🕐22.02.12 - 08:27 Uhr
PAN AFRICAN ANNOUNCES INTERIM RESULTS FOR SIX MONTHS ENDED 31 DEC 2011
Pan African announces Interim Results for the six months ended 31 December
2011 (This is a duplicate of the SENS)
1.
Highlights for the 6 months ended 31 December 2011
Corporate
- Revenue increased by 33.7% to 51.23 million (2010: 38.33
million).
- Earnings and Headline earnings per share increased by 88.7% to 1.00
pence (2010: 0.53 pence).
- Earnings before interest, taxes, depreciation and amortisation
(EBITDA) increased by 86.6% to 24.17 million (2010: 12.95 million).
- Attributable profit increased by 90.5% to 14.44 million (2010:
7.58 million).
- Cash on hand 4.9 million (2012: 10.6 million) *
- Unhedged and debt-free.
Mining Operations
Barberton Gold Mining Operations (BGMO)
- Gold sold increased 0.6% to 46,927oz (2010: 46,655oz).
- Tons milled increased by 3.6% to 154,643t (2010: 149,231t)
- Head grade increased 0.9% to 10.65g/t (2010: 10.55g/t).
- Total cash cost of ZAR192,397/kg (2010: ZAR176,199/kg) for the
period under review but improved to ZAR158,925/kg for the quarter ended 31
December 2011.
Phoenix Platinum Group Metals (PGM) Retreatment Plant (from Chrome
tailings)
- Plant commissioned two months ahead of schedule and on budget
during October 2011.
- 438oz of PGM contained in concentrate was produced and despatched
by the end of December 2011.
Near-Term Mining Projects Barberton Gold Tailings Retreatment Project
(BTRP)
- Commenced with a Definitive Feasibility Study (DFS)
- Acquired the Harper Gold Tailings dumps representing over 3Mt of
material at a grade of 1.3g/t for total consideration of 830,000.
Development projects Manica Gold Project
- Established a separate management team with the aim of listing the
Manica Gold project as a separate exploration company on an international
exchange in April 2012.
Significant post period acquisition Evander Gold Mines (Pty) Ltd
- Pan African Resources and Witwatersrand Consolidated Mines entered
into a 50:50 joint venture on 30 January 2012 to acquire 100% of the
Evander Gold Mines from Harmony Gold Mining Company for a total conditional
consideration of up to ZAR 1.7 billion (139 million).
* Cash on hand as at 17 February 2012 at the closing rate of 12.24 was 16.0
million.
Please note that there will be a results presentation today at 11.00am South
African time at Macquarie First South Capital
At: Macquarie First South Capital
The Place, 1 Sandton Drive, South Wing, Sandown
A LIVE audio cast will be available to:
UK listeners: 0800 917 7042
SA listeners Johannesburg: 011 535 3600
Cape Town: 021 819 0900
Durban: 031 812 7600
South African toll free: 0 800 200 648
Other countries: +27 11 535 3600
Financial Summary:
Six months ended 31 December 2011
Six months ended 31 December 2010
(Unaudited)
(Unaudited)
Revenue
()
51,229,660
38,326,410
EBITDA
()
24,166,658
12,947,012
Attributable profit
()
14,437,217
7,584,317
EPS
(pence)
1.00
0.53
HEPS
(pence)
1.00
0.53
Weighted average number of shares in issue
1,444,225,674
1,421,399,407
2.
Nature of Business
Pan African is a South African based precious metals mining group that
produces approximately 95,000oz of gold and 12,000oz* of Platinum Group
Metals (PGM) per annum.
The companys strategic focus is on delivering
attractive shareholder returns by exploiting ore-bodies that yield high
margins through a highly skilled and experienced management team.
The
company recently commissioned the Phoenix chrome tailings retreatment plant
that extracts PGMs from chrome tailings and is planning to build a 1.2Mt
per annum gold tailings retreatment plant at BGMO.
This plant could increase
gold production from BGMO by a further 25,000oz per annum from August 2013.
The group is debt free, unhedged and is able to fund all current capital
expenditure from internal cash flows.
The Group is generating significant
cash from operations and as at 31 December 2011 had 4.9 million cash on
hand.
* Full production build-up is expected from May 2012
3.
Financial Performance
Pan African is incorporated in England and Wales, its reporting currency is
pound sterling (`) and its functional currency is South African Rand
(ZAR).
Barberton Mines (Pty) Ltd (`Barberton Mines) is a South African
Company and its financial statements are prepared in South African Rand
(`ZAR).
When Barberton Mines financial statements are translated into
pound sterling for the purpose of Group consolidation and reporting, the
average and closing ZAR: exchange rates for the period affect the Group
consolidated financial results.
During the current period, the average ZAR: exchange rate was ZAR12.06
(2010: ZAR11.18) and the closing ZAR: exchange rate was ZAR12.54 (2010:
ZAR10.28).
The period-on-period change in the average and closing exchange
rates of 7.9% and 22.0% respectively should be taken into account when
comparing the period-on-period results.
Gross revenue from gold sales increased by 33.7% to 51.23 million (2010:
38.33 million).
The increase in revenue was mainly attributed to a 34.9%
period-on-period increase in the average gold spot price received of
US$1,736/oz (2010: US$1,286/oz) however the appreciation of the pound
sterling against the ZAR had a negative impact on the Pound revenue.
The
average :ZAR exchange rate strengthened by 7.9% to ZAR12.06 (2010:
ZAR11.18).
Revenue expressed in ZAR terms increased by 44.2% to ZAR 617.
80
million (2010: ZAR 428.49 million).
Although the average spot gold price in
the period under review increased by 34.9% to US$ 1,736 (2010: US$ 1,286),
the average US$: ZAR exchange rate strengthened by 6.2% to ZAR7.58 (2010:
ZAR 7.14) which had a negative impact on the ZAR revenue.
The effective ZAR
gold price per kilogram achieved increased by 43.3% to ZAR 423, 276/kg
(2010: ZAR 295, 281/kg).
Mining profit at BGMO increased by 113.4% to 28.6
million (2010: 13.4 million).
Other expenses were 1.76 million (2010: 1.35 million), and there were no
impairments in the current or prior reporting period.
Cost of production increased by 1.1% to 23.20 million (2010: 22.95
million).
In ZAR terms the cost of production increased by 9.0% to ZAR279.79
million (2010: ZAR256.58 million).
The increase was primarily due to a hike
in electricity rates by 29.6% to ZAR32.06 million, engineering and technical
services up 14.8% to ZAR25.64 million and salaries and wages up 11.1% to
ZAR131.43 million.
The Royalty tax charge increased 99.0% to 2.01 million (2010: 1.01
million).
Income tax increased by 123.7% to 8.39 million (2010: 3.75
million) as a result of the increase in profit before tax.
The effective tax
rate increased by 3.1% to 36.8%.
EBITDA increased by 86.6% to 24.17 million (2010: 12.95 million) and
attributable profit increased by 90.5% to 14.44 million (2010: 7.58
million).
Cash on hand decreased to 4.9 million (2010: 10.6 million)
mainly due to capital expenditure of 4.57 million associated with the
Phoenix Platinum Group Metals Retreatment Plant and the dividend payment of
7.42 million made during the period under review.
The increase in attributable profit is primarily due to the favourable gold
price.
The profit margin in ZAR terms increased by 93.9% to ZAR230,879/kg
(2010: ZAR119,082/kg).The total unit production cash cost increased by 9.2%
to ZAR192,397/kg (2009: ZAR 176,199/kg), but improved to ZAR 158,925/kg for
the quarter ended 31 December 2011.
Basic earnings per share increased by 88.7% to 1.00 pence (2010: 0.53 pence)
and basic headline earnings per share increased by 88.7% to 1.00 pence
(2010: 0.53 pence).
In ZAR terms the basic earnings per share increased by
102.0% to 12.06 cents (2010: 5.97 cents), and basic headline earnings per
share increased by 102.0% to 12.06 cents (2010: 5.97 cents).
4.
Review of Barberton Mines
a.
Safety & Training
We are pleased to report no fatalities occurred for the period under review.
To date fatality free shifts totalled 1,329,723 and the safety performance
at BGMO for the first six months of the 2012 financial year as measured by
the All Injury Frequency rate (AIFR) at 21.25 (2011: 24.82) indicates that
the total number of incidents decreased during this period.
However, in the
period under review, the Lost Time Injury Frequency rate (LTIFR)
deteriorated to 3.09 vs.
2.61 in 2011 and Reportable Injury Frequency Rate
(RIFR) to 1.03 vs.
0.33 in 2011.
In order to address these slight
increases a Mining Qualification Authority accredited training program for
supervisors is being implemented in order to identify and correct safety
hazards.
b.
Operating Performance
A total of 46,927oz (2010: 46,655oz) of gold was sold from BGMO (which
comprises the Fairview, Sheba and New Consort sections), a slight increase
of 0.6% from the previous year.
Total underground production remained
consistent at 45,209oz (2010: 45,385oz).
Tons milled increased by 3.6% to
154,643t (2010: 149,231t).
The tonnage increase was mainly due to the
additional surface dump material planned during the period under review to
make up for the BIOX problems.
Head grade remained constant at 10.65g/t
(2010: 10.55g/t).
Operating problems were experienced in the BIOX plant during July and
August 2011 which negatively affected gold production, when the cumulative
effect of breakdowns to the old high pressure blowers in the process and
excess oil from a collapsed crusher bearing.
These breakdowns created a lack
of oxygen supply to the reactors and resulted in poor recoveries.
To ameliorate the above, electronic oil pressure controls were installed in
the crusher and the outdated blowers were replaced with more efficient low
pressure blowers at a capital cost of ZAR2.4 million (0.199 million).
Production Summary
6 months ended
6 months ended
6 months ended
6 months ended
6 months ended
31 Dec 11
31 Dec 10
31 Dec 09
31 Dec 08
31 Dec 07
Tons Milled
(t)
154,643
149,231
152,584
159,919
161,455
Head grade
(g/t)
10.65
10.55
10.11
11.40
9.05
Overall Recovery
(%)
89
91
91
91
92
Production: Underground *
(oz)
43,355
45,209
45,385
47,634
43,145
Production: Calcine Dumps / Surface Ops
(oz)
264
-
-
3 545
3 601
Gold Sold *
(oz)
46,927
46,655
45,971
51,186
47,486
Average price: spot
(US$/oz)
1,736
1,286
1,032
824
721
Average price: hedge
(US$/oz)
-
-
-
-
460
Average price: spot
(ZAR/KG)
423,276
295,281
253,510
235,338
165,782
Total cash cost
(US$/oz)
786
767
670
451
521
Total cash cost
(ZAR/KG)
192,397
176,199
164,697
134,581
114,640
EBITDA
000
24,167
12,947
8,598
8,552
4,001
Depreciation
000
1,536
1,909
1,375
1,066
806
Capital Expenditure
000
4,567
4,076
2,199
2,282
1,532
Exchange rate average
ZAR/
12.06
11.18
12.48
15.13
14.05
Exchange rate closing
ZAR/
12.54
10.28
11.94
13.78
13.77
Exchange rate average
(ZAR/US$)
7.58
7.14
7.64
8.88
6.94
Exchange rate closing
(ZAR/US$)
8.12
6.65
7.39
9.55
6.86
* The variance between gold produced and sold is higher than the historical
figure of between 1% to 3% and is due to the dumping of the high grade
contents of the BIOX reactors during June 2011, which was then fed back
into the system during the period under review.
c.
Capital Expenditure Growth Projects
Project
Metres/ % Equipping completed
% Complete of budget
(Progressive to YTD)
Potential Resource
Comments
36 ZK
Sheba
197.4
101.23%
5,000
The footwall drive will reach the target area in June 2012 and development
along the cross fractures.
Edwin Bray
190.7
105.94%
15,000
Targets exceeded and continuing development towards the Thomas ore body.
Exploration drilling to commence in February 2012 to determine mining plan
and layouts.
Pillar Development
Sheba
75.3
82%
In reserve
25 - 560 Main Fracture area 1,960t @ 24,71g/t has been established.
27-360 Stoping area 6,860t @ 21,14g/t exposed with 90m of re-equipping
remaining to gain access for stoping.
35 - 10 - 382 Prospect - 40m of development completed and a structure
carrying a value of 9,94g/t has been intersected.
40 Level
Development
Consort
126.1
110.61%
8,500
Development has progressed through the pegmatite and subsequent cover
drilling indicates a second splay of pegmatite (+/- 30m thick), which still
has to be traversed.
The target zone is virgin area with very good potential to pick up the
upward extension of the ore body.
SI 22
50W1 Decline
Consort
88.0
99.32%
30,000
50 W1 decline is to be sunk for one level.
The opening up of 53 level has exposed potential high grade reserves
that have potential for mining and are currently being evaluated.
Pillar
Development
Consort
58%
80%
0.00%
In reserve
52 Level at 49 Sub-Vertical Shaft:
Re-equipment from 50 to 52 level is completed.
Secondary support in the form of sets has been completed.
Decline development to commence in February 2012.
33 Level
Ventilation doors and access services from station to ventilation door
completed.
80m of service piping required prior to de-watering.
Sampling to be carried out once this is completed.
SI 14
Equipping
Consort
55.9
147.11%
In reserve
The decline shaft rope raise and box hole are 95% complete.
Shaft equipping down to 40 level is to be completed in the 3rd quarter of
the 2012 financial year.
Mineable reserves on 38 level has been identified for the 2013 financial
year.
Project
Metres/ % Equipping completed
% Complete of budget
(Progressive to YTD)
Potential Resource
Comments
3# Deepening
Fairview
89.3
119.07%
350,000
The development of the 64 to 62 level return airways is on-going with, 55m
remaining.
Shaft sinking to commence in the new financial year, with the opening up of
the downward extension of the Hope reef.
58 Hope Reef
Equipping
85%
80.00%
In reserve
Equipping is progressing well and should be completed by April 2012.
54 Rositer Reef
122.9
122.90%
11,000
The Rositer reef has been intersected and reef development is under way.
16 Level
Opening Up
Fairview
100%
100.00%
In reserve
Re-equipping on 16 level is complete and new blocks for stoping are being
evaluated and brought into the mining plan.
d.
Maintenance Capital
Metallurgy Plants
Metallurgical Plants
Cost
Category
Impact on production
Sheba Concentrate truck
ZAR1,300,000
Replacement
Safety and maintenance improvement.
Sheba Pump replacements
ZAR200,000
Replacement
To improve mine water run off control.
BIOX - Air equipment machinery
ZAR2,250,000
Replacement
To improve Biox recoveries.
BIOX Instrumentation equipment
ZAR500,000
Replacement
To improve Biox recoveries.
Engineering
Engineering
Cost
Category
Impact on production
Winder ropes
ZAR1,190,000
Replacement
Legal and safety requirement.
Compactors and utility vehicles
ZAR1,070,000
Replacement
Safety and grade control in 11 block.
12 Ton tipper truck
ZAR1,101,000
Replacement
Safety and maintenance improvement.
Fairview 2# refurbishment
ZAR2,004,000
Maintenance
Safety and legal requirement.
Load haul dumpers
ZAR2,426,000
Maintenance
Safety and production requirement.
e.
Mineral Resources Management
Exploration Drilling
During the period under review a total of 7,740m (2010: 7,604.5m) of
exploration drilling was completed underground at Barberton Mines and the
following significant intersections are reported:
Section
Borehole Number
Drill width (cm)
Grade (g/t)
Description
Fairview
Bh 5849
1,626
50.22
MRC ore body down-dip extension
Bh 5864
1,383
43.82
MRC ore body down-dip extension
Bh 5861
77
21.20
Rositer down-dip extension
Sheba
24-460 - 01
104
13.45
Stope prospect drilling
29 ST 20
764
15.70
Stock work extension
29Stock23
63
30.08
Stock work extension
29Stock24
113
34.14
Stock work extension
33 MRC W37
86
10.30
MRC footwall structure
3340-W42
100
14.80
Prospect drilling for Birthday Northern Limb
3340-W42
91
15.13
Prospect drilling for Birthday Northern Limb
3340-W42
73
10.82
Prospect drilling for Birthday Northern Limb
36 ZK W01
82
42.71
ZK ore body below 35 level
36 ZK W02
74
35.20
ZK ore body below 35 level
36 ZK W02
34
15.98
ZK ore body below 35 level
36 ZK W02
40
10.04
ZK ore body below 35 level
36ZK 02
75
11.32
ZK ore body below 35 level
EB 09
64
13.64
Mineralised structure in the Moodies quartzite
New Consort
20IV-4
188
21.45
Ivora mineralisation below 20 level
3#7-1
64
25.20
3 Shaft resource extension
3#7-1
64
88.90
3 Shaft resource extension
3#7-1
64
72.70
3 Shaft resource extension
3#7-2
256
33.78
3 Shaft resource extension
3#7-3
256
19.93
3 Shaft resource extension
3#7-3
64
44.70
3 Shaft resource extension
3#7-5
87
23.20
3 Shaft resource extension
3#7-6
246
19.71
3 Shaft resource extension
3#7-6
87
14.40
3 Shaft resource extension
3#7-7
97
69.15
3 Shaft resource extension
3#7-8
82
21.80
3 Shaft resource extension
3#7-9
164
26.45
3 Shaft resource extension
3#CT-6
192
55.77
3 Shaft resource extension
3#CT-8
64
10.50
3 Shaft resource extension
37NE-2
97
30.30
37 Level new ore body exploration
37NE-3
97
17.50
37 Level new ore body exploration
37NE-3
97
32.40
37 Level new ore body exploration
37NE-4
97
29.50
37 Level new ore body exploration
37NE-5
100
111.00
37 Level new ore body exploration
37XC-16
87
11.00
37 Level new ore body exploration
37XC-18
91
23.80
37 Level new ore body exploration
Development results
A total of 1,617.6 m (2010: 1,636.7m) of development was completed on
working cost.
Capital development totalled 1,095.8 m (2010: 429.6m) of which
the majority, 481.9m (44%) was done at Sheba with 348.8m (32%) at Fairview
and 265.1m (24%) at Consort.
The capital development at Fairview was
focussed at deepening of the number 3 sub-vertical shaft, the Hope and
Rositer reefs.
New Consort
Fairview
Sheba
Metres
g/t
Metres
g/t
Metres
g/t
Reef
241.4
6.15
198.0
2.89
531.8
3.71
Stope Development
187.7
6.76
176.4
5.5
31.1
8.49
Capital
265.1
-
348.8
-
481.9
-
Waste working cost
441
-
434
-
742.6
-
Waste Total
706.1
-
782.8
-
1,224.5
-
5.
Review of Phoenix Platinum
Construction of the Phoenix Plant by Basil Read Matomo Projects exceeded
expectations when cold commissioning commenced in October 2011.
First
concentrates were produced on 29 November 2011 two months ahead of schedule.
Frazer Alexander carried out the construction of the Tailings Storage
Facility Extension and the completion thereof dovetailed with the early
commencement of tailings treatment by the plant.
Some 150,000 man hours
where expended during the construction phase without a time lost accident.
A five year Sale of Concentrate Agreement was concluded with Western
Platinum Limited (a subsidiary of Lonmin Plc) in November 2011.
The plant is in the process of progressing towards full production.
During
this period various practical feedstock blends will be bulk treated and
conditions examined for optimisation and enhancements tested to maximise the
process.
Full production is expected from May 2012.
6.
Near-Term Mining projects BTRP
During the period under review, Basil Read Matomo commenced with a DFS on
the final design for the BTRP.
The detailed design for the new tailings
storage facility has also commenced, while the Environmental Impact
Assessment study is progressing on schedule.
The Harper Gold Tailings dumps which are situated within close proximity to
the Bramber Tailings dump, and representing over 3Mt of material at a grade
of 1.3g/t, was acquired for total consideration of 830,000.
7.
Development Projects Manica Gold Project
During the period under review a separate management team was established to
list the Manica Gold project as a separate exploration company on an
international exchange.
Good progress has been made to achieve a separate
listing in April 2012.
8.
Capital Expenditure and Commitments
Capital expenditure at Barberton totalled 4.57 million of which Development
Capital was 2.47 million and Maintenance Capital was 2.10 million.
Capital expenditure on Phoenix Platinum totalled 4.57 million.
There were 0.57 million outstanding orders contracted for capital
commitments at the end of the period at Barberton and 0.5 million
outstanding at Phoenix.
Operating lease commitments, which fall due within the next year, amounted
to 0.147 million (2010: 0.179 million)
9.
Directorship Change
The Following changes took place in December 2011:
Non-Executive Directors:
Mr.
Cyril Ramaphosa resigned as chairman of the board.
Mr.
Keith Spencer replaced Mr.
Cyril Ramaphosa as chairman of the
board.
Ms.
Phuti Malabi replaced Mr.
Keith Spencer as Deputy Chairman of the
board.
Executive Directors:
Mr.
Cobus Loots resigned as Financial Director but will remain as a
non-executive director.
Ms.
Busi Sitole has been appointed as Financial Director.
10.
Shares Issued
During the period under review the company announced the issue and allotment
of 923,650 new ordinary shares in respect of share options exercised:
On 28 October 2011, 200,000 shares issued to Mr.
F.
Chadwick at 6
pence per share.
On 24 November 2011, 723,650 shares issued to Mr.
D.
Negri at 6 pence
per share.
11.
Dividend
The Company has adopted a policy whereby dividends are considered and,
deemed appropriate by the Board, declared on an annual basis.
Pan African
will consider a final dividend subsequent to the finalisation of financial
year-end results.
The consideration of any dividend will take account of
cash flow requirements and growth plans, whilst recognising that where
possible, the payment of a dividend on a consistent basis increases
shareholder value.
During the period under review the company declared and paid a final
dividend for 2011 of 0.5135 pence per share totalling 7.42 million.
12.
Going Concern
The board is satisfied that the Group is a going concern for the foreseeable
future, and have adopted the going-concern basis in preparing these interim
results.
13.
Accounting Policies
The financial information set out in this announcement does not constitute
the Companys statutory accounts for the half year ended 31 December 2011.
The interim results have been prepared and presented in accordance with, and
containing the information required by IFRS on Interim Financial Reporting,
IAS 34.
The financial information included in the interim results has been
prepared in accordance with the recognition and measurement criteria of
IFRS.
This announcement does not itself contain sufficient disclosure
information to comply fully with IFRS.
The interim results have not been reviewed or reported on by the Companys
external auditors.
Johannesburg Stock Exchange (JSE) Limited listing
The Company has a dual primary listing on JSE Limited ("JSE") and the
Alternative Investment Market ("AIM") of the London Stock Exchange.
The preliminary announcement has been prepared in accordance with the
framework concepts and the measurement and recognition requirements of IFRS,
the AC 500 standards as issued by the Accounting Practices Board ("APB") and
the information as required by International Accounting Standards ("IAS")
34: Interim Financial Reporting.
AIM Listing
The financial information for the period ended 31 December 2011 does not
constitute statutory accounts as defined in sections 435 (1) and (2) of the
United Kingdom ("UK") Companies Act 2006.
The Group announcement (the Groups financial statements) has been prepared
in accordance with IFRS and International Financial Reporting Interpretation
Committee ("IFRIC") interpretations adopted for use by the European Union,
with those parts of the Companies Act 2006 applicable to companies reporting
under IFRS.
Segmental Reporting
A segment is a distinguishable component of the Group that is engaged in
providing products or services in a particular business sector (operating
segment), which is subject to risk and rewards that are different to those
of other segments.
The segments which the Group reviews the business
activities of are: Mining Operations, Near-Term Mining Operations and
Development Projects.
14.
Directors Dealings
The Company was notified on Tuesday 18 October 2011 that Pangea Exploration
(Pty) Ltd ("Pangea"), a private company of which Mr Rob Still is a director,
had declared a dividend in specie (the "Dividend") to its shareholders on 1
October 2011.
Mr Still is also a trustee of the Alexandra Trust a major shareholder of
Pangea.
The Alexandra Trust received 12,430,900 ordinary shares of 1 pence
each in the Company ("Shares") at a price of ZAR1.46 per Share, with a total
value of ZAR18,149,114 as a consequence of the Dividend.
Following this off-market transaction Mr Stills total direct, beneficial
interest in Pan African remains unchanged at 2,000,000 Shares, representing
0.14% of the issued share capital of the Company as well as his total
indirect, non-beneficial interest of 16,755,308 Shares representing 1.16% of
the issued share capital of the Company.
Mr Still did not receive any direct
or indirect benefit from this off-market transaction.
The Company was notified between Friday 28 October and Tuesday 1 November
2011 that Pangea Exploration (Pty) Ltd ("Pangea"), a private company of
which Mr Rob Still is a director, had sold the following Shares at the
following prices:
277,863 Shares at R1.7056 per share
322,137 Shares at R1.7131 per share
45,708 Shares at R1.72 per share
54,292 Shares at R1.70 per share
300,000 Shares at R1.70 per share
The above shares were sold by Pangea in order to provide funding for other
potential projects.
Following the above on market transactions Pangea holds
3,324,408 Shares, representing 0.23% of the issued capital of the Company.
Mr Stills total direct, beneficial interest in Pan African remains
unchanged at 2,000,000 Shares, representing 0.14% of the issued share
capital of the Company as well as his total indirect, non-beneficial
interest of 15,755,308 Shares representing 1.09% of the issued share capital
of the Company.
Mr Still did not receive any direct or indirect benefit from the above
transactions.
15.
Significant events post the reporting period
Acquisition of Evander Gold Mines
On 30 January 2012 Pan African and Witwatersrand Consolidated Mines (Wits
Gold) announced that the parties had entered into a 50:50 joint venture to
acquire 100% of the Evander Gold Mines from Harmony Gold Mining Company for
a total conditional consideration of up to ZAR 1.7 billion (approximately
139 million).
The transaction represents an opportunity for Pan African to
materially increase its gold production profile by 50,000 ounces as well as
adding a significant project pipeline for future growth.
The implementation
of the Transaction is subject to the fulfilment of a number of conditions as
set out in the transaction announcement of 30 January 2012.
Barberton Gold Tailings Retreatment Project (BTRP)
On 1 February 2012 the Company announced that the Board had approved Phase
One of the BTRP, which will recover gold from the retreatment of the gold
tailings situated close to BGMO.
It is anticipated that the BTRP will
increase the production profile at Barberton by 25,000 ounces per annum.
16.
The Future
Despite falling short on planned gold production, due to operating problems
experienced in the BIOX plant during the start of the reporting period, a
high gold price and significant effort by the Barberton team to increase
production and manage cash cost allowed us to report record earnings for
the Group.
Barberton remains one of the lowest cash cost producers in the
South African Mining industry.
Despite significant inflationary pressures
the cash cost reported for the second quarter of the reporting period fell
to ZAR158, 000/kg.
This once again highlights that our focus on mining and
developing quality ore-bodies with experienced management teams and a
skilled workforce remains a competitive advantage that will allow us to
continue to grow our profit margin and dividend.
The commissioning of the Phoenix CTRP ahead of schedule and on budget
further demonstrates the Groups ability to develop projects in addition to
managing mining operations.
The Group now produces both gold and PGMs and
offers investors this unique investment exposure.
At an expected operating
cash cost of US$466/oz of 4E this project will be one of the lowest cash
cost producers of PGMs in the South African industry again highlighting
our competitive advantage in terms margin delivery.
The BTRP is the next organic growth project to be developed and once
commissioned should increase Barbertons annual production by 25,000oz from
August 2013.
Although the project will recover gold, it is similar to
Phoenix in that it will reclaim surface tailings that requires no
underground mining and as a result places it on the lower end of the cost
curve.
This project will allow us to grow our profit margin once again.
The announcement post the reporting period of the acquisition of Evander
Gold Mines from Harmony in a 50:50 Joint Venture with Wits Gold, gives the
Group;
- Access to 50,000oz of attributable production at a cash cost of
less than ZAR215,000/kg
- Additional attributable profits
- Newly upgraded underground infrastructure (ZAR256 million invested
by Harmony on Evander 8 Shaft over the last year)
- An attributable underground reserve of 3.8Moz at a recovered grade
of 8.02g/t
- An attributable underground resource of 16.26Moz at a grade of
6.88g/t in situ
- Two shallow development projects at depths of between 225m and
1000m below surface
- A significant surface tailings resource 100Mt grading 0.29g.t on
an attributable basis
- A further highly experienced management team and skilled workforce
This acquisition of the asset removes the concentrated asset risk of the
Group and the partnership with Wits Gold and payment structure will allow
the Group to acquire a sizeable, quality asset without:
- Negatively impacting any potential dividend
- Requiring any issuing of equity subject to cash flow from Evander
and the quantum of debt funding secured.
The group believes that managements proven track record for extracting value
at BGMO can be duplicated at Evander.
Our objective for the remainder of the financial year is to improve on the
reported results for the period under review.
17.
Consolidated Statement of Comprehensive Income for the period ended 31
December 2011
Group
31 December 2011
31 December 2010
(Unaudited)
(Unaudited)
Revenue
Gold sales
51,229,660
38,326,410
Realisation costs
(84,965)
(75,604)
On - mine revenue
51,144,695
38,250,806
Cost of production - Gold
(23,201,120)
(22,949,762)
Depreciation
(1,536,448)
(1,908,836)
Mining Profit
26,407,127
13,392,208
Other expenses
(1,762,357)
(1,346,045)
Royalty costs
(2,014,560)
(1,007,987)
Net income before finance income and finance costs
22,630,210
11,038,176
Finance income
223,324
414,657
Finance costs
(26,069)
(19,868)
Profit before taxation
22,827,465
11,432,965
Taxation
(8,390,248)
(3,848,648)
Profit after taxation
14,437,217
7,584,317
Other comprehensive income:
Foreign currency translation differences
(8,533,732)
4,676,586
Total comprehensive income for the year
5,903,485
12,260,903
Profit attributable to:
Owners of the parent
14,437,217
7,584,317
Non-controlling interest
-
-
14,437,217
7,584,317
Earnings per share
1.00
0.53
Diluted earnings per share
0.99
0.53
Weighted average number of shares in issue
1,444,225,674
1,421,399,407
Diluted number of shares in issue
1,452,808,064
1,426,159,912
Headline earnings per share is calculated :
Basic earnings
14,437,217
7,584,317
Adjustments: Impairment
-
-
Headline earnings
14,437,217
7,584,317
Headline earnings per share
1.00
0.53
Diluted headline earnings per share
0.99
0.53
18.
Consolidated Statement of Financial Position as at 31 December 2011
Group
31 December 2011
31 December 2010
30 June 2011
(Unaudited)
(Unaudited)
(Audited)
ASSETS
Non-current assets
Property, plant and equipment and mineral rights
59,516,827
44,422,134
59,052,015
Other intangible assets
13,332,945
17,247,371
14,214,426
Goodwill
21,000,714
21,000,714
21,000,714
Rehabilitation trust fund
2,669,022
3,073,793
3,013,385
96,519,508
85,744,012
97,280,540
Current assets
Inventories
1,487,066
1,740,777
1,457,202
Trade and other receivables
7,000,352
4,886,229
4,254,401
Cash and cash equivalents
4,994,854
10,630,963
10,123,822
13,482,272
17,257,969
15,835,425
TOTAL ASSETS
110,001,780
103,001,981
113,115,965
EQUITY AND LIABILITIES
Capital and reserves
Share capital
14,449,643
14,440,406
14,440,406
Share premium
50,982,790
50,752,830
50,932,830
Translation reserve
(223,190)
9,172,451
8,310,542
Share option reserve
799,227
807,924
861,450
Retained income
44,628,324
28,022,935
37,607,283
Realisation of equity reserve
(10,701,093)
(10,701,093)
(10,701,093)
Merger reserve
(10,705,308)
(10,705,308)
(10,705,308)
Equity attributable to owners of the parent
89,230,393
81,790,145
90,746,110
Total equity
89,230,393
81,790,145
90,746,110
Group
31 December 2011
31 December 2010
30 June 2011
(Unaudited)
(Unaudited)
(Unaudited)
Non - Current liabilities
Long term provisions **
2,994,493
3,735,682
3,386,591
Long term liabilities **
237,357
-
181,285
Deferred taxation
9,320,441
9,717,443
9,841,695
12,552,291
13,453,125
13,409,571
Current liabilities
-
Trade and other payables *
6,947,074
5,437,913
8,193,750
Short term provisions
-
1,689,122
-
Current tax liability
1,272,022
631,676
766,534
8,219,096
7,758,711
8,960,284
TOTAL EQUITY AND LIABILITIES
110,001,780
103,001,981
113,115,965
* Trade and other payables at 30June 2011 includes an amount of
1,465,299 (41,411 for the Company) relating to the leave pay accrual which
was classified as a short term provision in the prior year.
This is in
accordance with IAS: 19 Employee Benefits.
The leave pay accrual balance as
at 30 June 2010 was 1,151,895.
** Long term liabilities at 30June 2011 include an amount of 115,418
relating to the post-retirement benefits which was classified as a long term
provision in the prior year.
This is in accordance with IAS: 19 Employee
Benefits.
The post-retirement benefits balance as at 30 June 2010 was
136,602.
19.
Consolidated Cash flow Statement for the period ended 31 December 2011
Six months ended
Six months ended
31 December 2011
31 December 2010
(Unaudited)
(Unaudited)
Cash Generated by operations
23,585,992
15,928,379
Taxation paid
(6,824,551)
(3,587,061)
Royalty paid
(1,724,084)
(1,065,267)
Dividends paid
(7,416,175)
(5,376,165)
Net Finance Income
197,255
394,789
Cash inflow from operating activities
7,818,437
6,294,675
Cash outflow from investing activities
(9,140,205)
(8,500,858)
Cash inflow from finance activities
59,197
1,365,000
Net decrease in cash equivalents
(1,262,571)
(841,183)
Cash at the beginning of period
10,123,822
12,756,262
Effect of foreign currency rate changes
(3,866,396)
(1,284,116)
Cash at end of year
4,994,855
10,630,963
20.
Consolidated Statement of Changes in Equity for the period ended 31
December 2011
31 December 2011
(Unaudited)
31 December 2010
(Unaudited)
Shareholders equity at start of period
90,746,110
73,486,877
Share Issue
59,197
1,365,000
Share Option Reserve
(62,223)
53,530
Other Comprehensive Income
(8,533,732)
4,676,586
Profit for the period
14,437,217
7,584,317
Dividend
(7,416,176)
(5,376,165)
Total Equity
89,230,393
81,790,145
21.
Consolidated Segment Report for the period ended 31 December 2011
31 December 2011
Barberton Mines
Phoenix Platinum
Corporate and Growth Projects
Group
Revenue
Gold sales
51,229,660
-
-
51,229,660
Realisation costs
(84,965)
-
-
(84,965)
On - mine revenue
51,144,695
-
-
51,144,695
Cost of production
(23,201,120)
-
-
(23,201,120)
Depreciation
(1,536,448)
-
-
(1,536,448)
Mining Profit
26,407,127
-
-
26,407,127
Other expenses
(1,203,656)
(131,801)
(426,900)
(1,762,357)
Royalty costs
(2,014,560)
-
-
(2,014,560)
Net income/(loss) before finance income and finance costs
23,188,911
(131,801)
(426,900)
22,630,210
Finance income
29,227
4,998
189,099
223,324
Finance costs
(26,069)
-
-
(26,069)
Profit/(loss) before taxation
23,192,069
(126,803)
(237,801)
22,827,465
Taxation
(8,392,325)
2,077
-
(8,390,248)
Profit/(loss) after taxation
14,799,744
(124,726)
(237,801)
14,437,217
31 December 2011
Segmental Assets
55,310,901
18,656,764
15,033,401
89,001,066
Segmental Liabilities
20,344,317
89,565
337,505
20,771,387
Goodwill
-
-
-
21,000,714
Net Assets (excluding goodwill)
34,966,584
18,567,199
14,695,896
68,229,679
Capital Expenditure
4,566,352
4,566,448
7,405
9,140,205
31 December 2010
Barberton Mines
Phoenix Platinum
Corporate and Growth Projects
Group
Revenue
Gold sales
38,326,410
-
-
38,326,410
Realisation costs
(75,604)
-
-
(75,604)
On - mine revenue
38,250,806
-
-
38,250,806
Cost of production
(22,949,762)
-
-
(22,949,762)
Depreciation
(1,908,836)
-
-
(1,908,836)
Mining Profit
13,392,208
-
-
13,392,208
Other expenses
(772,076)
-
(573,969)
(1,346,045)
Royalty costs
(1,007,987)
-
-
(1,007,987)
Net income/(loss) before finance income and finance costs
11,612,145
-
(573,969)
11,038,176
Finance income
10,252
-
404,405
414,657
Finance costs
(19,868)
-
-
(19,868)
Profit/(loss) before taxation
11,602,529
-
(169,564)
11,432,965
Taxation
(3,848,648)
-
-
(3,848,648)
Profit/(loss) after taxation
7,753,881
-
(169,564)
7,584,317
30 June 2011
Segmental Assets
43,333,140
16,990,521
31,791,590
92,115,251
Segmental Liabilities
20,212,973
1,556,006
600,876
22,369,855
Goodwill
-
-
-
21,000,714
Net Assets (excluding goodwill)
23,120,167
15,434,515
31,190,714
69,745,396
Capital Expenditure
6,773,729
14,079,722
180,540
21,033,991
*All assets are held within South Africa, with the exception of assets
relating to Manica (31 December 2011 9,983,544 and 30 June 2011
10,865,478) which are held in Mozambique.
ENDS
Contacts: Pan African CEO, Jan Nelson 011 243 2900
Logo_sharper02
media & investor relations
louise brugman
managing director
Tel: +27 (0) 11 787 3015
Cell: +27 (0) 83 504 1186
skype louise.brugman
Email:
Web: www.vestor.co.za