evander Phase 2 Option
NEAR TERM XXX ORGANIC GROWTH NEAR TERM ORGANIC GROWTH EVANDER UNDERGROUND Conceptual Evander underground – recovered gold Phase 2 Option: 25 Level and 26 Level* • Study underway to assess merits of extending No.2 Decline to 25 and 26 Levels 250 000 • Mining method to employ hybrid of conventional br
Slide 40: Mintails Pre-Feasibility Study
MINTAILS PRE-FEASIBILITY STUDY 40
Slide 41: Mintails Prefeasibility Study
MINTAILS XXX PREFEASIBILITY STUDY MINTAILS PREFEASIBILITY STUDY PREFEASIBILITY STUDY COMPLETED, DEFINITIVE FEASIBILITY STUDY IN PROGRESS Current status DRA Mogale Gold PFS results • Pre-feasibility study (PFS) completed on Mogale Gold assets in July 2021 • The PFS demonstrated a cash cost of US$955/
Slide 42: Mogale Gold TSFs and Preliminary Production Profile
MINTAILS XXX PREFEASIBILITY STUDY MINTAILS PREFEASIBILITY STUDY MOGALE GOLD TSFS AND PRELIMINARY PRODUCTION PROFILE Preliminary Mintails production profile 70 000 60 000 50 000 Gold (oz) 40 000 30 000 20 000 10 000 0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Ounces Mogale Gold TSFs near Krugersdorp, Ga
Slide 43: FY2022 Delivery on Track
FY2022 DELIVERY ON TRACK 43
Slide 44: Key Deliverables
FY2022 XXX DELIVERY ON TRACK KEY DELIVERABLES FY2022 – DELIVERY ON TRACK • Continue to manage the impact of COVID-19 • Proactive journey to ‘zero harm’ • Deliver annual minimum production guidance of 195,000oz • Successfully execute into capital projects that will sustain and increase annual gold pr
Slide 45: Thank You
THANK YOU Contact: Hethen Hira, Head of investor relations Email: Hhira@paf.co.za www.panafricanresources.com 45
Slide 46: Appendix
APPENDIX 46
Slide 47: Share Price and Market Capitalisation
APPENDIX XXX SHARE PRICE AND MARKET CAPITALISATION As at 8 September 2021 • JSE (PAN) ZAR310cps • AIM (PAF) GBP16,0p • ADR (PAFRY) 20:1 US$4,45 • Market Capitalisation US$502m • Shares Outstanding 2,235m • Treasury Shares 306m • Shares in market 1,929m • Adjusted EBITDA US$144,1m • Net Debt US$39,0m
Slide 48: Board and Executives
APPENDIX XXX BOARD AND EXECUTIVES Keith Spencer Cobus Loots Deon Louw Chairman Chief executive officer Financial director Appointed: 8 October 2007 Appointed: 26 August 2009 Appointed: 1 March 2015 Experience Experience Experience Technical and operational Technical and operational Finance and accou
Slide 49: Reserves and Resources
APPENDIX XXX RESERVES AND RESOURCES GROWTH PORTFOLIO – ROBUST PROJECT PIPELINE Tonnes Grade Gold Gold Gold Mineral Resources* Mt g/t t Moz Barberton hard rock 24.7 4.5 110.0 3.5 BTRP 22.1 1.2 26.8 0.9 Evander underground 116.3 8.9 1 033.9 33.2 Elikhulu 178.2 0.3 50.0 1.6 TOTAL 341.3 3.6 1 220.7 39.2