Pan African Resources Plc · LSE:PAF
Pan African Resources — H1 FY2023 Earnings Presentation
50 slides from Pan African Resources's earnings presentation, Feb 15, 2023
Slide 1: Mining for a Future – Interim Results Presentation
XXX MINING FOR A FUTURE INTERIM RESULTS PRESENTATION for the six months ended December 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: Forward Looking Statements
XXX 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 a
Slide 4: Overview of Presentation
XXX OVERVIEW OF PRESENTATION H1 FY2023 – Key features Health and Safety Our operating environment Overview of our operations Performance by operation Further reducing Group AISC Capital projects (ZAR) ESG : Our “Beyond compliance” approach Financials Near term organic growth – Royal Sheba Exploratio
Slide 5: H1 FY2023 – Key Features
XXX H1 FY2023 – KEY FEATURES OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 5
Slide 6: Operational and Financial Performance
H1 FY2023 – KEY FEATURES XXX OPERATIONAL AND FINANCIAL PERFORMANCE IMPROVEMENT INITIATIVES IMPLEMENTED AT BARBERTON MINES PRODUCTION PERFORMANCE • Group gold production of 92,307oz following record H1 FY22 production of 108,085oz – impacted by Barberton Mines u/g performance • Operational restructur
Slide 7: Operational and Financial Performance
H1 FY2023 – KEY FEATURES XXX OPERATIONAL AND FINANCIAL PERFORMANCE IMPROVEMENT INITIATIVES IMPLEMENTED FINANCIAL PERFORMANCE • Profit after tax of US$28.9m (H1 FY22:US$46.1m) - identical to the US$28.9m generated in H2 FY22 • Attributable earnings lower at US$29.1m (H1 FY22: US$46.1m) – impacted by
Slide 8: Health and Safety
HEALTH AND SAFETY XXX HEALTH AND SAFETY SAFETY INITIATIVES REFOCUSED Surface operations - maintained excellent safety performance Fatality-free shift milestones achieved • Elikhulu achieved excellent results with an improvement in both the LTIFR and • 3.1 million fatality free shifts at Barberton’s
Slide 9: Our Operating Environment
XXX OUR OPERATING ENVIRONMENT OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 10
Slide 10: Our Operating Environment
OUR OPERATING ENVIRONMENT XXX OUR OPERATING ENVIRONMENT OPERATING SUCCESSFULLY IN SOUTH AFRICA ELECTRICITY AND TECHNICAL SUPPORT MINING TENURE AND REGULATORY FRAMEWORK • New private generation projects and partnerships fast-tracked • Mining rights secure by government to curb blackouts • Barberton M
Slide 11: Renewable Energy Roadmap
OUR OPERATING ENVIRONMENT XXX OUR OPERATING ENVIRONMENT OPERATING SUCCESSFULLY IN SOUTH AFRICA – RENEWABLE ENERGY ROADMAP May 2022 2022/23 2023 2023/24 2024/25 • First SA mining • Feasibility study • Commence • Commission • Wind power, company to complete to construction of feasibility study for ene
Slide 12: Overview of Our Operations
XXX OVERVIEW OF OUR OPERATIONS OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 13
Slide 13: Overview of Our Operations
OVERVIEW OF OUR OPERATIONS XXX OVERVIEW OF OUR OPERATIONS A UNIQUE COMBINATION OF UNDERGROUND MINING AND SURFACE REMINING Now 3 large asset complexes in South Africa Sudan Block 12 Port Sudan Mpumalanga Mbombela Consort Mine Sheba Mine and Khartoum Royal Sheba Fairview Mine Pretoria Middelburg and B
Slide 14: Performance by Operation
XXX PERFORMANCE BY OPERATION Completed Leslie/Bracken pump station at Elikhulu OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 15
Slide 15: Tailings Operations – Elikhulu
PERFORMANCE BY OPERATION XXX PERFORMANCE BY OPERATION TAILINGS OPERATIONS – ELIKHULU • Production steady at 25,830oz (H1 FY22: 25,900oz) Elikhulu LOM production profile* • AISC of US$947/oz (H1 FY22: US$937/oz) – one of the lowest cost gold producers in Southern Africa 80 000 Actual Forecast 70 000
Slide 16: Tailings Operations – BTRP
PERFORMANCE BY OPERATION XXX PERFORMANCE BY OPERATION TAILINGS OPERATIONS – BTRP • Production increased 9.7% to 10,012oz (H1 FY22: 9,126oz) BTRP LOM production profile* • Lowest cost of production in the Group 30 000 • AISC of US$725/oz (H1 FY22: US$814/oz), AISC margin of 58% 25 000 • LOM ~2 years
Slide 17: Mintails – Progressing Towards Construction
PERFORMANCE BY OPERATION XXX MINTAILS PROGRESSING TOWARDS CONSTRUCTION 6 October 2022 - Closure of transaction to acquire total share claims and capital of • Construction capex of US$161.3million – payback within 3.5 years post Mogale Gold and Mintails SA Soweto Cluster TSFs commissioning • Aggregat
Slide 18: Mintails – Proposed Project Execution Timeline
PERFORMANCE BY OPERATION XXX MINTAILS PROGRESSING TOWARDS CONSTRUCTION PROPOSED PROJECT EXECUTION TIMELINE ACTIVITY ESTIMATED DATE Completion and finalisation of DFS Completed Engineering optimisation activities Completed Detailed engineering optimisation Sept 2022 – Mar 2023 Funding package finalis
Slide 19: Surface Tailings Retreatment
PERFORMANCE BY OPERATION XXX SURFACE TAILINGS RETREATMENT BUILDING A WORLD CLASS TAILINGS BUSINESS Elikhulu and Mintails production profile 140 000 120 000 Gold production (oz) 100 000 80 000 60 000 40 000 20 000 0 2028 2021 2025 2031 2035 2038 2041 2042 2043 2040 2044 2019 2018 2020 2024 2027 2030
Slide 20: Evander Underground
PERFORMANCE BY OPERATION XXX PERFORMANCE BY OPERATION EVANDER UNDERGROUND EVANDER 8 SHAFT PILLAR • Pillar mining achieved steady state • Production of 19,173oz (H1 FY22: 27,312oz) – geotechnical parameters reduced mining rates for safe pillar mining, normalisation of face grades • 5% of production i
Slide 21: Fairview Mine
PERFORMANCE BY OPERATION XXX PERFORMANCE BY OPERATION FAIRVIEW MINE Improved mining flexibility with multiple platforms MRC orebody – Five high grade platforms (256, 257, 258, 259 and 358) available for mining • Six diamond boreholes drilled for stope delineation at down-dip extensions to the 260 pl
Slide 22: Barberton Mines' Smaller Underground Operations
PERFORMANCE BY OPERATION XXX BARBERTON MINES’ SMALLER UNDERGROUND OPERATIONS SHEBA MINE Production stable at 9,262oz (H1 FY22: 9,574oz) – continuous operating cycle to: • Optimise development rates to fast-track establishment of MRC mining platforms MRC and ZK orebodies development • Focus on reserv
Slide 23: Performance by Operation – Barberton Mines
PERFORMANCE BY OPERATION XXX PERFORMANCE BY OPERATION - BARBERTON MINES ADDRESSING THE COST AND PRODUCTION DRIVERS OF MATURE HIGH GRADE OPERATIONS Mining at Barberton Mines involves a legacy of over 130 years of continuous mining, and was not designed for efficient extraction of this world class ore
Slide 24: Group AISC
XXX GROUP AISC Solar PV plant at Evander Gold Mine OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 25
Slide 25: Group AISC – FY2023 Targeting ~US$1,250/oz
GROUP AISC XXX GROUP AISC FY2023 – TARGETING AISC OF ~ US$1,250/oz* Lower cost operations Evander Evander Barberton Total lower Mines surface Mines’ cost % Group Underground sources BTRP Elikhulu Fairview operations production AISC per kg 586,038 868,489 403,965 527,585 888,442 631,099 (ZAR/kg) 85%
Slide 26: Group AISC – FY2023 AISC Outlook
US$/oz GROUP AISC 2 000 200 600 1 200 1 800 1 600 0 400 800 1 000 1 400 West African Res B2Gold Corp GROUP AISC Endeavour Mining OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN FY 2023 – AISC OUTLOOK Perseus Mining Source: Individual company websites and presentations Caledonia Barrick Newmont Gold Fields
Slide 27: Capital Projects (ZAR)
XXX CAPITAL PROJECTS (ZAR) Phase 1 of underground refrigeration plant at Evander 24 Level OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 28
Slide 28: Capital Projects (ZAR)
CAPITAL PROJECTS (ZAR) XXX CAPITAL PROJECTS (ZAR) RE-INVESTMENT INTO LONG-LIFE ASSETS AND GROWTH PROJECTS TO GENERATE ATTRACTIVE RETURNS 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 328 195 430 900 BML Expansion 11
Slide 29: ESG: Our Beyond Compliance Approach
XXX ESG : OUR “BEYOND COMPLIANCE” APPROACH OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 30
Slide 30: ESG – Our Beyond Compliance Approach
ESG XXX ESG OUR “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 project Independent audi
Slide 31: H1 FY2023 Financials
XXX H1 FY 2023 FINANCIALS Income impacted by decline in production OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 32
Slide 32: Summarised Consolidated Financial Results
H1 FY 2023 FINANCIALS – STEADY MARGINS XXX H1 FY2023 FINANCIALS SUMMARISED CONSOLIDATED FINANCIAL RESULTS Six months ended Six months ended Movement Salient features Units 31 Dec 2022 31 Dec 2021 % Gold produced oz 92,307 108,085 (14.6) Gold sold1 oz 90,439 107,142 (15.6) Revenue US$ million 156.5 1
Slide 33: Summarised Cash Flow Statement
H1 FY 2023 FINANCIALS – STEADY MARGINS XXX H1 FY2023 FINANCIALS SUMMARISED CASH FLOW STATEMENT Six months ended US$ thousand 31 Dec 2022 Net cash from operating activities before dividend, tax, royalties, net finance costs 38,597 Taxes paid (5 272) Net finance costs (1 773) Net dividend paid (19 975
Slide 34: Debt Composition
H1 FY 2023 FINANCIALS – STEADY MARGINS XXX H1 FY2023 FINANCIALS DEBT COMPOSITION RedInk Facility R125 million Mintails Debt Facility R1.3 billion RCF Facility R1.0 billion DMTN Bond Issue R800 million GBF Facility R140 million Core debt Project specific debt OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN
Slide 35: Debt Redemption Profile (ZAR)
H1 FY 2023 FINANCIALS – STEADY MARGINS XXX H1 FY2023 FINANCIALS DEBT REDEMPTION PROFILE (ZAR) ZAR 1 400 000 000 1 200 000 000 1 000 000 000 800 000 000 600 000 000 400 000 000 200 000 000 0 Jan-23 Mar-23 May-23 Mar-24 May-24 Mar-25 May-25 Mar-26 May-26 Mar-27 May-27 Mar-28 May-28 Mar-29 Sep-23 Jan-2
Slide 36: Near Term Organic Growth – Royal Sheba
XXX NEAR TERM ORGANIC GROWTH – ROYAL SHEBA OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 37
Slide 37: Near Term Organic Growth – Royal Sheba
NEAR TERM ORGANIC GROWTH – ROYAL SHEBA XXX NEAR TERM ORGANIC GROWTH ROYAL SHEBA 850m strike length Progress Orebody Extraction of 10,000t bulk sample to further define grades and recoveries completed 5m – 20m thickness 786m down-dip slope length during H1 FY23: • Main decline and cross-cut developed
Slide 38: Exploration – Republic of the Sudan
XXX EXPLORATION – REPUBLIC OF THE SUDAN Target generation through remote sensing OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 39
Slide 39: Exploration – Republic of the Sudan
EXPLORATION – REPUBLIC OF THE SUDAN XXX EXPLORATION REPUBLIC OF THE SUDAN WHY SUDAN PROGRESS IN FY2023 • 3rd largest gold producer in Africa (after Ghana and SA) and 10th in • Exploration camp constructed ~100km from laboratory the world (2021) • Located in highly prospective Block 12A South • Produ
Slide 40: FY2023 – Focused on Delivery
XXX FY2023 – FOCUSED ON DELIVERY OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 41
Slide 41: Key Deliverables
FY2023 – FOCUSED ON DELIVERY XXX KEY DELIVERABLES FY2023 – FOCUSED ON DELIVERY Proactive journey to ‘zero harm’ through innovative health and safety initiatives Ensure successful execution of restructuring and other initiatives to increase production run rate Successfully execute into capital projec
Slide 42: Thank You
XXX THANK YOU Contact: Hethen Hira, Head of investor relations Email: Hhira@paf.co.za www.panafricanresources.com OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 43
Slide 43: Appendix
XXX APPENDIX OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 44
Slide 44: Share Price and Market Capitalisation
APPENDIX XXX SHARE PRICE AND MARKET CAPITALISATION As at 08 February, 2023 CORPORATE INFORMATION JSE (PAN) ZAR350cps CORPORATE OFFICE COMPANY SECRETARY AIM (PAF) GBP16.2p Jane Kirton The Firs Building ADR (PAFRY) 20:1 US$4.03 St James’s Corporate Services Limited 2nd Floor, Office 204 Office: +44 (0
Slide 45: Overview of Our Operations – Key Features
APPENDIX XXX OVERVIEW OF OUR OPERATIONS – KEY FEATURES GOLD PRODUCTION OF 92,307OZ (H1 FY22: 108,085OZ) BARBERTON EVANDER ELIKHULU BTRP Underground Underground • US$120m tailings retreatment plant • Capacity of 100,000 tpm – • Mining history of over 130 years, high • Benefit of historic sunk capital
Slide 46: Evander Mines' Shaft – 25 & 26 Level Extension
APPENDIX XXX NEAR TERM ORGANIC GROWTH EVANDER MINES’ 8 SHAFT – 25 & 26 LEVEL EXTENSION Key economic and financial metrics – Internal study Key metric Input ZAR Input US$ Gold price assumption* ZAR882,060/kg US$1,770/oz Evander Mines' recovered gold (oz) forecast including 24, 25, 26 Levels 100 000 D
Slide 47: Evander Mines' Shaft – Why Mining Is Different Now
APPENDIX XXX NEAR TERM ORGANIC GROWTH EVANDER MINES’ 8 SHAFT – 25 & 26 LEVEL EXTENSION – WHY MINING IS DIFFERENT NOW Factors During 2018 Mitigation measures for current project Low efficiencies/high High temperatures - inadequate refrigeration Install new refrigeration plant and infrastructure tempe
Slide 48: Performance by Operation – Barberton Mines
APPENDIX XXX PERFORMANCE BY OPERATION - BARBERTON MINES ADDRESSING THE COST AND PRODUCTION DRIVERS OF MATURE HIGH GRADE OPERATIONS Mining at Barberton Mines involves a legacy of over 130 years of continuous mining, and was not designed for efficient extraction of this world class orebody as mining d
Slide 49: Board and Executives
APPENDIX 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 Experience Experience Technical and operational Technical and operational Finance and accou
Slide 50: Reserves and Resources
APPENDIX XXX RESERVES AND RESOURCES GROWTH PORTFOLIO – ROBUST PROJECT PIPELINE Tonnes Grade Gold Gold Gold Mineral Resources* Mt g/t t Moz Barberton hard rock 24.5 4.3 105.9 3.4 BTRP 22.2 1.2 26.4 0.9 Evander underground 113.9 9.0 1 022.8 32.9 Elikhulu 167.3 0.3 47.2 1.5 TOTAL 327.9 3.7 1 202.2 38.7
Pan African Resources — H1 FY2023 Earnings Presentation on 6ix