Pan African Resources Plc · LSE:PAF
Pan African Resources — Denver Gold Forum 2020
42 slides from Pan African Resources's conference presentation, September 2020
Slide 1: Denver Gold Forum Investor Presentation
WWW.PANAFRICANRESOURCES.COM DENVER FOLD FORUM INVESTOR PRESENTATION SEPTEMBER 2020 JSE:PAN AIM:PAF ADR:PAFRY
Slide 2: Disclaimer and Forward Looking Statements
DISCLAIMER AND FORWARD LOOKING STATEMENTS 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 i
Slide 3: A safe, sustainable, high margin, long-life gold producer
“A safe, sustainable, high margin, long-life gold producer with assets in two of the world’s renowned gold provinces, in South Africa”
Slide 4: Overview of Presentation
OVERVIEW OF PRESENTATION Corporate overview Board and executives Operating in South Africa COVID-19 Impact Environmental, Social and Governance (ESG) FY2020 Operational and financial highlights : A year of delivery Near term organic growth and project pipeline A track record of delivery FY21 Looking
Slide 5: Corporate Overview
CORPORATE OVERVIEW Share price performance vs relevant indices Last 12 months (to August 2020) AS AT 11 SEPTEMBER 2020 200 • JSE (PAN) ZAR 515cps • AIM (PAF) GBP 24,0p • 12 month change +302% 175 • ADR (PAFRY) 20:1 US$ 6,18 • Market Capitalisation US$ 688 m 150 • Shares Outstanding 2,235 m • Treasur
Slide 6: Corporate Overview: Board and Executives
CORPORATE OVERVIEW 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
Slide 7: Operating in South Africa
OPERATING IN SOUTH AFRICA
Slide 8: 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 supply disruptions, power grid stable • Barberton and tailings operations – less exposed than deep-level miners • Completed bankable feasibility study
Slide 9: COVID-19 Impact
COVID-19 IMPACT
Slide 10: COVID-19 Impact
COVID-19 IMPACT EMPLOYEES AND PRODUCTION RELIEF AND ASSISTANCE FOR HOST CONTAINMENT AND COMPLIANCE COMMUNITIES MEASURES IN PLACE • Only two positive cases as at 30 June 2020 • Barberton Mines distributed over 5,000 • Group COVID-19 steering hampers (food and other essential items) committee establis
Slide 11: Environmental, Social and Governance (ESG)
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) “We are committed to producing high-margin ounces in a safe and efficient manner, while investing in local communities and minimizing the environmental impact of our operations”
Slide 12: ESG
ESG ONGOING REHABILITATION, SUSTAINABLE DEVELOPMENT INITIATIVES AND INDEPENDENT AUDITS Spent US$2.6 million on Barberton blueberries Commenced construction Independent audits rehabilitation of old shafts • Employment for local of healthcare completed and infrastructure communities infrastructure pro
Slide 13: FY2020 – A Year of Delivery – Highlights
FY2020 – A YEAR OF DELIVERY – HIGHLIGHTS
Slide 14: A Unique Combination of Underground and Surface Mining Operations
FY2020 HIGHLIGHTS A UNIQUE COMBINATION OF UNDERGROUND AND SURFACE MINING OPERATIONS Reserve AISC Production Moz Reserve FY2020 FY20 oz (‘000 Tonnes grade (FY2019) Operating assets (FY19 oz) Tonnes) (Mt) (g/t) US$/oz Status LOM Barberton Mines (underground operations) Profitable, long life, high-grad
Slide 15: FY2020 Highlights: Safety and Financial Performance
FY2020 HIGHLIGHTS SAFETY FINANCIAL PERFORMANCE PERFORMANCE • Industry-leading safety performance maintained with • Revenue 25.9% to US$273.7 million (2019: USD217.4 million) several safety initiatives and interventions • Net senior debt* 51.9% to US$62.0 million (2019: US$129.0 million) • Barbert
Slide 16: Operational Performance and Group Production and Costs
FY2020 HIGHLIGHTS OPERATIONAL ANNUAL GROUP PRODUCTION AND COSTS – PERFORMANCE SOLID PERFORMANCE • Gold production 4,1% to 179,457oz (2019: 172,442oz) – • Group cash costs of US$911/oz (2019: US$891), or despite loss of production days due to COVID-19 ZAR459,151/kg (2019: ZAR406,466/kg) • Elikhulu
Slide 17: FY2021 Outlook: AISC Comparison
Average USD 987/oz Source: Individual company websites and presentations Evolution Mining Kinross Iamgold Pure Gold Mining Galiano (Asanko) Gold Resolute West African Resources Hummingbird Resources Shanta Gold Roxgold B2 Gold Chaarat Gold Holdings Yamana Alamos Pretium Centamin TSX LSE Perseus Mini
Slide 18: Group Capital Expenditure
FY2020 HIGHLIGHTS GROUP CAPITAL EXPENDITURE (US$) 160 140 120 100 US$m 80 60 40 20 0 2017 2018 2019 2020 2021 FC Evander 7 Shaft 2,4 Elikhulu 97,8 37,7 0,6 8 Evander 19,3 26,7 2,7 21,0 1 BML Expansion 5,7 7,7 6,3 7,0 11 BML Sustaining 8,6 8,6 9,9 11,9 14 18
Slide 19: FY2020 Financials
FY2020- FINANCIALS
Slide 20: Senior Debt Contractual Profile
FY2020 FINANCIALS SENIOR DEBT CONTRACTUAL PROFILE 50 000 USD ‘000 40 000 30 000 Unhedged post Dec 2020 20 000 10 000 0 Dec 2019 Mar 2020 Jun 2020 Sep 2020 Dec 2020 Mar 2021 Jun 2021 Sep 2021 Dec 2021 Mar 2022 Jun 2022 Sep 2022 Dec 2022 Mar 2023 Jun 2023 Sep 2023 Dec 2023 Mar 2024 Jun 2024 RCF - bala
Slide 21: Ratio of Net Debt to Net Adjusted EBITDA
FY2020 FINANCIALS RATIO OF 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 0,1 0,0 June 16 June 17 June 18 June 19 June 20 *Net adjusted EBITDA is represented by earnings before interest, taxes, mining depreciation, and amortization, impairment reversal and fair valu
Slide 22: Historic Dividend Yield and Proposed Dividend for FY2020
FY2020 FINANCIALS HISTORIC DIVIDEND YIELD AND PROPOSED DIVIDEND FOR FY2020 7% 6,3% 6% 5,6% 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# * Dividend suspended due to cessation of large-scale deep level underground mining at Evander 8 Shaft and co
Slide 23: Near Term Organic Growth and Project Pipeline
NEAR TERM ORGANIC GROWTH AND PROJECT PIPELINE
Slide 24: Near-Term Organic Growth – Egoli Project
NEAR-TERM ORGANIC GROWTH – EGOLI PROJECT FINANCIAL MATRIX CAPITAL EXPENDITURE • Materially lower capital investment when benchmarked against other development projects of similar scale COMPELLING AND ROBUST ECONOMIC RETURNS: • Payback period from project inception – 3,8 years • NPV10,71 - R2,010 mil
Slide 25: Egoli Project: Way Forward
NEAR-TERM ORGANIC GROWTH – EGOLI PROJECT WAY FORWARD DEVELOPMENT PLAN • Detailed project scheduling and planning – under review: H1 FY21 NO.7 SHAFT AND KINROSS PLANT INFRASTRUCTURE: • Preliminary refurbishment: commenced Q1 FY21 • Long-lead equipment orders: Q2 FY21 • Underground dewatering and equi
Slide 26: Organic Growth Portfolio
ORGANIC GROWTH PORTFOLIO ROBUST PROJECT PIPELINE Tonnes Grade Gold Gold Tonnes Grade Gold Gold Gold Mineral Resources Mt g/t t Moz Gold Mineral Reserves Mt g/t t Moz Barberton hard rock 24.4 4.8 117.0 3.8 Barberton hard rock 15.5 3.3 51.7 1.7 BTRP 21.0 1.3 26.4 0.8 BTRP 9.1 1.7 15.4 0.5 Evander unde
Slide 27: A Track Record of Delivery
A TRACK RECORD OF DELIVERY
Slide 28: Projects Delivered on Time and Within Budget
A TRACK RECORD OF DELIVERY PROJECTS DELIVERED ON TIME AND WITHIN BUDGET Investment Project capital (ZARm) Forecast payback period BTRP 325 Paid back in 18 months ETRP 174 Paid back in less than 3 years Elikhulu 1,790* Forecasting less than 3 years (FY21) Evander 8 Shaft pillar 185,7 Forecasting less
Slide 29: FY2021 – Looking Ahead
FY2021 —- LOOKING AHEAD
Slide 30: FY2021 Looking Ahead
FY2021 LOOKING AHEAD Continue to produce Continuing our ESG Reduce Group AISC to Balance sheet safely and sustainably journey through US$1000/oz through deleveraging and into FY2021 Group project focused asset increasing dividends production guidance implementation and optimisation to shareholders o
Slide 31: Thank You
WWW.PANAFRICANRESOURCES.COM CONTACT US Hethen Hira THANK YOU Head: Investor Relations hhira@paf.co.za +27 11 243 2900 JSE:PAN AIM:PAF ADR:PAFRY
Slide 32: Appendix
APPENDIX
Slide 33: Operational Performance – Tailings Operations: Elikhulu
FY2020 HIGHLIGHTS OPERATIONAL PERFORMANCE – TAILINGS OPERATIONS Elikhulu LOM production profile ELIKHULU 80 000 • Production 29% to 59,616 ounces (2019: 46,201 ounces) - 70 000 AISC of US$614/oz (2019: US$587/oz) 60 000 50 000 Ounces • Achieved nameplate 60,000oz/yr design capacity 40 000 • Approv
Slide 34: Operational Performance – Tailings Operations: BTRP
FY2020 HIGHLIGHTS OPERATIONAL PERFORMANCE – BTRP LOM production profile TAILINGS OPERATIONS 30 000 BTRP 25 000 • Production 16% to 20,135 ounces (2019: 24,007 20 000 Ounces ounces) - AISC of US$795/oz (2019: US$552/oz) 15 000 • LOM of 6 years – 3 years at current resources 10 000 • EBITDA generate
Slide 35: Operational Performance – Barberton: Fairview Mine
FY2020 HIGHLIGHTS OPERATIONAL PERFORMANCE – BARBERTON FAIRVIEW MINE • Accelerated underground development programs in FY20 has improved flexibility – over 130 metres of high-grade face length availability • Increased mineral reserve delineation drilling has improved geological models and predictabil
Slide 36: Operational Performance – Barberton: Consort Mine
FY2020 HIGHLIGHTS OPERATIONAL PERFORMANCE – BARBERTON CONSORT MINE • PC Shaft Project delivered as per previous undertakings • Mineral Resource of 48,820t @ 25.5g/t for 40Koz • Development completed in May 2020 – first target block with proved Mineral Reserve of 5,000 tons at average grade of 25g/t
Slide 37: Operational Performance – Evander Shaft Pillar
FY2020 HIGHLIGHTS OPERATIONAL PERFORMANCE – EVANDER 8 SHAFT PILLAR • Shaft tower construction between 14 and 16 levels completed • Steady-state production reached in May 2020 – delays due to COVID-19 lockdown restrictions • Expected to produce 30,000oz/year at an average AISC of sub US$1,000/oz Evan
Slide 38: Reducing Group AISC
FY2020 HIGHLIGHTS REDUCING GROUP AISC Low cost operations Total lower cost % PAR Group Fairview Mine BTRP Elikhulu operations Production AISC per kg (ZAR/kg) 588,830 400,399 309,333 415,905 66% AISC per oz ( US$/oz) 1,169 795 614 826 Higher cost operations Evander Evander surface Total higher cost %
Slide 39: Near-Term Organic Growth – Egoli Project
NEAR-TERM ORGANIC GROWTH – EGOLI PROJECT HIGHLIGHTS LOCATION EGM Evander Gold Assets • Long-life: capitalising on established infrastructure Evander Gold Mining Operation • Initial Life of Mine (LOM) of 9 years – annual gold Evander Gold Underground Projects production of approximately 72,000 ounces
Slide 40: Summarised Consolidated Financial Results
FY2020 FINANCIALS SUMMARISED CONSOLIDATED FINANCIAL RESULTS Year ended Year ended Salient features Units 30 June 2020 30 June 2019 Movement Gold produced (Oz) 179,457 172,442 4.1% Gold sold (see Note 1) (Oz) 173,864 171,706 1.3% Revenue (US$ million) 273.7 217.4 25.9% Average gold price received (co
Slide 41: Five Year Historic ZAR Gold Prices
FY2020 FINANCIALS FIVE YEAR HISTORIC ZAR GOLD PRICES (ZAR/KG) GoldZAR: 26 March 2015 to 30 June 2020 Jun 2020 1 100 000 R991 000/kg 1 000 000 45% 900 000 Jun 2019 800 000 R629 000/kg (ZAR/kg) Jun 2016 R658 000/kg 7% 700 000 -39% -25% 600 000 500 000 Dec 2016 Feb 2018 R507 000/kg R493 000/kg 400 000
Slide 42: South Africa Ranked 2nd for Investment Attractiveness in Africa
OPERATING IN SOUTH AFRICA SOUTH AFRICA RANKED 2ND FOR INVESTMENT ATTRACTIVENESS IN AFRICA IN 2019 Fraser Institute Annual Survey of Mining Companies 2019 Investment attractiveness index - Africa Guinea (Conakry)* South Africa Botswana* Burkina Faso Namibia* Zimbabwe* Mali* Democratic Republic of Con