Pan African Resources PLC · LSE:PAF
Pan African Resources — Debt Investor Presentation (October 2022)
49 slides from Pan African Resources's debt investor presentation, October 2022
Slide 1: Mining for a Future – Debt Investor Roadshow
XXX MINING FOR A FUTURE DEBT INVESTOR ROADSHOW October 2022 OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 1
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: Agenda
XXX AGENDA 1. INTRODUCTION TO PAN AFRICAN RESOURCES 2. HEALTH & SAFETY 3. OUR OPERATING ENVIRONMENT 4. PERFORMANCE BY OPERATION AND GROWTH PROJECTS 5. ESG : OUR “BEYOND COMPLIANCE” APPROACH 6. FINANCIAL HIGHLIGHTS 7. PAR’S DMTN OFFERING OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresource
Slide 4: Introduction to Pan African Resources
XXX INTRODUCTION TO PAN AFRICAN RESOURCES The African-focused gold producer Pan African is an African-focused mid-tier gold producer, dual primary listed on the AIM of the LSE (ticker: PAF) and the main board of the JSE (ticker: PAN) as well as the A2X Market (A2X). Our shares trade on the OTCQX Bes
Slide 5: Company Organogram
XXX COMPANY ORGANOGRAM Corporate chart OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 5
Slide 6: Board and Executives
XXX BOARD AND EXECUTIVES KEITH COBUS DEON SPENCER LOOTS LOUW Chairman Chief executive Financial officer director Appointed: 8 October 2007 Appointed: Appointed: 26 August 2009 1 March 2015 Experience Independent Experience Experience Technical and operational Technical and operational Finance and ac
Slide 7: Company Overview
XXX COMPANY OVERVIEW A unique combination of underground mining and surface remining, with exploration upside Sudan Block 12 Port Sudan Mpumalanga Consort Sheba and Mbombela Royal Sheba Khartoum Fairview Pretoria Middelburg and BTRP Barberton Gauteng Emalahleni Johannesburg Evander Elikhulu Ermelo S
Slide 8: Group Profile
XXX GROUP PROFILE Positioning amongst peers and in the SA environment – Peel Hunt 14 October 2022 OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 8
Slide 9: Group Profile – Production Profile
XXX GROUP PROFILE Production profile PAR Group gold production profile 250,000 179,457oz 201,777oz 205,688oz * c.205,000oz * c.205,000oz 172,442oz 200,000 160,444oz 150,000 100,000 50,000 0 2018 2019 2020 2021 2022 2023 2024 Barberton BTRP Evander 8# Elikhulu *as per guidance OTCQX: PAFRF/PAFRY | AI
Slide 10: All-In Sustaining Costs
XXX ALL-IN SUSTAINING COSTS The Group’s AISC performance for its total operations is marginally higher than the average for the global factor, however, the Group’s lower-cost operations which account for 87% of the Group’s annual production, achieved an AISC of US$1 145/oz which is lower than the gl
Slide 11: Health and Safety
XXX HEALTH AND SAFETY OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 11
Slide 12: Health and Safety
XXX HEALTH AND SAFETY Safety performance – our journey to zero harm Continuing our industry leading safety performance COVID-19 • Overall reduction in all reportable accident rates for the Group • Group vaccination rate : >80% at 3o June 2022 (national vaccination rate ~46%) • Ongoing safety initiat
Slide 13: Our Operating Environment
XXX OUR OPERATING ENVIRONMENT OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 13
Slide 14: Overview of Our Operations
XXX OVERVIEW OF OUR OPERATIONS A unique combination of underground mining and surface remining, with exploration upside Sudan Block 12 Port Sudan Mpumalanga Consort Sheba and Mbombela Royal Sheba Khartoum Fairview Pretoria Middelburg and BTRP Barberton Gauteng Emalahleni Johannesburg Evander Elikhul
Slide 15: Overview of Our Operations – Key Features
XXX OVERVIEW OF OUR OPERATIONS – KEY FEATURES Gold production 1.9% to 205,688oz (FY21: 201,777oz) BARBERTON EVANDER ELIKHULU BTRP Underground Underground • US$120m tailings retreatment plant • Capacity of 100,000 tpm – • Mining history of over 130 years, high • Benefit of historic sunk capital wit
Slide 16: Our Operating Environment
XXX OUR OPERATING ENVIRONMENT Operating successfully in South Africa ELECTRICITY AND TECHNICAL SUPPORT MINING TENURE AND REGULATORY FRAMEWORK • Private generation licensing threshold increased – • Barberton Mines’ mining rights valid to 2051 significant number of projects in progress to stabilise an
Slide 17: Performance by Operation & Growth Projects
XXX PERFORMANCE BY OPERATION & GROWTH PROJECTS Leslie/Bracken pump station under construction at Elikhulu OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 17
Slide 18: Performance by Operation – Workforce
XXX PERFORMANCE BY OPERATION Workforce Evander Gold Mining Barberton Mines Employees 2018 2019 2020 2021 2022 Employees 2018 2019 2020 2021 2022 Kinross Plant & Fairview 1065 1057 1034 1001 1031 77 89 99 98 109 Underground Elikhulu 30 92 135 143 146 Sheba 552 554 555 518 512 Graduates and Consort 34
Slide 19: Performance by Operation – Unionisation
XXX PERFORMANCE BY OPERATION Unionisation – Evander Mines • Evander Gold Mining is not actively unionised. Employees use the Employee Representatives forum to engage on collective issues with the Employer • Our biggest contractor is unionised, where the majority of the employees belong to AMCU at a
Slide 20: Performance by Operation – Community Relations
XXX PERFORMANCE BY OPERATION Community relations Evander Mines: • Established a relationship with the Govan Mbeki Municipality. Parties hold bilateral meetings quarterly where the purpose of these meetings is to strengthen relationships and keep parties updated on business and government development
Slide 21: The Mintails Acquisition – DFS Complete
XXX THE MINTAILS ACQUISITION Definitive feasibility study (DFS) complete DFS results announced on Mintails Mogale Gold TSFs in June 2022 • Expected to add ~50koz/year over a 13-year LOM, increasing Group production • Concept study progressing on the Mintails SA Soweto Cluster TSFs by 25% • Further a
Slide 22: The Mintails Acquisition – Project Execution Timeline
XXX THE MINTAILS ACQUISITION Way forward and proposed project execution timeline Environmental authorisation process and stakeholder engagements in progress Activity Estimated date • Completion and finalisation of DFS Completed • Engineering optimisation activities June – August 2022 • Detailed engi
Slide 23: ESG: Our Beyond Compliance Approach
XXX ESG : OUR “BEYOND COMPLIANCE” APPROACH OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 23
Slide 24: ESG Strategic Focus
XXX ESG STRATEGIC FOCUS ESG is a priority for Pan African OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 24
Slide 25: Solar PV Plant Benefits – ESG in Action
XXX ESG Solar PV plant benefits – ESG in action ENVIRONMENT Elikhulu 9.975MW solar PV plant in operation • Path to decarbonisation – will produce 25,000MW of electricity and save 26,000t of CO₂ emissions per year • Ensures stability of supply & future cost reduction • Feasibility study to expand to
Slide 26: ESG – Beyond Compliance Approach
XXX ESG “Beyond compliance” approach GOVERNANCE ENVIRONMENT SOCIAL SOCIAL AND COMPLIANCE WATER RECYCLING LEAVING A LEGACY SUSTAINABLE COMMUNITIES FULLY COMPLIANT WITH GRI REPORTING Responsible and sustainable water use Socio-economic development Barberton Blueberries agri-project Independent audits
Slide 27: Environmental Risk Management and Rehabilitation Strategy
XXX ENVIRONMENTAL RISK MANAGEMENT AND REHABILITATION STRATEGY • Fully compliant with environmental permits as per NEMA, MPRDA and DWS regulations and requirements • Approved EMPr’s for the Group’s operations • Annual environmental performance audits undertaken by external third environmental practit
Slide 28: Financial Highlights
XXX FINANCIAL HIGHLIGHTS OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 28
Slide 29: Financial Highlights – Summarised Consolidated Results
XXX FINANCIAL HIGHLIGHTS Summarised consolidated financial results Year ended Year ended Year ended Year ended Year ended Salient features Units 30 June 2022 30 June 2021 30 June 2020 30 June 2019 30 June 2018 Gold produced Oz 205,688 201,777 179,457 172,442 160,444 Gold sold ¹ Oz 205,688 201,777 17
Slide 30: Financials – Cash Flow
XXX FINANCIALS Cash Flow Year ended Year ended Year ended Year ended Year ended 30 June 2021 Cash flow information Units 30 June 2022 30 June 2020 30 June 2019 30 June 2018 (Restated) Net cash from/(used in) operating activities ZAR thousand 1,652,191 1,185,223 896,383 542,517 (186,528) Net cash (us
Slide 31: Financials – Dividend Yield and Policy
XXX FINANCIALS Historic Dividend Yield and Dividend Proposed for FY2022 Dividend Policy • Target pay-out ratio of 40% to 50% of net cash generated from operating activities, after providing for the cash flow 7% impact of capital expenditure (reduced by external funded 6.3% capital), contractual debt
Slide 32: Prudently Managed Liquidity Through Centralised Treasury Operations
XXX PRUDENTLY MANAGED LIQUIDITY THROUGH CENTRALISED TREASURY OPERATIONS Existing Debt Facilities Treasury management GBF facilities – R140 million • Central treasury company – Group borrower (PAR Funding • Nedbank R90 million company) • RMB R50 million • Subsidiary – operational funding requirements
Slide 33: Financial Covenant Test
XXX FINANCIAL COVENANT TEST Active monitoring of the financial covenants Measured bi-annually in terms of current RCF debt facility (Identical for rescheduled RCF and approved senior debt funding for Mintails) Historical Historical 12 month rolling forecast Jun-22 Jun-22 ZAR US$ ZAR Dec-22 Jun-23 Ne
Slide 34: Hedging Strategy
XXX HEDGING STRATEGY The Group seeks to minimise the adverse impact of financial risk by using, inter alia, derivative financial instruments to hedge financial risks, where appropriate. The use of any financial derivatives is guided by the Group’s Financial Risk Management Policy and specific transa
Slide 35: Hedging Strategy – Interest Rate Hedge
XXX HEDGING STRATEGY Interest rate hedge • Variable for fixed interest rate swaps, with Nedbank and RMB • Will reduce the Group’s base interest rate on R300m of borrowings to the contracted rate of 4.65% • The details of these hedges are as follows: RMB Nedbank Nominal amount ZAR150 million ZAR150 m
Slide 36: Group Capital Expenditure (ZAR)
XXX GROUP CAPITAL EXPENDITURE (ZAR) Re-investment into long-life assets 2,000 1,800 1,600 1,400 1,200 1,000 ZARm 800 600 400 200 0 2020 2021 2022 2023 FC Elikhulu 9 64 168 405 Evander - Mostly expansion 328 195 422 900*Net of revenue BML Expansion 110 192 144 120 BML Sustaining 187 217 288 400 Inclu
Slide 37: Group Capital Expenditure (ZAR)
XXX GROUP CAPITAL EXPENDITURE (ZAR) Re-investment into long-life assets Projects Development capital ZAR Maintenance capital ZAR Expansion Capital ZAR Total ZAR 30 June 2022 113,137,091.0 175,258,313.0 144,142,346.0 432,537,750.0 Barberton Mines 30 June 2023 405,980,000.0 120,801,000.0 526,781,000.0
Slide 38: PAR's Domestic Medium Term Note Offering
XXX PAR’S DOMESTIC MEDIUM TERM NOTE OFFERING Inaugural Sustainability-Linked Bond Issuance OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 38
Slide 39: Second Ranking Debt Investor Structure
XXX SECOND RANKING DEBT INVESTOR STRUCTURE Funders Corporate Bond [R700- 800m] Bond Security Providers and Guarantors 2nd Ranking Debt Guarantee Borrower Project-Related Corporate Loan Debt Guarantee PAR Plc R1,300m term loan Security SPV ISSUER/ Existing PAR SA Holdings BORROWER: Pty Ltd R1,000m RC
Slide 40: Documentation Considerations
XXX DOCUMENTATION CONSIDERATIONS Documentation List Considerations • The programme memorandum prepared by Pan African Resources Funding Company Limited (the Issuer) with a programme amount of up to ZAR5,000,000,000 contains the terms and conditions of the debt securities (the Programme Memorandum) •
Slide 41: Indicative Term Sheet and Timing
XXX INDICATIVE TERM SHEET AND TIMING Issuer [Pan African Funding Company Limited] PAR Plc; Material Operating Subsidiaries: Evander Gold Mining Proprietary Limited; Barberton Mines Proprietary Limited; Evander Gold Mines Proprietary Limited ; Pan African Resources Sa Holdings Proprietary Limited DMT
Slide 42: ESG Material Matters
XXX ESG MATERIAL MATTERS Mapping PAR’s material matters to selected KPIs KPI 1: Energy consumption generated from renewable means KPI 2: Expedited land rehabilitation KPI 3: Employee safety OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 42
Slide 43: KPI 1: Energy Mix – Renewable Energy
XXX KPI 1: ENERGY MIX – RENEWABLE ENERGY Energy consumption generated from renewable means Aspiration • To reach a target of 15% energy generated from renewable means by 2027* Rationale • In South Africa, 89% of total primary energy supply is generated by fossil fuels • Renewable energy sources cont
Slide 44: KPI 2: Land Rehabilitation
XXX KPI 2: LAND REHABILITATION Land rehabilitated percentage of total rehabilitation required over the life of mine Aspiration • To achieve a target of 41% concurrent land rehabilitation by 2029 on Mintails project Rationale • Land and water rehabilitation is an ongoing activity for Pan African. Our
Slide 45: KPI 3: Employee Safety
XXX KPI 3: EMPLOYEE SAFETY Total Recordable Injury Frequency Rate Aspiration • To achieve a year-on-year average improvement of 3,86% in safety performance and a cumulative 24% reduction Rationale • Occupational injuries are a significant problem in the mining industry worldwide • Safety can be meas
Slide 46: Bond Structure
XXX BOND STRUCTURE Applicable to the 5-year instrument Applicable to the 3-year instrument Target observation period Target observation period Target observation period Target observation period Unit of Baseline Baseline Year 1 2 3 4 measurement 30-June-23 30-June-24 30-June-25 30-June-26 Renewable
Slide 47: Compliance with ICMA SLBP and JSE DLR
XXX COMPLIANCE WITH ICMA SLBP AND JSE DLR The Bond issuance meets all requirements put forward by the ICMA SLBP and the JSE DLR JSE Debt Listing Requirements for the Sustainability Segment JSE DLR How have PAR Addressed Compliance Check the full name, address and contact details of each independent
Slide 48: Contact Details
XXX CONTACT DETAILS Pan African Resources Deon Louw dlouw@paf.co.za (Group FD) Marileen Marileen@paf.co.za (Group Financial Manager) Barry Naicker barry@paf.co.za (Group Sustainability Manager) RMB DCM & Sustainable Finance Delia Patterson Delia.Patterson@rmb.co.za (DCM Distribution) Trishalia Naido
Slide 49: Thank You
XXX THANK YOU OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 49
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