Pan African Resources Plc · LSE:PAF
Pan African Resources — H1 FY2022 Earnings Presentation
46 slides from Pan African Resources's earnings presentation, Feb 16, 2022
Slide 1: Interim Results Presentation for the six months ended 31 December 2021
INTERIM RESULTS PRESENTATION for the six months ended 31 December 2021
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 H1 FY 2022 : Highlights Overview of our operations Operating successfully in South Africa Operational performance by mine Further reducing Group AISC Group capital expenditure ESG : Our “Beyond compliance” approach H1 FY 2022 financials : Record profits
Slide 5: Health and Safety
au: HEALTH AND SAFETY
Slide 6: Health and Safety
HEALTH XXX AND SAFETY HEALTH AND SAFETY COVID-19 IMPACT AND MITIGATION SAFETY PERFORMANCE Pan African COVID-19 dashboard as at 31 January 2022 % % 6 Positive Active Deceased Hospital Vaccination Recovery 4,62 5 4,05 Group 454 1 4 0 81 99 4 3,60 3 2,68 1,77 1,69 1,64 2 0,85 0,98 1 0,62 0,53 0,65 0,28
Slide 7: H1 FY2022 – Highlights
H1 FY2022 – HIGHLIGHTS 7
Slide 8: Group Key Performance Highlights vs H1 FY2021
H1 XXX- FY2022 – HIGHLIGHTS GROUP KEY PERFORMANCE HIGHLIGHTS VS H1 – FY2021 EXCELLENT OPERATIONAL AND FINANCIAL PERFORMANCE PRODUCTION PERFORMANCE • Group gold production 9.9% to 108,085oz • Evander Mines u/g production 116.6% to 27,312oz • Production guidance increased to approximately 200,000o
Slide 9: Group Key Performance Highlights vs H1 FY2021
H1 XXX- FY2022 – HIGHLIGHTS GROUP KEY PERFORMANCE HIGHLIGHTS VS H1 – FY2021 EXCELLENT OPERATIONAL AND FINANCIAL PERFORMANCE FINANCIAL PERFORMANCE • Revenue 5.3% to US$193.6m • Net cash generated by operating activities 54.4% to US$43.4m • Profit after tax 13% to US$46.1m • Net debt 56.7% to U
Slide 10: Overview of Our Operations
OVERVIEW OF OUR OPERATIONS 10
Slide 11: Operating Successfully in South Africa
OVERVIEW XXX OF OUR OPERATIONS OVERVIEW OF OUR OPERATIONS OPERATING SUCCESSFULLY IN SOUTH AFRICA ELECTRICITY AND TECHNICAL SUPPORT MINING TENURE AND REGULATORY FRAMEWORK • DMRE lifted private generation licensing threshold • Renewal of Barberton Mines’ mining rights granted for to 100MW, which will
Slide 12: Unique Combination of Underground Mining and Surface Remining
OVERVIEW XXX OF OUR OPERATIONS 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.215,000oz * c.220,000oz c.200,000oz 200 000 150 000 100 000 50 000 0 2018 2019 2020 2021 2022
Slide 13: Overview of Our Operations – Key Features
OVERVIEW XXX OF OUR OPERATIONS OVERVIEW OF OUR OPERATIONS – KEY FEATURES GOLD PRODUCTION 9.9% TO 108,085OZ (H1 FY21: 98,386OZ) Turning environmental liabilities into profits Attractive margins and production growth BARBERTON MINES EVANDER ELIKHULU BTRP Underground Underground • US$120m tailings •
Slide 14: Operational Performance by Mine
OPERATIONAL PERFORMANCE BY MINE 14
Slide 15: Tailings Operations – Elikhulu
OPERATIONAL XXX PERFORMANCE BY MINE OPERATIONAL PERFORMANCE BY MINE TAILINGS OPERATIONS – ELIKHULU Elikhulu LOM production profile* • Production 3.6% to 25,900z (H1 FY21: 26,863oz) - AISC of US$937/oz (H1 FY21: US$737/oz) 80 000 Actual Forecast • 12 Year LOM maintained 70 000 60 000 • 9.975MW sola
Slide 16: Tailings Operations – BTRP
OPERATIONAL XXX PERFORMANCE BY MINE OPERATIONAL PERFORMANCE BY MINE TAILINGS OPERATIONS – BTRP BTRP LOM production profile* • Production stable at 9,126oz (H1 FY21: 10,004oz) – AISC of US$814/oz (H1 30 000 Fy21: US$864/oz) 25 000 • LOM 3 years from current surface resources, to increase with incorpo
Slide 17: Barberton Underground
OPERATIONAL XXX PERFORMANCE BY MINE OPERATIONAL PERFORMANCE BY MINE BARBERTON UNDERGROUND FAIRVIEW Mine • Accelerated underground development improves mining flexibility – available high-grade face lengths in excess of 200m, with mining widths >15m • Improved geological models and predictability thr
Slide 18: Barberton Underground – Project Dibanisa
OPERATIONAL XXX PERFORMANCE BY MINE OPERATIONAL PERFORMANCE BY MINE BARBERTON UNDERGROUND Project DIBANISA Barberton Mines historic production profile • Development aimed at optimising costs and efficiencies 100 000 through the connection of underground infrastructure of ~85,000oz Fairview and Sheba
Slide 19: Evander Underground
OPERATIONAL XXX PERFORMANCE BY MINE OPERATIONAL PERFORMANCE BY MINE EVANDER UNDERGROUND EVANDER 8 SHAFT Pillar • Pillar mining ramped up in H1 FY22, consistent with planning • AISC decreased substantially to US$983/oz in H1 FY22 – targeting < US$1000/oz AISC for remaining 8 Shaft pillar LOM • Gold p
Slide 20: Further Reducing Group AISC
FURTHER REDUCING GROUP AISC 20
Slide 21: Targeting AISC below US$1,200/oz in FY2022
FURTHER XXX REDUCING GROUP AISC FURTHER REDUCING GROUP AISC TARGETING AISC BELOW US$1,200/oz IN FY2022* Lower cost operations Barberton Total lower Mines’ Evander Mines cost % Group Fairview Underground BTRP Elikhulu operations production AISC per kg (ZAR/kg) 617,748 475,196 393,691 452,872 499,910
Slide 22: H1 FY2022 AISC Outlook vs Peers
US$/oz 1 000 1 400 1 600 1 800 0 400 600 800 200 1 200 West African Res Endeavour Mining B2Gold Corp Caledonia Source: Individual company websites and presentations H1 - FY 2022 AISC OUTLOOK Perseus Mining Gold Fields Barrick PAR lower cost operations H1 FY22 Alamos Gold Newmont PAR H1 - FY22 FURTHE
Slide 23: Group Capital Expenditure (ZAR)
GROUP CAPITAL EXPENDITURE (ZAR) 23
Slide 24: Group Capital Expenditure (ZAR)
GROUP XXX CAPITAL EXPENDITURE (ZAR) 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 2017 2018 2019 2020 2021 2022 FC 2023 FC Elikhulu 1 256 535 9 64 250 250 Evander 262 342 38 328 195 450 25
Slide 25: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE 25
Slide 26: ESG – Beyond Compliance Approach
ENVIRONMENTAL, SOCIAL XXX AND GOVERNANCE (ESG) ESG “BEYOND COMPLIANCE” APPROACH ENVIRONMENT: ENVIRONMENT: SOCIAL: SOCIAL: RENEWABLE ENERGY BIODIVERSITY & CONSERVATION LEAVING A LEGACY SUSTAINABLE COMMUNITIES Elikhulu 9.975MW solar PV plant Collaboration with state and conservation Socio-economic dev
Slide 27: H1 FY22 Financials
H1 FY22 FINANCIALS 27
Slide 28: Summarised Consolidated Financial Results
H1 XXXFY2022 FINANCIALS H1 FY2022 FINANCIALS SUMMARISED CONSOLIDATED FINANCIAL RESULTS 6 months ended 6 months ended 31 December 2021 31 December 2020 Movement Salient features Units (current financial year) (prior financial year) % Gold produced Oz 108,085 98,386 9.9 Gold sold1 Oz 107,142 98,386 8.
Slide 29: Gold Price ZAR/kg H1 FY22
H1 XXXFY2022 FINANCIALS GOLD PRICE ZAR/KG H1 – FY22 AISC Margin Average Gold price received H1 – FY22 AISC H1 – FY22 US$1,804/oz US$1,173/oz 35% 1 400 000 1 200 000 July 2020 to Dec 2020: ZAR/kg gold price 1 000 000 ZAR gold price/kg 800 000 July 2021 to Dec 2021: ZAR/kg gold price 600 000 400 000 N
Slide 30: Senior Debt Repayment Profile / New RCF and DMTN Capacity
FY2021 XXX FINANCIALS H1 FY2022 FINANCIALS HISTORICAL/FORECAST SENIOR DEBT REPAYMENT PROFILE# / NEW RCF AND DMTN CAPACITY 325 000,000 140 000 000 120 000 000 3,6% Margin* 100 000 000 2.75% Margin* 80 000 000 US$ 60 000 000 40 000 000 20 000 000 0 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun S
Slide 31: Net Debt-to-Equity Ratio
H1 XXXFY2022 FINANCIALS H1 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 0,14 0,10 0,10 0,00 June 18 June 19 June 20 June 21 H1 FY2022 31
Slide 32: Historic Dividend Yields
H1 XXXFY2022 FINANCIALS FY2021 FINANCIALS HISTORIC DIVIDEND YIELDS 7% 6,3% 6% 5,6% 5,3% 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 June 21# * Dividend suspended due to cessation of large-scale deep level underground mining at Evander 8 Shaft a
Slide 33: Near Term Organic Growth
j NEAR TERM “| ORGANIC GROWTH
Slide 34: Evander Mines' 8 Shaft – 25 & 26 Level Extension
NEAR TERM XXX ORGANIC GROWTH NEAR TERM ORGANIC GROWTH EVANDER MINES’ 8 SHAFT – 25 & 26 LEVEL EXTENSION Description and history • Extends from the No.2 Decline 24 Level project which commenced with construction in Q1 of FY22 • No.2 Decline was first initiated in the early 1990’s to extend the shaft’s
Slide 35: 25 & 26 Level Extension – Key Economic and Financial Metrics
NEAR TERM XXX ORGANIC GROWTH NEAR TERM ORGANIC GROWTH EVANDER MINES’ 8 SHAFT – 25 & 26 LEVEL EXTENSION Key economic and financial metrics – Internal study Evander Mines' recovered gold (oz) forecast including 24, 25, 26 Levels 100 000 Key metric Input ZAR Input USD 80 000 Recovered Gold (Oz) Gold pr
Slide 36: Royal Sheba Progress
OPERATIONAL XXX PERFORMANCE BY ASSET NEAR TERM ORGANIC GROWTH ROYAL SHEBA PROGRESS 850m strike length • A world class orogenic greenstone gold deposit Orebody • Strike extent confirmed from surface in excess 5m – 20m thickness of 850m • Mineralised width averaging 10m delineated by 786m down-dip slo
Slide 37: Royal Sheba Progress – Bulk Sample
OPERATIONAL XXX PERFORMANCE BY ASSET NEAR TERM ORGANIC GROWTH ROYAL SHEBA PROGRESS • In the last quarter of FY21 the Group initiated a 10,000 ton bulk sample project: • Utilising the existing Royal Sheba adit on surface • Access to the ore body is achieved by a trackless decline system • The bulk sa
Slide 38: Further Opportunities in Tailings Retreatment
FURTHER OPPORTUNITIES IN TAILINGS RETREATMENT 38
Slide 39: Tailings Retreatment Acquisitions – Mintails and Blyvoor
TAILINGS RETREATMENT ACQUISITIONS - FURTHER TAILINGS XXX OPPORTUNITIES GROWTH OPPORTUNITIES MINTAILS AND BLYVOOR ACQUISITIONS Mintails current status Blyvoor current status • Currently finalising a DFS - scheduled for completion in Q1 of the 2022 • The Group has engaged independent consultants to co
Slide 40: FY2022 Delivery on Track
FY2022 DELIVERY ON TRACK 40
Slide 41: Key Deliverables
FY2022 XXX DELIVERY ON TRACK KEY DELIVERABLES FY2022 – DELIVERY ON TRACK • Continue to manage the impact of COVID-19 • Proactive journey to ‘zero harm’ • Deliver annual production guidance of approximately 200,000oz • Successfully execute into capital projects to sustain and increase gold production
Slide 42: Thank You
THANK YOU Contact: Hethen Hira, Head of investor relations Email: Hhira@paf.co.za www.panafricanresources.com 42
Slide 43: Appendix
APPENDIX 43
Slide 44: Share Price and Market Capitalisation
APPENDIX XXX SHARE PRICE AND MARKET CAPITALISATION As at 8 September 2021 CORPORATE INFORMATION • JSE (PAN) ZAR400cps CORPORATE OFFICE HEAD INVESTOR RELATIONS • AIM (PAF) GBP19,5p The Firs Building Hethen Hira • ADR (PAFRY) 20:1 US$5,08 2nd Floor, Office 204 Pan African Resources PLC Corner Cradock
Slide 45: Board and Executives
APPENDIX XXX 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 accou
Slide 46: 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 24.7 4.5 110.0 3.5 BTRP 22.1 1.2 26.8 0.9 Evander underground 116.3 8.9 1 033.9 33.2 Elikhulu 178.2 0.3 50.0 1.6 TOTAL 341.3 3.6 1 220.7 39.2
Pan African Resources — H1 FY2022 Earnings Presentation on 6ix