Interim results for the six months ended 31 Dec...
Pan African Resources plc
(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
("Pan African" or the "Company" or the "Group")
Interim Results For the six months ended 31 December 2010
Pan African is pleased to report its interim results for the six months ended
31 December 2010.
Highlights
A Corporate
- Earnings per share increased by 56% to 0.53 pence (2009: 0.34 pence)
- Earnings before interest, taxes, depreciation and amortisation (`EBITDA')
increased by 51% to £12.95 million (2009: £8.60 million)
- Revenue increased by 32% to £38.33 million (2009: £29.04 million
- Unhedged and debt-free
- Attributable profit increased by 70% to £7.58 million (2009: £4.47 million)
B Mining Operations
- Gold sold increased 1.5% to 46,655oz (2009: 45,971oz)
- Head grade remains sustainable at 10.55g/t (2009: 10.11g/t)
- Total cash cost of ZAR176,199/kg (2009: ZAR164,697/kg)
C Near-Term Project
- Resource base at Phoenix Platinum Mining (Pty) Ltd (`Phoenix Platinum')
increased by 16% to 469,000oz (2009: 405,000oz)
On the results, Chief Executive Officer of Pan African, Jan Nelson commented:
"We are pleased to announce a strong set of financial and operational results.
Despite the inflationary cost pressure and abnormal security expenditure, Pan
African has increased attributable earnings 70% to £7.58 million. We have
benefitted from a sustained high gold price but we continue to stress test with
a long term forecast of."
"Barberton remains our core asset, producing increased gold sales whilst our
platinum project at Phoenix is well underway, on schedule and within budget for
production later this year."
"We continue to remain focused on further productivity and cost improvements.
Organic growth will continue to improve margins whilst we leverage our balance
sheet and strategic partnership with Shanduka to realise further growth
opportunities."
Interim Statement
A Nature of Business
Pan African is an African focused precious metals mining group which produces
approximately 100,000oz of gold per year, with production of platinum group
metals forecast to commence by the end of the 2011 calendar year. It's focus is
on low cost, high margin production and near production projects. The group is
debt free, unhedged and is able to fund all current capital expenditure from
internal cash flows.
B Financial Performance
Pan African is incorporated in England and Wales, and its reporting currency is
pound sterling (`£'). 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 ZAR11.18 (2009: ZAR12.48) and the closing ZAR:£ exchange rate was ZAR10.28
(2009: ZAR11.94). The period-on-period change in the average and closing
exchange rates of 10.4% and 13.9% respectively should be taken into account
when comparing the period-on-period results.
Gross revenue from gold sales increased by 32% to £38.33 million (2009: £29.04
million). The increase in revenue was mainly attributed to a 24.6%
period-on-period increase in the average gold spot price received to US$1,286/
oz (2009: US$1,032/oz) and the depreciation of the pound sterling against the
ZAR. Revenue expressed in ZAR terms increased by 18.2% to ZAR428.49 million
(2009: ZAR362.48 million). The average ZAR:US$ exchange rate was 6.5% stronger
at ZAR7.14 (2009: ZAR7.64) which had a negative impact on the ZAR revenue. The
effective ZAR gold price was 16.5% higher at ZAR295,281/kg (2009: ZAR253,510/
kg). Mining profit at Barberton Mines increased by 54% to £13.4 million (2009:
£8.7 million).
Other expenses were £1.35 million (2009: £1.12 million). There were no
impairments in the current reporting period (2009:0.34 million).
Cost of production increased by 21.5% to £22.95 million (2009: £18.89 million).
In ZAR terms the cost of production increased by 8.8% to ZAR256.58 million
(2009: ZAR235.86 million). The increase in costs is mainly attributable to
increases in security costs by 97.6% to ZAR18.17 million, electricity by 18% to
ZAR24.74 million and salaries, wages and other staff expenses by 8.3% to
ZAR118.25 million.
The Royalty tax charge was £1.01 million (2009: nil) and the income tax expense
for the period was £3.75 million (2009: £2.68 million). The Royalty charge was
nil in the prior period due to the implementation of the Royalty tax only in
March 2010. The increase in the income tax charge is due to the increase in the
pre-tax profits.
EBITDA increased by 50.6% to £12.95 million (2009: £8.60 million) and
attributable profit increased by 70% to £7.58 million (2009: £4.47 million).
The increase in attributable profit is primarily due to the favourable gold
price and the fact that there is no longer an outside shareholding at Barberton
Mines. The profit margin in South African Rand terms increased by 34.1% to
ZAR119,082/kg (2009: ZAR88,813/kg). The total unit production cash cost
increased by 7% to ZAR176,199/kg (2009: ZAR 164,697/kg).
Basic earnings per share increased by 56% to 0.53 pence (2009: 0.33 pence) and
basic headline earnings per share increased by 47% to 0.53 pence (2009: 0.36
pence). In ZAR terms the basic earnings per share increased by 41.8% to 5.97
cents (2009: 4.21 cents), and basic headline earnings per share increased by
31.5% to 5.97 cents (2009: 4.54 cents).
Pan African's accounting records are compiled using a pound sterling functional
currency. It is management's intention to change the Group's functional
currency from pound sterling to ZAR, which is the currency of the primary
economic environment in which the Company now operates.
six months ended six months ended
31 Dec 2010 31 Dec 2009
(Unaudited) (Unaudited)
Revenue (GBP) 38,326,410 29,044,934
EBITDA (GBP) 12,947,012 8,597,517
Attributable profit (GBP) 7,584,317 4,467,939
EPS (pence) 0.5336 0.3374
HEPS (pence) 0.5336 0.3638
Weighted average number of shares 1,421,399,407 1,324,071,776
in issue
C Review of Barberton Mines
i) Safety & Training
The safety performance at Barberton Mines continued to improve with results of
Lost Time Injury Frequency rate (`LTIFR') at 2.61 (2009: 3.6) and Reportable
Injury Frequency Rate (`RIFR') at 0.33 (2009: 1.1).
We are pleased to report no fatalities for the period under review. To date
fatality free shifts totalled 608,947.
In October 2010, the South African Department of Minerals Resources (`DMR')
conducted a two day audit on safety systems as well as a workplace inspection
as a follow up to the nationwide Presidential Audit. This audit revealed no
fatal flaws and concluded that the safety system at Barberton Mines meets the
DMR's standard.
In addition to the already robust Safety, Health, Environment and Community
(`SHEC') system in place at the mine, the Company, through the involvement of
all role players, has designed additional SHEC elements, in line with best
practice, which are being implemented through a safety awareness programme.
ii) Operating Performance
A total of 46,655oz (2009: 45,971oz) of gold was sold from Barberton Mines
(which comprises the Fairview, Sheba and New Consort sections), an increase of
1.5% from the previous year. Total underground production decreased marginally
by 0.4% to 45,209oz (2009: 45,385oz). Tons milled decreased by 2.2% to 149,231t
(2009: 152,584t) and the head grade increased by 4.4% to 10.55g/t (2009: 10.11g
/t).
iii) Production Summary
six months six months six months
ended 31 ended 31 ended 31
December December December
2010 2009 2008
Tons Milled (t) 149,231 152,584 159,919
Headgrade (g/t) 10.55 10.11 11.40
Overall Recovery (%) 91 91 91
Production: Underground (oz) 45,209 45,385 47,634
Production: Calcine Dump (oz) - - 3,545
Gold Sold (oz) 46,655 45,971 51,186
Average price: spot (US$/oz) 1,286 1,032 824
Average price: hedge (US$/oz) - - -
Average price: spot (ZAR/KG) 295,281 253,510 235,338
Total cash cost (US$/oz) 767 670 451
Total cash cost (ZAR/KG) 176,199 164,697 134,581
EBITDA GBP `000 12,947 8,598 8,552
Depreciation GBP `000 1,909 1,375 1,066
Capital Expenditure GBP `000 4,076 2,199 2,282
Exchange rate - average ZAR/GBP 11.18 12.48 15.13
Exchange rate - closing ZAR/GBP 10.28 11.94 13.78
Exchange rate - average (R/US$) 7.14 7.64 8.88
Exchange rate - closing (R/US$) 6.65 7.39 9.55
(Production Summary continued)
six months six months
ended 31 ended 31
December December 2006
2007
Tons Milled (t) 161,455 166,377
Headgrade (g/t) 9.05 9.24
Overall Recovery (%) 92 92
Production: Underground (oz) 43,145 45,332
Production: Calcine Dump (oz) 3,601 -
Gold Sold (oz) 47,486 45,749
Average price: spot (US$/oz) 721 567
Average price: hedge (US$/oz) 460 406
Average price: spot (ZAR/KG) 165,782 144,564
Total cash cost (US$/oz) 521 516
Total cash cost (ZAR/KG) 114,640 104,471
EBITDA GBP `000 4,001 3,049
Depreciation GBP `000 806 1,077
Capital Expenditure GBP `000 1,532 867
Exchange rate - average ZAR/GBP 14.05 13.68
Exchange rate - closing ZAR/GBP 13.77 13.78
Exchange rate - average (R/US$) 6.94 7.22
Exchange rate - closing (R/US$) 6.86 6.99
v) Capital Expenditure
Organic Growth Projects
Key Project Category Metres % Complete Potential
developed/ Resource(oz)
drilled
a Sheba - 35 ZK Development 151.7 57 5,000
b Sheba - Edwin Bray Development 277.9 100 15,000
to Thomas
c Sheba - Eureka Reef Development - - -
Zone
d Fairview - 3 Shaft Development 74 25 350,000
deepening
e Fairview - 60/62 Development - 100 376,000
Level
f Fairview - 54 Level Equipping 13.8 50 11,000
g Consort - 37 Level Equipping - 52 12,000
East
h Consort - 37 Inter Development/ 0/743 45 10,000
level exploration Drilling
i Consort - 45 Level Development/ 113/972 80 10,000
Drilling
j Consort - 50 Level Development 45.3 40 30,000
Decline West
k Fairview 46-42 Ventilation 13.8 55 -
Return Airway
a Sheba - 35 ZK Decline
Access development has reached the target areas. Development is now following
the hanging wall contact of the ZK geological structures to evaluate the cross
fractures for mineralisation.
b Sheba - Edwin Bray to Thomas
This project to exploit the Thomas orebody has reached the expected orebody
position some 40 metres below the intersection position as interpreted from
diamond drilling results. No mineralisation was exposed at this position, thus
the development has been redirected via two incline raises towards the lowest
drilled intersection.
c Sheba - Eureka Reef Zone
The Eureka reef orebody (exposed enroute to the Thomas orebody) is being
developed with reef drives and raises to evaluate the stoping potential.
d Fairview - 3 Shaft deepening
The sliping, support and equipping of the shaft between 62 and 64 levels are
complete. Development to establish the hoist chamber is underway and once
completed and equipped, the 3 Shaft sinking will commence.
e Fairview - 60/62 Level
This project is complete and stoping is in progress.
f Fairview - 54 Level
The sliping and equipping of this level is 90% complete. Due to excessive water
ahead of the planned development the necessary cover drilling and cementation
has been completed and the overall project is on schedule.
g Consort - 37 Level East
The re-equipping of 37 level at the PC Shaft is being done to access and
explore the upward extension of the eastern section of Consort being mined
below 45 level.
h Consort - 37 Inter level exploration
A total of 743m of exploration drilling was completed during the reporting
period with some significant results.
i Consort - 45 Level
The exploration drive being developed is used as a drilling platform and 972m
of exploration drilling was completed with significant results. This area will
be blocked as new reserves.
j Consort - 50 Level Decline West
Development being done to establish reserves below 50 level in the 51 West Area
of Consort.
k Fairview 46-42 Return Airway
Development required to establish a return airway in the 3 Shaft area
Maintenance Projects
Metallurgical Cost Category Impact on production
Plants
Consort - Knelson ZAR1,200,000 Replacement Improve gold recovery at
Concentrator Consort
Fairview - Complete ZAR8,200,000 Replacement Tailings facility at end of
Tailings Extention life potential for
re-mining old dam
Biox - Purchase mobile ZAR2,600,000 Replacement Safety and maintenance
crane improvements
Biox - Refurbish ZAR440,000 Maintenance Reactor tanks repaired and
secondary reactors relined
Biox - Three compressed ZAR2368,000 Replacement Reduction in power
air blowers consumption and elimination
of oil contamination in
process
Engineering Cost Category Impact on production
Load Haul Dumpers ZAR1,443,000 Maintenance Required to maintain
(`LHD') major rebuilds underground production
Replace obsolete ZAR770,000 Replacement Reduction in power
compressors and consumption
overhaul 3000cfm
compressor
Replace twenty off 2.5 ZAR586,000 Replacement Underground tramming ore
ton hoppers flow improvement
New 12-ton Tipper truck ZAR712,000 Replacement Replaces 50 year old tipper
vi) Illegal Mining
The Company is pleased to report that the illegal miners and leaders of 11
syndicates responsible for coordinating illegal mining activity at Barberton
Mines have been arrested by the police. As a result the Company is not aware of
illegal mining activity during the period under review. What is more pleasing
is that the total cost of security has reduced by 21.6% to ZAR18,167,575 when
compared to the last 6 months of the 2010 financial year (ZAR23,184,654),
without compromising overall security at Barberton Mines. For the six month
period ending 30 June 2011 we expect a further reduction in security costs.
Despite this reduction in security costs, the total cash cost of ZAR176,199/kg
for the reporting period included abnormal security expenditure during Q1,
which resulted in a cash cost of ZAR195,552/kg for the quarter. The Company is
however pleased to report that the cash cost has been reduced to ZAR157,622 for
the last quarter of the reporting period.
The Company would like to commend its partners; the South African Police
Service, Barberton prosecuting team, local communities, security contractors
and our employees for their support and commitment in assisting us in
eradicating this problem from Barberton Mines.
D Mineral Resources Management
During the period under review a total of 7,604.5m of exploration drilling was
completed underground at Barberton Mines and the following significant
intersections are reported:
ShebaNew Consort
Mine Section Borehole Drill Grade Mineralisation Type
Number Width
(cm) (g/t)
Fairview Bh 5803 693 65.8 Down-dip of 64 MRC block
Bh 5809 277 5.3 Footwall of 60 MRC 25
24-20ST07 282 60.6 Stockwork extension
24-20ST04 296 56.4 Stockwork extension
24-20ST04 297 28.7 Stockwork extension
29 Stock 09 73 5.1 Stockwork
29 Stock 09 101 12.2 Stockwork
20XC-3 100 224.7 New target in MMR deep footwall
3#Dec-2 100 5.9 3# resource extension
intersections
3#Dec-3 200 17.2 3# resource extension
intersections
3#Dec-4 100 11.7 3# resource extension
intersections
3#Dec-6 100 70.7 3# resource extension
intersections
3#Dec-9 100 10.3 3# resource extension
intersections
3#Dec-9 200 21.8 3# resource extension
intersections
37XC-5 200 21.8 Mineralisation within schist
37XC-8 100 24.4 Mineralisation within schist
37XC-9 100 220.4 Mineralisation within schist
45H36 100 27.1 Intersection in footwall lens
45H39 200 7.0 Intersection in footwall lens
50W1-5 200 43.5 Intersection ahead of stope face
A total of 1,636.7m of development was completed on working cost and 661.90m on
capital development. A total of 65% (429.60m) of capital development was
completed at the Sheba section, targeting 16% of the resource at an in situ
grade of 9,96g/t. At the Consort section 24% (158.30m) of total capital metres
were completed targeting 16% of Barberton Mines resource at a grade of 10.59g/
t. The remaining 11% (74m) of total capital development was focused at the
Fairview section, targeting 68% of Barberton resource at a grade of 12.47g/t.
Although development at the Fairview section is low compared to the size of the
resource, the capital development completed represents a deepening of the
number 3# sub-vertical shaft, which will open up access to 350koz on several
levels.
New Consort Fairview Sheba
Metres g/t Metres g/t Metres g/t
Reef 278.8 3.45 368.8 3.57 392 3.14
Stope Development 318.6 8.08 77 6.41 75 15.78
Capital 157.7 140.7 429.5
Waste working cost 378.6 408.3 849.8
Waste total 536.3 549 1,279.3
E Review of Phoenix Platinum
Milestones achieved for the period under review
On 5 November 2010 a formal Chrome Tailings Retreatment Plant (`CTRP')
agreement was concluded with International Ferro Metals SA (Pty) Ltd (`IFM'),
which enables Phoenix Platinum, Pan African's 100% owned subsidiary, to
construct and commission the CTRP on IFM's Lesedi Mine property. The
consideration of ZAR80 million (GBP7.2 million), payable to IFM, will be funded
from existing Pan African cash resources. On signature of the CTRP agreement a
payment of ZAR25 million (GBP2.24 million) was made, with the balance of the
consideration to be paid in tranches. A further ZAR25 million (GBP2.24 million)
is payable on commencement of the bulk earthworks to prepare for construction
of the CTRP and ZAR29.5 million (GBP2.64 million) becomes payable on
commissioning of the CTRP. The balance of ZAR500,000 (GBP0.05 million) is to
purchase the property on which the CTRP is to be constructed and is payable on
transfer of the property.
This agreement enables Phoenix Platinum to purchase the property on which the
plant is to be sited, as well as the right to leverage off IFM's existing
mining permits and licenses and to gain access to, and the use of, existing
infrastructure and services, substantially accelerating the commissioning of
the project from three years to one year. Phoenix Platinum is permitted to
expand the planned CTRP tonnage throughput of 20,000 tons to 40,000 tons per
month, placing it in a position to secure and treat additional tailings
resources from the area. Furthermore, the agreement terminates the 25% net
profit interest held by IFM in respect of the platinum group metals (`PGM's').
On 18 November 2010, Matomo Projects (Pty) Ltd, a subsidiary of TWP Holdings
(Pty) Ltd, was contracted on a fixed price lump sum turnkey basis to design,
supply and construct the CTRP.
Outlook for 2011
The procurement of all major equipment and long lead items (feed thickener,
ultra fine grind mill and flotation cells) has been prioritised to be completed
by end February 2011, in order to finalise construction drawings and diagrams.
Civil construction is planned to commence with bulk earthworks during mid March
2011 and mechanical construction and erection starting in mid May 2011. Plant
commissioning is to commence in October 2011 with the CTRP full production rate
of 20,000 tons per month being achieved in the first quarter of 2012.
F Review of Manica Gold
The application to convert the prospecting licence to a mining licence was
submitted to the Mozambican government on 20 October 2010. The Company has been
informed that the application is in the process of being reviewed and that
conversion should be in 2011.
The pre-feasibility study on mining the oxide and some of sulphide bearing
mineralized material has been completed on schedule (December 2010). A detailed
pre-feasibility is being completed on the remainder of the sulphide bearing
mineralised material, which will include a detailed three dimensional
underground mine design. This study is expected to be completed by Q2 of 2011
and results of both studies will be made available towards the beginning of Q3
of 2011.
G New Business
Although it continues to review new business opportunities, the Company has
shifted the new business team resources to focus on major projects at Barberton
Mines that have the potential to significantly increase the production profile
of the mine.
The first project that the team is working on is the viability of the Fairview
tailings dam, which has been in use since 1986. A new tailings facility has
been established which presents the Company with the opportunity to drill the
Fairview tailings dam in order to determine the grade profile. The tailings dam
represents a total of 3,5Mt and 449 holes at an average depth of 24m are
planned to be drilled on a 20m x 20m grid. To date 120 holes have been
completed and assays received from 120 samples out of a total of 2,000 have
yielded grades of between 0,6g/t and 2,5g/t.
Drilling, sampling and assaying will be complete by Q2 of 2011. Metallurgical
test work will commence towards the end of Q2 and feasibility is expected to be
completed by Q3 of 2011. If viable, and depending on the grade profile, this
project could increase the Barberton Mines production profile.
H Capital Expenditure and Commitments
Capital expenditure at Barberton Mines totalled £4.08 million, of which
development capital was £1.45 million and maintenance capital was £2.63
million.
Capital expenditure on growth projects totalled £0.42 million, and £3.96
million was incurred on the development of Phoenix Platinum.
There were £0.69 million in outstanding orders contracted for capital
commitments at the end of the period.
Operating lease commitments, which fall due within the next year, amounted to £
0.179 million (2009: £0.156 million).
I Directorship Change
No changes have occurred during the period under review.
J Shares Issued
During the period under review the Company announced the issue and allotment of
34,500,000 new ordinary shares in respect of share options exercised:
On 25 August 2010 4,000,000 shares issued to N Steinberg at 4 pence per share.
On 6 October 2010 6,000,000 shares issued to J Nelson at 2 pence per share.
On 4 November 2010 4,000,000 shares issued to R Still at 4 pence per share.
On 4 November 2010 7,500,000 shares issued to Pangea Exploration (Pty) Ltd
("Pangea") at 4 pence per share.
On 10 November 2010 3,000,000 shares issued to J Yates at 5.5 pence per share.
On 25 November 2010 4,000,000 shares issued to M Bevelander at 7 pence per
share.
On 25 November 2010 4,000,000 shares issued to E Victor at 5.5 pence per share.
On 25 November 2010 2,000,000 shares issued to E Victor at 7 pence per share.
K Dividend
The Company has adopted a policy whereby dividends are considered, and where
deemed appropriate by the Board, declared, on an annual basis. The
consideration of any dividend will take account of cashflow requirements and
growth plans, whilst recognising that where possible, a consistent dividend
policy increases shareholder value.
During the period under review the Company approved and paid a dividend of
0.3723 pence per share totalling £5.38 million.
L Going Concern
The directors are satisfied that the Group is a going concern for the
foreseeable future, and have adopted the going-concern basis in preparing these
interim results.
M Accounting Policies
The financial information set out in this announcement does not constitute the
Company's statutory accounts for the half year ended 31 December 2010.
The interim results have been prepared and presented in accordance with, and
containing the information required by International Financial Reporting
Standards (`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 Company's
external auditors.
N Directors' Dealings
Please see the detailed table for Directors' Dealings in Section 21.
O Pan African Outlook
The team at Barberton Mines continues to not only deliver results on target,
but improve on previous achievements. This, together with significant cost
reductions in spite of inflationary pressures and abnormal security
expenditure, continues to highlight the strength of our team at Barberton Mines
and the quality of our asset.
Our journey towards platinum production has begun and we are on schedule to
start production in Q4 of 2011. We have grown our in-house project development
capability and re-focussed our new business team on sourcing additional
production ounces from our near-term growth projects at Barberton Mines.
We continue to remain focused on further productivity and cost improvements.
Organic growth will continue to improve margins whilst we leverage our balance
sheet and strategic partnership with Shanduka to realise further growth
opportunities.
The recent rerating of the Company's stock rewards stakeholders for the team's
consistent record of delivery. The journey has just started and the team is far
from finished.
We are looking forward to an exciting 2011
By order of the Board,
Jan Nelson Cobus Loots
Chief Executive Officer Financial Director
17 February 2011
Consolidated Statement of Comprehensive Income for the six months ended 31
December 2010
six months ended six months ended
31 December 2010 31 December 2009
(Unaudited) (Unaudited)
£ £
Revenue
Gold sales 38,326,410 29,044,934
Realisation costs (75,604) (82,410)
On - mine revenue 38,250,806 28,962,524
Cost of production (22,949,762) (18,898,789)
Depreciation (1,908,836) (1,374,753)
Mining Profit 13,392,208 8,688,982
Other expenses (1,346,045) (1,117,303)
Impairment - (348,915)
Royalty costs (1,007,987) -
Net income before finance income and 11,038,176 7,222,764
finance costs
Finance income 414,657 152,607
Finance costs (19,868) (1,588)
Profit before taxation 11,432,965 7,373,783
Taxation (3,848,648) (2,683,201)
Profit after taxation 7,584,317 4,690,582
Other comprehensive income:
Foreign currency translation differences 4,676,586 2,216,274
Total comprehensive income for the year 12,260,903 6,906,856
Profit attributable to:
Owners of the parent 7,584,317 4,467,939
Non-controlling interest - 222,643
7,584,317 4,690,582
Earnings per share 0.5336 0.3374
Diluted earnings per share 0.5318 0.3360
Weighted average number of shares in 1,421,399,407 1,324,071,776
issue
Diluted weighted average number of shares 1,426,159,912 1,329,710,617
in issue
Headline earnings per share is calculated
:
Basic earnings 7,584,317 4,467,939
Adjustments: Impairment - 348,915
Headline earnings 7,584,317 4,816,854
Headline earnings per share 0.5336 0.3638
Diluted headline earnings per share 0.5318 0.3622
Consolidated Statement of Financial Position as at 31 December 2010
31 December 2010 30 June 2010
(Unaudited) (Audited)
£ £
ASSETS
Non-current assets
Property, plant and equipment and 44,422,134 37,495,010
mineral rights
Other intangible assets 17,247,371 13,087,880
Goodwill 21,000,714 21,000,714
Rehabilitation trust fund 3,073,793 2,740,546
85,744,012 74,324,150
Current assets
Inventories 1,740,777 1,126,374
Trade and other receivables 4,886,229 3,794,659
Cash and cash equivalents 10,630,963 12,756,262
17,257,969 17,677,295
TOTAL ASSETS 103,001,981 92,001,445
EQUITY AND LIABILITIES
Capital and reserves
Share capital 14,440,406 14,095,406
Share premium 50,752,830 49,732,830
Translation reserve 9,172,451 4,495,865
Share option reserve 807,924 754,394
Retained income 28,022,935 25,814,783
Realisation of equity reserve (10,701,093) (10,701,093)
Merger reserve (10,705,308) (10,705,308)
Equity attributable to owners of the 81,790,145 73,486,877
parent
Non-controlling interest - -
Total equity 81,790,145 73,486,877
Non - Current liabilities
Long term provisions 3,735,682 3,338,198
Deferred taxation 9,717,443 8,092,332
13,453,125 11,430,530
Current liabilities
Trade and other payables 5,437,913 5,041,754
Short term provisions 1,689,122 1,465,299
Current tax liability 631,676 576,985
7,758,711 7,084,038
TOTAL EQUITY AND LIABILITIES 103,001,981 92,001,445
Consolidated Cash flow Statement for the six months ended 31 December 2010
six months ended six months ended
31 December 2010 31 December 2009
(Unaudited) (Unaudited)
£ £
Cash Generated by operations 15,928,379 7,776,767
Taxation paid (3,587,061) (2,537,000)
Royalty paid (1,065,267) -
Dividends paid (5,376,165) -
Net finance income 394,789 151,019
Cash inflow from operating activities 6,294,675 5,390,786
Cash outflow from investing activities (8,500,858) (2,429,578)
Cash inflow / (outflow) from finance 1,365,000 (954,759)
activities
Net (decrease) / increase in cash (841,183) 2,006,449
equivalents
Cash at the beginning of period 12,756,262 2,389,301
Effect of foreign currency rate changes (1,284,116) (160,273)
Cash at end of year 10,630,963 4,235,477
Consolidated Statement of Changes in Equity for the six months ended 31
December 2010
six months ended 31 six months ended 31
December 2010 December 2009
(Unaudited) (Unaudited)
£ £
Shareholders' equity at start of 73,486,877 56,360,402
period
Share issue 1,365,000 14,754,348
Share option reserve 53,530 79,128
Other comprehensive income 4,676,586 2,216,274
Profit for the period 7,584,317 4,467,939
Dividend (5,376,165) -
Realisation of equity reserve - (10,701,093)
Non-controlling interest - (3,988,577)
Total Equity 81,790,145 63,188,421
Consolidated Segment Report for the six months ended 31 December 2010
Barberton Phoenix Corporate Group
Mines Platinum and Growth
Projects
£ £ £ £
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)
income
Impairment costs - - - -
Royalty costs (1,007,987) - - (1,007,987)
Net income before 11,612,145 - (573,969) 11,038,176
finance income and
finance costs
Finance income 10,252 - 404,405 414,657
Finance costs (19,868) - - (19,868)
Profit before 11,602,529 - (169,564) 11,432,965
taxation
Taxation (3,848,648) - - (3,848,648)
Profit after taxation 7,753,881 - (169,564) 7,584,317
* Costs directly attributable to Phoenix Platinum, along with attributable
overheads, are capitalised to intangible assets.
Segmental Assets 43,136,356 5,592,221 33,272,690 82,001,267
Segmental Liabilities 20,686,361 238,990 286,485 21,211,836
Goodwill - - - 21,000,714
Net Assets (excluding 22,449,995 5,353,231 32,986,205 60,789,431
goodwill)
Capital Expenditure 4,075,674 - 15,102 4,090,775
Consolidated Segment Report for the six months ended 31 December 2010
Barberton Mines Phoenix Corporate and Group
Platinum Growth
Projects
£ £ £ £
Revenue
Gold sales 29,044,934 - - 29,044,934
Realisation costs (82,410) - - (82,410)
On - mine revenue 28,962,524 - - 28,962,524
Cost of production (18,898,789) - - (18,898,789)
Depreciation (1,374,753) - - (1,374,753)
Mining Profit 8,688,982 - - 8,688,982
Other (expenses)/ (595,064) - (522,239) (1,117,303)
income
Impairment costs - - (348,915) (348,915)
Royalty costs - - - -
Net income before 8,093,918 - (871,154) 7,222,764
finance income and
finance costs
Finance income 70,686 81,921 152,607
Finance costs (1,532) (56) (1,588)
Profit before 8,163,072 - (789,289) 7,373,783
taxation
Taxation (2,683,201) - - (2,683,201)
Profit after 5,479,871 - (789,289) 4,690,582
taxation
* Costs directly attributable to Phoenix Platinum, along with attributable
overheads, are capitalised to intangible assets.
Segmental Assets 37,757,322 4,591,649 15,859,269 58,208,240
Segmental Liabilities 15,783,514 25,768 211,251 16,020,533
Goodwill - - - 21,000,714
Net Assets (excluding 21,973,808 4,565,881 15,648,018 42,187,707
goodwill)
Capital Expenditure 2,199,471 - 10,484 2,209,955
Directors' Dealings
Name Relationship to Date Strike Price (if
Company applicable)
JP Nelson CEO 6 October 2 pence per share
12 October
8 November
R Still Non-Executive 4 November 4 pence per share
Director
14 December
30 December
J Yates Immediate family 9 November
member of R Still 1
26 November
1 December
3 December
6 December
7 December
C Loots Financial Director 11 November
Pangea Exploration 2 4 November 4 pence per share
(Pty) Limited
("Pangea")
10,11 November
17, 18 November
17, 18 November
19, 22 November
23 November
1 Mr R Still, a non-executive director of the Company, is an immediate family
member of Mrs J Yates. Mr R Still is therefore deemed to have an indirect,
non-beneficial interest in Mrs Yates's holding in the Company.
2 Mr R Still, a non-executive director of the Company, is also a director of
Pangea and a trustee of a family trust which owns 33.33% of Pangea. Mr Still is
therefore deemed to have an indirect, non-beneficial interest in Pangea's
holding in the Company.
Directors' Dealings CONTINUED
Name Shares Issued in No. of shares sold Remaining holding
relation to share share
options issued
JP Nelson 6,000,000 - -
- 2,500,000 3,622,442
- 2,500,000 1,122,442
R Still 4,000,000 - -
- 1,300,000 2,700,000
- 700,000 2,000,000
J Yates 3,000,000 -
- 450,000 2,550,000
- 600,000 1,950,000
- 542,268 1,407,732
- 661,289 746,443
- 746,443 -
C Loots - 65,000 65,000
Pangea Exploration 7,500,000 - -
(Pty) Limited
("Pangea")
1,250,000 44,993,798
567,126 43,743,798
1,021,071 43,176,672
331,193 42,155,601
132,807 41,824,408
For further information on Pan African Resources plc, please visit the website
at www.panafricanresources.com
Rosebank
22 February 2011
JSE Sponsor
MACQUARIE FIRST SOUTH ADVISERS (PTY) LIMITED
ENQUIRIES:
Pan African Resources
Jan Nelson, Chief Executive Officer
Office: +27 (0) 11 243 2900
Nicole Spruijt, Public Relations
Office: +27 (0) 11 243 2900
RBC Capital Markets
Martin Eales
Office: +44 (0) 207 653 4000
Macquarie First South (Pty) Ltd
Melanie de Nysschen/ Annerie Britz/ Yvette Labuschagne
Office: +27 (0) 11 583 2000
St James's Corporate Services Limited
Phil Dexter
Office: +44 (0) 20 7499 3916
Gable Communications
Justine James
Office: +44 (0)20 7193 7463
Vestor Media and Investor Relations
Louise Brugman
Office: +27 (0) 11 787 3015
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