Pan African Resources Plc · LSE:PAF
Pan African Resources — Non-Deal Roadshow (July 2018)
30 slides from Pan African Resources's roadshow presentation, July 2018
Slide 1: Pan African Resources PLC European Roadshow July 2018
PAN AFRICAN RESOURCES PLC EUROPEAN ROADSHOW JULY 2018
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 report 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 not sta
Slide 4: Pan African Resources Overview
PAN AFRICAN RESOURCES OVERVIEW
Slide 5: Pan African Resources Overview: Background and Asset Overview
PAN AFRICAN RESOURCES OVERVIEW Background Asset overview • South African mid-tier Gold Producer dual-listed on London’s AIM market and South Africa’s JSE (market capitalisation of ZAR3.2 billion (~USD242 million) • Quality, long-life, low-cost producing assets › Safety – LTIFR well below industry no
Slide 6: Our Long-Life, Low-Cost Tailings Retreatment Operations
OUR LONG-LIFE, LOW-COST TAILINGS RETREATMENT OPERATIONS Gold surface sources production (6 months ending 31 December) Oz AISC (USD) 60,000 800 49,937oz** 700 600 40,000 500 30,665oz* 400 21,810oz 20,389oz 300 20,000 11,710oz 200 100 0 0 H1 - 2015 H1 - 2016 H1 - 2017 H1 - 2018 Looking ahead Elikhulu
Slide 7: Our Long Life, High Grade Underground Mining Operation – Barberton Mines
OUR LONG LIFE, HIGH GRADE UNDERGROUND MINING OPERATION – BARBERTON MINES • Life of Mine: 20 years • Three operating underground mines: • Sheba Mine • Consort Mine • Fairview Mine • Birthplace of BIOX® (Biological oxidation) • Treating approximately 22,000 tons of underground ore per month • Average
Slide 8: Operational Cost Comparison
OPERATIONAL COST COMPARISON PAR lower cost operations (6 months ending 31 December 2017) Barberton BTRP ETRP Elikhulu** Total underground* All in sustaining cost (ZAR’mil) 479.7 74.2 117.4 935.9 264.6 Gold sold (kg) 863 2,368 263 371 871 All-in sustaining cost per Kg (ZAR) 556,220 282,376 316,208 30
Slide 9: Differentiating Factors From Other SA Gold Mines
DIFFERENTIATING FACTORS FROM OTHER SA GOLD MINES
Slide 10: Differentiating Factors: Operational Risk Reduced via Tailings Operations
DIFFERENTIATING FACTORS FROM OTHER SA GOLD MINES Operational risk – significantly reduced via long life, low cost tailings operations • Barberton Tailings Retreatment Plant › Initial capital outlay of ZAR326 million (~USD37 million) › Regrind mill installed to improve throughput and recoveries › LOM
Slide 11: Differentiating Factors From Other SA Gold Mines - Safety
DIFFERENTIATING FACTORS FROM OTHER SA GOLD MINES - SAFETY Accident rates compared to the South African gold mining industry Per million man hours BML LTIFR rate at 2.04 6 5 4 3 2 1 0 2013 2014 2015 2016 2017 2.74 2.97 2.29 3.50 3.51 - 5.13 4.27 4.67 5.22 4.44 PAR Lost-time injury frequency rate (LTI
Slide 12: Re-established Low Cost, Sustaining and Profitable Operations
RE-ESTABLISHED LOW COST, SUSTAINING AND PROFITABLE OPERATIONS
Slide 13: Introduction: PAN Share Price Underperformance
INTRODUCTION PAN share price underperformance as a result of operational challenges – 1 year ended 18 July 2018 Relative performance rebased to 100 160 FY17 Trading Results of AGM and Salient update dividend dates 140 Cautionary - ASA Resource Group 120 Removal of ASA Resource Group cautionary 100 F
Slide 14: Cessation of High Cost and High Risk Underground Operations
RE-ESTABLISHED LOW COST, SUSTAINING AND PROFITABLE OPERATIONS Cessation of high cost and high risk underground operations • Acquired Evander Gold Mines in 2013 from Harmony Gold • High cost due to expanded infrastructure and mining distance from the shaft • Depressed ZAR gold price for past three ye
Slide 15: Remedial Action at Barberton Mines
RE-ESTABLISHED LOW COST, SUSTAINING AND PROFITABLE OPERATIONS Remedial action at Barberton Mines • BTRP’s low recoveries - installed regrind mill to improves production to 21,000oz per annum • Underground flexibility - improved through additional development to ensure continuous availability of high
Slide 16: Short Term Growth – Elikhulu
RE-ESTABLISHED LOW COST, SUSTAINING AND PROFITABLE OPERATIONS Short term growth – Elikhulu • A near commissioned tailings plant forecast to produce 56,000 ounces per annum › Forecast capital of ZAR1.74 billion (~USD125 million) – forecasting payback of 4 years post commissioning › Real post tax IRR
Slide 17: Elikhulu Progress
RE-ESTABLISHED LOW COST, SUSTAINING AND PROFITABLE OPERATIONS Elikhulu progress 17
Slide 18: Short - Medium Term Growth Prospects
SHORT - MEDIUM TERM GROWTH PROSPECTS
Slide 19: Short - Medium Term Growth Prospects: Royal Sheba Project
SHORT - MEDIUM TERM GROWTH PROSPECTS Royal Sheba project Expansion of an previously mined orebody to produce an estimated 30,000 ounces per annum over medium term. Orebody is being accessed from 23 Level Sheba Mine development of which +/-900m has been developed and approximately 850m remains 19
Slide 20: Egoli Project Overview
SHORT - MEDIUM TERM GROWTH PROSPECTS Egoli project overview LOM Production Profile (ROM tonnes) • An orebody adjacent to Evander’s No 7 Shaft infrastructure. The Project will use the established No 7 Shaft and 50 000 metallurgical facilities, which are approximately 3km from 40 000 the shaft infrast
Slide 21: Growth Prospects – Exploration Prospects
SHORT - MEDIUM TERM GROWTH PROSPECTS – EXPLORATION PROSPECTS Short Term Exploration › Independent geological consultancy conducted a review of the group’s mining rights resulting in: – In excess of 35 targets being identified and ranked on prospectivity for exploration; – Exploration has commenced o
Slide 22: Exploration Programs at Barberton Mines
SHORT - MEDIUM TERM GROWTH PROSPECTS – EXPLORATION PROGRAMS AT BARBERTON MINES Royal Sheba (0.2Moz) New Consort (0.2Moz) Quartz Ridges (0.15Moz) PC Extension (0.1Moz) Belview BIF (0.1Moz) 3 Shaft Contorted Bar (0.1Moz) North star & Betty 50koz Gould Salvation (0.1Moz) 22
Slide 23: SA Mining Environment
SA MINING ENVIRONMENT
Slide 24: SA Mining Environment
SA MINING ENVIRONMENT • Declining production profile, increasing costs • Negative perceptions of SA mining industry › Underground mines – deep and increasingly › Safety - challenges difficult and expensive › Uncertainty around mining legislation › Declining employment numbers › Labour and community
Slide 25: SA Mining Environment: Positives on South Africa
SA MINING ENVIRONMENT Positives on South Africa • Mining safety › Between 1993 and 2016 mining fatalities reduced by 88% › Mining injuries have decreased by 9% from 2016 to 2017 Number of fatalities – SA Mining 700 600 500 400 300 200 100 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Slide 26: Summarised Investment Case
SUMMARISED INVESTMENT CASE Achievements and business prospects: • Operational challenges of 2017 financial year – remedial action achieving desired results on all fronts to re- establish sustainable operations • Cessation of Evander’s loss making underground mining production – materially reducing g
Slide 27: Thank You
THANK YOU
Slide 28: Thank You Appendix
THANK YOU APPENDIX
Slide 29: Differentiating Factors - Profitability: Dividends Paid
DIFFERENTIATING FACTORS FROM OTHER SA GOLD MINES - PROFITABILITY Dividends paid ZAR million / GBP million ZAR300.0m 350 ZAR258.0m GBP17.1m ZAR240.3m 300 GBP14.7m GBP14.3m ZAR210.0m ZAR185.0m 250 GBP9.7m GBP10.0m 200 150 100 50 0 2013 2014 2015 2016 2017 Headline earnings per share ZAR cents / GBP pe
Slide 30: PAR's Well Established Track Record
PAR’S WELL ESTABLISHED TRACK RECORD PAR historic dividend yield relative to market 1.4x 6% 1.2x 5% 1.0x 4% 0.8x Dividend yield Payout ratio 2.8% 3% 0.6x 0.59x 2.0% 2% 0.4x 1% 0.2x 1.4% 1.4% 1.1% 1.4% 1.1% 1.8% 4.1% 5.4% 1.2% 1.5% 0.8% 2.3% 4.0% 5.6% 3.2% 1.3% 3.1% 0.0x 0% Newmont AngloGold Ashanti N
Pan African Resources — Non-Deal Roadshow (July 2018) on 6ix