Pan African Resources Plc · LSE:PAF
Pan African Resources — Very Independent Research Conference (John Tumazos) 2020
39 slides from Pan African Resources's conference presentation, August 2020
Slide 1: Investor Presentation | August 2020
INVESTOR PRESENTATION | AUGUST 2020
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 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
Slide 4: Safe, High-Margin and Long-Life South African-Focused Gold Producer
SAFE, HIGH-MARGIN AND LONG-LIFE SOUTH AFRICAN-FOCUSED GOLD PRODUCER
Slide 5: Overview of Presentation
OVERVIEW OF PRESENTATION • Company information • Operating in South Africa • Overview of our operations • Key features - Financial • Environmental, Social and Governance (ESG) • Impact of COVID-19 • Asset optimisation • Near-term organic growth – Egoli Project • Where to next – FY21 and beyond 5
Slide 6: Company Information
COMPANY INFORMATION
Slide 7: Share Price and Market Capitalisation
COMPANY INFORMATION SHARE PRICE AND MARKET CAPITALISATION Share price performance vs relevant indices Last 12 months AS AT 7 AUGUST 2020 200 • JSE (PAN) ZAR 605cps • AIM (PAF) GBP 27,3p 175 Price performance (rebased to 100) • 12 month change +290% 150 • ADR (PAFRY) 20:1 USD 7,11 • Market Capitalisa
Slide 8: Board and Executives
COMPANY INFORMATION 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 an
Slide 9: Operating in South Africa
OPERATING IN SOUTH AFRICA
Slide 10: South Africa Ranked 2nd for Investment Attractiveness in Africa in 2019
OPERATING IN SOUTH AFRICA SOUTH AFRICA RANKED 2ND FOR INVESTMENT ATTRACTIVENESS IN AFRICA IN 2019 Fraser Institute Annual Survey of Mining Companies 2019 Investment attractiveness index - Africa Guinea (Conakry)* South Africa Botswana* Burkina Faso Namibia* Zimbabwe* Mali* Democratic Republic of Con
Slide 11: Long Track Record of Successfully Operating in South Africa
OPERATING IN SOUTH AFRICA PAN AFRICAN RESOURCES HAS A LONG TRACK RECORD OF SUCCESSFULLY OPERATING IN SOUTH AFRICA Electricity • Reduced instances of supply disruptions, power grid stable • Barberton and tailings operations – less exposed than deep-level miners • Completed bankable feasibility study
Slide 12: Overview of Our Operations
OVERVIEW OF OUR OPERATIONS
Slide 13: A Unique Combination of Underground and Surface Mining Operations
OVERVIEW OF OUR OPERATIONS A UNIQUE COMBINATION OF UNDERGROUND AND SURFACE MINING OPERATIONS Reserve Reserve Production Moz Tonnes AISC Operating assets grade Status LOM (oz/annum) (‘000 (Mt) (USD/oz) (g/t) Tonnes) Barberton Mines (underground operations) Profitable, long life, high-grade operation
Slide 14: Strong Production Profile
OVERVIEW OF OUR OPERATIONS STRONG PRODUCTION PROFILE Au Ounces Pan African Resources - Gold Production Profile Egoli 300000 Elikhulu Evander 8# 250000 Pillar BTRP Barberton 200000 c. 190,000oz 179,457oz 150000 100000 50000 0 2018 2019 2020 2021 2022 2023 2024 2025 Actual Projected 14
Slide 15: Industry Leading Group Safety Performance
OVERVIEW OF OUR OPERATIONS INDUSTRY LEADING GROUP SAFETY PERFORMANCE “Notwithstanding the fact that injury rates are well below industry average, we continuously strive to improve our safety performance and achieve our aim of zero harm to our employees” – Cobus Loots, CEO Barberton Mines achieved 3
Slide 16: All-In-Sustaining-Costs
OVERVIEW OF OUR OPERATIONS ALL-IN-SUSTAINING-COSTS AISC 1 400 1 200 1 000 * Average USD 987/oz 800 600 400 200 - *Targeted FY21 AISC Source: Individual company websites and presentations 16
Slide 17: Key Features – Financial
KEY FEATURES – FINANCIAL
Slide 18: EBITDA
KEY FEATURES-FINANCIAL EBITDA Adjusted EBITDA USD m 60,0 50,0 40,0 USD’ million 30,0 20,0 10,0 0,0 FY2016 FY2017 FY2018 FY2019 Source: PAR Annual Reports 18
Slide 19: Illustrative De-Gearing
KEY FEATURES - FINANCIAL ILLUSTRATIVE DE-GEARING – ASSUMING FORECAST ASSUMPTIONS ARE ACHIEVED 160 000 140 000 120 000 100 000 USD’000 80 000 60 000 40 000 20 000 - Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 For
Slide 20: Historic Dividend Yield – Dividends Reinstated
KEY FEATURES – FINANCIAL HISTORIC DIVIDEND YIELD – DIVIDENDS REINSTATED 7% 6% 5% 4% 3% 2% 1% 0% June 14 June 15 June 16 June 17 June 18* June 19 PAR dividend yield 5,60% 6,30% 5,10% 5,00% 0,00% 1,00% * Dividend suspended due to cessation of large-scale deep level underground mining at Evander 8 Shaf
Slide 21: Environmental, Social and Governance (ESG)
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
Slide 22: Environmental, Social and Governance (ESG)
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) Pan African Resources is committed to doing business, as guided by the group’s values and code of ethics. We recognise that we are an integral part of the societies in which we operate, and are therefore obligated morally and legally, to act in accordance w
Slide 23: ESG Highlights
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) ESG HIGHLIGHTS COMMENCED CONSTRUCTION OF DONATED 4 MOBILE TOTAL REHABILITATION SPENT USD0.9 MILLION HEALTHCARE LIBRARIES AND TRUST FUND USD25.6 INFRASTRUCTURE ON REHABILITATION OF IMPROVEMENTS TO MILLION, CLOSURE PROJECT - BARBERTON SCHOOLS SURROUNDING OLD
Slide 24: Impact of COVID-19
IMPACT OF COVID-19
Slide 25: Effects of Restrictions During National Lockdown and Resumption of Production
IMPACT OF COVID-19 EFFECTS OF RESTRICTIONS DURING NATIONAL LOCKDOWN AND RESUMPTION OF FULL SCALE PRODUCTION • Timeline • 23 March 2020: 21-Day Lockdown announced by SA government effective 27 March 2020 • All non-essential businesses and activities suspended, essential services at mines such as proc
Slide 26: Operational Prevention Measures and Community and Employee Relief
IMPACT OF COVID-19 OPERATIONAL PREVENTION MEASURES AND COMMUNITY AND EMPLOYEE RELIEF INITIATIVES BARBERTON OPERATIONS: FOOD AND HYGIENE PROACTIVELY MANAGING HAMPERS TO FAMILIES IN THE RISKS ASSOCIATED HOST COMMUNITIES, WITH THE PANDEMIC PROVISION OF WATER TANKERS FINANCIAL IMPACT: COST OF IMPLEMENTI
Slide 27: Asset Optimisation
ASSET OPTIMISATION
Slide 28: Growth Portfolio – Robust Project Pipeline
ASSET OPTIMISATION GROWTH PORTFOLIO – ROBUST PROJECT PIPELINE Group Resources Group Reserves 36.0Mz (335.8Mt @ 3.33g/t) 10.9Moz (216.6Mt @ 1.57g/t) Tonnes Grade Tonnes (Mt) Grade (g/t) Gold (t) Gold (Moz) Gold (t) Gold (Moz) (Mt) (g/t) Underground combined 110.4 9.35 1 032.1 33.2 Underground combine
Slide 29: Consort Operations – LOM of Years
ASSET OPTIMISATION CONSORT OPERATIONS – LOM OF 6 YEARS • Extraction of Prince Consort (‘PC’) Shaft pillar • PC Shaft pillar - Mineral Resource of 48,820t @ 25.54g/t for 40Koz • Development to PC Shaft pillar completed in May 2020 – first target block with proved Mineral Reserve of 5,000 tons at av.
Slide 30: Sheba Operations – LOM of Years
ASSET OPTIMISATION SHEBA OPERATIONS – LOM OF 9 YEARS (19 YEARS INCLUDING ROYAL SHEBA) Phase 1 Mining • Project Dibanisa • Forecasted to be completed during FY21 • Optimised usage of infrastructure expected to reduce all- in sustaining cost - targeting ~USD1,000/oz • Additional available shaft-time t
Slide 31: Near-Term Organic Growth Egoli Project
NEAR-TERM ORGANIC GROWTH EGOLI PROJECT
Slide 32: Egoli Project – History & Background, Location
NEAR-TERM ORGANIC GROWTH - EGOLI PROJECT HISTORY & BACKGROUND LOCATION • Harmony Gold previously exploited Evander Mines’ No.7 Shaft EGM Evander Gold Assets orebody, with development towards the Egoli orebody Evander Gold Mining Operation Evander Gold Underground Projects Evander Gold Tailings Proje
Slide 33: Egoli Project – Highlights
NEAR-TERM ORGANIC GROWTH - EGOLI PROJECT HIGHLIGHTS • Long-life, low cost brownfields asset, capitalising on established infrastructure • Initial Life of Mine (LOM) of 9 years - annual gold production of approximately 72,000 ounces at an average head grade of 6,61g/t - based on current Measured and
Slide 34: Egoli Project – Financial Matrix
NEAR-TERM ORGANIC GROWTH - EGOLI PROJECT FINANCIAL MATRIX • Materially lower capital investment when benchmarked against other development projects of similar scale • Compelling and robust economic returns: > Payback period from project inception – 3,8 years > NPV10,71 - R2,010 million ($131,25 mill
Slide 35: Capitalising on Existing Infrastructure
NEAR-TERM ORGANIC GROWTH - EGOLI PROJECT CAPITALISING ON EXISTING INFRASTRUCTURE • Upgrades to: • Change house and laundry • Offices and workshop • Refurbishment of: • Ventilation fan • Compressors • Lamp room • MV consumer substation • Security, fencing and access control Kinross Plant 7 Shaft Comp
Slide 36: Egoli Project – Way Forward
NEAR-TERM ORGANIC GROWTH - EGOLI PROJECT WAY FORWARD • Development plan • Detailed project scheduling and planning – to be completed: Q1 FY21 • No.7 Shaft and Kinross Plant infrastructure: • Dewatering to commence: Q1 FY21 • Preliminary refurbishment: Q1 FY21 • Placing orders for long-lead equipment
Slide 37: Where to Next – FY21 and Beyond
WHERE TO NEXT – FY21 AND BEYOND
Slide 38: Where to Next – FY21 and Beyond
WHERE TO NEXT – FY21 AND BEYOND • Continue to produce safely and sustainably into FY2021 group production guidance • Increase focus on ESG project implementation • Reduce group all-in sustaining costs • Deleverage balance sheet and increase dividends • Focus on asset optimization and organic growth
Slide 39: Thank You
THANK YOU www.panafricanresources.com CONTACT US Hethen Hira Head: Investor Relations JSE:PAN hhira@paf.co.za AIM:PAF +27 11 243 2900 ADR:PAFRY
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