Slide 1: Elikhulu Project Presentation
ELIKHULU PROJECT PRESENTATION DECEMBER 2016
Slide 2: Presentation Structure
PRESENTATION STRUCTURE • Project overview • Mineral resources and reserves • Project design • Environmental and social impact • Project execution plan • Financial overview 2
Slide 3: Project Overview
RESOURCES fir PROJECT OVERVIEW PR. ve. 9b --y “a4 & 9 ~
Slide 4: Project Overview
PROJECT OVERVIEW The Elikhulu project entails a one Mt per month tailings retreatment gold plant Three existing tailings storage facilities (TSF’s) will be reclaimed sequentially: • Kinross • Bracken/Leslie • Winkelhaak The project scope includes: • Water supply • Hydraulic mining infrastructure • A
Slide 5: Project Overview
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Slide 6: Project Timing
PROJECT TIMING The major project milestone dates are listed below: • Detail engineering starts Quarter 4 2016 • Procurement starts Quarter 2 2017 • Environmental and Social Impact Assessment approval Quarter 3 2017 • Issue of Integrated Water Usage Licence Quarter 3 2017 • Construction start* Quarte
Slide 7: Mineral Resources and Reserves
MINERAL RESOURCES AND RESERVES
Slide 8: Mineral Resources
MINERAL RESOURCES A mineral resources statement in accordance with SAMREC guidelines was completed by SRK in December 2015 Mineral Resources Statement – TSF’s (Indicated) Tonnes Au Au Au TSF Name (Mt) (g/t) (kg) (Moz) Kinross 52.67 0.31 16 568 0.533 Bracken/Leslie 70.07 0.32 22 178 0.713 Winkelhaak
Slide 9: Mineral Reserves
MINERAL RESERVES A SAMREC Mineral Reserves Estimate was reported by DRA in October 2016 The SRK resource statement was amended for depletion of the Kinross TSF by the ETRP and the Kinross material left as new TSF starter wall Mineral Reserves Estimation – All Probable Tonnes Au Au TSF Name (Mt) (g/t
Slide 10: Project Design
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Slide 11: Project - Flowsheet
PROJECT - FLOWSHEET The flow sheet selected in the Elikhulu plant design is as follows: 11
Slide 12: Hydraulic Mining
HYDRAULIC MINING • Same mining method as the existing ETRP operations • Combined hydraulic mining will produce 1.16 Mtpm (0.2 Mtpm to ETRP and 0.96 Mtpm to Elikhulu together with the 0.04 Mtpm of RoM tailings, Elikhulu total throughput is 1 Mtpm) 12
Slide 13: Processing - Design Criteria
PROCESSING - DESIGN CRITERIA • Hydraulically mined material will be screened at 4mm • Trash removal screen ahead of the CIL circuit • No milling required • No pre-leach thickener required, densities will be controlled at hydraulic mining site • CIL circuit: › 1 pre-oxidation stage › 7 leach tanks 13
Slide 14: Processing - Test Work
PROCESSING - TEST WORK • The Elikhulu resource has a long history of metallurgical test work • Test work conducted by SGS was used as the design basis (15 samples from Kinross, 21 samples from Bracken/Leslie and 16 samples from Winkelhaak) • The ETRP operation is achieving planned recoveries as pred
Slide 15: Processing – SGS Test Work Results
PROCESSING – SGS TEST WORK RESULTS Reserve Gold Recoveries per Carbon and Overall consensus TSF Name Tonnages Laboratory Tests Solution Losses recovery (Mt) (%) (%) (%) Kinross 47.0 51.7 3.1 48.6 Bracken/Leslie 70.1 47.2 3.4 43.8 Winkelhaak 70.0 54.7 4.1 50.6 Total 187.1 51.4 3.6 47.8 15
Slide 16: TSF - Design
TSF - DESIGN TSF design was done to maximize tailings deposition on selected site. Highlights of this design are as follows: • Cyclone deposition has been selected • Typical industry rates of rise of 4 – 5 m/yr • Design rate of rise is 4.5 m/yr • Initial deposition rate of 1.0 Mt/mth • ETRP tailings
Slide 17: TSF - Site Selection
TSF - SITE SELECTION 17
Slide 18: TSF Capacity
TSF CAPACITY • The current TSF design can accommodate 168 Mt (11 years) • LOM tailings tonnages of 181.2 Mt will be deposited (157.0 Mt ex Elikhulu and 24.2 Mt ex ETRP) • Options to increase the total deposition capacity: › During detail engineering optimise the existing footprint to increase capaci
Slide 19: Process Water
PROCESS WATER TOTAL WATER REQUIREMENT 15.2 Ml/day • Water sourced directly from underground (6.7 Ml/day) • Make-up water from Leeuwpan evaporation dam (8.5 Ml/day) › Leeuwpan is situated approximately 10 km south-west of the Kinross TSF › Pumped via the existing Leslie holding dam pipeline › A new p
Slide 20: Power Supply
POWER SUPPLY Installed capacity sufficient for the life of the project Installed Power Running Power Description MVA MW MVA Total Project Phase 1 22.1 9.9 16.6 Total Project Phase 2 23.1 10.2 17.3 Total Project Phase 3 23.1 10.2 17.4 Notes: Phase 1 – Kinross mining operation Phase 2 – Bracken/Leslie
Slide 21: Employees
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Slide 22: Employees
EMPLOYEES The total number of employees once in full production will be 245 Process Plant Hydraulic Mining (HM) and Deposition Operations (DO) Management 1 HM DO Process 39 General workers and operators 74 89 Engineering 22 Supervisors 4 4 Materials management 1 Site manager 2 1 Administration 2 Saf
Slide 23: Production Profile
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Slide 24: Mining Schedule and Production Profile
MINING SCHEDULE AND PRODUCTION PROFILE Elikhulu Production Profile 70 0.35 60 0.30 50 0.25 40 0.20 Gold Recovered (Koz) Grade (g/t) 30 0.15 20 0.10 10 0.05 0 0.00 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Gold recovered Grade 24
Slide 25: L.O.M Production Scheduling Results Summary
L.O.M PRODUCTION SCHEDULING RESULTS SUMMARY Unit Total ETRP Elikhulu Tailings Treated * Mt 193.2** 36.1 157.0 Average feed grade g/t Au 0.29 0.29 0.29 Ounces mined Moz 1.79 0.35 1.44 Ounces recovered Moz 0.86 0.17 0.69 L.O.M Years 13 13 13 Notes: * Excludes soil material – inferred resources (0.2 Mo
Slide 26: Environmental and Social Impact
ENVIRONMENTAL AND SOCIAL IMPACT
Slide 27: Environmental and Social Impact
ENVIRONMENTAL AND SOCIAL IMPACT • Environmental Impact Assessment process • The Environmental Impact Assessment process has been kicked off and Department of Mineral Resources approval is expected by Quarter 3 2017 • Activities completed as of 1December 2016: › Background information document (bid)
Slide 28: Environmental and Social Impact
ENVIRONMENTAL AND SOCIAL IMPACT The Integrated Water Usage License application process has kicked off and Department of Water Affairs approval is expected by Quarter 3 2017 Activities that have been completed as of 1 December 2016: • Pre-application meeting was held with the Department of Water Affa
Slide 29: Project Execution Plan
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Slide 30: Project Execution Plan
PROJECT EXECUTION PLAN • A PEP is the processes and strategies to be employed by PAR and the project management team to ensure the project is completed on time and that the facilities designed and constructed will satisfy the project functional requirement • The PEP addresses the following: › Projec
Slide 31: Key Role Players
KEY ROLE PLAYERS The key role players in executing the project are: • Pan African Resources Owner’s Team • DRA Projects SA Team for EPC • Cabanga Concepts as the Environmental Assessment Practitioner • EXM Advisory Services for Water Usage License Application • SLR Consulting for the new TSF Design
Slide 32: Target Price Contracting Philosophy
TARGET PRICE CONTRACTING PHILOSOPHY • PAR will execute the project through a “target price” contracting philosophy • This contracting philosophy is based on a shared risk/reward basis and is essentially executed on a cost plus basis with a variable DRA Projects SA fee, capped at 4% of the project va
Slide 33: Financial Overview
RESOURCES fir FINANCIAL OVERVIEW PR. ve. 9b --y “a4 & 9 ~
Slide 34: Production Parameters
PRODUCTION PARAMETERS Phase 1 Phase 2 Phase 3 Description Unit Total Kinross Leslie Winkelhaak Mined Mt 46.80 70.05 70.00 186.85 Transferred to ETRP Mt (11.97) (12.17) (11.97) (36.11) Arising fines Mt 1.46 2.39 2.43 6.29 Processed Mt 36.30 60.28 60.46 157.03 Grade g/t 0.32 0.30 0.25 0.29 Gold contai
Slide 35: Capital Costs
CAPITAL COSTS Phase 1 - Phase 2 - Phase 3 - R’million Total Kinross Leslie Winkelhaak Process Plant 683.18 - - 683.18 TSF 707.78 138.38 - 846.17 Overland Piping 75.76 29.76 47.94 153.46 Hydraulic Mining 56.58 125.90 58.43 240.91 Design & development 91.21 18.99 6.63 116.83 Pre-production costs 24.51
Slide 36: Overall Cost Analysis
OVERALL COST ANALYSIS Description R’million R/t R/oz US$/oz Remining 742.97 4.73 1,078.79 74.40 Tailings deposition 300.62 1.91 436.49 30.10 Processing 3,357.56 21.38 4,875.14 336.22 Refining 21.42 0.14 31.10 2.14 G&A 77.50 0.49 112.53 7.76 Sub-total 4,500.06 28.66 6,534.05 450.62 Cost recoveries (1
Slide 37: Free Cash Flow
FREE CASH FLOW R’million 31-Dec-17 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 Thereafter Total Revenue - 265.91 1,061.92 1,032.06 981.95 978.40 7,461.45 11,781.70 Operating costs - (83.41) (332.55) (335.72) (339.37) (336.75) (2,966.24) (4,394.05) Capital costs (704.04) (1,051.07) (64.38) (168
Slide 38: Investment Metrics
INVESTMENT METRICS Description US$ 1,180/oz @ R 14.50:US$ 1 US$ 1,250/oz @ R 14.50:US$ 1 Project NPV • 7% R 1,386 million R 1,681 million • 8% R 1,232 million R 1,509 million • 9% R 1,091 million R 1,352 million • 10% R 963 million R 1,209 million Project RATIRR% 23.1% 26.1% Payback (post commission
Slide 39: Sensitivity Analysis @ US$1,180/oz + R14.50:US$1 + 9% Real Discount Rate
SENSITIVITY ANALYSIS @ US$ 1,180/OZ + R 14.50:US$ 1 + 9% REAL DISCOUNT RATE NPV R’million -20% -10% Base case +10% +20% Gold price / R:US$ / Recoveries 182 637 1,091 1,543 1,975 Operating costs 771 936 1,091 1,246 1,401 Capital costs 726 906 1,091 1,265 1,447 SHAREHOLDER RATIRR% % -20% -10% Base cas
Slide 40: Thank You
RESOURCES THANK YOU ve, am b : re “ad f fa 9 ~
Slide 41: 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