Pan African Resources Plc · LSE:PAF
Pan African Resources — FY2020 Earnings Presentation
40 slides from Pan African Resources's earnings presentation, Sep 15, 2020
Slide 1: Annual Results Presentation
WWW.PANAFRICANRESOURCES.COM ANNUAL RESULTS PRESENTATION FOR THE YEAR ENDED 30 JUNE 2020 JSE:PAN AIM:PAF ADR:PAFRY
Slide 2: Disclaimer
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 and
Slide 3: Forward Looking Statements
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 are n
Slide 4: Overview of Presentation
OVERVIEW OF PRESENTATION COVID-19 Impact FY 2020 – A Year of Delivery – Highlights Safety and financial highlights Operational highlights • Tailings Operations • Barberton: Fairview • Barberton: Consort • Evander : 8 Shaft pillar AISC optimisation and outlook Capital expenditure Environmental, Socia
Slide 5: COVID-19 Impact
COVID-19 IMPACT
Slide 6: COVID-19 Impact
COVID-19 IMPACT RECOVERIES IN LINE WITH THE SA MINING INDUSTRY Daily and total cases over time EMPLOYEES 600 20 500 Total cases (‘000) • Only two positive cases as at 30 June 2020 15 400 Daily cases • As at 14 September 2020, the following statistics reported: 300 10 200 Pan African Resources COVID-
Slide 7: COVID-19 Impact: Relief and Assistance
COVID-19 IMPACT RELIEF AND ASSISTANCE FOR HOST CONTAINMENT AND COMPLIANCE MEASURES IN COMMUNITIES PLACE AT ALL OPERATIONS • Barberton Mines distributed over 5,000 hampers (food and • Group COVID-19 steering committee established to enforce other essential items) to employees, NGO’s and vulnerable an
Slide 8: FY2020 – A Year of Delivery – Highlights
FY2020 – A YEAR OF DELIVERY – HIGHLIGHTS
Slide 9: 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 several safety initiatives and interventions (2019: US$217.4 million) • Net senior debt* 51.9% to US$62.0 million • Barberton Mines achieved 3 mill
Slide 10: Operational Performance: Annual 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 11: 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 12: 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 ounces) - 20,000 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 13: 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 14: 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 15: 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$1,000/oz • Pr
Slide 16: A Unique Combination of Underground and Surface Mining Operations
FY2020 HIGHLIGHTS A UNIQUE COMBINATION OF UNDERGROUND AND SURFACE MINING OPERATIONS Reserve AISC Production Moz Reserve FY2020 FY20 oz (‘000 Tonnes grade (FY2019) Operating assets (FY19 oz) Tonnes) (Mt) (g/t) US$/oz Status LOM Barberton Mines (underground operations) Profitable, long life, high-grad
Slide 17: 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$/oz) 1,169 795 614 826 Higher cost operations Evander Evander surface Total higher cost %
Slide 18: FY2021 Outlook: Targeted AISC
18 US$/oz AISC 1,000 400 200 0 600 1,400 800 1,200 Pan African Resources DRD Gold Harmony AngloGold Ashanti Goldfields Caledonia FY2021 OUTLOOK Teranga Gold - TSX Endeavour Mining-TSX Targeted FY21 AISC (excluding hedging adjustments) Golden Star - TSX-NYSE Perseus Mining TSX-ASX Centamin TSX LSE Pr
Slide 19: Group Capital Expenditure (ZAR)
FY2020 HIGHLIGHTS GROUP CAPITAL EXPENDITURE (ZAR) 2,000 1,800 1,600 1,400 1,200 ZARm 1,000 800 600 400 200 0 2017 2018 2019 2020 2021 FC Evander 7 Shaft 40 Elikhulu 1,256.1 534.6 8.6 127 Evander 262.0 342.4 38.1 328.3 20 BML Expansion 77.9 99.4 89.3 110.3 174 BML Sustaining 116.5 111.0 140.0 186.6 2
Slide 20: Environmental, Social and Governance (ESG)
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
Slide 21: ESG: Ongoing Rehabilitation and Sustainable Development
ESG ONGOING REHABILITATION, SUSTAINABLE DEVELOPMENT INITIATIVES AND INDEPENDENT AUDITS Spent US$2.6 million on Barberton blueberries Commenced construction Independent audits rehabilitation of old shafts • Employment for local of healthcare completed and infrastructure communities infrastructure pro
Slide 22: FY2020 Financials
FY2020- FINANCIALS
Slide 23: Summarised Consolidated Financial Results
FY2020 FINANCIALS SUMMARISED CONSOLIDATED FINANCIAL RESULTS Year ended Year ended Salient features Units 30 June 2020 30 June 2019 Movement Gold produced (oz) 179,457 172,442 4.1% Gold sold (see Note 1) (oz) 173,864 171,706 1.3% Revenue (US$ million) 273.7 217.4 25.9% Average gold price received (co
Slide 24: Senior Debt Contractual Profile
FY2020 FINANCIALS SENIOR DEBT CONTRACTUAL PROFILE 50,000 US$ ‘000 40,000 30,000 Unhedged post Dec 2020 20,000 10,000 0 RCF - balance USD Elikhulu - outstanding balance USD ILLUSTRATIVE DE-GEARING – ASSUMING FORECAST ASSUMPTIONS ARE ACHIEVED 100,000 ‘000 US$ ‘000 90,000 80,000 USD 70,000 60,000 50,00
Slide 25: 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 26: 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 amortisation, impairment reversal and fair valu
Slide 27: 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 28: Near Term Organic Growth
NEAR TERM ORGANIC GROWTH
Slide 29: 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 production of approximately 72,000 ounces at an average head grade Evander
Slide 30: Egoli Project: Financial Matrix
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 31: 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 32: A Track Record of Delivery
A TRACK RECORD OF DELIVERY
Slide 33: 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 34: FY2021 – Looking Ahead
FY2021 —- LOOKING AHEAD
Slide 35: FY2021 Looking Ahead
FY2021 LOOKING AHEAD Continue to produce Continuing our ESG Reduce Group AISC to Balance sheet safely and sustainably journey through US$1000/oz through deleveraging and into FY2021 Group project focused asset increasing dividends production guidance implementation and optimisation to shareholders o
Slide 36: Thank You
WWW.PANAFRICANRESOURCES.COM CONTACT US Hethen Hira THANK YOU Head: Investor Relations hhira@paf.co.za +27 11 243 2900 JSE:PAN AIM:PAF ADR:PAFRY
Slide 37: Appendix
APPENDIX
Slide 38: Corporate Overview: Share Price and Market Capitalisation
CORPORATE OVERVIEW SHARE PRICE AND MARKET CAPITALISATION Share price performance vs relevant indices Last 12 months (to August 2020) AS AT 11 SEPTEMBER 2020 • JSE (PAN) ZAR 515cps 200 • AIM (PAF) GBP 24,0p • 12 month change +302% 175 • ADR (PAFRY) 20:1 US$ 6,12 • Market Capitalisation US$ 688 m 150
Slide 39: Company Information: Board and Executives
COMPANY INFORMATION 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 an
Slide 40: Asset Optimisation: Growth Portfolio
ASSET OPTIMISATION 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