Evander Gold Mines Acquisition Update

Pan African Resources PLC                           

  (Incorporated and registered in England and Wales under Companies Act 1985   

              with registered number 3937466 on 25 February 2000)              

                                 AIM Code: PAF                                 

                                 JSE Code: PAN                                 

                              ISIN: GB0004300496                               

                         ("Pan African" or "Company")                          

ANNOUNCEMENT REGARDING:

  * THE PROCUREMENT OF APPROXIMATELY 57% IRREVOCABLE SHAREHOLDER SUPPORT IN
    RESPECT OF THE PROPOSED ACQUISITION OF 100% OF EVANDER GOLD MINES LIMITED
    ("EVANDER") FROM HARMONY GOLD MINING COMPANY LIMITED ("HARMONY")
    ("TRANSACTION");
   
  * PAN AFRICAN SECURING R700 MILLION THROUGH RIGHTS OFFER SUBSCRIPTION
    COMMITMENTS;
   
  * AN EVANDER FINANCIAL UPDATE;
   
  * PROGRESS ON THE TRANSACTION;
   
  * THE PAN AFRICAN DIVIDEND POLICY; AND
   
  * A FURTHER CAUTIONARY ANNOUNCEMENT
   
Jan Nelson, CEO of Pan African commented: "The overwhelming support from our
largest institutional shareholders and Shanduka Resources has allowed us to
achieve a significant milestone in concluding the acquisition of the Evander
Gold Mine. Subject to shareholder approval, Pan African will issue
approximately 25% of new share capital in new equity to fund a cash generative
business that will double annual gold production to some 200 000 ounces per
annum and add significant reserves and resources. We are also pleased to be
able to conduct the rights offer in a manner that allows shareholders to
participate in the upside.

Evander generated production profit, as published by Harmony, for the full year
ended 30 June 2012 of R638 million, before tax and other charges, up from R183
million for the previous year. The ounces produced and announced by Harmony was
108 317, up from 87 900 the previous year. Despite Evander having had a
difficult last quarter due to a nine day stoppage as a result of a mechanical
failure on the rock winder, in addition to a number of public holidays
disrupting production during April, the full year financial and operational
performance underline the quality of both the asset and the Evander management
team. These results demonstrate the importance and success of the significant
re-engineering process, combined with a capital programme of some R390 million
in total and completed by Harmony during the past two financial years, prior to
Harmony disposing of the asset. Harmony's decision to implement and complete
this process was one of the key drivers for Pan African's investment decision.

The outcome of all of the above is that Evander ended the first quarter
attributable to Pan African, being 1 April to 30 June 2012, with a balance
sheet showing almost R120 million of net working capital, inclusive of almost
R100 million cash on hand, and no borrowings. Moreover, the environmental
liability is fully funded at approximately R197 million.

The Pan African board previously stated the company's policy is to pay an
annual dividend, subject to the capital requirements of the company. This
policy has not changed. However, taking into account the funding required to
implement the Evander transaction and the concomitant proposed rights offer,
and following discussions with our major shareholders, the board of directors
has decided to forego the declaration of a dividend in respect of the 2012
financial year.

The board remains committed to continue with the company's dividend policy and
intends to resume the dividend payment in the 2013 financial year, normal legal
and commercial considerations permitting. Pan African is positive that the
Evander transaction, once implemented, will further support the Group's cash
flows and drive to enhance shareholder returns through dividends."

 1. INTRODUCTION
   
Pan African shareholders ("Shareholders") are referred to the announcement
published on 30 May 2012 ("Announcement"), wherein they were advised that the
Company had entered into an agreement, which has subsequently been amended as
set out in paragraphs 5 and 6 below, ("Agreement") in terms of which Pan
African (via a wholly-owned subsidiary) ("SPV") will acquire the entire issued
share capital of and claims against Evander from Harmony for a total purchase
consideration of R1.5 billion ("Purchase Consideration"), subject to certain
terms and conditions.

 2. SHAREHOLDER COMMITMENTS TO SUBSCRIBE FOR NEW PAN AFRICAN SHARES AND
    IRREVOCABLE VOTING UNDERTAKINGS
   
Pan African intends to finance a portion of the Purchase Consideration through
the issue of new Pan African ordinary shares ("Rights Offer Shares") by way of
a rights offer ("Rights Offer"), as referred to in the Announcement.

Pan African authorised a bookbuild exercise ("Bookbuild") which was conducted
with, inter alia, the lead institutional shareholders of the Company and Pan
African's Black Economic Empowerment shareholder, Shanduka Resources,
("Bookbuild Participants") with a view to obtaining sufficient capital
subscription commitments to secure the funding of a portion of the Purchase
Consideration and, in particular, the potential R1 billion deposit ("Deposit")
which, at Harmony's election, may become due and payable on 30 November 2012.

Pan African is pleased to announce that the Bookbuild Participants have
collectively and irrevocably committed to:

  * subscribe for Rights Offer Shares up to an aggregate amount of R700
    million, upon the Rights Offer and the Transaction being approved by
    Shareholders ("Subscription Commitments"); and
   
  * vote in favour of all the requisite resolutions ("Transaction Resolutions")
    pertaining to the Transaction, the Rights Offer and matters ancillary
    thereto ("Voting Undertakings").
   
The Subscription Commitments were given by the Bookbuild Participants at an
issue price of R1.90 per Rights Offer Share ("Subscription Price").

The aggregate Voting Undertakings secured by Pan African represent
approximately 57% of the current total issued ordinary shares of the Company
("Shares").

In terms of the Subscription Commitments, the Bookbuild Participants have
committed to, inter alia:

  * follow their rights in terms of the Rights Offer; and/or
   
  * apply for so many excess Rights Offer Shares in terms of the Rights Offer,
   
so as to ensure a total minimum capital commitment to the Rights Offer of R700
million ("Secured Capital").

The combination of the Subscription Commitments, the Voting Undertakings and
the Secured Capital allows Pan African and/or SPV to:

  * discharge its/their obligations to Harmony in respect of a portion of the
    Purchase Consideration (or the Deposit, as the case may be); and
   
  * extend the Rights Offer to both the JSE and AIM markets and thereby allow
    the majority of its Shareholders trading or residing within jurisdictions
    that are not restricted from participating in the Rights Offer (further
    details of which will be set out in the Rights Offer circular to
    Shareholders) to participate in the Rights Offer.
   
The Subscription Price constitutes a discount of approximately:

  * 3.7% relative to the closing price of the Shares as traded on the exchange
    operated by the JSE Limited ("JSE") on 30 May 2012, being the date of the
    Announcement;
   
  * 3.7% relative to the volume weighted average Share price as traded on the
    JSE for the 30 trading days ended on the Announcement date; and
   
  * 4.2% relative to the volume weighted average Share price as traded on the
    JSE over the period from the Announcement date up to and including
    15 August 2012, being the period during which the Bookbuild was conducted.
   
Pan African will compensate the Bookbuild Participants for providing the
Subscription Commitments by paying them a liquidity fee equal to 2% of the
Secured Capital.

The Bookbuild outcome is summarised in the table below.

Table: Bookbuild outcome

Bookbuild Participants                             Voting      Subscription
                                             Undertakings                  
                                                                Commitments
                                                 (Shares)                  
                                                                    (Rands)
                                                                           
Investec Asset Management                     141 785 423       231 000 000
                                                                           
Coronation Asset Management                   160 000 000       220 000 000
                                                                           
Shanduka Gold                                 366 168 585       125 000 000
                                                                           
Allan Gray                                     97 074 447        75 000 000
                                                                           
PIC                                            39 894 492        19 282 500
                                                                           
Directors and others*                          18 942 752        29 717 500
                                                                           
Total Voting Undertakings /                   823 865 699       700 000 000
Subscription Commitments                                                   
                                                                           
Total Voting Undertakings as a                      56.9%                  
percentage of Shares in issue                                              

* Including JP Nelson, RG Still and JAJ Loots, being directors of Pan African
("Directors") and who hold or represent certain direct and/or beneficial and/or
other indirect/non-beneficial Shares. No other Directors hold Shares as at the
date of this announcement.

 3. EVANDER FINANCIAL UPDATE
   
Harmony published its results for the fourth quarter and the year ended
30 June 2012 ("Results") which include information regarding the financial
performance of Evander for that period. In addition to this information
provided by Harmony in the Results, Pan African has prepared a consolidated
balance sheet for Evander as at 30 June 2012, as adjusted in accordance with
certain terms of the Agreement, ("Adjusted Balance Sheet") which is provided
below. The Adjusted Balance Sheet has not been reviewed or reported on by the
Company's or Harmony's or Evander's auditors and is the responsibility of the
board of directors of the Company ("Board").

EVANDER ADJUSTED CONDENSED UNAUDITED CONSOLIDATED BALANCE SHEET     
AS AT 30 JUNE 2012                                                  
                                                                    
                                                            R'000   
                                                                    
ASSETS                                                              
                                                                    
Non-current assets                                                  
                                                                    
Property, plant and equipment                             1 073 057 
                                                                    
Restricted investments                                    196 408   
                                                                    
Investments in financial assets                           257       
                                                                    
Inventories                                               16 438    
                                                                    
Trade and other receivables                               1 085     
                                                                    
Total non-current assets                                  1 287 245 
                                                                    
Current assets                                                      
                                                                    
Inventories                                               50 239    
                                                                    
Trade and other receivables                               22 683    
                                                                    
Income and mining taxes                                   11 529    
                                                                    
Cash and cash equivalents                                 98 859    
                                                                    
Total current assets                                      183 310   
                                                                    
TOTAL ASSETS                                              1 470 555 
                                                                    
EQUITY AND LIABILITIES                                              
                                                                    
Share capital and reserves                                          
                                                                    
Share capital                                             869 616   
                                                                    
Other reserves                                            65 942    
                                                                    
Retained earnings                                         166 164   
                                                                    
Total equity                                              1 101 722 
                                                                    
Non-current liabilities                                             
                                                                    
Deferred tax liabilities                                  130 856   
                                                                    
Provision for environmental rehabilitation                170 173   
                                                                    
Retirement benefit obligation and other provisions        875       
                                                                    
Total non-current liabilities                             301 904   
                                                                    
Current liabilities                                                 
                                                                    
Trade and other payables                                  66 929    
                                                                    
Total current liabilities                                 66 929    
                                                                    
TOTAL EQUITY AND LIABILITIES                              1 470 555 

The Adjusted Balance Sheet has been prepared on the basis of the unaudited
results of Evander and may be subject to change. However, the parties to the
Transaction ("Parties") have agreed that as at 30 June 2012:

  * there will be no inter-company loans between any member of the Harmony
    group companies and any member of the Evander group companies;
   
  * Evander shall have an agreed cash balance of R98.86 million;
   
  * Evander's opening balances as at 1 April 2012 have been warranted by
    Harmony; and
   
  * the balance in Evander's fully invested environmental rehabilitation trust
    fund shall be R196.41 million.
   
 4. CONDITIONS PRECEDENT
   
The Transaction was subject to, inter alia, the fulfilment, or, where possible,
waiver, of the following conditions precedent ("Conditions"):

  * Pan African obtaining approval from the South African Reserve Bank
    pertaining to Pan African's obligations in terms of the Transaction ("SARB
    Approval");
   
  * the Transaction being unconditionally approved by the South African
    competition authorities ("Competition Authority Approval");
   
  * Evander entering into a new electricity supply agreement with Eskom by no
    later than 31 July 2012, on terms and conditions acceptable to Pan African
    ("Eskom Agreement");
   
  * Pan African obtaining irrevocable undertakings from Shareholders
    controlling no less than 50% of Pan African's issued share capital, to vote
    in favour of the Transaction ("Shareholder Support");
   
  * Pan African obtaining irrevocable undertakings from Shareholders to
    subscribe for such number of new Shares as have an aggregate subscription
    price of at least R500 million ("Subscription Undertakings");
   
  * approval of the terms and conditions of the Transaction by Shareholders and
    the stock exchanges on which Shares are listed ("Final Shareholder and
    Exchange Approval") by no later than 30 November 2012; and
   
  * the Parties obtaining the necessary consent for the Transaction from the
    Department of Mineral Resources in terms of section 11 of the Mineral and
    Petroleum Resources Development Act No. 28 of 2002 ("Ministerial Consent")
    by no later than 30 June 2013.
   
 5. FULFILMENT AND EXTENSION OF CERTAIN OF THE CONDITIONS
   
Pan African is pleased to inform Shareholders that the Conditions pertaining
to:

  * SARB Approval;
   
  * Competition Authority Approval;
   
  * Shareholder Support; and
   
  * Subscription Undertakings,
   
have been fulfilled.

The Parties have agreed to amend the Agreement by extending the date for
fulfilment or waiver of the Condition pertaining to the Eskom Agreement to 31
October 2012.

Accordingly, other than the Conditions pertaining to:

  * the Eskom Agreement;
   
  * Final Shareholder and Exchange Approval; and
   
  * Ministerial Consent,
   
all other Conditions have been fulfilled.

 6. BREAK FEE PAYMENT, ADJUSTMENT OF THE DEPOSIT AMOUNT AND FUNDING
    CONSIDERATIONS
   
Pan African has made payment in a further amount of R30 million to Harmony in
respect of the second tranche of the break fee ("Break Fee") payable in terms
of the Agreement.

As such, the full Break Fee, being an amount of R50 million, has been paid by
Pan African to Harmony.

Pan African and Harmony have furthermore agreed that the Break Fee shall be set
off against the R1 billion Deposit. The balance of the Deposit (if it becomes
payable, at Harmony's election) shall therefore constitute a total amount of
R950 million.

The Secured Capital, in addition to Pan African's existing cash funds available
and, to the extent necessary, draw-downs by Pan African from existing debt
funding facilities, will be sufficient to allow Pan African and SPV to make
payment of the Deposit.

Pan African intends to fund the balance of the Purchase Consideration through a
combination of, inter alia, third party debt financing and funds generated from
Pan African's existing operations.

 7. RIGHTS OFFER AMOUNT
   
The Board will determine the final amount of funds to be raised by Pan African
pursuant to the Rights Offer ("Rights Offer Amount") in due course, after
taking into account relevant factors and developments closer to the date of
posting the circular to Shareholders providing the terms and conditions of the
Rights Offer and containing a notice of general meeting (including the
Transaction Resolutions).

The factors to be considered by the Board when determining the Rights Offer
Amount shall include:

  * the financial performance and outlook of Pan African's existing operations
    (i.e. Barberton Mines and Phoenix Platinum);
   
  * the financial performance and outlook of Evander; and
   
  * general movements and trends in precious metal prices and mining costs.
   
The Board has retained full discretion to determine the Rights Offer Amount and
is therefore not restricted as a consequence of having received the
Subscription Commitments and Voting Undertakings, respectively (collectively
"Capital and Voting Agreements"). The Capital and Voting Agreements contain
terms and conditions customary to agreements of this nature, which, if
exercised or elected by the Bookbuild Participants, may allow certain of the
Bookbuild Participants to withdraw their capital and/or voting commitments in
circumstances where the Company materially deviates from the Rights Offer
Amount and/or the Agreement is materially amended.

Accordingly, the Rights Offer Amount may be equal to, less or more than the
Secured Capital.

Pan African intends to announce the Rights Offer Amount by no later than 31
October 2012.

 8. PAN AFRICAN DIVIDEND POLICY AND DIVIDEND CYCLE
   
Pan African has established a clear track record of enhancing Shareholder
returns by declaring regular dividends to Shareholders.

The Board, having considered, inter alia, the

  * feedback and support from Shareholders during the course of the Bookbuild
    and during further general interaction with other Shareholders;
   
  * implications of a dividend declaration during the course of a Rights Offer
    exercise; and
   
  * funding implications of a dividend declaration during the course of
    implementing the Transaction,
   
has resolved not to declare a further dividend during calendar year 2012 or in
respect of the 2012 financial year.

The Board wishes to emphasise that the interruption of the dividend cycle is
directly related to the funding of the Transaction and does not constitute a
change in the Company's dividend policy.

Pan African is committed, subject to the relevant legal and commercial
considerations impacting dividend declarations, to reinstate its dividend cycle
during the 2013 calendar year, upon the successful implementation of the
Transaction.

 9. FURTHER CAUTIONARY ANNOUNCEMENT
   
Shareholders are advised that the final terms and conditions of the Rights
Offer and the pro forma financial effects of the Transaction and the Rights
Offer are still being determined, the publication of which may have a material
effect on the price of Pan African securities.

Accordingly, Shareholders are advised to continue to exercise caution when
dealing in Pan African securities until a further announcement is made.

17 August 2012

Johannesburg

Lead Corporate Advisor on the Transaction, Sole Corporate Advisor on the
Subscription Commitments and Voting Undertakings and Sole Bookrunner on the
Bookbuild

One Capital

Transaction Sponsor and JSE Sponsor

One Capital

Joint Corporate Advisor on the Transaction

Nedbank Capital

Attorneys to the Transaction

Werksmans Inc.

Attorneys to the Bookrunner

Cliffe Dekker Hofmeyr Inc.

Enquiries                            UK                                        
                                                                               
South Africa                                                                   
                                                                               
Pan African Resources                Canaccord Genuity Limited - Nomad and     
                                     Joint Broker                              
Jan Nelson, Chief Executive Officer                                            
                                     John Prior / Sebastian Jones / Joe Weaving
[phone]                                                            
                                     [phone]                      
                                                                               
One Capital                          finnCap Limited - Joint Broker            
                                                                               
Sholto Simpson / Megan Young /       Elizabeth Johnson / Joanna Weaving        
Nicholas Tyler                                                                 
                                     [phone]                      
[phone]                                                            
                                                                               
Vestor Investor Relations            St James's Corporate Services Limited     
                                                                               
Louise Brugman                       Phil Dexter                               
                                                                               
[phone]                  [phone]                      
                                                                               
                                     Gable Communications                      
                                                                               
                                     Justine James                             
                                                                               
                                     [phone] / [phone]

For further information on Pan African, please visit the website at
www.panafricanresources.com