Slide 1: Results Presentation for the year ended 30 June 2014
Results Presentation for the year ended 30 June 2014
Slide 2: Disclaimer
DISCLAIMER This presentation is provided on a confidential basis. 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
Slide 3: Overview of Presentation
OVERVIEW OF PRESENTATION • Group Results and Strategic Overview • Operational Review o Review of Barberton Mines o Review of Barberton Tailings Retreatment Project (‘BRTP’) o Review of Evander Mines o Review of Phoenix Platinum Mining (‘CTRP’) • Outlook 3
Slide 4: Group Results & Strategic Overview
STAKEHOLDER GROUP RESULTS & STRATEGIC OVERVIEW
Slide 5: Geographical Map
GEOGRAPHICAL MAP NORTH JOHANNESBURG 5
Slide 6: Key Features
PAN AFRICAN RESOURCES PLC KEY FEATURES GOLD SOLD REVENUE HEADLINE EARNINGS ALL-IN COSTS DIVIDEND PER KILOGRAM 44% 41% 7% 9% 7% 2014: 188,179oz 2014: ZAR2,608.8 million 2014: ZAR452.0 million 2014: ZAR374,015/kg 2014: ZAR0.1410 per share (2013: 130,493oz) (2013: ZAR1,848.1 million) (2013: Z
Slide 7: Group - Safety Performance: Accident Rates
GROUP - SAFETY PERFORMANCE ACCIDENT RATES 8 6.26 Rates per million man hours 6 4 3.63 2.91 2.97 2.74 2.02 1.94 2 1.62 1.63 1.52 0 2010 2011 2012 2013 2014 Lost time injury frequency rate (LTIFR) Reportable injury frequency rate (RIFR) 7
Slide 8: Group - Safety Performance: Fatality Injury Frequency Rate
GROUP - SAFETY PERFORMANCE FATALITY INJURY FREQUENCY RATE 8 Rates per million man hours 6 4 2 0.48 0.30 0.19 0.22 0.00 0 2010 2011 2012 2013 2014 Fatality injury frequency rate (FIFR) * It’s with regret that we report 4 fatalities that occurred during the year under review 8
Slide 9: Group - Operations Highlights: Barberton
GROUP – OPERATIONS HIGHLIGHTS BARBERTON MINES • Significant increase in gold sold after commissioning of the BTRP (2014: 111,623oz vs 2013: 96,296oz) • Reduction in overall all-in cost per kilogram • One of the lowest cost producers in the SA gold industry (ZAR239,496/kg) BARBERTON TAILINGS RETREATM
Slide 10: Group - Operations Highlights: Evander
GROUP – OPERATIONS HIGHLIGHTS EVANDER MINES • Increased production tonnages with ZAR/t cost only increasing by 2% • Currently in the low grade mining cycle, until February 2015 • LOM increased from 14 to 17 years EVANDER TAILINGS RETREATMENT PLANT (ETRP) • Construction of the ETRP is currently on bu
Slide 11: Group - Operations Highlights: Phoenix Platinum
GROUP – OPERATIONS HIGHLIGHTS PHOENIX PLATINUM • Phoenix Platinum now cash-generative and profitable • PGE sales increased to 7,204oz (2013: 6,480oz) • Phoenix Platinum headline earnings ZAR3.7 million (2013: ZAR6.4 million headline loss) • Zero accidents since turning first sod • Remains as a strat
Slide 12: Key Drivers for Continued Growth
PAN AFRICAN RESOURCES PLC KEY DRIVERS FOR CONTINUED GROWTH • Targeting 225,000oz of gold production per year • Strong Statement of Financial Position • Maintain and increase dividend • Production and growth focus: o Protect margins by managing cost inflation o Target productivity and efficiency impr
Slide 13: Financial Review
FINANCIAL REVIEW COBUS LOOTS, FD
Slide 14: Summarised Consolidated Results
PAN AFRICAN RESOURCES PLC SUMMARISED CONSOLIDATED RESULTS For the year ended 30 June 2014 For the year ended 30 June 2013 ZAR GBP ZAR GBP Revenue (millions) 2,608.8 154.6 1,848.1 133.5 EBITDA (millions) 745.5 44.2 735.2 53.1 Attributable earnings (millions) 452.1 26.8 558.9 42.6 Headlines earnings (
Slide 15: Financial Summary: Revenue
FINANCIAL SUMMARY : GROUP RESULTS REVENUE 3,000 2,500 2,000 ZAR millions 1,500 1,000 500 0 2010 2011 2012 2013 2014 ZAR millions 817.3 879.7 1,240.3 1,848.1 2,608.8 GBP millions 68.5 79.2 101.1 133.5 154.6 15
Slide 16: Financial Summary: Headline Earnings
FINANCIAL SUMMARY : GROUP RESULTS HEADLINE EARNINGS 500 400 ZAR millions 300 200 100 0 2010 2011 2012 2013 2014 ZAR millions 174.3 190.7 359.7 487.0 452.0 GBP millions 14.6 17.2 29.3 35.2 26.8 16
Slide 17: Financial Summary: Headline Earnings Per Share
FINANCIAL SUMMARY : GROUP RESULTS HEADLINE EARNINGS PER SHARE 40 30 ZAR millions 20 10 0 2010 2011 2012 2013 2014 ZAR millions 11.88 13.31 24.89 30.07 24.74 GBP millions 1.07 1.20 2.03 2.17 1.47 17
Slide 18: Financial Summary: Group Capital Expenditure
FINANCIAL SUMMARY : GROUP RESULTS GROUP CAPITAL EXPENDITURE 500 ZAR381.6 million ZAR363.0 million 400 ZAR millions 300 ZAR253.2 million ZAR213.9 million 200 100 ZAR70.6 million 0 2010 2011 2012 2013 2014 GBP 5.9 million GBP 22.8 million GBP 17.4 million GBP 27.6 million GBP 21.5 million Barberton Mi
Slide 19: Costs as Defined by World Gold Council (ZAR/kg)
FINANCIAL SUMMARY : GROUP RESULTS COSTS AS DEFINED BY WORLD GOLD COUNCIL (ZAR/kg) 500,000 400,000 300,000 ZAR/kg 200,000 100,000 0 2010 2011 2012 2013 2014 Average gold price received 267,876 306,757 422,215 440,824 433,437 Cash cost 158,711 175,520 193,360 231,439 298,345 All-in sustaining cash cos
Slide 20: Costs as Defined by World Gold Council (USD/oz)
FINANCIAL SUMMARY : GROUP RESULTS COSTS AS DEFINED BY WORLD GOLD COUNCIL (USD/oz) 1,800 1,500 1,200 USD/oz 900 600 300 0 2010 2011 2012 2013 2014 Average gold price received 1,098 1,366 1,694 1,553 1,303 Cash cost 650 781 776 815 897 All-in sustaining cash costs 776 968 990 992 1,049 All-in costs 77
Slide 21: Group Operational Review
GROUP OPERATIONAL REVIEW RON HOLDING, CEO
Slide 22: Group Production
GROUP RESULTS AND STRATEGIC OVERVIEW GROUP PRODUCTION GOLD OPERATIONS 2014 2013 Total tonnes milled (Underground and Surface) (t) 948,149 512,869 Total tonnes processed (Tailings) (t) 815,736 - Recovered grade (Underground and Surface) (g/t) 5.4 7.9 Recovered grade (Tailings) (g/t) 0.9 - Gold sold (
Slide 23: Group Resource Update - Gold
GROUP RESOURCE UPDATE - GOLD 6% 6% 32% 34% 2013 2014 35.13Moz 33.5Moz (337.1Mt @ 3.10g/t) (326.3Mt @ 3.20g/t) 62% 60% Measured Indicated Inferred 23
Slide 24: Group Reserve Update - Gold
GROUP RESERVE UPDATE - GOLD 9% 10% 2013 2014 9.2Moz 10.1Moz (79.81Mt @ 3.43g/t) (87.6Mt @ 3.58g/t) 91% 90% Proved Probable 24
Slide 25: Operational Review: Barberton Mines
OPERATIONAL REVIEW BARBERTON MINES
Slide 26: Barberton Mines Operational Summary
BARBERTON MINES OPERATIONAL SUMMARY • Gold sold increased by 15.9% to 111,623oz (2013: 96,296oz) • Gold sold from underground and surface sources decreased by 7.9% to 88,738oz (2013:96,296oz) o March 2014 flooding at Sheba Mine o BIOX® - oil contamination from damaged crusher o Concentrate stock pil
Slide 27: Barberton Mines Underground Resource Update
BARBERTON MINES UNDERGROUND RESOURCE UPDATE 29% 31% 35% 39% 2013 2014 2.6Moz 2.9Moz (8.9Mt @ 9.19g/t) (8.9Mt @ 10.00g/t) 32% 34% Measured Indicated Inferred 27
Slide 28: Barberton Mines Underground Reserve Update
BARBERTON MINES UNDERGROUND RESERVE UPDATE 33% 2013 40% 2014 1.0Moz 1.2Moz (4.4Mt @ 7.40g/t) (3.9Mt @ 9.31g/t) 60% 67% Proved Probable 28
Slide 29: Barberton Mines - Underground and Surface Production Statistics
BARBERTON MINES – UNDERGROUND AND SURFACE PRODUCTION STATISTICS 350,000 12 300,000 Underground and Surface Head grade (g/t) 9 250,000 Tonnes 200,000 6 150,000 100,000 3 50,000 0 0 2010 2011 2012 2013 2014 Consort Sheba Fairview Head grade 29
Slide 30: Barberton Mines Gold Sold
BARBERTON MINES GOLD SOLD 120,000 111,623oz 98,091oz 96,296oz 100,000 92,197oz 94,449oz 80,000 oz 60,000 40,000 20,000 0 2010 2011 2012 2013 2014 BTRP - - - - 22,885 Underground 98,091 92,197 94,449 96,296 88,738 and Surface 30
Slide 31: Barberton Mines Costs (ZAR/kg)
BARBERTON MINES – EXCLUDING BTRP COSTS AS DEFINED BY WORLD GOLD COUNCIL (ZAR/kg) 500,000 400,000 300,000 ZAR/kg 200,000 100,000 0 2010 2011 2012 2013 2014 Average gold price received 267,876 306,757 422,215 450,829 435,464 Cash cost 158,711 175,520 193,360 221,424 258,972 All-in sustaining cash cost
Slide 32: Barberton Mines Costs (USD/oz)
BARBERTON MINES – EXCLUDING BTRP COSTS AS DEFINED BY WORLD GOLD COUNCIL (USD/oz) 1,800 1,500 1,200 900 USD/oz 600 300 0 2010 2011 2012 2013 2014 Average gold price received 1,098 1,366 1,694 1,588 1,309 Cash cost 650 781 776 780 778 All-in sustaining cash costs 776 968 990 964 937 All-in costs 776 9
Slide 33: Barberton Mines Cash Cost Breakdown
BARBERTON MINES – EXCLUDING BTRP CASH COST BREAKDOWN 4% 3% 4% 5% 12% 11% 2014 2013 9% ZAR734.4 million ZAR663.2 million 8% 48% GBP43.5 million 50% GBP47,9 million USD778/oz USD780/oz 8% ZAR2,447/t 9% ZAR2,153/t 14% 15% Salaries Mining Processing Engineering Electricity Security Other 33
Slide 34: Barberton Mines Capital Expenditure
BARBERTON MINES CAPITAL EXPENDITURE (INCL. BTRP) 350 ZAR316.8 million 300 250 ZAR millions 200 ZAR151.0 million 150 ZAR131.8 million 100 ZAR70.6 million ZAR75.4 million 50 0 2010 2011 2012 2013 2014 BTRP - - 55.4 229.6 40.7 Maintenance capital 35.0 39.9 38.7 45.1 33.3 Development capital 35.6 35.5 3
Slide 35: Barberton Tailings Retreatment Plant Operational Summary
BARBERTON TAILINGS RETREATMENT PLANT OPERATIONAL SUMMARY • 1st gold production from BTRP - 22,885oz • Revenue generated - ZAR309.2 million • Cash cost per kilogram - ZAR163,977/kg - (USD493/oz) • All-in cost per kilogram - ZAR227,286/kg – (USD683/oz) – expected to reduce with completion of construct
Slide 36: BTRP Resource Update: Tailings Dams
BTRP RESOURCE UPDATE: TAILINGS DAMS 25% 2013 2014 0.72Moz 0.8Moz 50% 50% (17.0Mt @ 1.30g/t) (19.8Mt @ 1.32g/t) 75% Indicated Inferred 36
Slide 37: BTRP Reserve Update: Tailings Dams
BTRP RESERVE UPDATE: TAILINGS DAMS 2013 2014 0.1Moz 0.6Moz (7.3Mt @ 0.56g/t) (14.4Mt @ 1.43g/t) 100% 100% Probable 37
Slide 38: BTRP Cash Cost Breakdown
BARBERTON TAILINGS RETREATMENT PLANT CASH COST BREAKDOWN 8% 8% MAJOR PROCESSING COSTS 2014 INCLUDE: Totals: ZAR 116.7 million • Cyanide - ZAR56.6 million ZAR163,977/kg USD 493/oz • Lime – ZAR17.8 million ZAR143/t • Salaries and wages – ZAR9.5 million 84% Salaries & wages Processing Electricity 38
Slide 39: Operational Review: Evander Mines
OPERATIONAL REVIEW EVANDER MINES
Slide 40: Evander Mines Operational Summary
EVANDER MINES OPERATIONAL SUMMARY • Remains in low grade mining cycle until February 2015 • Gold sold decreased by 19.5% to 76,556oz (2013: 95,089oz) • Revenue decreased by 22.9% to ZAR1.03 billion (2013: ZAR1.33 billion) • Cash cost per kilogram increased by 36.0% to ZAR284,150/kg (2013: ZAR259,640
Slide 41: Evander Mines Underground Resource Update
EVANDER MINES UNDERGROUND RESOURCE UPDATE 5% 5% 34% 35% 2013 2014 29.7Moz 27.9Moz (105.7Mt @ 8.73g/t) (91.3Mt @ 10.00g/t) 61% 60% Measured Indicated Inferred 41
Slide 42: Evander Mines Underground Reserve Update
EVANDER MINES UNDERGROUND RESERVE UPDATE 6% 8% 2013 2014 7.6Moz 7.8Moz (28.1Mt @ 8.40g/t) (29.0Mt @ 8.41g/t) 94% 92% Proved Probable 42
Slide 43: Evander Mines Production Statistics
EVANDER MINES PRODUCTION STATISTICS 1,000,000 6.0 Underground and Surface Head grade (g/t) 5.0 800,000 4.0 600,000 Tonnes milled 3.0 400,000 2.0 200,000 1.0 0 0.0 2010 2011 2012 2013 2014 Surface 293,000 290,000 178,000 202,112 260,901 Underground 580,000 541,000 460,000 390,372 395,127 Head grade 3
Slide 44: Evander Mines Gold Sold
EVANDER MINES GOLD SOLD 140,000 120,000 108,123oz 100,000 96,260oz 95,089oz 88,543oz 76,556oz oz 80,000 60,000 40,000 20,000 0 2010 2011 2012 2013 2014 Surface 17,008 13,889 6,237 7,087 10,600 Underground 79,252 74,654 101,886 88,002 65,956 44
Slide 45: Evander Mines Costs (ZAR/kg)
EVANDER MINES COSTS AS DEFINED BY WORLD GOLD COUNCIL (ZAR/kg) 500,000 400,000 300,000 ZAR/kg 200,000 100,000 0 2013 2014 Average gold price received 449,975 430,801 Cash cost 282,451 384,150 All-in sustaining cash costs 345,006 445,665 All-in costs 372,707 478,933 45
Slide 46: Evander Mines Costs (USD/oz)
EVANDER MINES COSTS AS DEFINED BY WORLD GOLD COUNCIL (USD/oz) 1,800 1,500 1,200 USD/oz 900 600 300 0 2013 2014 Average gold price received 1,585 1,295 Cash cost 995 1,154 All-in sustaining cash costs 1,215 1,339 All-in costs 1,313 1,439 46
Slide 47: Evander Mines Cash Cost Breakdown
EVANDER MINES CASH COST BREAKDOWN 9% 8% 1% 2% 18% 2014 2013* 20% ZAR914.7 million ZAR835.4 million GBP54.2 million 49% GBP60.4 million 50% USD1,154/oz USD995/oz 9% ZAR1,394t ZAR1,366t 8% 4% 3% 10% 9% Salaries and wages Mining Processing Engineering & technical services Electricity Security Administr
Slide 48: Evander Mines Capital Expenditure
EVANDER MINES CAPITAL EXPENDITURE 250 ZAR210.5 million ZAR196.3 million ZAR201.1 million* 200 ZAR175.1 million ZAR177.3 million 150 ZAR millions 100 50 0 2010 2011 2012 2013 2014 ETRP Capital - - - - 79.2 Maintenance capital 62.8 43.6 40.4 65.0 27.9 Development capital 112.3 152.7 136.9 136.1 103.4
Slide 49: Operational Review: Phoenix Platinum
OPERATIONAL REVIEW PHOENIX PLATINUM
Slide 50: Phoenix Platinum Operational Summary
PHOENIX PLATINUM OPERATIONAL SUMMARY • Phoenix was both cash generative and profitable in the 2014 financial year • PGE production increased by 11.2% to 7,204oz (2013: 6,480oz) • Revenue increased by 22.1% to ZAR71.9 million (2013: ZAR58.9 million) • Cash cost per ounce increased by 2.3% to ZAR7,723
Slide 51: Phoenix Platinum Production Statistics
PHOENIX PLATINUM PRODUCTION STATISTICS 300,000 5 250,000 4 200,000 Plant feed tonnes Head grade (g/t) 3 150,000 Plant recoveries increased from 21% to 29% 2 100,000 1 50,000 0 0 2013 2014 Plant feed tonnes 274,190 251,182 Head grade 3.68 3.65 51
Slide 52: Phoenix Platinum PGE Sold
PHOENIX PLATINUM PGE SOLD 8,000 6,000 Not affected by the industry strike oz 4,000 – all concentrates delivered to smelter before financial year end 2,000 0 2013 2014 PGE ounces 6,480 7,204 52
Slide 53: Phoenix Platinum Cash Cost Breakdown
PHOENIX PLATINUM CASH COST BREAKDOWN 1% 1% 1% 1% 6% 6% 32% 33% 2014 2013 ZAR55.6 million ZAR48.9 million GBP3.3 million GBP3.5 million ZAR7,723/oz ZAR7,551/oz ZAR222/t ZAR178/t 60% 59% Salaries and wages Processing Electricity Administration Security 53
Slide 54: Sustainable
Br aa SECRET Sis heh la ha cil 6 ASTROS SUSTAINABLE.
Slide 55: Performance Against 2014 Targets
PERFORMANCE AGAINST 2014 TARGETS • Direct all efforts to reducing the severity of accidents at all operations • Focus delivery on: o Profitable ounces (volume, grade and costs) ✔ o Sustain cost profiles ✔ • Mitigate the impact of the lower grade mining cycle at Evander: o Manage and engineer risks
Slide 56: Outlook: For the Next 12 Months
OUTLOOK: FOR THE NEXT 12 MONTHS 1. Continue all efforts to reduce the severity of accidents at all operations 2. Focus on delivery: o Volumes and grades at operations o Improve cash cost profiles 3. Ameliorate the effects of a lower grade mining cycle at Evander o Establish mining areas on 25 level
Slide 57: Growth: Our Investment Case
GROWTH OUR INVESTMENT CASE
Slide 58: Our Investment Case
PAN AFRICAN RESOURCES PLC OUR INVESTMENT CASE • Group remains profitable with attractive margins, despite lower gold price environment • Long life quality assets o Significant profit and cash flow upside once Evander Mines re-enters higher grade mining cycle • Industry leading dividend yield, with n
Slide 59: Dividend Comparison
PAN AFRICAN RESOURCES PLC DIVIDEND COMPARISON Investment case: Leading dividend payers in the gold space 2014 2013 2012 2011 Caledonia Mining Corporation 7.9% 6.4% 5.1% n/a Pan African Resources PLC 5.6% 6.2% n/a 4.1% Petropavlovsk PLC 0.8% 5.8% 2.5% 1.3% Highland Gold Mining Ltd 7.2% 5.4% 2.3% 0.9%
Slide 60: Thank You
PAN AFRICAN RESOURCES PLC THANK YOU