Pan African Resources Plc · LSE:PAF
Pan African Resources — FY2022 Earnings Presentation
53 slides from Pan African Resources's earnings presentation, Sep 14, 2022
Slide 1: Mining for a Future: Annual Results Presentation
XXX MINING FOR A FUTURE ANNUAL RESULTS PRESENTATION for the financial year ended June 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 Health and safety FY2022 – Highlights Our operating environment Performance by operation Further reducing Group AISC Group capital expenditure ESG : Our “Beyond compliance” approach FY 2022 financials – Robust profits and dividends Near term organic growth – Evander unde
Slide 5: Health and Safety
XXX HEALTH AND SAFETY OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 5
Slide 6: Health and Safety
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%) • Ongo
Slide 7: FY2022 – Highlights
XXX FY2022 – HIGHLIGHTS OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 7
Slide 8: Group Key Performance Highlights
FY2022 – HIGHLIGHTS XXX GROUP KEY PERFORMANCE HIGHLIGHTS ROBUST OPERATIONAL AND FINANCIAL PERFORMANCE PRODUCTION PERFORMANCE • Record Group gold production of 205,688oz 5.5% from initial guidance of 195koz • Elikhulu produced 52,220oz (FY2021: 51,459oz) • BTRP 7.2% to 19,560oz (FY2021: 18,239oz)
Slide 9: Group Key Performance Highlights
FY2022 – HIGHLIGHTS XXX GROUP KEY PERFORMANCE HIGHLIGHTS ROBUST OPERATIONAL AND FINANCIAL PERFORMANCE FINANCIAL PERFORMANCE • Net cash from operating activities 45.1% to US$110.0m (FY2021: US$75.8m) • Profit after tax steady at US$75.0m (FY2021:US$74.7m) • HEPS increased to US3.93 cents per share
Slide 10: Our Operating Environment
XXX OUR OPERATING ENVIRONMENT OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 10
Slide 11: Overview of Our Operations
OUR OPERATING ENVIRONMENT 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 Barberton and BTRP Gauteng Emalahleni Jo
Slide 12: Overview of Our Operations – Key Features
OUR OPERATING ENVIRONMENT 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
Slide 13: Our Operating Environment
OUR OPERATING ENVIRONMENT XXX OUR OPERATING ENVIRONMENT OPERATING SUCCESSFULLY IN SOUTH AFRICA ELECTRICITY AND TECHNICAL SUPPORT MINING TENURE AND REGULATORY FRAMEWORK • Private generation licencing threshold increased – • Barberton Mines’ mining rights valid to 2051 significant number of projects i
Slide 14: Performance by Operation
XXX PERFORMANCE BY OPERATION Leslie/Bracken pump station under construction at Elikhulu OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 14
Slide 15: Tailings Operations – Elikhulu
PERFORMANCE BY OPERATION XXX PERFORMANCE BY OPERATION TAILINGS OPERATIONS – ELIKHULU • Production 1.5% to 52,220oz (FY21: 51,459oz) Elikhulu LOM production profile* • AISC of US$1,003/oz (FY21: US$846/oz) 80 000 • 11 Year LOM 70 000 Actual Forecast • 9.9MW solar photovoltaic renewable energy plant
Slide 16: Tailings Operations – BTRP
PERFORMANCE BY OPERATION XXX PERFORMANCE BY OPERATION TAILINGS OPERATIONS – BTRP • Production 7.1% to 19,560oz (FY21: 18,239oz) BTRP LOM production profile* • AISC of US$891/oz (FY21: US$946/oz), AISC margin of 51% 30 000 • LOM ~2 years from current surface resources, to increase with incorporatio
Slide 17: Evander Underground
PERFORMANCE BY OPERATION XXX PERFORMANCE BY OPERATION EVANDER UNDERGROUND EVANDER 8 SHAFT Pillar • Pillar mining achieved steady state - outperformed in FY22 • Production 35.6% to 48,850oz (FY21: 36,016oz) • AISC decreased to US$1,112/oz (FY21: US$1,604) • Improved tonnages and higher grades • One
Slide 18: Fairview Mine
PERFORMANCE BY OPERATION XXX PERFORMANCE BY OPERATION FAIRVIEW MINE Increased mineral reserve delineation drilling has: • Improved geological models and predictability • Enabled development towards down-dip extensions of the orebodies • Improved confidence in the grade control models that can be upd
Slide 19: Sheba Mine
PERFORMANCE BY OPERATION XXX PERFORMANCE BY OPERATION SHEBA MINE Focus on extraction of MRC and ZK orebodies Project Dibanisa • Development on down-dip extension of ZK on 37 and 38 Levels towards Development to connect the underground infrastructure of Fairview and Sheba Fairview Mines will: • 10 di
Slide 20: Consort Mine
PERFORMANCE BY OPERATION XXX PERFORMANCE BY OPERATION CONSORT MINE Decreased production of 10,202oz (FY2021: 17,266oz) as a result of geotechnical constraints • Impeded timeous development towards the strike and up-dip continuation of the PC Shaft orebody • Constraints have subsequently been address
Slide 21: Further Reducing Group AISC
XXX FURTHER REDUCING GROUP AISC Solar PV plant at Evander Gold Mine OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 21
Slide 22: Further Reducing Group AISC
FURTHER REDUCING GROUP AISC XXX FURTHER REDUCING GROUP AISC FY2022 – TARGETING AISC OF ~ US$1,250/OZ IN FY2023* Lower cost operations Evander Evander Barberton Total lower Mines surface Mines’ cost % Group Underground sources BTRP Elikhulu Fairview operations production AISC per kg 544,262 807,566 4
Slide 23: FY2023 – AISC Outlook
US$/oz 0 1 000 1 200 1 600 1 800 2 000 400 600 800 200 1 400 West African Res FURTHER REDUCING GROUP AISC B2Gold Corp 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 F
Slide 24: Group Capital Expenditure (ZAR)
XXX GROUP CAPITAL EXPENDITURE (ZAR) OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 24
Slide 25: Group Capital Expenditure (ZAR)
GROUP CAPITAL EXPENDITURE (ZAR) XXX GROUP CAPITAL EXPENDITURE (ZAR) RE-INVESTMENT INTO LONG-LIFE ASSETS 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 328 195 422 900*Net of revenue BML
Slide 26: ESG: Our “Beyond Compliance” Approach
XXX ESG : OUR “BEYOND COMPLIANCE” APPROACH OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 26
Slide 27: Solar PV Plant Benefits – ESG in Action
ESG : OUR “BEYOND COMPLIANCE” APPROACH 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 redu
Slide 28: “Beyond Compliance” Approach
ESG : OUR “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 Blueb
Slide 29: FY2022 Financials: Robust Profits and Dividends
XXX FY 2022 FINANCIALS Robust profits and dividends OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 29
Slide 30: Summarised Consolidated Financial Results
FY 2022 FINANCIALS - ROBUST PROFITS AND DIVIDENDS XXX FY2022 FINANCIALS Summarised consolidated financial results Year ended Year ended Movement Salient features Units 30 June 2022 30 June 2021 % Gold produced Oz 205,688 201,777 1.9 Gold sold1 Oz 205,688 201,777 1.9 Revenue US$ million 376.4 368.9 2
Slide 31: Net Debt-to-Equity Ratio
FY 2022 FINANCIALS – ROBUST PROFITS AND DIVIDENDS XXX FY2022 FINANCIALS NET DEBT-TO-EQUITY RATIO 0,90 0,80 0,80 0,71 0,70 0,60 0,50 0,42 0,40 0,30 0,20 0,13 0,10 0,04 0,00 June 18 June 19 June 20 June 21 FY2022 OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 31
Slide 32: Historic Dividend Yield and Dividend Proposed for FY2022
FY 2022 FINANCIALS – ROBUST PROFITS AND DIVIDENDS XXX FY2022 FINANCIALS HISTORIC DIVIDEND YIELD AND DIVIDEND PROPOSED FOR FY2022 7% 6,3% 6% 5,6% 5,3% 5,1% 5,0% 5% 4,6% 4% 3,8% 3% 2% 1,2% 1% 0,0% 0% June 14 June 15 June 16 June 17 June 18* June 19 June 20 June 21 June 22# * Dividend suspended due to
Slide 33: Return on Equity
FY 2022 FINANCIALS – ROBUST PROFITS AND DIVIDENDS XXX FY2022 FINANCIALS RETURN ON EQUITY Return on shareholders' funds (%) 80% 59% 60% 44% 40% 26% 24% 21% 17% 17% 16% 12% 20% 10% 8% 7% 5% 0% -2% -4% -4% -6% -20% -10% -40% -42% -60% -59% -80% OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanres
Slide 34: Near Term Organic Growth – Evander Underground and Royal Sheba
XXX NEAR TERM ORGANIC GROWTH – EVANDER UNDERGROUND AND ROYAL SHEBA OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 34
Slide 35: Evander Mines’ 8 Shaft – 25 & 26 Level Extension
NEAR TERM ORGANIC GROWTH – EVANDER UNDERGROUND AND ROYAL SHEBA XXX NEAR TERM ORGANIC GROWTH EVANDER MINES’ 8 SHAFT – 25 & 26 LEVEL EXTENSION Description and history • Extends from the No.2 Decline 24 Level - commenced with construction in Q1 of FY22 • 2 Decline was first initiated in the early 1990’
Slide 36: Why Mining Is Different Now
NEAR TERM ORGANIC GROWTH – EVANDER UNDERGROUND AND ROYAL SHEBA 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 In
Slide 37: Key Economic and Financial Metrics – Internal Study
NEAR TERM ORGANIC GROWTH – EVANDER UNDERGROUND AND ROYAL SHEBA 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 Discount rate** (RAT)* 10.7
Slide 38: Royal Sheba
NEAR TERM ORGANIC GROWTH – EVANDER UNDERGROUND AND ROYAL SHEBA XXX NEAR TERM ORGANIC GROWTH ROYAL SHEBA BACKGROUND 850m strike length A world class orogenic greenstone gold deposit Orebody • Strike extent confirmed from surface in excess of 850m 5m – 20m thickness • Mineralised width averaging 10m d
Slide 39: Royal Sheba – Progress as at June 2022
NEAR TERM ORGANIC GROWTH – EVANDER UNDERGROUND AND ROYAL SHEBA XXX NEAR TERM ORGANIC GROWTH ROYAL SHEBA Royal Sheba – Progress as at June 2022 PROGRESS In Q4 FY2022, development intersected the 10,000 ton bulk sample area to be extracted: • Utilised existing Royal Sheba adit - access to orebody achi
Slide 40: Further Growth Opportunities – Mintails and Blyvoor
XXX FURTHER GROWTH OPPORTUNITIES – MINTAILS AND BLYVOOR OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 40
Slide 41: The Mintails Opportunity
FURTHER GROWTH OPPORTUNITIES – MINTAILS AND BLYVOOR XXX THE MINTAILS OPPORTUNITY DEFINITIVE FEASIBILITY STUDY (DFS) COMPLETE DFS results announced on Mintails Mogale Gold TSFs in June 2022 • Concept study progressing on the Mintails SA Soweto Cluster TSFs • Expected to add ~50koz/year over a 13-year
Slide 42: Way Forward and Proposed Project Execution Timeline
FURTHER GROWTH OPPORTUNITIES – MINTAILS AND BLYVOOR XXX THE MINTAILS OPPORTUNITY 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 optimi
Slide 43: The Mintails Opportunity: Environmental Benefits
FURTHER GROWTH OPPORTUNITIES – MINTAILS AND BLYVOOR XXX THE MINTAILS OPPORTUNITY Environmental benefits: diminishing sulphate plume over time OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 43
Slide 44: 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 44
Slide 45: Exploration – Republic of the Sudan
EXPLORATION – REPUBLIC OF THE SUDAN XXX EXPLORATION REPUBLIC OF THE SUDAN WHY SUDAN TARGETS FOR FY2023 • 3rd largest gold producer in Africa (after Ghana and SA) and • Regional exploration over all 5 exploration concessions 10th in the world (equal to Peru) • Based on analyses of acquired remote sen
Slide 46: Remote Sensing over Block 12E
EXPLORATION – REPUBLIC OF THE SUDAN XXX REMOTE SENSING OVER BLOCK 12E SIGNATURES COMPARABLE WITH KNOWN MINERALISED BELTS IN SUDAN Rationing of LANDSAT 8 OLI Level 2 bands over Block 12 E and the Ariab Mining Company district (Ariab). • 6/7, 4/2, 5/4 to highlight altered clay bearing rocks (alteratio
Slide 47: FY2023 – Positioned for Continued Delivery
XXX FY2023 – POSITIONED FOR CONTINUED DELIVERY OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 47
Slide 48: Key Deliverables
FY2023 – POSITIONED FOR CONTINUED DELIVERY XXX KEY DELIVERABLES FY2023 – POSITIONED FOR CONTINUED DELIVERY • Proactive journey to ‘zero harm’ through innovative health and safety initiatives • Maintain production run-rate • Successfully execute into capital projects to sustain and increase future go
Slide 49: 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 49
Slide 50: Appendix
XXX APPENDIX OTCQX: PAFRF/PAFRY | AIM: PAF | JSE: PAN www.panafricanresources.com 50
Slide 51: Share Price and Market Capitalisation
APPENDIX XXX SHARE PRICE AND MARKET CAPITALISATION As at 08 Sept, 2022 CORPORATE INFORMATION • JSE (PAN) ZAR386cps CORPORATE OFFICE HEAD INVESTOR RELATIONS • AIM (PAF) GBP19.1p The Firs Hethen Hira • ADR (PAFRY) 20:1 US$4.93 2nd Floor, Office 204 Pan African Resources PLC Corner Cradock and Biermann
Slide 52: 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 53: 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