Pan African to Acquire 100% of Evander

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")                          

   PAN AFRICAN TO ACQUIRE 100% OF EVANDER GOLD MINES LIMITED ("EVANDER") AND   
                        FURTHER CAUTIONARY ANNOUNCEMENT                        

 1. INTRODUCTION
   
Pan African is pleased to advise its shareholders ("Shareholders") that today,
30 May 2012, ("Signature Date") it entered into an agreement ("Acquisition
Agreement") with Harmony Gold Mining Company Limited ("Harmony") in terms of
which a wholly-owned subsidiary of Pan African ("Purchaser") will acquire the
entire issued share capital of and claims against Evander from Harmony ("
Transaction") for a total purchase consideration of R1.5 billion, subject to
certain terms and conditions more fully described below. The Transaction
follows the termination of the transaction regarding the proposed acquisition
of Evander from Harmony by a consortium, which included Pan African, as
referred to in an announcement released by Harmony on the Securities Exchange
News Service of the JSE Limited earlier today.

Jan Nelson, CEO of Pan African, said:

"The Transaction meets Pan African's strategic objective of acquiring a high
grade, high margin, quality asset on the low end of the cost curve from which
the Company will achieve profitable, sustainable, stakeholder growth. In
addition to acquiring an earnings accretive asset, the Transaction will double
Pan African's annual gold production, to approximately 200 000 ounces per year,
and increases the Company's resourcesand reservessignificantly."

BACKGROUND TO EVANDER AND RATIONALE FOR THE TRANSACTION

Evander, currently a wholly owned subsidiary of Harmony, mines and produces
gold and related products and is located in Mpumulanga, South Africa. Evander's
total underground resource represents 32.5Moz (147Mt @ 6.88g/t) and a reserve
of 7.6Moz (29.5Mt @ 8.02g/t) and its operations comprise, inter alia:

  * an operating shaft in the form of Evander 8 shaft which has an expected
    life of mine of more than ten years and is expected to produce
    approximately 100,000 ounces of gold per annum;
   
  * various development projects comprising Evander South, Rolspruit and
    Poplar;
   
  * surface resources comprising existing tailings dumps, the processing of
    which is currently being considered in terms of a project named Project
    Libra;
   
  * metallurgical processing facilities known as the Kinross plant which uses a
    hybrid carbon-in-pulp/carbon-in-leach (CIP/CIL) process; and
   
  * associated infrastructure and buildings.
   
Evander has recently experienced a vast improvement in performance through the
closure of unprofitable shafts, plants and additional investments in its
infrastructure and reported a net profit of R269 million for the 6 months ended
31 December 2011 with a net asset value of R1 276 million as at 31 December
2011.

Evander meets Pan African's investment criteria of a high grade, high margin,
quality asset, the acquisition of which is not only expected to be earnings
accretive, but will provide Pan African with a material increase in its
production profile through the doubling of its current gold production. The
introduction of an additional operating asset into the Pan African group shall
further the Company's strategy of reducing operational risk through the
broadening of its operations.

Pan African recognises the opportunity to further unlock value from the
Transaction through the potential orderly disposal of those assets held by
Evander which Pan African does not view as being core to its operations.

 2. TRANSACTION TERMS AND CONDITIONS
   
 1. CONDITIONS PRECEDENT
   
The Transaction remains subject to, inter alia, the fulfilment, or where
possible, waiver of the following conditions precedent ("Conditions"):

  * the Transaction being unconditionally approved by the South African
    competition authorities by no later than 31 July 2012;
   
  * 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;
   
  * 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 ("Irrevocable Undertakings") by no later than
    31 July 2012;
   
  * Pan African obtaining all the requisite approvals for the Transaction from
    the stock exchanges upon which it is listed by no later than
    31 October 2012;
   
  * Pan African obtaining approval from Shareholders for the Transaction and
    all resolutions ancillary to the implementation of the Transaction, by no
    later than 31 October 2012 ("Shareholder Approval"); and
   
  * the parties to the Transaction ("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 28 of
    2002 ("Consent") by no later than 30 June 2013.
   
In terms of the Acquisition Agreement, the Purchaser is entitled to waive the
Condition pertaining to Irrevocable Undertakings and each of Harmony and the
Purchaser is entitled to extend the relevant date for fulfilment of the
Condition pertaining to Shareholder Approval for a period of 30 days.

The closing date for the Transaction ("Closing Date") shall be the later of
1 October 2012 or the tenth business day after which all the conditions
precedent to the Transaction are fulfilled or waived, as the case may be. The
intention of the Parties is that the Closing Date shall be 31 October 2012.

 1. BREAK FEE
   
The Parties have agreed to a break fee arrangement in terms of which Pan
African shall pay to Harmony a break fee of R50 million ("Full Break Fee"). The
Full Break Fee is payable in two separate tranches and shall be deducted from
the Purchase Consideration in the event that the Transaction is successfully
implemented.

The first tranche of the Full Break Fee is an amount of R20 million ("First
Tranche Break Fee") and is payable within 5 business days of the Signature
Date.

The second tranche of the Full Break Fee is an amount of R30 million which
shall become payable within 5 business days from the date upon which the
Condition pertaining to Irrevocable Undertakings is fulfilled or waived, as the
case may be.

If the Condition pertaining to Irrevocable Undertakings is not fulfilled or
waived, the First Tranche Break Fee shall be non-refundable.

The Full Break Fee shall be non-refundable in the event that the Transaction is
not concluded as a result of the Condition pertaining to Shareholder Approval
not being fulfilled. In all other instances, the Full Break Fee shall be
refundable to Pan African.

 2. PURCHASE CONSIDERATION
   
In terms of the Acquisition Agreement, Pan African shall acquire the entire
issued share capital of and claims against Evander for a total consideration of
R1.5 billion to be settled in cash ("Purchase Consideration") in the following
manner:

  * Pan African shall pay to Harmony an amount of no less than R1 billion ("
    Deposit") upon the fulfilment or waiver of all the Conditions, other than
    Consent ("Deposit Date"); and
   
  * Pan African shall pay to Harmony the remainder of the Purchase
    Consideration, being no more than R500 million, in cash, upon fulfilment of
    the Consent Condition.
   
In the event that the Consent Condition is not fulfilled and the Transaction is
not implemented, Harmony shall be required to repay the Deposit to Pan African,
with interest, calculated at 5% per annum, thereon. The Deposit shall be
secured by various security cessions and mortgage bonds over the assets of
Evander and the gold proceeds earned by Evander.

All cash and profits generated by Evander from 1 April 2012 ("Effective Date")
onwards are for the benefit of Pan African ("Interim Period Profits").

 3. FUNDING THE TRANSACTION
   
When considering the funding of the Transaction, Pan African has formulated an
approach consistent with its philosophy of ensuring that its business provides
profitable, sustainable stakeholder growth.

With this is mind, Pan African intends funding the Transaction through a
combination of:

  * third party debt financing ("Debt Financing");
   
  * its current cash reserves and cash generated through the operations of and
    potential strategic disposals of non-core assets by Pan African and Evander
    until the Closing Date ("Cash Reserves"); and
   
  * to the extent necessary, through the issue of new ordinary shares in the
    share capital of Pan African for cash.
   
 1. DEBT FINANCING
   
Pan African has, in principle, secured Debt Financing from third party lenders
upon terms and conditions acceptable to Pan African.

These terms reflect Pan African's philosophy of ensuring the continued
sustainability of its and Evander's operations following the successful
implementation of the Transaction.

The salient information pertaining to the Debt Financing are:

  * the total amount of Debt Financing is not expected to exceed R600 million,
    comprising a R500 million single draw-down facility and a further
    R100 million revolving credit facility;
   
  * Evander shall not be required to hedge in excess of 25% of its projected
    gold production for purposes of any Debt Financing; and
   
  * the Debt Financing facilities shall be ring-fenced within Evander.
   
 1. CASH RESERVES
   
Pan African currently has available cash resources in the amount of
approximately R250 million, a portion of which may be utilised for purposes of
partially settling the Purchase Consideration. Furthermore, cash generated from
Pan African's Barberton Mines and Phoenix Platinum operations up until the
Closing Date may be utilised for purposes of partially settling the Purchase
Consideration.

In addition, Pan African, in-line with its stated strategy, is currently
considering the disposal of certain non-core assets ("Strategic Disposals"),
such as its interest in the Manica Gold Project in Mozambique, through which
additional cash resources are expected to be received. To the extent that any
cash is received by Pan African through the successful execution of any
Strategic Disposals, Pan African intends to apply such cash proceeds towards
the partial settlement of the Purchase Consideration.

Furthermore, the Purchase Consideration shall be reduced by, inter alia, any
distributions made by Evander from Interim Period Profits ("Interim
Distributions").

In light of the above, Pan African is confident that a considerable
contribution towards the partial settlement of the Purchase Consideration may
arise from a combination of Cash Reserves, Strategic Disposals and Interim
Distributions. Shareholders are encouraged to consider the information relating
to the historical financial performance of Pan African's operations and Evander
which is available on the websites of Pan African and Harmony, respectively, in
terms of the potential impact of the aforesaid.

 2. EQUITY CAPITAL RAISING
   
Upon finalisation of the quantum of the Debt Financing and reasonable
determination of projected Cash Reserves to be utilised for purposes of
partially settling the Purchase Consideration, Pan African may potentially
elect to raise additional funds through the issue of new ordinary shares in the
share capital of Pan African for cash ("Equity Capital Raising").

The quantum and terms of the Equity Capital Raising remain to be determined.
Pan African shall, to the extent possible, endeavour to ensure that
Shareholders be granted an opportunity to participate in an Equity Capital
Raising on an equitable basis, thereby providing Shareholders with an
opportunity to participate in the value accretion which is expected to result
from the successful implementation of the Transaction.

Shareholders shall be timeously informed of any further developments in regard
to the Equity Capital Raising.

 4. PRO FORMA FINANCIAL EFFECTS AND SALIENT DATES
   
The pro forma financial effects of the Transaction on the reported financial
information of Pan African, as well as the salient dates and times relating to
the implementation of the Transaction will be announced by Pan African as soon
as they have been determined.

 5. CATEGORISATION AND CIRCULAR
   
The Transaction is classified as a category 1 transaction for Pan African in
accordance with Section 9 of the JSE Limited Listings Requirements. A circular
containing further information pertaining to the Transaction will be posted,
together with a notice of general meeting, to Shareholders in due course.

 6. RENEWAL OF CAUTIONARY ANNOUNCEMENT
   
Shareholders are advised that the pro forma financial effects of the
Transaction are still being determined, and they 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`s securities until a
further announcement is made.

30 May 2012

Johannesburg

Lead Corporate Advisor, Transaction Sponsor and JSE Sponsor

One Capital

Joint Corporate Advisor

Nedbank Capital

Attorneys

Werksmans 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