Pan African Resources PLC
("Pan African" or “the Company" or “the Group”)
(Incorporated and registered in England and Wales under Companies Act 1985 with registered
number 3937466 on 25 February
2000)
Share code on AIM: PAF
Share code on JSE: PAN
ISIN: GB0004300496
TRADING STATEMENT AND OPERATIONAL UPDATE FOR THE SIX MONTHS
REPORTING PERIOD ENDED 31 DECEMBER
2016
TRADING STATEMENT
In terms of paragraph 3.4(b) of the Listings Requirements of the
JSE Limited, a listed company is required to publish a trading
statement as soon as it is satisfied that a reasonable degree of
certainty exists that the financial results for the period to be
reported upon next, will differ by at least
20 percent from those of the previous corresponding period.
Pan African is incorporated in England and Wales under the Companies Act 1985 and
accordingly, its presentation currency is Pounds Sterling
(“GBP”).
The average ZAR:GBP exchange rate affect the reporting of Group
results in GBP. For the six month’s reporting period ended
31 December 2016 (“current reporting
period”), the average prevailing ZAR:GBP exchange rate is used to
translate earnings per share (“EPS”) and headline earnings per
share (“HEPS”) from ZAR to GBP.
For the reporting period ended 31
December 2015 (“prior reporting period”), the average
ZAR:GBP exchange rate was ZAR20.83:1.
For the current reporting period, the ZAR appreciated against the
GBP, with an average exchange rate of ZAR17.88:1. This 14.2 percent period-on-period
appreciation in the average exchange rate should be taken into
account for the purposes of comparing results with the prior
reporting period.
Pan African advises shareholders that its EPS and HEPS for the
current reporting period are expected to be between:
-
EPS in ZAR terms: 23 percent to 43 percent higher
than the 12.43 cents EPS for
the prior reporting period (therefore estimated EPS of 15.34 cents to 17.82 cents).
-
HEPS in ZAR terms: 21 percent to 41 percent higher
than the 12.43 cents HEPS for
the prior reporting period (therefore estimated HEPS of
15.08 cents to 17.56 cents).
Using the average ZAR:GBP 17.88:1 exchange rate that
prevailed during the current reporting period, the Group’s EPS and
HEPS in GBP terms for the current reporting period are expected to
be between:
-
EPS in GBP terms: 45 percent to 65 percent higher
than the 0.60 pence EPS for
the prior reporting period (therefore estimated EPS of 0.87 pence to 0.99 pence).
-
HEPS in GBP terms: 42 percent to 62 percent higher
than the 0.60 pence HEPS for
the prior reporting period (therefore estimated HEPS of
0.85 pence to 0.97 pence).
The following items had a significant impact on the profit after
taxation during the current reporting period:
PAR Gold Proprietary Limited, previously known as Shanduka Gold
Proprietary Limited, transaction (“PAR Gold transaction”)
The materially earnings accretive PAR Gold transaction was
finalised on 7 June 2016, which has
resulted in the weighted average number of shares in issue reducing
significantly by 17.7 percent period-on-period. Disclosed below is
the Pan African share reconciliation, illustrating the effect of
the PAR Gold transaction on the weighted average number of shares
in issue, which is used to calculate the EPS and HEPS.
Pan African Shares
Reconciliation |
Shares |
Shares in issue at 31
December 2015 |
1,831,494,763 |
Issue of shares – 7
June 2016 |
111,711,791 |
Shares in issue at 31
December 2016 |
1,943,206,554 |
Elimination of shares
held by PAR Gold |
(436,358,058) |
Shares used to
calculate the EPS and HEPS |
1,506,848,496 |
Net reduction in
number of weighted average shares |
17.7% |
Uitkomst Colliery
The Uitkomst Colliery, acquired on the 31
March 2016, has performed well during the current reporting
period, contributing approximately 8.5 percent of the Group’s EPS
and HEPS. If the current favourable coal price environment
continues, the payback period for this acquisition is expected to
be less than the four years previously forecast.
Gold price hedge – fair value adjustment
Barberton Mines entered into a short term strategic hedge (“the
Cost Collar”) in July 2015, when the
prevailing spot gold price was ZAR440,000/kg, to protect its cash flows and the
Group’s annual dividend against severe adverse movements in the ZAR
gold price. During the current reporting period, the Group recorded
a pre-tax mark-to-market fair value gain of ZAR90 million on the Cost Collar (2015: pre-tax
mark-to-market fair value loss of ZAR40.6
million). The mark-to-market fair value gain was due to a
reduction in the gold price of ZAR625,000/kg at 30 June
2016 to ZAR505,000/kg at
31 December 2016.
Increase in the average ZAR gold price received
The average ZAR gold price received by the Group
period-on-period increased by 16.5 percent to R565,298/kg (2015:
R485,215/kg), as a result of the weakening of the ZAR/USD exchange
rate by 2.9 percent to R13.99:1 (2015: R13.60:1) and an increase in
the USD gold price received by 13.2 percent to USD1,257/0z (2015: USD1,110/0z).
OPERATIONAL UPDATE
The Group previously informed shareholders on 5 December 2016 of its revised gold production
guidance for the 2017 financial year of 195,000oz. The gold
production in the second half of the financial year is forecasted
to exceed the first half performance.
Six months ended
31 December |
Mining and tailings operations |
|
Barberton Mines
(Gold ounces) |
Evander Mines
(Gold ounces) |
Uitkomst Colliery
(Coal tonnes) |
Phoenix Platinum (PGE ounces) |
|
|
2015 |
56,447 |
45,350 |
- |
4,493 |
|
2016 |
49,212 |
42,401 |
327,202 |
4,575 |
|
Percentage |
(12.8%) |
(6.5%) |
100% |
1.8% |
|
For further information on Pan African, please visit the
Company’s website at www.panafricanresources.com
27 January 2017
Contact information |
Corporate Office
The Firs Office Building
1st Floor, Office 101
Cnr. Cradock and Biermann Avenues
Rosebank, Johannesburg
South Africa
Office: + 27 (0) 11 243 2900
Facsimile: + 27 (0) 11 880 1240 |
Registered Office
Suite 31
Second Floor
107 Cheapside
London
EC2V 6DN
United Kingdom
Office: + 44 (0) 207 796 8644
Facsimile: + 44 (0) 207 796 8645 |
Cobus
Loots
Pan African Resources PLC
Chief Executive Officer
Office: + 27 (0) 11 243
2900 |
Deon Louw
Pan African Resources PLC
Financial Director
Office: + 27 (0) 11 243 2900 |
Phil Dexter
St James's Corporate Services Limited
Company Secretary
Office: + 44 (0) 207 796 8644 |
John Prior / Paul
Gillam
Numis Securities Limited
Nominated Adviser and Joint Broker
Office: +44 (0) 20 7260 1000 |
Sholto Simpson
One Capital
JSE Sponsor
Office: + 27 (0) 11 550 5009 |
Matthew Armitt / Ross
Allister
Peel Hunt LLP
Joint Broker
Office: +44 (0) 207 418 8900 |
Julian Gwillim
Aprio Strategic Communications
Public & Investor Relations SA
Office: +27 (0)11 880 0037 |
Jeffrey Couch/Neil
Haycock/Thomas Rider
BMO Capital Markets Limited
Joint Broker
Office: +44 (0) 207 236 1010 |
Website:
www.panafricanresources.com |