Pan African Resources Plc Significan progress on renewable energy developments
May 15 2023 - 3:45AM
UK Regulatory
TIDMPAF
Pan African Pan African Resources Funding
Resources PLC Company Limited
(Incorporated Incorporated in the Republic of
and South Africa with limited
registered in liability
England and
Wales under Registration number:
the Companies 2012/021237/06
Act 1985 with
registered Alpha code: PARI
number
3937466 on 25
February
2000)
Share code on
AIM: PAF
Share code on
JSE: PAN
ISIN:
GB0004300496
ADR ticker
code: PAFRY
("Pan
African" or
the "Company"
or the
"Group")
PAN AFRICAN ANNOUNCES SIGNIFICANT PROGRESS ON ITS RENEWABLE ENERGY DEVELOPMENTS
Pan African is pleased to update shareholders on developments at the Group's
8.75MWAC (10.465 MWP) Barberton Mines' Fairview solar facility and the
conclusion of a Power Purchase Agreement (PPA) with Sturdee Energy (Pty) Ltd
(Sturdee Energy) comprising a 40MW wheeled renewable energy solution.
Highlights
Barberton Mines' Fairview solar facility
· Engineering, procurement and construction (EPC) agreement entered into with
JUWI Renewable Energies (JUWI), a leading solar, wind and hybrid project
developer for the construction of an 8.75MWAC solar photovoltaic (PV) renewable
energy facility (Fairview solar facility) at Barberton Mines' Fairview
operation. The plant is expected to provide:
· cost savings of approximately ZAR26 million (US$1.4 million at a
prevailing exchange rate of approximately US$/ZAR: 18.00) in year one with an
average of R40 million per year (US$2.2 million) per year over the life of the
plant
· a reduction in CO2 emissions of approximately 22,000t/year
Sturdee Energy Power Purchase Agreement
· A PPA has been entered into for a 40MW wheeled renewable energy solution,
with the generation capacity available to any of the Group's operations
Other initiatives
· Pan African has also made significant progress in implementing its renewable
energy strategy, which aims to achieve long-term sustainability by securing a
stable energy supply, reducing CO2 emissions and realising all-in sustaining
cost (AISC) savings through large scale renewable energy projects. The Group's
ongoing projects include:
· A feasibility study being progressed to expand Evander Mines' 10MW solar
PV renewable energy facility by at least an additional 12MW to secure additional
capacity for Evander Mines' long-life 24, 25 and 26 Level projects
· A feasibility study has also commenced on a solar PV renewable energy
facility for the Mogale Tailings Retreatment Plant
· Following the successful implementation of these projects, and based on
preliminary feasibility studies, Pan African will generate approximately 28% of
its power requirements through renewable energy, with a cumulative estimated
reduction of 137,000t in CO2 emissions annually and projected annual cost
savings of up to ZAR154 million (US$8.6 million) for the Group, at current
estimated Eskom tariffs and projected future price increases.
In May 2022, Pan African was the first South African mining company to
successfully commission a utility-scale, grid-tied solar PV plant with Evander
Mines' 10MWAC (12MWP) solar PV renewable energy facility (Evander solar
facility). The EPC works for the project were also completed by JUWI.
Fairview Solar PV renewable energy facility
In early 2020, Pan African commenced studies for the development of the 8.75MWAC
Fairview solar facility at its Barberton operations. This facility is now fully
permitted, including its water use licence, environmental approvals and its
registration with the National Energy Regulator of South Africa (NERSA).
To accelerate the site work at the Fairview solar facility, an early works phase
was undertaken by JUWI and is nearing completion. This phase included various
activities such as the facility design and conducting specialist studies that
are essential for completing the detailed design and cost estimation for the
subsequent EPC work.
The Fairview solar facility's plant is expected to generate approximately ZAR2.2
million in monthly cost savings in year one. Assuming an estimated annual tariff
increase rate, by Eskom, of 10% per year, a payback period of approximately 8
years is estimated. Based on preliminary studies, Fairview's solar facility will
reduce the Group's carbon emissions by some 22,000t of CO2 per annum. The solar
facility is expected to have an economic life in excess of 25 years, which is
sufficient for the mine's current 20-year life of mine, based on current Mineral
Reserve estimates.
JUWI is one of the world's leading renewable energy companies specialising in
the development, EPC, operation and maintenance of private and public utility
scale solar and wind energy projects. JUWI has successfully installed over 400
MW of renewable power facilities in South Africa (5.5 GW globally) and has
developed wind and solar sites across South Africa. Additionally, JUWI is listed
in the top 10 solar EPC contractors globally and is the leading renewable energy
specialist for mining companies. JUWI was also the EPC provider during the
construction of Pan African's Evander solar facility.
The construction of Fairview's solar facility will be financed on a ring-fenced
debt basis similar to the Evander solar facility. Financing Proposals have been
obtained from a number of interested parties and are expected to be finalised
and available by June 2023.
Sturdee Energy Power Purchase Agreement
Pan African has also entered into a PPA with Sturdee Energy for a wheeled
renewable energy solution of 40MW from its Bela-Bela Project (Bela) solar PV
facility in Limpopo to any of the Group's operations.
The initial PPA term is for 10 years, with the option to extend it for another 5
years. The indicative tariffs over the extended 15-year period will be
significantly lower than that expected from Eskom. The Bela solar PV facility is
expected to provide approximately 112,399 MWh of renewable energy per annum to
Pan African, resulting in an estimated ZAR646 million NPV10 savings over a 10
-year period and ZAR884 million over a 15-year period.
There may also be further tariff savings if this 40MW Bela project is scaled up
to its permitted 75MW of solar power. The resultant economies of scale
associated with the construction of such a larger project should result in an
even lower tariff for Pan African.
The Bela solar PV facility has already obtained the key permits required for
construction. This includes environmental approvals, water use license, and
rezoning approvals. The facility will be connected to the Eskom grid via a 132
kV line in the area of Bela Bela.
The PPA is subject to standard terms and conditions typical for agreements of
this nature and will become effective following the construction of the Bela
solar PV facility, estimated to take place during the 2025 calendar year. The
Bela project will be funded by third party financial institutions with no
upfront contribution from Pan African.
Sturdee Energy is an African independent power producer with a track record of
developing, owning and operating over 600MW of renewable energy projects in
South Africa. Its vision is to deliver economic growth and socio-economic
development to Africa through the production of reliable renewable energy.
Further, Sturdee Energy's focus is delivering renewable energy to corporate and
industrial customers on short and long term power purchase agreements through
onsite or wheeled power.
Pan African's renewable energy roadmap to decarbonisation
Pan African has embarked on a renewable energy strategy that includes:
· The construction of its 10MWAC Evander solar PV facility, the first utility
-scale, grid-tied solar PV plant to be commissioned in South Africa
· The construction of an 8.75 MWAC solar PV facility at Fairview Mines
· The entering into of the 40MWAC Sturdee Energy PPA for the provision of
wheeled power over a period of up to 15 years
· The development and construction of a second solar PV facility with a
minimum output of 12MWAC at Evander Mines
· The construction of a solar PV facility at its Mogale operations.
Cobus Loots, Chief Executive Officer of Pan African Resources, commented:
"Our solar PV renewable energy initiatives are key components in progressing Pan
African's renewable energy strategy and in achieving our sustainability targets.
In addition to measurably reducing the Group's carbon emissions, these projects
will assist in stabilising the electricity supply to our operations, while also
realising commensurate cost savings that will assist in reducing our overall
AISC per ounce of production in the longer term."
Certain information communicated in this announcement was, prior to its
publication, inside information for the purposes of Article 7 of Regulation
596/2014.
Rosebank
15 May 2023
For further information on Pan African, please visit the Company's website at
www.panafricanresources.com
+----------------------------------------------+--------------------------------
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|Corporate information
|
+----------------------------------------------+--------------------------------
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|Corporate office |Registered office
|
| |
|
|The Firs Office Building |2nd Floor
|
| |
|
|2nd Floor, Office 204 |107 Cheapside
|
| |
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|Cnr. Cradock and Biermann Avenues |London
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| |
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|Rosebank, Johannesburg |EC2V 6DN
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| |
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|South Africa |United Kingdom
|
| |
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|Office: + 27 (0)11 243 2900 |Office: + 44 (0)20 7796 8644
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| |
|
|info@paf.co.za |info@paf.co.za
|
+----------------------------------------------+--------------------------------
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|Chief executive officer |Financial director
|
| |
|
|Cobus Loots |Deon Louw
|
| |
|
|Office: + 27 (0)11 243 |Office: + 27 (0)11 243
|
|2900
|2900 |
+----------------------------------------------+--------------------------------
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|Head: Investor relations |Website:
www.panafricanresources.com |
| |
|
|Hethen Hira |
|
|Tel: + 27 (0)11 243 2900 |
|
|E-mail: hhira@paf.co.za |
|
+----------------------------------------------+--------------------------------
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|Company secretary |Nominated adviser and joint
broker |
| |
|
|Jane Kirton |Ross Allister/David McKeown
|
| |
|
|St James's Corporate Services Limited |Peel Hunt LLP
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| |
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|Office: + 44 (0)20 7796 8644 |Office: +44 (0)20 7418 8900
|
+----------------------------------------------+--------------------------------
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|JSE Sponsor and JSE debt sponsor |Joint broker
|
| |
|
|Ciska Kloppers |Thomas Rider/Nick Macann
|
| |
|
|Questco Corporate Advisory Proprietary |BMO Capital Markets Limited
|
|Limited |
|
| |Office: +44 (0)20 7236 1010
|
|Office: + 27 (0)11 011 |
|
|9200 (https://www.google.co.za/search?q=questc|
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|o |
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|&rlz=1C1EJFC_enZA816ZA818&oq=q |
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|uestco&aqs=chrome..69i57j0l5.1 |
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|159j0j4&sourceid=chrome&ie=UTF-8) |
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+----------------------------------------------+--------------------------------
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| |Joint broker
|
| |
|
| |Matthew Armitt/Jennifer Lee
|
| |
|
| |Joh. Berenberg, Gossler & Co KG
|
| |
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| |Office: +44 (0)20 3207 7800
|
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