Pan African Resources PLC Annual Report 2007

← All annual reports

FY2007 Annual Report · Pan African Resources PLC

Loading PDF…

Contents / geographiCal information

Directorate

Pan African Resources PLC

Chairman’s Report

Chief Executive Officer’s Review

Projects

Mozambique Manica Gold Project
Central African Republic
Ghana
South Africa

Corporate Governance

8
10
12
14

Directors’ Report 2007

Statement of Directors’ Responsibilities

Report of the Independent Auditor

Annual Financial Statements

Notes to the Financial Statements

Notice of 2007 Annual General Meeting

Form of Proxy

Corporate Information

Maps

Fold outs

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

direCtorate

Keith Cousens spencer BSc Eng (Mining)
Executive Chairman, Member: Technical Committee
Keith Cousens Spencer (58) is a qualified mining engineer with 34 years of practical mining experience.

In 1984, Keith was appointed as General Manager of Greenside Colliery and in 1986 moved to Kloof Gold

Mine as General Manager. He later served as Managing Director of Driefontein Consolidated, Chairman and

Managing Director of Deelkraal Gold Mine, and as a Board Member of all Gold Mines belonging to Gold

Fields of South Africa. In 1999, Keith joined Metorex Limited. In 2001, Keith became the Operations Director

for the Metorex Group. Keith has managed some of the largest gold mines in the world and this expertise

will now be available to the Pan African team.

Jan nelson BSc. (Hons)
Chief Executive Officer, Member: Technical Committee
After obtaining his honours degree in Geology, Jan Nelson (37) embarked on a career in gold exploration

and mining in South Africa, Zimbabwe and Tanzania. He has over 14 years’ experience and, within this

period, held positions in mine management and operations with Harmony Gold Mining Company Limited,

Hunter Dickenson and Gold Fields Limited. He also has experience in dealing with institutional analysts,

institutional investors as well as shareholders.

nathan steinberg FCA, CF, FCCA, TEP
Chief Financial Officer, Member: Audit Committee
A Chartered Accountant, Nathan Steinberg (54) is a partner in the London practice Munslows, through

which his services are provided to Pan African. He is an experienced tax adviser and has considerable

corporate experience of public companies. He is also a member of council of the Institute of Chartered

Accountants in England and Wales.

rob still B.Com (Hons), CTA
Non Executive, Member: Remuneration and Audit Committees
Rob Still (55) has over 22 years’ experience in mining, specialising in mining finance. He started his career

as a Chartered Accountant, becoming a partner of Ernst & Whinney before leaving in 1986 to co-found

Rhombus Exploration Limited. Since then, he has been involved in the mining industry world-wide and has

held executive and non-executive directorships in companies listed in South Africa, Australia, Canada and

the UK. He has participated in the evaluation and development of several new mining projects including;

Rhovan, Ticor Titanium, Pangea Gold Fields Limited, Southern Mining Corporation Limited (Corridor Sands),

Great Basin Gold Limited (Burnstone) and Zimbabwe Platinum Mines Limited. Mr Still is currently Chief

Executive of Pangea Diamondfields PLC, an AIM-quoted company.

hennie Blignault Ph.D
Non Executive, Member: Technical Committee
Hennie Blignault (65) is an experienced geologist who has, since 1989, been working as an independent

consultant for a number of clients. He has been active in the mining industry since 1967, and has held

a number of senior positions within major mining companies including Group Geologist at Gold Fields

Limited. In 1977, he received his Ph.D. from the University of Cape Town. He is experienced in a wide

spectrum of deposit types and geological terrains and has extensive knowledge of the African geological

and metallogenic framework.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

pan afriCan resourCes plC

Strategic Objectives

ORGANIC GROWTH

Vision

To grow a portfolio of gold deposits with world class potential in

manica gold project, mozambique

favourable areas of Africa and develop them to enhance shareholder

Complete Pre-Feasibility on Manica in Q1 2008 to enable the Board

value.

to make a decision on initiating a Bankable Feasibility Study to be

completed in Q3 2008.

Company Profile

Bogoin & dekoa gold projects, Central african republic

Define a SAMREC Resource in Q2 2008 at Bogoin and drill major

Pan African Resources PLC is a gold mining and exploration company,

with a pipeline of projects that vary from grassroots exploration to

anomalies at Dekoa in Q3 2008, together with its Joint Venture

near-term production.

partner, CARGold.

akrokerri gold project, ghana

Define drill targets in Q3 2008.

ACQUISITIONS

The Company will continue to allocate resources to review potential

targets to grow the production profile.

non-exeCutive direCtors Joining the Board
post finanCial year end

Charles needham Non Executive
Member: Remuneration Committee, Chairman: Audit Committee
Charles Needham (54) is the Chief Executive Officer of Metorex and has

been the Financial Director of Metorex for the past 20 years, prior to which

he spent six years with an auditing firm. He has been involved in the mining

sector his entire career and has specific expertise in financing, financial

reporting, management reporting, hedging and company matters.

simon malone, B.Sc., MBL, SAIMM, Pr.Eng.
Non Executive, Chairman: Technical Committee
Simon Malone (64) is a mining engineer with a business degree who

has been involved in the mining and exploration sector throughout his

career. His expertise lies in the identification, evaluation and development

of mining assets and interface between corporate and operational

management. He was initially employed by JCI Limited, thereafter Chapman

Wood and Griswald in Canada before returning to South Africa where he

formed Metorex in 1975.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

Chairman’s report 2007

the Company’s exploration

projects are robust, and

have the scope to deliver

significant value in both the

short and medium term.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

Your Company repositioned itself during 2007 with a major

Central African Republic is a relatively unexplored tenement which

transaction, being the acquisition of Barberton Mines (Pty) Ltd, which

could prove to be a major gold province.

was completed after the period under review. Going into the future, it

During the period, an agreement was signed with Birim Goldfields

is now a mid-tier gold Company, with both production ounces and an

Incorporated, to acquire the Akrokerri prospecting concession

exciting portfolio of exploration assets.

in Ghana. This concession abuts Anglogold-Ashanti’s Obuasi

During the fifteen months under review, the Company incurred

mine. Extensive work has been undertaken over the years on this

a loss of £922,450 (18 months ended 31 March 2006: £865,249),

concession, and during 2007 this data will be analysed to identify

representing a loss per share of 0.22p (2006: 0.24p).

prospective targets.

On 31 July 2007 your Company acquired Barberton Mines (Pty) Ltd

The Company’s exploration projects are robust, and have the

from Metorex Limited in exchange for a new issue of shares resulting

potential to deliver significant returns in both the near and medium

in Metorex Limited now holding a 55% interest in Pan Africa. At the

term.

time of completion, the Company was granted a secondary listing

I believe the outlook for gold remains robust, with a spectacular

on the Alternative Exchange (Altx) of the JSE Limited in South Africa.

increase in the Dollar-denominated gold price during the past year. A

Barberton Mines consists of three operational gold mines, Fairview,

lack of exploration investment over the past decade has reduced gold

Sheba and New Consort, situated in the Barberton Greenstone belt of

output and this, together with the weakening Dollar, rising oil prices

South Africa, which together produced 90 000 oz of gold in 2007, and

and the sub-prime crisis, has once again highlighted gold as a safe

the accounts for the year ended 30 June 2007 showed a net profit

haven. These fundamentals are expected to remain, giving support for

before interest, tax and depreciation of £5.8 million. This acquisition

the price and earnings growth going forward.

lifted your Company from a junior exploration Company to a mid-tier

The Company will continue to aggressively pursue acquisitions

exploration and gold producing Company. The significance of this is

of prospective gold deposits with good upside potential, as well as

that the profits generated from the mining operations will be used to

looking for acquisitions or Joint Ventures with other gold exploration

fund and increase the exploration effort of the Company.

companies who have proven resources or operating mines which can

Exploration activities were accelerated during the period. The

add to the production ounces and future cash flows.

Manica project in Mozambique has progressed well, with an

I would like to welcome Simon Malone and Charles Needham to

independent Pre-Feasibility study giving encouraging results to date.

the Board, who joined as Metorex Limited representatives upon the

Further drilling has delineated additional gold resources, which have

Barberton acquisition. My sincere thanks go to my fellow Directors,

been independently verified and are now in excess of 1.5 million

particularly to Jan Nelson our CEO and his staff for their efforts

ounces. This is by far the most advanced exploration site, and during

during the past year, and finally to my predecessor, Colin Bird, who

the coming year, we expect it to be progressed to a full Bankable

during his tenure as Chairman, took the Company to where it is today.

Feasibility Study.

In the Central African Republic, soil sampling and Reverse Air Blast

(‘RAB’) drilling has given encouraging results at the Bogoin prospect.

Two areas have been identified with a combined strike length of

12 km. During 2007, further drilling using a Reverse Circulation (‘RC’)

drill will be undertaken, with the view of delineating and evaluating

K C SPENCER

the resource. At the second concession, Dekoa, crews have been

Chairman

mobilised, and a soil geochemical survey will be conducted. The

20 December 2007

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

Chief exeCutive offiCer’s revieW

Within the last 24 months the Company has

increased its market capitalisation from us$50

million to approximately us$155 million. We

have an exciting pipe-line of growth projects,

supported by cash flow from a recently acquired

production base which gives us critical mass to

pursue significant future growth opportunities.

operational structure

mining operations

BARBERTON MINES (PTY) LIMITED

74% (100% ON MRC)

BARBERTON – SOUTH AFRICA

74% (100% ON MRC)

MANICA – MOZAMBIQUE

100%

exploration proJeCts

BOGOIN PROJECT – CENTRAL AFRICAN REPUBLIC

50% (68% ON BFS)

DEKOA PROJECT – CENTRAL AFRICAN REPUBLIC

50% (68% ON BFS)

AKROKERRI PROJECT – GHANA

90%

MRC – MINERAL RIGHTS CONVERSION (SOUTH AFRICA) – ADDITIONAL ISSUE OF 214M SHARES TO SHANDUKA RESOURCES
BFS – BANKABLE FEASIBILITY STUDY

Exploration Success –
Increasing Geological Capacity

Exploration success depends on defining and drilling prospective

targets, which results either in resource definition or writing off such

major mines across the African continent) as well as a first right of

refusal on any gold project discovered by Pangea.

As such, the Company is well positioned not only to grow and

advance current exploration projects, but also to identify and secure

targets. Ultimately, the success rate of advancing more exploration

future exploration opportunities.

targets to resource status as opposed to writing them off is

dependent on a sound geological model. In this regard, the Company

The Resource Base – Continued Growth

has strengthened the geological team with the appointment of 4 new

The total resource for the reporting period has been increased by

geologists with over 80 years of combined practical experience.

18% from 1.311Moz to 1.550Moz as a result of the completion of

The Company also has access to the geological skills base from the

over 17,462m of drilling at the Manica Gold project in Mozambique.

Pangea Group (which has been responsible for the discovery of several

The discovery cost of US$1,10/oz is well below the industry standard

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

(of approximately US$2,50/oz) and is the result of sound geological

modelling. A total of 12 major drilling targets were identified, of which,

9 have been tested and 5 brought to account in less than 12 months.

The consistent increase of the resource, as well as the corresponding

conversion from inferred to indicated and measured categories confirm

the robust geological nature of the Manica project. An additional

15,600 m of core drilling and 9, 000 m of Reverse Circulation (‘RC’)

drilling are currently being completed at Manica, targeting the Guy

Fawkes prospect, which we believe has the same geological potential

as the Fair Bride prospect where the majority of the current resource

has been delineated.

In addition to the work completed in Mozambique on the Manica

project, the soil sampling programmes at the Bogoin and Dekoa

projects in the Central African Republic have been completed.

Sampling along 13,527 m covering an area of 3,500 km2 delineated

12 major drill targets. A 27,600 m drilling programme has

commenced on the Bogoin and Dekoa projects where the Company is

targeting gold deposits near surface in excess of 3Moz.

The results from all these drilling programmes could therefore

significantly add to the current resource base.

The Future – A Focused Approach

Post Financial Year End – Gaining Critical Mass
Through The Acquisition of a Production Base

The acquisition of a production base in the form of Barberton Mines,

which became effective on 31 July 2007, currently enables the

Company to fund its ongoing organic growth for both our exploration

and mining operations from current cash resources. The immediate

impact on our shareholders is the increased market capitalisation of

the Company.

A further advantage is the critical mass it gives the Company to

pursue its growth strategy and to access opportunities not previously

available. In addition, we gain an experienced management team

at Barberton Mines in the field of geology, metallurgy, mining

engineering and project management, which is one of the most

significant competitive advantages for the company going forward.

Through the 55% shareholding in Pan African which Metorex holds,

Pan African also has access to the skill sets available in the larger

Metorex Group as well as the first right of refusal on any gold project

from the Metorex Group.

The Company has repositioned itself for future growth with

positive cash-flows from its recently acquired production base, an

active development team, and a pipe-line of exciting growth projects.

The aim for Pan African is to grow the current production base to

During the period under review, the Company contracted to acquire

500,000 oz per annum within 5 years through the addition of a new

90% of the Akrokerri project in Ghana, marking the Company’s return

operation at Manica and add significantly to the resource base by

to Ghana. In Africa, the most significant gold reserve and resource

both its Greenfield exploration projects, and seeking Joint Ventures or

base, after that present in South Africa, is found in Ghana. Ghana

partnerships with other gold exploration players.

represents a major area of focus in terms of acquiring new gold

I would like to thank our shareholders for their continued support

projects for the Company in the future and also provides a platform

and my fellow Directors for their counsel and guidance. Most

for reviewing further opportunities in West Africa.

importantly I would like to give credit to the teams in the field and

Despite the Company reviewing several exploration and production

staff who support them – without them our story of growth and

opportunities on an ongoing basis as part of our growth strategy, it

success would not be possible.

is the Board’s intent to remain focused on projects that can delineate

cost effective ounces. This approach will ensure that the Company not

only optimises its margins in terms of projects that will be brought

to account in the near term, but also provide a hedge in terms of the

future should gold prices decline.

JAN NELSON

Chief Executive Officer

20 December 2007

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

Chief exeCutive offiCer’s revieW continued

mozamBique
manica gold project

explorator limitada (‘explorator’)

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

Looking south from the Guy Fawkes prospect towards the Fair Bride prospect (left) and the Dot’s Luck prospect (right).

Management

martin Bevelander

Consulting Geologist

francisco matos

Exploration Manager

farai manenji

Geologist

Cornelio vasca

Field Assistant

Principle Consultants

denis napido

Environmental Consultant

garth mitchell

Geological Consultant – QAQC

deon van den heever

Geological Consultant – Mineral Resource Modelling

Local subsidiary

explorator limitada (‘explorator’)

Shareholding attributable: 100%

Country of Incorporation: Mozambique

Holding companies: (1) Pan African Resources PLC

Martin Bevelander (left) & Francisco Matos (right).
Photo: Modern Mining

Business Review

The Company started work on the Manica project over 2 years ago

and the in situ resource has been increased from 300,000oz to just

over 1,55Moz representing 16,28Mt at 2,96g/t. This is the result of

the completion of geochemical and geophysical ground surveys, as

well a 17,462m drilling programme. Total expenditure during this

period was US$1,7 million giving a discovery cost of US$1,10/oz. To

date most of the in situ resource has been delineated at the Fair Bride

prospect representing less than 20% of total strike length within the

exploration licence.

Preliminary indications from geological work carried out on the

Guy Fawkes prospect are that this prospect could be similar in size to

the Fair Bride prospect. Drilling is planned for the remainder of Q4 of

2007 to test the prospectivity of this target.

The Manica resource represents 50% of the Company’s total

resource, with 40% in the measured and indicated categories. Current

drilling is expected to increase the measured and indicated categories

to represent well in excess of 86% of total resource. Metallurgical

test work (by the BIOX® division of Gold Fields Limited), plant design

work (by TWP Engineering & Metallurgical Consultants) and an EMP

(in Q1 2008) have been completed to Pre-Feasibility level. Geological

work on the Fair Bride prospect and Mine design work is planned for

completion in Q1 of 2008.

(2) Mistral Resource Development

maniCa exploration proJeCt - measured mineral resourCe

Corporation Limited

Profile

The Manica gold project, situated just north of the town of Manica in

Mozambique, represents the Company’s most advanced exploration

project. A Pre-Feasibility study, on what could become Mozambique’s

first commercial gold mine, is scheduled for completion in Q1 2008.

Results from a scoping study, showed the project to be viable at

US$600/oz gold price producing 84,000oz per annum at a cash

prospect

Fair Bride

Category

Inferred

7,500,000

600,000

500,000

300,000

8,900,000

3.23

2.80

3.35

2.96

3.20

2.96

24,200

778,300

1,700

1,500

1,000

56,000

49,600

31,200

28,400

915,100

48,100

1,550,100

cost of US$387/oz with a LOM of 8 years. Since the scoping study

all prospects

16,280,000

maniCa exploration proJeCt - total mineral resourCe

was concluded, over 15,000m of drilling has been completed and

significant improvements from the scoping study are expected.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

Chief exeCutive offiCer’s revieW continued

Central afriCan repuBliC
Bogoin and dekoa gold projects

or ouBangui sa
(‘or ouBangui’)

10
10

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007
PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

Geological outcrop along a river at the Bogoin Exploration project.

Joseph Ngozo– Country Manager

JV Board of Directors

Jan nelson

Pan African Resources PLC

mike nunn

CARGold

JV Committee

martin Bevelander

Pan African Resources PLC

eduard victor

Pan African ResourcesPLC

george Bennett

CARGold

andre Bekker

CARGold

Management

martin Bevelander

Consulting Geologist

Joseph ngozo

Country Manager

nestor nganamodei

Exploration Manager

Principle Consultants

anton esterhuizen

Consulting Geologist

Local subsidiary

Or OuBangui SA (‘Or OuBangui’)

Shareholding attributable: 50%

Profile

The Bogoin and Dekoa gold projects, 75km north-northeast and 240km

northeast of the capital Bangui respectively, cover over 4000km2 of the

most prospective exploration ground in the Central African Republic.

Both projects form part of a 50:50 contributory Joint Venture (‘JV’) with

a South African company called CARGold. Pan African manages the

exploration projects, and can increase its holding in each project once

Bankable Feasibility Study level is reached, through an additional 10%

free carry, and a further right to acquire another 8% on commercial

terms. Both projects are grassroots exploration plays that could be as

prospective as the Victorian Gold Fields in Tanzania.

Business review

Exploration activity on the project started in Q3 of 2005 at the

Bogoin project, with regional gold-in-soil sampling programme

covering an area of over 1,000km2. Sampling activity was initially

focused around the defunct Roux Open Pit Mine, and was then

extended north and south, where historical boreholes were drilled

during the fifties, values intersected around the pit were very

promising, including 20m @ 5.05g/t, 28m @ 3.90g/t and 19m @

17.38g/t, all these intersections were shallow or on surface.

Completion of gold-in-soil sampling programme in Q2 of 2006,

delineated a 12km long by 2.5km wide anomaly. Further gold-in-

soil sampling, geological mapping and 2,809m of trenching was

completed in Q2 of 2007 at the Bogoin project. At the Dekoa project

1,490m of stream-sediment sampling was completed by Q2 of 2007

representing the first modern-day geological evaluation of the

project.

A Reverse Air Blast (‘RAB’) rig was purchased by the JV in Q1 of

2007 and transported to the Central African Republic. A 15,600m

RAB drilling programme has been initiated at the Bogoin project with

a further 12,000m of Reverse Circulation (‘RC’) drilling planned for

completion in Q2 of 2008 after the RAB drilling programme has been

completed.

Country of Incorporation: Central African Republic

To date US$1,2 million has been expended and a further

Holding companies: (1) Pan African Resources PLC

US$1,4 million is planned.

(2) CARGold

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007
PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

11
11

Chief exeCutive offiCer’s revieW continued

ghana
akrokerri gold project

par-african resources (ghana) limited

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

Geologists discussing rock outcrop at the Akrokerri prospect along a road cutting.

Simon Meadow-Smith – Consulting Geologist

Management

martin Bevelander

Consulting Geologist

thomas mensah

Exploration Manager

Principle Consultants

simon meadow-smith

Consulting Geologist

Local subsidiary

Business review

The Company contracted to acquire a 90% stake of the Akrokerri

project in Ghana during Q2 of 2007 from SEMS Exploration Services

Limited and Birim Goldfields (Ghana) Limited. The remaining 10%

interest in the Akrokerri project will be held by Birim as a free carried

interest, which Pan African has the right to acquire once the project

reaches Bankable Feasibility Study level at a value determined by

the study. Upon granting of a mining licence, a 10% interest will be

transferred to the Ghanaian government as a free carry.

Exploration activity is planned to start during the remainder of Q4

of 2007, and will entail further gold-in-soil sampling, trenching, hard

rock sampling and geological mapping and modelling. The exploration

PAR-African Resources (Ghana) Limited

work is intended to result in the delineation of drill targets which can

be tested by Q2 of 2008.

Shareholding attributable: 100%

Country of Incorporation: Ghana

Holding company: Pan African Resources PLC

Profile

The newly acquired license covers an area of 46.8km2 and is

contiguous to the largest gold producer in Ghana, the Obuasi Gold

Mine, which has produced approximately 55Moz of gold. Historical

underground production within the Akrokerri property at the start of

the century, yielded approximately 74,000oz at a recovered grade of

24.6g/t. In 1996, Birim Goldfields Incorporated completed close to

2,000m of drilling with two of the best intersections grading 1m @

24,8g/t and 1m @ 12,3g/t. In addition, three gold-in-soil anomalies

with a strike extent of 3km have been delineated on the property.

The Akrokerri property represents an advanced project, due to the

large dataset gained with the acquisition of the property which will

allow the Company to fast track exploration activity on the property.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

post finanCial year end

south afriCa
Barberton mines (pty) limited

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

View of BIOX® plant at the Fairview Mine.

Caspar Strydom – General Manager

Business case

The Company completed the acquisition of 74% of Barberton Mines

4 000 000

from Metorex Limited in South Africa, effective from 31 July 2007,

when the Company as a requirement of the acquisition, also took

a secondary listing on the AltX of the JSE Limited. Barberton Mines

comprises the Fairview, New Consort and Sheba Mines, which

collectively produce approximately 90,000oz of gold per year from

underground. The acquisition provides the Company with cash flow

and access to both project and management skill sets, and has

3 500 000

3 000 000

2 500 000

2 000 000

1 500 000

d
l
o
G
f
o

Z
O

resulted in a re-rating of the Company, moving it from a junior gold

1 000 000

explorer with a market capitalisation of approximately US$50m to a

mid-tier gold producer and explorer with a market capitalisation of

approximately US$155m. This represents a major transformation for

500 000

the Company, and strategically allows the Company to position itself

for growth through further acquisitions and internally funded organic

growth.

Sheba

Consort

Fairview

Agnes

Barbrook

Lily

Dorm ant

Mine/Prospect

historic gold production in the
Barberton greenstone belt

Barberton

tons milled (t)

headgrade (g/t)

overall recovery (%)

produced (kg)

sold (kg)

average price: spot (R/kg)

hedge (R/kg)

total cash cost/kg sold (R/kg)

eBitda (R’000)

Capital expenditure (R’000)

depreciation (R’000)

2007

330 367

9,2

2 800

2 786

148 230

96 088

107 656

79 965

22 834

30 056

2006

313 779

10,7

3 088

3 108

108 683

90 047

88 177

58 291

12 487

24 452

2005

316 094

11,1

3 230

3 201

86 265

101 890

85 073

56 494

11 796

23 432

2004

349 219

10,4

3 305

3 321

88 133

100 900

75 460

129 132

12 633

22 886

Review of key historical financial and operational parameter at Barberton Mines (results stated attributable to Metorex Limited)

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

Corporate governanCe

The Company is committed to maintaining high standards of corporate governance. The Company has developed

appropriate measures to ensure that it complies, as far as possible, with the Combined Code so far as is practicable

for a company of its size and stage of development.

The Board considers that the current non-executive Directors bring a wealth of experience to the Company and

a range of skills appropriate to facilitate the next stage of the Company’s growth. The Board recognises none of the

Directors would be regarded as independent non-executive Directors under the JSE Limited Listings Requirements or

the Combined Code and therefore the Company is not compliant with the Combined Code in this regard. However,

the Board considers that the Directors past record on managing public companies does not jeopardise shareholders

interests relating to the matter that none of the Directors are independent according to the Code.

The Company has also considered the guidance published by the Institute of Chartered Accountants in England and

Wales (commonly known as the Turnbull Report) concerning the internal control requirements of the Combined Code.

The Company will regularly review and manage key business risks in addition to managing financial risks facing the

Company in the operation of its business.

Annual Financial Statements

Accountability and Control

The Directors are responsible for the preparation of annual financial

The Board of Directors acknowledges its continued accountability

statements, which fairly present the state of affairs of the Company

in retaining full and effective control over the Company, reviewing

and that the accounting policies, supported by reasonable and

strategy, planning operational and financial performance, considering

prudent judgements and estimates, have been applied consistently.

acquisitions, disposals and major capital expenditure, managing

The Directors are further responsible to ensure that applicable

stakeholder communications as well as other material matters

accounting standards have been adhered to. The external auditors

reserved for its decisions. The Company’s Articles of Association allow

are responsible for carrying out an independent examination of the

provision for decision-making between Board meetings, by way of

financial statements and report their findings thereon in accordance

written resolutions.

with statements of International Standards for Auditing (UK and

Internal control is an integral part of the Company’s Corporate

Ireland).

Board of Directors

The Board of Directors meets every quarter and is responsible for

preparing financial statements, monitoring executive management,

and providing direction to the Company’s activities, as well as

establishing overall Company policy in addition to providing input

on strategic matters. The roles of the Chairman and Chief Executive

Officer are held by Mr. Keith Spencer and Mr. Jan Nelson respectively.

The Board currently comprises two executive Directors and three

non-executive Directors.

Governance. The Directors aim to reduce risk, fraud or loss in a

cost-effective manner by setting standards and by management

implementing systems of internal control. These systems and

standards include the proper delegation of responsibilities within a

defined framework, accounting procedures as well as an adequate

segregation of duties. Employees are expected to adhere to the

highest ethical standards to guarantee that sound business practices

are conducted in a manner that will be beyond criticism.

The Directors are of the opinion that all information gathered from

the Company in terms of these financial statements are true, correct

and reliable based on the information gathered from management as

At present, there is no separate nominations committee. A formal

well as the internal and external auditors.

and transparent nominations process is followed. One third of the

Directors eligible for retirement by rotation shall, at the subsequent

Risk Management

Annual General Meeting, retire, unless re-appointed as per the

The Company does not have a formalised risk committee, and for this

Company’s Articles of Association.

reason during the quarterly Board Meetings, the Company’s internal

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

Eduard Victor – Executive: Business Management

financial and operational control systems are assessed.

all Directors are entitled to seek independent professional advice

During the financial period under review, no incidents have

concerning the affairs of the Company at the Company’s expense,

indicated to the Board a breakdown in the internal functioning of

should they believe that course of action would be in the best

these control and systems. A material breakdown is defined as a

interests of the Company.

critical weakness in process of financial systems which could result in

a material loss, contingency, or uncertainty requiring disclosure in the

Nominated Adviser, Broker and Sponsor

published annual financial statements.

Audit Committee

Ambrian Partners acts as the Nominated Adviser (NOMAD) and Broker

to the Company in the UK, Macquarie First South Corporate Finance

(Pty) Limited serves as the Company’s Sponsor in South Africa. The

The Board has established an Audit Committee. The Audit Committee

duty of the NOMAD, Broker and Sponsor is to assist the Company on

is responsible for ensuring that the financial performance, position

compliance issues on the London AIM market and the South African

and prospects of the Company are properly monitored, controlled and

Altx market.

reported on and for meeting the auditors and reviewing their reports

relating to accounts and internal controls. The Audit Committee

Stakeholder Communication

comprises Nathan Steinberg and Rob Still.

The external auditors have unrestricted access to the committee

and representatives of the external auditors attend the committee

meetings by invitation. The Audit Committee meets quarterly and all

Stakeholder communication is a vital aspect of the Company. All

stakeholder information must therefore be transparent, honest,

reliable and accessible. Any material changes to the Company’s

structure, project updates and any other information which may

members attended these meetings.

Remuneration Committee

affect the share price is disseminated through direct communication

with shareholders after the release of such information on the London

Stock Exchange via PR Newswire (PRN) and simultaneously on the JSE

The Board has established a Remuneration Committee comprising

Limited via the Stock Exchange News Service (SENS), and subsequently

two of the non-executive Directors. The Remuneration Committee

through the local media, thereafter, it is available on the Company’s

reviews the performance of the executive Directors and determines the

website. All necessary measures are taken in order to ensure that

remuneration of the executive Directors and the basis of their service

communication disseminated is in line with the listing and regulatory

agreements with due regard to the interests of Shareholders. The

environment in which the Company operates. Operating and financial

Remuneration Committee also determines the payment of any bonuses

performance related information is released in the same manner

to executive Directors and the grant of options to employees, including

The Executive Directors are available at all times to address any

executive Directors, under the Company’s share option scheme. The

concerns or queries regarding the Company’s performance.

Remuneration Committee comprises Charles Needham and Rob Still.

All information disseminated is done so as to keep shareholders

fully appraised of developments in the company on an ongoing basis.

Company Secretary

The Company Secretary is appointed by the Board.

All Directors have access to the advice and services of the Company

Secretary, who is responsible to the Board for ensuring compliance

with procedures and regulations of a statutory nature. Furthermore,

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

direCtors’ report 2007

The Directors present their annual report and the audited financial

operational locations, could have an adverse effect on financial

statements for the 15 month period ended 30 June 2007.

performance.

On 4 July 2007, the Company changed its accounting reference date

from 31 March to 30 June.

Principal Activities and Review of Business

The group’s principal activity during the period was that of mineral

exploitation and exploration. A full review of the activity of the

business, including financial and non-financial key performance

indicators, and of future prospects is contained in the Chief Executive

Officer Review which accompanies these financial statements.

Results and Dividends

The results for the period are disclosed in the profit and loss account

dependence on key personnel – whilst the Company has entered

into contractual arrangements with the aim of securing the services

of its executive Directors and senior employees, the retention of their

services cannot be guaranteed.

regulatory risks – there is no guarantee that applications for mining

licences will be granted where minerals are discovered, or of the

terms of any such licence. Although the Directors believe that all

current activities are being carried out in accordance with applicable

rules and regulations, there can be no guarantee that new rules or

regulations or changes in the application of existing legislation will

not limit or curtail exploration, production or development.

on page 24.

The Board considers and reviews these risks on a strategic and day-

The Directors do not recommend payment of a dividend.

to-day basis in order to minimise any potential exposure.

Policy for Payment of Creditors

It is the Company’s policy to settle all agreed transactions within the

financial risks - the major balances and financial risks to which the

group is exposed and the controls in place to minimise those risks are

terms established with suppliers. There were no trade creditors at the

disclosed in Note 18.

balance sheet date.

Risk Management

The key business risks to which the Company is exposed are as follows:

general exploration and extraction risks – there is no certainty that

there will be commercially recoverable reserves in licence areas where

the group is currently in the early stages of exploration.

project development risks – any failure to effectively manage the

Company’s growth and development could have a material adverse

effect on the Company’s business, financial conditions and results.

operational risks – the Company’s operational targets are subject

to the completion of planned operational goals on time and within

set budgets. Any failure to meet these goals, in particular through

the disruption of the supply of goods and services to the Company’s

Internal Control

The Board is responsible for maintaining a sound system of internal

controls to safeguard shareholders’ investment and group assets.

The Directors monitor the operation of internal controls. The objective

of the system is to safeguard group assets, ensure proper accounting

records are maintained and that the financial information used

within the business and for publication is reliable. Any such system

of internal control can only provide reasonable, but not absolute

assurance against material mis-statement or loss.

Internal financial control procedures undertaken by the Board include:

•

Review of monthly financial reports and monitoring

performance.

Prior approval of all significant expenditure including

all major investment decisions.

Review and debate of treasury policy.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

The Board has reviewed the operation and effectiveness of the

Auditors

Company’s system of internal control for the financial period and the

period up to the date of approval of the financial statements.

Going Concern

The Board confirms that the business is a going concern and has

Grant Thornton UK LLP have expressed their willingness to continue in

office as auditors. A resolution to re-appoint them will be proposed at

the forthcoming Annual General Meeting in accordance with section

385 of the Companies Act 1985.

reviewed its working capital requirements in conjunction with its

Post Balance Sheet Event

future funding capabilities for the next 12 months and has found

them to be adequate.

Directors

On 31 July 2007, the Company acquired 74% of the issued share

capital of Barberton Mines (Pty) Limited. Details of this transaction

are set out in Note 22 to the financial statements.

The present membership of the Board is set out on page 2.

Approved by the Board of Directors and signed on behalf of the Board

Mr C Bird (retired 8 October 2007)

on 20 December 2007.

The following Directors have been appointed since the

period end:

Mr K C Spencer (appointed 8 October 2007)

Mr A S Malone (appointed 27 July 2007)

Mr C D S Needham (appointed 27 July 2007)

J P Nelson

Chief Executive Officer

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

statement of direCtors’ responsiBilities

The Directors are responsible for preparing the Annual Report and

The Directors are responsible for keeping proper accounting records

the financial statements in accordance with applicable law and

that disclose with reasonable accuracy at any time the financial

regulations.

position of the Company and enable them to ensure that the financial

Company law requires the Directors to prepare financial statements

statements comply with the Companies Act 1985. They are also

for each financial year. Under that law the Directors have elected

responsible for safeguarding the assets of the Group and hence for

to prepare financial statements in accordance with United Kingdom

taking reasonable steps for the prevention and detection of fraud and

Accounting Standards (United Kingdom Generally Accepted

other irregularities.

Accounting Practice). The financial statements are required by law to

give a true and fair view of the state of affairs of the Company and

the Group and of the profit or loss of the Group for that period. In

preparing these financial statements, the Directors are required to:

In so far as the Directors are aware:

•

there is no relevant audit information of which the Company’s

auditors are unaware; and

•

the Directors have taken all steps that they ought to have taken

•

select suitable accounting policies and then apply them

to make themselves aware of any relevant audit information and

consistently

to establish that the auditors are aware of that information.

• make judgments and estimates that are reasonable and prudent

•

state whether applicable UK Accounting Standards have been

followed, subject to any material departures disclosed and

explained in the financial statements

The Directors are responsible for the maintenance and integrity of

the corporate and financial information included on the Company’s

website. Legislation in the United Kingdom governing the preparation

and dissemination of financial statements may differ from legislation

•

prepare the financial statements on the going concern basis

unless it is inappropriate to presume that the Company will

in other jurisdictions.

continue in business.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

report of the independent auditor

We have audited the consolidated and parent Company financial

In addition we report to you if, in our opinion, the Company has

statements (the ‘financial statements’) of Pan African Resources plc

not kept proper accounting records, if we have not received all

for the period ended 30 June 2007 which comprise the principal

the information and explanations we require for our audit, or if

accounting policies, the consolidated profit and loss account, the

information specified by law regarding Directors’ remuneration and

consolidated and parent Company balance sheets, the consolidated

other transactions is not disclosed.

cash flow statement and notes 1 to 22. These group financial

We read other information contained in the Annual Report

statements have been prepared under the accounting policies set out

and consider whether it is consistent with the audited financial

therein.

statements. The other information comprises only the chairman’s

This report is made solely to the Company’s members, as a body,

statement, Chief Executive Officer’s Review, ‘Corporate Governance

in accordance with Section 235 of the Companies Act 1985. Our

Statement’ and Directors’ report. We consider the implications for our

audit work has been undertaken so that we might state to the

report if we become aware of any apparent misstatements or material

Company’s members those matters we are required to state to them

inconsistencies with the financial statements. Our responsibilities do

in an auditor’s report and for no other purpose. To the fullest extent

not extend to any other information.

permitted by law, we do not accept or assume responsibility to

anyone other than the Company and the Company’s members as a

Basis of opinion

body, for our audit work, for this report, or for the opinions we have

formed.

Respective responsibilities of Directors and
auditors

We conducted our audit in accordance with International Standards

on Auditing (UK and Ireland) issued by the Auditing Practices Board.

An audit includes examination, on a test basis, of evidence relevant

to the amounts and disclosures in the financial statements. It also

includes an assessment of the significant estimates and judgments

The Directors’ responsibilities for preparing the Annual Report and

made by the Directors in the preparation of the financial statements,

the group financial statements in accordance with United Kingdom

and of whether the accounting policies are appropriate to the group’s

law and Accounting Standards (United Kingdom Generally Accepted

circumstances, consistently applied and adequately disclosed.

Accounting Practice) are set out in the Statement of Directors’

We planned and performed our audit so as to obtain all the

Responsibilities.

information and explanations which we considered necessary in order

Our responsibility is to audit the financial statements in accordance

to provide us with sufficient evidence to give reasonable assurance

with relevant legal and regulatory requirements and International

that the financial statements are free from material misstatement,

Standards on Auditing (UK and Ireland).

whether caused by fraud or other irregularity or error. In forming our

We report to you our opinion as to whether the financial

opinion, we also evaluated the overall adequacy of the presentation

statements give a true and fair view, whether the financial statements

of information in the financial statements.

have been properly prepared in accordance with the Companies Act

1985. We also report to you whether in our opinion the information

given in the Directors’ Report is consistent with the financial

statements. The information given in the Directors’ Report includes

that specific information presented in the Chief Executive Officer’s

Review that is cross-referred from the business review section of the

Directors’ Report.

Opinion

In our opinion:

•

the group and parent Company’s financial statements give a true

and fair view, in accordance with United Kingdom Generally

Accepted Accounting Practice, of the state of group’s and parent

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

report of the independent auditor continued

Company’s affairs as at 30 June 2007 and of the group’s loss for

the period then ended

•

the financial statements have been properly prepared in

accordance with the Companies Act 1985 and

•

the information given in the Directors’ Report is consistent with

the financial statements.

Grant Thornton UK LLP

Registered Auditors

Chartered Accountants

LONDON

20 December 2007

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

annual finanCial statements

Consolidated Profit and Loss Account

Consolidated Balance Sheet as at 30 June 2007

Company Balance Sheet as at 30 June 2007

Consolidated Cash Flow

Notes to the Financial Statements

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007
PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

23
23

Consolidated profit and
loss aCCount

period ended 30 June 2007

Exploration costs

Administrative expenses

operating loss

Interest receivable

Amounts written off investments

loss on ordinary activities before taxation

Tax on loss on ordinary activities

Loss for the financial period

loss per ordinary share – basic and diluted

notes

15 months to
30/06/07

(345,208)

(609,637)

(954,845)

37,195

(4,800)

(922,450)

–

(922,450)

(0.22p)

18 months to
31/03/06
(restated)
£

(464,575)

(420,783)

(885,358)

30,759

(10,650)

(865,249)

–

(865,249)

(0.24p)

There were no recognised gains or losses other than the loss for the period.

the accompanying accounting policies and notes form an integral part of these financial statements.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

Consolidated BalanCe sheet
as at 30 June 2007

period ended 30 June 2007

fixed assets

Intangible assets

Investments

Current assets

Debtors

Cash at bank

Creditors: amounts falling due
within one year

total assets less current liabilities

Capital and reserves

Share capital

Share premium account

Merger reserve

Share option reserve

Profit and loss account

shareholders’ funds

notes

30/06/07

6,312,030

294,365

326,847

621,212

3,225

1,874,702

1,877,927

(1,026,493)

(399,455)

(405,281)

5,906,749

4,180,032

4,076,769

1,560,000

296,162

(4,206,214)

5,906,749

31/03/06
(restated)
£

4,847,630

4,800

4,852,430

1,478,472

6,330,902

4,077,532

3,978,178

1,485,000

73,956

(3,283,764)

6,330,902

These financial statements were approved by the Board on 20 December 2007 and signed on its behalf by:

N A Steinberg FCA FCCA TEP
Finance Director
the accompanying accounting policies and notes form an integral part of these financial statements.

J P Nelson
Chief Executive Officer

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

Company BalanCe sheet
as at 30 June 2007

period ended 30 June 2007

fixed assets

Investments

Current assets

Debtors

Cash at bank

Creditors: amounts falling due
within one year

total assets less current liabilities

Capital and reserves

Share capital

Share premium account

Merger reserve

Share option reserve

Profit and loss account

shareholders’ funds

notes

30/06/07

31/03/06
(restated)
£

3,069,705

3,074,505

3,640,646

326,797

3,967,443

2,273,630

1,874,652

4,148,282

(1,022,316)

(380,487)

2,945,127

6,014,832

4,180,032

4,076,769

1,560,000

296,162

(4,098,131)

6,014,832

3,767,795

6,842,300

4,077,532

3,978,178

1,485,000

73,956

(2,772,366)

6,842,300

These financial statements were approved by the Board on 20 December 2007 and signed on its behalf by:

N A Steinberg FCA FCCA TEP
Finance Director
the accompanying accounting policies and notes form an integral part of these financial statements.

J P Nelson
Chief Executive Officer

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

Consolidated Cash floW
statement

period ended 30 June 2007

Cash floW statement

Net cash outflow from operating activities

Returns on investments and servicing of finance

Capital expenditure and financial investment

Financing

(Decrease)/increase in cash

notes

15 months to
30/06/07
£

18 months to
31/03/06
£

(559,244)

37,195

(1,092,897)

67,091

(1,547,855)

(503,901)

30,759

(697,170)

1,820,881

650,569

the accompanying accounting policies and notes form an integral part of these financial statements.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements

period ended 30 June 2007

1. accounting policies

Basis of accounting

The financial statements are prepared under the historical convention

and in accordance with applicable United Kingdom accounting

standards.

The principal accounting policies, which have been reviewed by the

Directors in the light of FRS 18, are set out below.

The Group has adopted the requirements of Financial Reporting

Standard 20 (“FRS 20”), Share Based Payments, in accordance with

the transitional provisions (see below).

group’s share of the results is included in the profit and loss account.

To date only exploration costs have been incurred and these have

been consolidated within intangible fixed assets.

Where the group’s share of losses in a joint venture equals or

exceeds its interest in the undertaking, the group continues to

recognize these losses until an irrevocable event occurs that marks

the group’s withdrawal from its investment in the joint venture.

Segmental analysis

Other than noted in the preceding paragraph, the principal

The group’s exploration activities and intangible assets are in Africa

accounting policies of the Group have remained unchanged from the

although the working capital to fund these activities is held in the

previous period and are set out below.

United Kingdom. Other segmental analysis is not material to the

Consolidation

The group financial statements consolidate those of the Company and

financial statements.

Fixed asset investments

its subsidiary undertakings (see note 8) drawn up to 30 June 2007.

Fixed Asset Investments are included at cost less amounts written off

The results of the subsidiary undertakings acquired are included from

due to impairment.

the date of acquisition. Profits or losses on inter-group transactions

are eliminated in full. On acquisition of a subsidiary, all of the

Deferred exploration costs

subsidiary’s assets and liabilities which exist at the date of acquisition

The group uses the full cost method of accounting for mining

are recorded at their fair value reflecting their condition at that

operations. The cost of expenditure on licences concessions and

date. Any premium arising on the issue of shares as consideration

explorations incurred by subsidiary undertakings are carried as

for the acquisition of subsidiaries is credited to a merger reserve in

intangible assets until such time as it is determined that there are

accordance with Section 131, Companies Act 1985.

commercially exploitable reserves at which time such costs are

Goodwill arising on consolidation representing the excess of

transferred to tangible assets to be depreciated over the expected

the fair value of the consideration given over the fair values of the

productive life of the asset. The group’s intangible assets are

identifiable net assets acquired, is capitalised and amortised on a

reviewed periodically by the Directors. Exploration appraisal and

straight line basis over its useful economic life.

development costs determined as unsuccessful are written off to the

Investments in joint ventures

Investments in Joint Ventures are carried in the consolidated

profit and loss account.

Deferred tax

balance sheet at the group’s share of their net assets at the date of

Deferred tax is recognised on all timing differences where the

acquisition and of their post acquisition profits and losses together

transactions or events that give the group an obligation to pay

with any goodwill arising on the acquisition, net of amortisation. The

more tax in the future, or a right to pay less tax in the future,

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements continued

period ended 30 June 2007

have occurred by the balance sheet date. Deferred tax assets are

In accordance with the transitional provisions of FRS 20, the

recognised when it is more likely than not that they will be recovered.

Standard has been applied retrospectively to all grants of equity

Deferred tax is measured using rates of tax that have been enacted or

instruments after 7 November 2002 that were unvested as of

substantively enacted by the balance sheet date.

1 April 2006.

For period ended 30 June 2007 the change in accounting policy

FRS 20 and Share-based payment transactions
and prior year adjustments

has resulted in a net increase in the loss for the period of £222,206.

The balance sheet at 31 March 2006 has been restated to reflect the

The grant date fair value of options granted is recognized as an

employee expense in the case of options granted to employees, and

recognition of a equity settled share-based payments of £73,956 and

a share options reserve of £73,956. There is no deferred tax asset

as an administrative expense in the case of options granted to other

since the Company is loss making to date.

parties, with a corresponding increase in equity, over the period in

which the grantees become unconditionally entitled to the options.

Liquid Resources

The amount recognized as an expense is adjusted to reflect the

Liquid resources represent cash and current asset investments which

number of share options that vest.

are accessible by the Company at more than 24 hours notice.

FRS 20 ‘Share-Based Payment (IFRS 2)’ requires the recognition of

equity-settled share-based payments at fair value at the date of the

Corresponding figures

grant at each balance sheet date. Prior to the adoption of FRS 20,

Corresponding figures are shown for the 18 month period ended

the Company did not recognise the financial effect of share-based

31 March 2006.

payments until such payments were settled.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements continued

period ended 30 June 2007

2. operating loss

operating loss is stated after charging:

Auditors’ remuneration – audit services

– non statutory interim audit

Equity- settled share-based payment transactions

– included in staff costs

- external consultant

15 months ended
30/06/07

11,750

10,000

154,106

68,100

18 months ended
31/03/06
(restated)
£

10,500

73,956

The operating costs largely comprise central overheads related to the management of the group’s activities.

3. directors and employees
Staff costs, incuding directors, renumeration were as follows:

Wages and salaries

Social security costs

Directors’ fees

Equity- settled share-based payment transactions

- Directors

- other

15 months ended
30/06/07

8,125

87,636

66,470

162,231

18 months ended
31/03/06
(restated)
£

32,500

4,957

12,250

73,956

123,663

The only employees of the Company were the Directors as detailed in the Directors’ report. Nathan Steinberg is
a partner in Munslows, a firm of Chartered Certified Accountants. That firm charged fees of £17,625 (18 months
ended 31 March 2006: £20,000) excluding VAT in respect of professional services. The Company also paid service
charges of £9,375 (18 months ended 31 March 2006: £11,250) to Lion Mining Finance Limited, a Company of
which Colin Bird is a Director. No payments in respect of pension contributions have been made.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements continued

period ended 30 June 2007

4. taxation reconciliation

Loss on ordinary activities before taxation

Loss on ordinary activities multiplied by the standard

rate of UK corporation tax of 30% (2006: 30%)

Expense not deductible for tax purposes

Unrelieved tax losses to be carried forward

UK corporation tax payable

unrelieved tax losses available to carry forward

Capital

Revenue

15 months ended
30/06/07

(922,450)

(276,735)

2,029

274,706

1,257,238

1,844,534

3,101,772

18 months ended
31/03/06
(restated)
£

(865,249)

12,250

1,082

258,493

1,255,798

944,648

2,200,446

Deferred tax assets will not be recognised in respect of these losses until the group commences profitable trading activities.

5. loss for the financial period

The company has taken advantage of Section 230 of the Companies Act 1985 and has not included its own profit and loss

account in these financial statements. The company loss for the period was £1,325,765 (18 months to 31 March 2006 –

as originally stated: £295,499, – as restated: £369,455).

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements continued

period ended 30 June 2007

6. loss per ordinary share

The calculation of basic earnings per ordinary share is based on losses of £922,450 (18 months ended

31 March 2006: £865,249) and on 408,922,095 ordinary shares (18 months ended 31 March 2006: 354,281,542),

being the weighted average number of ordinary shares in issue during the year, calculated as follows:

Losses per financial statements

Weighted average number of shares

Loss per share – basic and diluted

15 months ended
30/06/07

(922,450)

408,922,095

(0.22p)

18 months ended
31/03/06
(restated)
£

(865,249)

354,281,542

(0.24p)

Following the Company’s secondary listing on the JSE Limited post year end the Group is required to disclose its

headline loss per share for the period in accordance with the Listings Requirements of the JSE Limited.

Reconciliation between loss per share and headline loss per share:

Losses per financial statements

Costs of aborted projects written off

Headline loss

Headline loss per share – basic and diluted

7. intangible fixed assets – group

Cost

At 1 April 2006

Additions - exploration costs

Less: costs of aborted projects written off

At 30 June 2007

(922,450)

345,208

(577,242)

(0.14p)

(865,249)

464,575

(400,674)

(0.11p)

exploration
expenditure
£

4,847,630

1,809,608

(345,208)

6,312,030

Of the above, £1,253,018 relates to joint venture exploration costs in the Central African Republic.

Included in the above are fees of £17,500 (18 months to 31 March 2006: £12,500) paid to Munslows, a firm in which N A Steinberg is a partner,
and fees of £10,000 (18 months to 31 March 2006: £nil) to H Blignault.

The £345,208 of aborted costs relates to the project in Ghana which was abandoned in July 2006.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements continued

period ended 30 June 2007

8. fixed asset investments - group

Cost

At 1 April 2006

Amount written off in the period

At 30 June 2007

4,800

(4,800)

fixed asset investments - Company

Cost

At 1 April 2006

Amount written off in the period

subsidiaries £

3,069,705

At 30 June 2007

3,069,705

other £

4,800

(4,800)

total £

3,074,505

(4,800)

3,069,705

fixed asset investments - group
At 30 June 2007 the company held the following shares in subsidiary undertakings.

name of undertaking

Country of
incorporation

principal
activity

Mistral Resource Development Corporation
Limited

British Virgin Islands

Mining exploration

Brampton Capital Overseas Limited

British Virgin Islands

Mining exploration

Viking Internet Limited

Globalstand Limited

Or Oubangui Limited

A Explorata Limitada

England and Wales

Dormant

Central African Republic

Mining exploration

Mozambique

Mining exploration

In accordance with the group’s policy in respect of deferred exploration costs, the costs of investments in OR Oubangui and

Explorator Limitada are included in intangible assets.

Other investments include Orevest plc, an investment which is traded on Plus Quoted, at market value of £nil (31 March 2006:

market value £4,800).

proportion
of capital
held
by country

100%

50%

100%

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements continued

period ended 30 June 2007

9. debtors

group

Company

30/06/07
£

31/03/06
£

30/06/07
£

31/03/06
£

Prepayments and other debtors Brampton Capital

294,365

3,225

292,159

3,225

Amounts owed by subsidiaries Viking Internet

3,348,487

2,270,405

294,365

3,225

3,640,646

2,273,630

Prepayments and other debtors (group and Company) includes £190,529 in respect of costs relating to the acquisition of Barberton Mines (Pty) Limited
(see note 22 below)

10. Creditors: amounts falling due within one year

group

Company

30/06/07
£

31/03/06
£

30/06/07
£

Accruals and other creditors

1,026,493

399,455

1,022,316

1,026,493

399,455

1,022,316

31/03/06
£

380,487

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements continued

period ended 30 June 2007

11. share capital

authorised equity shares

1,000,000,000 ordinary shares of £ 0.01 each

allotted equity shares

30/06/07
£

31/03/06
£

10,000,000

418,003,235 Allotted, called up and fully paid ordinary shares of £ 0.01 each

4,180,032

4,077,532

The following issue of shares were made during the period.
a) On 10 May 2007, 1,072,727 ordinary shares were issued at 5.5p per share of which 4.5p has been credited to share premium account.

b) On 10 May 2007, 7,500,000 ordinary shares were issued at 2p per share of which 1p has been credited to merger reserve, in order to acquire
100% of Explorator Limitada.

c) On 10 May 2007, 1,677,273 ordinary shares were issued at 4p per share of which 3p has been credited to share premium account, under the terms of
a share option agreement.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements continued

period ended 30 June 2007

12. reserves - group

At 1 April 2006
As previously stated
Share based payments - share options

As restated

Share based payments - share options
Issue of shares
Loss for the period

share
premium
account
£

merger
reserve

3,978,178
-

1,485,000
-

3,978,178

1,485,000

-
98,591
-

-
75,000
-

share
option
reserve
£

-
73,956

73,956

222,206
-
-

profit
and loss
account
£

(3,209,808)
(73,956)

(3,283,764)

-
-
(922,450)

at 30 June

4,076,769

1,560,000

296,162

(4,206,214)

reserves - company

At 1 April 2006
As previously stated
Share based payments - share options

As restated

Share based payments - share options
Issue of shares
Loss for the period

3,978,178
-

3,978,178

-
98,591
-

1,485,000
-

1,485,000

-
75,000
-

-
73,956

(2,698,410)
(73,956)

73,956

(2,772,366)

222,206
-
-

-
-
(1,325,765)

at 30 June

4,076,769

1,560,000

296,162

(4,098,131)

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements continued

period ended 30 June 2007

13. reconciliation of movement in shareholders’ funds

Loss for the period

Proceeds of share issue

Expenses of share issue

Recognition of share based payment in the period

Opening shareholders’ funds

Closing shareholders’ funds

group

15 months to
30/06/07
£

18 months to
31/03/06
£

(922,450)

276,091

222,206

(424,153)

6,330,902

5,906,749

(865,249)

2,220,138

(89,257)

73,956

1,339,588

4,991,314

6,330,902

14. reconciliation of operating loss to net cash outflow from operating activities

Operating loss

Increase in creditors

(Increase)/Decrease in debtors

Exploration costs written off

Equity- settled share-based payment transactions

15 months to
30/06/07
£

18 months to
31/03/06
£

(954,845)

119,327

(291,140)

345,208

222,206

(559,244)

(885,358)

292,292

15,209

73,956

(503,901)

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements continued

period ended 30 June 2007

15. gross cash flow

Returns on investments and servicing of finance

Interest received

Capital expenditure and financial investment

Proceeds from liquidation of investment

Purchase of intangible fixed assets

financing

Proceeds of issue of shares

Issue costs

16. reconciliation of net cash flow to movement in net funds

Net funds at 1 April 2006

(Decrease)/Increase in cash in the period

Net funds at 30 June 2007

15 months to
30/06/07

18 months to
31/03/06
(restated)
£

37,195

30,759

(1,092,897)

67,091

8,750

(705,920)

(697,170)

1,910,138

(89,257)

1,820,881

15 months to
30/06/07

1,874,702

(1,547,855)

326,847

18 months to
31/03/06
(restated)
£

1,224,133

650,569

1,874,702

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements continued

period ended 30 June 2007

17. share options

On 1 September 2005, the Company established a share option programme that entitles key management personnel to

purchase shares in the Company. On 27 July 2006, further grants on similar terms were offered to senior employees and an

external consultant. In accordance with these programmes options are exercisable at the market price of the shares at the

date of the grant.

Details of share option arrangements that were granted before 1 October 2004 are set out below. The recognition and

measurement principles of FRS 20 have not been applied to these grants. Share options issued after this date have been

recognized and measured in accordance with FRS 20.

The terms and conditions of these grants are as follows; all options are to be settled by physical delivery of the shares:

date granted

parties

no of shares

vesting date

final exercise date

10/5/2000

Former director

1,500,000

18/5/2003

18/5/2007

03/4/2000

Key management

1,200,000

18/5/2003

18/5/2010

13/8/2004

Key management

12,000,000

8/9/2004

8/09/2010

13/8/2004

Senior employees

14,622,727

8/9/2004

8/09/2007

01/9/2005

Key management

23,000,000

2/09/2006

2/09/2011

27/7/2006

Senior employees

4,000,000

2/08/2007

2/08/2012

27/7/2006

Third party consultant

3,000,000

28/07/2006

2/08/2012

The exercise of options granted to senior employees on 27 July 2006 is at the approval of the board having regard to the grantee’s fulfillment of obligations
to the group, achievement of targets and conduct of duties. In the event of the grantee’s ceasing to hold employment or office, the options will lapse
unless exercised within 30 days.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements continued

period ended 30 June 2007

17. share options (continued)
The number and weighted average exercise price of share options is as follows

Outstanding at 1 April 2006

Granted during the period

Exercised during the period

Lapsed in period

Outstanding and exercisable at 30 June 2007

Weighted average
exercise price

number of options

3.15p

5.5p

4.0p

Nil

3.4p

54,000,000

7,000,000

(1,677,273)

(1,500,000)

57,822,727

The share options exercised in the period related to options granted in the period up to 30 September 2004 and therefore the

measurement of these options is outside the scope of FRS 20.

The number of options exercisable at the balance sheet date was 55,322,727 at a weighted average exercise price of 3.34p.

The options outstanding at 30 June 2007 have an exercise price in the range of 2p to 5.5p and weighted average remaining

contractual life of 3.2 years.

The fair value of services received for share options granted is based on the fair value of share options granted, measured

using a Black Scholes model, with the following inputs:

date granted

As at

Date of grant

Fair value at date of grant

Share price

Exercise price

Expected volatility

Option life

Risk-free interest rate

Key management personnel

senior employees

Consultant

30.06.07

01.09.05

0.82p

1.75p

2.00p

65.15%

3.5years

3.7%

31.03.06

01.09.05

0.82p

1.75p

2.00p

65.15%

3.5years

3.7%

30.06.07

27.07.06

3.1p

5.25p

5.50p

78.81%

4.0years

4.3%

30.06.07

27.07.06

2.2p

5.25p

5.50p

78.81%

4.0 years

4.3 %

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements continued

period ended 30 June 2007

17. share options (continued)

The Company does not expect to pay any dividends during the contractual life of the share options.

The volatility of the Company’s share price on each date of grant was calculated as the average of volatilities of share prices

of the Company on the corresponding dates. The volatility of share price of the Company was calculated as the average of

annualized standard deviations of daily continuously compounded returns on the Company’s stock, calculated over 1, 2,

and 3 years back from the date of grant. Therefore, volatility of the Company’s share prices was calculated over the period

commensurate with the expected life of the options under consideration, giving more weight to more recent historical data to

account for volatility persistence.

There are no market conditions attached to the exercise of the share options.

The fair value of services received for share options granted is included in administrative expenses as follows:

employee expenses

In respect of share options granted in the period ended 31 March 2006

In respect of share options granted in the period ended 30 June 2007

other administrative expenses

Share options granted in the period ended 30 June 2007

total

30.06.07
£

66,470

87,636

154,106

68,100

222,206

31.03.06
£

73,956

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements continued

period ended 30 June 2007

18. financial instruments

The group uses financial instruments, other than derivatives, comprising, cash liquid resources and various items such as

debtors, creditors and other items that arise directly from its operations. The main purpose of these financial instruments is to

utilise finance in the Group’s operations.

The main risks arising from the group’s financial instruments are interest risk, liquidity risk and currency risk. The directors

review and agree policies for managing these risks and these are summarised below.

Short term debtors and creditors have been excluded from all the following disclosures.

Interest rate risk

The group finances its operations through equity financing to alleviate the interest rate risk. The interest rate exposure of the

financial assets of the Company as at 30 June 2007 related wholly to floating interest rates in respect of cash at bank and is

held in the following currencies:

Sterling – Cash at bank

US Dollars

Liquidity risk

30/06/07
£

326,847

31/03/06
£

1,874,652

326,847

1,874,702

The group seeks to manage financial risk to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash

assets safely and profitably.

Currency risk

The group manages its currency risk by holding financial investments in sterling and financing the investment in overseas

securities on an arising basis.

Fair values

The fair values of the group's instruments are considered not materially different to the book value.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notes to the finanCial statements continued

period ended 30 June 2007

19. related party transactions

Mr R G Still is a Director of Pangea Exploration (Pty) Limited which is owned as to 33% by a trust connected with his family.

Exploration expenditure of £356,044 (18 months ended 31 March 2006: £255,476) was incurred by Pangea Exploration (Pty)

Limited on behalf of the Company in respect of the Manica gold project in accordance with an agreement dated 19 November

2003, £255,108 (18 months ended 31 March 2006: £44,735) in respect of the Bogoin project in accordance with an agreement

dated 30 September 2005 and £333,672 (18 months ended 31 March 2006: £92,755) in respect of project management. In

addition, the group has acquired rights from Pangea in the Bogoin project in Central African Republic as set out in note 20

below.

Administration expenditure includes £10,500 (excluding VAT) (2006: £15,000) incurred by Munslows on behalf of the Company

in respect of its office accommodation costs.

20. Capital Commitments

The board has contracted to acquire rights in the joint venture in Central African Republic from Pangea Exploration (Pty)

Limited. The balance of the consideration is payable over 2 years and subject to the continuation of operations in the

Central African Republic over the period. The future commitments under this agreement are estimated at £676,000, which

the Company can either satisfy by the issue of a further 10,927,273 ordinary shares in the Company or in cash following an

interest acquired in Barberton Mines (Pty) Ltd. The Company has also contracted to acquire a 90% interest in a prospecting

licence over property in Ghana from Birim Gold Fields (Ghana) Limited and SEMS Exploration Services Limited for a

consideration of £52,632 and the issue of 12,000,000 ordinary shares credited as fully paid up at 6p per share. Conditions of

the contract were met post the period end.

21. Contingent liabilities

There were no contingent liabilities at 30 June 2007 or 31 March 2006.

22. post Balance sheet events

On 31 July 2007, the Company acquired 74% of the issued share capital of Barberton Mines (Pty) Limited (‘Barberton’) by the

issue of 593,740,476 ordinary shares to Metorex Limited and 60,000,000 to Pangea Exploration (Pty) Limited for the 20%

interest in the Manica Project. As a result of this transaction, Metorex holds 55% of the issued share capital of Pan African

and, accordingly, the Barberton acquisition constitutes a reverse takeover under the AIM rules. Following the completion of

this transaction the Company’s shares have commenced trading on the JSE Limited, through its secondary listing.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notiCe of 2008 annual general meeting

All times indicated in this document are United Kingdom times unless otherwise stated.

Notice is hereby given that the 2008 Annual General Meeting of the Company will be held at the offices of fasken martineau stringer saul llp
17 hanover square, london, W1s 1hu on 18 January 2008 at 12 noon to transact the following business of the Company:

To receive and adopt the Directors’ Report and the financial

As special business to consider and, if thought fit, to pass the

statements for the period ended 30 June 2007.

following resolution which will be proposed as a Special Resolution.

To re-appoint as a Director, Mr. Jan Nelson, who retires by

rotation in accordance with Article 82 of the Company’s Articles

THAT the Directors be and they are hereby empowered

of Association and offers himself for re-election.

pursuant to Section 95 of the Companies Act 1985 (‘the Act’),

To re-elect Simon Malone as a Director, who was appointed

in substitution for all previous powers granted thereunder, to

during the period.

allot equity securities (within the meaning of Section 94 of the

To re-elect Charles Needham as a Director, who was appointed

Act) for cash pursuant to the authority granted by resolution

during the period.

7 above as if Section 89(1) of the Act did not apply to any

To re-elect Keith Spencer as a Director, who was appointed

such allotment provided that this power shall expire at the

during the period.

conclusion of the next Annual General Meeting and such power

To reappoint Grant Thornton UK LLP as auditors and to authorise

is limited to the allotment of equity securities:

the Directors to fix their remuneration.

As special business, to consider and, if thought fit, to pass the

(a)

in connection with rights issues to holders of ordinary

following resolution which will be proposed as an Ordinary

shares where the equity securities respectively attributable

Resolution.

to the interests of such holders are proportionate (as

nearly as may be practicable) to the respective numbers

THAT the Directors be and are hereby generally and

of ordinary shares held by them, but subject to such

unconditionally authorised pursuant to Section 80 of the

exclusions or other arrangements as the directors may

Companies Act 1985 (‘the Act’), in substitution for all previous

deem necessary or expedient to deal with any fractional

powers granted to them, to exercise all the powers of the

entitlements or any legal or practical problems under

Company to allot and make offers to allot relevant securities

law of, or the requirements of any regulatory body or any

(within the meaning of Section 80(2) of the Act) up to an

recognised stock exchange in, any territory;

aggregate nominal amount of £9,211,335.62; such authority

(b) up to a maximum aggregate nominal value of £578,227.27

shall, unless previously revoked or varied by the Company in

in connection with the exercise of options granted to

general meeting, expire on the conclusion of the next Annual

various parties (including Directors) over an aggregate of

General Meeting of the Company, provided that the Company

57,822,727 Ordinary Shares;

may, at any time before such expiry, make an offer or enter into

(c)

up to a maximum aggregate nominal value of

an agreement which would or might require relevant securities

£1,071,743.71 (being 10 per cent. of the issued share

to be allotted after such expiry and the Directors may allot

capital of the Company as at the date of this notice) in

relevant securities pursuant to any such offer or agreement as if

connection with the granting of options by the Company

the authority conferred hereby had not expired

granted in accordance with the Pan African Resources PLC

Share Option Plan;

this doCument is important and requires your immediate attention. if you are in any doubt as to what action you should

take, you should immediately seek your own personal advice from your stockbroker or other independent advisor authorised under the
financial services and markets act 2000. If you have sold or transferred all of your ordinary shares in the capital of the Company, please
send this document together with its accompanying form of proxy at once to the purchaser or transferee or to the stockbroker, bank or other

agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notiCe of annual general meeting continued

All times indicated in this document are United Kingdom times unless otherwise stated.

(d) up to a maximum aggregate value of £643,046.22 (being

approximately 6 per cent. of the issued share capital of

the Company as at the date of this notice) in connection

with the exercise of the option granted to Shanduka

appointment of proxies
2.

If you are a member of the Company at the time set out in note

1 above, you are entitled to appoint a proxy to exercise all or

any of your rights to attend, speak and vote at the Meeting and

a proxy form is attached to this notice of meeting. You can only

Resources (Proprietary) Limited (“Shanduka”) to subscribe

appoint a proxy using the procedures set out in these notes and

for Ordinary Shares;

the notes to the proxy form.

(e) up to a maximum aggregate value of £2,086,115.79 (being

approximately 19 per cent. of the issued share capital of

3 .

If you are not a member of the Company but you have been

nominated by a member of the Company to enjoy information

rights, you do not have a right to appoint any proxies under

the Company as at the date of this notice) in connection

the procedures set out in this ‘Appointment of proxies’ section.

with the exercise of the option granted to Shanduka to

Please read the section ‘Nominated persons’ below.

require the Company to acquire all of Shanduka’s 26 per

cent. interest in Barberton Mines (Proprietary) Limited in

4. A proxy does not need to be a member of the Company but

must attend the Meeting to represent you. Details of how to

appoint the Chairman of the Meeting or another person as your

consideration of the issue of shares in the Company; and

proxy using the proxy form are set out in the notes to the proxy

(f)

up to a maximum aggregate value of £1,078,866.43 (being

approximately 10 per cent. of the issued share capital of

the Company as at the date of this notice) otherwise than

pursuant to paragraphs (a) to (e) above),

form. If you wish your proxy to speak on your behalf at the

Meeting you will need to appoint your own choice of proxy (not

the Chairman) and give your instructions directly to them.

You may appoint more than one proxy provided each proxy is

appointed to exercise rights attached to different shares. You may

not appoint more than one proxy to exercise rights attached to

save that the Company may, before such expiry make an offer

any one share. To appoint more than one proxy, it will be necessary

or agreement which would or might require equity securities to

be allotted after such expiry and the Directors may allot equity

to notify the Registrar in accordance with Note 7 below.

6. A vote withheld is not a vote in law, which means that the vote

will not be counted in the calculation of votes for or against the

securities in pursuance of any such offer or agreement as if the

resolution. If no voting indication is given, your proxy will vote

authority conferred hereby had not expired.

By Order of the Board date 20 December 2007

JOHN BOTTOMLEY

Secretary
Manfield House, 2nd Floor

1 Southampton Street

London WC2R 0LR

notes

entitlement to attend and vote
1.

Pursuant to Regulation 41 of the Uncertificated Securities

Regulations 2001, the Company specifies that only those

members registered on the Company’s register of members at

6.00 am on 16 January 2008 or, if this Meeting is adjourned, at

6.00 am on the day two days prior to the adjourned meeting,

shall be entitled to attend and vote at the Meeting.

or abstain from voting at his or her discretion. Your proxy will

vote (or abstain from voting) as he or she thinks fit in relation

to any other matter which is put before the Meeting.

appointment of proxy using hard copy proxy form
7.

The notes to the proxy form explain how to direct your proxy

how to vote on each resolution or withhold their vote. To

appoint a proxy using the proxy form, the form must be:

•

completed and signed;

sent or delivered to Capita Registrars, Proxies, The Registry,

34 Beckenham Road, Beckenham, Kent BR3 4TU; and

•

received by Capita Registrars no later than 10.00 am on

16 January 2008.

In the case of a member which is a company, the proxy form must be

executed under its common seal or signed on its behalf by an officer

of the company or an attorney for the company.

Any power of attorney or any other authority under which the proxy

form is signed (or a duly certified copy of such power or authority)

must be included with the proxy form.

appointment of proxy by joint members
8.

In the case of joint holders, where more than one of the joint

holders purports to appoint a proxy, only the appointment

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

notiCe of annual general meeting continued

All times indicated in this document are United Kingdom times unless otherwise stated.

submitted by the most senior holder will be accepted. Seniority

146 of the Companies Act 2006 to enjoy information rights

is determined by the order in which the names of the joint

(Nominated Person):

holders appear in the Company’s register of members in respect

•

You may have a right under an agreement between you

of the joint holding (the first-named being the most senior).

Changing proxy instructions
9.

To change your proxy instructions simply submit a new proxy

appointment using the methods set out above. Note that the

cut-off time for receipt of proxy appointments (see above) also

apply in relation to amended instructions; any amended proxy

appointment received after the relevant cut-off time will be

disregarded.

Where you have appointed a proxy using the hard-copy proxy

form and would like to change the instructions using another

hard-copy proxy form, please contact Capita Registrars.

If you submit more than one valid proxy appointment, the

appointment received last before the latest time for the receipt

of proxies will take precedence.

termination of proxy appointments
10.

In order to revoke a proxy instruction you will need to inform

the Company by sending a signed hard copy notice clearly

stating your intention to revoke your proxy appointment to

Capita Registrars. In the case of a member which is a company,

the revocation notice must be executed under its common

seal or signed on its behalf by an officer of the company or an

attorney for the company. Any power of attorney or any other

and the member of the Company who has nominated

you to have information rights (Relevant Member) to be

appointed or to have someone else appointed as a proxy

for the Meeting.

•

If you either do not have such a right or if you have such

a right but do not wish to exercise it, you may have a

right under an agreement between you and the Relevant

Member to give instructions to the Relevant Member as to

the exercise of voting rights.

•

Your main point of contact in terms of your investment in

the Company remains the Relevant Member (or, perhaps,

your custodian or broker) and you should continue to

contact them (and not the Company) regarding any

changes or queries relating to your personal details and

your interest in the Company (including any administrative

matters). The only exception to this is where the Company

expressly requests a response from you.

documents on display
13. Copies of the service contracts and letters of appointment of

the directors of the Company will be available:

•

for at least 15 minutes prior to the Meeting; and

during the Meeting.

authority under which the revocation notice is signed (or a duly

dematerialised shareholders

certified copy of such power or authority) must be included

Dematerialised shareholders in South Africa who are not own

with the revocation notice Capita Registrars. The revocation

name dematerialised shareholders and who wish to attend

notice must be received by Capita Registrars no later than

the AGM should instruct their Central Securities Depository

10.00 am on 16 January 2008. If you attempt to revoke your

Participant (‘CSDP’) or broker to issue them with the necessary

proxy appointment but the revocation is received after the time

authority to attend the meeting in person, in the manner

specified then, subject to the paragraph directly below, your

stipulated in the custody agreement governing the relationship

proxy appointment will remain valid.

between such shareholders and their CSDP or broker. These

Appointment of a proxy does not preclude you from attending

instructions must be provided to the CSDP or broker by the cut-

the Meeting and voting in person. If you have appointed a proxy

off time and date advised by the CSDP or broker for instructions

and attend the Meeting in person, your proxy appointment will

of this nature.

automatically be terminated.

issued shares and total voting rights
11. As at 6.00 pm on 19 December 2007 the Company’s issued

share capital comprised 1,078,866,438 ordinary shares of

1 pence each. Each ordinary share carries the right to one

vote at a general meeting of the Company and, therefore, the

total number of voting rights in the Company as at 6.00 pm on

19 December 2007 is 1,078,866,438.

Dematerialised shareholders in South Africa who are not own

name dematerialised shareholders and who cannot attend but

who wish to vote at the AGM should provide their CSDP or

broker with their voting instructions, in the manner stipulated

in the custody agreement governing the relationship between

such shareholders and their CSDP or broker. These instructions

must be provided to the CSDP or broker by the cut-off time

and date advised by the CSDP or broker for instructions of this

nominated persons
12.

If you are a person who has been nominated under section

nature.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

form of proxy – pan afriCan resourCes plC

All times indicated in this document are United Kingdom times unless otherwise stated.

(Incorporated and registered in England and Wales under Companies Act 1985 with registration number 3937466 on 25 February 2000)
Share code on AIM: PAF ISIN: GB0004300496 Share code ALTX: PAN

this form of proxy is for use by all non-south african shareholders and for south african certificated shareholders and
south african own name dematerialised shareholders only

I/We, the undersigned, being a member of the above-named company, hereby appoint

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
or failing him, the Chairman of the meeting, as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting
of the Company to be held on 18 January 2008 at 12 noon and at any adjournment thereof.

The proxy will vote on the undermentioned resolutions, as indicated.

ordinary resolutions

for

against

vote Withheld*

discretionary✝

to adopt the report and accounts

to re-elect Jan nelson, as director who was appointed since
the last agm

to re-elect simon malone, a director who was appointed
since the last agm

to re-elect Charles needham as a director, who was
appointed since the last agm

to re-elect Keith spencer a director, who was appointed
since the last agm

to reappoint grant thornton uK llp as auditors

to empower the directors to allot relevant securities
pursuant to section 80 of the Companies act 1985

speCial resolutions

for

against

vote Withheld*

discretionary✝

to provide the directors with a general authority to issue
shares for cash

If this form is signed and returned without any indication as to how

the proxy shall vote, he will exercise his discretion both as to how he

votes (and whether or not he abstains from voting).

* The ‘Vote Withheld’ option is to enable you to abstain on the

specified resolution. Please note a ‘Vote Withheld’ has no legal effect

and will not be counted in the votes ‘For’ and ‘Against’.
✝ If you select ‘Discretionary’ or fail to select any of the given

options, the proxy is authorised to vote (or abstain from voting) at

his discretion on the specified resolution. The proxy is also authorised

to vote (or abstain from voting) on any other business, which may

properly come before the meeting.

print name: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

date: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

signature: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

notes
1.

This form is for use of shareholders only and will be used only in the event of a poll being
directed or demanded.
You may, if you wish, delete the words “the Chairman of the Meeting” and substitute the
names(s) of your choice. Please initial such alteration.
To be effective, this form of proxy must be lodged at the Company’s registrars, Capita
Registrars, Proxies, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not later
than 48 hours before the start of the meeting.
In the case of a corporation, the form must be executed under its common seal or under
the hand of an officer or attorney duly authorised in writing.
In the case of joint holders, the signature of any of them will suffice but the names of
all joint holders should be shown. The vote of the senior joint holder who tenders a vote
whether in person or by proxy, shall be accepted to the exclusion of the votes of the other
joint holders, and for this purpose seniority shall be determined by the order in which the
names stand in the Register of Members in respect of the joint holding.
Dematerialised shareholders in South Africa who are not own name dematerialised
shareholders and who wish to attend the AGM should instruct their CSDP or broker to
issue them with the necessary authority to attend the meeting in person, in the manner
stipulated in the custody agreement governing the relationship between such shareholders
and their CSDP or broker. These instructions must be provided to the CSDP or broker by the
cut-off time and date advised by the CSDP or broker for instructions of this nature.
Dematerialised shareholders in South Africa who are not own name dematerialised
shareholders and who cannot attend but who wish to vote at the AGM should provide
their CSDP or broker with their voting instructions, in the manner stipulated in the
custody agreement governing the relationship between such shareholders and their CSDP
or broker. These instructions must be provided to the CSDP or broker by the cut-off time
and date advised by the CSDP or broker for instructions of this nature.

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007

BUSINESS REPLY SERVICE
Licence No. MB122

Second fold

d
o
f

t
s
r
i
F

Capita Registrars Limited
The Registry
34 Beckenham Road
BECKENAM
Kent
BR3 4BR

Third fold
and tuck in flap opposite

Corporate information

united Kingdom

Brokers and Nominated Advisers
Ambrian Partners Limited
Richard Greenfield / Richard Brown
8 Angel Court
London EC2R 7HP

Tel: + 44 (0) 207 776 6461
Fax: + 44 (0) 207 776 6470

Investor Relations – United Kingdom
St James’s Corporate Services Limited
Phil Dexter
6 St James’s Place
London SW1A 1NP

Tel: +44 (0) 207 499 3916
Fax: +44 (0) 207 491 1989

Auditors
Grant Thornton UK LLP
Grant Thornton House
Melton Street
Euston Square
London NW1 2EP

T + 44 (0) 207 383 5100
F + 44 (0) 207 383 4715

Solicitors
Fasken Martineau Stringer Saul LLP
17 Hanover Square
London W1S 1HU

Tel + 44 (0) 207 917 8500
Fax + 44 (0) 207 917 8555
info@paf.co.za

Company Secretary
John Michael Bottomley FICS

Registered Office and London Office
Manfield House
2nd Floor
1 Southampton Street
London WC2R 0LR

Tel + 44 (0) 207 845 7500
Fax + 44 (0) 207 845 7501

Company Number
3937466

Registrars
Capita Registrars
Northern House
Woodsome Park
Fenay Bridge
Huddersfield HD8 0LA

Tel + 44 (0) 208 639 3399

south africa

Sponsor
Macquarie First South Corporate Finance (Pty) Limited
Amanda Markman/ Doné Hattingh
181 Jan Smuts Avenue
Parktown North
Johannesburg 2193

Tel: +27 (0) 11 343 2300
Fax: +27 (0) 11 343 2301

Transfer Secretaries in South Africa
Computershare Investor Services 2004 (Pty) Limited
Ground Floor, 70 Marshall Street
Johannesburg 2001

Tel: +27 (0) 11 370 7843
Fax +27 (0) 11 688 5324

Administration Office
Viewpoint House
Cnr Main Street & Orchard Avenue
Bordeaux
Randburg 2125

Tel: +27 (0) 11 777 7840
Fax: +27 (0) 11 777 7842

Public Relations – South Africa
Nicole Stoyell
Viewpoint House
Cnr Main Street & Orchard Avenue
Bordeaux
Randburg 2125

Tel: +27 (0) 11 777 7840
Fax: +27 (0) 11 777 7842

Postal Address
PO Box 2768
Pinegowrie 2123

Website
www.panafricanresources.co.za

PAN AFRICAN RESOURCES PLC Annual Report and Accounts 2007