Pan African Resources Plc · LSE:PAF

Pan African Resources — H1 FY2021 Earnings Presentation

41 slides from Pan African Resources's earnings presentation, Feb 16, 2021

  1. Slide 1: Interim Results for the 6 months ended 31 Dec 2020

    TOP 10 COMPANY INTERIM RESULTS for the 6 months ended 31 Dec 2020 INVESTOR PRESENTATION FEBRUARY 16TH, 2021 COBUS LOOTS CEO

  2. 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

  3. 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

  4. Slide 4: Overview of Presentation

    OVERVIEW OF PRESENTATION COVID-19 Impact and mitigation H1 FY 2021 – Highlights Overview of our operations Operational performance by asset Further reducing Group AISC Group capital expenditure (ZAR) Environmental, social and governance (ESG) H1 FY2021 financials Near term organic growth: Egoli proj

  5. Slide 5: COVID-19 Impact and Mitigation

    COVID-19 IMPACT AND MITIGATION

  6. Slide 6: COVID-19 Impact and Mitigation

    COVID-19 IMPACT AND MITIGATION COPING WITH SOUTH AFRICA’S SECOND WAVE OF INFECTIONS Daily and total cases diagnosed over time OUR EMPLOYEES 800 30k • Two deaths due to COVID-19 complications (as at date of presentation) 25k • Total positive cases represent 3.4% of total Group employees and 600 20k c

  7. Slide 7: H1 FY2021 – Highlights

    H1 FY2021 – HIGHLIGHTS “Our improved operational and financial performance of the year continues to demonstrate the resilience and operational flexibility of our multiple producing assets.”

  8. Slide 8: Five-Year Historic Gold Prices ZAR/kg and US$/oz

    FY2021 HIGHLIGHTS FIVE-YEAR HISTORIC GOLD PRICES ZAR/KG AND US$/OZ 1 300 000 2 200 1 200 000 2 000 1 100 000 1 800 1 000 000 1 600 (US$/oz) (ZAR/kg) 900 000 1 400 800 000 1 200 700 000 1 000 600 000 800 500 000 600 400 000 400 2015/07/01 2015/12/01 2016/05/01 2016/10/01 2017/03/01 2017/08/01 2018/01

  9. Slide 9: H1 FY2021 Highlights

    H1 FY2021 HIGHLIGHTS Group performance highlights Safety performance Production performance Financial performance Cost performance • Ongoing safety initiatives and • Group gold production • Revenue  38.4% to US$183,8m • Group cash cost – interventions in pursuit of a  5.9% to 98,386oz • Net cash g

  10. Slide 10: Overview of Our Operations

    PAN AFRICAN © RESOURCES OVERVIEW OF OUR OPERATIONS

  11. Slide 11: Overview of Our Operations – Operating in South Africa

    OVERVIEW OF OUR OPERATIONS Operating in South Africa Electricity Mining tenure Security Stakeholder engagement ESG • Reduced instances of • Evander mining rights • Integrated multi- • Multi-facetted • Increased focus on supply disruptions, valid until 2038 faceted security engagements with all rehab

  12. Slide 12: Overview of Our Operations – Production Profile

    OVERVIEW OF OUR OPERATIONS A UNIQUE COMBINATION OF UNDERGROUND MINING AND SURFACE REMINING – WITH INCREASING PRODUCTION PROFILE PAR Group gold production profile 250 000 c. 210.000oz c. 190.000oz c. 195.000oz c.180.000oz 200 000 Ounces 150 000 100 000 50 000 0 2018 2019 2020 2021 2022 2023 Actual Pr

  13. Slide 13: Overview of Our Operations – Key Features

    OVERVIEW OF OUR OPERATIONS – KEY FEATURES GOLD PRODUCTION  5,9% to 98,386oz (2019: 92,941oz) ELIKHULU BTRP BARBERTON MINES EVANDER 8 SHAFT PILLAR Underground • This US$120million tailings • Designed to treat 100,000 • Improved mining flexibility and retreatment plant is one of the tonnes per month

  14. Slide 14: Operational Performance by Asset

    OPERATIONAL PERFORMANCE BY ASSET

  15. Slide 15: Operational Performance by Asset – Elikhulu

    OPERATIONAL PERFORMANCE BY ASSET TAILINGS OPERATIONS ELIKHULU Elikhulu LOM production profile Ounces production per year • Production 8.3%  to 26,863oz (2019: 29,301oz) - AISC of 80 000 70 000 Actual Forecast US$737/oz (2019: US$708/oz) 60 000 • Lower recoveries and constrained plant throughput to

  16. Slide 16: Operational Performance by Asset – BTRP

    OPERATIONAL PERFORMANCE BY ASSET TAILINGS OPERATIONS BTRP BTRP LOM production profile • Production stable at 10,004oz (2019: 10,619oz) - AISC of 30 000 US$864/oz (2019: US$643/oz) 25 000 • LOM of 9 years – 2-3 years at current resources, additional feed 20 000 Ounces sources planned from Royal Sheba

  17. Slide 17: Operational Performance by Asset – Barberton Underground

    OPERATIONAL PERFORMANCE BY ASSET BARBERTON UNDERGROUND FAIRVIEW MINE • Improved mining flexibility – combined high- grade face lengths available for mining cycles are in excess of 120m, with mining widths exceeding 15m • Increased mineral reserve delineation drilling has improved geological models a

  18. Slide 18: Fairview Mine – Development on High Grade Platforms

    OPERATIONAL PERFORMANCE BY ASSET FAIRVIEW MINE – EXCELLENT PROGRESS WITH DEVELOPMENT ON HIGH GRADE PLATFORMS 358 Platform Current footprint = 680 m² 257 Platform Average grade @14.74g/t gold Current footprint = 514 m² Average grade @35.76g/t gold Original footprint = 327 m² Average grade @ 17.28g/t

  19. Slide 19: Operational Performance by Asset – Consort Mine

    OPERATIONAL PERFORMANCE BY ASSET BARBERTON UNDERGROUND CONSORT MINE • Successful extraction of high-grade section at New Consort’s Prince Consort (PC) Shaft 42 Level – Proved Reserve of 5,000 tonnes at average grade of 25g/t • New Consort outperformed gold production targets by more than 34% (or 3,0

  20. Slide 20: Operational Performance by Asset – Evander Shaft Pillar

    OPERATIONAL PERFORMANCE BY ASSET EVANDER 8 SHAFT PILLAR • Shaft tower construction between 14 and 16 Levels completed • Teething issues with underground support pseudo-packs now resolved, following delays due to COVID-19 – now changed to dry tailings and fly ash • Production delays due to fracturing

  21. Slide 21: Further Reducing Group AISC

    FURTHER REDUCING GROUP AISC Lower cost operations Total lower Barberton Mines cost % PAR Group underground* BTRP Elikhulu operations Production AISC per kg (ZAR/kg) 656,633 451,700 385,214 538,715 80% AISC per oz ( US$/oz) 1,256 864 737 1,030 Higher cost operations Total higher Evander cost % PAR Gr

  22. Slide 22: Further Reducing Group AISC – FY2021 AISC Outlook

    US$/oz 200 600 0 400 800 1000 1200 1400 1600 B2Gold Corp Evolution Mining Kirkland Lake Gold FY 2021 AISC OUTLOOK Centerra Gold Newcrest Mining Source: S&P Global, Individual company websites and presentations Endeavour Mining Northern Star Kinross Gold Fields AngloGold Ashanti FURTHER REDUCING GROU

  23. Slide 23: Group Capital Expenditure (ZAR)

    GROUP CAPITAL EXPENDITURE (ZAR) 2 000 1 800 1 600 1 400 1 200 1 000 ZARm 800 600 400 200 0 2017 2018 2019 2020 2021 FC Egoli 70 Elikhulu 1 256,1 534,6 8,6 80 Evander 262,0 342,4 38,1 328,3 90 BML Expansion 77,9 99,4 89,3 110,3 200 BML Sustaining 116,5 111,0 140,0 186,6 250 Includes 9A block explorat

  24. Slide 24: Environmental, Social and Governance (ESG)

    ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)

  25. Slide 25: ESG

    ESG ONGOING REHABILITATION, BIODIVERSITY AND SUSTAINABLE DEVELOPMENT INITIATIVES ENVIRONMENT ENVIRONMENT SOCIAL SOCIAL Renewable energy: Biodiversity management Socio-economic development Barberton Blueberries agri-project Elikhulu 9,975MW solar PV plant • Reduced carbon footprint – will save • Coll

  26. Slide 26: H1 FY2021 Financials

    PAN AFRICAN © RESOURCES H1 FY2021 FINANCIALS

  27. Slide 27: Summarised Consolidated Financial Results

    H1 FY2021 FINANCIALS SUMMARISED CONSOLIDATED FINANCIAL RESULTS Period ended Period ended 31 December 31 December Salient features Units 2020 2019 Movement Gold produced (oz) 98,386 92,941 5.9% Gold sold (Note 1) (oz) 98,386 90,602 8.6% Revenue (US$ million) 183.8 132.8 38.4% Average gold price recei

  28. Slide 28: Senior Debt Contractual Repayment Profile

    H1 FY2021 FINANCIALS HISTORICAL/EXISTING SENIOR DEBT CONTRACTUAL REPAYMENT PROFILE 130 000 120 000 110 000 100 000 90 000 80 000 US$ ‘000 70 000 60 000 50 000 40 000 30 000 20 000 10 000 - Existing senior Actual debt – Repayment / Forecasted historical/forecasted Profile repayment profile Senior Deb

  29. Slide 29: Historical/Forecast Combined Senior Debt Profile

    H1 FY2021 FINANCIALS HISTORICAL/FORECAST COMBINED SENIOR DEBT PROFILE Total Senior Debt 140 000 120 000 US$ ‘000 100 000 80 000 60 000 40 000 20 000 - *Assumptions: R900,000/kg gold price to 30 June 2021 with a 5% annual escalation from 1 July 2021 | Guided ounces | Exchange rate US$/ZAR:16.50 29

  30. Slide 30: Ratio of Net Debt to Net Adjusted EBITDA

    H1 FY2021 FINANCIALS RATIO OF NET DEBT TO NET ADJUSTED EBITDA* 3,5 3,2 3,0 2,5 2,3 2,0 1,6 1,5 1,0 0,5 0,5 0,5 0,0 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20 *Net adjusted EBITDA is represented by earnings before interest, taxes, mining depreciation, and amortisation, impairment reversal and fair value gain

  31. Slide 31: Near Term Organic Growth

    PAN AFRICAN © RESOURCES NEAR TERM ORGANIC GROWTH

  32. Slide 32: Near-Term Organic Growth – Egoli Project

    NEAR-TERM ORGANIC GROWTH – EGOLI PROJECT PROJECT RATIONALE • Long-life: capitalising on established infrastructure, utilising proven mining methods • Initial LOM of nine years – production of ~72,000 oz/year at an average head grade of 6,61g/t gold • Significant geological and operational upside – I

  33. Slide 33: Near-Term Organic Growth – Egoli Project Status

    NEAR-TERM ORGANIC GROWTH – EGOLI PROJECT PROJECT STATUS FINANCIAL MATRIX EARLY WORKS CAPITAL EXPENDITURE • DRA Global mandated to complete detailed project scheduling • Materially lower upfront capital investment when and planning – early works commenced in October 2020 benchmarked against other dev

  34. Slide 34: Mintails SA Proposed Transaction

    MINTAILS SA PROPOSED TRANSACTION CONDITIONAL ACQUISITION AGREEMENTS SIGNED ANNOUNCED 6 NOVEMBER 2020 • Aggregate consideration of ZAR50 million (US$ 3.1 million) • Conditional due diligence and feasibility studies in progress TRANSACTION IS SUBJECT TO: • Independent due diligence and feasibility stu

  35. Slide 35: FY2021 Delivery on Track

    PAN AFRICAN © RESOURCES FY2021 DELIVERY ON TRACK

  36. Slide 36: FY2021 – Delivery on Track

    FY2021 – DELIVERY ON TRACK KEY DELIVERABLES • Continue to manage the impact of COVID-19 Responsible • Proactive journey to ‘zero harm’ and Safe Mining • Deliver (and potentially exceed) production guidance of 190,000oz • Reduce AISC at Evander 8 Shaft and Barberton Mines’ Sheba Results and operation

  37. Slide 37: Thank You

    THANK YOU CONTACT US Hethen Hira Head: Investor Relations JSE:PAN hhira@paf.co.za AIM:PAF +27 11 243 2900 WWW.PANAFRICANRESOURCES.COM ADR:PAFRY

  38. Slide 38: Appendix

    PAN AFRICAN © RESOURCES APPENDIX

  39. Slide 39: Corporate Overview – Share Price and Market Capitalisation

    CORPORATE OVERVIEW SHARE PRICE AND MARKET CAPITALISATION PAF SHARE PRICE PERFORMANCE VS RELEVANT GLOBAL INDICES (PAST 12 MONTHS) AS AT 9 FEBRUARY 2021 • JSE (PAN) ZAR473cps PAF 25,00 • AIM (PAF) GBP23,5p • 12 month change +97% • ADR (PAFRY) 20:1 US$6,15 20,00 • Market Capitalisation US$720m • Shares

  40. Slide 40: Corporate Overview – Board and Executives

    CORPORATE OVERVIEW 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 and

  41. Slide 41: Reserves and Resources

    RESERVES AND RESOURCES 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

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