Can you give an overview of Pan African Resources and the company’s history in South Africa?

Pan African Resources Representative: Pan African Resources is a gold mining company operating in South Africa. Our production capacity currently stands at approximately 200,000 ounces per year of gold from our two asset complexes, Barberton Mines and Evander Gold mines. What sets us apart is that around 50% of our production comes from the cost-effective retreatment of surface resources, known as tailings retreatment, which significantly reduces mining costs.

Barberton Mines, which started production in the 1870s, is one of the oldest mining operations in the world. It still has a mine life of 20 years and contains areas with high-grade gold deposits and significant exploration potential. Barberton produces around 100,000 ounces per year, with approximately 80% coming from underground mining and 20% from surface tailings retreatment. Evander Gold mines produce around 85,000 ounces per year, with approximately 55,000 ounces from tailings retreatment and the remainder from underground mining at the 8 Shaft pillar operation. Our tailings retreatment project at Evander, called “Elikhulu,” is a capital project that involves treating 1.2 million tons of tailings per month and has a 12-year life of mine.

Can you elaborate on Pan African Resources’ growth pipeline?

Over the past two years, we have focused on increasing our underground exploration efforts at the New Consort gold mine. This led to the discovery of a particularly rich zone within the existing orebody, containing mineral reserves of 5,000 tonnes with an average gold grade of 25 g/t Au. This discovery demonstrates the significant potential that exists when implementing systematic and new exploration techniques.

We also have an attractive external growth pipeline. We are currently finalizing a pre-feasibility study for the Mintails assets, the last remaining Witwatersrand gold tailings retreatment resources in South Africa. This project has the potential to add another 50,000 ounces of high-margin gold production per year for a minimum of 10 years. We expect to complete the pre-feasibility study by July 2021 and the final feasibility study by the first quarter of 2022.

What did the feasibility study indicate for the Egoli project and Evander, and how do you plan to finance this project?

The Egoli project will capitalize on the existing infrastructure at the 8 Shaft 24 level of the Evander mine during its development and exploitation. This synergy significantly reduces the upfront capital investment required for Egoli. By extending the current life of our 8 Shaft operations to a minimum of five years, we can use existing cash flows to develop Egoli, reducing our reliance on debt funding. With the current gold prices, the project will be self-funded from the existing 8 Shaft operations.

What are some of Pan African Resources’ sustainability initiatives?

At our Elikhulu operations in Evander, we have implemented a 10 MW solar plant that was commissioned in the 4th Quarter of 2021. This solar plant reduces the power cost for the Elikhulu operation by approximately 30% and has a return on investment of fewer than five years for an $8 million investment. We plan to expand the solar plant at Evander to 30 MW and establish a 10 MW plant at Barberton. Additionally, we have various community development projects at Evander Mines and Barberton Gold Mines, including the retreatment of underground water for use in processing.

Can you elaborate on Pan African Resources’ overall balance sheet structure?

We have a unique advantage compared to many other African producers, as approximately 95% of our costs are based on the South African Rand rather than the US dollar. This provides us with flexibility and helps to mitigate currency exchange risks. Our surface operations also contribute to lower costs and higher profit margins compared to underground mining.

In the previous financial year, our excellent performance resulted in a 69% increase in headline earnings per share (HEPS) and a 45.6% reduction in Group net senior debt. We are on track with our degearing forecast while continuing to invest in our assets and increase dividends to shareholders.

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