79
79
MINING FOR A FUTURE
AuGold
Au
Au
196.97
p: 79
n: 118
Gold
Gold
196.97
196.97
p:79
p:79
n:118
n:118
2023
INTEGRATED
ANNUAL REPORT
for the year ended 30 June
REPORT
NAVIGATION
CONTENTS
The following tools will assist you throughout this report:
About our report
Flap
Integrated thinking in action
Find more information on our website,
www.panafricanresources.com/
Alternative performance measures (APMs)
as reconciled on pages 254 to 261.
Limited assurance obtained
CAPITALS
Financial capital
Manufactured capital
Intellectual capital
Human capital
Social and relationship
capital
Natural capital
Refer to pages 12 and 13.
STAKEHOLDERS
Providers of capital
Customers
Suppliers
Employees and unions
Communities
Governments and
regulatory bodies
Collaboration partners
The environment
Refer to pages 36 to 45.
MATERIAL MATTERS
Execution
Growth
Cost
Health, safety and
security
Talent and skills
Unemployment and
social responsibility
Electricity
Beyond compliance
Geology
Tailings management
Innovation and
opportunity
Biodiversity and
decarbonisation
Refer to pages 26 and 27.
OUR BUSINESS AND STRATEGY
About Pan African
How we create value
Value-creation timeline
Value created and distributed in 2023
Investment case
Our strategy
Our strategic objectives and initiatives
Our business model
Our material matters
Our primary risks and opportunities
Our key stakeholder relationships
Our operating environment
Chairman’s statement
PERFORMANCE REVIEW
Chief executive officer’s review
Performance against our strategic objectives
Five-year overview
Our sustainability-linked finance framework
Financial director’s review
Operational performance review
– Barberton Mines
– Evander Mines
– Elikhulu
– Tailings management
Operational production
Financial capital
Manufactured capital
– Abridged Mineral Resources and
Mineral Reserves report
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
Intellectual capital
Human capital
Social and relationship capital
Natural capital
Non-financial and sustainability
information statement
Corporate governance overview
Board of directors
Remuneration report
ANNUAL FINANCIAL STATEMENTS
Statement of directors’ responsibilities
Chief executive officer’s and financial director’s
responsibility statement
Certificate of the company secretary
Directors’ report
Audit and risk committee report
Independent auditors’ report to the members
of Pan African Resources PLC
Statements of financial position
Statements of profit or loss and other
comprehensive income
Statements of cash flows
Statements of changes in equity
Notes to the financial statements
OTHER INFORMATION
Shareholders’ analysis
Alternative performance measures
Glossary
Corporate information
Shareholders’ diary
4
8
10
12
14
18
20
22
26
28
36
46
50
54
68
70
72
74
82
84
88
90
92
94
96
100
103
118
120
123
126
129
134
140
145
164
165
165
166
168
172
178
179
180
181
182
252
254
262
IBC
IBC
GOLD ABOUT OUR
REPORT
Pan African Resources PLC’s (Pan African
or the Company or the Group) integrated
annual report provides stakeholders with
a clear, concise and accurate overview
of the Group’s activities, performance
and its impact on financial, environmental
and governance matters. The report
encompasses our strategy, operations,
financial and non-financial performance
and environmental and social responsibility
initiatives.
Gold is a chemical element with the
symbol Au (from Latin aurum) and
atomic number 79. This makes it one of
the higher–atomic-number elements
that occur naturally. It is a bright, slightly
orange-yellow, dense, soft, malleable
and ductile metal in pure form.
Energy levels:
79
Electrons:
6
79
174
Atomic radius (pm):
Neutrons:
Au
118
Gold
196.97
p:79
n:118
Protons:
79
Gold is a transition metal in
group 11, period 6 and the
d-block of the periodic table. It
has a melting point of 1,064 ºC.
The trends across the transition
metals are due to electrons filling
an inner d-subshell, shielding the
outer (valence) electrons from the
increasing nuclear charge.
INTEGRATED THINKING
In our business model, we embrace integrated thinking by incorporating it
into our decision-making processes, strategies and operations. We recognise
that our financial performance is not the sole measure of our success, but
is intertwined with our impact on the environment, society and governance
practices. We strive to integrate environmental, social and governance
considerations into our day-to-day activities and strategic initiatives, rather than
treating them as separate silos.
We are committed to building a sustainable
future through responsible mining and
integrated thinking. We understand that our
business success depends on our ability
to balance economic, environmental and
social considerations.
In this report, we invite you to explore how
Pan African continues to create long-term
value for our stakeholders.
OUR FOCUS THIS YEAR
We have made this report easier to read
and understand by:
• highlighting the benefits of integrated
thinking for our business
• providing a clearer investment case
•
•
focusing on short-, medium- and long-
term time horizons
improving balance and ensuring
comprehensive coverage
• strengthening the links between our
strategy, performance and outlook.
REPORTING COMPLIANCE
Compiling this report has been guided by but not limited to the following:
• Alternative Investment Market (AIM) Rules of the London Stock Exchange (LSE)
for companies
• Global Reporting Initiative (GRI) Standards
•
•
International Financial Reporting Standards (IFRS)
International Integrated Reporting Framework ( Framework) of the IFRS Foundation
• JSE Limited (JSE) Listings Requirements
• JSE Sustainability Disclosure Guidance
• King IV Report on Corporate Governance for South Africa, 2016TM (King IV™)
• Principles of the United Nations Global Compact
• South African Code for the Reporting of Exploration Results, Mineral Resources and
Mineral Reserves, 2016 edition (SAMREC Code)
• South African Companies Act, 71 of 2008 (South African Companies Act)
• South African Institute of Chartered Accountants (SAICA) Financial Reporting Guidelines
• United Kingdom (UK) Companies Act 2006 (Companies Act 2006)
• United Nations Sustainable Development Goals (UN SDGs)
• Task Force on Climate-related Financial Disclosures (TCFD) recommendations.
™ Copyright and trademarks are owned by the Institute of Directors South Africa NPC and all of its
rights are reserved.
MATERIALITY
Materiality is a key concept in our reporting. It refers to information that could reasonably
be expected to influence the decisions of our stakeholders. We have included information
on all material events that occurred after 30 June 2023 and up to the date the board
approved this report. Management is not aware of any material information that was
unavailable or subject to legal publication prohibitions.
Our materiality process involves identifying, evaluating and prioritising the most significant
issues based on their potential impact on our ability to create and preserve value over the
short (one year), medium (two to three years) and long term (more than three years).
How we identify our
macroeconomic issues and
material matters
Our macroeconomic issues
Material matters are
analysed under each
of our capitals
Our materiality process is
outlined on page 26
Our operating environment is discussed
on pages 46 to 49
The six capitals are defined on page 12
and their associated material matters
are analysed on pages 96 to 128
Throughout the report:
• we indicate positive impacts,
movements and effects in
green
• negative outcomes in red
• and neutral results in black
.
We have introduced information
boxes to provide additional
background or simple explanations
of terminology.
ABOUT OUR REPORT continued
BOUNDARY AND SCOPE
This report covers all of Pan African’s operations and exploration programmes and is published annually. It includes our progress for the year
from 1 July 2022 to 30 June 2023.
Our integrated reporting boundary
Integrated
Environmental, social
Task Force on
Notice of
Mineral Resources and
annual
report
Strategy
and governance report
Climate-related Financial
annual general meeting
Mineral Reserves report
(ESG report)
Disclosures report
(TCFD report)
Operating
environment
Primary risks and
Six capitals used
opportunities
or impacted
Stakeholder
relationships
Our financial reporting boundary
Annual financial statements
Our integrated reporting boundary aligns with our financial statement reporting boundary and includes details of our
investments in subsidiaries, associates and listed investments
Holding company – Pan African
Corporate
Gold mining and tailings retreatment operations
100%
Pan African Resources SA Holdings Proprietary Limited
100%
Barberton Mines Proprietary Limited
100%
Pan African Resources Funding Company Proprietary Limited
100%
Evander Gold Mining Proprietary Limited
49.9%
PAR Gold Proprietary Limited
100%
Evander Gold Mines Proprietary Limited
100%
Pan African Resources Management Services Company
Proprietary Limited
100% Mogale Tailings Retreatment Proprietary Limited (MTR)
100%
Pan African Resources Properties Proprietary Limited
100% Mogale Gold Proprietary Limited (Mogale Gold)
100%
Concrete Rose Proprietary Limited
100% Mintails SA Soweto Cluster Proprietary Limited (MSC)
Agricultural, solar and ESG projects
Exploration programmes
80%
Barberton Blue Proprietary Limited
80%
Pan African Resources Minerals DMCC
100%
Evander Solar Solutions Proprietary Limited
100%
Pan African Resources Minerals Co. Limited
100%
Barberton Green Proprietary Limited
ALTERNATIVE PERFORMANCE MEASURES
We use financial and non-financial measures to assess our
performance, including APMs that assist in illustrating the
underlying financial performance of the Group. The purpose
of each of these measures is defined and explained on
pages 254 to 261, and a reconciliation to the equivalent IFRS
measures is provided. It is important to note that these APMs
should be considered in addition to, and not as a substitute
for, or as superior to, measures reported in accordance with
IFRS. Also, these APMs may not be comparable with similarly
titled measures by other companies, including those in the
gold mining industry.
STRATEGIC REPORT
Our strategic report, including our investment case, on
pages 4 to 144, was reviewed and approved by the board
on 13 September 2023.
LIMITED ASSURANCE
Reported values containing the gold seal of approval indicate
limited assurance granted by PricewaterhouseCoopers Inc.
(PwC). The limited assurance report from PwC can be found
on pages 79 and 80 of the 2023 ESG report.
ASSURANCE
We apply a combined assurance model:
• The board and the audit and risk committee assessed the
effectiveness of controls for the year ended 30 June 2023
as satisfactory after a review of internal control policies
and reports from internal audit and other assurance
providers and confirmation from executive management.
Refer to the statement of directors’ responsibilities on
page 164
• The PwC LLP opinion on our 2023 annual financial
statements is set out on pages 172 to 177
• PwC Inc. has assured key sustainability information
• The execution of our combined assurance model is
monitored by the audit and risk committee which reports
to the board, on an annual basis, on the execution of the
combined assurance plan.
BOARD APPROVAL
The board assumes ultimate responsibility for the integrity of
this report. The board is satisfied that the report addresses all
material matters and fairly presents the Group’s performance
for the financial year 1 July 2022 to 30 June 2023. The report
is an accurate reflection of our strategic commitments for the
short, medium and long term.
The board is of the opinion that the 2023 integrated annual
report complies in all material respects with the relevant
statutory and regulatory requirements – particularly the
Framework, IFRS and the Companies Act 2006.
This report is prepared under the supervision of senior
management and is subject to an internal and external review
process. The audit and risk committee reviews the content of
this report and the collation process, relying on the assurance
provided at the various reporting levels.
OUR REPORTING SUITE
79
79
79
MINING FOR A FUTURE
MINING FOR A FUTURE
Au
Au
Au
Gold
Gold
196.97
196.97
p:79
p:79
n:118
n:118
Gold
196.97
p: 79
n: 118
2023
PROVISIONAL
SUMMARISED
AUDITED RESULTS
for the year ended 30 June
Our provisional summarised audited
results are available on our website at:
https://www.panafricanresources.com/investors/financial-reports/
79
79
79
MINING FOR A FUTURE
MINING FOR A FUTURE
Au
Au
Au
Gold
Gold
196.97
196.97
p:79
p:79
n:118
n:118
Gold
196.97
p: 79
n: 118
2023
ENVIRONMENTAL,
SOCIAL AND
GOVERNANCE REPORT
for the year ended 30 June
Our environmental, social and
governance report contains additional
non-financial disclosures and is available
on our website at:
https://www.panafricanresources.com/investors/gri-and-sustainability/
79
79
79
MINING FOR A FUTURE
MINING FOR A FUTURE
Au
Au
Au
Gold
Gold
196.97
196.97
p:79
p:79
n:118
n:118
Gold
196.97
p: 79
n: 118
2023
MINERAL RESOURCES
AND MINERAL
RESERVES REPORT
for the year ended 30 June
Our Mineral Resources and Mineral
Reserves report provides technical
information in compliance with the SAMREC
Code and is available on our website at:
https://www.panafricanresources.com/operations-at-a-glance-2/mineral-resource-mineral-reserve-2/
79
79
79
MINING FOR A FUTURE
MINING FOR A FUTURE
Au
Au
Au
Gold
Gold
196.97
196.97
p:79
p:79
n:118
n:118
Gold
196.97
p: 79
n: 118
2023
TASK FORCE ON
CLIMATE-RELATED
FINANCIAL DISCLOSURES
REPORT
for the year ended 30 June
Our Task Force on Climate-related
Financial Disclosures report is available
on our website at:
https://www.panafricanresources.com/investors/gri-and-sustainability/
79
79
79
MINING FOR A FUTURE
MINING FOR A FUTURE
Au
Au
Au
Gold
Gold
196.97
196.97
p:79
p:79
n:118
n:118
Gold
196.97
p: 79
n: 118
2023
NOTICE OF ANNUAL
GENERAL MEETING
for the year ended 30 June
Our notice of annual general meeting
will be available on our website on
31 October 2023 at:
https://www.panafricanresources.com/investors/shareholder-announcements/
FORWARD-LOOKING STATEMENTS
Certain statements in this integrated annual report may
be regarded as forward-looking statements or forecasts,
but do not represent an earnings forecast. All forward-
looking statements are based solely on the judgement and
expectations of the directors at the time of preparing this
report. Emerging risks, uncertainties and other important
factors may materially change the results from our
expectations. These statements have not been reviewed and
are not reported on by the external auditor.
On the recommendation of the audit and risk committee, the board approved the integrated annual report and the Group’s annual financial
statements on 13 September 2023.
Keith Spencer
Chairman
Dawn Earp
Lead independent
director
Thabo Mosololi
Director
Charles Needham
Director
Yvonne Themba
Director
Cobus Loots
Chief executive
officer
Deon Louw
Financial director
All signatures have been removed to protect the security and privacy of the signatories.
1
PAN AFRICAN RESOURCES PLC Integrated annual report 2023 Energy levels:
6
Energy levels (or electron shells) are fixed distances from
the nucleus of an atom where electrons may be found.
A gold atom has six levels.
About Pan African
How we create value
Value-creation timeline
Value created and distributed in 2023
Investment case
Our strategy
Our strategic objectives and initiatives
Our business model
Our material matters
Our primary risks and opportunities
Our key stakeholder relationships
Our operating environment
Chairman’s statement
4
8
10
12
14
18
20
22
26
28
36
46
50
OUR BUSINESS
AND STRATEGY
Pan African is a sustainable, safe,
high-margin and long-life gold producer.
1
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
ABOUT PAN AFRICAN
WHO WE ARE
Pan African is a mid-tier, African-focused gold producer. Our
shares trade as follows:
• In the UK through a primary listing on the AIM of the LSE (ticker: PAF)
• In South Africa through a primary listing on the Main Board of the JSE
(ticker: PAN) and a secondary listing on the A2X Market (A2X)
• In the United States of America (USA) on the OTCQX Best Market
(OTCQX) through a Level 1 American Depository Receipt (ADR)
programme sponsored by the Bank of New York Mellon (ticker:
PAFRY) and ordinary shares (ticker: PAFRF).
OUR VALUE-CREATING STRATEGY
To safely and efficiently extract value from
our mineral deposits while prioritising the
long-term sustainability of our business.
We leverage our combined knowledge
and skills base to approach mining in
an entrepreneurial manner, generating
compelling returns for our stakeholders.
For more information, refer to pages 18
and 19.
Action and
delivery
Integrity
Teamwork
Excellence
Ownership
Courageous
conversations
Care
Innovation
OUR VALUES
Geographical representation of our shareholders
Resilience
Attitude
South Africa
58.7%
UK
USA
Denmark
Switzerland
France
30.3%
5.8%
2.0%
0.9%
0.9%
Other (<0.5%)
1.4%
OUR PURPOSE
We are committed to
optimally and consistently
extracting gold from mineral
deposits while creating
sustainable value for all
our stakeholders through
responsible mining
OUR VISION
We aspire to further develop
Pan African as a leading
mid-tier gold producer that
upholds its purpose
GEOGRAPHICAL
REPRESENTATION
of our shareholders at
30 June 2023
Cash and cash equivalents
Restricted cash
Available general banking facilities
Available RCF
OUR
SUSTAINABILITY
COMMITMENT
Our commitment to sustainability
extends beyond compliance. We
collaborate with experts in community
engagement, conservation and
sustainability initiatives to benefit all
stakeholders. Our approach prioritises
ESG considerations, including the
use of renewable energy
GROWTH
Our growth strategy
is based on a
combination of organic
portfolio growth and
production-enhancing,
value-accretive projects
PROFITABILITY
We aim to maintain
a strong focus on
profitability by being
one of the highest-
margin producers of
gold in Southern Africa
OUR STRATEGIC
PILLARS
STAKEHOLDERS
We believe that an
integrated stakeholder
approach is crucial
for our success and
to prioritise the health
and well-being of our
employees and host
communities
SUSTAINABILITY
Our sustainability is
centred on creating
long-term value for all
stakeholders by balancing
economic, environmental
and social considerations
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
ABOUT PAN AFRICAN continued
OUR OPERATING GOLD MINES
A unique combination of African underground and surface mining operations.
Gold mining in Sudan
Sudan produced an estimated
50t of gold in 2022, making it the
fifth-largest producer in Africa and
18th-largest in the world1
Block 12
Port Sudan
Khartoum
Sudan
OUR OPERATIONS
Evander Mines
Elikhulu Tailings Retreatment Plant
Sheba Mine and Royal Sheba
Fairview Mine and the Barberton Tailings
Retreatment Plant
Consort Mine
Mogale Tailings Retreatment project
Block 12 – Sudan
South
Africa
Mpumalanga
Gold mining in South Africa
South Africa ranks as the world’s
eighth-largest gold producer, with an
estimated output of 110t (2022). The
country has 28 operational gold mines,
including the deepest shaft in the world1
Pretoria
Gauteng
MTR
Johannesburg
Middelburg
Barberton
Emalahleni
Elikhulu
Evander Mines
Ermelo
Mbombela
Consort Mine
Sheba Mine and
Royal Sheba
Fairview Mine
and BTRP
Production
(oz/annum)
2023
(2022)
Mineral
Reserves
2023
(2022)
Mineral
Resources
2023
(2022)
Production
(tonnes milled
and processed)
2023
(2022)
Recovered
grade
(g/t)
2023
(2022)
AISC
(US$/oz)
2023
(2022)
Life-of-mine
(years)
2023
(2022)
BARBERTON MINES (UNDERGROUND MINING OPERATIONS)
A long-life, high-grade operation comprising three underground mines: Fairview, Sheba and Consort
64,586
5.5Mt at 6.49g/t
24.1Mt at 4.14g/t
342,622
(1.14Moz)
(3.20Moz)
(75,738)
(14.2Mt at 3.51g/t)
(24.1Mt at 4.30g/t)
(322,038)
5.9
(7.3)
1,810
(1,645)
(1.60Moz)
(3.3Moz)
BARBERTON TAILINGS RETREATMENT PLANT (BTRP)
The plant was completed in June 2013 and adds high-margin and low-risk ounces to our production profile
19,875
3.9Mt at 3.03g/t
22.7Mt at 1.25g/t
921,753
(0.38Moz)
(0.91Moz)
(19,560)
(6.1Mt at 1.57g/t)
(22.6Mt at 1.27g/t)
(908,198)
0.7
(0.7)
717
(891)
(0.31Moz)
(0.9Moz)
ELIKHULU TAILINGS RETREATMENT PLANT (ELIKHULU)
This plant exploits tailings deposited on the Kinross, Leslie/Bracken and Winkelhaak tailings
storage facilities (TSFs) in Evander. It commenced production in 2018
50,573
140.9Mt at 0.27g/t
163.4Mt at 0.27g/t
13,587,371
(1.24Moz)
(1.42Moz)
(52,220)
(159.3Mt at 0.28g/t)
(167.3Mt at 0.28g/t)
(13,732,147)
0.1
(0.1)
1,008
(1,003)
(1.44Moz)
(1.5Moz)
EVANDER MINES (UNDERGROUND MINING OPERATIONS)
Extraction of the 8 Shaft pillar and the development of the 24, 25 and 26 Level high-grade areas at Evander Mines
33,256
3.5Mt at 6.82g/t
24.0Mt at 10.28g/t
159,063
6.4
1,158
(0.77Moz)
(7.95Moz)
(48,850)
(3.3Mt at 7.20g/t)
(24.4Mt at 10.31g/t)
(129,087)
(11.8)
(1,112)
(0.77Moz)
(8.1Moz)
20
(20)
3
(2)
10
(11)
13
(14)
EVANDER MINES (SURFACE SOURCES)
The purchase of gold-bearing material from third parties – leveraging the excess capacity
of Evander Mines’ metallurgical plants
6,919
(9,320)
Not reported
Not reported
248,575
(261,338)
0.9
(1.1)
1,718
(1,650)
Not reported
MOGALE TAILINGS RETREATMENT PROJECT (MTR PROJECT)
A plant is being constructed to process gold tailings deposited onto the Mogale Gold and MSC TSFs
Figures in the table below are based on the expected definitive feasibility study results announced in June 2022
50,000 227.7Mt at 0.29g/t
259.8Mt at 0.30g/t
9,600,000
0.2
<1,000
21
(2.1Moz)
(2.5Moz)
EXPLORATION PROGRAMME IN SUDAN
The Group has five exploration concession areas in north-eastern Sudan. Exploration activities
were placed under care and maintenance due to the outbreak of violence in Sudan during April 2023.
The Group remains positive that it will continue with exploration activities once the situation has stabilised.
After year-end, the Group resumed its Sudanese activities, following a detailed risk assessment
of the operational environment in the exploration area
I
S
N
O
T
A
R
E
P
O
R
U
O
1
https://www.statista.com/statistics/264628/world-mine-production-of-gold/
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
HOW WE
CREATE VALUE
EXPLORE
On-mine growth
projects and greenfield
exploration contribute to
our Mineral Resources,
which potentially extend
the life of our mining
operations.
DEVELOP
Successful development
of our orebodies and
execution of our capital
projects improves our costs
and production profile and
increases the economic life
of our operations.
MINE
We extract gold-bearing ore through underground
mining and vamping using various methods, including
conventional breast and up-dip mining and trackless
cut-and-fill mining.
We remine gold-bearing tailings through hydro-mining.
Read more in the abridged Mineral Resources and
Mineral Reserves report on page 103.
REFINE
Gold doré is
transported to
Rand Refinery
Proprietary Limited
(Rand Refinery)
where it is refined
into gold bullion.
MONETISE
Gold sales transactions
are entered into with
authorised bullion
banks and other
credible parties. Our
customers and gold
investors include the
gold bullion export
market, Rand Refinery,
Gold Exchange Traded
Funds and the makers
of Krugerrands and
gold jewellery.
REHABILITATE
Consult ation with affected communities is necessary
during a mine’s life-of-mine to ensure social and
economic stability after the closure of a mine. These
consultations help develop initiatives through the
mine’s Social and Labour Plan (SLP) for post-closure
economic sustainability. When the mine reaches
the end of its life, the Group manages its closure
responsibly and safely to minimise disruption to
natural resources and communities.
Read more about our ‘beyond compliance’ approach
on page 125.
PROCESS
Gold is extracted from tailings sources and
concentrate after being processed through our
plants at Elikhulu and the BTRP utilising industry
best practice.
Third-party gold-bearing ore is processed through
a supply contract at Evander Mines’ Kinross plant.
We also treated, on a trial basis, third-party gold-
bearing ore at the Consort Mine and BTRP plants.
Refractory gold-bearing ore is treated at our BIOX®
plant at Barberton Mines. Specialised bacteria break
down insoluble sulphide minerals, which expose the
gold for efficient extraction. The BIOX® concentrate
is sent to the cyanide circuit at Fairview Mine for
chemical processing, where gold doré is produced.
Non-refractory gold-bearing ore undergoes physical
and chemical processing into gold doré at our
Fairview, Consort, Sheba, BTRP, Elikhulu or Kinross
plants.
Note: The illustrations in the graphic are for display purposes only. The models are digitally generated and have no bearing in real world projects and facilities.
8
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
VALUE-CREATION
TIMELINE
• Constructed and
commissioned Elikhulu
• Acquired Evander Mines
• Commissioned the BTRP
• Commissioned the Evander Tailings
Retreatment Plant
• Acquired Barberton Mines
• AIM listing
• JSE listing
• Incorporated
• Exploration phase
• 8 Shaft pillar –
production commenced
• Egoli project and Evander
• ADR programme
Mines’ 8 Shaft pillar
mining – commissioned
feasibility studies
established
• COVID-19 – proactive
management response
• Egoli project – feasibility
study completed
• Evander Mines – solar
plant approved
• Barberton Blueberries –
project approved
• Entered into conditional
agreements to acquire
Mogale Gold and MSC
• Evander Mines
– commenced
construction of the
solar plant
• Evander Mines –
completed the water
retreatment plant
feasibility study
• Barberton Blueberries
– commissioned the
project
• A2X listing
• Sudan – commenced
gold assay exploration
• Sudan – established a
gold laboratory
• Completed the share
buy-back programme
• Completed a definitive
feasibility study on the
Mogale Gold and
MSC TSFs
• One of the first mining
companies in South Africa
to issue a sustainability-
linked bond
• Mogale Gold and MSC –
acquisitions finalised
• MTR project –
commenced construction
in July 2023
• Barberton Mines –
commenced construction
of the solar plant
• Barberton Mines –
• 40MW Sturdee Energy
power purchase
agreement for the
provision of wheeled
power for up to 15 years
completed the solar plant
feasibility study
• Evander Mines –
completed the solar plant
expansion feasibility study
• Evander Mines –
commissioned the
9.9MW solar plant
• Evander Mines –
commenced construction
of the water retreatment
plant
• Barberton Blueberries
project – first commercial
harvest
Total gold
production
(oz)
Market
capitalisation
(US$ million)2
130,493
388.2
3
1
0
2
188,179
175,857
307.0
4
1
0
2
206.9
5
1
0
2
204,928
364.7
6
1
0
2
173,285
172,442
160,444
433.0
7
1
0
2
248.7
8
1
0
2
344.7
9
1
0
2
1 The timeline represents the period spanning the start of one financial year to the end of the subsequent financial year.
2
3
Source: JSE’s Trading and Market Services. Calculated at the end of each calendar year at quoted prices and the
closing US$/ZAR exchange rate.
Source: JSE’s Trading and Market Services. Calculated at 30 June 2023 using the quoted price and the closing
US$/ZAR exchange rate at that date.
733.5
179,457
201,777
205,688
540.0
438.0
0
2
0
2
1
2
0
2
2
2
0
2
175,209
357.73
3
2
0
2
10
11
2013to 2015200112007to 20092016to 201820192020202120222023PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
VALUE CREATED AND
DISTRIBUTED IN 2023
Performance
Positive increase
Negative increase
Positive decrease
Negative decrease
Unchanged
Our capitals
Capitals defined
SDGs
Value created and distributed
2023
2022
%Δ
Pan African enhanced
and preserved its
valuable capitals in
the past year.
The UN SDGs comprise 17 interlinked
objectives for peace and prosperity for
people and the planet now and into
the future. The SDGs emphasise the
interconnected environmental, social
and economic aspects of sustainable
development by putting sustainability at
their centre. The SDGs were formulated
in 2015 by the UN General Assembly
and adopted in a resolution called the
2030 Agenda as most targets are to be
achieved by 2030.
Equity, debt and surplus cash
from our operating activities
Infrastructure, orebodies and
tailings retreatment operations at
Barberton Mines, Evander Mines
and the MTR project
More than 130 years of mining
the unique Barberton Greenstone
Belt orebodies and an established
track record in surface tailings
remining
FINANCIAL
CAPITAL
MANUFACTURED
CAPITAL
INTELLECTUAL
CAPITAL
HUMAN
CAPITAL
SOCIAL AND
RELATIONSHIP
CAPITAL
Employees and contractors who
are knowledgeable, competent
and adequately skilled, supported
by a robust safety culture in
pursuit of a zero-harm working
environment
The quality of our stakeholder
relationships, the initiatives we
have implemented to improve
the well-being of our employees
and host communities and
our commitment to regulatory
compliance and responsible
business practices
The responsible use of fuel,
energy, water, air and land
resources while aspiring to do
minimal harm to the environment
NATURAL
CAPITAL
Revenue
Finance income
Finance costs paid to debt funders
Dividend paid
All-in sustaining cost (AISC)
Infrastructure investment
•
Including: Solar plants
Water retreatment plant
Utilising modern exploration techniques and mine
planning systems expands the resource base, assists
in gaining insight into the geological complexities and
enhances the effectiveness of our decision-making
processes
• Metres drilled
• Datamine software costs
Integrated security plan and modernisation of security
technology
US$321.6 million
US$376.4 million
(14.6)
US$1.1 million
US$6.3 million
US$23.2 million
US$1,327/oz
US$112.7 million
US$2.3 million
US$2.0 million
US$1.1 million
US$4.0 million
US$25.0 million
US$1,284/oz
US$82.7 million
US$8.8 million
US$1.0 million
–
57.5
(7.2)
3.3
36.3
(73.9)
100
16,665m
US$0.1 million
11,683m
US$0.4 million
42.6
(75.0)
• Security costs
US$7.4 million
US$8.1 million
(8.6)
Collaboration with government bodies and peer
companies to combat illegal mining and criminality.
Refer to page 87 for more information
Employee salaries, wages and benefits paid1
US$48.5 million
US$50.9 million
Permanent employees
Contractors
Safety initiatives
Skills and development training
Health and wellness initiatives
Value-added tax (VAT) received
Royalties and income taxes paid
Withholding tax paid
Employee taxes paid
Corporate social investment (CSI)
Alternative employment opportunities through the
Barberton Blueberries project
• Permanent jobs
• Seasonal jobs
• Salaries and wages paid
Water consumption
Energy consumption
Carbon emissions intensity per ounce produced
Direct greenhouse gas (GHG) emissions Scope 1
2,469
4,338
US$1.4 million
US$2.2 million
US$0.3 million
US$35.7 million
US$7.7 million
US$2.3 million
US$11.9 million
US$1.7 million
2,198
2,920
US$1.2 million
US$0.8 million
US$0.5 million
US$34.2 million
US$8.5 million
US$1.4 million
US$14.2 million
US$1.9 million
25
272
26
175
US$0.3 million
US$0.2 million
9,178ML
1,447.17TJ
8,232ML
1,405.45TJ
1.92tCO2 e/oz Au
3.7ktCO2e
1.68tCO2 e/oz Au
4.1ktCO2e
(4.7)
12.3
48.6
16.7
>100
(40.0)
4.4
(9.4)
64.3
(16.2)
(10.5)
(3.8)
55.4
50.0
11.5
3.0
14.3
(8.6)
A detailed review of our performance in contributing
to the UN SDGs is provided in our separate ESG report.
https://www.panafricanresources.com/investors/gri-and-sustainability/
1 Excludes employee-related taxes paid to the South African government.
12
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
INVESTMENT
CASE
As a sustainable and safety-focused gold producer committed to creating
long-term value for stakeholders, Pan African presents an attractive investment
opportunity with a strong pipeline of growth projects.
Value enhancers
Value enhancers
FINANCIAL
CAPITAL
Diversified
operations
A unique combination of South
African underground and surface
remining operations
Low production
cost
One of the lowest-cost gold
producers in South Africa
High
production
capacity
Ability to meet and exceed our
production guidance, with an
increasing production profile
• Long-life, high-grade underground mining
• Low-cost surface remining operations
• Long-term mining rights at Evander Mines (to 2038)
and Barberton Mines (to 2051)
• AISC of US$1,152/oz for our lower-cost operations,
comprising all operations, excluding Sheba Mine and
Consort Mine, which account for 81.4% of annual
production
• AISC of US$1,327/oz for total operations
• Return on shareholders’ funds of 20.6%
(2022: 25.9%)
• Production capacity >200,000oz of gold per annum
• 2023 production: 175,209oz (2022: 205,688oz)
• 2023 production guidance was revised to 175,000oz,
with increased production expected for 2024
Agile and
flexible
Sustainable, safe, high-margin
and long-life operations
• Surface remining track record and processing experience
• BIOX® processing plant with high recoveries of refractory
gold deposits
• Successfully mining highly variable greenstone belt
orebodies
• Increased use of mechanisation and technology
MANUFACTURED
CAPITAL
INTELLECTUAL
CAPITAL
Evander Mines’ 7 Shaft headgear
and surface infrastructure
HUMAN
CAPITAL
SOCIAL AND
RELATIONSHIP
CAPITAL
Focus on
health and
safety
Industry-leading safety
performance in pursuit of a zero-
harm working environment
• Surface remining operations – a low employee
complement
• Proactive and effective safety culture
• Constant reinforcement of safety practices and
innovative communications
• Awareness programmes aimed at employees and
communities to curb illegal mining
Sustainable
stakeholder
value creation
‘Beyond compliance’ approach
to promoting sustainable
communities beyond mining
• Established long-life mines
• Established sustainable renewable energy and
agricultural projects
• Land rehabilitation for alternative development purposes
• Continued investment in local community businesses to
stimulate sustainable economic development and job
creation
Low carbon
footprint
Lower carbon dioxide emissions
contribute to reducing the impact
of climate change
• Surface remining operations
• First mining company in South Africa to commission a
large-scale grid-tied solar plant
NATURAL
CAPITAL
Responsible
and sustainable
water use
Moving towards zero use of
potable water
• 3ML water retreatment plant at Evander Mines complex
14
15
PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
INVESTMENT CASE continued
AISC (US$/oz)
The Group’s AISC of US$1,327/oz is below the peer group average of US$1,330/oz.
AISC (US$/oz)
Read more on page 57.
PRODUCTION PROFILE (oz)
We aim to steadily increase our production profile with a pipeline of organic and expansionary projects.
Production profile (oz)
Read more on pages 57 and 82.
3,000
2,500
2,000
1,500
1,000
500
0
Average US$1,330/oz
2
9
8
8
2
9
9
5
9
6
8
0
,
1
5
0
1
,
1
8
3
1
,
1
8
3
1
,
1
2
5
1
,
1
2
4
2
,
1
1
7
2
,
1
4
9
2
,
1
0
1
3
,
1
7
2
3
,
1
6
4
3
,
1
3
8
3
,
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9
9
3
,
1
9
4
4
,
1
8
9
4
,
1
8
5
5
,
1
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8
5
,
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2
8
7
,
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4
,
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l
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t
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4
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n
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r
a
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l
3
d
o
g
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a
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r
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b
g
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i
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i
t
n
a
h
s
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d
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o
g
n
A
l
l
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e
t
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t
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-
e
y
n
a
b
S
i
Global producers Pan African's operations Entities with operations in South Africa
1 All of Pan African’s operations excluding Sheba Mine and Consort Mine.
2 South African operations.
3 AISC for the respective company at 31 December 2022.
4 AISC for the respective company at 30 June 2023.
Source: Individual company websites and presentations.
RETURN ON SHAREHOLDERS’ FUNDS (%)
Our return on shareholders’ funds comfortably exceeds the peer group average.
Return on shareholders’ funds1 (%)
Read more on page 81.
28.4
26.6
25.1
22.0
21.9
20.6
40
30
20
10
0
-10
-20
-30
15.0
13.0
12.7
9.4
7.7
3.2
1.4
Average 8.9%
(0.5)
(1.2)
(1.5)
(2.3)
(7.8)
l
6
d
o
G
D
R
D
6
n
a
c
i
r
f
A
n
a
P
6
y
n
o
m
r
a
H
i
5
n
m
a
t
n
e
C
i
i
6
g
n
n
M
s
u
e
s
r
e
P
l
5
d
o
G
o
n
a
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G
5
s
e
c
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u
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a
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f
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W
5
r
e
t
a
w
l
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S
-
e
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a
b
S
i
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i
5
s
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e
F
d
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l
5
k
c
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l
5
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2
B
5
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s
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g
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l
l
l
5
d
o
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s
o
m
a
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l
i
5
g
n
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M
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r
u
o
v
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n
E
5
t
n
o
m
w
e
N
l
5
d
o
G
a
t
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a
h
S
l
5
d
o
g
m
a
I
5 The respective companies have a 31 December 2022 financial year-end.
6 The respective companies have a 30 June 2023 financial year-end.
As calculated, using the most recent calculated annual financial statements of the respective companies.
(24.3)
5
d
r
i
b
g
n
m
m
u
H
i
i
i
5
g
n
n
M
e
t
u
o
s
e
R
l
160,444
172,442
179,457
201,777
205,688
190,000
175,209
250,000
200,000
150,000
100,000
50,000
0
2018
2019
2020
2021
2022
2023
20247
7 2024 production guidance is expected to be between 178,000oz and 190,000oz.
CAPITAL EXPENDITURE (US$ million)
We continue to reinvest in our mines to ensure sustainability and to generate the requisite returns. We strive to balance reinvestment with
other capital allocation priorities.
Capital expenditure (US$ million)
Read more on page 58.
155.2
113.0
82.8
56.6
41.1
49.1
128.4
160
140
120
100
80
60
40
20
0
2018
2019
2020
2021
2022
2023
2024
8 Forecast capital expenditure converted at an exchange rate of US$/ZAR:18.50.
SAFETY PERFORMANCE (per million man hours)
Safety performance
Read more on page 57.
(per million man hours)
1.2
1.0
0.8
0.6
0.4
0.2
0
1.08
1.02
0.88
0.80 0.75
0.51
0.90
0.63
0.81
0.71
0.35
0.05
–
2018
0.02
–
0.03
–
0.08
0.04
0.02
–
2019
2020
2021
20229
0.06
0
–
–
20239
Pan African RIFR10 Industry RIFR Pan African FIFR11 Industry FIFR
9 2023 industry rates were not available at the time of this report.
10 Reportable injury frequency rate (RIFR) per million man hours.
11 Fatal injury frequency rate (FIFR) per million man hours.
16
17
PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR
STRATEGY
INTEGRATED THINKING
Our unique purpose is clearly articulated. It is embraced
by our board, management, employees, customers,
suppliers and local communities. We all work together
towards the Group’s long-term sustainability.
Our strategy is to safely and efficiently extract value from our mineral deposits
while prioritising the long-term sustainability of our business. We leverage our
combined knowledge and skills base to approach mining in an entrepreneurial
manner, generating compelling returns for our stakeholders.
Incorporating the six capitals, defined on page 12, in the execution
of our strategy and business activities, discussed on pages 8
and 9, is essential to achieving our strategic objectives. Annually,
we consider our strategic initiatives to ensure they remain aligned
with our purpose, vision and commitment to sustainable value
creation, thereby allowing us to effectively utilise our resources to
deliver value to all our stakeholders.
Our strategic initiatives are designed to align with each of the
six capitals, enabling us to meet our objectives while creating
sustainable value for our stakeholders. The trade-offs between
the capitals are thoughtfully considered to create and preserve
sustainable stakeholder value. By adopting this approach, we
ensure that our strategic initiatives holistically consider how value is
created across all aspects of our operations while safeguarding the
environment and prioritising the well-being of our people.
F I N A N CIAL CAPITAL
L
A
NSHIP C A PIT
B I L I T A T E
A
H
E
R
EXPLO
R
E
OUR
PURPOSE
E
IS
T
E
N
O
M
OUR
VISION
OUR
VALUES
ATIO
L
E
D R
N
L A
A
I
C
O
S
N
A
T
U
R
A
L
R
E
F
I
C
N
A
E
P
I
T
A
L
OUR
SUSTAINABILITY
COMMITMENT
PROCES S
HUMAN CAP I TA L
M
A
N
U
F
A
C
T
U
R
E
D
C
A
P
I
T
A
L
D
E
V
E
L
O
P
L
A
PIT
A
L C
A
U
T
IN TELLEC
MINE
The reefs running through our
operations are rich in minerals
Given our strategic pillars, defined on page 5, we identify
material matters that influence our ability to create value in the
short, medium and long term; manage and assess risks and
opportunities; understand and address key stakeholder
concerns and execute value-creating growth projects.
MATERIAL MATTERS
Execution
Growth
Cost
Health, safety and
security
Talent and skills
Unemployment and
social responsibility
Electricity
Beyond compliance
Geology
Tailings management
Innovation and
opportunity
Biodiversity and
decarbonisation
Our material matters are defined on pages 26 and 27.
RISKS AND OPPORTUNITIES
01
02
03
04
05
Constrained electricity
Social instability
Operational execution
Safety
Inflation
06
07
08
09
10
Geological variability
Ageing mines
Macroeconomic volatility
Skills
Capital allocation
Our risks and opportunities are described on pages 28 to 35.
OPERATING ENVIRONMENT
Our operating environment has a material impact on our strategy
and business activities.
Gold price
Crime and corruption
US$/ZAR exchange rate
Geopolitical tension
South African economy
Activism, special interest groups
and regulatory uncertainty
Refer to pages 46 to 49.
We are committed to the highest standards of governance, ethics and integrity.
18
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR STRATEGIC OBJECTIVES
AND INITIATIVES
Short-term focus (one year)
Medium-term focus (two to three years)
Long-term focus (three years or more)
Integrated thinking is essential to delivering our strategy, managing our risks and
identifying opportunities. It informs our strategic initiatives, which are approved
annually by the board.
INTEGRATED THINKING
Management reviews and updates the Group’s
strategic objectives based on insights gained from the
integrated planning process.
FINANCIAL
CAPITAL
MANUFACTURED
CAPITAL
INTELLECTUAL
CAPITAL
HUMAN
CAPITAL
SOCIAL AND RELATIONSHIP
CAPITAL
NATURAL
CAPITAL
I
C
G
E
T
A
R
T
S
I
S
E
V
T
C
E
J
B
O
Ensure adequate, competitively
priced and flexible financial
resources for the funding of
our operations and disciplined
capital allocation for sustainable
long-term value creation
Unlock the full potential of our
Mineral Resources and Mineral
Reserves through sustainable
extraction and processing, while
embracing renewable energy, to
pave the way for a responsible
and prosperous mining future
Optimise the use of technology
and harness the expertise of our
teams to consistently deliver
safe, reliable, efficient and
responsible mining operations
Further strengthen the Group’s
capital structure and funding
flexibility
Successfully execute capital
projects to sustain and increase
future gold production
Optimise the Group’s existing
operations to achieve their
targeted operational objectives
I
S
E
V
T
A
T
N
I
I
I
I
C
G
E
T
A
R
T
S
Ensure adequate liquidity for
operational requirements and debt
redemptions
Ensure appropriate medium-
term funding for organic growth,
exploration and acquisitive
opportunities
Innovative funding solutions
to raise capital and manage
financial risk
Prioritise sustainable returns to
shareholders
Successfully execute operational
restructuring programmes and
other initiatives to sustain and
increase the production run rate
Achieve production guidance
of 195,000oz to 205,000oz
per annum
Diversify the Group’s solar energy
sources by entering into a 40MW
power purchase agreement with
an independent power producer
Reduce AISC at all operations
in real terms, through optimisation
and cost-reduction initiatives,
as well as increased ounce
production
Use technology to improve
mine production, efficiency,
safety and security
Evaluate organic and
acquisitive growth opportunities
and exploration projects
Investigate potential exploration
and mining opportunities
outside South Africa that meet
the Group’s stringent investment
criteria
Attract, cultivate and retain
exceptional talent while fostering
a culture of safety, respect and
continuous learning
Engage stakeholders to build
positive relationships, maintain our
social licence to operate and create
sustainable value
Manage our operations with
climate-conscious practices
that preserve and protect
natural resources and promote
sustainability
Work towards zero fatalities and
an annual improvement in the total
recordable injury frequency rate
(TRIFR) to 3.86%
Rehabilitate 41% of MTR’s surface
area by 2030, while concurrently
conducting remining operations
Commence construction of the
8.75MW solar plant at Barberton
Mines
Develop employee skills and
introduce retention programmes for
scarce skills
Curtail illegal mining and property
theft through cooperation between all
stakeholders
Commission the water retreatment
plant at Evander Mines
Maintain an entrepreneurial and
performance-driven culture
Hand over phase 3 of the Sheba
(formerly Kaapvallei) and Ngwenya
Primary Schools in Barberton to the
Department of Basic Education
Operate TSFs in line with the Global
Industry Standard on Tailings
Management (GISTM) as far as
reasonably practicable
Address the gaps identified in the
2022 PwC ESG readiness review
report, publish the Group’s maiden
TCFD report in 2023 and obtain
assurance on selected ESG key
performance indicators (KPIs)
Expand Evander Mines’ solar plant
by 12MW
Construct a 10MW solar plant at the
MTR project
Progress the implementation of
TSF audit recommendations and
advance compliance with the GISTM
as far as reasonably practicable
20
21
PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR BUSINESS
MODEL
Our business model utilises our inputs in a balanced manner to achieve the
desired outputs and outcomes through sustainable trade-offs.
Performance
Positive increase
Negative increase
Positive decrease
Negative decrease
Unchanged
INTEGRATED THINKING
We recognise the need to make trade-offs in the use
of our capitals in order to create and preserve value in
the short, medium and long term. This experience has
provided us with a competitive advantage.
INPUTS
OUTCOMES
OUTPUTS
Our capital resources
2023
2022 Trade-offs made
What we want
to achieve
Stakeholders
affected
Value created,
preserved or eroded
2023
2022 %Δ
Shareholders’ equity
US$294.6 million
US$294.6 million
• While we have no control over the
• Achieve production
• Providers of capital
Revenue
US$321.6 million
US$376.4 million
(14.6)
FINANCIAL
CAPITAL
Available debt facilities
US$49.9 million
US$42.4 million
US$ gold price or US$/ZAR
exchange rate, we mitigate
potential adverse impacts through
disciplined financial capital
management, strict cost control
and hedging strategies
Mineral Resources
40.50Moz gold
38.65Moz gold • Investment in our mining assets
ensures long-term sustainability
Mineral Reserves
12.81Moz gold
11.31Moz gold
• Balancing organic growth and
MANUFACTURED
CAPITAL
Investment in infrastructure US$112.7 million
US$82.7 million
Production costs
before depreciation and
amortisation
US$198.8 million
US$226.4 million
INTELLECTUAL
CAPITAL
Mining and prospecting rights
Sudanese exploration licences
Key personnel with requisite skills
Management and board expertise
value-enhancing acquisitions to
increase our production profile
• Investing in technology and
efficiency-improving processes
• Growing tailings and processing
expertise
Expansion and integration of technologies at our operations
Increasing our investor outreach to new markets
Sudanese gold assay laboratory
HUMAN
CAPITAL
Employees and contractors
Women permanently
employed
Percentage of women
in mining
Skills development
and training
6,857
406
16.1
5,118
331
• Tailings retreatment lends itself
to automation, is less labour-
intensive and inherently safer
• Employee earnings supplement
the local community’s income
14.7
• Multi-year wage agreements
US$2.2 million
US$0.8 million
concluded at Barberton Mines,
contributing to employee relations
stability and cost containment
targets and optimise
performance through
disciplined capital
allocation
• Manage financial risk
• Meet stakeholder
expectations
• Enhanced
shareholder returns
• Excellent safety
performance
• Cost-effectiveness
• Progress exploration
and mining projects
• Rehabilitate land
• Increase Mineral
Reserves
• Competitive
advantage
portfolio
• Continued Sudanese
gold exploration
• Improved valuation
and wider
shareholder base
• Safe working
environment
• Employment
opportunities created
• Customers
• Suppliers
• Governments and
regulatory bodies
Profit for the period
US$60.7 million
US$75.0 million
(19.1)
Net cash from operating activities US$100.1 million
US$110.0 million
(9.0)
Net debt
US$22.0 million
US$13.0 million
69.2
• Providers of capital
Gold produced
175,209oz
205,688oz
(14.8)
• Customers
• Suppliers
• Employees and
unions
• Communities
AISC
US$1,327/oz
US$1,284/oz
3.3
• Employees and
Maximised resource utilisation
unions
• Efficient extraction of
gold from mined ore
• Providers of capital
• Collaboration
• Increased production
partners
Increased annual production ounces to improve our profile and attract larger
fund managers
Effective and efficient technology application at Elikhulu
Diversified the Group’s Mineral Resources base outside of South Africa in a
value-enhancing manner
Improved trading liquidity
• Employees and
Fatalities
unions
• Providers of capital
TRIFR (per million man hours)
1
7.96
None
8.95
(11.1)
• Governments and
regulatory bodies
Employee remuneration
US$60.4 million
US$65.1 million
(7.2)
22
23
PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR BUSINESS MODEL continued
Performance
Positive increase
Negative increase
Positive decrease
Negative decrease
Unchanged
INPUTS
OUTCOMES
OUTPUTS
Our capital resources
2023
2022 Trade-offs made
What we want
to achieve
Stakeholders
affected
Value created,
preserved or eroded
US$1.7 million
US$1.9 million
• Investing in socio-economic
• Build trust with local
• Suppliers
CSI, local economic development (LED)
projects and bursaries
SOCIAL AND
RELATIONSHIP
CAPITAL
Enterprise development programmes
in place at Barberton Mines and
Evander Mines
Stakeholder engagement and
relationship policy statement to guide
and enable constructive stakeholder
engagement
development secures our social
licence to operate and contributes
to stable long-term operations
• Investment in projects to establish
a sustainable local economy not
reliant on mining
• Stakeholder engagement forums in
place in communities to address
issues before they escalate
NATURAL
CAPITAL
Energy consumption
1,447.17TJ
1,405.45TJ
• Our environmental footprint
reduces as surface tailings
remining operations are expanded
Water consumption
9,178ML
8,232ML
• Rehabilitation programmes
expand local supplier development
and create job opportunities
Tonnes milled and processed
15,259,384t
15,352,808t
Electricity generated by solar plants at
our operations
23,770MWh
–
We take utmost care to
preserve the biodiversity of the
Barberton Makhonjwa Mountains
• Employees and
unions
• Communities
• Governments and
regulatory bodies
communities
• Secure social
licence to operate
through SLP
and ‘beyond
compliance’
initiatives
• New employment
opportunities
created to sustain
communities
• The environment
• Communities
• Governments and
regulatory bodies
• Providers of capital
• Reduce
environmental
footprint and carbon
emissions
• Responsible
extraction of ore and
rehabilitation
• Land for housing
and agriculture to
sustain communities
after surface
remining
Government taxes paid
excluding VAT
Percentage of mining goods
procured from suppliers
controlled by historically
disadvantaged persons (HDPs)
Percentage of services procured
from suppliers controlled by
HDPs
2023
2022 %Δ
US$21.9 million
US$24.2 million
(9.5)
37.6%
34.8%
2.8
40.5%
29.0%
11.5
Preferential procurement
US$66.8 million
US$55.2 million
(21.0)
Socio-economic development
of host communities
Refer to page 124 for more
information
Carbon emission intensity per
ounce produced
1.92tCO2 e/oz Au
1.68tCO2 e/oz Au
14.3
Independent rehabilitation
closure cost assessments
conducted at all operations
Reduced TSF footprint
through the combined Elikhulu
and Kinross TSFs and the
rehabilitation of the Leslie/
Bracken and Winkelhaak TSF
footprints
24
25
PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR MATERIAL
MATTERS
INTEGRATED THINKING
We clearly identify our material issues and determine
their effect on our business model and our ability to
execute our strategy.
Our material matters are factors that have the potential to substantially impact our
performance and ability to create, preserve or erode value in the short, medium
and long term. Identifying these material matters constitutes a vital part of our
strategic planning and integrated reporting activities.
HOW WE DEFINE OUR MATERIAL MATTERS
Review and analyse
our business
model, operating
environment and
risks and
opportunities
Engage with our
key stakeholders
through various
platforms
Brainstorm
with executive
and senior
management
in a dedicated,
externally
facilitated
material matters
workshop
Collate, analyse
and categorise
information to
identify and
prioritise those
matters that have
the potential to
materially impact
our business
Present the
identified
material matters
annually to the
board for review
Identified material
matters are
addressed and,
to the extent
possible, reported
on with the aim of
providing all our
stakeholders with
a balanced view of
our business
Our material matters are integrated into our strategy and inform our strategic objectives (refer to pages 20 and 21).
Performance against the strategic objectives is tracked through clearly identified KPIs set by the remuneration committee (Remco) and
monitored by the board.
OPERATING ENVIRONMENT
The operating environment presents factors which have the potential to materially impact our performance or future value. These items are
almost entirely of an external nature and are therefore not included in our list of material matters.
Factor
Description
Gold price
The price of gold in US$ has a significant impact on our overall profitability and cash flows
FINANCIAL
CAPITAL
US$/ZAR exchange rate
South African economy
As the rand is our functional currency, US$/ZAR exchange rate fluctuations have a direct
impact on our revenue and profitability. The fragility of South Africa's post-pandemic
economic recovery has adversely affected the valuation of the rand relative to the major
currencies and we monitor it closely to manage our financial risks
The current state of the economy is characterised by poor employment figures,
worsening consumer sentiment, rising borrowing costs, a depreciating currency and
other concerns over diplomatic relations, compounded by the electricity crisis and
challenges faced by Eskom
Crime and corruption
Illegal mining, vandalism and corruption have resulted in extensive measures to protect
the Group’s assets, resulting in increased security-related operational costs
SOCIAL AND
RELATIONSHIP
CAPITAL
Geopolitical tension
The ongoing conflict in Ukraine has resulted in volatility in global commodity prices,
supply chain disruptions and increased interest rates, which have had an adverse impact
on our production and profitability
Activism, special interest
groups and regulatory
uncertainty
Gold holds a distinct position in the global economy, safeguarding financial security
while driving advancements in various sectors. Responsible gold mining fosters
socio-economic development, creating jobs, generating tax revenues and benefiting
local communities, while the industry's commitment to decarbonisation aligns with
sustainability goals
NATURAL
CAPITAL
For an in-depth discussion on our operating environment, refer to pages 46 to 49.
Level of influence
High
Medium
Low
Short-term focus (one year)
Medium-term focus (two to three years)
Long-term focus (three years or more)
MATERIAL MATTERS
Primary capital affected
Other Material matters
FINANCIAL
CAPITAL
MANUFACTURED
CAPITAL
INTELLECTUAL
CAPITAL
HUMAN
CAPITAL
SOCIAL AND
RELATIONSHIP
CAPITAL
NATURAL
CAPITAL
Execution
Our profitability is influenced by several factors, including our production levels
and efficiency in extracting high-grade gold through cost containment, productivity
improvements and operational resilience
Growth
Our portfolio of growth projects and expansion opportunities has been rigorously
evaluated and meets our strict investment criteria, ensuring that we can deliver
long-term value to our shareholders
Cost
We prioritise sustainable profitability, growth and expansion through disciplined cost
and cash flow management, strategic capital allocation and prudent capital spending
Electricity
The availability and cost of electricity are critical input factors in achieving our
production targets and maintaining profitability. We strive to continuously improve
the efficient use of water and electricity at our operations
Geology
We continuously explore for new mineral deposits and down-dip extents of our
known deposits, while improving underground mining efficiency and flexibility as well
as further optimising our tailings operations
Innovation and opportunity
Our entrepreneurial and performance-driven culture fosters innovation, while
diversifying our portfolio and investing in sustainable solutions enhance long-term
profitability and contribute to a sustainable future
Health, safety and security
We prioritise employee health and safety and maintain stringent physical and
cybersecurity measures to ensure responsible and sustainable operations. This
creates a safe working environment that fosters employee trust and confidence
Talent and skills
We prioritise the development and retention of our people through transparent
and constructive relationships with our employees and unions to address diversity,
inclusivity and the challenge of an ageing workforce
Unemployment and social responsibility
We manage community expectations and mitigate social unrest through
development projects and employment opportunities
Beyond compliance
We adopt a ‘beyond compliance’ approach, ensuring adherence to regulatory
requirements while actively seeking opportunities to exceed these requirements for
the benefit of our stakeholders
Tailings management
We are committed to responsible tailings management, including the rehabilitation
and recycling of waste products, to minimise the impact on the environment,
mitigate risks, ensure regulatory compliance and uphold stakeholder trust
Biodiversity and decarbonisation
We uphold environmental preservation as a top priority and actively participate in
programmes aimed at promoting biodiversity and supporting decarbonisation efforts.
This commitment contributes to stakeholder value by minimising environmental
impacts, mitigating regulatory risks and fostering positive community relationships
26
27
For a discussion of the key outcomes related to each of these material matters, refer to pages 96 to 128.
PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR PRIMARY
RISKS AND
OPPORTUNITIES
INTEGRATED THINKING
The Group has a robust cross-functional risk
management process. Management identifies future
opportunities during the strategic planning process
and assesses these opportunities in the context of the
associated strategic risks.
Risk management is integrated into Pan African’s culture and business activities.
RISK MANAGEMENT PROCESS
Our risk management process is fundamental to managing the uncertainties we face. Effective risk management enables us to deliver on our
strategic objectives while protecting stakeholder value and promoting our long-term sustainability and is based on a structured and systematic
process that takes into account risks that arise from strategic and operational matters as well as external events outside of our control.
RISKS AND OPPORTUNITIES ARE MANAGED ON FOUR TIERS
Board
The board oversees the Group’s
risk management process and
is guided by its committees,
own experience and knowledge
of the business, internal risk
assessments and reviews of
risk reports. The tone, risk
management culture and risk
appetite are set and monitored
by the board.
Each year, the board reviews
the Group’s risk appetite for
ongoing relevance in relation to
the Group’s strategy. The board
monitors the effectiveness of
the Group’s risk management
process and the implementation
of risk-mitigating strategies.
Executive management
Management at operational
level – implement and monitor
day-to-day compliance with
the Group’s risk management
process. Risk consciousness
and a culture of safety are
embedded in day-to-day
operations.
Employees
We continually reinforce the
message that managing risk is
the responsibility of everyone
at Pan African.
Board committees
The audit and risk committee
supports the board and is
complemented by the safety,
health, environment, quality and
community (SHEQC) committee,
the social and ethics committee
and Remco which oversee
activities and provide feedback
to the board.
The Group’s risks are reviewed
quarterly by the audit and risk
committee.
Board of directors
Audit and risk committee
Long-term
value
protection
Establish the
context
All steps in the
risk management
process are monitored
and reviewed to
ensure continuous
improvement
Mitigate,
monitor and
review risks
Risk
management
process
Identify and
record risks
Communicate
and consult
with internal and
external stakeholders
at each stage of the
risk management
process
Evaluate
risks
Analyse
risks
Operations
Residual risk
Capitals
High
Medium to high
Low to medium
Financial capital
Manufactured capital
Medium
Low
Intellectual capital
Human capital
Social and relationship capital
Natural capital
Internal
External
OUR TOP 10 STRATEGIC RISKS
We identified the top 10 risks that pose a potential threat to the execution of our business strategy and assessed these risks based on the
likelihood of their occurrence, velocity and potential impact. Through mitigating actions and controls, we endeavour to reduce inherent risks
to an acceptable level of residual risk. These risks have also been benchmarked against risks identified by our mining peers to ascertain
whether these risks are industry-specific.
RESIDUAL RISK RANKING
2021
2022
2023
Key risks
Internal
External
COVID-19
1
2
3
4
5
6
7
8
9
Constrained electricity
Social instability
Operational execution
Safety
Inflation
Geological variability
Ageing mines
Macroeconomic volatility
Skills
Regulatory changes
and complexity
Climate change
10
Capital allocation
10
5
8
3
2
1
4
7
9
6
Likelihood
Pan African’s management follows a collective
risk assessment approach. The assessment of
the identified risks and the effectiveness of the
risk-mitigating controls are, to a large extent,
subjective.
28
29
1234PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR PRIMARY RISKS AND OPPORTUNITIES continued
THE IMPACT OF RISKS ON OUR STRATEGY
Each of the risks described in the following pages may have an impact on the Group’s material matters which form an integral part of the
Group’s strategic planning. Refer to pages 18 to 21 for more on the Group’s strategy, strategic objectives and initiatives.
For each of the top 10 risks described, we discuss the mitigating actions, the opportunities and the outlook on the following pages. We also
link these risks to our material matters and strategic objectives, as detailed on pages 96 to 128. Refer to our key stakeholder relationships
section on pages 36 to 45 for an understanding of the stakeholders affected.
Residual risk
Capitals
Predicted trend
High
Medium to high
Low to medium
Financial capital
Manufactured capital
Increase
Medium
Low
Intellectual capital
Human capital
Social and relationship capital
Natural capital
Decrease
Unchanged
01
CONSTRAINED ELECTRICITY
Adverse production impact, safety concerns and increased operating costs
03
OPERATIONAL EXECUTION
Not achieving guided production and cost targets
Material matters linked
Cause
Potential impact
Material matters linked
Cause
Potential impact
• Execution
• Growth
• Cost
• Innovation and
opportunity
• Electricity
• Biodiversity and
decarbonisation
Governance
responsibility
• Board
• SHEQC committee
• Social and ethics
committee
• Executive committee
(Exco)
• Constrained electricity supply, power surges and power
• Threat to the health and safety of employees and
curtailment
contractors
• Unstable electricity supply and increasing electricity
• Damage to electrical equipment and infrastructure
rates
• Production and operational interruptions
• Increase in the unit cost of production
Mitigating actions taken
• Migration to renewable energy
Opportunities
• Invest in renewable energy
• Strengthen our relationship with Eskom (South African
• Reduce reliance on Eskom
state-owned utility)
• Flexible scheduling of operations
• Implemented initiatives to improve energy efficiency
• Improve energy efficiency
• Initiatives to reduce the cost of electricity
• Initiatives to reduce carbon emissions
Outlook
• Constrained electricity supply by Eskom is expected to
continue for the foreseeable future
• Increased investment in renewable energy infrastructure
is expected to alleviate electricity supply constraints
Capitals impacted
Short- to medium-term
trend
02
SOCIAL INSTABILITY
Heightened social instability, political tension and criminality
Material matters linked
Cause
Potential impact
• Execution
• Cost
• Low economic growth
• Production and operational interruptions
• Poor socio-economic conditions
• Increased security costs
• Health, safety and
• 2024 South African general election
• Potential financial losses and damage to assets
security
• Unemployment and
social responsibility
• Innovation and
opportunity
• Beyond compliance
Governance
responsibility
• Board
• SHEQC committee
• Social and ethics
committee
• Exco
• Poverty, unemployment and inequality
• Reputational damage
• Social discord and unrest
• Criminal mining activities
Mitigating actions taken
Opportunities
• Set up stakeholder engagement forums
• Enhance our relationships with host communities
• Community liaison managers
and related stakeholders
• SLP, CSI and ‘beyond compliance’ ESG initiatives
• Job creation
• Focus on job creation, health, education, poverty
alleviation, food security and women and youth
development
• Technology-driven crime prevention measures
• Focused security operations and initiatives
• Cooperation with law enforcement
Outlook
• Geopolitical risk expected to increase interest rates,
inflation, commodity price volatility and unemployment
• Poor socio-economic conditions are expected to
worsen
• Constrained electricity supply expected to impact
business and investor confidence
• Create economic opportunities for host communities
Capitals impacted
Short- to medium-term
trend
• Execution
• Growth
• Cost
• Above-inflationary increases in input costs
• These adversely affect:
• Deeper orebodies and longer travel times reduce
– operational and financial results
mining efficiencies
• Innovation and
opportunity
• Logistical bottlenecks and infrastructure constraints
• Depletion of high-grade reserves through mining
• Health, safety and
• Inadequate infrastructure
– shareholder returns
– investor confidence
– long-term business sustainability
• Increased unit cost of production
security
• Unplanned events such as safety-related incidents or
• Possible mine closure
• Talent and skills
regulatory stoppages
• Not meeting shareholder expectations
Governance
responsibility
• Board
• Exco
Mitigating actions taken
Opportunities
• Detailed review of Barberton Mines’ underground
operations
• Restructured Fairview Mine and Sheba Mine into
continuous shift operations
• Converted Consort Mine to a contract mining operation
• Implemented cost savings and production improvement
initiatives
Refer to Barberton Mines’ operational review on page 84
for more information
• Reduce AISC and increase production
• Achieve the Group’s strategic objectives
• Meet investor expectations and increase the
share price
Outlook
Capitals impacted
Short-term trend
• Continued focus on increasing productivity and
mining flexibility while reducing AISC per unit by
implementing optimisation and cost-reducing initiatives
and maintaining strict operating and capital cost control
• The mine planning department at Barberton Mines has
implemented state-of-the-art planning and scheduling
systems
• Barberton Mines’ survey and geology department has
been equipped with cutting-edge computer-assisted
drawing and three-dimensional (3D) systems improving
their geological modelling capabilities
30
31
PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR PRIMARY RISKS AND OPPORTUNITIES continued
04
SAFETY
Increase in safety incidents and accidents
Material matters linked
Cause
• Execution
• Cost
• Inherent safety risks in mining
• Fall of ground incidents
Potential impact
• Loss of life
• Increase in safety incidents and accidents
• Health, safety and
• Negligent employee actions
• Human suffering
security
• Talent and skills
Governance
responsibility
• Board
• Explosion or fire incidents
• Production and operational interruptions
• Breakdowns, failures or incorrect use of mining
• Reputational damage
infrastructure or equipment
• Shortage of adequate and appropriate skills
Mitigating actions taken
Opportunities
• SHEQC committee
• Targeted safety campaigns and incentives
• Provide a safe working environment for our
employees and contractors
• Incentivise safe behaviour and reward safety
achievements
• Exco
– Fatality prevention
– Road safety and road accident prevention
– Encouraging employees to avoid taking shortcuts
– Prevention of fall of ground incidents, alcohol and
substance abuse and fatigue
• Independent compliance reviews by regulators and
safety experts
• Compliance with operational safety standards
• Safety audits
Outlook
• Continue to enhance safety through the combined
efforts of our people in pursuit of our ultimate goal of
zero harm
Residual risk
Capitals
Predicted trend
High
Medium to high
Low to medium
Financial capital
Manufactured capital
Increase
Medium
Low
Intellectual capital
Human capital
Social and relationship capital
Natural capital
Decrease
Unchanged
05
INFLATION
Increasing mining costs and capital expenditure due to inflation
Material matters linked
Cause
Potential impact
• Execution
• Growth
• Cost
• Innovation and
opportunity
Governance
responsibility
• Board
• Audit and risk
committee
• Exco
• Above-inflationary price increases
• Increased interest rates may have a negative impact
• Supply chain disruptions
• Geopolitical risks and uncertainty
• Commodity price volatility
on the cost of capital funding
• Increased AISC
• Reduced profitability, cash flows and shareholder
returns
• Not meeting shareholder expectations
Mitigating actions taken
• Monthly operational and cost reviews
Opportunity
• Reduce AISC
• Optimisation improvement and cost-reducing initiatives
• Migration to renewable energy
• Provide the market with production and cost guidance
• Expansion of the Group’s lower-cost tailings retreatment
operations
Outlook
• Aim to reduce AISC to US$1,350/oz in 2024
assuming an exchange rate of US$/ZAR:18.50
Capitals impacted
Short- to medium-term
trend
Capitals impacted
Short- to medium-term
trend
06
GEOLOGICAL VARIABILITY
Inherent geological variability in Mineral Resources and Mineral Reserves
Material matters linked
Cause
Potential impact
Mining industry safety standards
Safety in the mining industry is of the utmost importance. It saves lives and has the potential to prevent thousands of work-related
injuries every year.
The safety issues facing the mining industry are vast and include:
• exposure to dangerous chemicals
• exposure to dust or airborne hazards
•
•
injury from heavy machinery and ground or shaft failure
injury from explosives, gas or fire
• hearing loss resulting from improper use of ear protection
• heat and ultraviolet exposure.
Safety in the South African mining industry is regulated by the Mine Health and Safety Act, 29 of 1996. The Mine Health and Safety
Council is a national public entity established in terms of the Act. It has representation from government, employers and labour and
operates under the chairmanship of the Chief Inspector of Mines. The MHSC is accountable to Parliament and advises the Minister
of Mineral Resources and Energy on occupational health and safety legislation and research outcomes focused on improving and
promoting occupational health and safety in South African mines to promote a culture of health and safety in the mining industry.
• Execution
• Cost
• Geology
• Innovation and
opportunity
Governance
responsibility
• Board
• Audit and risk
committee
• Exco
• Inherent risk in the estimation of Mineral Resources and
• Not achieving guided production in the short to
Mineral Reserves
• Geological complexity of orebodies in the hydrothermal
lode gold deposits of the Barberton Greenstone Belt
medium term may adversely affect:
– operational and financial results
– shareholder returns
– investor confidence
Mitigating actions taken
Opportunity
• Mine planning and forecast production supported
by modifying factors achieved over the preceding
three years
• Experience in orebody delineation provides confidence
in our predictive ability
• Independent exploration Mineral Resources and Mineral
Reserves audit conducted in the past two years
• The mine planning department at Barberton Mines has
implemented state-of-the-art planning and scheduling
systems
• Barberton Mines’ survey and geology department has
been equipped with cutting edge computer assisted
drawing and 3D systems improving their geological
modelling capabilities
Outlook
• Geological complexity inherently holds opportunities in
the project pipeline for exploration and delineation of
additional ore deposits
• Maintain a pipeline of Mineral Resources and Mineral
Reserves to ensure sustainable future production
Capitals impacted
Short- to medium-term
trend
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
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AND STRATEGY
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REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR PRIMARY RISKS AND OPPORTUNITIES continued
07
AGEING MINES
Infrastructure dependency and constraints due to the ageing nature of infrastructure
Material matters linked
Cause
• Breakdowns or failures in mining infrastructure
Potential impact
• Loss of life
• Execution
• Growth
• Cost
• Health, safety and
security
• Innovation and
opportunity
Governance
responsibility
• Board
• Tailings dam failure, fire, explosions or flooding
• Increase in safety incidents and accidents
• Production and operational interruptions
• Costly and time-consuming repairs
• Damage to property, surrounding communities and
the environment
• Reputational damage
• Increased insurance premiums and/or limited
appetite from a reducing number of insurers
prepared to underwrite the Group’s risk exposure
• SHEQC committee
Mitigating actions taken
Opportunities
• Audit and risk
committee
• Exco
• Insurance for all underground operations, with specific
• Improve safety performance and productivity
exclusions
• Planned and proactive maintenance programmes
• Ongoing capital expenditure and prioritisation of
maintenance
• Specialist third-party contractors appointed to design,
build and operate TSFs in cooperation with the Group’s
executive management
• The Group’s TSF sites are overseen by an appointed
competent person
• Implementing controls to ensure ongoing progression
to compliance with the GISTM as far as reasonably
practicable
• Independently audited procedures to prevent fires and
explosions
Outlook
• Prioritise capital expenditure and enhance the use of
technology
• Reduce costs
• Increase flexibility
• Reduce unplanned stoppages
Capitals impacted
Medium-term trend
08
MACROECONOMIC VOLATILITY
Specifically the gold price and currency fluctuations
Material matters linked
• Execution
• Growth
• Cost
Cause
• Volatility in commodity prices and exchange rates
• Commodity prices and exchange rates are affected
by macroeconomic factors which are almost entirely
outside of our control
Potential impact
• A decline in the US$ gold price or an appreciation
in the US$/ZAR exchange rate will adversely affect
revenue, cash flow generation, operating margins
and shareholder returns
Governance
responsibility
• Board
• Audit and risk
committee
• Exco
Refer to our operating environment on pages 46 to 49 for
more information
Mitigating actions taken
• Hedging of the US$ gold price and/or the US$/ZAR
exchange rate as governed by the Group’s financial
risk policy
• Monitoring gold market trends
• Cost management and production efficiency
improvement initiatives to reduce unit costs
• Disciplined capital expenditure
• Ensuring sufficient and appropriate funding facilities
Outlook
• The US$/ZAR exchange rate is anticipated to remain
volatile due to global geopolitics, macroeconomic
developments and specific South African challenges
Opportunities
• Protect margins and cash flows
• Ensure adequate liquidity
Capital impacted
Short- to medium-term
trend
Residual risk
Capitals
Predicted trend
High
Medium to high
Low to medium
Financial capital
Manufactured capital
Increase
Medium
Low
Intellectual capital
Human capital
Social and relationship capital
Natural capital
Decrease
Unchanged
09
SKILLS
Shortage of adequate and appropriate skills
Material matters linked
• Execution
• Growth
• Cost
• Innovation and
opportunity
• Health, safety and
security
• Talent and skills
Governance
responsibility
• Board
• Remco
• Exco
Cause
• Loss of key employees
• A shortage of employees with specialised skills
• Ageing staff complement
Mitigating actions taken
• Career progression, succession planning and talent
management
• Focusing on critical operational roles
• Competitive and incentive-focused remuneration
packages to attract and retain sought-after skills
Outlook
• The macroeconomic environment sees many
professionals emigrating from South Africa, prompting
a strong focus on succession planning and identifying,
developing and recruiting for critical roles
10
CAPITAL ALLOCATION
Suboptimal allocation of capital resources
Potential impact
• Impede our ability to meet production targets which
may adversely affect:
– operational and financial results
– shareholder returns
– investor confidence
• Increase in safety incidents and accidents
Opportunity
• Promote, attract, retain and develop our employees
Capitals impacted
Short-term trend
Material matters linked
• Execution
• Growth
• Cost
• Electricity
• Innovation and
opportunity
Governance
responsibility
• Board
• Audit and risk
committee
• Exco
Cause
• Poor capital allocation decisions
Potential impact
• Suboptimal return on capital and value destruction
adversely impact stakeholder value creation and
investor confidence
Mitigating actions taken
• Rigorous investment and capital allocation analysis
• Ensuring that investment decisions have appropriate
Opportunities
• Ensure the continued sustainability of our mines
• Maximise the value of our assets and shareholder
oversight
returns
• Predefined risk-adjusted return parameters which take
into account execution risk
• Monitor ongoing projects to effectively manage
execution risks
Outlook
• Macroeconomic pressures and capital scarcity raise the
importance of ensuring optimal capital allocations
Capitals impacted
Short-term trend
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
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AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR KEY
STAKEHOLDER
RELATIONSHIPS
We recognise the importance
of fostering positive
relationships with our
stakeholders. These individuals,
groups and organisations play
a crucial role in shaping our
business. We are committed to
engaging with our stakeholders
in an open and transparent
manner, taking their views
and concerns into account
as we make decisions, and
strive to create value for all
our stakeholders.
Our business environment is complex and dynamic,
with a wide range of stakeholders who have diverse
and often competing interests. At Pan African,
we believe that constructive engagement and
collaboration are key to building strong relationships
with our stakeholders, and by working together we
create sustainable value and make a positive impact
on the communities and environments in which
we operate.
INTEGRATED THINKING
We value the quality of our relationships with all of
our stakeholders. We also recognise that this directly
impacts our ability to fulfil our purpose.
KEY STAKEHOLDERS
The
environment
Providers
of capital
Governments
and regulatory
bodies
Employees and
unions
Collaboration
partners
Communities
Suppliers
Customers
Our licence to operate depends on the quality of our relationships with our
various stakeholders.
Our stakeholders represent one of our four strategic pillars (refer to page 5).
Authentic engagement at all levels of the Group is essential for shaping our
strategy, managing risks, identifying opportunities and safeguarding
our reputation.
Underground rock support installation
at Evander Mines’ 8 Shaft pillar mining
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR KEY STAKEHOLDER RELATIONSHIPS continued
PROVIDERS OF CAPITAL
Investors, shareholders, fund managers, analysts and financial institutions
Their significance and why we engage
• Consistent and clear communication on the Group’s strategic direction, operational performance, growth prospects and financial information
maintains trust and aligns expectations
Related residual risks
• Constrained electricity
• Social instability
• Operational execution
• Safety
• Inflation
• Geological variability
• Ageing mines
• Macroeconomic volatility
• Skills
• Capital allocation
Material matters linked
Strategic initiatives
• Execution
• Growth
• Cost
• Electricity
• Innovation and opportunity
• Health, safety and security
• Beyond compliance
• Tailings management
• Biodiversity and decarbonisation
• Further strengthen the Group’s capital
structure and funding flexibility
• Ensure adequate liquidity for operational
requirements and debt redemptions
• Ensure appropriate medium-term funding
for organic growth, exploration and
acquisition opportunities
• Innovative funding solutions to raise capital
and manage financial risk
• Prioritise sustainable returns to
shareholders
• Successfully execute capital projects to
sustain and increase future gold production
• Successfully execute operational
restructuring programmes and other
initiatives to sustain and increase the
production run rate
• Reduce AISC at all operations in real
terms, through optimisation and cost-
reduction initiatives as well as increased
ounce production
Key stakeholder concerns during the year
Actions to address stakeholder concerns
• Consistent financial and operational
performance which enable sustainable
shareholder returns
• Executed restructuring and other initiatives to improve and maintain consistent operational
performance. Refer to the operational performance review for more information on the
Group’s operations and optimisation initiatives
• Increasing debt levels
• The Group has raised debt to fund the construction of the MTR project, which is aligned with
a key strategic objective of increasing production capacity and driving profitability
• Improved communication strategy with analysts through regular engagement
• Delivering capital projects on time and
within budget
• Shareholder dilution
• A disciplined approach to capital allocation, prioritising investments that preserve and
enhance stakeholder value and generate attractive shareholder returns while retaining
financial flexibility
• Our established track record in constructing and commissioning tailings retreatment plants,
coupled with our team’s expertise, has enabled us to successfully construct capital projects
of this nature on time and within budget, giving us confidence in our ability to construct
similar projects in the future
• Refer to the chief executive officer’s review for more on the Group’s organic and future
growth projects
Financial capital
Human capital
Social and relationship capital
Natural capital
The strength of our key stakeholder relationships is
determined by the quality of interactions our relationship
managers have with them over the reporting period.
Performance
Positive increase
Negative increase
Positive decrease
Negative decrease
Positive
Stable
Challenging
Unchanged
Outputs and performance
2023
2022
%Δ
Dividend paid to shareholders
US$23.2 million
US$25.0 million
(7.2)
Market capitalisation
US$357.7 million1
US$438.0 million2
(18.3)
Headline earnings per share
Return on shareholders’ funds
Net senior debt
AISC
US 3.15 cents
US 3.93 cents
(19.8)
20.6%
25.9%
(20.5)
US$18.9 million
US$9.3 million
>100
US$1,327/oz
US$1,284/oz
3.3
Outcomes
Revenue
2023
2022
%Δ
US$321.6 million
US$376.4 million
(14.6)
Net cash from operating activities
US$100.1 million
US$110.0 million
(9.0)
Proposed a final dividend of ZAR400.1 million or US$21.2 million at the prevailing exchange rate
• During December 2022, the Group issued its inaugural sustainability-linked bond to the value of US$43.2 million3 to finance growth projects.
This landmark bond issuance not only strengthened the Group’s ESG status but also earned recognition as the Metals and Mining Deal of the
Year at the Bonds, Loans and ESG Capital Markets Africa Awards 2023
• In March 2023, Pan African secured ZAR400 million in a synthetic gold forward sale transaction (US$21.6 million3) as a component of the
funding package for the MTR project’s construction
• In July 2023, a US$70.3 million3 debt funding package for the MTR project construction was secured through a credit-approved term
loan facility
• Sustainability performance and reporting
• Developed an ESG policy and framework
• Published our maiden TCFD report
• The Group aims to generate 40MW of energy from renewable sources by 2027, representing a target of 15% of its total energy consumption
• Pan African was selected as a top-five finalist for the 2022 ESG Producer of the Year Award by Mines and Money in the UK, in recognition of
• Our ESG report now includes key sustainability information independently assured by PwC
the Company’s excellence in ESG
for the first time
1Source: JSE’s Trading and Market Services. Calculated at 30 June 2023 using the quoted price and the closing US$/ZAR exchange rate at that date.
2Source: JSE’s Trading and Market Services. Calculated at 31 December 2022 using the quoted price and the closing US$/ZAR exchange rate at that date.
3Source: Converted at an exchange rate of US$/ZAR:18.50.
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
a
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR KEY STAKEHOLDER RELATIONSHIPS continued
EMPLOYEES AND UNIONS
Employees and unions
Their significance and why we engage
• Strong relationships with employees are fundamental to business sustainability
• To achieve our strategic objectives, we focus on building a strong productive culture and up-skilling our employees
Related residual risks
• Constrained electricity
• Operational execution
• Safety
• Ageing mines
• Skills
Material matters linked
Strategic initiatives
• Execution
• Health, safety and security
• Electricity
• Geology
• Talent and skills
• Innovation and opportunity
• Unemployment and social responsibility
• Work towards zero fatalities and an annual
improvement in the TRIFR to 3.86%
• Develop employee skills and introduce
retention programmes for scarce skills
• Maintain an entrepreneurial and
performance-driven culture
Key stakeholder concerns during the year
Actions to address stakeholder concerns
• Employee safety
• The Group’s safety strategy aims to achieve zero harm by implementing targeted safety
campaigns and programmes that promote safe operational practices with special emphasis
on new employees and continuous reinforcement of safe practices
• The Group has introduced several programmes to address safety performance shortcomings
at its underground operations. These programmes include pre-emptive safety stoppages to
reinforce safety protocols, strengthening the on-site safety teams and conducting a third-
party audit of safety systems at both Barberton Mines and Evander Mines to identify areas
for improvement
• Focused security operations, initiatives and awareness programmes aimed at employees
and communities
Refer to page 32 for the mitigating actions taken to address the Group’s safety risks
Financial capital
Human capital
Social and relationship capital
Natural capital
The strength of our key stakeholder relationships is
determined by the quality of interactions our relationship
managers have with them over the reporting period.
Performance
Positive increase
Negative increase
Positive decrease
Negative decrease
Positive
Stable
Challenging
Unchanged
Outputs and performance
Employee remuneration
2023
2022
%Δ
US$60.4 million
US$65.1 million
(7.2)
Skills and development training
US$2.2 million
US$0.8 million
>100
Employees and contractors
Women permanently employed
Outcomes
Fatalities
Safety initiatives
TRIFR (per million man hours)
Lost-time injury frequency rate (LTIFR) (per million man hours)
RIFR (per million man hours)
6,857
406
2023
1
5,118
34.0
331
22.7
2022
%Δ
None
US$1.4 million
US$1.2 million
16.7
7.96
1.86
0.81
8.95
(11.1)
1.04
78.8
0.35
>100
• Working hours and employee benefits
associated with the reconfiguration of
Fairview and Sheba Mines into continuous
shift operations
• Regular engagement with employees through employee future forums
• Close monitoring of the transition to a continuous shift operating cycle
• Working hours and employee benefits were restructured in close consultation with
employees and unions to ensure a collaborative approach and mutual agreement
Refer to Barberton Mines’ operational performance review on page 84 for more information
• Employees have the opportunity to benefit from increased profitability through production bonuses, which are awarded for their contributions to
increased production levels
• By implementing a continuous shift operating cycle that aligns with the Company’s operating model, production efficiency is enhanced and the
unit cost of gold production lowered
• Diversity and transformation
• The Group aims to foster a culture of action and accountability, teamwork and compassion
• Through its employee share ownership plan, Barberton Mines paid a dividend of US$0.3 million (2022: US$0.1 million) to employees
through its human capital strategy and core values
• Women make up 16.4% (2022: 15.1%) of the permanent employees in the Group
• The percentage of women in mining has increased to 16.1% (2022: 14.7%)
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR KEY STAKEHOLDER RELATIONSHIPS continued
COMMUNITIES
Communities
Their significance and why we engage
• We invest in and support initiatives that benefit our host communities and promote their sustainable development
• Managing the impact of mining is integral to maintaining our social licence to operate
Related residual risk
• Social instability
Material matters linked
Strategic initiatives
• Unemployment and social responsibility
• Hand over phase 3 of the Sheba and
• Tailings management
• Biodiversity and decarbonisation
Ngwenya Primary Schools in Barberton to
the Department of Basic Education
• Rehabilitate 41% of MTR’s surface area
by 2030, while concurrently conducting
operational activities
• Curtail illegal mining and property
theft through cooperation between all
stakeholders
Financial capital
Human capital
Social and relationship capital
Natural capital
The strength of our key stakeholder relationships is
determined by the quality of interactions our relationship
managers have with them over the reporting period.
Performance
Positive increase
Negative increase
Positive decrease
Negative decrease
Positive
Stable
Challenging
Unchanged
Outputs and performance
2023
2022
%Δ
Transformation trust contributions to communities
US$1.1 million
US$1.7 million
(35.3)
Procurement expenditure
US$178.9 million
US$207.2 million
(13.7)
Instances of community unrest at Evander Mines
Community service delivery-related protests at Barberton Mines
Key stakeholder concern during the year
Actions to address stakeholder concern
Outcomes
2023
2022
%Δ
• Socio-economic support and opportunities
• Effective stakeholder engagement forums are maintained in Barberton and Evander
through job creation and infrastructure
development
comprising representatives from host communities and other pertinent community-based
structures
• Regular public participation meetings held with Mogale community stakeholders
• The Group prioritises education, healthcare and job creation as part of its socio-economic
development initiatives and focuses on meeting its legal compliance requirements as part of
its ‘beyond compliance’ initiatives
• Improved communication with communities through social media
CSI, LED programmes and bursary expenditure
US$1.7 million
US$1.9 million
(10.5)
Barberton Blueberries permanent jobs
Seasonal jobs
25
272
26
(3.8)
175
55.4
Proactive engagement between Barberton Mines and its host communities has significantly strengthened relationships, leading to a notable
decrease in community unrest incidents
Refer to the social and relationship capital section on page 123 for more information
GOVERNMENTS AND REGULATORY BODIES
The South African government, the government of Sudan, the JSE, the A2X, the LSE, the OTCQX and other regulatory authorities
Their significance and why we engage
• Our industry is subject to policies and regulatory requirements set by governments that can have a significant impact on our operations
• Capital providers supply guidelines and frameworks on corporate governance and ESG matters
Outputs and performance
Related residual risks
• Constrained electricity
• Social instability
• Safety
Material matters linked
Strategic initiatives
• Electricity
• Health, safety and security
• Unemployment and social responsibility
• Beyond compliance
• Tailings management
• Biodiversity and decarbonisation
• Rehabilitate 41% of MTR’s surface area
by 2030, while concurrently conducting
remining operations
• Curtail illegal mining and property
theft through cooperation between all
stakeholders
• Operate TSFs in line with the GISTM as far
as reasonably practicable
• Address the gaps identified in the 2022
PwC ESG readiness review report, publish
the Group’s maiden TCFD report in
2023 and obtain assurance on selected
ESG KPIs
South African government taxes paid (excluding VAT but including
employee taxes)
2023
2022
%Δ
US$21.9 million
US$24.2 million
(9.5)
VAT received from government
US$35.7 million
US$34.2 million
4.4
Electricity cost
Electricity consumption
US$28.5 million
US$33.8 million
(15.7)
1,403.02TJ
1,357.07TJ
3.4
Evander Mines’ five-year SLP for July 2023 to June 2028 was submitted to the DMRE in January 2023 for processing and approval
Key stakeholder concern during the year
Actions to address stakeholder concern
Outcomes
• Compliance with regulatory requirements
• Engagement with the regulatory authorities to obtain the necessary environmental approvals
for the MTR project’s construction process to commence
• Engagement with the Department of Mineral Resources and Energy (DMRE) to obtain
approval of Evander Mines’ SLP submitted in January 2023
• Strengthened the compliance management function within the Group
• The DMRE has issued the integrated environmental authorisation for the MTR project
• Ongoing engagement with the regulatory authorities to address outstanding matters and ensure compliance
• Submitted a revised scope for LED projects and are awaiting DMRE approval
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR KEY STAKEHOLDER RELATIONSHIPS continued
THE ENVIRONMENT
Represented by regulators and civil society groups whose primary areas of interest include environmental-related issues
Their significance and why we engage
• To demonstrate that the Group is proactively managing areas of environmental concern and minimising its environmental impact to the extent
possible
Related residual risk
• Constrained electricity
Material matters linked
• Electricity
• Tailings management
• Biodiversity and decarbonisation
Strategic initiatives
• Commence construction of the 8.75MW
solar plant at Barberton Mines
• Commission the water retreatment plant at
Evander Mines
• Expand Evander Mines’ solar plant by
12MW
• Construct a 10MW solar plant at the MTR
project
• Progress the implementation of TSF
audit recommendations and advance
compliance with the GISTM as far as
reasonably practicable
Financial capital
Human capital
Social and relationship capital
Natural capital
The strength of our key stakeholder relationships is
determined by the quality of interactions our relationship
managers have with them over the reporting period.
Performance
Positive increase
Negative increase
Positive decrease
Negative decrease
Positive
Stable
Challenging
Unchanged
Outputs and performance
2023
2022
%Δ
Carbon emissions intensity per ounce produced
1.92tCO2 e/oz Au
1.68tCO2 e/oz Au
14.3
Water consumption
Energy consumption
9,178ML
8,232ML
11.5
1,447.17TJ
1,405.45TJ
3.0
Key stakeholder concern during the year
Actions to address stakeholder concern
Outcomes
• Sustainability performance and reporting
• Developed an ESG policy and framework
• The Group aims to generate 40MW of energy from renewable sources by 2027, representing a targeted capacity of 15% of its total energy
• Published our maiden TCFD report
consumption
• The Group’s ESG report now includes key sustainability information independently assured
• Pan African was selected as a top-five finalist for the 2022 ESG Producer of the Year Award by Mines and Money in the UK, in recognition of
by PwC for the first time
the Company’s excellence in ESG
General view of Wadi Dirut
in Block 12A South
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR OPERATING
ENVIRONMENT
INTEGRATED THINKING
We respond to current trends in an agile manner to
ensure value creation or protection in the short and
medium term. We detect early indications of long-term
strategic opportunities.
Our operating environment and the external macroeconomic forces that
influence it have the potential to materially impact our performance and ability
to create or protect value, despite these factors being almost entirely outside
of our control.
GEOPOLITICAL TENSION
The global trade landscape
How it affects the macroeconomic
environment
According to the International Monetary Fund,
sub-Saharan Africa would face significant
challenges if the global trade landscape was
to be divided into two isolated blocs centred
around China or the West. While economic
and trade alliances with China have brought
certain benefits to the region, they have also
resulted in increased reliance on food and
energy imports, making the countries in the
region more vulnerable to global shocks,
including disruptions caused by trade
restrictions. In such a scenario, sub-Saharan
Africa could potentially be disadvantaged,
especially if foreign direct investment and
official development assistance inflows were
to be severed. This could further exacerbate
the existing challenges faced by the region,
such as food and employment insecurity.
How it affects us
Our response
Trade disruptions exacerbate market
volatility, which may adversely impact
demand and sentiment for gold, which
in turn, directly affects the price of gold.
Additionally, the Group’s operations rely
on various inputs such as equipment,
machinery, fuel and chemicals. Any
disruptions in the supply chain can have
adverse effects on both the availability and
cost of these essential inputs, ultimately
impacting the Group’s profitability.
Increased geopolitical uncertainty and
economic challenges often lead to a more
cautious approach from investors, insurers
and financial institutions. This cautiousness
can result in reduced investment appetite,
potentially curtailing the Group’s expansion
or exploration initiatives. Furthermore,
geopolitical tensions have the potential to
trigger changes in the regulatory and political
environments. Governments may implement
stricter regulations, change tax policies
or impose new trade barriers, all of which
directly influence the Group’s operations and
profitability.
The Group’s financial risk management
policy includes gold price and US$/ZAR
exchange rate hedging strategies aimed at
mitigating transactional risk, stabilising cash
flows during periods of elevated debt levels
and ensuring debt covenant compliance.
Hedge volumes and instruments used in
these strategies adhere to the Group’s
financial risk management policy and are
subject to board oversight.
Gold market trends are constantly monitored
to provide critical market insights and
support agile financial risk management and
decision-making.
There is a continuous focus on the
Group’s optimisation initiatives to improve
productivity, reduce costs and streamline
processes. Adequate critical spare parts are
kept on hand to mitigate any anticipated
supply chain disruptions, and orders are
placed in advance to counter unexpected
long lead times.
The Group maintains strong and established
relationships with its network of financial
institutions and insurers. Effective
communication with these partners is
prioritised, ensuring they are well-informed
on the Group’s operations, performance and
any significant changes within the business
environment.
Financial capital
Social and relationship capital
Natural capital
What affects the price of gold?
The price of gold is influenced by various factors. It typically increases in price in times of
perceived stock market risk when investors view it as a safe-haven investment and also
during elevated inflation levels. Recently, the gold price has been driven by geopolitical and
economic risks, such as the US/China trade war, Brexit, COVID-19 and heightened tensions
between Russia and Ukraine and their allies. Additionally, in South Africa, the rand gold price
is further affected by the US$/ZAR exchange rate.
The all-time highest price of gold was US$2,074.88/oz on 7 August 2020.
GOLD PRICE
The US$ gold price affects our profitability and value creation
How it affects the macroeconomic
environment
Gold is widely regarded as a safe-haven
investment during periods of geopolitical
tensions, economic uncertainty and market
volatility. Its historical performance has
consistently demonstrated resilience in the
face of high inflation.
Prominent sources, such as Trading
Economics, and various analysts expect that
the price of gold will surpass US$2,000/oz
again in the next 12 months.
How it affects us
Our response
The Group’s profitability and value-creation
ability are directly influenced by the revenue
generated from gold sales which is positively
impacted by an increase in the price of gold.
The average gold price received by our
mines during 2023 was US$1,836/oz, which
is 0.7% higher than the average received in
2022 (US$1,824/oz).
The Group prioritises not only its financial
success but also contributes to the
economic activity in the regions where it
operates. This includes creating employment
opportunities, developing local suppliers,
making socio-economic contributions,
fulfilling tax obligations and delivering value
to shareholders.
US$/ZAR EXCHANGE RATE
The exchange rate influences our revenue and our costs
How it affects the macroeconomic
environment
The rand experienced a continued
depreciation, with a further 15.7% decline
relative to the US$, following a 14.0%
depreciation in the previous financial year.
The closing US$/ZAR exchange rate was
US$/ZAR:18.83 (2022: US$/ZAR:16.28).
During the past year, the US$ strengthened
against other major global currencies, while
the rand underperformed in comparison to
most of its emerging market counterparts.
How it affects us
Our response
During the 2023 financial year, the
average US$/ZAR exchange rate was
US$/ZAR:17.77 (2022: US$/ZAR:15.22).
As a result of this devaluation and a
marginally higher US$ gold price, the
average rand gold price received increased
by 17.5% from ZAR892,431/kg to
ZAR1,048,823/kg.
The strengthening of the US$ exerts
pressure on the imported component of
inflation, particularly on fuel and other
US$-denominated commodities. The
Group is directly impacted by fluctuating
commodity prices, including fuel and
other materials, which ultimately influence
operating costs and profitability.
The Group manages specific financial
risks by utilising zero-cost collars to hedge
against adverse gold price fluctuations and
foreign exchange contracts for specific
foreign currency-denominated purchases
and commodity price hedges. However, the
implementation of hedge strategies, except
for specific transactional risks, requires
board approval.
Management maintains a cost-conscious
mindset which is directed at implementing
cost-reducing initiatives, whenever possible,
to ensure operational robustness.
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR OPERATING ENVIRONMENT continued
Financial capital
Social and relationship capital
Natural capital
SOUTH AFRICAN ECONOMY
ACTIVISM, SPECIAL INTEREST GROUPS AND REGULATORY UNCERTAINTY
The post-pandemic recovery has experienced several setbacks
Adverse effect on investor confidence and capital allocation decisions
How it affects the macroeconomic
environment
The current economic weakness is evident
through poor employment figures and
worsening consumer sentiment. These
factors are exacerbated by rising borrowing
costs, the depreciation of the rand and
concerns regarding South Africa’s diplomatic
relations with the global community.
Furthermore, the negative impact of the
electricity crisis is compounded by the
challenges faced by the South African power
utility, Eskom, including sabotage, corruption,
poorly maintained infrastructure and ageing
systems that may require substantial time
and capital investment to fully repair.
How it affects us
A weaker US$/ZAR exchange rate has the
potential to increase the rand gold price
received per ounce, positively affecting
overall revenue. However, it also brings the
risk of higher costs for imported equipment
and consumables. Additionally, monetary
policy measures, such as higher interest
rates, can result in elevated cost of capital,
adversely impacting profitability and
potentially deterring investments in capital
initiatives.
The electricity crisis in South Africa,
particularly the challenges faced by Eskom,
poses significant production obstacles,
leading to production delays and increased
costs. This resulted in an approximate loss of
10,000oz for the current financial year. These
challenges require careful management and
strategic planning to mitigate their impact on
the Group’s performance.
Our response
Refer to the previous explanation for the
Group’s response to volatility in the US$/ZAR
exchange rate and commodity prices.
To mitigate the impact of rising interest rates,
the Group has implemented an interest
rate hedge strategy using variable or fixed
interest rate swaps. This strategy allows the
Group to lock in fixed interest rates, providing
protection against potential increases in the
Johannesburg Interbank Average Rate. By
employing such swaps, the Group aims to
reduce the adverse impact of rising interest
rates on its financial performance and overall
profitability.
We have made significant progress in
implementing our renewable energy strategy,
which aims to achieve long-term sustainability
by securing a stable energy supply and
realising cost savings through large-scale
renewable energy projects.
Power curtailment by Eskom
Since 2007, South Africa has experienced multiple periods of power curtailment as the country’s demand for electricity exceeded
Eskom’s ability to supply it. During these periods, power is rationed between different electrical grid areas across the country and within
municipalities. Power outages typically last for two to four hours.
Many Eskom power stations are almost 50 years old and near decommissioning. Following the first period of power curtailment in 2007,
Eskom commissioned the construction of the Medupi and Kusile coal-fired power plants to expand energy production. The construction
of these plants encountered numerous technical problems and cost overruns while the existing fleet of power plants was not replaced and
continued to operate past their operational lifespan.
CRIME AND CORRUPTION
Adverse economic conditions have fuelled criminal elements in the mining and other sectors
How it affects the macroeconomic
environment
In the 2022 Corruption Perceptions
Index, which assesses perceived levels of
public sector corruption in 180 countries
and territories worldwide, South Africa
experienced a decline in its ranking. With a
score of 43 (2021: 44) out of 100, the country
now stands at the 72nd position.
According to the findings of the 2022
Afrobarometer survey, a majority of South
Africans believe that corruption in the country
is on the rise. The survey reveals that the
government’s efforts to combat corruption
are perceived as ineffective, and individuals
who report corruption often face potential
threats. Alarmingly, only one-third of citizens
expressed confidence in the government’s
genuine commitment to combat corruption.
How it affects us
There is an increased risk of unethical
practices that could disrupt operations,
delay permits or approvals and impact the
Group’s ability to conduct business.
Pan African is the largest employer in the
Barberton region and an important employer
in the Evander area of South Africa.
Mining companies are spending in excess of
ZAR2.5 billion a year on security measures
to safeguard their assets and employees
according to the Minerals Council
South Africa.
The Group spent US$7.4 million
(2022: US$8.1 million) during the year
on security costs.
Our response
The Group has an established code of ethical
conduct, setting clear standards of behaviour
for employees, contractors and stakeholders.
In June 2023, our commercial malpractice
policy was reviewed and updated.
To ensure transparency and accountability,
the Group provides an anonymous whistle-
blowing hotline, accessible to both employees
and external parties, including third-party
service providers. This hotline serves as a
reporting mechanism for any suspected
unlawful or illegal activities associated with the
Group’s operations.
The Group has made strategic investments
in fostering positive relationships with host
communities by focusing on key engagement
initiatives. These include creating employment
opportunities, developing local suppliers and
making socio-economic contributions. As a
result, the Group has successfully reduced
the occurrence of community unrest and road
closures in and around its operations.
How it affects the macroeconomic
environment
Gold holds a distinctive position in the global
economy, safeguarding the financial security
of nations, investors, communities and
families, while also driving advancements in
medical, environmental and communication
technologies. The public’s trust is essential to
uphold the numerous positive roles that gold
plays in society.
Responsible gold mining is instrumental
in fostering sustainable socio-economic
development in the countries and
communities where gold is extracted. It
not only creates well-paying jobs but also
generates valuable tax revenues for host
governments, contributing to their economic
stability. Moreover, responsible mining
practices deliver enduring benefits to local
communities.
The gold mining industry is actively pursuing
a credible pathway towards decarbonisation,
aligned with the objectives of the Paris
Agreement. By striving to achieve net-zero
emissions by 2050, the industry is committed
to mitigating its environmental impact and
embracing sustainable practices for a
greener future.
How it affects us
Our response
The Group’s commitment to responsible
mining practices, socio-economic
development, environmental stewardship
and regulatory compliance underpins its
efforts to protect its reputation, attract
investors, maintain its social licence to
operate and make positive contributions to
the communities and environments in which
it operates.
The Group’s commitment to sustainability
is evident as it was one of the first mining
companies to issue a sustainability-linked
bond in the South African market. This bond
explicitly commits the Group to making
future improvements in environmental and
social areas that are relevant, core and
material to its overall business.
Aligned with its broader sustainability goals,
the Group’s renewable energy strategy plays
an important role in stabilising the supply
and cost of electricity to its operations. This
strategic initiative not only leads to cost
savings but also contributes to a significant
reduction in carbon emissions. The
Group’s solar renewable energy initiatives
serve as key components in advancing its
renewable energy objectives and achieving
sustainability targets.
In 2023, the Group published its maiden
report following the guidelines set by the
TCFD. This report provides comprehensive
insights into the Group’s climate-related
risks, opportunities and strategies for
mitigation. In addition, the Group’s ESG
report underwent an assurance process for
the first time, enhancing the credibility and
reliability of the reported sustainability data.
Both reports are available for download on
our website.
Ease of doing business in South Africa
South Africa is ranked 84th among 190 economies in the ease of doing business, according to the latest World Bank ratings.
Rankings on specific aspects include:
Protecting minority investors: 13th
Paying taxes: 54th
Obtaining credit: 80th
Enforcing contracts: 102nd
Registering property: 108th
Electricity supply: 114th
Starting a business: 139th.
The President has set the goal of elevating South Africa into the top 50 within the next three years.
48
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
CHAIRMAN’S
STATEMENT
The global economy continues to struggle with the lingering
aftermath of the COVID-19 pandemic, exacerbated by ongoing
political tensions caused by Russia’s invasion of Ukraine and the
tightening of economic policy to combat rising inflationary pressures.
As a consequence, global growth is anticipated to experience a
substantial deceleration during the latter half of this year, with the
weakness persisting into 2024.
OUR OPERATING ENVIRONMENT
South Africa’s economy is under pressure from an energy crisis, high unemployment, crime,
borrowing costs, depreciation of the local currency and concerns regarding South Africa’s
diplomatic relations with the rest of the world. The approach of the South African Reserve
Bank has been consistent with that of other central banks in that monetary policy will
have to remain restrictive for longer to curtail inflation to within its target band.
As a direct result of the energy crisis, South Africa’s gross domestic product (GDP) is
projected to grow by only 0.3% in 2023 before increasing to 1% in 2024, as forecast by
the Organisation for Economic Co-operation and Development. In comparison, 2023
global GDP growth is projected to be 2.7%, improving to 2.9% in 2024.
On the positive side, gold continues to demonstrate its value as a safe haven and low-risk
asset class for investors, and the robust rand gold price continues to boost Pan African’s
margins and profitability.
Refer to pages 46 to 49 for a more detailed analysis of our operating
environment and how it has affected Pan African’s operations.
OUR OPERATIONAL AND FINANCIAL PERFORMANCE
Pan African’s operations were not immune to the Eskom-induced energy
crisis. As a direct result of the unreliability of Eskom’s electricity supply, the
Group lost an estimated 10,000oz in gold production in the financial year,
contributing to the revised production guidance of approximately 175,000oz
announced in May 2023.
Adjusted earnings before interest, income tax expense, depreciation
and amortisation (adjusted EBITDA ) declined by 16.8% to US$115.0 million
(2022: US$138.3 million), resulting in a return on capital employed of 27.8%
(2022: 32.6%). Our operations generated cash flows of US$100.1 million
(2022: US$110.0 million). Net senior debt
increased to US$18.9 million
(2022: US$9.3 million), primarily attributable to capital expenditure
for Evander Mines’ expansionary projects and the MTR project.
Refer to the financial director’s review on page 74 and the
operational performance review on page 82 for more detail.
KEITH SPENCER
Chairman
SAFETY
The Group deeply regrets the fatal accident that occurred at
Evander Mines in March 2023, following 1 million fatality-free shifts
achieved at the operation prior to the accident. Despite this tragic
setback, we are encouraged by the progress the Group has made
in improving its overall safety rates compared to the previous
financial year, which is attributable to the implementation of various
awareness and other initiatives aimed at further enhancing our
safety performance.
Refer to page 57 for more details.
OUR ESG PERFORMANCE
Pan African’s commitment to ESG goes beyond mere compliance
and forms an essential part of its overall business approach.
The Group has embarked on a renewable energy strategy which
aims to achieve long-term sustainability by securing a reliable
energy supply, reducing carbon dioxide emissions and realising
cost savings through implementing large-scale renewable energy
projects.
The key components of this strategy include:
• our 9.9MW solar plant at Evander Mines, the first utility-scale,
grid-tied solar plant to be commissioned in South Africa
•
the construction of an 8.75MW solar plant at Barberton Mines’
Fairview Mine, with the plant expected to be completed
during 2024
• entering into a 40MW Sturdee Energy power purchase
agreement for the provision of wheeled power over a period of
up to 15 years
the development and construction of a second solar plant at
Evander Mines, with a minimum output of 12MW, to expand the
existing facility
the inception of a feasibility study to construct a solar plant at
the MTR project’s site.
•
•
Other highlights during the year include:
The Group’s environmental liabilities are funded at an estimated
US$21.6 million with ongoing rehabilitation as mining progresses.
Read more in our online ESG report at
https://www.panafricanresources.com/investors/gri-and-sustainability/
CORPORATE GOVERNANCE
Pan African is committed to the highest standards of corporate
governance, ethics and integrity.
The board provides active oversight, thereby enabling management
to execute its strategy effectively. We are confident that the board
has the right balance of skills, experience and diversity to fulfil its
fiduciary responsibilities and to provide the necessary oversight
of the Group’s strategic direction. There were no changes to the
board during the financial year.
STRATEGY AND OUTLOOK
The Group is committed to its purpose of optimally and consistently
extracting gold from mineral deposits in a manner that creates
sustainable value for its stakeholders. We will achieve this by
positioning Pan African as a sustainable, safe, high-margin and
long-life gold producer.
Refer to pages 18 to 21 for more information on the Group’s
strategy, strategic objectives and initiatives.
Our key focus areas for the next year include:
•
the unrelenting pursuit of a zero-harm working environment
• delivering on our guided gold production of 178,000oz to
190,000oz for the 2024 financial year
• proactively managing unit production cost increases
• advancing our ESG initiatives
• executing our capital and growth projects to position the Group
for increased future gold production
• ensuring the construction of the MTR project progresses
according to the planned schedule and within budget
• evaluating potential acquisitions and capital projects against our
• commissioning our 3ML per day water retreatment plant at
stringent investment criteria and capital allocation priorities
Evander Mines in March 2023
• Barberton Mines continuing its partnership with the Barberton
Nature Reserve and the Mpumalanga Tourism and Parks
Agency as well as its sponsorship of orphaned rhinos at the
Care for Wild Rhino Sanctuary
•
the Barberton Blueberries project, which currently employs
25 permanent and 272 seasonal employees from the
surrounding communities. The project is well positioned to
produce its second commercial harvest, which commenced
in June 2023
• being one of the first mining companies in South Africa to
issue a sustainability-linked bond with KPIs encompassing
climate change, land and environmental rehabilitation as well as
employee safety
•
•
the successful completion and handover of phase 3 of the
Ngwenya and Sheba Primary Schools to the Department of
Basic Education during August 2023
the Group publishing its maiden report following the guidelines
set by the TCFD.
•
increasing returns to shareholders through dividends and other
means of distribution.
APPRECIATION
I want to extend my appreciation to my fellow board members,
as well as the Group’s executive management and dedicated
employees. Despite the challenges we encountered in our
operating environment, their unwavering commitment and
dedication have been invaluable. I am confident in the Group’s
ability to achieve its long-term value-creation aspirations.
Keith Spencer
Chairman
13 September 2023
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 Electrons:
79
Gold atoms contain 79 electrons and
the shell structure is 2.8.18.32.18.1.
Chief executive officer’s review
Performance against our strategic initiatives
Five-year overview
Our sustainability-linked finance framework
Financial director’s review
Operational performance review
– Barberton Mines
– Evander Mines
– Elikhulu
– Tailings management
Operational production
Financial capital
Manufactured capital
– Abridged Mineral Resources and
Mineral Reserves report
54
68
70
72
74
82
84
88
90
92
94
96
100
103
PERFORMANCE
REVIEW
We measure and respond to our KPIs,
which cover all of the six capitals that
we employ in our value creation and
preservation, not only financial.
2
Elikhulu plant offices and
carbon-in-leach tanks at dusk
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
CHIEF EXECUTIVE
OFFICER’S REVIEW
Pan African delivered a resilient financial performance for the
current financial year, with a much-improved rand gold price
compensating for lower production from our underground operations.
We are confident that the measures we are implementing, specifically
at Barberton Mines’ underground operations, will result in higher
production in the future, with production guidance increased for the
2024 financial year. If the current rand gold price tailwinds persist,
we can look forward to another robust financial performance from
Pan African in the year ahead.
HIGHLIGHTS FOR THE YEAR
Our surface remining operations, Elikhulu and the BTRP, performed in line with
expectations during the past financial year, contributing significantly to the Group’s
production, cash flows and profits. The consistent performance of these low-cost
and, in the case of Elikhulu, long-life assets, demonstrates their importance in our
portfolio and reinforces our decision to develop the MTR project.
Pan African has an outstanding track record in the development and operation of
tailings retreatment operations. Full-scale construction of the MTR plant commenced
on schedule in July this year, with commissioning anticipated within the next
18 months. The MTR project’s incremental production of approximately 50,000oz
per year will contribute to almost 50% of the Group’s annual gold output being
sourced from low-cost, safe, surface remining operations. In addition to being
a compelling investment, large-scale tailings retreatment operations of this
nature rehabilitate and restore the environment while providing much-needed
employment and economic opportunities.
The development of Evander Mines’ 24 Level project is progressing
well, with crews being redeployed to the 24 Level area as the 8 Shaft’s
pillar mining nears completion. Improved mining flexibility, together
with other initiatives being implemented to ensure that infrastructure
availability is optimised, will ensure sustainable production from
this long-life underground operation.
We are grateful that after year-end, we managed to resume
our gold exploration activities in Sudan. The decision to
recommence operations was only made after a comprehensive
risk assessment of the in-country operating environment in
the exploration area, and we will continue to closely monitor
the political situation.
COBUS LOOTS
Chief Executive Officer
Globally, gold producers have experienced severe cost
inflation in recent years. Despite inflationary pressures on
input costs, with, specifically, reagents used in processing
and electricity costs being subject to large increases, the
financial results for the year benefited from Pan African’s
culture of cost control. AISC increased by only 3.3% in
US$ to US$1,327/oz, with the depreciation of the rand
relative to the US$ providing an offset to the higher rand
unit costs.
of US$22.0 million, despite a substantial capital
We ended the financial year in a strong financial position with
net debt
investment programme and the payment of an attractive
dividend to shareholders in the past year. The fact that we are
able to maintain this dividend in rand terms, while undertaking
the MTR project’s construction, our largest capital project
ever, is a testament to the quality of our portfolio.
Excellent progress was also made with our ESG initiatives,
with an increased focus on renewable energy projects.
In May 2023, construction of the Group’s second solar
plant commenced at Barberton Mines. This plant, with a
capacity of 8.75MW, will supply most of the daytime power
requirements for the Fairview Mine. The Group has also
signed a third-party power purchase agreement for the
off-site provision of 40MW of wheeled power over a period
of up to 15 years. Along with Evander Mines’ operating
solar plant, these projects are expected to reduce our
carbon emissions by up to 30% (by 2030), as well as deliver
associated cost benefits, as the price of grid power continues
to increase at above-inflation rates. Evander Mines’ water
recycling plant is also expected to generate attractive cost
savings as underground water can now be used as process
water, reducing our reliance on municipal resources.
Reflecting on the past year, we wish to again express our
condolences to the family, friends and co-workers of our
colleague, Mr Sahlukaniso, who was fatally injured in a
fall of ground accident at Evander Mines’ underground
mine in March 2023. Pan African remains steadfast in its
resolve to achieve a zero-harm working environment in the
coming years.
In terms of the outlook for the year ahead, we will continue
to balance safe, sustainable gold production, the successful
delivery of our transformational growth projects, cash returns
to shareholders and all our other initiatives to the benefit of
our stakeholders.
We are well positioned to exceed
the production achieved in
the current financial year, with
estimated production of between
178,000oz and 190,000oz forecast
for the 2024 financial year.
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
CHIEF EXECUTIVE OFFICER’S REVIEW continued
KEY FEATURES
Production
• Gold production of 175,209oz (2022: 205,688oz), in line with
revised guidance
•
Increased production outlook for the 2024 financial year –
guidance of 178,000oz to 190,000oz.
Safety
• As previously announced, a fatal accident occurred at Evander
Mines in March 2023, following 1 million fatality-free shifts at the
operation prior to the accident
•
Improvement in overall safety rates compared to the previous
financial year, with a TRIFR of 7.96 per million man hours for
the year (2022: 8.95 per million man hours)
• Focused initiatives implemented to further enhance safety
performance.
Costs and cost outlook
• AISC for the current financial year of US$1,327/oz,
(2022: US$1,284/oz) a sub-US$ inflation increase of 3.3%
• AISC in line with revised guidance for 2023 of between
US$1,325/oz to US$1,350/oz
• Group’s lower-cost operations, which exclude Sheba and
Consort Mines, account for more than 81% (2022: 87%)
of the Group’s gold production, produced at an AISC of
US$1,152/oz (2022: US$1,145/oz)
• Remedial measures implemented to reduce real AISC at
high-cost operations (Sheba and Consort mines)
• Renewable energy generation and water recycling, together with
other initiatives to increase the Group’s future gold production,
are expected to contribute to a decline in future real AISC
Financials
• Net cash generated from operating activities of US$100.1 million
(2022: US$110.0 million)
• Profit for the period of US$60.7 million (2022: US$75.0 million)
• Headline earnings of US$60.5 million (2022: US$75.6 million)
• Earnings per share of US 3.19 cents per share
(2022: US 3.90 cents per share) and headline earnings
per share of US 3.15 cents per share (2022: US 3.93 cents
per share)
• Robust financial position at year-end, with net debt
of only
US$22.0 million (2022: US$13.0 million)
• Liquidity remains healthy, with access to immediately
available cash and undrawn facilities of US$84.7 million
(2022: US$69.4 million) at financial year-end. Post the current
financial year, the Company also closed the dedicated
MTR project senior debt facility of US$70.3 million.
Proposed dividend
• Sector-leading final dividend of ZA 18.00000 cents per share
(or approximately US 0.95592 cents per share at an exchange
rate of US$/ZAR:18.83) proposed for approval at the upcoming
annual general meeting (AGM).
Growth projects
• The MTR project construction commenced in July 2023 with
steady-state production expected by December 2024
• Evander Mines’ 8 Shaft 24, 25 and 26 Level underground
expansion project is on track
– Refrigeration plant at 24 Level commissioned in phases to
facilitate mining at depth
– Development to access the 25 and 26 Level mining areas
has commenced
• 2024 AISC guidance of US$1,350/oz (assuming an exchange
– Equipping of an existing underground ventilation shaft for
rate of US$/ZAR:18.50).
The soil turning ceremony
marking the start of construction
for the new MTR plant
rock hoisting capacity of up to 40,000t per month is planned
to be completed during the third quarter of the 2024 financial
year, improving efficiencies and eliminating the cumbersome
conveyor system.
ESG initiatives
• Established a renewable energy roadmap to decarbonisation
– construction of Fairview Mine’s solar facility commenced at
Barberton Mines
• Commissioned Evander Mines’ water recycling plant to reduce
potable water requirements and lower costs.
Sudan exploration
• Exploration activities resumed post the reporting period,
following a detailed risk assessment of the in-country operating
environment in the exploration area.
MANUFACTURED CAPITAL
Average gold price received
US$1,836/oz
US$1,824/oz
0.7
SUMMARY OF SALIENT FEATURES
Revenue
Adjusted EBITDA
Performance
Positive increase
Negative increase
Positive decrease
Negative decrease
Unchanged
2023
2022
%Δ
US$321.6 million
US$376.4 million
(14.6)
US$115.0 million
US$138.3 million
(16.8)
FINANCIAL
CAPITAL
Attributable earnings – owners of the Company
US$61.1 million
US$75.1 million
(18.6)
Headline earnings
Earnings per share
US$60.5 million
US$75.6 million
(20.0)
US 3.19 cents
US 3.90 cents
(18.2)
Headline earnings per share
US 3.15 cents
US 3.93 cents
(19.8)
Net debt
US$22.0 million
US$13.0 million
69.2
Cash flows from operating activities
US$100.1 million
US$110.0 million
Weighted average number of shares in issue
1,916.5 million
1,926.1 million
Average exchange rate
Closing exchange rate
Gold produced
Gold sold
Cash costs
AISC 2
US$/ZAR:17.77
US$/ZAR:15.22
US$/ZAR:18.83
US$/ZAR:16.28
175,209oz
174,760oz
205,688oz
(14.8)
205,688oz
(15.0)
ZAR1,048,823/kg
ZAR892,431/kg
17.5
US$1,142/oz
US$1,099/oz
3.9
ZAR652,426/kg
ZAR537,879/kg
21.3
US$1,327/oz
US$1,284/oz
ZAR758,141/kg
ZAR628,292/kg
(9.0)
(0.5)
16.8
15.7
3.3
20.7
19.0
38.9
All-in-costs (AIC)
1
US$1,788/oz
US$1,503/oz
ZAR1,021,529/kg
ZAR735,670/kg
Total sustaining capital expenditure
US$20.2 million
US$23.1 million
(12.6)
Total capital expenditure
Net asset value per share
LTIFR (per million man hours)
RIFR (per million man hours)
US$113.0 million
US$82.8 million
36.5
US 15.37 cents
US 15.37 cents
–
1.86
0.81
1.04
78.8
0.35
131.4
9.9MW solar plant commissioned at Evander Mines
Commenced site establishment for the 8.75MW solar plant at Barberton Mines
Commenced construction of Evander Mines’ water retreatment plant to substitute potable water from the local
municipality
HUMAN
CAPITAL
NATURAL
CAPITAL
1
The AISC per kilogramme and AIC per kilogramme include realised derivative mark-to-market fair value gains/losses and exclude unrealised derivative mark-to-market fair
value gains/losses relating to the current gold mining operations. Refer to the APM summary report for the reconciliation of cost of production as calculated in accordance with
IFRS to AISC and AIC .
2 Adjusted EBITDA comprises earnings before interest, tax, depreciation and amortisation and impairment.
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
CHIEF EXECUTIVE OFFICER’S REVIEW continued
SAFETY
Regrettably, the Group experienced one fatality during the 2023
financial year (2022: none) and continues to implement ongoing
initiatives to further enhance its safety performance.
The Group reported an improvement in the TRIFR to 7.96 per
million man hours for the year (2022: 8.95 per million man hours).
Pan African has implemented and reinforced a number of
safety initiatives and interventions directed at ensuring its safety
performance remains sector-leading. This includes targeted
safety campaigns and independent safety audits to address the
regression in the LTIFR and RIFR.
In June 2023, Barberton Mines
achieved 3.4 million fatality-free shifts.
At the end of the financial year, Sheba
Mine and Consort Mine achieved ten
and 21 years, respectively, without any
fatalities.
OPERATIONAL PERFORMANCE
The Group produced 175,209oz (2022: 205,688oz) of gold for the
current financial year, in line with the revised production guidance
of 175,000oz, referred to in the Stock Exchange News Service
(SENS) announcement of 26 May 2023. While gold production
from surface operations was stable, underground production was
primarily impacted by the following:
• A slower-than-anticipated ramp-up of continuous operations
at Fairview and Sheba Mines
• Delays in recruitment of scarce skills, following the change to
a contractor mining model at Consort Mine
• Electricity supply disruption.
The gold production split per operation is as follows:
Fairview Mine
Sheba and Consort Mines
BTRP
Elikhulu
Evander Mines1
Total ounces produced
Year ended
30 June 2023
Year ended
30 June 2022
38,849
25,737
19,875
50,573
40,175
175,209
48,097
27,641
19,560
52,220
58,170
205,688
1
Includes gold equivalent production of osmiridium concentrate.
Progress made with the measures to address the key underlying
issues that adversely impacted the underground operations are
detailed hereafter.
Group AISC
The Group’s AISC per ounce has increased by 3.3% to
US$1,327/oz (2022: US$1,284/oz). This excludes estimated
electricity savings of US$1.9 million from Evander Mines’ 9.9MW
solar plant at current rates, which would reduce the Group’s
AISC per ounce to US$1,316/oz.
The AISC was impacted by the following:
• The depreciation of the average US$/ZAR exchange rate by
16.8% to US$/ZAR:17.77 (2022: US$/ZAR:15.22), positively
impacting the Group’s AISC in US$ terms
• Barberton Mines’ underground AISC per ounce increased
by 10.0% to US$1,810/oz (2022: US$1,645/oz) impacted
primarily by a 14.7% decrease in gold production, which is
being addressed by the remedial measures outlined in this
report. In rand terms, overall underground costs at Barberton
Mines were well controlled, with the total AISC increasing by
9.5% to ZAR2,076.9 million (2022: ZAR1,895.9 million), noting
the following:
– Above-inflationary increases in reagent costs of 11.2%
– An increase in salaries and wages of 6.9% following a 5.6%
increase as agreed with labour unions, combined with an
increase in the engineering staff complement
– An increase in sustaining capital expenditure of 8.3%
• The BTRP’s AISC per ounce reduced by 19.5% to
US$717/oz (2022: US$891/oz) following a production increase
and recoveries increasing by 9.3% to 47% (2022: 43%). In rand
terms, the total AISC decreased by 4.6% to ZAR253.1 million
(2022: ZAR265.2 million) primarily as a result of:
– a decrease in processing costs of 1% as a result of a
29.7% decrease in reagent costs due to the introduction
of an additional Aachen shear reactor and optimisation of
the carbon-in-leach process, offset by increased transport
costs and the cost of gold-bearing surface tailings material
purchased from third parties
–
reduced electricity costs of 24.5% due to optimised elution
schedules and the associated reduction in electricity usage
• Elikhulu’s AISC per ounce increased by 0.5% to
US$1,008/oz (2022: US$1,003/oz), adversely impacted by a
reduction in recoveries to 32% (2022: 35%). The AISC in rand
terms increased by 13.6% to ZAR905.9 million
(2022: ZAR797.5 million) as a result of above-inflationary
increases of 20.6% in reagent costs and an increase in
electricity costs of 23.5% due to increased pumping distances,
following the changeover to the new Leslie/Bracken pump
station and also above-inflationary increases in electricity rates
• Evander Mines’ underground AISC per ounce increased by 4.1%
to US$1,158/oz (2022: US$1,112/oz) impacted by a decrease in
gold production of 31.9%. The AISC in rand terms decreased
by 17.2% to ZAR684.4 million (2022: ZAR827.0 million) primarily
as a result of a 21.4% increase in the costs capitalised to the
24 Level project.
The target AISC for the next financial year is approximately
US$1,350/oz, assuming an exchange rate of US$/ZAR:18.50.
The Group endeavours to improve
gold production and reduce unit
costs at its higher-cost operations by
pursuing a number of initiatives as
detailed in this report.
Group capital expenditure budget
The Group continues to reinvest in its assets and growth projects to
ensure sustainability and to generate attractive shareholder returns
and value for our stakeholders.
The operational capital budget for the year ending 30 June 2024 is
detailed below.
Operation
Barberton Mines
Elikhulu
Evander Mines underground
(including the Egoli and
24 Level project)
MTR project
Total
Sustaining
capital
US$ million1
Expansion
capital
US$ million1
15.7
2.3
–
–
18.0
8.9
12.4
39.9
76.0
137.2
1 Budgeted capital converted to US$ at an exchange rate of
US$/ZAR:18.50.
Major expansion capital items for the 2024 financial year include:
• Barberton Mines’ chairlift expansion at a cost of US$4.1 million
• Completion of phases 2 and 3 of Elikhulu’s TSF footprint
extension at a cost of US$12.4 million
• US$31.2 million for expansion capital for 8 Shaft’s 24, 25 and
26 Level project and equipping costs for Evander Mines’ 7 Shaft
infrastructure, which includes steelwork and development costs
• The MTR plant’s initial construction costs of US$76.0 million.
With the completion of Elikhulu’s TSF extension during the 2024
financial year, this operation’s capital expenditure will revert to
previous sustaining capital levels. The capital expenditure for
Evander Mines’ 24, 25 and 26 Level underground operations will
contribute significantly to the Group’s future production profile.
Our commitment to sustainability and
ESG management is now entrenched
into our Company values and business
model. Some of our highlights for the
year are presented below.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
Pan African acknowledges the importance of protecting the
environment and preserving its social licence to operate for
delivering long-term and sustainable value creation, and the Group
continues to focus on its ‘beyond compliance’ ESG approach.
A solid project portfolio was established in recent years, which is
being supplemented with new initiatives and expansion projects.
We have produced our best set of sustainability performance
results since we began our sustainability journey, as more fully
described in our third annual ESG report and maiden TCFD report,
produced in accordance with the guidelines set by the TCFD.
To ensure our continued ability to deliver stakeholder value, we
remained focused on the key areas where Pan African can make
a meaningful contribution while taking further steps to reduce our
environmental footprint and positively impact our social landscape.
Our activities have positive primary and secondary impacts on
a range of UN SDGs. The Group has invested in sustainable
development projects and initiatives that have impacted our
business sustainability and community stakeholders in a positive
manner. These include energy management and climate change,
water management, biodiversity and conservation, education
and health infrastructure, skills development, youth and women
employment and health and wellness programmes.
A sustainability-linked bond, TCFD reporting and ESG disclosures
provide assurance and monitor our progress.
Environment
Pan African’s renewable energy roadmap to
decarbonisation – energy management and climate
change
Pan African’s renewable energy strategy is key in achieving our
sustainability targets and measurably reducing the Group’s carbon
emissions in the long term, while stabilising the electricity supply to
our operations and realising cost savings that will continually assist
in lowering our overall AISC .
Pan African has embarked on a renewable energy strategy that
includes:
• Steady-state renewable solar energy generation at Evander
Mines with possible expansion of the existing facility
– Evander Mines’ 9.9MW solar plant was fully commissioned
in May 2022. The plant has provided 23,770MWh of
renewable energy for the 2023 financial year, with operational
performance consistent with the project’s feasibility study.
The solar plant generates approximately 30% of Elikhulu’s
energy requirements, significantly reducing our reliance
on the national electricity grid while saving an estimated
US$1.9 million in annual electricity costs at current tariffs.
The long-term impact of this development will be a reduction
in our carbon footprint by about 6% per annum as a result of
approximately 21,000t less carbon dioxide emissions in its
first year of operation
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
CHIEF EXECUTIVE OFFICER’S REVIEW continued
• Commencement of Barberton Mines’ construction of an
8.75MW solar plant, with commissioning scheduled for
June 2024
– An engineering, procurement and construction agreement
was entered into with juwi Renewable Energies (juwi),
a leading solar, wind and hybrid renewable energy
project developer for the construction of the plant, which
is expected to deliver cost savings of approximately
ZAR26 million (US$1.4 million at a prevailing exchange
rate of approximately US$/ZAR:18.00) in year one, with an
average saving of ZAR40 million (US$2.2 million) per year
over the life of the plant
• Entering into a power purchase agreement with Sturdee Energy
for the off-site provision of 40MW wheeled power to any of
the Group’s operations over a period of up to 15 years, with
construction expected to commence in January 2024
• A potential 10MW capacity solar plant at the MTR project.
The Group successfully achieved its renewable energy mix target
for 2023 of 6.1% compared to the sustainability-linked bond
benchmark of 5.0%.
Pan African intends to achieve a renewable energy mix of 30%
by 2030 and a 50% renewable energy mix by 2035. We are also
aggressively investigating opportunities to source renewable energy
power purchase agreements from wind energy, hydropower and
battery storage solution providers.
Water management – water retreatment plant at
Evander Mines
Our most recent efforts related to water stewardship have
culminated in the construction of a water retreatment plant that
has resulted in significant reductions in water withdrawals from
municipal sources, which both reduces our environmental footprint
and supports the local municipality’s efforts in ensuring adequate
and wider water supply to users in the area.
Evander Mines’ water retreatment plant and the 7 Shaft distribution
system were successfully commissioned in March 2023. The water
retreatment plant provides 3ML per day of potable water to the
Elikhulu processing plant and Evander Mines’ 8 Shaft underground
infrastructure. The water quality meets the South African National
Standard (SANS) 241:2015 quality requirements, which prescribe
the minimum requirements for potable water to be considered safe
for human consumption.
The plant’s operations have resulted in water use-related savings of
US$61,200 since operations commenced, with expected estimated
annual savings of US$350,000.
Additional studies are in progress to assess whether the Group can
further enhance its water sustainability performance, including:
• a desktop feasibility study at Barberton Mines for the treatment
of polluted water produced from the mines’ processing plants
and TSFs
•
investigating the feasibility of treating polluted water from
underground sources for the MTR project’s processing plant
water requirements.
Biodiversity management, conservation and land
rehabilitation
We consider environmental preservation as one of our top ESG
priorities and actively participate in, and contribute to, programmes
aimed at promoting biodiversity and conservation. The recognition
of the importance of responsible biodiversity management has
been increasing, even though the Group has focused on ensuring
the ongoing rehabilitation of land since acquiring its operations.
The Group rehabilitated an additional 23.03ha of land disturbed
by mining at Barberton Mines during 2023. As part of enhancing
our biodiversity focus, we have established initial land rehabilitation
targets to 2030 for our MTR project.
The rehabilitation liabilities related to Barberton Mines and Evander
Mines of US$7.8 million are fully funded. The rehabilitation liabilities
related to the MTR project of US$2.2 million will be funded over the
life of the project.
The Group continues its collaboration with the Mpumalanga
Tourism and Parks Agency for the preservation of biodiversity in
the Barberton Nature Reserve and the annual sponsorship of rhino
orphans at the Care for Wild Rhino Sanctuary. The three rhinos
currently sponsored by Barberton Mines are progressing well and
will soon reach a stage where they can be reintroduced into their
natural habitat.
Social
As a result of increased levels of social unrest, unemployment, the
costs of living and service delivery challenges, it is imperative that
Pan African increases efforts to support our communities, focusing
on sustainable socio-economic development. We take community
development seriously and support initiatives that have long-term
benefits and become self-sustaining, without reliance on continued
mine funding. Health, education, skills development, youth and
women employment and economic development programmes,
especially for local small businesses, are catalysts to realising
these socio-economic gains and are therefore prioritised by our
operations.
CSI and LED initiatives update
During the reporting period, Pan African invested US$1.7 million
(2022: US$1.9 million) in CSI and LED initiatives and bursaries,
including the following:
• Health and wellness initiatives
– A running club at Barberton Mines was established to
encourage fitness and well-being of employees and
community members by providing professional fitness
coaches and promoting active participation in sporting codes
Evander Mines’ 9.9MW solar plant
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
CHIEF EXECUTIVE OFFICER’S REVIEW continued
• Beyond compliance’ job creation – Barberton Blueberries
project
– Twenty-five permanent employment positions and up to
276 seasonal jobs have been created with total salaries
of US$0.3 million paid, significantly contributing to the
sustainability and development of small businesses in the
local townships and improvements in living standards
– The project’s first commercial harvest of 120t was completed
during 2022. The current harvest season expects
150t of blueberries for the international market and 70t for
the domestic market, as a result of improved yields as the
plants mature
• Beyond compliance’ tertiary development of learners
– Barberton Mines initiated a high school scholarship
programme in January 2022, granting full scholarships to
25 high-achieving students in need of financial assistance.
The Group is considering expanding the programme to
tertiary learning in the 2024 academic year
• School infrastructure projects as part of our current SLP
commitments
– The Group handed over phase 3 of the Sheba and Ngwenya
Primary Schools in Barberton to the Department of Basic
Education. Up to 35 local contracting companies were used
and 285 local jobs were created during construction. These
schools will benefit over 1,500 learners
– Evander Mines completed the building of the computer and
science laboratory at Thomas Nhlabathi High School and is
in the process of equipping the facility prior to handover. The
building of a similar facility at Thistle Grove Combined School
is expected to be completed in the 2024 financial year
• Enterprise and supplier development
enrolled 47 (2022: 37) local entrepreneurs, of which
32 entrepreneurs have already graduated. An 18-month-long
mentorship programme is also offered and 13 (2022: 13)
local entrepreneurs have been enrolled
• Youth development and performing arts
– Pan African partnered with Elangeni Generations Outreach,
a renowned filmmaking institution, which provides technical
support for the performing arts. On 4 June 2023, the first
Pan African-funded movie series was broadcast on national
television. The programme has so far produced three films,
predominantly in the SiSwati language.
Governance
Governance remains the cornerstone of our sustainability approach.
We have risen to the challenge of improving our ESG governance
amid evolving ESG regulations and standards as follows:
• A significant milestone of our collective efforts has been the
release of our first TCFD report, providing our stakeholders with
a clear view of our approach to managing climate-related risks
and opportunities, and our future vision
• To enhance the governance of our tailings facilities, we
have appointed an independent tailings review board (ITRB)
consisting of members from independent, credible tailings
consultancies, as required by the GISTM requirements
• To enhance the strength of our ESG reporting we have
embarked on designing an ESG reporting, performance and
disclosure assurance strategy. The KPIs which have been
assured have been detailed in the 2023 ESG report
• Pan African issued one of the first sustainability-linked bonds by
a gold mining company in South Africa during December 2022.
– April 2022 marked the first anniversary of the establishment
of Barberton Mines’ enterprise supplier development
programme. The first business incubation programme
Our ESG report, containing details of our ESG initiatives and
compliance, is available on our website at
https://www.panafricanresources.com/investors/gri-and-sustainability/
Barberton Blueberries farm
MINERAL RESOURCES AND MINERAL RESERVES
A 13% increase in Mineral Reserves to 12.8Moz and Mineral Resources of just over 40.5Moz underpin Pan African’s long-life assets and
organic growth potential.
The estimated Mineral Resources, Mineral Reserves and production targets for the Group are supported by the following assets:
• Barberton Mines’ Fairview Mine, with a remaining life-of-mine of 20 years
• Consort Mine and the BTRP, with remaining lives of nine years and three years (tailings only), respectively. At the end of the BTRP’s
tailings retreatment life, when current sources are depleted, it is planned to convert the plant to process hard rock feedstock from the
Royal Sheba project, which has an estimated life-of-mine of eight years, with the orebody being open at depth
• Elikhulu, the Group’s flagship tailings retreatment operation in Evander, has a remaining life-of-mine of 10 years
• Evander Mines’ 8 Shaft operation has a remaining life-of-mine of 13 years (8 Shaft pillar and 24, 25 and 26 Levels), excluding the
Egoli project
• The newly acquired MTR project TSF assets have a modelled 21-year life-of-mine, which includes the Mogale and Soweto Clusters’
Indicated Mineral Resources.
The Group’s access to long-life organic growth projects, such as Egoli, Rolspruit, Poplar and others within its mining rights areas, form the
basis of a solid foundation for the estimated Mineral Resources and Mineral Reserves.
The Group’s estimated Mineral Resources and Mineral Reserves at 30 June 2023, in compliance with Table 1 of the SAMREC Code, are
summarised as follows:
Estimated gold Mineral Resources of 581.0Mt at 2.17g/t for 40.50Moz (2022: 327.9Mt at 3.67g/t for 38.65Moz), constituted as follows:
Barberton Mines hard rock
BTRP and stockpiles
Elikhulu
Evander Mines underground
MTR project
Total1 – 2023
Total – 2022
Gold Mineral Resources
Tonnes
Mt
Grade
g/t
24.5
22.3
163.4
111.1
259.8
581.0
327.9
4.2
1.2
0.3
9.1
0.3
2.2
3.7
Gold
t
102.1
26.0
44.2
1,009.0
78.5
1,259.8
1,202.2
Gold
Moz
3.3
0.8
1.4
32.4
2.5
40.5
38.7
Estimated gold Mineral Reserves of 408.3Mt at 0.90g/t for 12.81Moz (2022: 209.7Mt at 1.68g/t for 11.31Moz), constituted as follows
(Mineral Reserves are reported based only on the Measured and Indicated Mineral Resources, inclusive of diluting and contaminating
material delivered to the respective metallurgical plant for beneficiation and treatment):
Barberton Mines hard rock
BTRP
Elikhulu
Evander Mines underground
MTR project
Total1 – 2023
Total – 2022
1 Any discrepancies in totals are due to rounding.
Gold Mineral Reserves
Tonnes
Mt
Grade
g/t
5.5
3.9
140.9
30.3
227.7
209.7
6.5
3.0
0.3
8.2
0.3
1.7
Gold
t
35.6
11.9
38.6
247.7
64.6
Gold
Moz
1.1
0.4
1.2
8.0
2.1
352.0
11.3
For a summary of Pan African’s Mineral Resources and Mineral Reserves, refer to pages 103 to 115. The full report is available on our
website at
https://www.panafricanresources.com/operations-at-a-glance-2/mineral-resource-mineral-reserve-2/
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
CHIEF EXECUTIVE OFFICER’S REVIEW continued
OUR OPERATIONS, OPTIMISATION INITIATIVES AND GROWTH PROJECTS
The Group’s operational performance presented both challenges and notable achievements. Following a 14.8% decrease in production
to 175,209oz (2022: 205,688oz), compared to a record performance in the previous financial year, we have implemented a number of
initiatives to improve production from the underground assets.
EXPLORATION
DEVELOPMENT
PROJECT
MINE CONSTRUCTION
Proved
Probable
MINE
PRODUCTION
Mineral
Reserves
Mineral
Resources
Inferred
Measured
Indicated
Mogale
Cluster
Royal Sheba
east extension
Rolspruit
Poplar
Evander South
Fairview
subvertical
shaft
Egoli
project
Consort PC
remnant blocks
Royal
Sheba
BTRP
Evander
Mines’
8 Shaft
pillar
Evander
Mines’
8 Shaft
25 Level
and
26 Level
Barberton
Mines
Elikhulu
Evander
Mines’ 8 Shaft
24 Level
Sataib
Mirudaab
Turukti
Jebel Karyous
Evander
Mines’
near-mine
exploration
Barberton
Mines’
near-mine
exploration
Sheba Hills
exploration
DISCOVERY
DESKTOP STUDY
FEASIBILITY
STUDY
PROJECT COMMISSIONING
E
U
L
A
V
T
C
E
J
O
R
P
CONFIDENCE
Near-mine growth projects
Barberton Mines’ growth projects
Evander Mines’ growth projects
West Rand targets
Sudan targets
Barberton Mines
Barberton Mines’ underground operations faced several challenges
in maintaining gold production and containing costs which included
skilled labour shortages, energy and processing cost increases in
excess of inflation, increasing mining depth and associated travel
times at Fairview Mine, which resulted in reduced productivity.
From February 2023, both Fairview and Sheba Mines
implemented a continuous operating cycle, while still allowing for
ongoing maintenance and other support activities.
These operations experienced a slower-than-anticipated
ramp-up during the transition to the new mining cycle. The
Group is, however, pleased to report that notable production
improvements were achieved during the last quarter of the
financial year and post year-end, as follows:
• Continuous operations, the optimisation of mining methods
at Sheba Mine’s Main Reef Complex (MRC) and Zwartkoppie
(ZK) stopes, along with increased availability of trackless
mining machinery, have contributed to improved underground
production tonnes and grades:
– Sheba Mine’s average monthly underground production
improved by 38.5% from an average of 6,656t for the
period July 2022 to February 2023 to an average of 9,220t
for the period March 2023 to July 2023, with average gold
production per month increasing from 40kg to 49kg over the
same period
– Fairview Mine’s average monthly underground production
from the MRC and Rossiter orebodies improved by 7.7%,
from an average of 8,239t for the period July 2022 to
February 2023 to an average of 8,875t for the March 2023
to July 2023 period, with average monthly gold production
increasing commensurately from 96kg to 105kg.
• A ‘remnant area’ exercise is being carried out at Fairview Mine
to identify additional mining blocks for extraction. Areas along
the 1 and 2 Decline shaft infrastructure are being investigated,
as these areas can utilise available ore hoisting capacity.
Additional resource blocks, which do not require shaft hoisting,
were also identified on 11 Level. This material can substitute the
lower-grade surface sources currently being processed by the
metallurgical plants and supplement current ore tonnes from the
underground operations
• At Fairview Mine, the following projects will also reduce the
3 Decline’s logistical constraints and improve availability for
hoisting high-grade ore from the MRC and Rossiter orebodies:
– The development and equipping of a chairlift decline
adjacent to the 3 Decline will commence between 42 and
64 Levels to ensure increased available times for hoisting.
The project is scheduled for completion in 2024
–
Installation of a grout backfill plant has been completed,
enabling the pumping of backfill from the surface using the
decline systems rather than transporting bags of cement
through the 3 Decline as is currently the practice. The
remaining infrastructure will be in place during the second
quarter of this financial year.
• At Consort Mine, the contractor model was implemented
commencing March 2023. The operation’s workforce was
reduced from more than 400 employees and contractors to a
current complement of approximately 275 contract employees,
and the mine plan was reconfigured. The operation achieved
its contracted production targets in June 2023 and is now well
positioned to return to profitability
– Run-of-mine (RoM) production in June and July 2023
averaged 3,450t per month compared with the January to
May 2023 average of 1,800t per month, while monthly gold
production improved to an average of 17kg from 10kg for
the same period (excluding gold from surface sources)
– The current focus at Consort Mine is on equipping the Prince
Consort (PC) Shaft remnant blocks to enable the extraction
of high-grade ore from the 41 to 45 Level areas.
In line with the implementation of a continuous operating cycle and
improved production metrics, the underground Mineral Reserve
delineation drilling programme was enhanced:
• Barberton Mines achieved 10,618m of drilling (2022: 8,922m),
a 19% increase year-on-year. This drilling was mainly aimed at
delineating and de-risking the mine plan’s variability at Fairview
Mine’s MRC cross-fracture being mined downwards from the
257 Platform
• Additionally, this drilling is also directed at exploring for
economic mineralisation in subparallel structures as well as
on nearby known grade-carrying structures
• At Sheba Mine, the drilling was focused around the lower
37 Level mining sections of the ZK orebody.
The remaining life-of-mine from the BTRP’s current tailings sources
is estimated at three years, with a declining production profile
over the last two years of its life. In the coming years, production
from the BTRP is expected to be supplemented with ore from
Barberton Mines’ Western Cross and Royal Sheba orebodies,
where the extraction and processing of a 10,000t bulk sample was
successfully completed.
• Preliminary optimisation work on the life-of-mine plan estimates
an eight-year lifespan at Royal Sheba, with production of around
235,000oz of gold at an average mining grade of 3g/t over
the life-of-mine, and the potential for further extensions as the
orebody remains open at depth
• The Western Cross orebody at Sheba Mine is a lower-grade
(3g/t to 4g/t) 10m wide free-milling orebody that is currently
accessed via the Southwall adit and forms part of the mine’s
production profile. The orebody is amenable to bulk mining,
similar to that planned at the Royal Sheba project, and will
further supplement feed material to the BTRP.
Evander Mines
Evander Mines’ underground operations have a life-of-mine of
13 years, which includes planned production from 24, 25 and
26 Levels, but excludes any expected production from the
7 Shaft’s Egoli project. As the 8 Shaft pillar mining is depleted over
the next two years, the focus has shifted to mining from 24 Level,
with four crews already transferred during the current financial year.
Annual production of approximately 35,000oz is anticipated for a
period of three years from 24 Level, whereafter the 25 and 26 Level
projects are planned to ramp up production to approximately
65,000oz to 70,000oz per annum for an eight-year life-of-mine.
Development of the 24 Level project is progressing well, despite
encountering several geotechnical challenges during the year,
which adversely impacted the lateral development’s advance rates.
Significant progress continues to be made:
• Phase 1 of the underground refrigeration plant was successfully
commissioned, enabling mining operations on both the 24 Level
F and D raise line stopes and, following completion of the
required access development, mining of the 24 Level A, B and
C raise lines. Currently, two crews are mining the 24 Level F
raise line, while two additional crews are operating on the
24 Level D raise line
• Phase 2 of the refrigeration plant is currently under construction,
with commissioning expected in the second quarter of the 2024
financial year
• To improve efficiency, the existing ventilation shaft from 17 to
24 Level is being equipped to provide hoisting capacity of up to
40,000t per month
– This initiative will reduce reliance on the ageing conveyor belt
system while simplifying and speeding up the ore handling
process. Excavations for the winder chamber, in preparation
for the winder’s installation, have been completed and piping
installations in the ventilation shaft commenced in April 2023
– The ventilation shaft is scheduled to be commissioned for
hoisting during the third quarter of the 2024 financial year
– As an interim measure, additional crews have been
deployed to the conveyor belts to improve maintenance
and breakdown response times. This effort is expected
to increase conveyor belt availability until ore hoisting can
commence through the ventilation shaft
• The construction of an additional grout plant at 8 Shaft, which
provides pseudo-pillar support, has also been completed.
This plant will supply the required grout for mining support on
24 Level and future mining operations on 25 and 26 Levels
– The utilisation of pseudo-pillars in the 8 Shaft pillar has
proven to be effective in controlling mining subsidence and
enhancing clean mining practices.
Development on 25 Level is anticipated to commence in the
2024 financial year. Footwall development blasting on 24 Level is
progressing and will be used to access 25 and 26 Levels through
an on-reef decline layout where the 24 Level footwall development
intersects the reef horizon.
The dewatering process of the 3 Decline at Egoli’s 7 Shaft
project commenced in June 2022 and reached a milestone in
June 2023 when it was successfully dewatered to below 19 Level.
The dewatering process was, however, hindered by intermittent
electricity supply interruptions due to Eskom’s infrastructure
failures. To maintain the desired water levels, continuous pumping
64
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
CHIEF EXECUTIVE OFFICER’S REVIEW continued
operations remain in place. Despite these challenges, we are
actively working on a comprehensive plan to mine the existing
remnant lower-grade blocks at 7 Shaft. This planning process
is currently underway and is expected to be finalised by the first
quarter of the 2024 financial year.
Elikhulu
Despite facing challenges that included electricity supply
disruptions and unfavourable weather conditions during the
rainy season, gold production from Elikhulu remained stable at
50,573oz (2022: 52,220oz) during the year. Elikhulu processed
13,587Mt of tailings material (2022: 13,732Mt) and achieved an
overall recovery of 32% (2022: 35%). The operation successfully
completed the installation of a 6km pipeline and commissioned the
Leslie/Bracken pump station in September 2022, which should
ensure a consistent production profile from Elikhulu for the next
financial year.
Elikhulu remains one of the lowest-
cost gold mining operations in
Southern Africa, with an estimated
remaining life-of-mine of 10 years.
MTR project
As previously announced, all required permits for the construction
of the MTR project are in place.
In the SENS announcement of 1 August 2023, Pan African
informed shareholders that all conditions precedent to the Group’s
ZAR1.3 billion (US$70.3 million) senior debt tranche designated
for the funding of the MTR project had been fulfilled and the senior
debt facility has become effective. The senior debt facility was
underwritten by Rand Merchant Bank, a division of FirstRand Bank
Limited (RMB), with Nedbank Limited (acting through its Nedbank
Corporate and Investment Banking division), as co-financier.
Following the successful issue of the Group’s inaugural
Domestic Medium-term Note (DMTN) programme of ZAR800 million
(US$43.2 million) in December 2022, completion of a ZAR400 million
(US$21.6 million) synthetic gold forward sale with RMB in March
2023 and closure of the senior debt facility, the full upfront capital of
ZAR2.5 billion for the project’s development has been secured.
Full-scale construction of the MTR plant has now commenced, with
expected production of 50,000oz per year for more than 20 years
(remining both the Mogale Cluster and Soweto Cluster TSFs) at
an AISC similar to that of Elikhulu. Steady-state production is
expected by December 2024.
Feasibility studies into the merits of renewable energy solutions
for the new tailings retreatment plant’s energy requirements are
underway.
For further details, including economic parameters, refer to the
abridged Mineral Resources and Mineral Reserves report on
page 103.
EXPLORATION
Gold exploration programme in Sudan
Pan African Resources Minerals Co. Limited, a subsidiary of the
Group, is the holder of five exploration concessions in the Red Sea
state of Sudan, located near the key coastal city of Port Sudan.
The exploration concessions are valid for a period of three years.
• After the initial three-year period, the concessions can be
extended twice for a period of one year each. At the point of
each extension, the exploration concession holder is required
to relinquish 50% of the concession area, or the remaining
concession area in the case of the second extension period
• At any time during the active exploration concession period,
the holder can apply to upgrade the exploration concession
to a mining lease.
A mining lease can only be applied for once a positive feasibility
study is completed and submitted to the Sudanese Mineral
Resources Company and the Ministry of Mines.
• A mining lease is active for a period of 25 years and is
renewable, with each renewal period valid for 20 years. Once a
mining lease has been approved, the Sudanese government is
entitled to a 30% free carried interest in the company to which
the mining lease was granted.
During September 2022, the Group successfully commissioned
the first commercial fire assay multi-element analytical laboratory in
Sudan. This laboratory is used to analyse all exploration samples
collected from the exploration concessions and enables the
quick turnaround of critical assay results, essential for informative
decision-making during the exploration phases.
Initial assay results received from the exploration targets identified in
the south-eastern corner of Block 12A South averaged 1.7g/t from
12 samples taken from quartz veins, rock debris and soil, noting
the following:
• Some of the structures sampled indicated significantly higher
gold mineralisation results, with values ranging from 2.9g/t up
to 9.4g/t
• These structures will be further defined as part of a confirmatory
sampling programme. Preliminary field investigations identified
a siliceous unit hosting significant iron oxide alteration, with
reported gold grades of 7.3g/t, 0.19g/t and 0.58g/t
• Further sampling along the strike and down-dip of the structure,
as well as subsequent mapping, revealed a potential extension
of the mineralised zone of several kilometres towards the
south-west.
Following the military-led coup d’état on 25 October 2021, the
paramilitary group known as the Rapid Support Forces launched
attacks against the ruling military group, the Sudanese Armed
Forces, in April 2023. Because of the conflict that ensued thereafter,
all expatriate employees of the Group were safely extracted from
Sudan. Accordingly, a notice of force majeure on the Group’s
exploration licences was issued to the Sudanese Mineral Resources
Company. All of the Group’s in-country assets were placed on
care and maintenance to minimise operational expenditure. During
August 2023, the Group initiated the return of the expatriate
workforce to recommence with our exploration activities.
No Mineral Resources or Mineral Reserves are currently reported
for any of the targets identified.
discretion, believes that a dividend in line with the dividend policy
is justified for the 2023 financial year given the favourable gold
price environment, robust 2023 cash flows and the encouraging
prospects for the 2024 financial year.
The net proposed dividend constitutes a payout ratio of 40.5% of
the Group’s discretionary cash flows, as defined by its dividend
policy. The payout ratio is indicative of the board’s assessment of
the sustainability of the operations and favourable prospects for the
2024 financial year. The proposed dividend equates to a dividend
yield of 5.9% based on the 30 June 2023 closing share price of
ZAR3.03 per share.
OUTLOOK AND PROSPECTS
Our primary focus for the coming year is safely delivering high-
quality ounces in line with our production guidance and successfully
executing capital projects that will sustain and increase future gold
production. Our approach strikes a circumspect balance between
financial stability and the pursuit of growth opportunities.
For the upcoming 2024 financial year, our focus areas include:
• monitoring the Group’s optimisation and restructuring initiatives
intended to increase production and further reduce costs
• executing capital projects designed to sustain and increase
future gold production profile to approximately 250,000oz
per year
• ensuring adequate liquidity to fund the Group’s capital
programmes
• continuing to progress the Group’s ESG initiatives with a
focus on maintaining our social licence to operate in our host
communities
• monitoring debt levels and senior debt facility compliance as the
construction of the MTR project progresses
• maintaining the focus on generating sustainable shareholder
returns.
APPRECIATION
I am grateful for the support and commitment from our dedicated
staff and contractors, the leadership shown by our management
team and the steadfast guidance from our trusted board in
managing challenges and advancing exciting opportunities in
the past year.
Cobus Loots
Chief executive officer
13 September 2023
GOLD PRICE HEDGING
The new MTR project term loan and the revolving credit facility
(RCF) refinance facilities (senior debt facilities) require that the Group
hedges a minimum number of ounces (capped at 30% of total annual
production) on a two-year rolling basis, with the intent of locking in a
minimum level of cash flow available for debt service, in excess of the
Group’s annual AISC base, to reduce the risk of adverse rand gold
price movements on the Group’s cash generation during the term of
these facilities. In terms of the hedging policy agreed with RMB and
Nedbank, as participants in the senior debt facilities, the Group may
elect to conduct additional discretionary hedging up to a maximum of
60% of annual production in any given year.
The Group currently has the following hedge transactions in place:
• Synthetic forward transaction: The Company is obligated to
sell 4,846oz of gold per month, for 24 months commencing in
March 2023, at a fixed price of ZAR1,025,000/kg (US$1,723/oz1),
and received an upfront premium of US$21.6 million
(ZAR400 million). The effective price at which the Group sold the
3,617kg of gold, representing approximately 30% of annual
Group production, over the 24 months, is ZAR1,135,604/kg
(US$1,909/oz1). This instrument satisfies the mandatory hedging
requirement provided for in the senior debt facilities.
1 Converted at an exchange rate of US$/ZAR:18.50.
• Zero-cost collars in place in terms of discretionary hedging as
per the hedging policy:
Term
Notional quantity
Total notional
quantity
Cap price
Floor price
July 2023 to
December 2023
July 2023 to
December 2023
2,150oz per month
2,150oz per month
12,900oz
ZAR1,312,070/kg
US$2,206/oz
ZAR1,100,000/kg
US$1,849/oz
12,900oz
ZAR1,341,459/kg
US$2,255/oz
ZAR1,100,000/kg
US$1,849/oz
DIVIDENDS
Proposed dividend for the financial year ended
30 June 2023
The board has proposed a final dividend of ZAR400.1 million for
the 2023 financial year (approximately US$21.2 million), equal to
ZA 18.00000 cents per share or approximately US 0.95592 cents
per share (0.75219 pence per share). The dividend is subject to
approval by shareholders at the AGM, which is to be convened on
Thursday, 23 November 2023.
Pan African aspires to pay a regular dividend to its shareholders
and in balancing this cash return to shareholders with the Group’s
strategy of generic and acquisitive growth, Pan African believes
a target payout ratio of 40% to 50% of net cash-generated from
operating activities, after providing for the cash flow impact
of capital expenditure (reduced by externally funded capital),
contractual debt repayments and the cash flow impact of once-off
items (discretionary rand cash flow), is appropriate. This measure
aligns dividend distributions with the cash-generation potential of
the business. In proposing a dividend, the board will also take into
account the Company’s financial position, prospects, satisfactory
solvency and liquidity assessments and other factors deemed by
the board to be relevant at the time. The board, having applied its
66
67
PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 Substantially achieved
Moderate progress
Not achieved
2023
1
7.96
2022
None
8.95
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
PERFORMANCE AGAINST OUR
STRATEGIC OBJECTIVES
We are committed to producing high-margin gold ounces in a safe and efficient
manner, while investing in host communities and minimising the environmental
impact of our operations.
Strategic objective
Value created
2023
2022
Strategic objective
Value created
FINANCIAL CAPITAL
Ensure adequate,
competitively priced and
flexible financial resources for
the funding of our operations
and disciplined capital
allocation for sustainable long-
term value creation
MANUFACTURED
CAPITAL
Unlock the full potential of our
Mineral Resources and Mineral
Reserves through sustainable
extraction and processing,
while embracing renewable
energy, to pave the way for a
responsible and prosperous
mining future
INTELLECTUAL
CAPITAL
Optimise the use of
technology and harness
the expertise of our teams
to consistently deliver
safe, reliable, efficient and
responsible mining operations
Net senior debt
US$18.9 million
US$9.3 million
Net cash from operating activities
US$100.1 million
US$110.0 million
One of the first South African mining companies to issue a US$43.2 million sustainability-linked
bond during December 2022
In July 2023, a US$70.3 million debt funding package for the MTR project construction was
entered into through a credit-approved term loan facility
Secured US$21.6 million by means of a synthetic gold forward sale transaction in March 2023
as a funding component for the construction of the MTR project
Dividend paid
US$23.2 million
US$25.0 million
Capital expenditure
US$113.0 million
US$82.8 million
Progressed restructuring programmes and other initiatives to increase the production run rate.
Refer to the operational performance review on page 82
Gold production
175,209oz
205,688oz
A power purchase agreement has been entered into for 40MW wheeled renewable energy
Fatalities
TRIFR (per million man hours)
HUMAN CAPITAL
Attract, cultivate and retain
exceptional talent while
fostering a culture of safety,
respect and continuous
learning
Skills and development training
US$2.2 million
US$0.8 million
Continuing progress in fostering an entrepreneurial and results-driven culture
SOCIAL AND
RELATIONSHIP
CAPITAL
Engage stakeholders to build
positive relationships, maintain
our social licence to operate
and create sustainable value
Reduced illegal mining through partnerships, surveillance and enhanced technology
applications
Successfully handed over phase 3 of the Ngwenya and Sheba Primary Schools to the
Department of Basic Education during August 2023
Implemented measures to progress the operation of the Group’s TSFs in line with the GISTM
as far as reasonably practicable
PwC assured certain key sustainability information in the Group’s ESG report, and the Group
published its maiden TCFD report in 2023
AISC
US$1,327/oz
US$1,284/oz
In March 2023, Evander Mines’ water retreatment plant was commissioned
Optimisation initiatives were undertaken at all operations. Refer to the operational performance
review on page 82
The Group employed modern exploration techniques and advanced mine planning systems,
implemented a safety reporting system across our mining operations and enhanced our
surveillance technology
Finalised the acquisition of Mogale Gold and MSC
Continued with the gold exploration programme in north-eastern Sudan. Exploration activities
were placed on care and maintenance during April 2023 due to the outbreak of violence but
resumed after year-end following a detailed risk assessment of the operational environment in
the exploration area
In May 2023, preparatory construction activities on Fairview Mine’s solar plant commenced
Action plans and remedial activities are being implemented to mitigate high-risk safety and
environmental issues
NATURAL CAPITAL
Manage our operations with
climate-conscious practices
that preserve and protect
natural resources and promote
sustainability
68
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
FIVE-YEAR
OVERVIEW
Unit
2023
2022
2021
2020
2019
Unit
2023
2022
2021
2020
2019
Operating performance
Gold mining tonnes milled
Gold tailings and feedstock processed
Overall recovered grade
Gold produced
Average gold price received
Total gold mining cash costs
t
t
g/t
oz
394,091
381,148
376,118
285,016
311,606
14,757,699
14,901,683
14,315,881
14,339,922
13,035,165
0.4
0.4
0.4
0.4
0.4
175,209
205,688
201,777
179,457
172,442
US$/oz
US$/oz
1,836
1,142
1,824
1,099
1,826
1,035
1,574
911
1,266
891
US$ million
2023
2022
2021
2020
2019
Statistics
Shares in issue
million
2,222.9
2,222.9
2,234.7
2,234.7
2,234.7
Weighted average number of shares
in issue
Earnings per share
Headline earnings per share
Net asset value per share
Dividend paid per share
million
US cents
US cents
US cents
US cents
1,916.5
1,926.1
1,928.3
1,928.3
1,928.3
3.19
3.15
15.37
1.04
3.90
3.93
15.37
1.27
3.87
3.87
14.71
0.84
2.30
2.29
9.52
0.15
1.97
1.19
9.52
–
321.6
376.4
368.9
274.1
217.7
(158.5)
(153.0)
Shares traded
2023
2022
2021
2020
2019
JSE
ZAR
million
AIM
GBP
million
JSE
ZAR
million
AIM
GBP
million
JSE
ZAR
million
AIM
GBP
million
JSE
ZAR
million
AIM
GBP
million
JSE
ZAR
million
AIM
GBP
million
Statement of profit or loss
Revenue
Cost of production before depreciation
and amortisation
Gross profit
Adjusted EBITDA
Impairment (cost)/reversal
Profit for the period
Headline earnings
Dividend paid
Statement of financial position
Non-current assets
Current assets
Total equity
Non-current liabilities
Current liabilities
Statement of cash flows
Net cash from operating activities
Capital expenditure on property, plant and equipment
Net increase/(decrease) in cash and cash equivalents
(198.8)
102.4
115.0
–
60.7
60.5
(23.2)
439.7
61.3
294.6
129.0
77.4
100.1
112.7
9.1
(226.4)
123.5
138.3
(0.5)
75.0
75.6
(25.0)
401.1
56.0
294.6
103.5
59.0
110.0
82.7
(3.7)
(208.8)
128.0
144.1
–
74.7
74.7
(20.6)
398.5
84.6
283.6
93.5
106.0
82.2
44.4
(6.4)
94.1
86.5
0.1
44.3
44.2
(3.4)
315.0
53.6
183.6
106.3
78.7
53.8
34.6
26.5
48.5
56.8
17.9
38.0
22.9
–
363.2
30.0
183.6
145.7
63.9
37.7
55.1
3.9
Value of shares traded
2,854.2
140.4
4,018.9
194.6
5,294.3
164.5
1,742.7
50.6
680.9
19.7
2023
2022
2021
2020
2019
Unit
JSE
AIM
JSE
AIM
JSE
AIM
JSE
AIM
JSE
AIM
million
782.3
834.0
1,056.3
1,015.7
1,192.6
773.4
680.5
397.7
418.7
222.8
%
35.2
43.5
47.5
46.9
53.4
34.6
30.5
17.8
18.7
10.0
number 102,319
68,708
99,368
97,950 173,253
70,163
71,233
35,211
23,424
14,449
Volume of
shares traded
Volume traded
as percentage of
number in issue
Number of
transactions
Price:earnings
ratio
5.3
4.7
6.6
7.0
5.7
6.0
10.3
9.7
6.7
6.5
Dividend yield at
the last traded
share price
%
5.9
6.0
4.6
4.3
5.3
5.3
3.8
3.7
1.2
1.3
2023
2022
2021
2020
2019
JSE
ZA
cents
AIM
GB
pence
303.0
485.0
283.0
365.0
12.5
21.2
12.0
16.9
JSE
ZA
cents
394.0
476.0
295.0
374.6
AIM
GB
pence
20.8
24.0
15.1
19.2
JSE
ZA
cents
341.0
642.0
311.0
440.0
AIM
GB
pence
17.2
27.1
15.4
21.3
JSE
ZA
cents
370.0
398.0
150.0
245.1
AIM
GB
pence
17.6
18.0
9.0
12.4
JSE
ZA
cents
186.0
215.0
125.0
161.7
AIM
GB
pence
10.0
10.8
6.9
8.8
Last sale in year
High
Low
Average price per share traded
70
71
PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 One of Barberton Mines’ female
employees underground at Fairview Mine
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OUR SUSTAINABILITY-LINKED
FINANCE FRAMEWORK
Pan African is one of the first mining
companies to issue a sustainability-
linked bond in the South African market.
INTEGRATED THINKING
The framework is the endorsement of our common belief
in delivering on our purpose in a sustainable manner.
In December 2022, Pan African announced its medium-term note programme, with an allocated amount of up to ZAR5 billion.
These notes are classified as sustainability-linked bonds and sustainability-linked loans and are forward-looking performance-based
instruments, incorporating financial and structural characteristics that may differ based on the Group's attainment of specific predefined ESG
KPIs. The bond explicitly commits the Group to making future improvements in environmental and social areas that are relevant, core and
material to its overall business.
These KPIs are objectively measurable and quantifiable, and an independent third party will annually verify them using a recognised and
established methodology, ensuring their accuracy and reliability.
KPI
2022
2023
2024
2025
2026
2027
2028
2029
2030
Renewable energy as a percentage
of total energy consumption (%)
Land rehabilitated as a percentage
of total area to be rehabilitated (%)
0B
0B
5
–
7
8
TFIFR (per million man hours)
8.95B
8.50
8.08
B Baseline.
12
14
15
15
15
16
7.75
24
7.44
32
7.22
36
7.00
39
6.79
–
41
–
Pan African, along with its significant operating subsidiaries, serves as the guarantor for the programme, which is listed on the Interest Rate
Market of the JSE. The programme is governed by specific financial covenants, which are as follows:
Ratio
Net debt-to-equity
Debt service cover
Net debt-to-EBITDA
Interest cover
Year ending on or before redemption date
≤ 1:1
> 1.3:1
≤ 2:1
> 4:1
After a highly successful bookbuild resulting in oversubscription, the Group issued senior second-ranking secured sustainability-linked bonds
to the value of US$43.2 million (ZAR800 million). These bonds were officially listed on 13 December 2022. This strategic move not only
broadens the Group’s funding sources but also directs the proceeds towards its growth project pipeline, enabling further expansion and
development.
The sustainability-linked finance framework specifically focuses on three
essential sustainability themes, each accompanied by a relevant KPI and
sustainability performance target (SPT). These themes are as follows:
RENEWABLE ENERGY – CLIMATE CHANGE
This KPI monitors renewable energy generation, GHG emissions and
energy consumption. The associated SPTs are designed to drive progress
towards increased use of renewable energy, reducing emissions and
enhancing energy efficiency over a seven-year time horizon.
Target
Achieve 15% renewable energy mix by 2027
2023 milestone
Achievement of the SPT of 6.1% versus 5.0%
LAND REHABILITATION – BIODIVERSITY
The KPI for this theme revolves around soil and land use, ensuring
responsible land rehabilitation practices. The SPTs are aimed at restoring
and preserving biodiversity. Notably, the MTR project is the sole area
where land rehabilitation progress is being evaluated for this SPT.
Target
Achieve 41% land rehabilitation by 2030 on the
MTR project
2023 milestone
SPT to be measured in 2024 once the MTR project
plant is constructed
TRIFR – OCCUPATIONAL HEALTH AND SAFETY
This KPI tracks the Group’s performance in ensuring employee safety. The
SPT aims to reduce the TRIFR metric within a seven-year time frame.
Target
Achieve year-on-year average improvement of 3.86%
in safety performance for the reporting period 2023 to
2030 and a cumulative 24% reduction, compared to
the past seven years
2023 milestone
Achievement of the SPT of 7.96 per million man
hours versus 8.50 per million man hours
72
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123PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
FINANCIAL
DIRECTOR’S
REVIEW
Despite the production challenges experienced at our
underground operations, Pan African delivered a robust
financial performance for the 2023 financial year.
The Group has made significant progress in advancing its
growth projects, with capital expenditure prioritising the
development of Evander Mines’ 24 Level project and the
MTR project.
OVERVIEW
The Group’s performance in the current financial year reflects
both challenges and achievements. Notably, revenue declined
by 14.6% in line with the 14.8% decline in production to
175,209oz, following the record production of 205,688oz in
the previous financial year. In response to these challenges,
and to mitigate against future setbacks, we purposefully
addressed the underlying issues that have impacted our
operations. Refer to the operational performance review on
page 82 for the details of the initiatives taken to address
these issues.
The Group has made significant progress in advancing its
growth projects, with the development of Evander Mines’
24 Level project and the MTR project being prioritised. Total
capital expenditure for the year amounted to US$113.0 million
(2022: US$82.8 million), which resulted in an increase in net
debt
previous financial year.
to US$22.0 million compared to US$13.0 million in the
AISC has increased marginally to US$1,327/oz
(2022: US$1,284/oz), resulting in an AISC margin of 27.7%
(2022: 29.6%) on the average gold price of US$1,836/oz
(2022: US$1,824/oz) received during the 2023 financial year.
Cash holdings increased to US$34.8 million
(2022: US$27.0 million), while net cash from operating activities
decreased to US$100.1 million (2022: US$110.0 million).
Liquidity remains healthy, with access to immediately
available cash and undrawn facilities of US$84.7 million
(2022: US$69.4 million) at financial year-end.
DEON LOUW
Financial director
Performance
Positive increase
Negative increase
Positive decrease
Negative decrease
Unchanged
2023
2022
%Δ
Highlights for the year
Revenue
Profit for the period
Headline earnings
Basic earnings per share
FINANCIAL
CAPITAL
Net cash from operating activities
US$100.1 million
US$110.0 million
Net debt
Adjusted EBITDA
US$22.0 million
US$13.0 million
US$115.0 million
US$138.3 million
Dividend proposed per share
US 0.95592 cents
US 1.04046 cents
US$321.6 million
US$376.4 million
US$60.7 million
US$60.5 million
US 3.19 cents
US$75.0 million
US$75.6 million
US 3.90 cents
(14.6)
(19.1)
(20.0)
(18.2)
(9.0)
69.2
(16.8)
(8.5)
CAPITAL STRUCTURE AND FINANCING ARRANGEMENTS
During the 2023 financial year, Pan African strengthened its capital structure and diversified its funding sources by:
• successfully issuing its inaugural sustainability-linked bond of US$43.2 million (ZAR800 million) in December 2022
•
implementing a synthetic gold forward sale transaction structure in March 2023 to raise funding of US$21.6 million
(ZAR400 million)
• closing a US$70.2 million senior debt facility for the part funding of the MTR project’s construction
•
refinancing its existing RCF, which was due to expire in June 2024, to June 2026, contributing to ensuring the Group’s financial
stability and liquidity as the MTR project is being constructed.
The strengthened capital structure significantly reduces the Group’s financial risk during the MTR project’s construction period as
there are no material scheduled principal debt repayments during this period.
The sustainability-linked bond, RCF and term loan facility are tied to specific sustainability-linked KPIs, verified annually over a period
of seven years. An improvement in these metrics will result in a reduction of the interest rates borne by these instruments. For further
details on these KPIs and our sustainability-linked finance framework, refer to page 72.
Adjusted EBITDA decreased due to a US$54.8 million decrease in revenue, which was offset by decreased production costs of
US$27.6 million. The adjusted EBITDA margin decreased to 35.8% (2022: 36.7%).
Adjusted EBITDA for the year ended 30 June 2023 (US$ million)
27.6
(2.6)
5.4
1.1
(54.8)
138.3
115.0
150
120
90
60
30
0
74
75
June 2022
Revenue
Cost of production
before depreciation
and amortisation
1 The movement excludes non-mining depreciation and amortisation.
Other income
Other expenses1
Royalty costs
June 2023
PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
FINANCIAL DIRECTOR’S REVIEW continued
FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2023
US$ million
Revenue
Cost of production
Mining and processing costs
Salaries and wages
Electricity costs
Engineering and technical costs
Other
Depreciation and amortisation
Gross profit
Other income
Other expenses
Royalty costs
Impairment loss on plant and equipment
Net income before finance income and finance
costs
Finance income
Finance costs
Profit before tax
Income tax expense
Profit for the period
Adjusted EBITDA
Headline earnings
2023
321.6
(198.8)
(83.0)
(51.0)
(28.5)
(18.8)
(17.5)
(20.4)
102.4
5.9
(13.2)
(1.0)
–
94.1
1.1
(9.7)
85.5
(24.8)
60.7
115.0
60.5
2022
%Δ
(14.6)
(12.2)
(13.8)
(10.4)
(15.7)
(12.1)
(2.8)
(23.0)
(17.1)
(30.6)
(27.9)
(52.4)
376.4
(226.4)
(96.3)
(56.9)
(33.8)
(21.4)
(18.0)
(26.5)
123.5
8.5
(18.3)
(2.1)
(0.5)
111.1
(15.3)
1.1
(5.3)
106.9
(31.9)
75.0
138.3
75.6
–
83.0
(20.1)
(22.3)
(19.1)
(16.8)
(20.0)
The income tax expense for the current financial year resulted in an effective tax rate of 29.0%, which
is slightly lower than the previous financial year’s rate of 29.8%. The year-on-year decrease of 22.3%
in the Group’s income tax expense is primarily attributable to the lower-than-planned production levels,
which reduced taxable income.
The deferred tax expense decreased to US$19.3 million (2022: US$25.0 million).
Finance costs increased following a 54.3% increase in borrowings as well as an increase in interest
rates during the financial year.
Other expenses decreased by US$5.1 million mainly due to a decrease in costs incurred associated
with the Group’s employee incentive scheme to US$0.9 million (2022: US$5.6 million).
The gross profit
margin decreased
from 32.8% to 31.8%.
Other income decreased
by US$2.6 million largely
due to:
• a US$3.8 million
decline in the change
in estimate associated
with the Group’s
rehabilitation obligation,
following an increase
in the risk-free rate
which resulted in
a US$0.9 million
decrease in the
rehabilitation
obligation compared
to a US$4.7 million
decrease in the
previous financial year
• offset by a
US$1.3 million
increase in the
fair value gain on
the environmental
rehabilitation obligation
fund. The fair value
gain recognised in the
current financial year
was US$1.9 million
compared to
US$0.6 million in the
previous financial year.
Evander Mines’ Kinross metallurgical plant
Performance
Positive increase
Negative increase
Positive decrease
Negative decrease
Unchanged
Revenue decreased due to gold sold decreasing by 15.0% to 174,760oz (2022: 205,688oz). The average US$ gold price received
was US$1,836/oz, which is consistent with the price received in 2022 of US$1,824/oz.
Production costs are incurred in rand, the functional currency of our main operating entities, with translations to US$ impacted by
the US$/ZAR exchange rate. The Group’s cost of production decreased by 12.2% primarily due to the 16.8% depreciation of the
average US$/ZAR exchange rate relative to the previous financial year. However, when measured in rand, the cost of production
increased by 2.5% which is below South Africa’s current inflation rate of approximately 5.6%.
• Mining and processing costs increased by 0.6% in rand terms predominantly due to increased mining support costs at
Barberton Mines, following the implementation of continuous mining operations at Fairview and Sheba Mines, above-inflationary
increases in reagent costs and increased processing costs at Elikhulu. In September 2022, Elikhulu commenced remining the
Leslie/Bracken TSF, in addition to the ongoing Kinross TSF remining, which resulted in increased processing costs during the
financial year. However, these increases were offset by the capitalisation of mining costs related to Evander Mines’ 24 Level
development.
• Salaries and wages increased by 4.8% in rand terms. The Group’s average annual salary increase was approximately 5.0%.
This was partially offset by the capitalisation of operating costs which related to the 24 Level development, a decrease in
production bonuses paid at both Barberton Mines and Evander Mines, in line with the decline in gold production, and cost-saving
initiatives such as the implementation of new time and attendance software at Barberton Mines.
• Electricity costs decreased by 1.7% in rand terms, mainly due to the capitalisation of the 24 Level development costs and
savings, following the commissioning, in May 2022 of Evander Mines’ solar plant. However, this decrease was offset by a 9.6%
regulatory electricity rate increase and higher costs associated with remining the Leslie/Bracken TSF due to increased pumping
distances as well as increased tonnes milled by Evander Mines’ underground operations compared to the previous financial year.
• Engineering and technical costs increased by 2.4% in rand terms, mainly due to repairs and maintenance on valves and
electrical equipment at Evander Mines’ Kinross plant, pump upgrades at Elikhulu and increased engineering costs as a result of
the implementation of continuous shift operations at Barberton Mines. This increase, however, was offset by the capitalisation of
costs related to the 24 Level development.
The depreciation and amortisation charge reduced by 23.0% primarily due to the 14.8% decline in gold production. This charge
for the mining operations is calculated based on actual production in relation to the estimated available RoM mining tonnes over the
Mineral Reserve life of the operations. Additionally, the 16.8% depreciation of the average US$/ZAR exchange rate compared to the
previous financial year also contributed to the overall decrease. In rand terms, depreciation decreased by 9.9%.
The depreciation charge for Evander Mines’ underground operations decreased by US$4.9 million mainly due to the extension of the
life-of mine from five years to 14 years, which includes planned production from 24, 25 and 26 Levels but excludes any provision for
future production from Egoli.
The reduction in depreciation was, however, partially offset by a US$0.4 million and US$0.2 million increase in the depreciation
charge related to the Group’s solar and agriculture facilities, respectively.
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
FINANCIAL DIRECTOR’S REVIEW continued
FINANCIAL POSITION AS AT 30 JUNE 2023
US$ million
2023
2022
%Δ
ASSETS
Property, plant and equipment
Goodwill
Long-term inventory
Environmental rehabilitation obligation fund
Other
Non-current assets
Inventory
Trade and other receivables
Cash and cash equivalents
Other
Current assets
Total assets
EQUITY AND LIABILITIES
Share capital and premium
Retained earnings
Reserves
Non-controlling interests
Total equity
Environmental rehabilitation obligation
Borrowings
Contract liability
Deferred tax
Other
Non-current liabilities
Trade and other payables
Borrowings
Contract liability
Share-based payment obligations
Other
Current liabilities
Total liabilities
Total equity and liabilities
CASH FLOW FOR THE YEAR ENDED 30 JUNE 2023
US$ million
Cash from operating activities
Cash used in investing activities
Cash from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of foreign exchange rate changes
Cash and cash equivalents at the end of the year
395.2
16.1
6.0
21.6
0.7
439.6
9.6
15.2
34.8
1.7
61.3
500.9
273.1
306.0
(283.9)
(0.6)
294.6
10.1
42.5
7.1
64.6
4.7
129.0
52.1
10.9
10.6
2.4
1.3
77.3
206.3
500.9
355.8
18.6
0.2
23.0
3.5
401.1
10.0
17.3
27.0
1.7
56.0
457.1
273.1
264.8
(243.1)
(0.2)
294.6
8.6
33.3
–
53.8
7.8
103.5
50.2
1.3
–
5.6
1.9
59.0
162.5
457.1
11.1
(13.4)
>100
(6.1)
(80.0)
9.6
(4.0)
(12.1)
28.9
–
9.5
9.6
–
15.6
(16.8)
(>100)
–
17.4
27.6
20.1
(39.7)
24.6
3.8
>100
(57.1)
(31.6)
31.0
27.0
9.6
2023
2022
%Δ
100.1
(112.7)
24.9
12.3
27.0
(4.5)
34.8
110.0
(81.3)
(32.4)
(3.7)
35.1
(4.4)
27.0
(9.0)
(38.6)
>100
>100
(23.1)
(2.3)
28.9
Performance
Positive increase
Negative increase
Positive decrease
Negative decrease
Unchanged
Capital expenditure on property, plant and equipment amounted to US$113.0 million (2022: US$82.8 million), which
included sustaining capital
of US$92.8 million (2022: US$59.7 million) mainly related to Evander Mines’ 24 Level project and the MTR project’s
construction offset by depreciation of US$20.8 million (2022: US$26.6 million) and a net foreign currency reserve loss of
US$52.8 million (2022: US$46.2 million).
expenditure of US$20.2 million (2022: US$23.1 million) and expansion capital expenditure
The long-term inventory increased following the acquisition of the Mogale Gold and MSC TSFs.
The return on capital employed decreased from 32.6% in 2022 to 27.8% mainly due to the decrease in EBIT.
The Group’s net assets remained constant at US$294.6 million. Equity increased by the profit for the period, offset by:
• net dividend payments of US$20.0 million (2022: US$21.6 million) to shareholders
• other comprehensive loss of US$40.8 million (2022: US$39.2 million) due to the recognition of a foreign translation loss
of US$41.0 million (2022: US$40.1 million) associated with the depreciation of the closing exchange rate from
US$/ZAR:16.28 to US$/ZAR:18.83.
The environmental rehabilitation obligation increased by US$1.5 million mainly as a result of the acquisition of
Mogale Gold and MSC and their associated environmental rehabilitation obligations of US$2.4 million as well as a
US$1.3 million (2022: US$1.9 million) increase associated with the unwinding of the obligation offset by a US$1.4 million
(2022: US$1.4 million) foreign currency translation reserve gain.
Borrowings increased to US$53.4 million (2022: US$34.6 million), which is attributable to the expansionary capital
expenditure on Evander Mines’ 24 Level project and the MTR project.
The contract liability relate to an upfront consideration of US$21.6 million received in March 2023 from the synthetic gold
forward sale transaction. This liability is being recognised as revenue over a 24-month period.
The share-based payment obligations decreased primarily as a result of the settlement of amounts due to employees as
vested benefits.
Cash from operating activities was adversely impacted by operational performance and is stated after a net dividend
payment of US$20.0 million (2022: US$21.6 million).
Cash used in investing activities includes capital expenditure on property, plant and equipment of US$112.7 million
(2022: US$82.7 million).
Cash from financing activities includes proceeds from borrowings of US$94.7 million (2022: US$12.9 million), partially
offset by the repayment of senior debt facilities of US$69.3 million (2022: US$41.4 million).
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
FINANCIAL DIRECTOR’S REVIEW continued
Pan African has sufficient liquidity
at the end of the financial year with
access to cash and undrawn facilities of
US$84.7 million (2022: US$69.4 million).
Available cash and
undrawn facilities
(US$ million)
42.5
34.8
7.4
Cash and cash equivalents
Available general banking facilities
Available RCF
CAPITAL ALLOCATION DISCIPLINE
The board is conscious of stakeholder aspirations for sustainable value creation. As a result, all capital allocation decisions are
subject to rigorous analysis and predefined risk-adjusted return parameters to ensure this objective is fulfilled. Of paramount
importance in all such capital allocation decisions is the Group’s ability to successfully execute investment opportunities and
realise the required risk-adjusted return over the investment horizon. The compelling returns currently being earned on the
historical capital invested in the BTRP, Evander Mines’ 8 Shaft pillar and Elikhulu bear testimony to our success in this regard.
Our primary investment criterion is to earn a minimum return in excess of the Group’s cost of capital, after adjusting for
project-specific and sovereign risks. Furthermore, to ensure our returns are robust through the cycle, we endeavour to invest
only in projects that fall into the lower half of the cost curve and where the execution risk is within our capability.
DIVIDENDS
In balancing our aspiration to return cash to shareholders with the
Group’s strategy of generic and acquisitive growth, Pan African
believes a target payout ratio of 40% to 50% of net cash from
operating activities, after providing for the cash flow impact
of capital expenditure (reduced by externally funded capital),
contractual debt repayments and the cash flow impact of once-off
items (discretionary rand cash flow), is appropriate. This measure
aligns dividend distributions with the cash-generation potential of
the business. In proposing a dividend, the board also considers
the Company’s financial position, future prospects, satisfactory
solvency and liquidity assessments and other factors considered
by the board to be deemed relevant at the time. The board,
having applied its discretion, believes that a dividend in line with
the dividend policy is justified for the 2023 financial year given the
favourable gold price environment, robust 2023 cash flows and the
encouraging prospects for the 2024 financial year.
Proposed dividend for the financial year
ZAR400.1 million for the 2023 financial year (approximately
US$21.2 million at an exchange rate of US$/ZAR:18.83), equal to
ZA 18.00000 cents per share or approximately US 0.95592 cents
per share (0.75219 pence per share). The dividend is subject to
approval by shareholders at the AGM in November 2023.
The proposed dividend equates to a dividend yield of 5.9% based
on the closing share price at 30 June 2023.
The net proposed dividend constitutes a payout ratio of 40.5% of
the Group’s discretionary cash flows. The payout ratio is indicative
of the board’s assessment of the sustainability of operations and
favourable prospect for the 2024 financial year.
Gold pour at the
Fairview smelt house
Shareholder returns at 30 June
Unit
2023
Attributable cash flow per share
US cents per share
Dividend yield at the last traded price
Cash flow yield per share
Return on shareholders’ funds
Return on capital employed
%
%
%
%
1.46
5.9
9.1
20.6
27.8
2022
1.23
4.6
5.1
25.9
32.6
Over the past financial year, the Group generated attributable cash flow of US$55.0 million
(2022: US$23.6 million), which positively impacted attributable cash flow per share. The decline
in the Group’s return on shareholders’ funds and return on capital employed can largely be
attributed to a 19.1% decline in profit for the period.
LOOKING AHEAD
Our primary focus for the coming year is delivering high-quality ounces in line with our
production guidance and successfully executing capital projects that will sustain and increase
gold production in the future. Our approach strikes a balance between financial stability and
pursuing growth opportunities.
For the upcoming 2024 financial year, our financial focus areas are as follows:
• Monitor the Group’s optimisation and restructuring initiatives intended to increase production
and reduce costs
• Execute capital projects designed to sustain and increase future gold production
• Ensure adequate liquidity to fund the Group’s capital programmes
• Monitor debt levels and senior debt facility compliance as the construction of the
MTR project progresses
• Maintain the focus on generating sustainable shareholder returns.
Deon Louw
Financial director
13 September 2023
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
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PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OPERATIONAL
PERFORMANCE REVIEW
The Group’s operational
performance in the current
financial year has presented
both challenges and
notable achievements.
Despite a 14.8% decrease
in production to 175,209oz
(2022: 205,688oz), following
an exceptional record in the
previous financial year, we
have taken proactive steps
to address the underlying
issues adversely impacting
our operations and to
mitigate against future
setbacks.
Lower current year gold
production stems primarily
from constraints at our
underground operations
and challenges related
to electricity supplied by
Eskom.
KEY OPERATIONAL FEATURES
Despite these challenges, we have made progress in key areas:
• Barberton Mines: We are pleased to report that Barberton
Mines’ underground production improved during the last
quarter of the financial year. This was achieved through the
implementation of continuous shift operations at Fairview and
Sheba Mines as well as the implementation of a contractor
mining model at Consort Mine.
• Evander Mines: The ongoing development at Evander Mines’
24 Level project is progressing well and as the 8 Shaft pillar
mining nears completion, we are strategically redeploying crews
to the 24 Level project. The 24 Level project enhances mining
flexibility which, coupled with other ongoing initiatives, positions
the operation for sustainable future production.
• AISC : The Group’s AISC per ounce has increased by 3.3%
compared to the previous financial year, reaching US$1,327/oz
(2022: US$1,284/oz). In response, we have restructured
Barberton Mines’ operations and the Group is actively
implementing various initiatives to improve gold production
and reduce unit costs.
• MTR project: We are pleased to announce that the DMRE has
issued the integrated environmental authorisation for the MTR
project, marking an important regulatory milestone and allowing
construction to commence. Refer to page 66 for further details.
• Renewable energy strategy: The Group's renewable energy
strategy plays a crucial role in stabilising the electricity supply
to our operations, resulting in cost savings and a reduction in
our carbon emissions. This strategic initiative aligns with our
broader commitment to sustainable practices and environmental
stewardship. Refer to page 51 for further details.
Employees
Contractors
Fatalities
TRIFR (per million man hours)
LTIFR (per million man hours)
RIFR (per million man hours)
2023
2,414
4,111
1
7.96
1.86
0.81
2022
2,146
2,920
–
8.95
1.04
0.35
Our employees and contractors are fundamental to the
sustainability of our business and long-term value creation, in
addition to being key enablers in the execution of our strategy,
which makes it imperative that they are part of an organisational
culture that prioritises safety. The number of contractors engaged
in our operations has increased by 50.2% primarily due to the
ongoing development and stoping at Evander Mines’ 24 Level
project. We continue to encourage and reward safe practices
through targeted safety campaigns and incentives in pursuit of our
ultimate goal of achieving zero harm. We are deeply saddened by
the fatal accident that occurred at Evander Mines during the year
as a result of a fall of ground accident.
Gold sold – total operations
(oz)
Capital expenditure1 – total operations
(US$ million)
2023
2022
2021
2020
2019
174,760
2023
205,688
2022
201,777
2021
173,864
2020
171,706
2019
100.3
67.6
44.7
40.5
56.6
AISC – total operations
(US$/oz)
Cost of production before depreciation and amortisation
(US$ million)
2023
2022
2021
2020
2019
1,327
2023
1,284
2022
1,261
2021
1,147
2020
988
2019
Overall recovered grade – mining operations
(g/t)
Overall recovered grade – tailings operations
(g/t)
2023
2022
2021
2020
2019
6.1
8.6
8.4
7.1
8.0
2023
2022
2021
2020
2019
198.8
226.4
208.8
158.5
153.0
0.2
0.2
0.2
0.2
0.2
Tonnes milled and processed – mining operations
(tonnes)
Tonnes milled and processed – tailings operations
(tonnes)
2023
2022
2021
2020
2019
501,685
2023
451,125
2022
445,463
2021
388,840
2020
357,235
2019
14,757,699
14,901,683
14,315,881
14,339,922
13,035,165
1 Converted to US$ at the average exchange rate prevailing for the respective period.
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OPERATIONAL PERFORMANCE REVIEW continued
BARBERTON
MINES
•
Three underground gold mines:
Fairview Mine, Sheba Mine and
Consort Mine
•
One tailings retreatment operation:
BTRP
GREG MOSS
General manager
OVERVIEW OF OPERATIONS
The Fairview, Sheba and Consort underground mining operations constitute the
Group’s Barberton Mines complex, which has been operating for over 130 years.
With a remaining life-of-mine estimated at 20 years, this asset is positioned as a
long-life operation in Pan African’s portfolio.
Sheba Mine is recognised as one of the oldest working gold mines
in the world and commenced its operations in 1885. Fairview Mine
is the birthplace of BIOX®, an environmentally friendly process of
releasing gold associated with sulphide (refractory) minerals using
micro-organisms that perform this process naturally and with
excellent recoveries consistently in the region of 98.8%. The BIOX®
plant was commissioned in 1988 and is still used as a training
facility for BIOX® plants globally.
These flagship underground mines are high-grade operations that
can produce approximately 80,000oz of gold per year, with an
excellent long-term safety record.
Barberton Mines also includes the BTRP surface retreatment
operation which is located within Fairview Mine’s mining right
footprint area. The BTRP was designed to treat 100,000t of
tailings per month and adds low-cost and low-risk ounces to
our production profile.
Barberton Mines has made significant progress in recent years
to enhance mining flexibility through various key initiatives.
These include achieving higher development rates at Fairview
Mine, leading to the establishment of multiple high-grade mining
platforms on the MRC and Rossiter orebodies. Ongoing exploration
drilling is currently underway to extend its Mineral Reserves.
Measures have also been implemented to alleviate congestion in
existing infrastructure, and plans are in place to optimise hoisting
operations from a subvertical shaft in the future. Additionally, an
up-dip mining method has been implemented at Sheba Mine to
reduce dilution on the narrow orebodies previously mined using
cut-and-fill methodology, and significant attention has been given to
equipping the PC Shaft remnant blocks at Consort Mine, enabling
the extraction of high-grade ore in the 41 to 45 Level range. These
initiatives collectively demonstrate Barberton Mines’ commitment
to improving operational efficiency and maximising the value of
its resources.
Fairview Mine is working to improve its production profile and
enabling mining at deeper levels. As part of these efforts, it will be
developing and equipping a chairlift decline adjacent to the 3 Decline
between 42 and 64 Levels. This development aims to enhance
hoisting times and address existing logistical constraints. Additionally,
it is extending its refrigeration infrastructure and making investments
in a grout backfill plant. These measures will contribute to optimised
operations and improved mining capabilities.
Despite the aforementioned improvements, the underground
operations faced several challenges in their efforts to maintain
gold production. These challenges included labour, energy and
processing cost increases that exceeded inflationary rates, as well
as the escalating depth and resultant travel times at Fairview Mine,
adversely impacting productivity. Additionally, the high-grade 42 Level
block at Consort Mine was depleted while geotechnical conditions
hampered access to the 41 Level up-dip extensions. These
operational headwinds required strategic solutions and mitigation
measures to ensure optimal productivity and sustainable operations,
which entailed a detailed review of Barberton Mines’ operations.
After engagement with stakeholders, an agreement was reached
to restructure the underground operations. Consort Mine was
converted to a contractor mining operation, and both Fairview and
Sheba Mines implemented a continuous shift operating cycle, while
still allowing for ongoing maintenance and other support activities.
Negotiations with the unions to support the conversion to continuous
shift operations were concluded in January 2023, and the transition
to continuous shift operations was initiated in February 2023.
FAIRVIEW AND SHEBA MINES
The Fairview and Sheba Mines experienced a slower-than-
anticipated ramp-up during the transition to continuous operations.
However, the Group is pleased to report that notable improvements
in production were achieved during the last quarter of the
financial year. Additionally, the optimisation of mining methods
at Sheba Mine’s MRC and ZK stopes, along with increased
availability of trackless mining machinery, have contributed to
enhanced underground production tonnes and mined grades.
The implementation of the Consort Mine contractor model achieved
full production in June 2023, and the operation is now positioned
to return to profitability.
During the year, operational challenges led to a decline in the
high-grade tonnes processed from the underground mining
platforms, resulting in additional milling capacity becoming
available. This additional milling capacity was optimised through
increased tonnages being processed from our lower-grade surface
stockpile, causing the processed tonnes from mining to increase
year-on-year, while the recovered grade decreased.
COST-SAVING AND PRODUCTION IMPROVEMENT
INITIATIVES
• Commissioning of an 8.75MW solar plant. We have entered
into an agreement with juwi, a leading developer of solar, wind
and hybrid electricity projects, to construct an 8.75MW solar
energy plant at Barberton Mines’ Fairview operation. This plant
will bring significant benefits, including annual cost savings.
Moreover, the solar plant is expected to reduce carbon dioxide
emissions by approximately 22,000t per year. With an economic
life in excess of 25 years, the solar plant is expected to generate
power beyond the mine’s existing 20-year life-of-mine, based on
the current Mineral Reserves estimates.
The plant has obtained all the necessary permits, including a
water-use licence, environmental approvals and registration with
the National Energy Regulator of South Africa. juwi has completed
the early works phase, which involved tasks such as facility
design and conducting specialist studies to finalise the detailed
design and cost estimation for the subsequent engineering,
procurement and construction work. Preparatory construction
activities began in May 2023. The first power generation is
anticipated to take place in the hot commissioning phase during
the 2024 calendar year, assuming Eskom’s cooperation and the
absence of delays on the project.
It is foreseen that the solar plant’s construction will be financed
through a ring-fenced facility, similar to the financing of Evander
Mines’ solar plant, and negotiations are already well advanced
with financiers in this regard.
• Optimised infrastructure plans for an improved production
profile. The design of the proposed subvertical shaft project at
Fairview Mine’s 42 Level to 78 Level is progressing as planned
and should be completed over the next two years. In addition,
deeper gold reserves are being bolstered to further enhance the
business case for this development after which construction
of the shaft can commence. It is expected that the subvertical
shaft can contribute an additional 10,000oz of production per
annum through an increase in the available hoisting capacity
below 42 Level (3 Decline). Extension of the existing refrigeration
infrastructure, to enable cooling as mining progresses at depth,
is also planned through the development of a pipe-raise.
Additionally, the development and equipping of a chairlift
decline adjacent to the 3 Decline will commence between
42 and 64 Levels to ensure improved hoisting times from the
current logistically constrained 3 Decline. A grout backfill plant
will also be installed at Fairview Mine, enabling the pumping of
backfill from the surface down the decline system, rather than
transporting bags of cement as is currently the practice. These
projects will relieve logistical constraints on the 3 Decline and
improve the available time for hoisting high-grade ore from the
MRC and Rossiter orebodies.
Project Dibanisa has been completed by connecting 23 Level at
Sheba Mine with 38 Level at Fairview Mine. This connection not
only allows for the movement of mined ore from the Sheba Mine
infrastructure to Fairview Mine, when required, but also allows
for the movement of employees and consumables between the
mines. The completion of this project adds flexibility in access
and logistics between different sections of the underground,
thereby improving operational efficiency.
An integrated drilling and production plan has been formulated
to ensure that exploration and grade control drilling is done in
accordance with the short-, medium- and long-term mine plans.
This was done to de-risk the relevant mine plans and improve
the Group’s Mineral Resources to Mineral Reserves conversion.
Additionally, the electronic radio frequency reef and waste
tagging system has been fully commissioned at both Fairview
and Sheba Mines, enabling the management team to actively
track on a live system the movement of ore from underground
to the plant.
The mine planning department has successfully implemented
state-of-the-art planning and scheduling systems and enhanced its
technical expertise, allowing them to schedule and plan all mining-
related activities with specific measurable tasks and timelines. This
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enhanced system has significantly improved the department’s
ability to achieve its planned goals. Furthermore, the survey and
geology department has been equipped with computer-assisted
drawing and 3D systems, further bolstering their capabilities.
During the current financial year, an operations control room was
established, which is integrated with multiple supervisory control
and data acquisition (SCADA) systems to monitor various
mining services, including a comprehensive reporting protocol.
The primary objective behind this initiative is to enhance
response times to breakdowns and emergencies, ultimately
leading to a reduction in production downtime.
Furthermore, we are currently in the process of installing the
Mineware Syncromine reporting system. This system will
provide valuable insights by reporting on production data in
relation to planning statistics. Additionally, it will capture labour-
related information, enabling detailed analysis and facilitating
expeditious decision-making.
We are also implementing a safety application and upgrading
the mine’s fibre and radio communication infrastructure to
empower employees to report safety incidents from any location
within the mine. This upgrade is designed to enhance the flow of
information and facilitate prompt responses, ultimately fostering
an even safer working environment.
• Exploration drilling for target identification. Barberton Mines
faces operational challenges due to the geological variability
and the complexity of its greenstone orogenic orebodies. These
orebodies, which are characterised by gold deposits hosted
in shear zones within the greenstone belts, exhibit significant
variations in metal content and mineralised extents along both
strike and down-dip directions. To address these challenges,
we have continued our rigorous exploration programmes
throughout the financial year, focusing on identifying additional
mining opportunities in the form of high-grade platforms within
Fairview’s MRC and Rossiter orebodies.
During the current financial year, up to five large high-grade
platforms (256, 257, 258, 259 and 260 Platforms) were available
for mining in the MRC orebody, along with two platforms within
the Rossiter orebody. However, two of the five high-grade
platforms (256 and 257) were depleted, leaving three platforms
in the MRC orebody available for mining in the 2024 financial
year. Notably, access to the lower high-grade platform (260) in
Fairview Mine’s MRC orebody was achieved in January 2023,
and the development towards the down-dip 261 Platform is
progressing as planned.
BARBERTON TAILINGS RETREATMENT PLANT
The BTRP produced 19,875oz (2022: 19,560oz) for the 2023
financial year at an AISC of US$717/oz (2022: US$891/oz).
The remaining life-of-mine from current tailings sources is estimated
at three years with production declining in the last two years.
In the coming years, production at the BTRP is expected to be
supplemented with ore from Barberton Mines’ Western Cross
and Royal Sheba orebodies, where the extraction of a 10,000t
bulk sample was successfully conducted. Mining the Royal
Sheba orebody has the potential to increase the BTRP’s life by
an estimated eight additional years.
ROYAL SHEBA
The processing of the 10,000t bulk sample from the Royal Sheba
project at the Sheba and Consort metallurgical plants has been
completed. The achieved grade of the bulk sample was 1.22g/t,
surpassing the planned grade of 0.5g/t, with recoveries of 84%
relative to the planned recovery rate of 85%.
Finalisation of mine layout optimisation and scheduling has
been achieved, and requests for quotations have been issued
for the initial development and production activities. Preliminary
optimisation work for life-of-mine planning has also been
completed, utilising a cut-off grade of 1.7g/t, resulting in an
estimated average mining grade of approximately 3.0g/t. Over
the project’s currently estimated eight-year lifespan, it is projected
that approximately 235,000oz of gold can be recovered from the
orebody, with the potential for further extensions at depth.
DRA Global has concluded the feasibility study for installing
a crushing and milling circuit at the Royal Sheba project site,
incorporating a design to enable slurry pumping from the milling
plant to the BTRP. The processing plant’s feasibility study and
the project’s financial model are currently undergoing updates
and reviews. A phased capital spending approach, aligning with
the availability of BTRP material feed, is being considered for the
development of this project. This phased development includes
the progression of the decline, production levels and the necessary
ventilation infrastructure for initial stoping operations.
The planned timeline for the project envisions the mining of the
first stoped ore in 2025 at a rate of 5,000t per month, gradually
increasing to 10,000t, 30,000t and 45,000t per month thereafter,
following a defined development and production schedule.
Through a trucking cost trade-off analysis, it has been determined
that the on-site crushing and milling circuit, as well as the slurry
pipeline, will only be feasible once a production rate of 45,000t
per month has been attained. The internal feasibility study for the
entire project is anticipated to be completed in the coming months,
providing further insights into DRA Global’s feasibility study.
The adverse impact of illegal mining on gold production remains
a challenge, however, the implementation of a multi-faceted and
integrated security strategy, along with improved collaboration with
law enforcement, has significantly enhanced our ability to combat
the effects of illegal mining. Measures have been taken to limit the
unauthorised access of illegal miners to underground areas and
prevent the theft of surface infrastructure.
Since May 2022, a national police intervention contingent has been
deployed to Barberton Mines specifically targeting illegal mining and
associated criminal activities. Specialised police units, including the
National Intervention Unit, tactical response teams and public order
police, have been engaged in this external operation.
The deployment of these dedicated external police resources has
yielded substantial successes, targeting and neutralising almost
120 gold-bearing material processing plants and illicit smelting
facilities.
The mine’s security services continued to implement their
integrated security model to address criminal activities. Utilising
surveillance technology, more than 700 individuals were arrested
at the mine for various offences during the current financial year.
The expanded CCTV network, consisting of 744 cameras, of which
284 cameras were installed in the current financial year, facilitated
these arrests. The integration of radar, seismic, long-range thermal
cameras and X-ray technology is also underway to further enhance
crime prevention measures.
The Group’s risk and security executive, along with specialised
security personnel, are dedicated to introducing new technologies,
integrated security strategies and collaborative efforts with
national law enforcement and prosecution agencies to mitigate
the challenge of illegal mining in Barberton.
FOCUS FOR 2024
Our objective is to continually enhance our industry-leading
safety performance while consistently delivering high-
quality ounces consistent with our production guidance of
approximately 100,000oz per annum from the Barberton
Mines complex. Additionally, we are actively pursuing
value-accretive growth opportunities within our orebodies.
Our track record demonstrates our ability to replenish
Mineral Resources and Mineral Reserves through effective
brownfield exploration. We are also exploring organic
growth projects, such as the Royal Sheba project, to
further bolster the sustainability and longevity of our
operations.
For the upcoming 2024 financial year, our key focus areas
are as follows:
• Reducing underground unit costs
•
Increasing production flexibility
• Enhancing Barberton Mines’ infrastructure utilisation by
NEW PICTURE TO BE PLACED
advancing the Royal Sheba project
• Commencing the development of a chairlift decline
adjacent to Fairview Mine’s 3 Decline
• Extending the mines’ Mineral Reserves through
comprehensive definition and infill drilling programmes
•
•
Identifying additional exploration targets using
advanced geophysical techniques and following up
with exploration drilling
Installing a grout backfill plant and underground
piping infrastructure at Fairview Mine to optimise the
extraction of the high-grade MRC orebody and alleviate
congestion in the 3 Decline, the deepest section of
the mine
• Commissioning the Fairview Mine solar plant to reduce
carbon emissions and operating costs, while also
ensuring a reliable electricity supply at Barberton Mines.
The adit at the Royal Sheba project
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OPERATIONAL PERFORMANCE REVIEW continued
EVANDER
MINES
Underground mining and surface
sources operations
RANDEL RADEMANN
General manager
OVERVIEW OF OPERATIONS
Mining of the 8 Shaft pillar at Evander Mines commenced during
the second quarter of the 2020 financial year and reached steady-
state production during 2022. The pillar mining significantly reduced
the risk profile of the underground operations. This is attributed to
simplified logistics, modern underground mining support systems
and improved working conditions, including reduced distances for
underground travel. As we approach the completion of the pillar
mining, we are now focusing on developing mining areas on
24 Level, which will facilitate the phased transfer of crews from
the 8 Shaft pillar to the deeper 24 Level area.
Evander Mines’ underground operations have a life-of-mine of
13 years, which includes production planned from 24, 25 and
26 Levels, but excludes expected production from Egoli. During
the phased depletion of the 8 Shaft pillar mining over the next two
years, the operational focus will shift to mining from 24 Level, which
is expected to yield approximately 35,000oz annually for a period
of two and a half years. Four crews have already been transferred
in the current financial year. Thereafter, the 25 and 26 Level project
is anticipated to ramp-up to produce approximately 65,000oz to
70,000oz per annum for eight years.
24, 25 AND 26 LEVELS
Development of the 24 Level project is progressing well, despite
encountering several geotechnical challenges during the financial
year which adversely impacted on advance rates. Phase 1
of the underground refrigeration plant has been successfully
commissioned following completion of the required access
development, allowing for mining operations on both the 24 Level
F and D raise line stopes and planned mining of the 24 Level A,
B and C raise lines. Currently, two crews are mining the 24 Level
F raise line, while an additional two crews are working on the
24 Level D raise line.
Phase 2 of the refrigeration plant is currently under construction.
Once completed, this plant will supply chilled water to a bulk air
cooler on 24 Level, with a nominal cooling capacity of 3.5MW.
The commissioning of this phase is expected in the second quarter
of the 2024 financial year, enabling operations on 24 Level with
a production target of 18,000 RoM ore tonnes per month once
steady-state production is achieved.
To enhance operations, the existing ventilation shaft from 17 to
24 Level is being equipped to provide hoisting capacity of up
to 40,000t per month. This initiative will reduce reliance on the
ageing conveyor belt system and simplify the ore handling process.
Excavations for the winder chamber, in preparation for equipment
installation, have been completed and pipe installation in the
ventilation shaft commenced in April 2023. The ventilation shaft is
planned to be commissioned for hoisting during the third quarter
of the 2024 financial year. Furthermore, as an interim measure,
additional crews have been deployed to the conveyor belts to
improve maintenance and breakdown response times. This effort is
expected to increase conveyor belt availability until ore hoisting can
commence through the ventilation shaft.
The construction of an additional grout plant, which provides
pseudo-pillar support, has also been completed. This plant will
supply the required output for mining support on 24 Level and
future mining operations on 25 and 26 Levels. The utilisation of
pseudo-pillars in the 8 Shaft pillar has proven to be effective in
controlling mining subsidence and enabling clean mining practices.
Development of 25 Level is anticipated to commence in the 2024
financial year. The existing 24 Level footwall infrastructure will be
used to access 25 and 26 Levels through an on-reef decline layout
where the footwall development intersects the reef horizon.
The 2 Decline is currently positioned to accommodate continued
mining on 24 Level. The planned mining method for 25 and 26
Levels is a hybrid approach, combining conventional breast mining
with mechanised trackless on-reef development. An estimated
80,000t of waste development leading towards 25 and 26 Levels
will be hoisted to the surface and processed in the Kinross
metallurgical plant.
EGOLI
The dewatering process of the 3 Decline at Egoli commenced in
June 2022 and reached a successful milestone in June 2023 when
it was dewatered to below 19 Level. To maintain the desired water
levels, continuous pumping is currently being undertaken. However,
the dewatering process was hindered by intermittent interruptions
in Eskom’s electricity supply due to infrastructure failures. Despite
these challenges, we are actively working towards a comprehensive
plan to mine the existing remnant lower-grade Mineral Reserves at
7 Shaft. This planning phase is currently underway and is expected
to be finalised during the first quarter of the 2024 financial year.
SECURITY
The challenging economic climate and rising unemployment
rates have contributed to a rise in syndicated criminal activities,
including illegal mining, protests for economic opportunities and
theft of infrastructure and mine consumables such as copper,
steel and diesel.
Our security team remains committed to implementing a
comprehensive and integrated security model at the mine.
This approach encompasses various initiatives to combat and
prevent on-site crime. Additionally, we are working to strengthen
cooperation and coordination with external law enforcement
and prosecuting agencies. By enhancing these partnerships, we
aim to improve overall security measures and effectively address
the challenges posed by criminal activities in our operating
environment.
During the current financial year, mine security arrested
77 individuals primarily for theft of gold-bearing material, copper,
pipelines and mine equipment. Additionally, 13 employees,
including contractors, were also arrested for criminal activities
at the mine. The implementation of an expanded surveillance
technology network, including 159 new CCTV cameras, supported
these achievements. We also improved security infrastructure by
upgrading perimeter fences, installing physical barriers in high-risk
areas and integrating drone technology for enhanced operations.
These measures reflect our commitment to maintaining a secure
and protected mine environment.
In the new financial year, we have planned security improvement
initiatives at the mine, including the renovation of the primary
entrance. The objective is to create a modern entrance equipped
with enhanced security technology to improve access control.
These measures reflect our commitment to continuously enhancing
security at the mine, ensuring a safer operating environment.
FOCUS FOR 2024
Our primary objective for the upcoming year is to achieve
optimal performance at our underground operations.
We are fully committed to extracting the maximum value
from our current orebodies by prioritising continuous
optimisation, adhering to mine plans and diligently
managing capital expenditure in alignment with mining
requirements and organic growth objectives.
To accomplish these goals, we have identified several key
focus areas for the year ahead:
• Phased transferring of mining crews from the 8 Shaft
pillar mining areas to the 24 Level areas as the pillar
reaches depletion
• Commissioning the ventilation shaft hoisting project
•
Installing phase 2 of the underground refrigeration plant
on 24 Level to enable planned mining activities
• Prioritising the development of the necessary raise
lines on 24 Level to access Mineral Reserves and
accommodate the transitioning crews from the
8 Shaft pillar
•
Initiating development towards the 25 Level Mineral
Reserves
• Continuation of brownfield exploration programmes to
identify additional organic growth opportunities within
Evander Mines’ existing mining right.
Through a focused and dedicated approach to fulfilling
these objectives, we have confidence in our ability to
drive performance and pursue sustainable growth in the
year ahead.
Return-water dam at Elikhulu
for reuse in the processing facility
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ELIKHULU
ORIEL SHIKWAMBANA
General manager
OVERVIEW OF OPERATIONS
Elikhulu, Pan African’s flagship tailings retreatment operation, is
one of the lowest-cost gold mining operations in Southern Africa,
producing 50,573oz (2022: 52,220oz) at an AISC of US$1,008/oz
(2022: US$1,003/oz), with a remaining operational life of 10 years.
The plant processes approximately 1.2Mt of historical tailings per
month from the existing Leslie/Bracken TSF. Reprocessing these
historical tailings will result in the residues being redeposited to a
single TSF site, reducing our ecological footprint. Elikhulu’s Kinross
phase 1 and 2 TSF extension is lined to mitigate the risk of possible
underground seepage and pollution. This demonstrates our
commitment to addressing the environmental legacy of historical
tailings depositions. As the TSFs are located near residential areas,
expert independent contractors were appointed to construct and
operate the TSFs.
The Elikhulu operation consists of a technologically advanced,
automated plant with a reduced labour contingent. The plant’s
numerous innovations, in addition to its high throughput and
relatively short pumping distances, include its modern extraction
process, which does not require regrind mills and thickeners,
and has low reagent consumption. The plant also supplements
recirculated process water with non-potable water from adjacent
underground operations.
The Group designs its tailings plants to incorporate a high oxygen
mass transfer pre-oxidation step to improve gold extraction.
The remining activities are also automated to some degree, with
the latest in hydro-mining technology employed. These factors
contribute to production costs remaining low.
Elikhulu is a testament to Pan African’s ability to conceptualise, plan
and construct substantial growth projects ahead of time and within
budget. The Group has successfully delivered three such projects
to date.
Despite facing challenges such as disruptions to electricity supply
and unfavourable weather conditions during the November and
December rainy season, gold production from Elikhulu remained
stable at 50,573oz (2022: 52,220oz) during the current financial
year. Following the successful installation of a 6km pipeline
and the commissioning of the Leslie/Bracken pump station in
September 2022, gold production from Elikhulu has remained
relatively unchanged.
The design of the Elikhulu TSF involved the expansion and
construction of a significant TSF deposition site between 2017 and
2019 as part of phase 1. This expansion took place concurrently
with the construction of the plant and associated infrastructure.
Furthermore, forming part of phase 2, the existing Kinross footprint
will again be utilised once the reclamation process is completed.
At present, construction activities for phase 2 of the Elikhulu TSF
are being progressed and are expected to be completed and
commissioned in December 2023 and January 2024, respectively.
In May 2022, Pan African became the first South African mining
company to successfully commission a utility-scale, grid-tied solar
plant with the commissioning of Evander Mines’ solar energy plant.
The plant has a capacity of 9.9MW and supplies clean energy to
Elikhulu. By meeting approximately 30% of the plant’s annual power
requirements, this solar plant plays an important role in reducing
the GHG footprint. The engineering, procurement and construction
works for this project were undertaken by juwi.
The impact of climate change has led to disruptions in rainfall
patterns, resulting in increased rainfall intensities over shorter
periods, compelling the operations to adapt to managing increased
water volumes as weather conditions change.
The unstable electricity supply from the national grid has caused
operational disruptions and process flow interruptions, leading
to production delays. Unplanned power outages and the ageing
electrical infrastructure of the national grid exacerbate the situation,
resulting in production losses that cannot be recouped over the
short term, potentially leading to missed production targets.
While excessive rainwater is manageable, severe lightning activity
and consequential electricity supply outages negatively affect
production by impairing pumping capacity, which hinders the
removal of excess water from the mining compartments. Once
electricity is restored, flooded workings require approximately two
hours of draining before production can resume.
Despite these challenges, Elikhulu’s production has remained
relatively stable compared to the previous financial year, attesting
to management’s acumen in dealing with production difficulties.
The installation of the solar plant at Evander Mines has significantly
mitigated some of these electricity-related supply challenges,
reducing the operation’s reliance on the national grid.
FOCUS FOR 2024
Our goal for the year ahead is to maintain our performance
at the surface operations.
Our focus areas for the year ahead include:
• completing the construction of phase 2 of Elikhulu’s TSF
extension on the Kinross footprint
•
the installation of a cyanide storage and make-up facility,
which will ensure sustainable cyanide availability in the
event of supplier logistical constraints
• continuing to invest in sustaining capital projects focused
on maintaining Elikhulu’s infrastructure.
90
Carbon measurements
at Elikhulu
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OPERATIONAL PERFORMANCE REVIEW continued
TAILINGS
MANAGEMENT
JONATHAN IRONS
Group consulting metallurgist and
executive accountable for tailings
OVERVIEW OF OPERATIONS
Recent incidents of TSF failures in the mining industry have
underscored the need for enhanced safety and regulatory
measures. In response, Pan African has taken a proactive approach
to benchmark its TSF management in accordance with global
standards. Below is an overview of the Group’s efforts to comply
with regulatory requirements as far as reasonably practicable and
the implementation of measures to ensure safe and responsible
TSF management.
the context of a recognised tailings management company is
appointed to oversee monitoring and compliance with legislation,
as well as the Group’s internal codes of practice. In line with the
GISTM recommendations, Pan African appointed:
• an executive accountable for tailings management in June 2022
• a tailings facility engineer in June 2022, responsible for the
robust management of the TSFs
• Barberton Mines’ engineer of record to also serve as Evander
Mines’ engineer of record.
We recognise the importance of adhering to the global standards
and guidelines for TSF management. In August 2020, the GISTM
was launched by the International Council on Mining and Metals,
the United Nations Environment Programme and the Principles
for Responsible Investment. The GISTM emphasises the safe
management of TSFs, community engagement, governance and
the requirement for independent review.
To ensure an ongoing progression to compliance with the GISTM
as far as reasonably practicable, Pan African has taken proactive
measures and has conducted internal audits and studies over the
past two years to evaluate its TSF management relative to the
GISTM. Subsequently, an ITRB was appointed to conduct a formal
audit of Pan African’s TSFs. Comprised of three suitably qualified
independent members, the ITRB conducted site visits to the TSFs
in April 2023, followed by the issuance of an assessment report in
June 2023, which is being reviewed. Notably, certain Pan African
TSFs have been classified as high-impact TSFs due to their
proximity to local communities and water sources.
Pan African prioritises effective tailings dam management across
its operations. At each TSF site, a competent person within
Considering that the majority of Pan African’s TSFs were
constructed before the introduction of the GISTM, the Group has
actively engaged in ongoing assessments to identify and address
any compliance deficiencies to the extent reasonably practicable.
Noteworthy progress has been made, including:
• ongoing construction activities for phase 2 of Elikhulu’s TSF
extension and the commencement of planning and design for
phase 3 of the extension in line with the life-of-mine plan
• design proposals for the phase 3 extension project are currently
being evaluated.
We are committed to working collaboratively with stakeholders
to ensure the implementation and maintenance of statutory TSF
management standards. Action plans and remedial activities
identified through internal and external reviews are continually
being implemented to mitigate high-risk safety and environmental
concerns. With these actions, we aim to ensure safety compliance
for our mining operations, employees and the surrounding
communities.
FOCUS FOR 2024
FOCUS FOR 2024
Our focus areas for the year ahead include:
• assessing the implications of the GISTM being adopted
Our focus areas for the year ahead include:
into the SANS
• assessing the implications of the GISTM being adopted into the
• commissioning phase 2 of Elikhulu’s TSF extension
SANS
• completing the design and commencing construction of
• commissioning phase 2 of Elikhulu’s TSF extension
• completing the design and construction of phase 3 of Elikhulu’s
phase 3 of Elikhulu’s TSF extension.
TSF extension
Elikhulu tailings hydro-mining
92
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
OPERATIONAL
PRODUCTION
Mining operations
Tailings operations
Total operations
Mining operations
Tailings operations
Total operations
Year
ended
30 June
Barberton
Mines
Evander
Mines
Unit
Total
BTRP
Evander
Mines’
surface
sources
Elikhulu
Total
Barberton
Mines
total
Evander
Mines
total
Group
total
Year
ended
30 June
Barberton
Mines
Evander
Mines
Unit
Total
BTRP
Evander
Mines’
surface
sources
Elikhulu
Total
Barberton
Mines
total
Evander
Mines
total
Group
total
Tonnes milled –
underground
Tonnes milled
– surface
Tonnes milled – total
underground and
surface
Tonnes processed
– tailings
Tonnes processed
– surface feedstock
Tonnes processed
– total tailings and
surface feedstock
Tonnes milled and
processed – total
Tonnes capacity
Head grade – total
Overall recovered
grade
Overall recovery
– underground
Overall recovery
– tailings
Gold produced
– underground
Gold production
– surface operations
Gold produced
– tailings
Gold produced
– surface feedstock
Gold produced
– total
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
t
t
t
t
t
t
t
t
t
t
t
t
t
t
235,028
159,063
394,091
252,061
129,087
381,148
107,594
69,977
–
–
107,594
69,977
342,622
159,063
501,685
322,038
129,087
451,125
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
921,753
908,198
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
235,028
159,063
394,091
252,061
129,087
381,148
107,594
69,977
–
–
107,594
69,977
342,622
159,063
501,685
322,038
129,087
451,125
13,587,371
14,509,124
921,753
13,587,371
14,509,124
13,732,147
14,640,345
908,198
13,732,147
14,640,345
–
–
248,575
261,338
–
–
248,575
261,338
–
–
248,575
248,575
261,338
261,338
921,753
248,575
13,587,371
14,757,699
921,753
13,835,946
14,757,699
908,198
261,338
13,732,147
14,901,683
908,198
13,993,485
14,901,683
342,622
159,063
501,685
921,753
248,575
13,587,371
14,757,699
1,264,375
13,995,009
15,259,384
322,038
129,087
451,125
908,198
261,338
13,732,147
14,901,683
1,230,236
14,122,572
15,352,808
14,400,000
15,600,000
1,632,000
14,538,000
16,170,000
14,400,000
15,600,000
1,632,000
14,538,000
16,170,000
t/annum
432,000
138,000
570,000
1,200,000
t/annum
432,000
138,000
570,000
1,200,000
g/t
g/t
g/t
g/t
%
%
%
%
oz
oz
oz
oz
oz
oz
oz
oz
oz
oz
6.5
7.9
5.9
7.3
91
93
–
–
60,477
74,065
4,109
1,673
–
–
–
–
6.7
12.0
6.4
11.8
96
98
–
–
6.5
9.1
6.1
8.6
93
95
–
–
33,256
93,733
48,850
122,915
–
–
–
–
–
–
4,109
1,673
–
–
–
–
1.4
1.6
0.7
0.7
–
–
47
43
–
–
–
–
19,875
19,560
–
–
64,586
75,738
33,256
97,842
48,850
124,588
19,875
19,560
–
–
1.2
1.4
0.9
1.1
–
–
74
80
–
–
–
–
–
–
0.4
0.3
0.1
0.1
–
–
32
35
–
–
–
–
1.4
1.5
0.2
0.2
–
–
37
39
–
–
–
–
50,573
52,220
70,448
71,780
6,919
–
6,919
9,320
6,919
9,320
–
50,573
52,220
9,320
77,367
81,100
2.8
3.2
2.1
2.4
91
93
47
43
60,477
74,065
4,109
1,673
19,875
19,560
–
–
0.4
0.5
0.2
0.2
96
98
74
80
0.6
0.7
0.4
0.4
93
95
37
39
33,256
93,733
48,850
122,915
–
–
50,573
52,220
4,109
1,673
70,448
71,780
6,919
6,919
9,320
9,320
84,461
90,748
175,2091
95,298
110,390
205,688
Capacity
2023
oz/annum
110,000
40,000
150,000
25,000 Not reported
75,000
100,000
135,000
115,000
250,000
2022
oz/annum
110,000
40,000
150,000
25,000 Not reported
75,000
100,000
135,000
115,000
250,000
Gold sold – total
2023
2022
oz
oz
64,586
75,738
32,807
97,393
48,850
124,588
19,875
19,560
6,919
9,320
50,573
52,220
77,367
81,100
84,461
90,299
174,760
95,298
110,390
205,688
1 Includes gold equivalent production of osmiridium concentrate.
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Average ZAR gold
price received
Average US$ gold
price received
ZAR cash cost
ZAR AISC
ZAR AIC
US$ cash cost
US$ AISC
US$ AIC
ZAR cash cost
Capital
expenditure
ZAR/kg
1,053,892
1,050,071
1,052,605
1,017,667
1,002,305
1,060,148
1,044,062
1,045,368
1,052,055
1,048,823
ZAR/kg
895,953
889,168
893,293
896,149
894,844
888,552
891,107
895,993
889,356
892,431
US$/oz
US$/oz
1,845
1,831
1,838
1,817
1,842
1,826
1,781
1,831
1,754
1,829
1,856
1,816
1,827
1,821
1,830
1,831
1,841
1,817
1,836
1,824
ZAR/kg
819,967
618,170
751,377
400,967
937,904
520,754
527,287
721,370
588,258
652,426
ZAR/kg
634,869
505,720
584,231
421,958
780,634
427,388
466,672
591,170
491,874
537,879
ZAR/kg
1,033,898
661,655
907,375
409,427
981,523
575,903
569,410
886,951
638,254
758,141
ZAR/kg
804,795
544,262
702,642
435,879
807,566
490,982
514,073
729,076
541,287
628,292
ZAR/kg
1,057,128
1,703,600
1,276,861
419,776
981,523
769,503
698,621
907,150
1,127,984
1,021,529
ZAR/kg
865,984
814,367
845,745
435,879
848,501
565,201
566,567
777,706
699,380
735,670
US$/oz
US$/oz
US$/oz
US$/oz
US$/oz
US$/oz
ZAR/t
ZAR/t
2023 ZAR million
2022 ZAR million
1,263
1,297
1,810
1,645
735
1,770
4,808
4,644
350.8
424.9
1,082
1,033
1,158
1,112
2,982
1,664
4,020
5,953
1,315
1,194
1,588
1,436
2,235
1,728
4,558
5,019
1,077.9
1,428.7
410.5
835.4
Revenue
2023 ZAR million
2,117.1
1,071.5
3,188.6
2022 ZAR million
2,110.6
1,351.0
3,461.6
Cost of production
2023 ZAR million
1,647.2
2022 ZAR million
1,495.6
2023 ZAR million
2,076.9
2022 ZAR million
1,895.9
639.4
768.4
684.4
827.0
2,286.6
2,264.0
2,761.3
2,722.9
2023 ZAR million
2,123.6
1,762.2
3,885.8
2022 ZAR million
2,040.0
1,237.4
3,277.4
AISC
AIC
Adjusted EBITDA
2023 ZAR million
Average
exchange rate
Employees
Contractors
2022 ZAR million
2023
US$/ZAR
2022
US$/ZAR
2023
2022
2023
2022
number
number
number
number
557.4
737.6
17.77
15.22
2,094
1,817
1,397
1,229
630.5
604.9
17.77
15.22
95
93
2,382
1,432
1,187.9
1,342.5
17.77
15.22
2,189
1,910
3,779
2,661
702
862
717
891
735
891
269
283
11.6
7.7
629.1
545.2
247.9
256.7
253.1
265.2
259.5
265.2
309.8
217.8
17.77
15.22
73
72
32
61
1,642
1,595
1,718
1,650
1,718
1,734
812
866
9.4
19.7
215.7
259.4
201.8
226.3
211.2
234.1
211.2
246.0
11.3
30.6
17.77
15.22
13
17
4
–
911
873
1,008
1,003
1,347
1,155
60
51
332.5
168.5
923
954
997
1,051
1,223
1,158
86
79
353.5
195.9
1,263
1,208
1,552
1,490
1,588
1,589
1,499
1,424
362.4
432.6
1,030
1,005
1,117
1,106
1,974
1,429
119
120
1,142
1,099
1,327
1,284
1,788
1,503
233
224
1,419.8
1,782.2
598.7
1,031.3
1,667.6
2,512.4
2,746.2
2,954.8
5,701.0
1,443.2
2,247.8
2,655.8
3,053.6
5,709.4
819.1
694.2
905.9
797.5
1,268.8
1,895.1
1,660.3
3,555.4
1,177.2
1,752.3
1,688.9
3,441.2
1,370.2
2,330.0
1,801.5
4,131.5
1,296.8
2,161.1
1,858.6
4,019.7
1,210.4
1,681.1
2,383.1
3,183.8
5,566.9
918.0
736.2
890.9
17.77
15.22
139
147
296
198
1,429.2
2,305.2
2,401.4
4,706.6
1,057.3
1,139.3
17.77
15.22
225
236
332
259
867.2
955.4
17.77
15.22
2,167
1,889
1,429
1,290
1,378.0
2,245.2
1,526.4
2,481.8
17.77
15.22
247
257
2,682
1,630
17.77
15.22
2,414
2,146
4,111
2,920
94
95
PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
FINANCIAL
CAPITAL
Ore tramming at Fairview Mine
MATERIAL MATTERS
Page
KEY STAKEHOLDERS
Page
Execution
Growth
Cost
97
98
99
Providers of capital
Employees and unions
38
40
Suppliers
Electricity
101
Customers
Execution
Our profitability is influenced by several factors, including our production
levels and efficiency in extracting high-grade gold through cost containment,
productivity improvements and operational resilience.
Equity, debt and surplus cash from our operating activities.
STRATEGIC OBJECTIVE
Ensure adequate, competitively priced and flexible
financial resources for the funding of our operations and
disciplined capital allocation for sustainable long-term
value creation.
KEY STATISTICS
Revenue
Net cash from operating activities
Net debt
Dividend paid
Profit for the period
Return on shareholders’ funds
Net debt-to-equity ratio
Net debt-to-net adjusted
EBITDA ratio 1
Interest cover ratio
Debt service cover ratio
Current ratio
Unit
US$ million
US$ million
US$ million
US$ million
US$ million
%
ratio
ratio
ratio
ratio
ratio
2023
321.6
100.1
22.0
23.2
60.7
20.6
0.07
0.2
18.4
7.5
0.79
2022
376.4
110.0
13.0
25.0
75.0
25.9
0.04
0.1
34.1
7.3
0.95
2021
368.9
75.8
39.0
20.6
74.7
32.0
0.1
0.3
23.0
3.0
0.80
2020
274.1
53.8
76.4
3.4
44.3
24.1
0.4
0.7
10.1
3.4
0.68
2019
217.7
37.7
129.9
–
38.0
23.0
0.7
2.2
4.1
1.4
0.47
1
Net adjusted EBITDA is represented by earnings before interest, income tax expense, depreciation and amortisation, impairment and impairment reversals
and fair value gains and losses from financial instruments.
KEY OUTCOMES
• Profit for the period decreased to US$60.7 million (2022: US$75.0 million)
• Net senior debt
debt facilities
increased to US$18.9 million (2022: US$9.3 million) due to drawdowns on the Group’s senior
• Net cash from operating activities decreased to US$100.1 million (2022: US$110.0 million), adversely impacted by
operational performance, as detailed in the financial director’s review
• Final dividend of ZAR400.1 million (US$23.2 million) paid for the 2022 financial year in December 2022, and a final
dividend of ZAR400.1 million (approximately US$21.2 million1) is proposed for the 2023 financial year
• Issued a sustainability-linked bond for US$43.2 million during December 2022
• In March 2023, secured US$21.6 million through a synthetic gold forward sale transaction, as a component of the
funding package for the MTR project’s construction
• In July 2023, a US$70.3 million debt funding package for the MTR project construction was secured through a
credit-approved term loan facility
• Return on shareholders’ funds decreased to 20.6% (2022: 25.9%)
• Gold produced decreased to 175,209oz (2022: 205,688oz)
• Group AISC increased to US$1,327/oz (2022: US$1,284/oz)
1 Assuming an exchange rate of US$/ZAR:18.83.
STRATEGIC INITIATIVES
• Further strengthen the Group’s
capital structure and funding
flexibility
• Ensure adequate liquidity for
operational requirements and
debt redemptions
• Ensure appropriate medium-
term funding for organic growth,
exploration and acquisitive
opportunities
• Innovative funding solutions
to raise capital and manage
financial risk
• Prioritise sustainable returns
to shareholders
• Achieve production guidance
of 195,000oz to 205,000oz
per annum
• Reduce AISC at all operations
in real terms, through
optimisation and cost-reduction
initiatives, as well as increased
ounce production
Why these initiatives are important
Related risks
Long-term objectives
• The Group’s capital structure needs to be robust to
• Constrained electricity
• Our investment criterion is to earn a return in
ensure that the Group can be sustainable through the
commodity cycle and macroeconomic volatility, to
appropriately fund its operations and access capital to
fund organic and acquisitive growth opportunities
• Generating the requisite risk-adjusted returns on capital
employed, and returning capital to shareholders in the
form of dividends or share buy-backs is important to
maintaining their support for future equity funding
• Social instability
• Operational execution
• Safety
• Inflation
• Geological variability
• Ageing mines
• Macroeconomic volatility
• Capital allocation
excess of our cost of capital, after adjusting for
project-specific and sovereign risks associated
with the capital invested
• To ensure returns are robust through the commodity
cycle, we endeavour to invest only in projects that fall
into the lower half of the cost curve and where the
execution risk is within our capability
96
97
PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
FINANCIAL CAPITAL continued
Growth
Our portfolio of growth projects and expansion opportunities has been
rigorously evaluated and meets our strict investment criteria, ensuring that
we can deliver long-term value to our shareholders.
Cost
We prioritise sustainable profitability, growth and expansion through
disciplined cost and cash flow management, strategic capital allocation
and prudent capital spending.
STRATEGIC INITIATIVES
• Achieve production guidance
of 195,000oz to 205,000oz
per annum
• Successfully execute capital
projects to sustain and
increase future gold production
• Successfully execute
operational restructuring
programmes and other
initiatives to sustain and
increase the production
run rate
• Evaluate organic and
acquisitive growth opportunities
and exploration projects
• Investigate potential exploration
and mining opportunities
outside South Africa that
meet the Group’s stringent
investment criteria
KEY OUTCOMES
• Gold produced decreased by 14.8% to 175,209oz (2022: 205,688oz)
• Evander Mines’ Egoli project (for further details, refer to page 89)
– Dewatering of 7 Shaft’s 3 Decline infrastructure to below 19 Level was achieved in June 2023, and pumping is currently
ongoing to maintain the water levels
– A comprehensive plan to mine the existing remnant marginal-grade Mineral Reserves at 7 Shaft is currently underway
and is expected to be finalised during the first quarter of the 2024 financial year
• Evander Mines’ 24, 25 and 26 Level project (for further details, refer to pages 88 and 89)
– Phase 2 of the refrigeration plant is currently under construction and is expected to be commissioned in the second
quarter of the 2024 financial year
– The ventilation shaft, which is being upgraded to allow for rock hoisting capacity of up to 40,000t per month, is planned
to be commissioned during the third quarter of the 2024 financial year
– The construction of an additional grout plant, which will provide the necessary output for pseudo-pillar support on
24 Level as well as future mining operations on 25 and 26 Levels, has been successfully completed
• Barberton Mines’ underground operations (for further details, refer to pages 84 to 86)
– The design of the proposed subvertical shaft project at Fairview Mine, extending from 42 Level to 78 Level, is progressing
as planned and is expected to be completed within two years. This project has the potential to increase production by up
to 10,000oz annually
– Project Dibanisa has been completed by connecting 23 Level at Sheba Mine with 38 Level at Fairview Mine. This adds
flexibility in access and logistics between different sections of the mines thereby improving operational flexibility
– At Sheba Mine, an up-dip mining method has been adopted to minimise dilution on narrow orebodies, replacing the
previous cut-and-fill operations. Additionally, substantial efforts have been made to enhance the equipment in the PC
Shaft remnant blocks at Consort Mine, allowing for the extraction of high-grade ore from the 41 to 45 Level range
• Barberton Mines’ Royal Sheba project (for further details, refer to page 86)
– Finalisation of mine layout optimisation and scheduling has been achieved, and requests for quotations have been issued
for initial development and production activities
– The feasibility study for installing a crushing and milling circuit at the Royal Sheba project site has been completed, along
with the design to enable the pumping of slurry from the milling plant to the BTRP
• MTR project (for further details, refer to page 66)
– The DMRE has issued the integrated environmental authorisation for the MTR project. Construction of the plant
commenced in July 2023, with commissioning expected in December 2024 and steady-state production within three
months thereafter
• Blyvoor transaction
– Due diligence and fulfilment of conditions for the acquisition of Blyvoor Gold Operations Proprietary Limited’s historical
TSFs were not completed in time, resulting in the transaction’s lapse
• Sudanese exploration concessions (for further details, refer to page 66 and 67)
– Due to the outbreak of violence in Sudan during April 2023, all expatriate employees working on the exploration project
were safely repatriated. The Group’s assets in Sudan, including the fire assay multi-element analytical laboratory, are
secured and under care and maintenance until the situation stabilises for the resumption of the exploration programme
KEY OUTCOMES
• Barberton Mines’ underground operations experienced a decrease in production to 64,586oz (2022: 75,738oz) due
to challenges arising from power disruptions, deteriorating state infrastructure adversely affecting Eskom’s electricity
supply, as well as logistical constraints, despite implementing a continuous operating mining cycle at Fairview and
Sheba Mines that resulted in improved production during the last quarter of the financial year
• Production from Evander Mines’ underground operations decreased to 33,256oz (2022: 48,850oz)
• Production from the BTRP and Elikhulu remained stable at 19,875oz (2022: 19,560oz) and 50,573oz
(2022: 52,220oz), respectively
• The Group’s production decreased by 14.8% to 175,209oz (2022: 205,688oz) and was lower than the initial
guided production of 195,000oz to 205,000oz
• The Group’s cost of production before depreciation and amortisation decreased by 12.2% to US$198.8 million
(2022: US$226.4 million)
• Barberton Mines’ operations’ AISC increased by 4.2% to US$1,552/oz (2022: US$1,490/oz)
• Evander Mines’ total operations’ AISC increased by 1.0% to US$1,117/oz (2022: US$1,106/oz)
• Group AISC increased to US$1,327/oz from US$1,284/oz
• AISC for the Group’s low-cost operations comprising all operations, excluding Sheba Mine and Consort Mine,
was US$1,152/oz (2022: US$1,145/oz) for the financial year
• Total capital expenditure increased by 36.5% to US$113.0 million (2022: US$82.8 million) comprising:
– sustaining capital expenditure of US$20.2 million (2022: US$23.1 million)
– expansion capital expenditure of US$92.8 million (2022: US$59.7 million)
• Approximately US$1.9 million (2022: US$0.3 million) in cost savings has been achieved through Evander Mines’
solar plant, which was commissioned in May 2022
• Fairview Mine’s solar plant is expected to generate power for the first time during the hot commissioning phase
during 2024, thereby aiding in the reduction of future operational costs
• Evander Mines’ water retreatment plant, commissioned in March 2023, realised cost savings of approximately
US$61.2 thousand
STRATEGIC INITIATIVES
• Successfully execute capital
projects to sustain and increase
future gold production
• Successfully execute
operational restructuring
programmes and other
initiatives to sustain and
increase the production run rate
• Optimise the Group’s existing
operations to achieve their
targeted operational objectives
• Achieve production guidance
of 195,000oz to 205,000oz
per annum
• Reduce AISC at all operations
in real terms, through
optimisation and cost-reduction
initiatives, as well as increased
ounce production
• Diversify the Group’s solar
energy sources by entering
into a 40MW power purchase
agreement with an independent
power producer
• Commence construction of
the 8.75MW solar plant at
Barberton Mines
• Expand Evander Mines’ solar
plant by 12MW
• Construct a 10MW solar plant
at the MTR project
• Commission the water
retreatment plant at
Evander Mines
Why these initiatives are important
• Delivering on annual production guidance
enables the Group to produce gold
profitably, generate the requisite cash to
meet its capital requirements and debt
obligations, improve investor confidence
in the Group’s sustainability and return
capital to shareholders
• Successfully executing capital and/or
organic growth projects, which prove to be
both viable and value-enhancing, enables
the Group to increase annual production
and move up the ranks of mid-tier gold
producers
Related risks
• Constrained electricity
• Operational execution
• Inflation
• Geological variability
• Ageing mines
• Skills
• Capital allocation
Long-term objectives
• Explore organic growth opportunities within our mining rights and
exploration concession areas to extend the life of our operations
• Diversify our Mineral Resources and production portfolio to move
away from a single sovereign jurisdiction
• The Group’s successful track record in commissioning and operating
tailings retreatment plants, most recently demonstrated by its flagship
Elikhulu operation, has provided the expertise and confidence to
construct and operate similar plants such as the MTR plant
• The Group’s experience in exploration and retreatment of surface
tailings deposits can be applied in evaluating similar resources in
other jurisdictions
• Increase the Group’s annual production profile to more than
300,000oz of gold to attract institutional fund managers that invest in
upper mid-tier gold mining companies
• Widen our investor base in the global markets
Related risks
• Constrained electricity
• Inflation
• Geological variability
• Ageing mines
• Capital allocation
Why these initiatives are important
• Delivering on annual production guidance enables
the Group to produce gold profitably, generate the
requisite cash to meet its capital requirements and debt
obligations, improve investor confidence in the Group’s
sustainability and return capital to shareholders
• Solar energy and water recycling projects, together
with other initiatives to increase the Group’s future gold
production, are also expected to contribute to future
AISC reductions
• Effectively managing and reducing production costs
underpins the Group’s profitability and sustainability in
the longer term to increase annual production and move
up the ranks of mid-tier gold producers
Long-term objectives
• Disciplined capital allocation remains a priority in
assessing the merits of any capital expenditure
programme or acquisition
• All capital allocation decisions are subject to
rigorous analysis and predefined risk-adjusted return
parameters to ensure the required return is generated
• Continue with modern exploration techniques and
reserve delineation drilling of our orebodies
• Seek acquisition opportunities that meet our stringent
investment criteria
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
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ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
MANUFACTURED
CAPITAL
MATERIAL MATTERS
Page
KEY STAKEHOLDERS
Page
Cost
Electricity
Geology
99
101
102
Providers of capital
Employees and unions
Governments and
regulatory bodies
The environment
38
40
42
44
Suppliers
Customers
Infrastructure, orebodies and tailings retreatment operations at Barberton
Mines, Evander Mines and the MTR project.
STRATEGIC OBJECTIVE
Unlock the full potential of our Mineral Resources and Mineral
Reserves through sustainable extraction and processing,
while embracing renewable energy, to pave the way for a
responsible and prosperous mining future.
KEY STATISTICS
Mineral Resources
Mineral Reserves
Investment in infrastructure
Gold mining tonnes milled
Gold tailings processed
Gold production
Average gold price received
AISC
Unit
Moz Au
Moz Au
US$ million
t
t
oz
US$/oz
US$/oz
2023
40.5
12.8
112.7
2022
38.7
11.3
82.7
2021
39.2
10.8
44.4
2020
37.6
10.9
34.6
2019
36.0
10.9
55.1
394,091
381,148
376,118
285,016
311,606
14,757,699
14,901,683
14,315,881
14,339,922
13,035,165
175,209
205,688
201,777
179,457
172,442
1,836
1,327
1,824
1,284
1,826
1,261
1,574
1,147
1,266
988
Electricity
The availability and cost of electricity are critical input factors in achieving
our production targets and maintaining profitability. We strive to continuously
improve the efficient use of water and electricity at our operations.
KEY OUTCOMES
STRATEGIC INITIATIVES
• Electricity consumption for the Group increased by 3.4% to 1,403.02TJ (2022: 1,357.07TJ)
• Reduce AISC at all
• The Group’s electricity costs decreased by 15.7% to US$28.5 million (2022: US$33.8 million)
• Evander Mines’ solar plant realised cost savings of approximately US$1.9 million (2022: US$0.3 million)
• The Group generated 23,770MWh of renewable energy, and purchased electricity amounted to 365,956MWh,
achieving a 6.1% renewable energy mix
• Several energy efficiency projects are currently in progress. Refer to the TCFD report for more information
• A power purchase agreement has been entered into for 40MW wheeled renewable energy
• Evander Mines’ water retreatment plant was commissioned in March 2023
• Water consumption by the Group increased by 11.5% to 9,178ML (2022: 8,232ML)
• Evander Mines’ water retreatment plant realised cost savings of approximately US$61.2 thousand in its first
three months of operation
• The Group has partnered with the National Cleaner Production Centre South Africa, hosted by the Council
for Scientific and Industrial Research on behalf of the Department of Trade, Industry and Competition. This
collaboration is focused on achieving cost reduction through improved energy, water, materials consumption
and waste management efficiencies. Additionally, it enables us to participate in the circular economy through
the industrial symbiosis programme
• Preparatory construction activities commenced on Fairview Mine’s solar plant in May 2023
operations in real terms,
through optimisation and
cost-reduction initiatives,
as well as increased ounce
production
• Diversify the Group’s solar
energy sources by entering
into a 40MW power
purchase agreement with an
independent power producer
• Commence construction of
the 8.75MW solar plant at
Barberton Mines
• Expand Evander Mines’ solar
plant by 12MW
• Construct a 10MW solar plant
at the MTR project
Why these initiatives are important
Related risks
Long-term objectives
• Solar energy and water recycling projects, together with other
• Constrained electricity
initiatives, contribute to the sustainability of the Group’s future gold
• Operational execution
• Safety
• Inflation
• Capital allocation
production and are also expected to contribute to future AISC
reductions
• Through the investment in solar plants at our operations, the
Group is proactively managing its migration to renewable energy
and contributing to the curtailment of its electricity costs and
addressing electricity supply issues
• The water retreatment plant is designed to treat approximately 3ML
of mine water a day, using reverse osmosis technology that will
produce potable water from recycled underground mine water to
be used for processing at Elikhulu, thereby alleviating the need to
purchase municipal water. Reduced water usage will have a positive
environmental impact and will result in cost savings
• Investigate storage solutions to extend the
period of available power supply from the
solar plants
• As part of the MTR project’s development,
the merits of a solar plant will also be
evaluated. The envisaged solar plant is
expected to be similar in size to Evander
Mines’ phase 1 facility
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MANUFACTURED CAPITAL continued
Geology
We continuously explore for new mineral deposits and down-dip extents
of our known deposits, while improving underground mining efficiency and
flexibility, as well as further optimising our tailings operations.
KEY OUTCOMES
• Mineral Resources of 40.50Moz (2022: 38.65Moz) and Mineral Reserves of 12.81Moz (2022: 11.31Moz)
• A 13.2% year-on-year increase in the Mineral Reserves base of 408.3Mt at 0.9g/t for 12.81Moz (2022: 209.7Mt
at 1.68g/t for 11.31Moz)
• There were five large high-grade platforms (256, 257, 258, 259 and 260 Platforms) in the MRC orebody and
two platforms in the Rossiter orebody available for mining during the current financial year. By the end of the
financial year, two of the high-grade platforms (256 and 257) were depleted, leaving three platforms in the MRC
orebody available for mining in the 2024 financial year
• Access to the lower high-grade platform (260) in Fairview Mine’s MRC orebody was achieved in January 2023,
and the development towards the down-dip 261 Platform is progressing as planned
• The Mineral Resources estimation on the Soweto Cluster 2L16 and 2L24 TSFs was completed at the end
of March 2023, resulting in these TSFs being upgraded to the Indicated Mineral Resources category. The
remainder of the Soweto Cluster TSFs remain classified in the Inferred Mineral Resources category
• Mine design and scheduling were completed on the Indicated Mineral Resources of the Soweto Cluster TSFs
which have been converted to Probable Mineral Reserves
• Surface feed material at the BTRP has been supplemented with rehabilitation material from Fairview Mine
• Initial mining of the raise lines at Evander Mines’ 24, 25 and 26 Level project was executed
• The Group increased its focus on reserve delineation drilling at the extensions of the high-grade orebodies at
the Barberton Mines complex
STRATEGIC INITIATIVES
• Achieve production guidance
of 195,000oz to 205,000oz
per annum
• Reduce AISC at all
operations in real terms,
through optimisation and
cost-reduction initiatives,
as well as increased ounce
production
• Successfully execute
capital projects to sustain
and increase future gold
production
• Use technology to improve
mine production, efficiency,
safety and security
Why these initiatives are important
Related risk
Long-term objectives
• Delivering on annual production guidance enables
the Group to produce gold profitably, generate the
requisite cash to meet its capital requirements and debt
obligations, improve investor confidence in the Group’s
sustainability and return capital to shareholders
• Mineral Resources and Mineral Reserves are key
components of the Group’s sustainability
• Geological variability
• Increase Mineral Resources and Mineral Reserves
through exploration and value-accretive acquisitions
• Create sustainable stakeholder value by optimising
extraction efficiencies at our mining operations in a
cost-effective and safe manner
• Increase technical skills by developing an internal
pipeline of qualified successors for critical roles
ABRIDGED MINERAL RESOURCES
AND MINERAL RESERVES REPORT
AIM OF THIS REPORT
This abridged report was extracted from Pan African’s Mineral Resources and Mineral Reserves report 2023 which conforms to the
standards determined by the SAMREC Code and reports the Group’s position on Mineral Resources and Mineral Reserves at 30 June 2023.
This report must be read in conjunction with the entire reporting suite of documents available on our website at
www.panafricanresources.com
The Mineral Resources component in this report is reported inclusive of Mineral Reserves, unless otherwise stated. Information in this report
is presented by operation, mine or project on an attributable basis. Rounding of numbers may result in minor computational discrepancies.
PAN AFRICAN’S OPERATIONAL FOOTPRINT
A unique combination of African underground and surface mining operations.
BARBERTON REGION
EVANDER REGION
WEST RAND REGION
SUDAN REGION
Barberton Mines consists of three
underground mines and a tailings
retreatment operation
Evander Mines consists of one
underground mine, a tailings
retreatment operation and
several projects
The MTR project consists of the
Mogale Cluster TSFs and the
Soweto Cluster TSFs
The Sudan region consists of five
exploration concessions totalling
1,088km2
• Fairview Mine
• Consort Mine
• 8 Shaft
• Elikhulu
• Sheba Mine and Royal Sheba
• Egoli project
• Mogale Cluster
• Soweto Cluster
• BTRP
• Rolspruit project
• Poplar project
• Evander South project
• Block 12A North
• Block 12A South
• Block 12D
• Block 12E
• Block 12K
Barberton Mines
Mineral Resources
Evander Mines
Mineral Resources
West Rand
Mineral Resources
10%
6%
84%
Barberton Mines
Mineral Reserves
Evander Mines
Mineral Reserves
West Rand
Mineral Reserves
12%
16%
72%
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ABRIDGED MINERAL RESOURCES AND
MINERAL RESERVES REPORT continued
GROUP OVERVIEW
The estimated Mineral Resources and Mineral Reserves for the Group are reported according to the guidelines of the SAMREC Code
at 30 June 2023. Estimated Mineral Resources and Mineral Reserves exclude any exploration targets, for which no Mineral Resources
have been reported, and represent the attributable constituent for Pan African. All estimated Mineral Resources include that portion of the
estimated Mineral Resources that was converted to estimate the Mineral Reserves by applying modifying factors and a mine plan to the
Mineral Reserve blocks. Estimated Mineral Reserves are reported inclusive of diluting and contaminating material delivered to the respective
metallurgical plant for treatment and beneficiation.
GROUP MINERAL RESOURCES
The total Mineral Resources for the Group increased from 38.65Moz (327.9Mt at 3.67g/t) in June 2022 to 40.50Moz (581.0Mt at 2.17g/t) in
June 2023 – a gross annual increase of 1.85Moz, or 4.8%.
Estimated Mineral Resources
At 30 June 2023
Contained gold
At 30 June 2022
Contained gold
Category
Measured
Indicated
Measured and Indicated
Inferred
Total
Tonnes
million
Grade
g/t
Tonnes
gold
61.0
413.0
474.0
107.0
581.0
1.77
1.67
1.68
4.33
2.17
107.7
688.6
796.3
463.5
1,259.8
Moz
3.46
22.14
25.60
14.90
40.50
Tonnes
million
Grade
g/t
Tonnes
gold
70.5
178.2
248.6
79.3
327.9
1.63
3.53
2.99
5.78
3.67
115.0
629.3
744.3
457.9
1,202.2
Moz
3.70
20.23
23.93
14.72
38.65
Estimated Mineral Resources increased mainly as a result of the successful acquisition of the MTR project and changes in the cut-off grade
applied at Barberton Mines and Evander Mines’ 8 Shaft areas. The Mineral Resources as reported are depleted for all mining activities taking
place during the reporting period. Additional Mineral Resource blocks were reported at Barberton Mines’ Fairview operation. Changes in the
cut-off grade are a result of the higher production cost used in the cut-off grade estimations relative to the previous declarations whereas the
gold price assumed remained constant (June 2023: ZAR950,000/kg Au – June 2022: ZAR950,000/kg Au).
GROUP MINERAL RESERVES
Pan African’s estimated Mineral Reserves increased to 12.81Moz (408.3Mt at 0.90g/t) at 30 June 2023 post mining depletion of 0.18Moz
relative to 11.31Moz (209.7Mt at 1.68g/t) at 30 June 2022 – a gross annual increase of 1.49Moz, or 13.2%. Mineral Reserves are reported
inclusive of diluting and contaminating material delivered to the relevant metallurgical plant for treatment and beneficiation.
Estimated Mineral Reserves
At 30 June 2023
Contained gold
At 30 June 2022
Contained gold
Category
Proved
Probable
Total
Tonnes
million
Grade
g/t
Tonnes
gold
42.6
365.7
408.3
0.97
0.89
0.90
41.3
357.0
398.3
Moz
1.33
11.48
12.81
Tonnes
million
Grade
g/t
Tonnes
gold
58.2
151.5
209.7
0.86
1.99
1.68
50.1
301.9
352.0
Moz
1.61
9.70
11.31
Increases in the Mineral Reserves were observed for Barberton Mines’ surface marginal-grade stockpiles and as a result of the successful
acquisition of the MTR project. Marginal decreases, mainly due to mining depletion, are evident at the BTRP, Fairview, Consort and Sheba
operations at Barberton Mines as well as at Elikhulu. A redesign of the Royal Sheba project to optimise the plant feed grade from 2g/t to
3g/t resulted in a significant decrease in the Mineral Reserves reported.
COMPETENT PERSON
The competent person for Pan African,
Hendrik Pretorius, the Group technical
services manager, signs off on the
estimated Mineral Resources and Mineral
Reserves report for the Group.
HENDRIK PRETORIUS
Group technical
services manager
Hendrik is a member of the South African Council for Natural
Scientific Professions (SACNASP No. 400051/11 – Management
Enterprise Building, Mark Shuttleworth Street, Innovation Hub,
Pretoria, South Africa), as well as a member in good standing of
the Geological Society of South Africa (GSSA No. 965978 – CSIR
Mining Precinct, corner Rustenburg and Carlow Roads, Melville,
South Africa). Hendrik has 20 years’ experience in economic
geology, mineral resource management and mining (surface mining
and shallow to ultra-deep underground mining).
He is based at The Firs Building, 2nd Floor, Office 204, corner
Cradock and Biermann Avenues, Rosebank, Johannesburg,
South Africa. He holds a BSc (Hons) degree in Geology from the
University of Johannesburg as well as a Graduate Diploma in
Mining Engineering (GDE) from the University of the Witwatersrand.
Hendrik has reviewed and approved the information contained
in this document as it pertains to Mineral Resources and Mineral
Reserves and has provided written confirmation to Pan African that
the information is compliant with the SAMREC Code and, where
applicable, the relevant requirements of section 12 of the JSE
Listings Requirements and Table 1 of the SAMREC Code, and may
be published in the form and context in which it appears.
Estimated Mineral Resources reconciliation
Estimated Mineral Reserves reconciliation
2.02
(0.18)
38.65
40.50
)
z
o
M
(
s
e
c
n
u
o
l
d
o
G
45
40
35
30
25
20
15
10
5
0
1.67
(0.18)
11.31
12.81
)
z
o
M
(
s
e
c
n
u
o
l
d
o
G
14
12
10
8
6
4
2
0
30 June 2022
Mined
Change
30 June 2023
30 June 2022
Mined
Change
30 June 2023
Mineral Resources at the reporting date Decrease in Mineral Resources
Mineral Reserves at the reporting date Decrease in Mineral Reserves
Increase in Mineral Resources
Increase in Mineral Reserves
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ABRIDGED MINERAL RESOURCES AND
MINERAL RESERVES REPORT continued
GEOLOGICAL/RESOURCE ESTIMATION
METHODOLOGY
Geological modelling
The grade and the structure of the orebodies exploited by the
Group are highly erratic in nature, and most of the data for
evaluating resource blocks is derived from development adjacent
to the mining blocks and from the position of the present and
historical mining areas along with diamond drill hole information.
The data is continuously evaluated for representativeness and
accuracy. During the year, no discrepancies in data accuracy
were noted. The continuity of grade values within the ore shoots
is derived primarily from short-range statistical projections, based
on historical mining measurements of the orebody, the study of its
tectonic structure and continuity modelling such as variography and
trend analyses.
The tectonic structure and orebody geometry have been modelled
using the Lynx orebody modelling system (StopeCAD) and
Datamine Studio RM®. These systems allow for the 3D structure
of the mineralised volume to be modelled, modified and viewed
graphically. Additionally, these 3D models can be adjusted as new
data becomes available. Furthermore, these systems are employed
as a tool for visualising grade continuity and are an aid for mine
planning.
Resource estimation
During grade control, both diamond-cored drill holes and
underground channel/chip sampling results are utilised. A minimum
sampling width of 230cm is used in the case of mechanical mining
and 20cm for conventional scraper-type stoping. Where the
reef width is narrower, hanging wall and footwall waste samples
are included to mimic practical mining parameters. Exploration
diamond drill holes and sampling are conducted over a sample
width of 50cm within the mineralised or lithological contacts. Drilling
is also conducted on the tailings material that is re-treated at the
BTRP and Elikhulu and also at the MTR plant currently undergoing
construction. In these cases, the samples from either auger drilling,
dual drilling or sonic drilling are sampled at 150cm intervals.
All the samples are transported from the Group’s Barberton
region and Evander region sites to the SGS Barberton assay
laboratory (SGS Barberton) located in close proximity to Barberton
Mines. The West Rand region samples are transported to the
SGS Performance assay laboratory (SGS Performance) located
in Randfontein. SGS Barberton and SGS Performance are
independent South African National Accreditation System-
accredited assay laboratories (T0565 and T0265, respectively)
and are certified to conduct the relevant gold analyses. During
transportation and submission, the samples are accompanied by
a representative from the Company (either a geologist or sampler)
and a sample dispatch note. Sample preparation and assaying are
conducted by SGS Barberton or SGS Performance. Preparation of
the samples includes the drying of the sample at 110oC, followed
by crushing to 85% passing 2.36mm. Between 0.5kg and 0.75kg
of crushed material is subsampled and pulverised using Rocklabs
LM2 and RM2000 pulverisers to 85% passing 75µm. A 25g (grade
control) or 50g (exploration) aliquot is blended with a premix flux
for fire assay purposes. Low-grade orebodies are analysed using
atomic absorption spectrometry while high-grade orebodies employ
a parted gravimetric finish.
An in-house quality assurance and quality control (QA/QC)
system is implemented, where certified reference material (CRM)
is employed to indicate the accuracy of the assaying procedure.
For exploration, up to 10% of the samples are reassayed for
precision tests and are accompanied by CRM at a 10% frequency
rate. A two-times standard deviation from the expected CRM
assay values retrieved is employed as a failing criterion in the QA/
QC system and triggers a reassaying procedure of the total batch
analysed. All exploration samples retrieving grades in excess of
10g/t are immediately reassayed and will employ a gravimetric
finish to validate the grades achieved.
Mineral Resource estimation (MRE) at Fairview, Sheba and Consort
Mines uses an inverse distance weighted grade and orebody width
estimate within a limited search ellipse defined for each orebody
specifically. At Royal Sheba (located within the Sheba mining right),
an ordinary kriging MRE is conducted for the various resource
classification criteria. The MRE method employed for generating
local grade estimates at Evander Mines is ordinary kriging. All of the
Group’s tailings resources at the BTRP, Elikhulu and the MTR plant
are estimated utilising ordinary kriging. The search ellipse employed
during the kriging process is in line with the orebody dimension and
modelled variogram ranges. In all cases, historical data is employed
during the MRE due to the rich history of mining and exploration
in the area. All historical data is continuously evaluated relative to
newly acquired data for representativeness. During the reporting
period, no inconsistencies were noted in the historical or new data.
Extreme high-grade samples are evaluated per orebody and
capped to an acceptable maximum grade for each orebody and
operation specifically. These high grades are identified by sample
statistics, histograms and capping curves. The capped high-grade
samples are employed for the MRE of each orebody and aim to
limit the possible over-estimation of grade by using uncommonly
high-grade values during the MRE.
Mineral Resources classification
Blocks of Measured Resources are generally 20m on strike and
10m in the dip direction of actual mining. Where blocks are defined
adjacent to a development end only, the grade and true width of
the reef in the block are estimated by calculating the arithmetic
mean or ‘stretch average’ of the samples along the development
end. If the sample spacing is at the standard stope sampling grid of
3m, the block value is derived by calculating the inverse weighted
estimated value of all available samples. During an ordinary kriging
MRE, a Measured Resource block is defined as a block estimated
within the modelled variogram range with a slope of regression not
less than 70% into parent cells not larger than 30m by 30m. This
effectively reports a Measured Resource within 50m of sufficient
representative sampling.
Blocks of Indicated Resources are defined where only auger,
diamond, dual drilling or sonic drill hole samples and local
geological information are available. Both the grades and orebody
widths are either estimated by means of an inverse weighted
estimate or ordinary kriging. The Indicated Resource extends up to
the modelled variogram ranges of a sufficiently sampled area with
a slope of regression not less than 50%. Grades and widths are
mostly interpolated into the Indicated Resource blocks which are
60m by 60m in size.
The Inferred Resource blocks are characterised by a regional grade
and width obtained from arithmetic means, Sichel’s t-estimates and
macro ordinary kriging. Inferred Resource blocks are extrapolated
to double the modelled variogram range or grade continuity for
each orebody into parent cells of 120m by 120m in size.
Mineral Reserves conversion
Indicated Mineral Resources are converted to Probable Mineral
Reserves due to the lower confidence mainly in grade continuity
relative to that of Measured Mineral Resources. In most instances,
Measured Mineral Resources are converted to Proved Mineral
Reserves. Certain Measured Mineral Resources are not immediately
accessible for mining and require development or equipping. Under
these circumstances, Measured Mineral Resources have been
converted to Probable Mineral Reserves. Mineral Reserves are
reported inclusive of diluting and contaminating material delivered
to the relevant metallurgical plant for treatment and beneficiation.
Measured and Indicated Mineral Resources are only converted
into a Mineral Reserve once a mine plan with positive economic
parameters, inclusive of all modifying factors, is achieved. Inferred
Mineral Resources are not converted to Mineral Reserves, nor are
Inferred Mineral Resources utilised in feasibility studies.
Assumptions
Mineral Resources gold price
Mineral Reserves gold price
Exchange rate
ASSESSMENT AND REPORTING IN COMPLIANCE
WITH THE SAMREC CODE
To meet the requirements of the
SAMREC Code, the material reported
as Mineral Resources should have
‘reasonable and realistic prospects for
eventual economic extraction’.
Pan African has determined an appropriate cut-off grade, which
has been applied to the quantified mineralised orebody. In
determining the Mineral Resources and Mineral Reserves cut-off
grades, Pan African uses the following metal price deck. Mineral
Reserves represent the portion of the Measured and Indicated
Mineral Resources above an economic cut-off grade within the life-
of-mine plan. These Mineral Reserves have been estimated after
considering all modifying factors affecting extraction. A range of
disciplines is involved at each operation in the life-of-mine planning
process, including geology, surveying, planning, mining design and
engineering, rock engineering, metallurgy, financial management,
human resources management and environmental management.
Unit
30 June 2023
30 June 2022
US$/oz
ZAR/kg
US$/oz
ZAR/kg
1,663
950,000
1,488
1,906
950,000
1,706
850,000
850,000
US$/ZAR
17.77
15.50
ORGANIC GROWTH
Pan African has an exceptional pipeline of attractive growth opportunities, both in
established projects and brownfield resource definition prospects.
The operations’ robust life-of-mine plans support the Group’s strategic plan. Current exploration drilling as well as initiatives to access and
develop orebodies were aggressively pursued at the Group’s operations during the year. The strategy of converting Mineral Resources to
Mineral Reserves was progressed by moving organic growth projects further up the mining value curve and closer towards the feasibility
and production stages. These include Evander Mines’ 8 Shaft, the 24, 25 and 26 Level project, the Egoli project, Consort Mine’s PC
Shaft remnant blocks and the Royal Sheba project. The schematic on page 64 illustrates the progress of near-mine growth projects that
contributed ounces to the increased Mineral Resources for the year.
106
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
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ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
ABRIDGED MINERAL RESOURCES AND
MINERAL RESERVES REPORT continued
2023 IN REVIEW
Some of the Group’s achievements for the year ended 30 June 2023 are presented below.
LICENCE TO OPERATE
MINERAL RESOURCES
OPERATIONAL EXECUTION
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
• Barberton Mines’ mining rights are valid until May 2051
• The Group’s estimated Mineral Resources base increased by 4.8%
• Achieved the revised production guidance of 175,000oz for the year
• Successful commissioning of Evander Mines’ water retreatment
• Evander Mines’ mining right is valid until April 2038
year-on-year to 40.5Moz (581.0Mt at 2.2g/t)
PROJECTS
• Successful exploration drilling programme at Fairview, Consort and
Sheba Mines generated additional Mineral Resources and Mineral
Reserves as reported in this document
• Successful acquisition of the MTR project
• Steady-state production from Evander Mines’ 8 Shaft pillar
• Continued positive gold market economics resulted in limited
• Maintained Evander Mines’ 8 Shaft phase 1 underground refrigeration
plant construction, 24 Level development and the planning of the
25 Level to 26 Level mining phases
• Commissioned Evander Mines’ 8 Shaft underground mining on
24 Level
• Commenced with the dewatering of the 3 Decline at Egoli
movement in the reported cut-off grades of the Group’s operations
and projects
MINERAL RESERVES
• Developed additional target blocks at the Consort Mine PC Shaft
down-dip of the high-grade 42 Level orebody as well as at the Sheba
Mine MRC orebody
• The Group’s estimated Mineral Reserves base increased by 13.2%
year-on-year to 12.81Moz (408Mt at 0.9g/t)
• Advancement in the reserve delineation drilling in the Barberton region
• Access gained into an additional high-grade platform (260 Platform)
• Optimisation of mining methods and modifying factors
in the MRC orebody at Fairview Mine
• Additional platforms in the high-grade MRC and Rossiter orebodies at
• Completed the bulk sample mining at the Royal Sheba project
Fairview Mine to increase mining flexibility
• Completed the pump station at the Leslie/Bracken TSF and
• Optimisation of the BTRP scheduling and rehabilitation sources
commenced mining of the TSF at Elikhulu
• Successful acquisition of the MTR project during September 2022
• Finalised Barberton Mines’ 8.75MW solar plant feasibility and funding
BTRP metallurgical plant
FINANCIAL METRICS
• Capital allocation aligned with the Group’s strategic plan
• Managed production cash cost to US$1,142/oz (2022: US$1,099/oz)
• Group net debt
increased to US$22 million (2022: US$13 million)
by producing 175,209oz
– Barberton Mines: 64,586oz
– BTRP: 19,875oz
– Evander Mines: 40,175oz (including toll treatment)
– Elikhulu: 50,573oz
SAFETY
• The Group’s LTIFR regressed from 1.04 to 1.86 per million man hours
• The Group’s RIFR regressed from 0.35 to 0.81 per million man hours
• One fatal accident was recorded during the year ended 30 June 2023
(2022: nil)
• Evander Mines’ LTIFR regressed to 3.64 (2022: 0.93) and the
RIFR to 2.43 (2022: nil) per million man hours
plant, with operational performance in line with the feasibility study.
Commenced construction of Barberton Mines’ 8.75MW solar plant
in June 2023
• Feasibility studies on an agri-solar project for Evander Mines’ and
Barberton Mines’ solar plants completed
• Successful handover of the Ngwane and Sheba (formerly Kaapvallei)
schools to the Department of Basic Education by Barberton Mines
• Sponsorship of youth development and employment in the arts and
culture film industry and the launch of a mini-series on the national
broadcaster, SABC, communicating social issues on illegal mining,
gender-based violence and health
• Sponsorship of sports development and fostering health and wellness
among our employees. Our pro-elite running team achieved two gold
medals in the prestigious Comrades Marathon in 2023
• Addressed gaps identified in the ESG readiness review report 2022
• Issued the initial TCFD report in 2023
• Evander Mines’ (including Elikhulu) LTIFR regressed to 3.09
• Climate change targets for 2030 as per the RMB Sustainability Bond
(2022: 1.06) and the RIFR to 1.89 (2022: 0.21) per million man hours
Performance Targets
• Evander Mines’ metallurgical plant achieved 365 days without a
• Appointed an ITRB consisting of members from independent credible
lost-time or reportable injury for the year under review
tailings companies as per the GISTM requirements
• Barberton Mines’ LTIFR regressed to 1.26 (2022: 1.03) and
the RIFR has significantly improved to 0.26 (2022: 0.41) per
million man hours
• Sheba Mine achieved 11 years’ fatality-free shifts
• Consort Mine achieved 22 years’ fatality-free shifts
• Initiatives implemented at all sites to improve the Group’s safety
performance in the coming year
• Commissioned a formal compliance audit to gauge compliance of the
TSFs, in relation to the GISTM, taking into consideration the individual
ages of the TSFs and the legal framework at the time of construction
and periods of operation
108
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PERFORMANCE
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ENVIRONMENTAL, SOCIAL AND
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ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
ABRIDGED MINERAL RESOURCES AND MINERAL RESERVES REPORT
continued
Performance
Increase
Decrease
Unchanged
BARBERTON REGION
Fairview Mine
During the reporting period, Fairview Mine continued
its focus on optimising the extraction and successfully
increasing flexibility within the MRC and Rossiter Reef. This
was achieved by increasing development rates towards
down-dip extensions of the orebodies and by increasing
the reserve definition drilling rate. Broader-scale exploration
drilling is focused on the Hope, Main Muiden and Golden
Quarry Reefs, with desktop studies being conducted
on various known but unmined lower-grade blocks in all
orebodies.
Sheba Mine
Sheba Mine continued to focus on extraction of the MRC
and ZK orebodies during the year, while the high-grade
Verster and Thomas Reefs supplemented the plant feed
material. Specific attention was given to the reserve
definition drilling and development of the ZK orebody’s
down-dip extension on 37 Level and 38 Level in the
unmined areas between the Sheba and Fairview Mines.
Consort Mine
During the year, development at Consort Mine progressed
towards the Consort Bar and Main Muiden Reef (MMR)
orebodies at 38 and 15 Levels, respectively. Specific focus
and studies were centred on equipping the PC Shaft
remnant blocks and extracting high-grade ore between
42 and 41 Levels. Geotechnical constraints impeded
the timeous development towards the strike and up-dip
continuation of this orebody. Additionally, exploration drilling
during the year focused on the MMR and PC horizons.
High-resolution reserve definition drilling focused on the
15 Level MMR and deeper Consort Bar orebodies around
43 Level to 45 Level.
Barberton Tailings Retreatment Plant
Mining of the Harper North, Harper South and Vantage
dams progressed in accordance with the plan. It is
envisaged that the Royal Sheba project will form part of the
BTRP feed sources when this project is commissioned and
enabled through the construction of a RoM crusher circuit.
This will allow the BTRP to treat approximately 35,000t
per month of RoM material from the Royal Sheba project,
thereby extending the life of the operation and ensuring its
sustained output in future. Additionally, the currently mined
Western Cross orebody at the Sheba Mine lends itself to
a bulk mining approach. This will further supplement feed
material to the BTRP.
Royal Sheba project
During the current financial year, the bulk sample position
was intersected as planned and the mineralisation
encountered confirmed the Mineral Resource estimates
of the area. Following this successful intersection of the
orebody, the 10,000t bulk sample was extracted and
processed at the Group’s Consort and Sheba metallurgical
plants during the reporting period.
Estimated Mineral Resources
Affected by
Estimated Mineral Reserves
Affected by
Modelled life-
of-mine
Decreased by 94Koz, with the
tonnage increasing by 186kt
and grade decreasing by 1g/t,
a 6% decrease in gold content
year-on-year
• Depletion through mining activities
• Geological boundary and structural
updates
• Mineral Resource block updates
(tonnes and grade)
• Cut-off grade increased from 1.75g/t for
the previous financial year to 1.88g/t for
the current financial year
Decreased by 189kt at 5.77g/t
for 35Koz. This equates to a 5%
decrease year-on-year
• Depletion through mining activities
20 years
• Impact of updated geological structures
and boundaries
• Update of grades in Mineral Resource
blocks
• Mine call factor decreased from 99.6%
to 92.1% and the plant recovery factor
remained constant at 93%
Decreased by 125kt at 5.21g/t
for 21Koz, a 6% decrease
year-on-year
Decreased by 57kt at 3.55g/t
for 6.5Koz, a 2% decrease
year-on-year
• Depletion through mining activities
• Geological boundary and structural
updates
• Mineral Resource block updates
(tonnes and grade)
• Cut-off grade increased to 2.60g/t for
the current financial year, relative to
2.05g/t for the previous financial year
• Depletion through mining activities
• Geological boundary and structural
updates
• Mineral Resource block updates
(tonnes and grade)
• Cut-off grade increased from 2.75g/t for
the previous financial year to 3.77g/t for
the current financial year
Decreased gold content by 9Koz
and grade decreased by 1.44g/t
while tonnes increased by 197kt.
This equates to a 7% decrease
year-on-year
Decreased by 26kt at 13.35g/t
for 0.1Koz, an 11% decrease
year-on-year
• Depletion through mining activities
8 years
• Impact of updated geological structures
and boundaries
• Update of grades in Mineral Resource
blocks
• The mine call factor decreased from
103% in the previous financial year to
91% in the current financial year
• Depletion through mining activities
9 years
• Impact of updated geological structures
and boundaries
• Update of grades in Mineral Resource
blocks
• The mine call factor decreased
year-on-year from 110% to 94% while
the plant recovery factor decreased
slightly from 91% to 90.8% for the
current financial year
Increased by 63Koz, with tonnage
decreasing by 469kt at 4.18g/t,
a 7% increase in gold content
year-on-year
• Depletion through mining activities
• Inclusion of screened low-grade
stockpile material
• The cut-off grade remained constant
year-on-year
Increased gold content by 73Koz
and grade by 1.03g/t while tonnes
decreased by 2.214kt, a 24%
increase year-on-year
• Depletion through mining activities
• The plant recovery factor improved
to 37.5% from 34.1% for the previous
financial year
3 years,
excluding the
treatment of
material from
Royal Sheba
Remained constant
year-on-year
• Proposed mining method optimisation
to long hole open stoping
• Cut-off grade remained constant year-
on-year at 0.8g/t
Decreased by 8,707kt at 1.45g/t
for 405Koz, a decrease of 64%
year-on-year
• Long hole open stoping mining
8 years
method adopted
• Cut-off grade increased from 0.8g/t to
1.7g/t in the current reporting period
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AND STRATEGY
PERFORMANCE
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ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
ABRIDGED MINERAL RESOURCES AND MINERAL RESERVES REPORT
continued
Performance
Increase
Decrease
Unchanged
EVANDER REGION
Evander Mines’ 8 Shaft
During the current financial year, all mining development
and infrastructure placement for the mining of 24 Level
progressed with four mining crews actively mining on
24 Level by the financial year-end. Commissioning of phase
1 of the refrigeration plant was successfully completed
during the first quarter of the reporting period. The purpose
of phase 1 of the project is to allow mining of both the
24 Level F line stopes and mining of the 24 Level B, C and D
raise lines. Phase 2 of the refrigeration plant, currently under
construction, will allow for additional mining crews to be
placed on 24 Level as well as 25 Level mining.
Elikhulu
Elikhulu is expected to yield approximately 50Koz of gold
per annum over its 10-year remaining life-of-mine. These
production estimates exclude an Inferred Resource of 74Koz
of gold delineated in the soil material beneath the existing
tailings dumps.
Evander Mines’ 7 Shaft – Egoli project
The traditional off-reef footwall development of the deep-
level, narrow tabular Witwatersrand orebodies has been
optimised by placing the development haulages on-reef.
This enhances the lead time to first gold and results in
lock-up of material in pillars that could be extracted at the
end of the operation’s economic life. This is done using
newly developed backfill and support technology currently
successfully employed at the Group’s 8 Shaft pillar mining
operation.
Rolspruit project
This orebody is a down-dip extension of the same Kinross
payshoot currently being exploited at 8 Shaft. The project
is located immediately west-north-west of the 8 Shaft.
Exploration on the Rolspruit project commenced in 1955,
and by 1988, a total of 53 boreholes with accompanying
reef deflections had been completed by various companies.
The Group regularly reviews its portfolio of exploration
projects and applies the latest available economic data to
assess their feasibility.
Poplar project
Exploration on the Poplar project commenced in the mid-
1950s and has been the subject of several studies. A total
of 104 mother holes were drilled in the project area, with
an additional 146 intersections obtained through deflection
drill holes.
Estimated Mineral Resources
Affected by
Estimated Mineral Reserves
Affected by
Modelled
life-of-mine
Decreased by 315kt at 12.56g/t
for 128Koz, a 2% decrease
year-on-year
• Depletion through mining activities
• Geological boundary and structural
updates
• Mineral Resource block updates
• Cut-off remained constant year-on-year
at 660cmg/t
Increased by 202kt at 0.58g/t
for 5Koz, a 1% increase
year-on-year
Decreased by 3,853kt at
0.77g/t for 95Koz, a 6%
decrease year-on-year
• Depletion through remining activities
• TSF boundary updates for Leslie/
Bracken and Winkelhaak TSFs
• Mineral Resource block updates on the
Leslie/Bracken TSFs
Decreased by 18,336kt at 0.34g/t
for 200Koz, a 14% decrease
year-on-year
Remained constant
year-on-year
• Cut-off grade increased slightly due
to increases in mining costs and a
constant gold price assumed
Remained constant
year-on-year
• Depletion through mining activities
13 years
• Impact of updated geological structures
and boundaries
• Update of grades in Mineral Resource
blocks and inclusion of the 8 Shaft
24 Level and 25 to 26 Level mining
areas
• Modifying factors remained constant
year-on-year as per achieved results
• Depletion through remining activities
10 years
• Impact of updated TSF limits for Leslie/
Bracken and Winkelhaak TSFs
• Update of grades in Mineral Resource
blocks in Leslie/Bracken TSF estimates
• Modifying factors employed as per
actual results since the commissioning
of Elikhulu
• Modifying factors remained constant
year-on-year
9 years
(on Measured
and Indicated
Mineral
Resources, per
independent
feasibility study)
Remained constant
year-on-year
Remained constant
year-on-year
• Cut-off grade increased slightly year-on-
year to 424cmg/t (2022: 418cmg/t)
• Cut-off grade increased slightly due
>29 years
to inflationary increase in mining costs
assumed through conventional narrow
tabular breast mining at a depth of
more than 2,500m to 475cmg/t
(2022: 461cmg/t)
Decreased by 979kt at 4.57g/t
for 144Koz, a 2% decrease
year-on-year
• Cut-off grade increased slightly year-
on-year due to inflationary increase in
mining costs assumed to 519cmg/t
(2022: 489cmg/t)
None reported
None reported
Evander South project
This project is located directly west of Evander Mines’
9 Shaft and is south of the Poplar project. A total of
116 mother holes were drilled in the project area, with
475 deflections.
Decreased by 1,575kt at 3.40g/t for
172Koz, a 3% decrease
year-on-year
• Cut-off grade increased slightly year-
on-year due to inflationary increase in
mining costs assumed to 348cmg/t
(2022: 333cmg/t)
None reported
None reported
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ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
ABRIDGED MINERAL RESOURCES AND MINERAL RESERVES REPORT
continued
Performance
Increase
Decrease
Unchanged
WEST RAND REGION
Estimated Mineral Resources
Affected by
Estimated Mineral Reserves
Affected by
Modelled
life-of-mine
Mogale Cluster
The Mogale Cluster is expected to yield an average of
approximately 50Koz of gold per annum over the initial
11 years of its life-of-mine, while the last two years are
expected to yield an average of approximately 25Koz of gold
per year. These production estimates exclude an Inferred
Resource of 49Koz of gold estimated at the base of some
of the TSFs.
Soweto Cluster
The Soweto Cluster TSFs and the related MTR infrastructure
on the West Rand, owned and operated by Pan African, will
be utilised to re-treat historical gold plant tailings at a rate of
up to 1.0mt per month through a newly constructed tailings
retreatment plant within the Mogale Cluster.
Increased by 125,267kt at 0.29g/t
for 1,176Koz, a 100% increase
year-on-year
Increased by 133,494kt at 0.31g/t
for 1,347Koz, a 100% increase
year-on-year
Aerial view of the large 1L23-25 Mineral
Resource of the Mogale Cluster
• New project acquired
• New project acquired
13 years
Increased by 119,332kt at 0.29g/t
for 1,095Koz, a 100% increase
year-on-year
• New project acquired
• New project acquired
Increased by 108,325kt at 0.28g/t
for 982Koz, a 100% increase
year-on-year
16 years
(blending the
Mogale and
Soweto Cluster
material as feed
to the MTR
plant results in
an overall 21
life-of-mine for
the MTR plant)
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radius (pm):
174
Intellectual capital
Human capital
Social and relationship capital
Natural capital
Non-financial and sustainability
information statement
Corporate governance overview
Board of directors
Remuneration report
118
120
123
126
129
134
140
145
Gold has an atomic radius (the size of an atom from
the centre of the nucleus to the most outermost
isolated electron) of 174pm.
Pan African acknowledges the importance
of protecting the environment and looking
after its social licence to operate in
delivering on its long-term and sustainable
value creation and preservation.
ENVIRONMENTAL,
SOCIAL AND
CORPORATE
GOVERNANCE
3
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
INTELLECTUAL
CAPITAL
MATERIAL MATTERS
Page
KEY STAKEHOLDERS
Page
Execution
Growth
Electricity
Geology
97
98
101
102
Providers of capital
Employees and unions
38
40
Suppliers
Customers
Innovation and opportunity 119
Health, safety and security
121
Talent and skills
122
More than 130 years of mining the unique Barberton Greenstone Belt
orebodies and an established track record in surface tailings remining.
STRATEGIC OBJECTIVE
Optimise the use of technology and harness the expertise
of our teams to consistently deliver safe, reliable, efficient
and responsible mining operations.
Slurry sample preparation at
Fairview Mine’s metallurgical plant
Innovation and opportunity
Our entrepreneurial and performance-driven culture fosters innovation,
while diversifying our portfolio and investing in sustainable solutions
enhances long-term profitability and contributes to a sustainable future.
KEY OUTCOMES
• Pan African was awarded the merit award in the Chartered Governance Institute of Southern Africa’s Integrated
Reporting Awards for the Small Capital category in November 2022
• The mine planning department successfully implemented state-of-the-art planning and scheduling systems, allowing
them to meticulously schedule and plan all mining-related activities with specific measurable tasks and timelines
• The survey department has been equipped with cutting-edge computer-aided drawing and 3D systems, bolstering
their capabilities
• An operations control room was established at Barberton Mines, which is integrated with multiple SCADA systems to
monitor various mining services to enhance response times to breakdowns and emergencies, ultimately leading to a
reduction in production downtime and improved response time to safety incidents
• A Mineware reporting system is currently being installed at the Group’s operations, which will provide valuable insights
on production data, planning statistics and labour-related information for detailed analysis and faster decision-making
• A safety application is currently being implemented as well as upgrades to the mine’s fibre communication infrastructure
to empower any mine employee to report safety incidents from any location within the mine, even without an active
internet connection
• The Company’s ability to prevent and combat illegal mining, crime and other security-related incidents was improved
through the implementation of an integrated security plan and various technology-driven prevention methods, including:
– the installation of additional high-risk perimeter fences, early detection systems, CCTV networks and other modern
surveillance technologies
– the integration of radar, seismic, long-range thermal cameras and X-ray technology
• Since May 2022, a national police intervention project has been deployed to Barberton Mines specifically targeting
illegal mining and associated criminal activities. Specialised police units, including the National Intervention Unit, tactical
response teams and public order police, have been engaged in this independent external operation
• To effectively manage ESG data and drive sustainable business practices, the Group has implemented an ESG
information management system
STRATEGIC INITIATIVES
• Optimise the Group’s existing
operations to achieve their
targeted operational objectives
• Use technology to improve mine
production, efficiency, safety
and security
• Curtail illegal mining and
property theft through
cooperation between all
stakeholders
• Maintain an entrepreneurial and
performance-driven culture
Why these initiatives are important
• An entrepreneurial and performance-driven culture
is a competitive advantage, leading to superior
decision-making, improved employee retention, loyalty,
productivity and sustainability
• Technology can be used as a tool to engage with
employees on education and promote self-development
as well as enhance the working environment to enable
improved communication, productivity and safety
Related risks
• Social instability
• Safety
• Geological variability
• Skills
• Capital allocation
Long-term objectives
• The Group will continue its journey to instil an
entrepreneurial performance-driven culture throughout
the organisation
• Deploy technology to establish virtual communication
platforms at all operations to improve employee
engagement
• Enforce the culture changes required to support our
relentless pursuit of zero harm for all stakeholders and
the environment
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PERFORMANCE
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ENVIRONMENTAL, SOCIAL AND
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ANNUAL FINANCIAL
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OTHER
INFORMATION
HUMAN
CAPITAL
MATERIAL MATTERS
Page
KEY STAKEHOLDERS
Page
Execution
Growth
97
98
Innovation and opportunity 119
Health, safety and security
121
Talent and skills
122
Providers of capital
Employees and unions
Governments and
regulatory bodies
38
40
42
Suppliers
Customers
Health, safety and security
We prioritise employee health and safety and maintain stringent physical
and cybersecurity measures to ensure responsible and sustainable
operations. This creates a safe working environment that fosters
employee trust and confidence.
Employees and contractors who are knowledgeable, competent and
adequately skilled, supported by a robust safety culture in pursuit of a
zero-harm working environment.
STRATEGIC OBJECTIVE
Attract, cultivate and retain exceptional talent while fostering
a culture of safety, respect and continuous learning.
KEY STATISTICS
Employees
Employee remuneration
Skills development and training
TRIFR
RIFR
LTIFR
Fatalities
Unit
number
US$ million
US$ million
Per million man hours
Per million man hours
Per million man hours
number
2023
2,469
60.4
2.2
7.96
0.81
1.86
1
2022
2,198
65.1
0.8
8.95
0.35
1.04
–
2021
2,104
62.1
1.1
7.36
0.63
1.41
1
2020
2,126
52.5
1.7
9.12
0.8
1.70
–
2019
2,148
59.7
1.0
10.71
0.51
1.62
–
At 30 June 2023, 90.73% (2022: 89.29%) of our employees were HDPs.
KEY OUTCOMES
• The Group experienced one fatality during the 2023 financial year (2022: no fatalities)
• In March 2023, Barberton Mines achieved 3 million fatality-free shifts. At the end of the 2023 financial year, Sheba Mine
and Consort Mine achieved 11 and 22 years, respectively, without any fatalities
• The Group’s TRIFR improved to 7.96 (2022: 8.95) per million man hours
• The Group’s LTIFR regressed to 1.86 (2022: 1.04) per million man hours
• The Group’s RIFR regressed to 0.81 (2022: 0.35) per million man hours
• The Group has implemented various awareness initiatives aimed at enhancing its safety performance
• A safety application is currently being implemented as well as upgrades to the mine’s fibre communication infrastructure
to empower any mine employee to report safety incidents from any location within the mine, even without an active
internet connection
• The Group increased its focus on educating employees on lifestyle diseases and enhancing the health and wellness
programme
• Tuberculosis cases reported in the 2023 financial year have decreased by 63.6% to eight cases (2022: 22 cases)
• Through engagement with the Group’s corporate office, the South African Police Service deployed specialised police
resources to our mines in May 2022 as part of a special intervention project to assist in combating illegal mining and
other forms of transnational organised crime
STRATEGIC INITIATIVES
• Use technology to improve mine
production, efficiency, safety
and security
• Work towards zero fatalities and
an annual improvement in the
TRIFR to 3.86%
• Maintain an entrepreneurial and
performance-driven culture
• Curtail illegal mining and
property theft through
cooperation between all
stakeholders
Why these initiatives are important
Related risks
Long-term objective
• Promoting and providing our employees with a safe
• Social instability
working and operating environment is key to the well-
being of our employees and the sustainability of our
operations
• Operational execution
• Safety
• Ageing mines
• Skills
• While injury rates are well below the South African
mining industry average, we aim to achieve our
objective of zero harm to employees and contractors
120
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ANNUAL FINANCIAL
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OTHER
INFORMATION
HUMAN CAPITAL continued
Talent and skills
We prioritise the development and retention of our people through
transparent and constructive relationships with our employees and unions
to address diversity, inclusivity and the challenge of an ageing workforce.
STRATEGIC INITIATIVES
• Develop employee skills
and introduce retention
programmes for scarce skills
• Maintain an entrepreneurial and
performance-driven culture
KEY OUTCOMES
• Employee turnover has increased to 12.9% (2022: 8.5%)
• The Group contributed US$170 thousand (2022: US$122 thousand) towards full-time bursaries for 14 university
students (2022: 23 university students)
• Skills and development training expenditure increased to US$2.2 million (2022: US$0.8 million)
• As part of its skills development strategy, Barberton Mines has:
– implemented a graduate development programme for 11 (2022: nil) students as part of the succession planning
for the mining department
– provided adult education and training to 25 (2022: 16) community learners through an accredited external
training provider
– provided an engineering learnership programme for one (2022: nil) employee and six (2022: three) community
members as part of this programme
– provided one (2022: nil) intern with workplace exposure in the finance department through the graduate programme
– introduced 10 (2022: nil) employees to its onsetter programme
– introduced nine (2022: three) employees to the learner miner programme
• Evander Mines’ skills development strategy has:
– provided an engineering learnership programme to its employees and community members. This programme
includes six (2022: six) employees and six (2022: three) community members
– continued with a formal mentorship programme whereby mentors are paired with mentees within the disciplines
of engineering, metallurgy, administration and support, and instrumentation. Seventeen mentorships have been
formally signed to date
– provided 15 (2022: 13) university graduates with workplace exposure in both technical and support functions
through its internship and graduate programmes
– continued to assist its employees in furthering their studies in different fields; 17 employees are part of this
programme
Why these initiatives are important
Related risks
Long-term objective
• Ongoing, effective talent development and succession
planning are essential to ensure we have the necessary
skills to meet our strategic objectives and operational
needs
• Operational execution
• Strengthen leadership and technical skills by
• Safety
• Skills
developing an internal pipeline of successors for
critical roles
SOCIAL AND
RELATIONSHIP CAPITAL
MATERIAL MATTERS
Page
KEY STAKEHOLDERS
Page
Electricity
101
Providers of capital
Innovation and opportunity 119
Employees and unions
Health, safety and security 121
Unemployment and
social responsibility
Beyond compliance
124
125
Governments and
regulatory bodies
Suppliers
Communities
Collaboration partners
Customers
38
40
42
The quality of our stakeholder relationships,
the initiatives we have implemented to improve
the well-being of our employees and host
communities and our commitment to regulatory
compliance and responsible business practices.
STRATEGIC OBJECTIVE
Engage stakeholders to build positive
relationships, maintain our social licence
to operate and create sustainable value.
KEY STATISTICS
Unit
2023
2022
2021
2020
2019
CSI and LED
initiatives and
bursaries
South African
government
taxes paid1
US$ million
1.7
1.9
1.8
1.3
1.9
US$ million
21.9
24.2
33.1
16.1
14.1
1 Excluding VAT, but including employee taxes.
122
Portable training in building and
construction skills at Barberton Mines
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ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
SOCIAL AND RELATIONSHIP CAPITAL continued
Unemployment and social responsibility
We manage community expectations and mitigate social unrest through
development projects and employment opportunities.
Beyond compliance
We adopt a ‘beyond compliance’ approach, ensuring adherence to
regulatory requirements while actively seeking opportunities to exceed
these requirements for the benefit of our stakeholders.
STRATEGIC INITIATIVES
• Hand over phase 3 of the Sheba
and Ngwenya Primary Schools
in Barberton to the Department
of Basic Education
• Curtail illegal mining and
property theft through
cooperation between all
stakeholders
KEY OUTCOMES
• Pan African invested US$1.7 million (2022: US$1.9 million) in CSI and LED initiatives
• A running club at Barberton Mines was introduced as a health and wellness initiative to encourage fitness and well-
being by providing professional fitness coaches and encouraging participation in sporting events
• The Group handed over phase 3 of the Sheba and Ngwenya Primary Schools in Barberton to the Department of Basic
Education. A total of 35 local contractors participated in the infrastructure development of these schools creating
approximately 285 temporary employment jobs during the three-year construction period
• Evander Mines completed the computer and science laboratory at Thomas Nhlabathi High School as part of its SLP.
Furniture and equipment are being procured to ensure the facility is fully equipped. Additionally, a similar facility at
Thistle Grove Combined School is progressing well and is expected to be completed in the 2024 financial year
• Barberton Mines initiated a high school scholarship programme in January 2022, granting full scholarships to
25 learners based on academic excellence and financial need. Twenty-two bursars successfully passed their 2022
academic year. The Group is considering expanding the programme to tertiary learning in the 2024 academic year
• Twenty-five permanent employment positions and up to 276 seasonal jobs have been created through the Barberton
Blueberries project with total salaries of US$0.3 million (2022: US$0.2 million) paid
• The recent investment in the packhouse and frost mitigation equipment has significantly improved the Barberton
Blueberries project’s sustainability and global competitiveness
• The Barberton Blueberries project’s first commercial harvest was completed in October 2022 with 120t sold. The
current harvest season commenced in June 2023, with a forecast harvest of 150t planned for the international market
and 70t for the domestic market
• April 2022 marked the first anniversary of the establishment of the office of Barberton Mines’ enterprise supplier
development programme. A nine-month-long business incubation programme is provided and 47 (2022: 37) local
entrepreneurs have been enrolled to date, of which 32 entrepreneurs have already graduated. An 18-month-long
mentorship programme is also offered and 13 (2022:13) local entrepreneurs have been enrolled to date. Currently,
five entrepreneurs are rendering their services to Barberton Mines
• As part of its performing arts programme launched in 2016, Pan African partnered with Elangeni Generations Outreach,
a renowned film-making institution, that provides technical support for the performing arts. On 4 June 2023, the first
Pan African-funded movie series was broadcast on national television. The programme has yielded three films
predominantly in the SiSwati language
KEY OUTCOMES
• Barberton Mines has approved SLPs in place
• Evander Mines’ five-year SLP submission for July 2023 to June 2028 was submitted to the DMRE in January 2023
• Action plans and remedial activities are being implemented to mitigate high-risk safety and environmental issues
associated with the Group’s TSFs
• An ITRB was appointed to conduct a formal audit of the Group’s TSF facilities management against the GISTM
standards
• The DMRE has issued the integrated environmental authorisation for the MTR project
• The tax compliance policy, whistle-blowing policy, fraud prevention plan and investigation protocols were approved
by the board in June 2023. The board also reviewed other key policies and charters to ensure their effectiveness and
alignment with best practices
• PwC has assured certain key sustainability information in the Group’s ESG report
• The Group published its maiden TCFD report for the 2023 financial year
• As part of the environmental due diligence for the MTR project, an Equator Principles gap analysis was completed
which resulted in a roadmap to address identified deficiencies in the environmental and social management system
for alignment
STRATEGIC INITIATIVES
• Work towards zero fatalities
and an annual improvement in
the TRIFR to 3.86%
• Rehabilitate 41% of MTR’s
surface area by 2030, while
concurrently conducting
remining operations
• Operate TSFs in line with the
GISTM as far as reasonably
practicable
• Address the gaps identified in
the 2022 PwC ESG readiness
review report, publish the
Group’s maiden TCFD report in
2023 and obtain assurance on
selected ESG KPIs
• Progress the implementation
of TSF audit recommendations
and advance compliance with
the GISTM as far as reasonably
practicable
Why these initiatives are important
Related risk
Long-term objectives
Why these initiatives are important
Related risk
Long-term objective
• Most of our employees are employed from local
• Social instability
• Focus on the youth through early childhood
• Being committed to and focused on regulatory
• Operational execution
• Ongoing compliance with all applicable legislative
communities, and the success of the Group’s SLP
initiatives and ‘beyond compliance’ community
projects will lead to more prosperous and sustainable
communities and contribute to a more stable operating
environment
• As employers and valuable contributors to the
nation’s economy, the Group has a key role to play
in South Africa’s transformation journey and making
a contribution to the country’s economic growth
by improving infrastructure and facilities in our host
communities
• Creating a sustainable economy outside of mining
prevents ghost towns once mining activities have ceased
development programmes as well as arts and culture
initiatives and skills development
• Proactive management of community expectations
through ongoing engagement and education
• Through the Barberton Mines Transformation Trust,
we aim to contribute to improving infrastructure and
facilities in our host communities
compliance within the Group enables and supports the
long-term sustainability of the Group
and regulatory requirements pertinent to the Group’s
operations
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INFORMATION
NATURAL
CAPITAL
MATERIAL MATTERS
Page
KEY STAKEHOLDERS
Page
Geology
Tailings management
Biodiversity and
decarbonisation
102
127
128
Providers of capital
Communities
Governments and
regulatory bodies
The environment
Collaboration partners
38
42
42
44
The responsible use of fuel, energy, water, air and land resources while
aspiring to do minimal harm to the environment.
STRATEGIC OBJECTIVE
Manage our operations with climate-conscious practices
that preserve and protect natural resources and promote
sustainability.
KEY STATISTICS
Energy consumption
Water consumption
Scope 1 emissions
Scope 2 emissions
Carbon emissions intensity
per tonne milled
Carbon emissions intensity
per ounce produced
Environmental rehabilitation
obligation
Unit
TJ
ML
ktCO2e
ktCO2e
tCO2e/tonne
tCO2e/oz Au
US$ million
2023
20221
20211
20201
20191
1,447.17
1,405.44
9,178
3.7
332
0.022
1.92
10.1
8,232
4.1
341
0.022
1.68
8.6
1,468.68
12,408
4.7
375
1,395.25
12,170
3.7
346
1,433.00
13,369
16.1
355
0.026
0.024
0.028
1.88
13.6
2.01
9.2
2.16
15.8
1 Following the assurance of key sustainability information certain prior years’ non-financial and sustainability numbers have been restated. These restatements do not
affect our previously reported financial results or the integrity of the financial statements and primarily affect the following non-financial and sustainability KPIs: energy
consumption, water consumption, scope 1 and scope 2 emissions and carbon emissions intensity per ounce produced.
The regional Elikhulu TSF at Evander Mines
which will contain all the future underground
and Elikhulu processed residues
Tailings management
We are committed to responsible tailings management, including the
rehabilitation and recycling of waste products, to minimise the impact on
the environment, mitigate risks, ensure regulatory compliance and uphold
stakeholder trust.
KEY OUTCOMES
• The Group has conducted internal audits and studies over the past two years to evaluate the compliance of its TSF
management against the GISTM standards
• An ITRB, comprising three suitably qualified independent members, was appointed to conduct a formal audit
• In line with the GISTM recommendations, Pan African appointed:
– an accountable executive for tailings management in June 2022
– a responsible tailings facility engineer in June 2022
– Barberton Mines’ engineer of record to also serve as Evander Mines’ engineer of record
• Construction activities for phase 2 of the Elikhulu TSF are ongoing
• The Group commenced with the planning and design of phase 3 of the Elikhulu TSF extension
STRATEGIC INITIATIVES
• Operate TSFs in line with the
GISTM as far as reasonably
practicable
• Progress the implementation
of TSF audit recommendations
and advance compliance with
the GISTM as far as reasonably
practicable
Why these initiatives are important
Related risk
Long-term objectives
• Demonstration of our commitment to conducting our
operations in a manner that results in minimal harm to
the environment and enables and supports the long-term
sustainability of the Group and the environment in which
we operate
• Operational execution
• Consolidate the Kinross, Leslie/Bracken and
Winkelhaak TSFs into a single facility at Elikhulu, which
will materially reduce the environmental footprint of
Evander Mines’ TSFs and result in rehabilitated land
becoming available for alternative uses
• Continue to develop, refine and enhance our
biodiversity plans and evaluate new opportunities
to add value for stakeholders by improving and
maintaining nature conservation partnerships
• Invest in additional ESG value-add ‘beyond
compliance’ projects with the intention of creating
sustainable businesses and opportunities in our host
communities
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NATURAL CAPITAL continued
Biodiversity and decarbonisation
We uphold environmental preservation as a top priority and actively
participate in programmes aimed at promoting biodiversity and
supporting decarbonisation efforts. This commitment contributes to
stakeholder value by minimising environmental impacts, mitigating
regulatory risks and fostering positive community relationships.
KEY OUTCOMES
STRATEGIC INITIATIVES
• A TCFD maturity assessment and roadmap were completed in the previous financial year, resulting in a three-year plan to
• Commission the water
significantly strengthen our climate change strategy
• We have actioned a significant part of that roadmap, specifically through:
– conducting an overall climate change risk assessment and scenario analysis project during this financial year
– taking steps to improve climate change governance and risk management within Pan African
For the full report, refer to our website or refer to page 129 for the non-financial and sustainability information statement
• In March 2023, a biodiversity gap analysis was conducted focusing on the Consort, Fairview and Sheba Mines mining areas.
The objective of the analysis was to enhance future reporting in accordance with biodiversity GRI Standards
• The carbon emissions intensity increased to 1.92tCO2/oz Au produced (2022:1.68tCO2/oz Au produced)
• The Group generated 23,770MWh of renewable energy and purchased electricity amounted to 365,956MWh, achieving a
6.1% renewable energy mix
• Preparatory construction activities commenced on Fairview Mine’s solar plant in May 2023
• Evander Mines’ water retreatment plant was commissioned in March 2023
• Barberton Mines continues its partnership with the Barberton Nature Reserve and the Mpumalanga Tourism and Parks
Agency as well as its sponsorship of orphaned rhinos at the Care for Wild Rhino Sanctuary
• There were no reportable environmental incidents at Barberton Mines
• There was one reportable environmental incident at Evander Mines which related to the failure of a pipeline transporting slurry
from Elikhulu to the Winkelhaak TSF and resulted in a slurry spillage into Winkelhaakspruit. Remedial action was immediately
initiated by repairing the pipe and cleaning the spillage area
retreatment plant at Evander
Mines
• Rehabilitate 41% of MTR’s
surface area by 2030, while
concurrently conducting
remining operations
• Diversify the Group’s solar
energy sources by entering
into a 40MW power purchase
agreement with an independent
power producer
• Commence construction of
the 8.75MW solar plant at
Barberton Mines
• Expand Evander Mines’ solar
plant by 12MW
• Construct a 10MW solar plant
at the MTR project
Why these initiatives are important
• Reducing the Group’s carbon emissions is one of the
ways Pan African is ‘mining for a future’ and forms part
of our integrated ‘beyond compliance’ approach in
support of our ESG objectives
Related risks
• Constrained electricity
• Operational execution
• Inflation
Long-term objectives
• Continue to prioritise the preservation of the
environment and protect vital natural resources such as
air, water, soil, minerals, fuel, plants and animals through
biodiversity protection initiatives
• Our vision for climate change and energy management
encompasses the following key elements:
– Ensuring energy security by striving for pragmatic
ways to produce and supply our electricity
– Pursuing energy efficiency initiatives to optimise gold
production sustainably while using less energy
– Reducing GHG emissions by adopting an energy
portfolio that includes a renewable energy mix,
aligned with our commitment to sustainable mining
and climate change response
– Decarbonising gold production to enhance export
competitiveness through effective GHG emissions
intensity management
• By 2024, we aspire to have 30MW of solar capacity in
place, resulting in reduced demand for grid electricity
by 75,000MWh and an 80,000tCO2e reduction in our
Scope 2 carbon footprint annually
NON-FINANCIAL AND
SUSTAINABILITY INFORMATION
STATEMENT
Climate change has been a consideration in Pan African’s strategy for several
years. As a gold mining company with significant energy requirements, we
recognise that we have an essential role to play in mitigating our carbon footprint.
The non-financial and sustainability information statement has been drafted in accordance with the requirements of section 414 of the
Companies Act 2006. Our approach to climate change must carefully balance mitigation of our carbon footprint, building climate adaptation
and resilience and supporting the Just Energy Transition Framework.
PROGRESS ON TCFD REPORTING
During the 2022 financial year, we conducted a TCFD gap assessment and developed a TCFD integration roadmap. In the second half of
the 2023 financial year, we commenced the roll-out of the roadmap.
Achieved by 2023
Planned for 2024
• TCFD gap assessment and integration roadmap
• High-level climate change risk assessment
• Commenced with a climate change scenario analysis
• Conducted climate change training workshops
• Updated applicable board committee charters
• Published the first stand-alone TCFD report
• Finalise the climate change scenario analysis
• Finalise the climate change risk and impact assessment
• Integration of climate change into the core risk management framework
• Finalise the methodology and publish upstream Scope 3 GHG emissions
We will continue working towards improving Pan African’s long-term resilience against the physical and transitional effects of climate change
as well as contributing to the global initiative on reducing GHG emissions.
STRATEGY
Our strategy is designed to address the current and projected impacts of climate change on the Group, and it aims to meet the growing demand
from investors for disclosure on our approach to this pertinent issue.
Climate-related risks and opportunities
• To strengthen our understanding of climate
change risks and opportunities, we initiated
a scenario analysis process during the 2023
financial year which confirmed the resilience
of our business model and strategy. Common
issues raised across all considered scenarios
include:
– civil unrest in local communities due to the
impact of climate change on Pan African’s
operations and the resultant loss of job
opportunities
– the impact of increasing temperatures over
time on human performance and the BIOX®
process
– energy efficiency as a mechanism for
reducing power costs and carbon emissions
– market impositions on carbon-intensive
exports
– decreasing water availability and deteriorating
quality
– the necessity for a shift to renewable energy
and storage solutions.
Refer to pages 28 to 35 for a detailed discussion
of our primary risks and the associated
opportunities.
Impact
• The following risks could potentially have
Strategy
• The identified opportunities align with the
significant impacts on the Group’s operations:
– Boycotting of carbon-intensive gold may
adversely impact revenue
– A weaker US$/ZAR exchange rate and
higher interest rates may adversely impact
the Group’s ability to execute climate change
response plans such as self-generation
– Civil unrest and activism associated
with climate-related tension, such as
water availability, may adversely impact
the Group’s operations and stakeholder
management processes.
The following potential financial impacts were
highlighted:
• Implementing climate change mitigation
measures, such as investing in renewable
energy, energy-efficient equipment and flood
management, may result in increased costs
• To maintain productivity and safety, increasing
temperatures may necessitate an increased
investment in infrastructure, such as equipment
and buildings at the BIOX® plant, as well as
additional ventilation and cooling equipment for
underground operations.
Group’s strategic objectives, which include
supporting decarbonisation efforts, investing
in renewable energy and the pursuit of long-
term environmental sustainability. Additionally,
we aim to reduce our reliance on external
providers for drinking water through the
recycling of existing polluted water sources.
Our roadmap also includes the following:
– Incorporating assured climate-related
performance metrics into the remuneration
policy in addition to ESG criteria already
included
– Establishing an internal carbon price
– Investigating revenue optimisation by
exploring climate-related opportunities in
products and services suitable for a low-
carbon economy, including opportunities for
further decarbonising the Group’s gold.
Refer to pages 22 to 25 for Pan African’s
resilient business model and pages 20 and
21 for details on our strategic objectives and
initiatives.
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ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
NON-FINANCIAL AND SUSTAINABILITY
INFORMATION STATEMENT continued
GOVERNANCE
Pan African is committed to the highest standards of corporate governance and recognises that an effective corporate governance culture is
critical to long-term performance. The board is responsible for overseeing the management of Pan African and providing strategic direction. The
board has established committees to assist it in the execution of its functions. More information on Pan African’s corporate governance can be
found in the 2023 ESG report.
RISK MANAGEMENT
The Group has a comprehensive risk management framework in place. In line with our broader ESG priorities, we are progressively integrating
climate risks into our risk management process, which includes a clear disclosure strategy. Our approach to defining and managing climate risks
has and will continue to evolve.
Management’s role
The Group’s ESG manager and ESG specialist are responsible for climate
change-related matters, such as monitoring, reporting and compliance. They
have adopted a collaborative approach, working closely with general and
senior managers across the Group’s operations.
As part of the Group’s ongoing projects related to climate change, various
capacity-building and training needs have been identified, and a capacity-
building plan will be developed to effectively address these requirements.
This plan aims to enhance the necessary skills and knowledge within the
organisation to address climate change challenges successfully.
Our risk management process
We utilise a structured and systematic risk
management process to identify, assess and address
uncertainties and protect stakeholder value, promoting
long-term sustainability. This process considers risks
from strategic, operational and external sources.
A structured risk management process is used to
identify, assess and manage or mitigate uncertainties,
safeguarding stakeholder value and promoting long-
term sustainability. Our risks and opportunities are
managed across four tiers: the board, the board’s
committees, executive management and employees.
Managing climate-related risks
Aligned with the Group’s ESG objectives, we
are steadily integrating climate risks into our risk
management process. As our understanding
of climate change improves, we are enhancing
our methodologies to identify and address these
risks. We have made significant progress in the
past year.
Integration into overall risk management
Where relevant, climate-related risks and
opportunities are incorporated into the
Group’s risk management frameworks for
monitoring and management.
Refer to page 28 for more information on
Pan African’s risk management process.
Climate change governance structure
Pan African’s main structures responsible for climate change governance
and management are shown below.
Climate change-related matters are discussed at the social and ethics,
SHEQC and audit and risk committee meetings and the board is updated
quarterly. Although the board retains overall responsibility, the social and
ethics committee is primarily responsible for climate change- related
matters.
The audit and risk committee specifically focuses on climate change-related
risks, while the Group’s management is responsible for day-to-day climate
change-related responsibilities.
The Group’s key outcomes related to climate change have been considered
under the electricity material matter on page 101 and the biodiversity and
decarbonisation material matter on page 128.
Governance activities in 2023
• The board, through the social and ethics committee, monitored:
– the progress of the implementation of the 2022 PwC ESG readiness
review recommendations to ensure the auditability of key sustainability
information to be disclosed in the 2023 ESG report
– carbon tax compliance and reporting
– environmental compliance audits to National Environmental
Management Act, 127 of 1998 (NEMA) regulations
• The board oversaw the progress of the required permit and construction
activities for the 8.75MW solar plant at Barberton Mines
• The board, through the SHEQC committee:
– monitored the Group’s carbon footprint and GHG emissions and
reviewed initiatives to reduce baseline GHG emissions
• The board monitored and approved the sustainability-linked bonds issued
• The board, through its social and ethics committee, monitored the
Group’s sustainability performance against predefined KPIs and reviewed
sustainability reports for transparent, accurate and balanced reporting.
Outlook
• On the conclusion of the climate change risk assessment and scenario
analysis in the 2024 financial year, a cross-functional committee
comprising climate change champions at the operations will be responsible
for elevating climate-related risks and opportunities and reporting quarterly
to Exco, the board and its committees
• To enhance governance over climate-related risks and opportunities,
we have drafted a Group ESG policy for consultation and plan to draft a
climate change policy, however, the process has been postponed pending
clarity on policy direction from the Climate Change Bill.
OVERVIEW OF PAN AFRICAN’S CLIMATE CHANGE GOVERNANCE
Board
SHEQC committee
Social and ethics committee
Audit and risk committee
Group ESG manager
Group ESG specialist
Group SHEQC manager
Operations ESG and SHEQC personnel
SCENARIO ANALYSIS
To strengthen our understanding of climate change risks and opportunities, we initiated a scenario analysis process during 2023. The process
included four scenarios, as illustrated below.
High gold demand
Inadequate global climate efforts lead to a
global temperature increase of more than 2°C
this century. Intensified extreme events divert
funds to adaptation and resilience measures.
Gold reserves are increased as a risk mitigation
measure increasing demand for gold but
adversely affecting global economic growth.
South Africa experiences a stagnant economy
and political instability.
Pan African benefits from the increased
demand for gold, and a favourable exchange
rate, but its operations are adversely
impacted by social unrest and extreme
weather events. Overall investor confidence
remains neutral.
Under pressure
Beautiful day
An optimistic global and gold mining
outlook. Sufficient global climate change
efforts keep global warming to less than
2°C this century. South Africa’s strict,
well-implemented climate regulations drive
effective GHG mitigation. Investment in
renewable energy and storage technologies
improves energy security. Growing global
gold demand and positive investor
sentiment.
>2°C
<2°C
A pessimistic global and gold mining outlook.
Due to insufficient global climate change
efforts, there is a significant increase in
temperature and extreme events are more
frequent.
Limited progress in reducing GHG emissions
in South Africa hampers funding to invest in
renewable energy and adaptation measures.
Exports are affected by carbon border taxes
and boycotts, attributed to limited progress in
South Africa’s domestic policy and planning.
Low investor confidence, extreme weather
events, social unrest and a shortage of critical
skills regularly disrupt the Group’s operations.
Here comes
the rain again
Somewhere
over the
rainbow
Low gold demand
A worldwide GHG reduction stabilises
temperatures to below 2°C.
South Africa takes strides in reducing its
domestic GHG emissions, but economic
growth and energy availability remain
challenging, however, a lack of investment
in infrastructure increases the risk of water
scarcity. South African exports face carbon
border taxes.
While global gold demand is low, there
is some foreign capital investment into
the country and investor confidence is
increasingly optimistic.
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OTHER
INFORMATION
NON-FINANCIAL AND SUSTAINABILITY
INFORMATION STATEMENT continued
Short-term focus (one year)
Medium-term focus (two to three years)
Long-term focus (three years or more)
The Group’s climate change risks were identified during the 2023 financial year as part of an integrated assessment. These risks will be
refined as part of the Group’s broader climate change adaptation and mitigation journey, including board and management climate change
training and scenario analysis.
Climate change risk
Possible mitigating actions/opportunities
Physical risks
Droughts increase in intensity and
duration
• Develop a comprehensive adaptation plan throughout the Group to address issues such as
information gathering and stakeholder engagement
• Introduce water efficiency measures and targets
• Explore research and development opportunities for water reuse and recycling
Extreme weather events increase,
including frost, storms and floods
• Engage in collaborative research to develop advanced long-range weather forecasting and
early warning systems
• Implement flood and mudslide prevention measures specifically tailored for our tailings facilities,
which are integral components of the adaptation plan
• Formulate strategies to effectively manage and mitigate the adverse impacts of frost,
safeguarding critical processes from potential disruptions
• Formulate contingency plans and refine transportation schedules to the refinery
• Assess staff transport logistics and its potential impact on the Group’s operations
• Plan for anticipated supply chain disruptions and maintain operational continuity
• Install upgraded ventilation and cooling systems to counter elevated temperatures
• Build enclosures for vulnerable operations presently exposed to the environment
• Develop strategies to manage the potential increase in diseases such as malaria due
to rising temperatures
Temperature increases
Environmental risk
Deterioration in water quality
• Enhance water retreatment facilities to effectively reduce water-related risks
Social risk
Increased civil unrest
• Increase stakeholder engagement efforts and identify opportunities, such as providing water to
local communities and aligning risk-mitigating strategies
Increased automation increases the
risk of job losses
• Expand SLP and LED projects to proactively address potential societal challenges
• Reskill and upskill staff for new areas, such as energy provision, to counteract workforce
disruption risks
Reputational risks
The Company may be viewed as
unresponsive to climate change
concerns
Policy and regulatory risks
Increased climate change legislation
and tax regulations in South Africa
The risk of non-compliance with
current GHG reporting regulations
and carbon tax regulations
Border tax adjustment mechanisms
expand to encompass gold exports
• Conduct regular briefings to keep stakeholders informed and mitigate uncertainties
• Incorporate climate change criteria into procurement policies, mitigating supply chain
vulnerabilities
• The Group discloses its emissions to the Department of Forestry, Fisheries and the
Environment annually. Presently, we are unaffected by carbon tax as electricity consumption
from the grid (Scope 2) is not covered by the regulations and our current fuel combustion
(Scope 2) is taxed at source
• Procure certified renewable energy and collaborate with independent power producers and
purchase offset credits
• Adopt a life cycle approach and focus on carbon dioxide emissions reduction
• Proactively explore new markets to mitigate potential market-related risks
METRICS AND TARGETS
Pan African has consistently disclosed its ESG performance in its previous integrated annual reports, using the report as its primary platform to
reach its stakeholders. The extent of our disclosure has broadened over time.
We consider climate risk metrics related to water and energy use and GHG-emitting activities. We continue to meet our mandatory GHG emissions
reporting regulations and comply with the Carbon Tax Act, 15 of 2019, in South Africa. Refer to page 126 for our monitored KPIs, which include
energy and water consumption and Scope 1 and 2 GHG emissions.
We currently target an energy mix comprising 75% fossil fuels and 25% renewable energy sources by 2030. Furthermore, we have set an
aspirational renewable energy target for 2027, by which time, 15% of our energy generation is to be sourced from renewable sources. This
overarching target aligns with our strategic goals concerning energy security, efficiency, emissions reduction and GHG emissions intensity. Refer to
the chairman’s statement on page 51 where the key components of the Group’s renewable energy strategy are outlined and to the chief executive
officer’s review on page 55 for the progress which has been made on the Group’s renewable energy projects.
CONCLUSION
This report reflects our commitment to transparency, resilience and sustainable financial practices. Through a rigorous assessment and
disclosure of climate-related risks and opportunities, we have provided stakeholders with valuable insights into our strategic approach to
addressing climate change. By incorporating the recommendations of the TCFD, we have enhanced our understanding of the potential
impacts of climate change on our business and established a foundation for informed decision-making. We remain dedicated to proactive
measures that promote long-term value creation, environmental stewardship and a sustainable future for all.
Refer to Pan African’s TCFD report for the year ended 30 June 2023, which is available on our website at
for further reading.
www.panafricanresources.com
Evander Mines’ 3ML per day
water retreatment plant
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CORPORATE GOVERNANCE
OVERVIEW
The Pan African board is committed to upholding corporate governance
practices and promoting responsible corporate citizenship as an integral part of
the Group’s strategic framework.
The board assumes ultimate responsibility for ensuring that the
Group adheres to sound corporate governance standards and
makes business decisions with due diligence, expertise and focus
to maximise sustainable value for all stakeholders.
Our board comprises a diverse group of directors who possess
the requisite knowledge, expertise, technical experience and
business acumen to govern the Group responsibly, ethically,
honestly and transparently. We recognise that we operate in an
evolving environment shaped by evolving social and political
dynamics, and we are committed to maintaining effective and
responsive governance structures that safeguard our reputation
and social licence to operate, while creating sustainable value for
our stakeholders.
CORPORATE GOVERNANCE FRAMEWORK
The board committees assist the board in discharging its
duties and responsibilities, but without abdicating the board’s
responsibilities. Each committee has an approved charter to ensure
the effective delegation of its roles and responsibilities from the
board. The corporate governance framework, which was reviewed
in June 2023, is depicted below.
The standards of disclosure relating to corporate governance
are regulated by the Companies Act 2006, the South African
Companies Act¹, the AIM Rules of the LSE, the JSE Listings
Requirements and King IV™. We uphold the principles of King IV™,
which we have adopted as our recognised corporate governance
code for both the JSE and the AIM on the LSE. Our compliance
with King IV™ is documented in our King IV™ corporate
governance compliance report on page 44 of the ESG report,
which provides a transparent account of our adherence to these
principles.
STAKEHOLDER CONCERNS, STRATEGIC FOCUS
AREAS AND ISSUES ADDRESSED
Stakeholder engagement is a critical aspect of the Group’s
governance. Our stakeholder engagement and relationship
policy can be found on our website at
www.panafricanresources.com/about/corporate-governance/
Our directors are acutely aware of their responsibility to act in
the best interests of the Company and its members as a whole,
considering the short-, medium- and long-term success of the
Company, taking into account the factors listed in section 172
of the Companies Act 2006.
1 The South African Companies Act is applicable to South African entities.
The board is responsible for setting the strategic direction of the
Group, overseeing the overall conduct of its business and culture
and ensuring alignment with the Group’s purpose and values as
detailed on pages 4 and 5. The board convenes at least four times
a year, with additional meetings as needed. In 2023, the board met
on 10 occasions.
Regular updates on the Group’s performance and related matters
are provided to the board by the chief executive officer.
Refer to pages 36 to 45 for an analysis of our key stakeholder
relationships, with more detail on their significance and key
concerns, why and how we engage as well as how these
relationships are affected by our risks, material matters and
strategic initiatives and the resultant strategic outcomes.
ETHICAL LEADERSHIP
Pan African is committed to the highest standards of personal and
professional ethical behaviour. Its leadership endeavours to instil a
culture of ethical behaviour that permeates throughout the Group.
The Group’s code of ethics details its values and practices which
are in addition to the requirements of formal governance codes and
legal requirements. It is designed to provide guidance on ethical
conduct in all areas and across all activities.
The Group has a zero-tolerance approach to bribery and
corruption. To ensure compliance with the UK Bribery Act, the
Foreign Corrupt Practices Act of the United States of America and
the South African Prevention and Combating of Corrupt Activities
Act, a formal anti-bribery and anti-corruption policy is in place.
Active steps are taken to ensure that the policy is enforced and
used as an effective mechanism for curtailing corruption. Pan
African aims to create an environment that discourages fraud and
corruption through its policies, awareness campaigns and training,
and encourages honesty and transparency across all functions
within the organisation. In June 2023, the board approved the
whistle-blowing policy, fraud prevention plan and investigation
protocols. The commercial malpractices policy was also reviewed
and updated in June 2023.
The Group has established an anonymous whistle-blowing hotline
which can be used by both employees and external parties
(including third-party service providers) to report any suspected
unlawful or illegal activities linked to any of the Group’s operations.
The whistle-blowing register is reviewed quarterly by the audit and
risk committee.
INTEGRATED THINKING
Our board’s and management’s objectives are clearly
defined. The organisational structure and decision-
making processes support the board and management
in executing our strategy and delivering on our strategic
objectives.
HUMAN RIGHTS
We recognise our responsibility as a good corporate citizen to both prevent and address potential risks of adverse human rights impacts
linked to our business activities, as well as catalysing the advancement of human rights. We thereby, embed respect for human rights into
our policies, procedures, programmes and activities across the Group which is key to delivering on our strategy.
• We abide by the human rights conventions of South Africa’s Constitution and the human rights policy is informed by, and supports,
various international standards. These include the United Nations Guiding Principles on Business and Human Rights and the conventions
of the International Labour Organisation.
• We are committed to upholding freedom from child labour and forced or compulsory labour. We do not employ any individuals under the
age of 18 years.
• We have a zero-tolerance policy in relation to any form of slavery or human trafficking.
Shareholders and other stakeholders
Board of directors
Board committees
Audit and risk
committee
SHEQC
committee
Social and ethics
committee
Remuneration
committee
Nomination
committee
Executive committee
Operations committee and management committee
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CORPORATE GOVERNANCE OVERVIEW continued
PROVIDERS OF CAPITAL
Investors, shareholders, fund managers, analysts and financial institutions
Strategic objective
Ensure adequate, competitively priced and flexible financial resources for the funding of our operations and disciplined capital allocation for
sustainable long-term value creation
Governance activities in 2023
• The board monitored the Group’s capital structure, cash flow projections, debt covenant compliance and ongoing operational
performance relative to budgets and operational forecasts. The board is confident that the Group’s capital structure and its
mitigation of liquidity risk are appropriate and effective
• The board recommended that management investigates and explores alternative sources of funding for the Group’s capital
programmes and, in March 2023, Pan African secured ZAR400 million by means of a synthetic gold forward sale transaction
(US$21.6 million) as a component of the funding package for the MTR project’s construction
• The board monitored and approved the sustainability-linked bonds issued
• Following the review of the definitive feasibility study and the merits of a large-scale tailings retreatment project, the board
approved the acquisition of Mogale Gold and MSC
• The board reviewed the status of the Group’s strategic capital projects ensuring that these projects are progressing as
planned, in line with the projected timelines and within the allocated budget
• The board, through its social and ethics committee, monitored the Group’s sustainability performance against predefined KPIs
and reviewed sustainability reports for transparent, accurate and balanced reporting
• The executive directors actively engaged with shareholders to discuss and address concerns related to shareholder dilution
resulting from possible equity issues to fund capital projects
• Taking into consideration the Group’s strategic objectives, capital structure and liquidity, the board recommended the
proposed dividend for the year ended 30 June 2023 to shareholders for their approval at the November 2023 AGM
Governance
responsibility
• Board
• Audit and risk
committee
• Exco
Looking ahead
• Monitor the Group’s optimisation and restructuring initiatives intended to increase production and reduce costs
• Execute capital projects intended to sustain and increase gold production into the future
• Monitor debt levels as the MTR project’s construction progresses
• Maintain the focus on generating sustainable shareholder returns
• Advance organic growth projects within our mining right areas and progress the exploration programme in north-eastern Sudan,
once the in-country political situation allows for it
EMPLOYEES AND UNIONS
Strategic objective
Attract, cultivate and retain exceptional talent while fostering a culture of safety, respect and continuous learning
Governance activities in 2023
• The board, assisted by the SHEQC committee, had oversight of the Group’s compliance with safety standards and monitored
the safety performance and improvement measures implemented at the operations
Governance
responsibility
• Board
• The board monitored the Group’s response to the fatal accident that occurred at Evander Mines during the year as a result
• SHEQC
of a fall of ground
• Executive directors ensured that employee safety was a consistent and prominent agenda item in every Exco meeting
• The board discussed and approved initiatives to enhance the safety and risk management of the Group’s TSFs
• The board actively monitored engagement between unions, employees and senior management at Barberton Mines to
ensure the effective implementation of the continuous operating cycle, fostering open communication, collaboration and fair
outcomes for all stakeholders involved
• Satisfied with management’s assessment of the reconfiguration of Fairview and Sheba Mines into continuous shift operations,
committee
• Social
and ethics
committee
• Exco
the board approved this transition
• The board, assisted by Remco:
– deliberated succession plans, retention and remuneration schemes and identified future leaders within the Group and the
development of these leaders
– reviewed, monitored and ensured compliance in terms of stipulated employment equity targets and other regulatory
requirements
• Following the conflict in Sudan, the board exercised oversight in ensuring the safe repatriation of all expatriate employees to
South Africa. Additionally, proactive measures were taken to safeguard the Company’s assets, including placing the large-
scale assay laboratory on care and maintenance. After year-end, the Group resumed its Sudanese activities, following a
detailed risk assessment of the operational environment in the exploration area
Looking ahead
• Continue to drive year-on-year improvements in safety performance
• Implement new safety initiatives at all operations
• Continue to maintain a strong focus on talent management, skills development and succession planning
Operators at the Fairview metallurgical plant
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CORPORATE GOVERNANCE OVERVIEW continued
COMMUNITIES
Strategic objective
THE ENVIRONMENT
Represented by civil society groups whose primary areas of interest include environmental-related issues
Engage stakeholders to build positive relationships, maintain our social licence to operate and create sustainable value
Strategic objective
Governance activities in 2023
• The executive directors managed stakeholder relationships on behalf of the Group, and the chief executive officer updated the
board on the status of stakeholder engagements
Governance
responsibility
• Board
• Feedback from external stakeholders such as host communities, bankers, the South African government and shareholders
• SHEQC
Manage our operations with climate-conscious practices that preserve and protect natural resources and promote sustainability
Governance activities in 2023
• The board, through the SHEQC committee, monitored the progress of the Group’s rehabilitation initiatives
• The board monitored the progress of the construction of Barberton Mines’ 8.75MW solar plant
was discussed by the board
committee
• The board monitored the progress of the construction of Evander Mines’ water retreatment plant
• The board, through the social and ethics committee, monitored the progress of the Group’s CSI and LED projects and was
• Social
• Reportable environmental incidents were investigated and corrective actions were monitored by the SHEQC committee and
Governance
responsibility
• Board
• SHEQC
committee
• Social
and ethics
committee
• Exco
discussed by the board
• The board, through the SHEQC committee, monitored:
– the Group’s carbon footprint and GHG emissions and reviewed initiatives to reduce baseline GHG emissions
– biodiversity and conservation collaboration partnerships between Barberton Nature Reserve and Barberton Mines
– the sponsorship of the Care for Wild Rhino Sanctuary
Looking ahead
• Continue to monitor and improve regulatory compliance
• Continue to assess and respond to any negative impacts that the Group’s operations may have had on communities and the
environment surrounding our operations
Newly constructed classrooms
at the Kaapvallei School
– Barberton Mines SLP project
satisfied with the progress made:
– by the Group on its CSI and LED projects
– on the Barberton Blueberries project, including the extent of employment opportunities created, remuneration paid to
employees and blueberries harvested and sold
• In August 2022, the board attended an ESG tour in Barberton which included the opening of the Barberton Blueberries
project, visiting the Care for Wild Rhino Sanctuary, the Barberton Nature Reserve as well as a visit to Barberton Mines’ Royal
Sheba project
and ethics
committee
• Exco
Looking ahead
• Continue to engage with communities and stakeholders surrounding our operations and provide assistance in terms of our SLPs and
other initiatives
• Continue investing in local community socio-economic development projects through Barberton Mines’ and Evander Mines’ SLP, CSI
and ‘beyond compliance’ ESG projects
• Continue with small enterprise development assistance for local historically disadvantaged South African (HDSA) companies through
business incubation centres that provide training, mentoring and support infrastructure
GOVERNMENTS AND REGULATORY BODIES
The South African government, the government of Sudan, the JSE, the A2X, the AIM, the OTCQX and other regulatory authorities
Strategic objective
Engage stakeholders to build positive relationships, maintain our social licence to operate and create sustainable value
Governance activities in 2023
• The board, through the audit and risk committee:
– reviewed ongoing compliance with King IV™, the listings requirements (JSE and AIM) and other relevant regulations
Governance
responsibility
• Board
applicable to the Group. The board is satisfied with the extent of the Group’s compliance with the King IV™ principles and
the listings requirements
• Audit and risk
committee
– monitored investigations emanating from the Group’s whistle-blowing hotline
• The board, through the social and ethics committee and SHEQC committee, monitored compliance with SLP commitments
• The board monitored the implementation of risk management initiatives aimed at enhancing the safety and operational
management of the Group’s TSFs, while striving for compliance with the GISTM as far as reasonably practicable
• The board, through the audit and risk committee, approved the tax compliance policy, whistle-blowing policy, fraud prevention
plan and investigation protocols in June 2023 and reviewed other key policies and charters to ensure their relevance,
effectiveness and alignment with best practices
• The board, through the social and ethics committee, monitored:
– engagement with regulatory bodies to obtain the necessary environmental approvals for the commencement of
construction of the MTR project
– the progress of the implementation of the 2022 PwC ESG readiness review recommendations to ensure the auditability of
• Social
and ethics
committee
• Exco
key sustainability information to be disclosed in the 2023 ESG report
– carbon tax compliance and reporting
– environmental compliance audits to NEMA regulations
• The board oversaw the progress of the required permitting and construction activities for the 8.75MW solar plant at
Barberton Mines
Looking ahead
• Through ethical awareness campaigns, further promote and enhance awareness of ethical behaviour
• Continued compliance with the Group’s SLPs
• Continue with our strategy of adopting a ‘beyond compliance’ ESG approach
• Continue to progress the implementation of TSF audit recommendations and compliance with the GISTM as far as reasonably
practicable to ensure that the Group’s TSFs are compliant, to the extent possible
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INFORMATION
BOARD OF
DIRECTORS
NON-EXECUTIVE DIRECTORS
KEITH SPENCER (73)
Chairman
Independent
BSc Eng (Mining)
Date of appointment
8 October 2007
DAWN EARP (61)
Non-executive lead independent director
Independent
BCompt (Hons), CA(SA)
Date of appointment
21 September 2021
Significant directorships
Significant directorships
None
Arcelor Mittal South Africa, Impala Platinum Holdings, Truworths International
Limited and South African Guide-dogs Association non-profit organisation
Skills and experience
Experience
Skills and experience
Experience
Keith is a mining engineer with
48 years’ practical experience. Since
1986, Keith has held senior positions at
some of the largest gold mines in the
world including:
• Managing director of Driefontein
Consolidated
• Chairman and managing director
of Deelkraal Gold Mine
• Director on the boards of gold mines
belonging to Gold Fields, South
Africa
• Operations director of Metorex
• Technical and operational
• Risk management
• Environmental and sustainability
• Business and strategy
• Leadership
Committee membership
• SHEQC committee
• Nomination committee
Chairman of the SHEQC committee
Chairman of the nomination
committee
Dawn previously held the position
of financial director, both at Impala
Platinum and Rand Refineries. She has
served as a non-executive director of
various private and listed companies
• Finance and accounting
• Risk management
• Governance and regulation
• Business and strategy
• Leadership
• Taxation
Committee membership
• Audit and risk committee
• SHEQC committee
• Nomination committee
Chairperson of the audit and risk
committee
THABO MOSOLOLI (54)
Non-executive
YVONNE THEMBA (58)
Non-executive
Independent
BCom (Hons), CA(SA)
Date of appointment
9 December 2013
Independent
BA, MBA
Date of appointment
17 July 2019
Significant directorships
Significant directorships
MFT Investment Holdings, Truworths International Limited, New Season Investment
Fund, MalaMala Game Reserve, Roadgrass Investments and Famous Brands Limited
Adopt-a-School Foundation non-profit organisation, Canadoce Investments Close
Corporation, Bo Themba Projects Proprietary Limited, eLogistics Portal Proprietary
Limited, Pfortner Holdings Proprietary Limited, Pfortner Solutions Proprietary
Limited, Xerosystems Proprietary Limited and Energy Mobility Education Trust
CHARLES NEEDHAM (69)
Non-executive
Independent
Articles of Clerkship-Accounting, Dip in
Mining Taxation
Date of appointment
17 July 2019
Significant directorships
Alphamin Resources Corporation, Divitiae Holdings Limited, Imagined Earth
Proprietary Limited, METPROP Proprietary Limited, MetQuip Proprietary Limited,
Orpheus Property Holdings Proprietary Limited, Unit 8 Tradewinds Proprietary
Limited (company is dormant) and Alphamin Bisie Mining Proprietary Limited
Skills and experience
Experience
Charles is chairman of Alphamin
Resources Corporation (listed on
the Toronto Stock Exchange). His
previous experience includes 31 years
at Metorex and its mining operations
in Namibia, South Africa, Zambia and
the Democratic Republic of the Congo.
He progressively held the positions of
group accountant, financial director
and ultimately chief executive officer
of Metorex
• Finance and accounting
• Technical and operational
• Governance and regulation
• Business and strategy
• Leadership
Committee membership
• Audit and risk committee
• Remuneration committee
• Nomination committee
EXECUTIVE DIRECTORS
COBUS LOOTS (45)
Chief executive officer
Not independent
CA(SA), CFA® Charterholder
Date of appointment
26 August 2009
Significant directorships
None
DEON LOUW (61)
Financial director
Not independent
CA(SA), CFA® Charterholder,
HDip (Tax Law), AMCT (UK)
Date of appointment
1 March 2015
Significant directorships
None
Skills and experience
Experience
Skills and experience
Experience
Skills and experience
Experience
Skills and experience
Experience
Thabo brings a wealth of experience
in financial management, corporate
governance and audit to the board.
He qualified as a chartered accountant
with KPMG in 1994. Since then, he has
served on various boards as a member
and chairman of audit committees
in the resources and other industries
in South Africa
• Finance and accounting
• Governance and regulation
• Business and strategy
• Leadership
• Taxation
• Environmental and sustainability
Committee membership
• Audit and risk committee
• Remuneration committee
• Social and ethics committee
• Nomination committee
Chairman of the social and ethics
committee
Yvonne is the executive director
of BoThemba Projects. She was
previously responsible for human
capital at Phembani Group and
Shanduka Group. She headed the
group corporate communications
department at African Life Assurance
Limited and the CSI and corporate
communications department at
Sanlam. Prior to that, she was deputy
director of the Life Officers’ Association
• Technical and operational
• Risk management
• Governance and regulation
• Environmental and sustainability
• Business and strategy
• Leadership
Committee membership
• Remuneration committee
• Social and ethics committee
• Nomination committee
Chairperson of the remuneration
committee
Cobus has many years of experience in
the African mining sector. He qualified
as a chartered accountant with
Deloitte & Touche in South Africa.
He has been a director of
Pan African since 2009, serving as
financial director from 2013 until his
appointment as chief executive officer
on 1 March 2015
• Technical and operational
• Finance and accounting
• Business and strategy
• Leadership
• Technology
• Taxation
Committee membership
• SHEQC committee
Deon has extensive finance and
business experience, which includes
investment banking, advisory and
business administration in the finance
and mining sectors. As a founding
member of Investec Bank’s emerging
market finance team, he was involved
in financing mining transactions in sub-
Saharan Africa for more than a decade.
He fulfilled the roles of chief financial
officer of Shanduka Coal, financial
director of Sentula Mining Limited,
director of Resource Finance Advisers
and head of resource structured
finance at Investec Bank
• Finance and accounting
• Risk management
• Business and strategy
• Leadership
• Technology
• Taxation
• Environmental and sustainability
Committee membership
• Social and ethics committee
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BOARD OF DIRECTORS continued
THE BOARD AND ITS COMMITTEES (AT JUNE 2023)
Board of
directors
Audit and risk
committee
Safety, health,
environment, quality
and community
committee
Social and ethics
committee
Nomination
committee
Remuneration
committee
Meets at least four
times a year
Meets at least four
times a year
Meets at least four
times a year
Meets at least four
times a year
Meets when required
Meets at least twice
a year
Keith Spencer
Dawn Earp
Keith Spencer
Thabo Mosololi
Keith Spencer
Yvonne Themba
Chairman
Chairperson
Chairman
Chairman
Chairman
Chairperson
Members:
Charles Needham,
Thabo Mosololi
Members:
Dawn Earp,
Cobus Loots
Members:
Yvonne Themba,
Deon Louw
Other non-executive
and executive board
members attend as
invitees.
The audit and risk
committee assists the
board in fulfilling its
corporate governance
and oversight
responsibilities to
ensure the integrity
of the Group’s
financial and
corporate reporting,
while ensuring that
adequate systems of
internal control and
risk management
processes are in place
and are operating
effectively.
The SHEQC
committee was
established to
assist the board
in its oversight of
the effectiveness
of Pan African’s
SHEQC policies and
programmes and
to keep the board
informed on Pan
African’s objectives
and compliance with
and maintenance of
applicable standards.
The social and
ethics committee
assists the board
in ensuring that the
Group is and remains
a committed and
socially responsible
corporate citizen by
creating a sustainable
business, having
regard for the Group’s
economic, social and
environmental impact
on the areas in which
it operates.
Members:
Dawn Earp,
Thabo Mosololi,
Yvonne Themba,
Charles Needham
Members:
Charles Needham,
Thabo Mosololi
Remco assists the
board to ensure that:
• both executive
and non-executive
directors are fairly
and responsibly
remunerated
• executive directors’
remuneration
is structured
to incentivise
sustainable
performance for
the benefit of
shareholders
• the disclosure of
director remuneration
is accurate, complete
and transparent.
The role of the
nomination committee
is to assist the board in
ensuring that:
• the composition of
the board has an
appropriate level of
skills, experience,
diversity and
independence
• directors are
appointed through
a formal nomination
process
• induction of newly
appointed directors
and ongoing training
and development of
existing directors is
undertaken
• formal succession
plans for the board,
chief executive
officer and senior
management
appointments are
in place.
The board provides
leadership to
the Group and
is collectively
responsible for
promoting and
safeguarding the
long-term success
and sustainability of
the business.
The board is
supported by
several committees
to which certain
powers have been
delegated.
The board
delegates the
responsibility of
managing the
Group’s operations,
developing
strategy and
implementing the
board’s directives
to executive
management.
EXECUTIVE COMMITTEE
Exco meets on a regular basis to review the Company’s performance against a set of predetermined objectives and to manage the Group’s
operations, develop the Group’s strategy and implement the board’s directives. Exco is not a subcommittee of the board. Members of Exco include
the chief executive officer, the financial director, the shared services executive, the Group finance executive, the Group mining engineer, the Group
technical services manager and the Group consulting metallurgist and executive accountable for tailings.
BOARD COMPOSITION
Director independence
There were no changes in the
board’s composition during the 2023
financial year.
The board comprises a majority of independent non-executive
directors with five independent non-executive directors and two
executive directors (not independent). The executive directors are
the chief executive officer and the financial director. We believe the
board has the appropriate balance of knowledge, skills, experience,
diversity, continuity and independence to objectively and effectively
discharge its governance role and responsibilities.
Pursuant to the articles of association of the Company, one-third
of directors, excluding any director appointed since the previous
AGM, must retire on a rotational basis from office at each AGM.
Cobus Loots and Deon Louw will retire by rotation pursuant to the
articles of association. They again make themselves available for re-
election at the November 2023 AGM.
Diversity of experience
Our board reflects a considerable amount of experience in mining,
business and related activities and collectively has a wealth of
industry knowledge1.
Diversity of experience
Environmental and sustainability
Taxation
Technology
Leadership
Business and strategy
Governance and regulation
Risk management
Technical and operational
Finance and accounting
29%
57%
57%
57%
57%
57%
71%
1 Percentage of directors with requisite skills.
Independent non-executive directors
Executive directors
71%
29%
The board comprises seven directors: two executive directors
(chief executive officer and financial director) and five non-executive
directors. The board’s non-executive directors are all independent
of management and free from any business or other relationship
which could materially interfere with their ability to exercise
independent judgement.
There is a separation of responsibilities between the leadership of
the board (the responsibility of the chairman) and the executive
responsibility for the leadership of the Group’s business (the
responsibility of the chief executive officer).
Diversity of age
40 – 50 years
50 – 60 years
Above 60 years
14%
29%
57%
The board is responsible for implementing a retirement age of 73
for its members. In certain cases, the board reserves the right to
extend the age limit to 78 years, depending on the board member’s
fitness to serve as a director.
Diversity of tenure
100%
100%
Two to six years
Six to nine years
Above nine years
43%
14%
43%
In terms of the JSE Listings Requirements and the Group’s
constitutional documents, one-third of directors, excluding any
director appointed since the previous AGM, must retire from
office at each AGM on a rotational basis. Non-executive directors
who have served more than nine years are subject to an annual
assessment of their independence.
Keith Spencer and Thabo Mosololi, both independent
non-executive directors, have served on the board for more
than nine years. An assessment of their independence was
conducted, and the board has satisfied itself that they both display
independence of thought, mindset and judgement in their roles
as chairmen of the board and the social and ethics committee,
respectively.
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BOARD OF DIRECTORS continued
Time commitment and external appointments
The board acknowledges that non-executive directors have
business interests other than those of the Company. Before their
appointment to the board, non-executive directors are required
to declare any directorships, appointments and other business
interests to the Company in writing. Non-executive directors are
required to seek approval from the chairman, on behalf of the
board, before accepting significant additional commitments that
might affect the time they have available to perform their role as
non-executive directors. The board’s conflict of interest policy was
reviewed in June 2023. Currently, four of the five non-executive
directors hold more than two external appointments.
Refer to pages 140 and 141 for the external appointments held.
The board has considered these external commitments, taking
into account the time commitment required for each role, and is
satisfied that they do not impact the individual board members’
ability to discharge their responsibilities fully and effectively in
respect of their roles in the Company. As evidenced in the table on
page 41 of the ESG report, in 2023, directors attended 95.4% of
board and committee meetings.
Executive directors are required to seek approval from the board,
following consideration by the nomination committee, before
accepting an external directorship. Currently, the two executive
directors do not hold any external appointments.
Gender
(%)
2023
2022
29
29
71
71
Female Male
Historically disadvantaged South Africans
(%)
2023
2022
43
43
HDSA
To enable the board to discharge its duties and responsibilities
effectively, the board considers the benefits of all aspects of
diversity in its composition.
The board has exceeded the following target for its director
representation:
• 25% female
• 40% HDSA.
REMUNERATION
REPORT
On behalf of Remco and the board, I am pleased to present the 2023 financial
year’s remuneration report. This report presents a succinct overview of Remco’s
activities during the past year and provides context to the Group’s remuneration
philosophy and practices.
We review our corporate governance practices regularly and have adopted King IV™ as the recognised corporate governance code to
ensure that we act in the best interests of our stakeholders, comply with applicable laws and regulations and expeditiously adapt to the
evolving regulatory environment. In compliance with King IV™, this report is presented in three parts:
• Part one is the background statement and provides context to our remuneration philosophy and resultant decisions
• Part two contains our forward-looking remuneration policy
• Part three details how we have implemented our remuneration policy during the 2023 financial year. Directors’ and prescribed officers’
emoluments and incentives are disclosed in note 37 to the annual financial statements on pages 239 to 243.
PART ONE: BACKGROUND STATEMENT
REMUNERATION GOVERNANCE
Remco, comprising only independent non-executive directors, monitors the effectiveness and credibility of the Group’s executive
remuneration system through the application of its charter, which is reviewed on an annual basis. The committee reviews the performance
of the executive officers and senior management and sets the scale, structure and basis of their remuneration as well as the terms of their
employment contracts. The committee also considers remuneration packages and policies and makes recommendations in this regard to
the board. The membership and meeting attendance of Remco is shown in the Group’s ESG report on page 41.
The chief executive officer, the financial director and the executive: shared services attend Remco meetings as invitees, but are not present
when their remuneration is discussed.
Some of the key focus areas discussed during the financial year were:
Focus area
Discussion
Setting appropriate short-term incentive
(STI) parameters for the 2023 financial
year
Remuneration adjustments and
benchmarking
Ensuring appropriate parameters are set for the upcoming financial year
Ensuring that remuneration levels were in line with the Group’s remuneration philosophy and aligned
with industry peer benchmarks provided by REMchannel® market analysis and other independent
sources
Value creation
Identifying key strategic value drivers for the Group and incorporating these into management
long-term incentive (LTI) and STI schemes
Salaries and wages
Ratification of annual salary increases for non-unionised operational employees
Other areas of focus
Internal and external matters considered by Remco during the current financial year included:
• approval of the 2022 financial year STI incentives which were paid during the 2023 financial year
• analysing market-related non-executive directors’ remuneration information provided by
management and proposing non-executive directors’ remuneration aligned to industry best
practice to the board for approval
• together with the board, reviewing and monitoring the performance of senior executives
• selecting an appropriate peer group of companies for LTI benchmarking purposes, assisted by
independent research and analysis
Remco reviewed general remuneration levels and structures across the Group and is satisfied that current procedures and practices
adequately ensure that employee performance objectives are defined, progress is tracked and training and development opportunities
are identified. Remco is satisfied that it acted objectively and independently in the application of a remuneration policy and pursuit of a
philosophy that underpins the Group’s objectives and stakeholder aspirations. It is also satisfied that, to the extent it makes use of external
consultants, these consultants are independent and objective.
Rehabilitation in progress
at Fever Creek, Barberton
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REMUNERATION REPORT continued
INTERNAL AND EXTERNAL FACTORS IMPACTING
REMUNERATION OUTCOMES
In the current financial year, management continued to deliver into
the board’s strategic mandate of positioning Pan African as a safe,
sustainable and higher-margin gold producer.
Remuneration is reviewed annually and independently
benchmarked against a competitor and peer group, which includes
South African mining and national sectors, as well as international
peers, so as to provide Remco with the requisite insights into the
prevailing executive remuneration environment.
PART TWO: REMUNERATION POLICY
REMUNERATION OBJECTIVES
The Group’s remuneration framework is structured to support our strategic pillars:
Remco is satisfied that the executive directors, guided by the
board, continue to provide exemplary leadership and remain
committed to achieving the Group’s objectives and targets.
The Group’s performance over the past years is a testament to
the efforts and acumen of our senior management team and the
Group’s employees, who performed exceptionally well under
challenging circumstances.
We wish to thank management and all of our employees for their
unrelenting efforts in what are unprecedented and tumultuous
times, and we look forward to the year ahead and further progress
in positioning Pan African as a sector-leading gold producer.
ENGAGEMENT WITH SHAREHOLDERS
Remco engages with key shareholders on the Group’s
remuneration structures on a regular basis. Furthermore, Remco
commits to engage with major shareholders in the event that either
the remuneration policy or the implementation report is disapproved
by 25% or more of the votes exercised at the AGM.
The levels of support for our remuneration policy and
implementation remained relatively unchanged during 2022,
with 71.53% (2021: 71.78%) of votes cast being in favour of our
remuneration report, and 73.01% (2021: 69.06%) of votes cast
being in favour of our implementation report.
As required by King IVTM, Pan African invited those dissenting
shareholders who rejected the remuneration resolutions to
engage with the Company on their remuneration policy and/
or implementation report concerns. The Company undertook
to respond in writing and, if required, engage further with these
shareholders.
Only one material shareholder engaged with us in the past year
on the remuneration resolutions. Remco has in the past engaged
with large institutional and other shareholders on any concerns and
will continue to do so in the future. These engagements include
meetings with the chairperson of Remco and written responses to
queries raised, where appropriate.
The board reviews and ratifies remuneration proposals from
Remco, whereafter they are submitted to shareholders for a
non-binding vote of approval at the AGM.
LOOKING FORWARD
In the coming year, Remco’s emphasis will include:
• ongoing review of operational production incentives and
bonuses and their alignment with the Group’s performance
• better alignment with shareholders’ requirements and improved
efficiency and effectiveness of the STI and LTI schemes
• continuous review of the Group’s compliance with regulatory
requirements for executive compensation.
IN SUMMARY
Our commitment to responsible remuneration practices remains
resolute. In the face of evolving global expectations and
governance standards, we have taken proactive steps to ensure
that our executive remuneration framework remains transparent,
fair and equitable. Our practices are based on benchmarking
against relevant industry peers, considering market trends and
adhering to local regulations.
Remco firmly believes that our success is not only measured by
short-term financial gains but also by the sustainable growth and
resilience of our business. Therefore, we continue to stress the
importance of long-term performance through the utilisation of LTIs,
which are tied to share price growth and ESG performance targets
and vest over an extended period. This approach encourages and
incentivises our senior management to think beyond immediate
gains and to make decisions that contribute to the enduring
success of the Company.
I thank my fellow committee members for their valuable
contributions, and management for their commitment and special
effort during the past financial year amid significant challenges.
We will continue to shape the remuneration policy to ensure that it
fairly rewards deserving employees and contributes to propelling
the Group into a sustainable and bright future.
We value constructive engagements and, where appropriate,
have addressed concerns and implemented improvements to
our remuneration policies and structures.
On behalf of Remco
ACCESS TO INFORMATION AND ADVISERS
Remco has unrestricted access to the Company’s records, facilities
and any other resources necessary to discharge its duties and
responsibilities.
Yvonne Themba
Chairperson of the remuneration committee
13 September 2023
Profitability
We aim to maintain a strong
focus on profitability by being
one of the highest-margin
producers of gold in Southern
Africa
Sustainability
Stakeholders
Our sustainability strategy
is centred on creating long-
term value for all stakeholders
by balancing economic,
environmental and social
considerations
We believe that an integrated
stakeholder approach is crucial
for our success and prioritise
the health and well-being
of our employees and host
communities
Growth
Our growth strategy is
based on a combination of
organic portfolio growth and
production-enhancing, value-
accretive projects
OUR STRATEGIC OBJECTIVES
I
C
G
E
T
A
R
T
S
I
S
E
V
T
C
E
J
B
O
s
I
P
K
I
C
G
E
T
A
R
T
S
I
S
E
V
T
C
E
J
B
O
s
I
P
K
FINANCIAL
CAPITAL
MANUFACTURED
CAPITAL
INTELLECTUAL
CAPITAL
Ensure adequate, competitively priced
and flexible financial resources for
the funding of our operations and
disciplined capital allocation for
sustainable long-term value creation
Unlock the full potential of our Mineral
Resources and Mineral Reserves
through sustainable extraction
and processing, while embracing
renewable energy, to pave the way
for a responsible and prosperous
mining future
Optimise the use of technology and
harness the expertise of our teams
to consistently deliver safe, reliable,
efficient and responsible mining
operations
• Profitability
• Gold production
• Managing senior debt and credit facilities
• Capital spend
• Optimisation initiatives
• Monitoring TSFs
• Cash generated by operating activities
• Sustaining organic production and
• Mintails acquisition and project execution
• Returns to shareholders
developing expansion projects
• Exploration programme in north-eastern
• Evander Mines’ 24, 25 and 26 Level
Sudan
project
• Other organic growth projects
• Group AISC
HUMAN
CAPITAL
SOCIAL AND RELATIONSHIP
CAPITAL
NATURAL
CAPITAL
Attract, cultivate and retain exceptional
talent while fostering a culture of safety,
respect and continuous learning
Engage stakeholders to build positive
relationships, maintain our social licence
to operate and create sustainable value
Manage our operations with climate-
conscious practices that preserve and
protect natural resources and promote
sustainability
• Zero-harm initiatives
• Injury frequency rates
• Barberton Blueberries project
Progress on:
• Community clinics and schools
• Evander Mines’ 12MW expansion study
• Entrepreneurial and results-driven culture
• Sponsorships
• Barberton Mines’ 8.75MW solar plant
• Curtail illegal mining
• Sturdee Energy power purchase
agreement offtake arrangement
• Mitigating high-risk safety and
environmental issues
• Conservation initiatives
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ANNUAL FINANCIAL
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REMUNERATION REPORT continued
ALIGNING REMUNERATION TO STRATEGY
Remco assists the board in aligning remuneration with the Group’s overall business strategy while attracting, incentivising, developing and
retaining people capable of creating long-term value for all our stakeholders, as detailed below.
Strategic business activities and incentive criteria
Benchmarked safety parameters
to industry standards and the
requirement for continuous
improvement
Disciplined capital allocation to
ensure sustaining and expansion
capital expenditure that meets the
Group’s investment criteria
Optimal extraction combined
with cost control, benchmarked
against relevant standards
and targets
Safety
Investment
Production
Sustainability
Compelling returns
Management of the Group’s
operations in a manner which
is aligned to current ESG
requirements and trends
Generating value consistent with
shareholder and other stakeholder
expectations
REMUNERATION PHILOSOPHY
Pan African’s remuneration philosophy seeks to reward executive directors, senior management and our various levels of employees for
performance, consistent with its key remuneration objectives. It recognises that these individuals have the ability to materially impact the
performance of the Group over the short, medium and long term.
Executive directors and senior executives carry significant responsibility, statutory and otherwise, and appropriate skills are difficult to attract
and retain in what is an increasingly challenging and competitive environment. It is therefore critical that remuneration levels align with the
contribution and performance of the Group, its operating units and, importantly, the contribution of key individuals.
The Group’s remuneration policy provides a framework for remuneration to attract, retain and motivate employees to achieve the
organisation’s strategic objectives within its risk tolerance and risk management framework.
The remuneration framework for senior management recognises the following principles:
Objective of STIs
Objective of LTIs
Alignment to shareholders
Application of discretion
Comprises an annual incentive
which rewards management
for matters under their control
and influence, and excludes
matters outside their control,
specifically, commodity prices
and exchange rates
Aligns the long-term interest
of the Group’s management
and employees with that of the
Group’s shareholders through
incentives that are directly linked
to the increase in Pan African’s
share price, relative to that of
its peers, progress with ESG
initiatives and returns generated
on capital employed. These
awards generally vest over a
three- to four-year period
We believe that the combination
of these incentives should
achieve the objectives embedded
in the remuneration philosophy
by aligning the interests of
employees with the aspirations of
our shareholders
Remco has the authority to
apply its discretion in instances
where specific circumstances
are outside the control of the
operations or executives, and
not taking account of these
circumstances would be
prejudicial to employees or
management
To achieve its remuneration objectives, Remco, in consultation with and through oversight from the board, retains flexibility and a degree of
discretion in the manner in which it incentivises and rewards performance. Remco took note of previous concerns raised by shareholders
and undertook, from the 2020 financial year, not to award incentives or discretionary bonuses to employees for successfully concluding
transactions, with the exception of a change in control of Pan African. However, the committee retains its discretion to implement incentives
with the intent of ensuring the successful execution of large-scale capital projects that materially increase Group production and margins.
EQUITABLE AND RESPONSIBLE REMUNERATION
Remco remains committed to ensuring fair remuneration across all levels in the Group – employees, irrespective of their gender or race, are
paid equally for comparable peer positions. Remuneration is based solely on the employee’s qualifications, experience, appointment level,
scarcity of skill and performance levels, with no other differentiating factors being relevant.
Senior executives’ remuneration is structured in a manner to disincentivise undue risk-taking and is formulated by Remco, comprising only
independent non-executive directors, with an emphasis on value creation.
Remco regularly reviews compensation levels and incentive schemes to ensure they remain market-related and aligned with executive
compensation best practice by using REMchannel® market analysis and other independent benchmarking sources. The REMchannel®
analysis is an independent report compiled from extensive and detailed participant-provided information and is customised for sectoral
differences and remuneration practices complexities.
Remco strives to fairly remunerate the Group’s employees at a level that approximates market-related benchmarks, ensuring the retention
of key skills and enabling the Group to attract and retain top candidates for senior management positions.
REMUNERATION FRAMEWORK
Employee remuneration components
Performance
management
Retention and
attraction
Employee growth
and development
Pan African
has adopted a holistic
approach to its remuneration
philosophy for senior executives
and employees and has
implemented a well-designed
structure which consists of the
following monetary and
non-monetary
components:
Guaranteed
package
(including benefits)
Short-term
incentives
Long-term
incentives
Although remuneration is disclosed in US$, the Group’s reporting currency, all non-executive directors, executive directors and employees
are remunerated in South African rand and no compensation is made in other currencies or linked to other currencies, with the exception of
employees deployed in foreign countries.
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REMUNERATION REPORT continued
GUARANTEED PACKAGE
Executive and senior management
Collective bargaining unit and other employees
Eligibility
• Exco
• Collective bargaining employees
VARIABLE REMUNERATION CONDITIONS
Short-term incentives
Framework
• Operations committee (Opsco)
• Management committee (Manco)
• Heads of department (HODs)
Pay structure
Total guaranteed pay (TGP)
Key features
• Pensionable salary
• Leave
Cost plus benefits
• Pensionable salary
• Leave
Policy
• Pension/provident fund contributions (including life and
• Pension/provident fund contributions (including life and
disability cover)
• Medical contributions
• Travel allowance
These items are included in each eligible employee’s
total TGP
disability cover)
• Medical contributions
• Overtime/housing or living-out allowance
• Other fixed allowances
Reviewed annually against competitive industry peer market
data supplied by REMchannel®. The Group generally
rewards employees between the 25th and 50th percentile,
as per REMchannel®’s market analysis, aligned to an
individual’s contribution to the Group, including:
• skills and competencies required to generate results
• sustained contribution to the Group
• the value of the role and contribution of the individual to
the Group
Aligned to an individual’s contribution to the Group,
including:
• skills and competencies required to generate results
• sustained contribution to the Group
• the value of the role and contribution of the individual to
the Group
Compensation is determined by all relevant factors in the
industry such as annual or multi-year wage agreements
How guaranteed
pay is determined
Pay is determined by the following factors:
• Contractual arrangements
• Group performance
• Individual performance
• Inflation
• Annual benchmarking against relevant peers
• Outlook for the next financial year
All relevant factors, including annual or multi-year wage
agreements
Executive and senior management
Collective bargaining unit and other employees
Purpose
To drive and reward short- and medium-term results,
reflecting the level and risk time horizon
To drive and reward short-term results, reflecting the level
and risk time horizon
Eligibility
Exco, Opsco, Manco and HODs
Collective bargaining employees
Payment period
• Exco, Opsco and Manco are paid annually
• HODs are paid quarterly
Paid monthly, quarterly and annually depending on seniority
of employee
Performance
measures and STI
opportunity
Financial and non-financial parameters and metrics at a
Group, subsidiary and individual (and team) level:
• Eligibility to participate in the scheme
• The maximum variable remuneration as a percentage of
• Group financial and strategic performance
total individual TGP
• Business unit (team) financial and strategic performance
• Production and other target parameters to be achieved
• Individual contribution to team performance
• Individual performance, including alignment with
corporate values and meeting performance objectives
If the individual, team or the Group does not meet, or only
partially meets risk and compliance requirements, no award
or a reduced award may be granted
For achieving 105% of budgeted gold production
(maximum stretch), participating management’s production
KPI percentage is increased from the maximum of 100% to
140%, with a pro rata increase between 100% and 105%
specific to the gold production KPI
Senior executives are encouraged to accumulate a material
long-term shareholding in the Group
Maximum STI
opportunity (stretch
targets)
The maximum variable remuneration as a percentage of
total TGP of an individual
STI gatekeepers
To protect the Company from incentive payments that are
unaffordable or inappropriate in the specific circumstances:
Not applicable
• If the Group makes operational losses
• Unacceptable or unprofessional personal behaviour,
resulting in a disciplinary judgement
• Material non-compliance with regulations, with the
executive being guilty of serious misconduct or
negligence
Malus and
clawback
All STIs are subject to malus and clawback provisions
Not applicable
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ANNUAL FINANCIAL
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REMUNERATION REPORT continued
STI performance measures and maximum opportunity
KPIs relate to predetermined value drivers designed to enhance shareholder value and are reviewed on a regular basis. See the
remuneration framework on page 149 for details.
Position
Maximum
STI1
Group-based KPIs
Individual KPIs
Weight
Weight
Parameters
Weight
Determined by
Chief executive officer 110%
60%
Financial director
80%
60%
Senior managers at
corporate level
50%
60%
Senior managers at
operational level
50%
80%
50%
30%
20%
50%
30%
20%
50%
30%
20%
50%
30%
20%
Total Group gold sold (ounces)
40%
Remco and the board
Total Group cost per kilogramme
of gold produced
Group safety record
Stretch targets on production
Total Group gold sold (ounces)
40%
Remco and the board
Total Group cost per kilogramme
of gold produced
Group safety record
Stretch targets on production
Total Group gold sold (ounces)
40%
Total Group cost per kilogramme
of gold produced
Group safety record
Stretch targets on production
Total Group gold sold (ounces)
20%
Total Group cost per kilogramme
of gold produced
Group safety record
Stretch targets on production
Chief executive officer in
consultation with Remco
Chief executive officer in
consultation with Remco
1 2023 maximum variable remuneration as a percentage of TGP – qualification criteria at 100% achievement.
Long-term incentives
The Group has in recent years simplified its LTI schemes and currently has two LTI schemes for Group employees; the PAR Gold Long-
term Incentive Plan (PGLIP) for senior corporate management and the Pan African Share Appreciation Bonus Plan (PASABP) for senior
operational management.
The PGLIP is a conditional share plan that is performance-linked with allocations based on a percentage of TGP in line with current market
benchmarks. Senior corporate management qualifies to purchase a predetermined number of shares, at a nominal value, in PAR Gold
Proprietary Limited (PAR Gold), with each annual allocation being a new class of share, as calculated by the allocation formula.
On measurement date, participants may receive, subject to vesting conditions, dividends from PAR Gold, based on their respective
shareholdings, as per the predetermined dividend formula.
In terms of the PASABP, select senior employees of the Group are allocated notional shares in Pan African Resources PLC. These notional
shares will confer a conditional right to the participant, entitling the employee to be paid a cash bonus equal to the appreciation in the
Company’s share price, from the date of allocation to the date of surrender or deemed surrender of the participant’s notional shares (share
appreciation bonus).
The Company also has an employee share ownership programme at Barberton Mines.
Summary of current LTIs
Details
PASABP
PGLIP
Objectives
Instrument
The main objectives of the LTIs are to:
• appropriately incentivise selected managerial employees within the Group
• ensure retention of key skills required for the Group’s ongoing profitable performance and growth
• align management interests with those of shareholders and shareholder aspirations
• ensure longer-term vesting
• link incentives to share price performance
• provide objective measurement and benchmarking against the Group’s performance and/or personal contribution
Discretionary incentives are designed to drive and reward long-term corporate growth, within the context of sustaining
Company values, and to align the interests of shareholders and scheme participants. These include share incentive or
similar schemes
It is the intention to structure any form of LTI in such a way as to attract and retain the requisite Group skills and to ensure
that it is market-related and promotes appropriate actions and behaviour
A conditional share incentive plan where select senior Group
employees are allocated notional shares in Pan African.
These notional shares will confer a conditional right to a
participant, entitling the participant to a cash bonus equal to
the appreciation in the Company’s share price from the date
of allocation to the date of surrender or deemed surrender of
the participant’s notional shares (share appreciation bonus)
A conditional share incentive plan where participants qualify
to acquire actual PAR Gold shares of a special class, based
on an allocation formula, at a nominal value. At the end
of the measurement period, subject to dividend formula
conditions being fulfilled, employees receive a dividend
per share, provided the employee is still an employee of
good standing
Eligibility
Operational management
Corporate senior managers and executive directors
Vesting period
Four years
Three years
Performance
criteria and
vesting
percentages
• Continued employment within the Group for senior
managers at an operational level
• Share price performance is the main driver of value in this
scheme and unless the share price appreciates, there is
no benefit for the participant
• The PGLIP dividend payment is performance-linked with
allocations based on a percentage of TGP, in line with
current market benchmarks
• Employees qualify to purchase a number of shares in
PAR Gold, as calculated by the allocation formula, at a
nominal value. These shares may qualify for dividends
in accordance with a dividend formula at the end of the
measurement period
• Return on shareholders’ funds (ROSF), total
shareholder returns (TSR) and ESG criteria are used as
part of the dividend qualifying formula
• Once dividends have been declared and paid on
these shares, PAR Gold may reacquire them from the
participants at a nominal value
Allocation criteria
Minimum notional shareholding formula: Current TGP
multiplied by a Paterson Grading factor, divided by Pan
African’s 30-day volume-weighted average price (VWAP)
share price
Annual share allocation formula: Current TGP multiplied by
the applicable industry benchmark percentage, divided by
Pan African’s 90-day VWAP share price and multiplied by
a factor of 95%
Paterson Grading factors applied:
• E-Upper – 3 times
• E-Lower – 2 times
• D-Upper – Once
Current industry benchmarked percentages used:
• Chief executive officer – 130%
• Financial director – 120%
• Senior management – 40% to 80%, depending on
seniority
Pan African’s 30-day VWAP share price
In accordance with dividend formula
Pan African’s 30-day VWAP share price, applicable to each
allocation
Not applicable
Measurement
criteria
Strike price
Change of control
All unvested options vest automatically
Vesting will occur on a pro rata basis based on lapsed
time. In the event of death or disability, similar pro rata
vesting will occur
Other criteria
Lapses on the sixth anniversary of the date on which the
option was issued
• There is no mechanism to carry over or defer unvested
shares (due to underperformance)
• Malfeasance/malice and clawback clauses are included
consistent with current market practice
Settlement
Cash, based on Pan African’s share price appreciation
between date of award and date of exercise
Dividend based on Pan African’s 90-day VWAP share price
on measurement date
Dilution limit
Non-dilutive scheme
Non-dilutive scheme
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INFORMATION
REMUNERATION REPORT continued
PGLIP D shares dividend criteria
• ROSF – 50% weighting (calculated as average ROSF over a three-year period)
Annual ROSF is calculated as follows:
PGLIP E shares dividend criteria
• ROSF – 50% weighting (calculated as average ROSF over a three-year period)
Annual ROSF is calculated as follows:
ROSF = Net profit after tax/average shareholder funds (equity and distributable reserves) over the financial year
ROSF = Net profit after tax/average shareholder funds (equity and distributable reserves) over the financial year
– Relative – 20% (average ROSF relative to a peer group over a three-year period)
– Absolute – 80% (ROSF equal to or higher than the Group’s cost of equity).
• TSR – 20% weighting (calculated over a three-year period)
Shareholders’ returns are calculated as follows:
– Relative – 20% (average ROSF relative to a peer group over a three-year period)
– Absolute – 80% (ROSF equal to or higher than the Group’s cost of equity).
• TSR – 20% weighting (calculated over a three-year period)
Shareholders’ returns are calculated as follows:
TSR = {(current price – starting price) + dividends} ÷ starting price at inception of the three-year term
TSR = {(closing 90-day VWAP share price – starting 90-day VWAP share price) + dividends} ÷ starting 90-day VWAP share price
• ESG criteria – 30% weighting
Predetermined ESG performance criteria will be set for each measurement period.
• ESG criteria for the 2023 financial year – possible part vesting of PGLIP D shares:
– Successful commissioning of Evander Mines’ water retreatment plant, with operational performance in line with the feasibility study –
Environmental
– Commence construction of Barberton Mines’ solar plant by June 2023 – Environmental
– Feasibility study on agri-solar project for Evander Mines’ and Barberton Mines’ solar plants – Social
– Successful handover of the Ngwane and Sheba schools to the Department of Basic Education by Barberton Mines – Social
– Addressing gaps identified in the PwC ESG readiness review report 2022 – Governance
–
Issuing of the initial 2023 TCFD report – Governance
– Climate change targets for 2030 consistent with the RMB, Sustainability Bond Performance Targets – Governance/environmental
– Appoint an ITRB comprising members from independent credible tailings companies, consistent with the GISTM requirements –
Environmental/governance
– Commission a formal compliance audit to gauge TSF compliance, in relation to the GISTM, taking into consideration the
individual ages of the historical TSFs, the applicable legal framework at the time of construction and operational periods –
Environmental/governance.
All the required measurement criteria (ROSHF, TSR and ESG) for the PGLIP D shares dividend were met at 30 June 2023 and as such the
participants will receive a PGLIP D shares dividend in the 2024 financial year.
Elikhulu carbon-in-leach tanks
• ESG criteria – 30% weighting
Predetermined ESG performance criteria will be set for each measurement period.
ESG criteria for the 2024 financial year – conditional PGLIP E shares vesting:
Number
Project
Category
Details
1
2
3
4
5
6
7
8
9
Barberton Mines’ solar plant
producing first power by June 2024
Environmental
The Group’s decarbonisation strategy is aligned with the
Sustainability Bond Linked Finance (SBLF) framework of a
15% renewable energy mix by 2027
Environmental
The MTR project to achieve land rehabilitation of 8% for
2024 as detailed in the SBLF
Environmental
The Group’s decarbonisation strategy with an intended
30% renewable energy mix by 2030
Environmental
Barberton Mines’ land rehabilitation strategy to reduce the
environmental impact of on-site pollutants
Social
Achieving a Group TRIFR of 8.50% for 2024
Social
Implementation of Evander Mines’ SLP 2023 for social
licence to operate compliance
Social
Wellness programmes, with specific emphasis on:
KPI 1 – Human resources: Lifestyle disease awareness
and education for 40% of the workforce
KPI 2 – Social: Increase the number of physically active
employees from a 25% baseline by promoting the sporting
codes of soccer, running and aerobics
Governance
Corporate governance in ESG reporting
Governance
Tailings management safety and compliance
Achieving the land rehabilitation
targets for the MTR project as
per the RMB Sustainability Bond
Performance Targets for 2024
Commence construction of the
Sturdee Energy Bela-Bela solar
plant by June 2024
Construction and commissioning of
the arsenic treatment plant at the
Fairview BIOX® plant by June 2024
Achieving the safety targets for the
Group’s TRIFR as per the RMB
Sustainability Bond Performance
Targets for 2024
Successful handover of school
computer and science laboratories
to the Department of Basic
Education by Evander Mines by
June 2024
Implementation of a formal health
and wellness programme at
Barberton Mines – Phase 1
PwC assurance certificate of
10 ESG disclosures in the ESG
report 2024
Scheduling the GISTM
recommendations with
implementation of high-risk
findings from the TSF audit report,
post completion of an impact
assessment
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ANNUAL FINANCIAL
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OTHER
INFORMATION
REMUNERATION REPORT continued
Example of PGLIP scheme – share awards and dividend formula application
Information used for calculation
• Participant TGP: ZAR2,000,000
• Participant multiple based on Paterson Grading: 70%
• Pan African’s 90-day VWAP share price on date of issue: ZAR3.50
• Pan African’s 90-day VWAP share price on vesting date: ZAR4.50
• 100% of dividend qualifying criteria fulfilled after the three-year measurement period.
PAR Gold shares qualified for
Formula
(TGP x multiple based on Paterson Grading) ÷ Pan African’s 90-day VWAP x 95%1
= number of PAR Gold shares available for purchase
Calculated as follows: ((ZAR2,000,000 x 70%) ÷ ZAR3.50) x 95% = 380,000 PAR Gold C, D and E shares
Note 1: The 95% weighting is a condition of the conversion of the Pan African Resources Senior Management Share Scheme
to the PGLIP scheme, to ensure tax parity between the two schemes
PAR Gold dividend
The number of shares calculated above will qualify for a dividend, based on the above-mentioned dividend qualifying criteria,
equal to Pan African’s 90-day VWAP share price on measurement date, calculated as follows:
(PAR Gold shares x Pan African’s 90-day VWAP on measurement date)
x percentage of dividend criteria achieved = possible dividend
That is: 380,000 shares x ZAR4.50 x 100% = ZAR1,710,000
The participant will therefore be entitled to a dividend of ZAR1,710,000, before dividend taxation, at the end of the
three-year measurement period, assuming all vesting criteria are fulfilled
RISK MANAGEMENT AND REMUNERATION
Pan African recognises the need to fairly remunerate employees to attract, incentivise and retain talent. It is, however, cognisant of the need
to ensure that effective risk management is part of its remuneration criteria to promote the desired behaviour and to avoid exposing the
Group to intolerable risk levels. The Group’s remuneration philosophy reinforces the need for superior and sustainable long-term results while
promoting sound risk management principles.
These performance elements incorporate production and personal performance parameters which are weighted, based on the relevant
seniority level, to drive the desired personal behaviour. Safety is imperative to the mining operations and is included in the Group’s
production incentive parameters.
All senior management KPIs include specific performance elements and deliverables aligned with the Group’s strategic or other
critical objectives.
NON-EXECUTIVE DIRECTORS’ REMUNERATION
Remco advises the board on non-executive directors’ fees. In determining their fees, Remco considers the directors’ responsibilities
throughout the year, scarcity of skills, the Group’s performance, market-related conditions and local and international comparative
remuneration levels. King IV™ recommends that fees should comprise a base fee and an attendance fee per meeting.
The board agreed that a fixed fee for directors’ services on the board and subcommittees was more appropriate as the board’s input
extends beyond the attendance of meetings.
When non-executive directors are required to spend significantly more time and effort than is normally expected in preparing for and
attending board meetings, Remco considers additional fees to compensate non-executive directors for their additional time and effort.
There are no contractual arrangements for compensation for loss of office for non-executive directors. Non-executive directors’ remuneration
is subject to regulations which include the Companies Act 2006, the JSE Listings Requirements and King IV™.
EXCO, OPSCO AND MANCO REMUNERATION
Remco is responsible for making recommendations to the board regarding the remuneration of the chief executive officer, financial director,
chief operating officer and senior corporate management. Remuneration of executive and senior management is reviewed on an annual
basis in relation to the Group’s operational, financial and strategic performance as well as individual contribution thereto, alignment with the
Group’s values and contributions to risk management and compliance requirements.
Where the individual, team or the Group does not meet, or only partially meets performance requirements, either all or a portion of the
discretionary awards are forfeited. An annual benchmarking exercise, conducted by REMchannel® market analysis (supplemented with other
independent benchmarking sources), is used as a basis to determine a fair market-related remuneration package.
Individual KPIs are agreed annually and contain the performance elements disclosed on page 159.
Remuneration comprises fixed and variable (STI and LTI) remuneration components. STIs have certain parameters, disclosed on page 152,
to ensure a performance-based culture.
The board and Exco retain a level of discretion to determine which parameters apply, their respective weighting taking cognisance of
immediate and evolving priorities, and alignment of employee behaviour to shareholder aspirations.
PRESCRIBED OFFICERS
The Group’s prescribed officers are those individuals who exercise general executive control over and manage a significant portion of the
Group’s business activities or regularly participate, to a material degree, in the exercise of general executive control over a significant portion
of the Group’s business activities.
In accordance with these requirements, Pan African’s prescribed officers are included in note 37 to the annual financial statements on
pages 239 to 243.
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ANNUAL FINANCIAL
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OTHER
INFORMATION
REMUNERATION REPORT continued
PART THREE: REMUNERATION IMPLEMENTATION
REPORT
The detailed remuneration of the Group’s non-executive directors, executive directors and prescribed officers is disclosed in note 37 to the
annual financial statements on pages 239 to 243.
EXECUTIVE DIRECTORS’ OPERATIONAL AND PERSONAL KPI ANALYSIS
Executive directors’ remuneration
US$ thousand
Basic
remuneration
Allowance
Leave
payment
Retention3
payment
Total
remuneration
Incentives1
PGLIP
Total
single
figure
remuneration
2023
Cobus Loots
Deon Louw
Total
407
370
777
Basic
US$ thousand
remuneration Allowance
10
–
10
10
–
10
250
222
472
677
592
1,269
350
226
576
1,043
855
1,898
2,070
1,673
3,743
Leave
payment
Total
remuneration
Incentives2
Loan
repayment4
PGLIP4
PGLIP4
net
payment
received
Total
single
figure
remuneration
2022
Cobus Loots
Deon Louw
Total
443
404
847
13
–
13
13
–
13
469
404
873
457
295
752
(4,042)
(2,713)
(6,755)
4,537
3,124
7,661
495
411
906
1,421
1,111
2,532
1 These incentives, paid in the 2023 financial year, relate to the 2022 financial year’s annual STI achievement, consistent with the approved qualifying criteria.
2 These incentives paid in the 2022 financial year, relate to the 2021 financial year annual STI achievement, consistent with the approved qualifying criteria.
3 Retention payments made in accordance with the employees’ employment contracts. See details on page 161.
4
These loan advances from PAR Gold relate to the restructuring of the Group’s LTI. In terms of the rules of the restructured Pan African Corporate Option
Scheme (PACOS) scheme (PGLIP B shares), participants were entitled to an advance, on market-related terms (South African repo rate plus a margin of 1%)
once a monetary value has vested and is locked-in. This rate is applied to all participants of the scheme. Subsequent PGLIP issues (C, D and future share
issues) do not provide for advances to participants. Advances from PAR Gold amounting to US$12.3 million were made to scheme participants in the 2021
financial year, and are included in the current portion of loans receivable, for that financial year, in the Group’s statement of financial position. These advances
were offset against dividends when declared by PAR Gold, consistent with the rules of the restructured scheme. As detailed in the 17 September 2020
and 30 June 2021 announcements, all listings and regulatory requirements were complied with in the restructuring of these incentive schemes and loans
advanced to scheme participants. With the inception of PACOS (converted to PGLIP B shares), the Pan African 30-day VWAP share price was ZAR1.21 and
at the measurement date for the PGLIP B shares, the Pan African 30-day VWAP share price was ZAR5.65.
Chief executive officer’s performance for incentive purposes
2023
Production parameters
2022
Production parameters
Production parameters, per operation, are weighted on the basis of
budgeted profit contribution:
Production parameters, per operation, are weighted on the basis of
budgeted profit contribution:
• Barberton Mines’ production and safety weighting of 42% was
• Barberton Mines’ production and safety weighting of 42% was 7.75%
7.02% (max. 27.94%)
(max. 27.91%)
• Evander Mines’ production and safety weighting of 58% was
• Evander Mines’ production and safety weighting of 58% was 33.6%
12.67% (max. 38.06%)
(max. 38.09%)
• Production stretch parameter was 1.8% (max. 13.20%)
• Production stretch parameter was 4.4% (max. 13.20%)
Personal KPIs
Personal KPIs
Personal KPIs approved by Remco and fulfilled for the 2023 financial
year were:
Personal KPIs approved by Remco and fulfilled for the 2022 financial
year were:
• Establish a funding strategy for the Group’s renewable energy
• Complete the definitive feasibility study on the Mintails acquisition
projects to ensure sufficient and reasonably priced funding for future
projects
and progress the transaction, as communicated to the market, taking
cognisance of legal impediments
• Successful inaugural issuance under the DMTN programme as
• Complete the establishment of the Sudanese exploration venture and
partial funding for the MTR project
initiate the exploration programme
• Successful implementation of continuous operations at Barberton
• Board approval of Evander Mines’ underground development plan
Mines
• Increase in institutional shareholding through funds from the USA
• Finalise all permitting required for the commencement of
construction of the MTR plant
• Complete the USA/Europe marketing drive, with a view to increasing
trade in the ADR programme and enhancing new shareholder traction
Financial director’s performance for incentive purposes
2023
Production parameters
2022
Production parameters
Production parameters, per operation, are weighted on the basis of
budgeted profit contribution:
Production parameters, per operation, are weighted on the basis of
budgeted profit contribution:
• Barberton Mines’ production and safety weighting of 42% was
• Barberton Mines’ production and safety weighting of 42% was 5.64%
5.10% (max. 20.31%)
(max. 20.30%)
• Evander Mines’ production and safety weighting of 58% was 9.21%
• Evander Mines’ production and safety weighting of 58% was 24.42%
(max. 27.69%)
(max. 27.70%)
• Production stretch parameter was 1.3% (max. 9.60%)
• Production stretch parameter was 3.2% (max. 9.60%)
Personal KPIs
Personal KPIs
Personal KPIs, approved by Remco and fulfilled for the 2023 financial
year were:
Personal KPIs, approved by Remco and fulfilled for the 2022 financial
year were:
• Successful inaugural issuance under the DMTN programme as
• Complete the definitive feasibility study on the Mintails acquisition and
partial funding for the MTR project
progress the transaction, as communicated to the market
• Secure a funding package for the MTR project consisting of a senior
• Tangible progress made with funding sources for the MTR project
debt facility and an alternative funding source for Pan African’s
equity contribution to the total funding package
development
• Complete the establishment of the Sudanese corporate structure and
• Establish a funding strategy for the Group’s renewable energy
establishment of the exploration programme
projects to ensure sufficient and reasonably priced funding for future
projects
• Complete the share buy-back programme
• Complete the USA/Europe marketing drive, with a view to increasing
trade in the ADR programme and enhancing new shareholder traction
158
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
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ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
REMUNERATION REPORT continued
EXECUTIVE DIRECTORS’ LTI SCHEME ANALYSIS
The executive directors’ LTI schemes are cash-settled. These option costs are accrued annually, based on independent actuarial valuations.
Payment occurs when qualification criteria are fulfilled and vested options are exercised, subject to Remco approval.
Shares granted but not vested
Executive directors
2023
Cobus Loots
PGLIP1, 3
– PAR Gold D shares
– PAR Gold E shares
– PAR Gold F shares
Deon Louw
PGLIP1, 3
– PAR Gold D shares
– PAR Gold E shares
– PAR Gold F shares
2022
Cobus Loots
PGLIP1
– PAR Gold C shares
– PAR Gold D shares
– PAR Gold E shares
Deon Louw
PGLIP1
– PAR Gold C shares
– PAR Gold D shares
– PAR Gold E shares
Number of unvested shares/options
Opening
balance
Issued
Exercised
Forfeited
2,848,556
2,337,972
–
–
–
2,190,419
2,335,468
1,916,851
–
–
–
1,795,876
4,434,380
2,848,556
–
–
–
2,337,972
3,635,648
2,335,468
–
–
–
1,916,851
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Closing
balance
2,848,5562
2,337,972
2,190,419
2,335,4682
1,916,851
1,795,876
4,434,3802
2,848,5562
2,337,972
3,635,6482
2,335,4682
1,916,851
1 These are cash-settled shares issued under the PGLIP scheme. These shares receive dividends only if the specified measurement criteria are fulfilled at the
end of a three-year measurement period.
2 Shares to be repurchased at a nominal amount and cancelled by PAR Gold during the 2024 financial year; no further payment will be made on these shares,
consistent with the rules of the PGLIP scheme.
3 Subsequent to year-end, on the recommendation of Remco, the board approved in principle an additional tranche under the PGLIP scheme for the MTR
project to vest in 2025. Measurement criteria will be based on safe and timely commissioning, project completion within the approved budget and operational
performance as per the feasibility study parameters. Participants will be finalised by the end of October 2023.
Vested share options (no further payments to be made on these shares/options)
Executive directors
2023
Cobus Loots
PGLIP1
– PAR Gold B shares
– PAR Gold C shares
Deon Louw
PGLIP1
– PAR Gold B shares
– PAR Gold C shares
2022
Cobus Loots
PGLIP1
– PAR Gold B shares
Deon Louw
PGLIP1
– PAR Gold B shares
Opening
balance
17,107,580
4,434,380
11,523,153
3,635,648
17,107,580
11,523,153
Number of vested shares/options
Issued
Exercised
Forfeited
Closing
balance
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
17,107,5802
4,434,3802
11,523,1532
3,635,6482
17,107,5802
11,523,1532
1
2
These are cash-settled shares issued under the PGLIP scheme. These shares receive dividends only if the specified measurement criteria are fulfilled at the
end of a three-year measurement period.
Shares to be repurchased at a nominal amount and cancelled by PAR Gold during the 2024 financial year; no further payment will be made on these shares,
consistent with the rules of the PGLIP scheme.
SUMMARY OF KEY CONTRACTUAL ARRANGEMENTS FOR THE CHIEF EXECUTIVE OFFICER AND
FINANCIAL DIRECTOR
Chief executive officer
Financial director
Contract duration
Employed on a permanent basis from 1 July 2022
Retention payment
• 120% x 50% of TGP payable at inception, 120%
x 50% of TGP payable at the end of three years
(30 June 2025)
• The employee is not allowed to resign within the first
12 months from the inception of his employment
contract
Current contract extended to 30 June 2024, with an
option to extend by an additional 12 months, by mutual
agreement
• 120% x 50% of TGP payable at inception of contract
and the amount payable at the end of the two-year
employment contract will be based on the following
formula: ((employee’s TGP on 30 June 2024 x 120%
x 50%) x 1/3)
• Should the contract be extended for a third year,
the amount payable at the end of the three-year
employment contract will be based on the following
formula: ((employee’s TGP on 30 June 2024 x 120%
x 50%) x 3/3)
• The employee is prohibited from resigning within the first
12 months of the employment contract’s inception
STI
A maximum of 110% of annual TGP
A maximum of 80% of annual TGP
LTI – PGLIP
Acquires PAR Gold shares
Acquires PAR Gold shares
Minimum
shareholding in
Pan African
• Previous requirement of ZAR2 million to be held for a
minimum of two years. No increased requirement as
Remco reviewed the employee shareholding during the
current financial year and concluded that the employee
held sufficient shares on 30 June 2023, comprising:
• Initial requirement of ZAR0.5 million to be held for a
minimum of two years. No increased requirement as
Remco reviewed the employee shareholding during the
current financial year and concluded that the employee
held sufficient shares on 30 June 2023, comprising:
– 5,048,504 indirect beneficial shares
– 1,873,982 direct beneficial shares
– 314,280 contracts for differences
– 3,122,349 indirect beneficial shares
– 988,112 direct beneficial shares
160
161
PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 Protons:
79
Neutrons:
118
Statement of directors’ responsibilities
Chief executive officer’s and
financial director’s responsibility statement
Certificate of the company secretary
Directors’ report
Audit and risk committee report
Independent auditors’ report to the
members of Pan African Resources PLC
Statements of financial position
Statements of profit or loss and
other comprehensive income
Statements of cash flows
Statements of changes in equity
Notes to the financial statements
164
165
165
166
168
172
178
179
180
181
182
There are 79 protons and 118 neutrons
in the nucleus of one gold atom.
ANNUAL
FINANCIAL
STATEMENTS
4
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ENVIRONMENTAL, SOCIAL AND
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ANNUAL FINANCIAL
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OTHER
INFORMATION
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the integrated annual
report and the financial statements in accordance with applicable
law and regulation.
Company law requires the directors to prepare financial statements
for each financial year. Under that law the directors have prepared
the Group and the Company financial statements in accordance
with United Kingdom (UK) adopted international accounting
standards.
Under company law, directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of
the profit or loss of the Group and Company for that period. In
preparing the financial statements, the directors are required to:
• select suitable accounting policies and then apply them
consistently;
• state whether applicable UK-adopted international accounting
standards have been followed, subject to any material
departures disclosed and explained in the financial statements;
• make judgements and accounting estimates that are reasonable
and prudent; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and
Company will continue in business.
The directors are responsible for the maintenance and integrity
of the Company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
DIRECTORS’ CONFIRMATIONS
In the case of each director in office at the date the directors’ report
is approved:
• so far as the director is aware, there is no relevant audit
information of which the Group’s and Company’s auditors are
unaware; and
•
they have taken all the steps that they ought to have taken as a
director in order to make themselves aware of any relevant audit
information and to establish that the Group’s and Company’s
auditors are aware of that information.
Keith Spencer
Chairman
Cobus Loots
Chief executive officer
Deon Louw
Financial director
The directors are responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
13 September 2023
The directors are also responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the Group and Company and
enable them to ensure that the financial statements comply with the
UK Companies Act 2006 (Companies Act 2006).
We have removed all signatures from this document to protect the security
and privacy of all our signatories.
CHIEF EXECUTIVE OFFICER’S AND FINANCIAL
DIRECTOR’S RESPONSIBILITY STATEMENT
Each of the directors, whose names are stated below, hereby
confirm that:
•
•
•
•
the annual financial statements set out on pages 164 to 248,
fairly present in all material aspects the financial position,
financial performance and cash flows of the issuer in terms
of International Financial Reporting Standards (IFRS)
to the best of our knowledge and belief, no facts have been
omitted or untrue statements made that would make the
financial statements false or misleading
internal financial controls have been put in place to ensure that
material information relating to the issuer and its subsidiaries has
been provided to effectively prepare the financial statements of
the issuer
the internal controls are adequate and effective and can be
relied upon in compiling the financial statements, having fulfilled
our role and function as executive directors with primary
responsibility for implementation and execution of controls
• where we are not satisfied, we have disclosed to the audit and
risk committee and the auditors any deficiencies in design and
operational effectiveness of the internal financial controls and
have remediated the deficiencies
• we are not aware of any fraud involving directors.
Cobus Loots
Chief executive officer
Deon Louw
Financial director
13 September 2023
CERTIFICATE OF THE COMPANY SECRETARY
I hereby certify that Pan African Resources PLC (Pan African) has lodged with the Registrar of Companies for England and Wales all such
returns as are required of a public company in terms of the Companies Act 2006. All such returns are true, correct and up to date.
St James’s Corporate Services Limited
Company secretary
13 September 2023
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CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
DIRECTORS’ REPORT
The directors present the integrated annual report and the audited
financial statements for the reporting period ended 30 June 2023.
PRINCIPAL ACTIVITIES
Pan African is incorporated in the UK and registered in England
and Wales under the Companies Act 2006. Pan African is a public
company limited by shares with the registration number 3937466.
The Company has a dual primary listing on the Main Board of
the JSE Limited (JSE) and the London Stock Exchange (LSE)
Alternative Investment Market (AIM). The Company also has a
sponsored Level 1 American Depository Receipt (ADR) programme
in the United States of America (USA) through the Bank of New
York Mellon and a secondary listing on the A2X Market exchange.
In addition, Pan African Resources Funding Company Limited
(Funding Company) issued listed notes on the JSE Debt Board in
the current reporting period (refer to pages 217 and 218.
The nature of the Group’s operations and its principal activities
relate to gold mining and exploration activities. The Group owns
and operates a portfolio of high-quality, low-cost operations
and projects located in South Africa and an exploration project
in Sudan.
A full review of the activities of the business and of its prospects is
contained in the chief executive officer’s review (page 54) and in the
operational performance review (page 82) that accompany these
annual financial statements, with financial and non-financial key
performance indicators (KPIs) shown on pages 68 and 69.
FINANCIAL RESULTS
The results for the 2023 reporting period are disclosed in the Group
statement of profit or loss and other comprehensive income on
page 179. The key features of these results can be found in the
financial director’s review on page 74. Pan African has elected
earnings per share and headline earnings per share as its key
performance metrics for trading purposes.
OPERATIONAL REVIEW
The operations are reviewed in detail in the operational performance
review on page 82.
HISTORICAL DIVIDENDS
At the annual general meeting (AGM) of the shareholders held on
24 November 2022, a final dividend of ZA 18.00000 cents per
share equating to 0.86915 pence per share (US 1.05820 cents per
share) was approved.
RISK MANAGEMENT
A separate risk committee is not considered necessary, as this
role is fulfilled by the board, its subcommittees and executive
management. The identification and management of critical risks is
a strategic focus area for executive management, reviewed monthly
and, together with action plans, reported regularly to the board. The
Group’s risk management and key business risks are documented
within our risks and opportunities section on page 28.
INTERNAL CONTROL
The board is responsible for maintaining a sound system of
internal controls to safeguard shareholders’ investments and Group
assets. The directors monitor the operation of internal controls. The
objective of the system is to safeguard the Group’s 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 misstatement or loss.
Internal financial control procedures undertaken by the board
include:
•
•
•
reviewing monthly financial reports and monitoring performance
reviewing internal audit reports and follow-up action of
weaknesses identified by these reports
reviewing the competency and experience of senior
management
• prior approval of all significant expenditure, including all major
investment decisions
•
reviewing and debating Group policies.
The board has reviewed the operation and effectiveness of
the Group’s system of internal controls for the 2023 reporting
period and the period up to the date of approval of the financial
statements, and is satisfied that there has been no material
breakdown in the Group’s system of internal controls for the
review period.
GOING CONCERN
The Group closely monitors and manages its liquidity risk by means
of a centralised treasury function. Cash forecasts are regularly
produced and sensitivities run for different scenarios including, but
not limited to, changes in commodity prices and different production
profiles from the Group’s producing assets. The Group had
US$49.9 million (2022: US$42.4 million) of available debt facilities
and US$34.7 million (2022: US$26.7 million) of cash and cash
equivalents at 30 June 2023. The Group has considered the going
concern forecast through to 30 June 2025, using a base case rand
gold price of ZAR1,050,000/kg (US$1,838/oz) and a downside
rand gold price of ZAR954,000/kg (US$1,670/oz). The Group’s
forecasts based on the board-approved budgets demonstrate that
it will have sufficient liquidity headroom to meet its obligations, under
both scenarios, in the ordinary course of business (refer to note 41),
and will comply with financial covenants for the 12 months from the
date of approval of the financial statements; in the downside case,
this includes mitigating actions which are in management’s control.
The board has a reasonable expectation that the Group has
adequate resources to continue in operational existence for
the foreseeable future. Accordingly, the Group continues to
adopt the going concern basis of accounting in preparation
of the 30 June 2023 financial statements.
AUDITORS
PricewaterhouseCoopers LLP’s (PwC) appointment as external
auditor was approved by shareholders at the Company’s AGM
on 24 November 2022. Tim McAllister was the designated audit
partner for the reporting period ended 30 June 2023.
Each of the persons who are directors, at the date of approval of
this integrated annual report, confirm that:
• as far as the directors are aware, all relevant information has
been provided to the Group’s auditors
•
the directors have taken all the steps that they ought to have
taken as directors to be aware of any relevant audit information
and to establish that the Group’s auditors are aware of that
information.
This confirmation is given and should be interpreted in accordance
with section 418 of the Companies Act 2006.
PwC has expressed its willingness to continue in office as auditors,
and a resolution to reappoint them will be proposed at the
forthcoming AGM.
APPROVAL OF THE ANNUAL FINANCIAL
STATEMENTS
The board of directors hereby approves the integrated annual
report, strategic report and annual financial statements.
By order of the board
Cobus Loots
Chief executive officer
13 September 2023
DIRECTORS
There were no changes to the board during the reporting period
under review.
The directors for the current reporting period are:
• Mr KC Spencer
Independent non-executive chairman
• Mr JAJ Loots
Chief executive officer
• Mr GP Louw
Financial director
• Mrs D Earp
Independent non-executive director
• Mr TF Mosololi
Independent non-executive director
• Mrs YN Themba
Independent non-executive director
• Mr CDS Needham Independent non-executive director
The Company has directors’ and public officers’ liability insurance in
place that provides insurance cover in the event of a claim or legal
action. The insurance cover was in place throughout the reporting
period and remains in place.
DIRECTORS’ REMUNERATION AND SHAREHOLDING
Details of the directors’ remuneration and shareholding are set out
in note 37 to the financial statements.
DIRECTORS’ INTERESTS IN CONTRACTS
No material contracts in which directors have an interest were
entered into during the reporting period.
COMPANY SECRETARY
St James’s Corporate Services Limited is the company secretary.
The business and postal addresses are set out on the back page.
LITIGATION AND CLAIMS
The Group has no current, pending or threatened legal or
arbitration proceedings.
EVENTS AFTER THE REPORTING PERIOD
Post the current reporting period, the Group entered into a
ZAR1.3 billion (US$70.3 million) senior debt facility, designated for
the funding of the Group’s Mogale Tailings Retreatment project
(MTR project) and a refinance of the existing revolving credit facility
(RCF) of ZAR1 billion (US$54.1 million) with a new repayment
date of 30 June 2026. The senior Debt Facility and RCF were
underwritten by Rand Merchant Bank, a division of FirstRand Bank
Limited (RMB), with Nedbank Limited (acting through its Nedbank
Corporate and Investment Banking division) as co-financier.
The new RCF has a three-year term and provides the Group
with access to flexible and cost-effective working capital. The
senior debt facility has a six-year term, with quarterly repayments
commencing two years after the financial close date. The financial
close date for this agreement for both facilities became effective
on 31 July 2023.
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INFORMATION
AUDIT AND RISK COMMITTEE REPORT
INTRODUCTION
The principal purpose of the audit and risk committee is to assist
the board in fulfilling its corporate governance and oversight
responsibilities to ensure the integrity of the Group’s financial and
corporate reporting while ensuring adequate systems of internal
control and risk management are in place and are operating
effectively. The functions of a risk committee at a Group level also
fall within the ambit of the audit and risk committee.
The committee has both reporting responsibilities to the
shareholders and the board and is accountable to them. It operates
in line with a documented charter and complies with all relevant
legislation, regulation and governance codes and executes its
duties in terms of the requirements of the governance codes in the
UK (for AIM) and South Africa, and through adopting the King IV
Report on Corporate Governance for South Africa, 2016™
(King IV™) as its code of corporate governance.
The performance of the audit and risk committee is evaluated
against its charter on an annual basis and a self-evaluation of
the committee’s effectiveness is performed by the members and
reviewed by the board.
The directors were appointed to the committee at the AGM on
24 November 2022. In terms of King IV™, all three members
of the audit and risk committee are independent non-executive
directors.
At 30 June 2023, the audit and risk committee comprised three
independent non-executive directors.
The independent non-executive directors of the audit and risk
committee at the date of approval of this report were:
•
•
reviewing the integrity of the integrated annual report by
ensuring its content is reliable and includes all relevant
operational, financial and other non-financial information, risks
and other relevant factors culminating in a recommendation to
the board for approval
reviewing the ESG, Task Force on Climate-related Financial
Disclosures (TCFD) and Mineral Resources and Mineral
Reserves reports for consistency with information in the
integrated annual report
• considering significant judgements and estimates applied in the
preparation of the interim results and annual financial statements
• oversight of whistle-blowing procedures
• monitoring the integrity of formal announcements relating to the
Group’s financial performance and reviewing significant financial
and other reporting judgements
•
•
reviewing the external audit reports
reviewing the effectiveness of the external audit function
• assessing the external auditors’ independence, specifying
guidelines for, and authorising if applicable, the award of non-
audit services to the external auditors
• approving the audit fees in respect of the annual external audit
• making recommendations to the board on the appointment,
reappointment or change of the Group’s external auditors.
Such changes are subject to shareholder approval at the
Company’s AGM
•
•
reviewing the effectiveness of the internal audit function
reviewing the internal audit management reports with, when
relevant, recommendations being made to the board
• approving the internal audit plan
• ensuring that a coordinated approach to all assurance activities
• Dawn Earp (chairperson of the audit and risk committee)
is in place
• Thabo Mosololi
• Charles Needham.
Details on the number of meetings held and attendance by
members are included on page 41 of the environmental,
social and governance (ESG) report on our website at
https://www.panafricanresources.com/investors/gri-and-sustainability/
All the members of the audit and risk committee are considered
by the board to have an independent and objective mindset.
The board believes that the audit and risk committee members
collectively have the necessary skills to carry out their duties
effectively and with due care. In cases where circumstances and
issues arise, which are deemed outside of the scope of expertise of
the audit and risk committee members, independent services and
advice from professional bodies and service providers are sourced.
AUDIT AND RISK COMMITTEE RESPONSIBILITIES
AND DUTIES
The audit and risk committee fulfils its responsibilities and duties as
set out in its charter. The functions of the audit and risk committee
include:
•
reviewing the interim and annual financial statements,
challenging the consistency and appropriateness of accounting
principles, policies and practices that have been applied in
the preparation, measurement and disclosures in the financial
reports, culminating in a recommendation to the board for
approval
• monitoring the Group’s compliance with legal and regulatory
requirements including listings requirements
• ensuring that effective procedures are in place relating to the
Group’s whistle-blowing and anti-corruption policies
• evaluating the appropriateness and effectiveness of risk
management, internal controls and governance processes
including information technology governance
•
reviewing the chief executive officer’s and financial director’s
responsibility statement in terms of paragraph 3.84(K) of the
JSE Listings Requirements
• dealing with concerns relating to accounting and tax practices,
significant accounting transactions including impairments,
internal audit, the audit or content of financial statements and
internal financial controls
• evaluating the performance of the financial director and the
finance department
•
•
•
•
reviewing the adequacy of the Group’s risk management
process, policies, mitigating controls and risk register
reviewing the adequacy of the Group’s insurance cover
reviewing the governance of information and technology and
the effectiveness of the Group’s information systems
reviewing the Group’s going concern status to determine
the appropriateness of the Group’s financial statements
being presented on a going concern basis, together with the
solvency and liquidity assessment as part of the dividend
recommendation to the board.
TM Copyright and trademarks are owned by the Institute of Directors South Africa NPC and all of its rights are reserved.
Pan African has put measures in place in order to prevent the
impairment of the external auditors’ independence, namely:
• Disallowance of certain services that may cause impairment of
their independence such as providing internal audit services
• All non-audit services provided by the external auditors are
preapproved by the executive committee (Exco) and the audit
and risk committee
• Appropriate disclosure of all non-audit services provided by the
external auditors.
The approval of non-audit services by the external auditors only
occurs when there is certainty that these services will not cause any
impairment to the independence of the external auditors.
Non-audit fees represented US$14 thousand (2022:
US$26 thousand) of the 2023 audit fee of US$437 thousand
(2022: US$408 thousand) which does not affect the auditors’
independence as it equates to 3.2% (2022: 6.4%) of the total fee.
Refer to note 10 to the financial statements for the disclosure of
the audit and non-audit fees.
FINANCIAL REPORTING
The principal role of the audit and risk committee in relation to
financial reporting is reviewing, with senior management and the
external auditors, the integrated annual report, financial results
announcements and other publications to ensure statutory and
regulatory compliance.
The committee has evaluated the consolidated and separate
financial statements for the reporting period ended 30 June 2023
and, based on the information provided to the committee, considers
that the consolidated and separate financial statements comply, in
all material respects, with the requirements of the Companies Act
2006 and IFRS. The consolidated and separate financial statements
were subsequently recommended to the board for approval. The
audit and risk committee makes its recommendation based on a
comprehensive review conducted by the executive directors and
other senior management. Furthermore, compliance with King IV™
requirements is continuously being assessed and improved on.
The committee reviewed the annual financial statements and the
non-financial information in the integrated annual report and web-
based information and concluded that the key risks have been
appropriately reported on.
The Company has established appropriate financial reporting
procedures and the committee confirms that such procedures are
operating sufficiently.
No instances of fraud involving the directors occurred during the
current reporting period.
EXTERNAL AUDITORS
The committee is responsible for recommending the appointment
or reappointment of a firm of external auditors to the board that,
in turn, will recommend the appointment to shareholders. The
committee is responsible for determining that the designated
appointee firm and signing registered auditor have the necessary
independence, experience, qualifications and skills and that the
audit fee is adequate.
Tim McAllister was the designated audit partner for the 2023
reporting period.
PwC’s appointment as external auditors for the 2023 reporting
period was approved by the shareholders at the Company’s
previous AGM held on 25 November 2022. PwC will be
recommended for reappointment as auditors for the 2024 reporting
period at the next AGM.
The audit and risk committee is satisfied with the accreditation
of PwC. The committee satisfied itself that the external auditors
are independent as defined by the Companies Act 2006 and the
standards stipulated by the auditing profession. The committee
received the quality information from the firm regarding the
individual auditor, their quality process, their JSE accreditation and
the regulator’s inspection letters. The audit and risk committee
concluded it is appropriate to recommend PwC to the board for
shareholder approval. The audit and risk committee held meetings
with the external auditors, without the presence of management,
and the chairperson of the audit and risk committee independently
met with the external auditors as required during the financial year.
The audit and risk committee, in consultation with executive
management, agreed to the terms of engagement. The audit fee
for the external audit has been considered and approved for the
2023 reporting period, taking into consideration such factors as the
timing of the audit, the extent of the work required and the scope.
The committee monitors the external auditors’ performance and
the effectiveness of the audit process as provided in the terms of
engagement and in respect of audit scope and approach. The
committee reviewed and approved the annual audit plan at its
meeting in June 2023 including the proposed scope, materiality
levels and significant risk areas.
It was established that the approach was appropriate to be
responsive to regulatory changes and organisational risks and other
applicable requirements.
Through the review of external audit reports, and interactions with
the external audit team, the audit and risk committee is satisfied
with the quality of the external audit performed for the reporting
period.
EXTERNAL AUDITORS’ INDEPENDENCE
The committee has a policy on the nature and extent of non-audit
services which is reviewed annually. The policy allows for limited
other services as well as the provision of reporting accountant
services in relation to capital market transactions.
The external auditors’ independence is impacted by non-audit
services that are provided to the client.
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INFORMATION
AUDIT AND RISK COMMITTEE REPORT continued
SIGNIFICANT ISSUES CONSIDERED BY THE AUDIT AND RISK COMMITTEE
Significant judgements, estimates and assumptions made by management are detailed in the notes to the consolidated and separate
financial statements. Position papers were presented to the audit and risk committee by management during the course of the reporting
period detailing management’s critical and other significant accounting judgements and estimates. These were reviewed by the audit and
risk committee and included, but were not limited to, the following areas:
Critical accounting judgements
Audit and risk committee response
Impairment assessment of goodwill and cash generating units
(CGUs)
In accordance with IAS 36: Impairment of Assets, goodwill is tested
for impairment annually or earlier where an indicator of impairment
becomes apparent.
The values of mining operations are sensitive to a range of attributes
unique to each asset. Management is required to apply judgement in
the key underlying assumptions and estimation of:
• Mineral Resources and Mineral Reserves
• Commodity prices
• Foreign exchange rates
• Discount rates
The committee monitors the impairment review process, including the
identification of impairment indicators. The committee has reviewed the
judgements and inputs used in the valuation of the recoverable amount,
together with the identification of CGUs.
Goodwill relating to the Barberton Mines underground operations is
assessed at each reporting date for impairment in accordance with IAS 36
and the committee is satisfied that there are no indications of impairment.
The committee is also satisfied that there is no indication of impairment
indicating impairment of other CGUs.
• Operating costs, capital expenditure and other operating factors.
Other significant accounting judgements
Audit and risk committee response
Going concern basis of accounting
Deferred tax
Rehabilitation and decommissioning obligation
Revenue
The committee has reviewed the forecast net debt levels, headroom on
existing facilities and compliance with debt covenants. The going concern
analysis covered the period 1 July 2023 to 30 June 2025, and considered
a range of downside sensitivities, including the impact of lower commodity
prices and reduced production levels.
The committee concluded that it was appropriate to adopt going concern
as a basis for the preparation of the financial statements.
The committee has reviewed management’s judgement applied in the
determination of the future expected deferred tax rate for the Group’s gold
mining entities based on the approved budgets for the Group.
The committee considered the key assumptions consistent with the
assumptions discussed in the impairment of goodwill section, applied
in the determination of the future expected deferred tax rate to be
reasonable.
The committee reviewed the estimate for the environmental and
decommissioning obligation, which was based on the work of external
consultants and internal experts.
The committee considered the disclosure of the rehabilitation and
decommissioning obligation in the financial statements and the changes
in assumptions and other drivers of the movement in the obligation and
concluded that the recognised obligation was appropriate.
The committee reviewed management’s judgement applied in accounting
for the forward sale contract entered into with RMB.
The committee considered the recognition, measurement and related
disclosures and concluded these to be in compliance with IFRS.
RISK MANAGEMENT
Risk management is the responsibility of the board and is integral to
the achievement of the Group’s objectives.
Refer to our primary risks and opportunities section on page 28
where the risk management approach and process are discussed
further.
The board, through the audit and risk committee, fulfils its
responsibility in reviewing the effectiveness of the Group’s risk
management approach and internal controls through the review of
reports submitted over the course of the reporting period covering
the risk management process and control environment, specifically
in-depth reviews of the Group’s risk registers and review of internal
audit reports.
The committee is satisfied that there was no material breakdown in
the internal accounting controls during the reporting period under
review.
I would like to extend my appreciation to my fellow committee
members, management and the external and internal auditors for
their work and support throughout the reporting period.
On behalf of the audit and risk committee
Dawn Earp
Chairperson of the audit and risk committee
13 September 2023
INTERNAL AUDITOR
The committee performs an oversight role of the internal audit
function, which is outsourced to a third party, by approval of the
internal audit plan and review of the internal auditor’s findings on
a regular basis. The committee has satisfied itself that the internal
audit function is independent and has the necessary resources,
standing and authority to discharge its duties. The head of internal
audit has direct access to the chairperson of the audit and risk
committee, and the internal auditor is invited to attend each audit
and risk committee meeting.
The committee reviewed the proposed 2023 internal audit plan and
assessed whether the plan addressed the key areas of risk for the
Group. The committee approved the plan having discussed the
scope of work in relationship to the Group’s risks.
The committee assesses the work of internal audit on a regular
basis through receipt of reports on the progress of the internal audit
plan. The committee met with the head of internal audit on two
occasions, which enabled further evaluation of the work performed.
COMMITTEE REMUNERATION
Audit and risk committee members are remunerated in the
same way as members of other board subcommittees. The
fees are reviewed annually by the remuneration committee. The
remuneration report, which includes the remuneration policy
and the implementation report, is tabled for endorsement by the
shareholders at the AGM. No retirement fund contributions are
made by the Group to or on behalf of non-executive directors.
Refer to page 240 for disclosure of remuneration to audit and risk
committee members.
SUBSIDIARY COMPANIES
The functions of the audit and risk committee are also performed
for each subsidiary company of the Pan African Group.
FINANCIAL DIRECTOR
The committee assessed and is satisfied that Deon Louw has
the appropriate skills, expertise and experience, for the role of
financial director, as required by the JSE Listings Requirements and
AIM Rules.
The committee considered the functioning of the Company’s
finance department and believes that it functions effectively, with
the required controls and systems in place.
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INDEPENDENT AUDITORS’ REPORT TO THE
MEMBERS OF PAN AFRICAN RESOURCES PLC
REPORT ON THE AUDIT OF THE FINANCIAL
STATEMENTS
OPINION
In our opinion, Pan African Resources PLC’s Group financial statements and Company financial statements (the “financial statements”):
• give a true and fair view of the state of the Group’s and of the Company’s affairs as at 30 June 2023 and of the Group’s and Company’s
profit and the Group’s and Company’s cash flows for the year then ended;
• have been properly prepared in accordance with UK-adopted international accounting standards; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Integrated Annual Report (the “Annual Report”), which comprise: the Group
and the Company statements of financial position as at 30 June 2023; the Group and the Company statements of profit or loss and other
comprehensive income, the Group and the Company statements of cash flows, and the Group and the Company statements of changes in
equity for the year then ended; and the notes to the financial statements, which include a description of the significant accounting policies.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements
in the UK, which includes the FRC’s Ethical Standard, as applicable to other listed entities of public interest, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in note 10 to the financial statements, we have provided no non-audit services to the Company or its controlled
undertakings in the period under audit.
OUR AUDIT APPROACH
Overview
Audit scope
• As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In
particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates that
involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed the
risk of management override of controls, including evaluating whether there was evidence of bias by the directors that represented a risk
of material misstatement due to fraud.
• We performed an audit of the three significant components of the Group, namely Barberton Mines (Pty) Ltd, Evander Gold Mining (Pty)
Ltd and Pan African Resources PLC. In addition, we performed specified procedures over ten other components in the Group.
• Financial reporting is undertaken for the consolidated Group at the head office in Johannesburg, South Africa. Our scope enabled us to
obtain 100% coverage of consolidated revenue, 82% of the Group’s absolute profit before tax and 98% of consolidated total assets.
Key audit matters
• Goodwill impairment assessment and impairment trigger assessment of property, plant and equipment (Group)
• Carrying value of investments in subsidiaries and receivables from Group companies (Company)
Materiality
• Overall Group materiality: US$4.3 million (2022: US$5.3 million) based on 5% of profit before tax.
• Overall Company materiality: US$1.4 million (2022: US$1.8 million) based on approximately 1% of total assets.
• Performance materiality: US$3.2 million (2022: US$4.0 million) (Group) and US$1.1 million (2022: US$1.4 million) (Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon,
were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Goodwill impairment assessment and impairment trigger
assessment of property, plant and equipment (Group)
Impairment assessments require significant judgement and there
is the risk that the valuation of the assets may be incorrect,
and any potential impairment charge or reversal miscalculated.
As such, this was a key area of focus for our audit due to the
material nature of the respective balances.
The Group has goodwill of US$16.1 million and property, plant
and equipment of US$395.2 million as at 30 June 2023, primarily
contained in four cash generating units (“CGUs”).
The Barberton Mines’ underground operations CGU has the total
goodwill balance of US$16.1 million allocated to it.
The Barberton Mines’ underground operations CGU has been
assessed for impairment using a fair value less costs of disposal
model which is based on future cash flow forecasts using life
of mine reserve and production estimates approved by the
internal competent person. Management has concluded that
the recoverable amount of the Barberton Mines’ underground
operations CGU is greater than the carrying amount of the
associated net assets, therefore no impairment charge has
been recognised.
In addition, management has performed an impairment trigger
and impairment reversal trigger assessment for the other CGUs
in the Group. Management has determined that there were no
triggers for impairment or impairment reversal in any of the other
CGUs, having considered factors such as long-term gold prices,
foreign exchange, inflation and interest rates, life of mine reserves
and production.
In assessing the carrying value of the Barberton Mines’ underground
operations CGU, we evaluated management’s future cash flow
forecasts and the process by which they were drawn up, including
checking the mathematical accuracy of their cash flow model.
We agreed future capital and operating expenditure to the latest
Board approved budget and the latest approved reserves and
resources statement, forecast life of mine production plan and capital
expenditure budget.
We assessed the reasonableness of management’s future forecasts
of capital and operating expenses included in the cash flow forecasts
in light of the historical accuracy of such forecasts and the current
operational results.
We note that the reserves and resources statement is prepared
internally, and we assessed the competent person’s qualifications,
professional standing and experience and concluded that they are
appropriately qualified and experienced.
We used our valuation experts to assist us in evaluating the
appropriateness of key market related assumptions in management’s
valuation model, including gold prices, and foreign exchange, inflation
and discount rates. We have also ensured that the impact of climate
change has been considered.
We performed sensitivity analysis around the key assumptions within
the cash flow forecasts using a range of discount rates and lower
long-term gold prices and exchange rates based on what, in our view,
a market participant may apply.
We considered management’s impairment trigger and reversal
analysis and agreed that no impairment or reversal indicators existed
for the other CGUs in the Group.
We examined the related disclosures in notes 15 and 16 of the
financial statements, including the sensitivities provided with respect
to the Barberton Mines’ underground operations CGU.
Based on our analysis, we consider management’s impairment
assessment and conclusions relating to the recoverable amount of
goodwill, as well as the associated disclosures, to be reasonable.
We also consider management’s conclusions that there were no
impairment triggers or reversal indicators for any of the other CGUs
to be reasonable.
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CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS
OF PAN AFRICAN RESOURCES PLC continued
Key audit matter
How our audit addressed the key audit matter
In respect of investments in subsidiaries and receivables from Group
companies, we evaluated and challenged management’s assessment
of the carrying values.
We independently performed an assessment of internal and external
factors, including considering the market capitalisation of the Group
with reference to the carrying value of investments in subsidiaries and
receivables from Group companies.
As a result of our work, we are satisfied that the carrying value of the
Company’s investments in subsidiaries and receivables from Group
companies is appropriate as at 30 June 2023.
Carrying value of investments in subsidiaries and
receivables from Group companies (Company)
As at 30 June 2023, the Company holds investments in
subsidiaries amounting to $83.6 million, comprising shares and
long-term funding balances for which the directors do not intend
to demand repayment in the foreseeable future, as well as short-
term receivables from Group companies of $61.1 million.
In assessing the carrying value of the assets, management
considered whether the underlying net assets of the investments
support the carrying amount, the nature of the underlying
assets and whether other facts and circumstances, including
impairments recorded in the Group financial statements,
could also be indicative of impairment. Management has also
performed an assessment of the expected credit losses of the
receivables from Group companies, which also impacts the
carrying value.
Based on management’s assessment, management has
concluded that no impairment is required in relation to the
carrying value of investments in subsidiaries and receivables
from Group companies. Management has also concluded that
no expected credit losses against the receivables from Group
companies are required.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a
whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry in which
they operate.
In establishing the overall approach to the Group audit, we determined the type of work that needed to be performed at the statutory
reporting unit level by us, as the Group audit team, or through involvement of our component auditors in South Africa. The Group’s
assets and operations are primarily located within two mine sites in South Africa. Financial reporting is undertaken at the head office
in Johannesburg.
We identified three reporting units which, in our view, required an audit of their complete financial information, either due to their size or
risk characteristics. This included the two main operating subsidiaries in South Africa, as well as the Company. In addition, we performed
specified procedures over ten other components in the Group. Audit work was performed by our component auditors in South Africa and
we determined the level of involvement we needed to have in the audit work for each reporting unit to be able to conclude whether sufficient
appropriate audit evidence had been obtained as a basis for our opinion on the Group financial statements as a whole.
As part of our year-end audit, the Group audit team’s involvement comprised of site visits to one of the South African operations, working
with our component audit team in-person in Johannesburg, and various other procedures performed remotely, including conference
calls and other forms of communication as considered necessary. We performed remote and in-person working paper reviews to satisfy
ourselves as to the appropriateness of audit work performed by our component audit team. We also attended key meetings virtually and
in person with local management and our component team.
The impact of climate risk on our audit
In planning our work, including identifying areas of audit risk and determining an appropriate audit response, we were mindful of the
increased focus on the impact of climate change risk on companies and their financial reporting. As part of our audit, we made enquiries of
management to understand its processes to assess the extent of the potential impact of climate change risks on the Group and its financial
statements. We used our knowledge of the Group to consider the completeness of the risk assessment performed by management,
giving consideration to both physical and transition risks, and management’s own public reporting and announcements. This included
consideration of the Group’s renewable energy target for 2027, by which time it is targeting 15% of its energy use to be sourced from
renewable sources.
Whilst the impact is uncertain, we particularly considered the impact of both physical and transition risks arising due to climate change, as
well as the climate targets announced by the Group on the recoverable value of the Group’s property, plant and equipment; there were no
indications that the useful lives had been impacted by climate change as disclosed in note 15. We concur with management’s assessment
that there are no indications.
We also read the disclosures made in relation to climate change, in the other information within the Annual Report, and considered their
consistency with the financial statements and our knowledge from our audit; this included a reading of the Group’s Non-Financial and
Sustainability Information Statement.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on
the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate
on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – Group
Financial statements – Company
Overall materiality
US$4.3 million (2022: US$5.3 million).
US$1.4 million (2022: US$1.8 million).
How we determined it
5% of profit before tax
Approximately 1% of total assets
Rationale for
benchmark applied
We believe that profit before tax is the primary
measure used by shareholders in assessing the
performance of the Group and is a generally
accepted auditing benchmark.
We believe that total assets is the most appropriate
benchmark as the entity is the ultimate holding
company of the Group and therefore its financial
position is driven substantially by its investments and
intercompany loans.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The range
of materiality allocated across components was between US$1.4 million and US$4.3 million. Certain components were audited to a local
statutory audit materiality that was also less than our overall Group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the
nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes.
Our performance materiality was 75% (overall materiality: 75%) of overall materiality, amounting to US$3.2 million (2022: US$4.0 million)
for the Group financial statements and US$1.1 million (2022: US$1.4 million) for the Company financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment and
aggregation risk and the effectiveness of controls – and concluded that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above US$214,000
(Group audit) (2022: US$260,000) and US$71,000 (Company audit) (2022: US$96,000) as well as misstatements below those amounts
that, in our view, warranted reporting for qualitative reasons.
CONCLUSIONS RELATING TO GOING CONCERN
Our evaluation of the directors’ assessment of the Group’s and the Company’s ability to continue to adopt the going concern basis of
accounting included:
• Obtaining the directors’ evaluation of the cash flow forecasts for the Group for the going concern period, which supports their use of the
going concern basis of accounting for the Group and the Company;
• Testing the integrity of the forecast model, including the mathematical accuracy;
• Holding discussions with management and reviewing the key assumptions in the forecast model, such as the gold price and exchange
rates, which we have compared against consensus prices and rates from external sources to verify the reasonability, and forecasted
production, and operational and capital expenditure, which we have agreed to the Group budget;
• Consideration of the historical accuracy of management’s forecasting;
• Critically evaluating management’s downside sensitivities and agreeing that these represent severe but plausible downside scenarios;
• Obtaining an understanding of the Group’s existing facilities and the debt capacity of the Group, and its ability to comply with debt
covenants, over the going concern period; and
• Reviewing the disclosure provided in the Directors’ Report and note 41 to the financial statements, and concurring that this is sufficient
to inform members about the directors’ going concern assessment.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of
the financial statements is appropriate.
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ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS
OF PAN AFRICAN RESOURCES PLC continued
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s and the
Company’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
REPORTING ON OTHER INFORMATION
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report
thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information
and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to
be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to
conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based
on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report based on these responsibilities.
With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures required by the UK Companies Act
2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters
as described below.
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and Directors’ Report
for the year ended 30 June 2023 is consistent with the financial statements and has been prepared in accordance with applicable legal
requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the audit, we did
not identify any material misstatements in the Strategic Report and Directors’ Report.
RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS AND THE AUDIT
Responsibilities of the Directors for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation of the financial
statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also
responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and regulations
related to compliance with UK and South African tax legislation and employment law, and regulations and environmental legislation, and we
considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and
regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives
and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that
the principal risks were related to management bias in key accounting estimates, and posting inappropriate journal entries to manipulate
results. The Group engagement team shared this risk assessment with the component auditors so that they could include appropriate audit
procedures in response to such risks in their work. Audit procedures performed by the Group engagement team and/or component auditors
included:
• Enquiries of the directors, management and the Group’s legal counsel, including consideration of known or suspected instances of non-
compliance with laws and regulations and fraud;
• Review of minutes of meetings of the Board of Directors;
• Challenging assumptions and judgements made by management in relation to their significant accounting judgements and estimates;
•
Identifying and testing journal entries that exhibit risk-based criteria, in particular any journal entries posted with unusual account
combinations that could be used to manipulate the results and other key performance indicators; and
• Review of related work performed by the component audit team, including their responses to risks related to management override of
controls and to the risk of fraud in revenue recognition.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance
with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of
not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques.
However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to
target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a
conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 of
Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our
prior consent in writing.
OTHER REQUIRED REPORTING
COMPANIES ACT 2006 EXCEPTION REPORTING
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from
branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
•
the Company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Timothy McAllister
Senior Statutory Auditor
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
13 September 2023
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PERFORMANCE
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CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
STATEMENTS OF FINANCIAL POSITION
as at 30 June
US$ thousand
Notes
2023
2022
2023
2022
Group
Company
ASSETS
Non-current assets
Property, plant and equipment
Goodwill
Intangible assets
Deferred tax assets
Long-term inventory
Investments in subsidiaries
Investments – other
Environmental rehabilitation obligation fund
Total non-current assets
Current assets
Inventory
Trade and other receivables
Current tax assets
Receivables from Group companies
Loan receivable
Derivative financial asset
Cash and cash equivalents
Total current assets
Total assets
EQUITY AND LIABILITIES
Share capital
Share premium
Retained earnings
Reserves
Equity attributable to owners of the Company
Non-controlling interests
Total equity
Non-current liabilities
Environmental rehabilitation obligation
Borrowings
Lease liabilities
Contract liability
Share-based payment obligations
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Contract liability
Share-based payment obligations
Derivative financial liability
Current tax liabilities
Total current liabilities
Total equity and liabilities
15
16
17
32
22
19
20
21
22
23
32
18
35
24
25
26
27
28
29
8
30
32
31
28
29
8
30
35
32
395,247
16,117
265
428
5,992
–
–
21,627
439,676
9,567
15,182
1,292
–
–
451
34,771
61,263
500,939
38,002
235,063
306,004
(283,946)
295,123
(527)
294,596
10,085
42,485
2,849
7,081
1,884
64,573
128,957
52,072
10,868
634
10,621
2,404
55
732
77,386
500,939
355,802
18,642
281
2,074
189
–
1,127
23,024
401,139
9,977
17,275
751
–
271
686
26,993
55,953
457,092
38,002
235,063
264,840
(243,125)
294,780
(171)
294,609
8,603
33,293
3,795
–
4,022
53,781
103,494
50,224
1,319
553
–
5,559
–
1,334
58,989
457,092
–
–
–
309
–
83,555
–
–
83,864
–
90
188
61,050
–
–
2,435
63,763
147,627
38,002
235,063
47,239
(173,980)
146,324
–
146,324
–
–
–
–
–
–
–
–
–
–
1,774
–
96,630
1,127
–
99,531
–
53
–
79,594
–
–
2,457
82,104
181,635
38,002
235,063
57,578
(151,043)
179,600
–
179,600
–
–
–
–
–
–
–
1,303
–
–
–
–
–
–
1,303
147,627
1,669
–
–
–
–
–
366
2,035
181,635
The above statement of financial position should be read in conjunction with the accompanying notes.
The annual financial statements on pages 164 to 248 were approved by the board of directors and authorised for issue on
13 September 2023 and were signed on its behalf by:
Cobus Loots
Chief executive officer
Deon Louw
Financial director
STATEMENTS OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
for the reporting period ended 30 June
US$ thousand
Revenue
Cost of production
Gross profit
Other income
Other expenses
Royalty costs
Impairment loss on plant and equipment
Income before finance income and finance costs
Finance income
Finance costs
Profit before tax
Income tax expense
Profit for the period
Other comprehensive (loss)/income
Items that may be reclassified to profit or loss
Group
Company
Notes
2023
2022
2023
2022
8
9
10
10
15
12
12
32
321,606
(219,189)
102,417
5,906
(13,253)
(963)
–
94,107
1,139
(9,692)
85,554
(24,817)
60,737
376,371
(252,873)
123,498
8,501
(18,329)
(2,096)
(467)
17,550
32,116
–
17,550
255
(4,758)
–
–
–
32,116
209
(7,189)
–
–
111,107
13,047
25,136
1,095
(5,326)
106,876
(31,924)
74,952
99
(1)
13,145
(316)
12,829
28
(28)
25,136
(1,153)
23,983
Foreign currency translation reserve movement
26
(40,978)
(40,125)
(23,140)
(27,809)
Items that may not be reclassified to profit or loss
Investment measured at fair value through other
comprehensive income movement
20
Tax thereon
Other comprehensive loss for the period, net of tax
Total comprehensive income/(loss) for the period
Profit/(loss) attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive income/(loss) attributable to:
Owners of the Company
Non-controlling interests
Basic and diluted earnings per share (US cents)
13
1,563
(1,360)
(40,775)
19,962
60,737
61,139
(402)
19,962
20,318
(356)
3.19
975
(46)
(39,196)
35,756
74,952
75,137
(185)
35,756
35,930
(174)
3.90
1,563
(1,360)
(22,937)
(10,108)
975
(46)
(26,880)
(2,897)
The above statements of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
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ENVIRONMENTAL, SOCIAL AND
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ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
STATEMENTS OF CASH FLOWS
for the reporting period ended 30 June
STATEMENTS OF CHANGES IN EQUITY
for the reporting period ended 30 June
Group
Company
Group
US$ thousand
Notes
2023
2022
2023
2022
Cash flows from operating activities
Net cash from operating activities before dividend, tax,
royalties and net finance costs
Dividend paid
Reciprocal dividend received
Income tax paid
Royalties paid
Securities transfer tax paid
Finance costs paid
Finance income received
34.1
14
34.2
34.3
132,941
(23,168)
3,193
(6,521)
(1,194)
(7)
(6,254)
1,133
142,879
(24,984)
3,425
(6,764)
(1,756)
–
(4,042)
1,248
13,389
(23,168)
–
(883)
–
–
(1)
99
28,442
(24,984)
–
(1,108)
–
–
(12)
28
Net cash from/(used in) operating activities
100,123
110,006
(10,564)
2,366
Cash flows from investing activities
Additions to property, plant and equipment
Proceeds from disposal of property, plant and equipment
Additions to intangible assets
Consideration for assets acquired, net of cash acquired
Repayment of loan receivable
Receipts from the environmental rehabilitation obligation fund
Proceeds from disposal of investments – other
Increase in investments in subsidiaries
Advances of loans to subsidiaries
Repayment of loans to subsidiaries
17
36
21
20
19
(112,709)
(82,683)
160
(113)
(2,939)
255
130
2,485
–
–
–
563
(2)
–
583
151
–
–
–
–
Net cash (used in)/from investing activities
(112,731)
(81,388)
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Share buy-back
Repayment of lease liabilities
34.4
34.4
34.4
Net cash from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Effect of foreign exchange rate changes
Cash and cash equivalents at the end of the period
24
94,705
(69,276)
–
(562)
24,867
12,259
26,993
(4,481)
34,771
12,903
(41,422)
(3,222)
(616)
(32,357)
(3,739)
35,133
(4,401)
26,993
The above statements of cash flows should be read in conjunction with the accompanying notes.
–
–
–
–
–
–
2,485
(12)
(32,547)
40,239
10,165
–
–
–
–
–
(399)
2,457
377
2,435
–
–
–
–
–
–
–
(13)
(38,214)
40,486
2,259
–
–
(3,222)
–
(3,222)
1,403
2,963
(1,909)
2,457
US$ thousand
Share
capital
Share
premium
Reserves1
Retained
earnings
Equity
attributable
to the
owners of
the Company
Non-
controlling
interests
Total
equity
Balance as at 1 July 2021
38,151
235,063
(200,837)
211,254
283,631
–
283,631
Total comprehensive income
Profit for the period
Other comprehensive loss
Dividends paid
Reciprocal dividend – PAR Gold2
Recognition of non-controlling
interests
Share buy-back3
Unwinding of broad-based black
economic empowerment (B-BBEE)
structure: share-based payment
–
–
–
–
–
–
(149)
–
–
–
–
–
–
–
–
–
(39,207)
–
(39,207)
–
–
–
(3,073)
(8)
75,137
75,137
–
(24,984)
3,425
–
–
8
35,930
75,137
(39,207)
(24,984)
3,425
–
(3,222)
–
Balance as at 30 June 2022
38,002
235,063
(243,125)
264,840
294,780
Total comprehensive income
Profit for the period
Other comprehensive loss
Dividends paid
Reciprocal dividend – PAR Gold2
–
–
–
–
–
–
–
–
–
–
(40 821)
–
(40,821)
–
–
61,139
61,139
–
(23,168)
3,193
20,318
61,139
(40,821)
(23,168)
3,193
(174)
(185)
11
–
–
3
–
–
(171)
(356)
(402)
46
–
–
35,756
74,952
(39,196)
(24,984)
3,425
3
(3,222)
–
294,609
19,962
60,737
(40,775)
(23,168)
3,193
Balance as at 30 June 2023
38,002
235,063
(283,946)
306,004
295,123
(527)
294,596
US$ thousand
Balance as at 1 July 2021
Total comprehensive loss
Profit for the period
Other comprehensive loss
Dividends paid
Share buy-back3
Balance as at 30 June 2022
Total comprehensive loss
Profit for the period
Other comprehensive loss
Dividends paid
Balance as at 30 June 2023
Company
Share
capital
Share
premium
Reserves1
Retained
earnings
Total
equity
38,151
235,063
(121,090)
–
–
–
–
(149)
–
–
–
–
–
(26,880)
–
(26,880)
58,579
23,983
23,983
–
–
(24,984)
(3,073)
–
210,703
(2,897)
23,983
(26,880)
(24,984)
(3,222)
38,002
235,063
(151,043)
57,578
179,600
–
–
–
–
–
–
–
–
(22,937)
–
(22,937)
–
38,002
235,063
(173,980)
12,829
12,829
–
(23,168)
47,239
(10,108)
12,829
(22,937)
(23,168)
146,324
1 Reserves comprise all reserves balances. Refer to note 26 for further details.
2 Reciprocal dividend – PAR Gold Proprietary Limited (PAR Gold) refers to the intra-Group transaction which relates to the dividend received on the treasury
shares held by PAR Group in the Company. PAR Gold holds 13.8% (2022: 13.8%) of the issued share capital of the Company. Refer to note 38 in respect of
the related party transaction.
3 The Company completed a share buy-back programme which resulted in the total issued shares of the Company decreasing by 11,825,491 shares during
the previous reporting period.
The above statements of changes in equity should be read in conjunction with the accompanying notes.
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ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
NOTES TO THE FINANCIAL STATEMENTS
for the reporting period ended 30 June
1. GENERAL INFORMATION
Pan African Resources PLC (the
Company) is incorporated in the UK and
registered in England and Wales under the
Companies Act 2006 with the registration
number 3937466. The Company has a
dual primary listing on the JSE and the
UK’s AIM. The Company’s shares can also
be traded on its Level 1 ADR programme in
the USA and on the A2X Market exchange
as a secondary exchange in South Africa.
In addition, Funding Company issued listed
domestic medium-term notes (DMTN)
on the JSE Debt Board in the current
reporting period (pages 217 and 218. The
consolidated financial statements comprise
the Company and its subsidiaries (together
referred to as the Group). The nature of
the Group’s operations and its principal
activities relate to commodity mining and
exploration activities.
STATEMENT OF
2.
COMPLIANCE
The financial statements of the Pan African
Group have been prepared in accordance
with UK-adopted international accounting
standards and the requirements of the
Companies Act 2006 as applicable to
the companies reporting under these
standards.
Furthermore, they have been prepared in
accordance with SAICA Financial Reporting
Guidelines as issued by the Accounting
Practices Committee, Financial Reporting
Pronouncement as issued by the Financial
Reporting Standards and the JSE Listings
Requirements.
3. BASIS OF PREPARATION
The financial statements have been
prepared as a going concern (refer to
note 41) on the historical basis, except
for financial assets at fair value through
other comprehensive income or fair value
through profit or loss, the environmental
rehabilitation obligation fund and derivative
financial instruments, which are stated at
fair value. The accounting policies, inclusive
of judgements and estimates, have been
consistently applied for the reporting
periods presented and comply with IFRS.
Functional and presentation
currency
The financial statements are presented
in US$ and all values are rounded to the
nearest thousand (US$’000), except where
otherwise indicated.
The individual financial results of each
Group company are maintained in their
functional currencies, which are determined
by reference to the primary economic
environment in which each company
operates. The Company, and its South
African subsidiaries, have determined
their functional currency as the South
African rand. The subsidiary in Sudan
has determined its functional currency as
the Sudanese pound.
SIGNIFICANT ACCOUNTING
4.
POLICIES
The accounting policies, inclusive of
judgements and estimates, have been
consistently applied for the reporting
periods presented and comply with IFRS.
4.1 Current versus non-current
classification
The Group presents assets and liabilities in
the statement of financial position based
on current/non-current classification.
An asset is current when it is:
• expected to be realised or intended
to be sold or consumed in the normal
operating cycle
• held primarily for the purpose of trading
• expected to be realised within
12 months after the reporting period
• cash or cash equivalent unless
restricted from being exchanged or
used to settle a liability for at least
12 months after the reporting period.
All other assets are classified as
non-current.
A liability is current when:
•
•
•
it is expected to be settled in the normal
operating cycle
it is held primarily for the purpose of
trading
it is due to be settled within 12 months
after the reporting period
• or there is no unconditional right to
defer the settlement of the liability for
at least 12 months after the reporting
period.
The Group classifies all other liabilities as
non-current.
Deferred tax assets and liabilities are
classified as non-current assets and
liabilities.
4.2 Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the
Group. The Group ‘controls’ an entity
when it is exposed to, or has rights to,
variable returns from its involvement with
the entity and has the ability to affect those
returns through its power over the entity.
The financial statements of subsidiaries
are included in the consolidated financial
statements from the date on which control
commences until the date on which
control ceases.
Transactions eliminated on
consolidation
Intra-Group transactions, balances
and unrealised gains on transactions
between Group companies are eliminated.
Unrealised losses are also eliminated
unless the transaction provides evidence
of an impairment of the transferred assets.
Non-controlling interests
Non-controlling interests are measured
initially at their proportionate share of the
acquiree’s identifiable net assets at the
date of acquisition. Subsequently, the
carrying amount of the non-controlling
interests is the amount of the interest
at initial recognition plus its share of
subsequent changes in equity.
4.3 Foreign currency
Foreign transactions
Foreign currency transactions by Group
companies are recognised in the functional
currency of the company at the rate
of exchange ruling on the date of the
transaction.
At each reporting date, monetary assets
and liabilities denominated in foreign
currencies are translated at the functional
currency spot rates of exchange ruling at
the reporting date. Gains or losses arising
on translation of monetary items are
recognised in the statement of profit or loss
and other comprehensive income.
Non-monetary assets and liabilities are
measured in terms of historical cost in a
foreign currency and are translated using
the exchange rates at the dates of the
initial transactions.
Foreign operations
The assets and liabilities of foreign
operations, including goodwill and fair
value adjustments arising on acquisition,
are translated at the exchange rate at the
reporting date. The income and expenses
of foreign operations are translated at
the exchange rates at the dates of the
transactions.
Foreign currency translation differences are
recognised in other comprehensive income
and accumulated in the foreign currency
translation reserve, except to the extent
that the translation difference is allocated to
non-controlling interests. Foreign exchange
gains and losses arising from a monetary
receivable from, or payable to, a foreign
operation, the settlement of which is
neither planned nor likely in the foreseeable
future, are considered to form part of the
net investment in a foreign operation and
are recognised in other comprehensive
income and presented in the foreign
currency translation reserve.
When a foreign operation is disposed of in
its entirety or partially such that control is
lost, the cumulative amount in the foreign
currency translation reserve related to that
foreign operation is reclassified to profit or
loss as part of the gain or loss on disposal.
If the Group disposes of part of its interest
in a subsidiary but retains control, then
the relevant proportion of the cumulative
amount is reattributed to non-controlling
interests.
Translation to presentation currency
The Group’s assets and liabilities are
translated into the presentation currency
(US$) of the Group at the rate of exchange
prevailing at the reporting date. Income
and expense items are translated at the
exchange rate prevailing at the date of the
significant transaction or the average rate
for the period. The exchange differences
arising on translation for consolidation
are recognised in other comprehensive
income.
Impairment of non-financial
4.4
assets
At each reporting date, the Group
assesses the carrying amounts of its
tangible and intangible assets to determine
whether there is any indication that those
assets are impaired. If any such indication
exists, the asset’s recoverable amount
is estimated. An asset with an indefinite
useful life, for example goodwill, is not
subject to amortisation and is tested at the
reporting date for impairment.
Impairment losses are immediately
recognised as an expense in profit or
loss whenever the carrying amount of an
asset or its CGU exceeds its recoverable
amount.
An impairment loss in respect of goodwill
is not reversed. For other assets, a reversal
of an impairment loss is recognised in
profit or loss. When an impairment loss
subsequently reverses, the carrying
amount of the asset or CGU is increased
to the revised estimate of its recoverable
amount, to the extent that the increased
carrying amount does not exceed the
carrying amount that would have been
determined had no impairment been
recognised on the asset or CGU.
4.5 Financial assets
Classification, recognition and
measurement
The Group’s financial assets are classified
into the following measurement categories:
instruments measured at amortised
cost, instruments measured at fair value
through other comprehensive income and
instruments measured at fair value through
profit or loss.
Financial assets are classified as measured
at amortised cost only if the asset is held
within a business model whose objective
is to collect the contractual cash flows and
contractual terms of the asset give rise
to cash flows that are solely payments of
principal interest.
The Group has elected to measure equity
instruments at fair value through other
comprehensive income as this better
reflects the strategic nature of the Group’s
equity investments. For equity instruments
at fair value through other comprehensive
income, changes in the fair value, including
those related to foreign exchange, are
recognised in other comprehensive income
and there is no subsequent reclassification
of fair value gains and losses to profit
or loss.
All financial assets not classified as
measured at amortised cost or fair value
through other comprehensive income as
described above are measured at fair value
through profit or loss including all derivative
financial assets and the environmental
rehabilitation obligation fund.
A financial asset (unless it is a trade
receivable without a significant financing
component) is initially measured at fair
value plus transaction costs that are
directly attributable to its acquisition.
Transaction costs for an item at fair value
through profit or loss are expensed. A trade
receivable without a significant financing
component is initially measured at the
transaction price.
Financial assets at amortised cost are
subsequently measured using the effective
interest method. The amortised cost is
reduced by impairment losses. Interest
income, foreign exchange gains and losses
and impairment losses are recognised
in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss.
Equity investments at fair value through
other comprehensive income are
subsequently measured at fair value. Other
net gains and losses are recognised in
other comprehensive income and never
reclassified to profit or loss.
Financial assets at fair value through profit
or loss are subsequently measured at fair
value. Net gains and losses, including any
interest or dividend income, are recognised
in profit or loss.
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INFORMATION
The gains or losses on non-substantial
modifications are recognised as part of
finance costs or income. If an exchange
of debt instruments or modification
of terms is accounted for as an
extinguishment, any costs or fees incurred
are recognised as part of the gain or loss
on the extinguishment. If the exchange or
modification is not accounted for as an
extinguishment, any costs or fees incurred
adjust the carrying amount of the liability
and are amortised over the remaining term
of the modified financial liability.
Offsetting
Financial assets and financial liabilities are
offset and the net amount presented in
the statement of financial position when,
and only when, the Group has a legally
enforceable right to set off the amounts
and it intends either to settle them on a
net basis or to realise the asset and settle
the liability.
4.7 Fair value measurement
Fair value is determined based on
observable market data (in the case of
listed investments, the market share price)
or discounted cash flow models (and other
valuation techniques) using assumptions
considered to be reasonable and
consistent with those that would be applied
by a market participant. Where discounted
cash flows are used, the resulting fair value
measurements are considered to be at
Level 3 in the fair value hierarchy as defined
in IFRS 13: Fair Value Measurement as
they depend to a significant extent on
unobservable valuation inputs.
Impairment
The Group recognises loss allowances
for expected credit losses (ECLs) on a
financial asset measured at amortised cost.
The Group recognises ECLs based on
lifetime default events for financial assets,
except those that have not experienced
a significant increase in credit risk, which
are measured using 12-month default
events. When determining whether the
credit risk of a financial asset has increased
significantly since initial recognition
and when estimating ECLs, the Group
considers reasonable and supportable
information that is relevant and available
without undue cost or effort. This
includes both quantitative and qualitative
information and analysis based on the
Group’s historical experience, informed
credit assessment and includes forward-
looking information. The maximum period
considered when estimating ECLs is the
maximum contractual period over which
the Group is exposed to credit risk. Credit
losses are measured as the difference
between the cash flows due in accordance
with the contract and the cash flows the
Group expects to receive. A financial asset
is ‘credit-impaired’ when one or more
events that have a detrimental adverse
impact on the estimated future cash flows
of a financial asset have occurred.
Derecognition
Financial assets are derecognised when
the right to receive cash flows from the
asset has expired, or the right to receive
cash flows has been transferred together
with substantially all the risks and rewards
of ownership, or the Group neither
transfers nor retains substantially all of the
risks and rewards of ownership and it does
not retain control of the financial asset.
4.6 Financial liabilities
Classification, recognition and
measurement
Financial liabilities are classified and
accounted for as debt according to the
substance of the contractual arrangements
entered into.
Financial liabilities are classified and
measured at amortised cost or fair value
through profit or loss. A financial liability
is classified at fair value through profit or
loss if it is classified as held for trading, it
is a derivative or it is designated as such
on initial recognition. Borrowings and trade
and other payables are initially recognised
at fair value net of directly attributable
transaction costs, except for derivative
instruments which are initially recognised
at fair value. Financial liabilities at fair value
through profit or loss are measured at fair
value, and net gains and losses, including
any interest expense, are recognised in
profit or loss. Other financial liabilities are
subsequently measured at amortised cost
using the effective interest method. Interest
expense and foreign exchange gains or
losses are recognised in profit or loss.
Any gain or loss on derecognition is also
recognised in profit or loss.
Derecognition
Financial liabilities are derecognised
when the associated obligation has been
discharged, cancelled or has expired.
A substantial modification of the terms
of a financial liability is accounted for as
an extinguishment of the original financial
liability and the recognition of a new
financial liability. The difference between
the carrying amount of the extinguished
financial liability and the consideration
paid is recognised in profit or loss. The
terms of a financial liability are considered
substantially different if the present value
of the cash flows under the new terms
(including any fees paid net of fees
received) differs at least 10% from the
present value of the financial liability’s cash
flows using the original effective interest
rate and term.
The determination of assumptions used
in assessing the fair value of identifiable
assets and liabilities is subjective and the
use of different valuation assumptions
could have a significant impact on financial
results. In particular, expected future cash
flows, which are used in discounted cash
flow models, are inherently uncertain and
could materially change over time. They
are significantly affected by several factors
including Mineral Resources and Mineral
Reserves, together with economic factors
such as commodity prices, exchange
rates, discount rates and estimates
of production costs and future capital
expenditure.
JUDGEMENTS AND
5.
ESTIMATES
The preparation of the financial statements
in accordance with IFRS requires
management to make judgements,
estimates and assumptions that may
materially affect the application of the
Group’s accounting policies and the
reported amounts of assets, liabilities,
income and expenses.
These judgements and estimates are
based on management’s best knowledge
of the relevant facts and circumstances,
historical experience, current and expected
future economic conditions and other
factors. Actual results may differ from
the amounts included in the financial
statements.
The estimates and underlying assumptions
are reviewed on an ongoing basis.
Revisions to accounting estimates are
recognised prospectively.
Judgements
Information about judgements made in
applying accounting policies that have the
most significant effects on the amounts
recognised in the financial statements is
included in the following notes:
• Note 8: Revenue
• Note 15: Property, plant and equipment
• Note 36: Acquisitions and disposals.
Significant assumptions and
estimates
Information about assumptions and
estimation uncertainties at 30 June 2023
that have a significant risk of resulting
in a material adjustment to the carrying
amounts of assets and liabilities in the next
reporting period is included in the following
notes:
• Note 16: Goodwill
• Note 32: Tax expense.
Information about other assumptions and
estimation uncertainties is included in the
following notes:
• Note 15: Property, plant and equipment
• Note 27: Environmental rehabilitation
obligation
• Note 28: Guarantees
• Note 29: Leases
• Note 30: Share-based payment
obligation
• Note 33: ESOP transactions
• Note 39: Commitments.
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NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
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ENVIRONMENTAL, SOCIAL AND
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ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
6. RECENT ACCOUNTING DEVELOPMENTS
6.1 New standards, interpretations and amendments effective for the first time as at 30 June 2023
The following standards became effective during the current reporting period:
Title
Impact
Annual Improvements
Cycle 2018 – 20201
Amendment to IAS 16: Property, Plant and
Equipment – Proceeds before Intended Use1
IFRS 9: Financial Instruments has been amended to only include costs or
fees between the borrower and the lender in the calculation of the ‘10%
test’ for derecognition of a financial liability. Fees paid to third parties are
excluded from the calculation.
The amendment to IAS 16 prohibits an entity from deducting from the
cost of an item of property, plant and equipment any proceeds received
from selling items produced while the entity is preparing the asset for its
intended use. The proceeds from selling such items, together with the
costs of producing them, are recognised in profit or loss.
1 None of the above amendments had a material impact on the Group and Company.
Annual period
beginning on or after
1 January 2022
1 January 2022
6.2 New standards, interpretations and amendments issued but not yet effective as at 30 June 2023
The following standards and interpretations applicable to the Group, which were in issue and not yet effective as at 30 June 2023, have not
been early adopted by the Group:
Title
Impact
Amendment to IAS 1: Presentation of
Financial Statements on Classification of
Liabilities as Current or Non-current1
The amendment clarifies that liabilities are classified as either current or
non-current, depending on the rights that exist at the end of the reporting
period. A number of requirements are required to be met in conjunction
with this amendment.
Annual period
beginning on or after
1 January 2024
Narrow scope amendments to IAS 1:
Presentation of Financial Statements,
Practice Statement 2 and IAS 8: Accounting
Policies, Changes in Accounting Estimates
and Errors1
The amendments aim to improve accounting policy disclosures and help
users of the financial statements to distinguish changes in accounting
policies from changes in accounting estimates.
1 January 2023
Amendments to IAS 12: Income Taxes –
Deferred Tax related to Assets and Liabilities
arising from a Single Transaction1
The amendments require companies to recognise deferred tax on
transactions that, on initial recognition, give rise to equal amounts of
taxable and deductible temporary differences.
1 January 2023
1 None of the above amendments are expected to have a material impact on the Group and Company.
IBOR reform
A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered
rates (IBORs) with alternative nearly risk-free rates (referred to as ‘IBOR reform’). The Group has exposure to the Johannesburg Interbank
Average Rate (JIBAR). The South African Reserve Bank has indicated their intention to move away from JIBAR and to create an alternative
reference rate for South Africa. This reform is at various stages globally, and a suitable alternative for South Africa is expected to be
announced in due course. Accordingly, there is uncertainty surrounding the timing and manner in which the transition would occur and how
this would affect various financial instruments issued and held by the Group. Funding Company, the Group’s corporate treasury function,
currently monitors the Group’s transition to an alternative rate and evaluates the extent to which contracts reference JIBAR, whether such
contracts will need to be amended as a result of IBOR reform and how to manage communication about IBOR reform with counterparties.
SEGMENT ANALYSIS
7.
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as Pan African Exco. The operating
segments of the Group are determined based on the reports
used to make strategic decisions that are reviewed by Exco.
Exco considers the business principally according to the location
and nature of the products and services provided, with each
segment representing a strategic business unit.
The reported segments are all located in South Africa except for the
exploration assets located in Sudan and comprise the following:
• Barberton Mines including the Barberton Tailings Retreatment
Plant (BTRP) located in Barberton
• Evander Mines (the Elikhulu Tailings Retreatment Plant (Elikhulu),
underground 8 Shaft pillar, 24, 25 and 26 Level project, Egoli
project and surface sources) located in Evander
• MTR project: the MTR project located in Mogale district; a
plant is being constructed to process gold tailings deposits
of Mogale Gold and Mintails SA Soweto Cluster (MSC).
These segments derive their revenue from mining, extraction,
production and the sale of gold.
• Solar projects currently consist of the solar plant located at
Evander Mines, and the planned development of a solar plant
at Barberton Mines and the extension of Evander Mines’
solar plant
• Exploration assets consist of five prospecting concessions
(or exploration licences) in north-eastern Sudan (the Block 12
concessions), covering an area of almost 1,100km² and located
approximately 70km north-west of Port Sudan
• Agricultural ESG projects mainly comprise the Group’s
Barberton Blueberries project (Barberton Blue Proprietary
Limited (Barberton Blue)), as well as other small-
scale agricultural projects in the Barberton Mines host
community areas
• Corporate consists mainly of the Group’s holding companies
and management services company which renders services to
the Group and is located in Johannesburg
• Funding Company is the centralised treasury function of the
Group located in Johannesburg.
186
187
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
SEGMENT ANALYSIS continued
7.
The segment results have been presented based on Exco’s reporting format, in accordance with the disclosures presented as follows:
US$ thousand
Revenue
Cost of production
Depreciation and amortisation
Gross profit/(loss)
Other income1
Other expenses1
Royalty costs
Notes
9
15
Income/(loss) before finance income and
finance costs
Finance income1
Finance costs1
Profit/(loss) before tax
Income tax expense
Profit/(loss) for the period excluding
intra-Group transactions
Revenue
Cost of production
Elimination of dividends received from/(paid
to) fellow Group companies
Management fees
Finance income/(costs)
Profit/(loss) after tax including intra-Group
transactions
Segment assets (total assets excluding
goodwill)
Segment liabilities
Net assets (excluding goodwill)2
Goodwill
Capital expenditure3
Reconciliation of adjusted EBITDA4
Income/(loss) before tax, finance income
and finance costs
Excluding: depreciation and amortisation
included in gross profit
Excluding: other depreciation and
amortisation
Adjusted EBITDA4
Barberton
Mines
154,641
(106,644)
(8,806)
39,191
1,021
(1,812)
(598)
Evander
Mines
166,659
(91,239)
(10,905)
64,515
3,283
(2,601)
(365)
37,802
64,832
2
(430)
37,374
(9,348)
7
(1,782)
63,057
(14,688)
28,026
48,369
–
–
–
(5,784)
2,165
–
(2,198)
–
(3,471)
(2,519)
2023
Solar
projects
–
(238)
(472)
(710)
–
(12)
–
(722)
2
(578)
(1,298)
(137)
(1,435)
2,198
–
–
(169)
(299)
MTR
project
Mining
operations
Exploration
assets
Agricultural
ESG projects
Corporate
Funding
Company
2023
–
–
(3)
(3)
395
(665)
–
(273)
135
(174)
(312)
(7)
(319)
–
–
–
–
(135)
321,300
(198,121)
(20,186)
102,993
4,699
(5,090)
(963)
101,639
146
(2,964)
98,821
(24,180)
74,641
2,198
(2,198)
–
(9,424)
(788)
–
–
–
–
17
(767)
–
(750)
–
–
(750)
–
(750)
–
–
–
(169)
–
306
(669)
(213)
(576)
–
(131)
–
–
–
–
–
486
(6,912)
–
(707)
(6,426)
–
–
(707)
–
(707)
–
–
–
(101)
(523)
117
(40)
(6,349)
(487)
(6,836)
12,904
–
(12,904)
9,807
(3,340)
–
–
–
–
704
(353)
–
351
876
(6,688)
(5,461)
(150)
(5,611)
–
–
–
(113)
4,651
Group
total
321,606
(198,790)
(20,399)
102,417
5,906
(13,253)
(963)
94,107
1,139
(9,692)
85,554
(24,817)
60,737
15,102
(2,198)
(12,904)
–
–
24,407
40,181
295
(454)
64,429
(919)
(1,331)
(369)
(1,073)
60,737
132,031
48,755
83,276
16,117
20,391
280,915
93,342
187,573
–
79,889
11,003
1,443
9,560
–
2,251
17,177
4,284
12,893
–
8,806
441,126
147,824
293,302
16,117
111,337
4,199
1
4,198
–
872
3,060
129
2,931
–
400
4,569
4,923
(354)
–
350
31,868
53,466
(21,598)
–
–
484,822
206,343
278,479
16,117
112,959
37,802
64,832
(722)
(273)
101,639
(750)
(707)
(6,426)
351
94,107
8,806
10,905
–
46,608
–
75,737
472
–
(250)
3
20,186
–
(270)
–
121,825
–
178
(572)
213
14
(480)
–
–
20,399
312
(6,114)
–
351
504
115,010
1 Other expenses and income exclude intra-Group management fees. Finance income and finance costs exclude intra-Group interest.
2 The segment assets and liabilities above exclude intra-Group balances.
3 Capital expenditure comprises additions to property, plant and equipment, mineral rights, exploration and intangible assets.
4 Adjusted EBITDA comprises earnings before interest, tax, depreciation, amortisation and impairment losses.
188
189
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
7.
SEGMENT ANALYSIS continued
US$ thousand
Revenue
Cost of production
Depreciation and amortisation
Gross profit/(loss)
Other income1
Other expenses1
Royalty costs
Impairment loss on plant and equipment
Income/(loss) before finance income
and finance costs
Finance income1
Finance costs1
Profit/(loss) before tax
Income tax (expense)/benefit
Profit/(loss) for the period excluding
intra-Group transactions
Revenue
Cost of production
Elimination of dividends received from/(paid to) fellow Group
companies
Management fees
Finance income/(costs)
Profit/(loss) after tax including intra-Group transactions
Segment assets (total assets excluding goodwill)
Segment liabilities
Net assets (excluding goodwill)2
Goodwill
Capital expenditure3
Reconciliation of adjusted EBITDA4
Income/(loss) before tax, finance income
and finance costs
Excluding: depreciation and amortisation included
in gross profit
Excluding: other depreciation and amortisation
EBITDA4
Excluding: impairment loss on plant and equipment
Adjusted EBITDA4
Notes
Barberton
Mines
9
15
174,596
(115,129)
(10,460)
49,007
2,222
(2,949)
(1,581)
–
2022
Evander
Mines
201,775
(110,654)
(15,836)
75,285
4,601
(1,097)
(515)
(467)
46,699
77,807
141
(708)
46,132
(12,281)
2
(1,732)
76,077
(18,157)
33,851
57,920
–
–
–
(5,700)
1,718
29,869
139,985
50,584
89,401
18,642
28,419
–
(308)
–
(6,240)
(3,430)
47,942
246,549
68,013
178,536
–
39,327
Solar
projects
Mining
operations
Exploration
assets
Agricultural
ESG projects
Corporate
Funding
Company
2022
–
(257)
(90)
(347)
–
–
–
–
(347)
1
(119)
(465)
103
(362)
308
–
–
(197)
(26)
(277)
12,018
8,477
3,541
–
8,828
376,371
(226,040)
(26,386)
123,945
6,823
(4,046)
(2,096)
(467)
124,159
144
(2,559)
121,744
(30,335)
91,409
308
(308)
–
(12,137)
(1,738)
77,534
398,552
127,074
271,478
18,642
76,574
–
–
–
–
41
(83)
–
–
(42)
–
–
(42)
–
(42)
–
–
–
–
–
(42)
3,345
1
3,344
–
3,639
–
(405)
(42)
(447)
–
(195)
–
–
–
–
–
–
285
(13,669)
–
–
(642)
(13,384)
1
–
(641)
–
(641)
–
–
–
(118)
(349)
(1,108)
3,592
97
3,495
–
1,000
384
(49)
(13,049)
(1,245)
(14,294)
28,665
–
(28,665)
12,386
(1,544)
(3,452)
8,619
9,104
(485)
–
1,597
–
–
–
–
1,352
(336)
–
–
1,016
566
(2,718)
(1,136)
(344)
(1,480)
279
–
(279)
(131)
3,631
2,020
24,342
26,207
(1,865)
–
–
Group
total
376,371
(226,445)
(26,428)
123,498
8,501
(18,329)
(2,096)
(467)
111,107
1,095
(5,326)
106,876
(31,924)
74,952
29,252
(308)
(28,944)
–
–
74,952
438,450
162,483
275,967
18,642
82,810
46,699
77,807
(347)
124,159
(42)
(642)
(13,384)
1,016
111,107
10,460
15,836
–
57,159
–
57,159
–
93,643
467
94,110
90
–
(257)
–
(257)
26,386
–
150,545
467
151,012
–
–
(42)
–
(42)
42
14
(586)
–
(586)
–
252
–
–
26,428
266
(13,132)
1,016
137,801
–
–
467
(13,132)
1,016
138,268
1 Other expenses and income exclude intra-Group management fees. Finance income and finance costs exclude intra-Group interest.
2 The segment assets and liabilities above exclude intra-Group balances.
3 Capital expenditure comprises additions to property, plant and equipment, mineral rights, exploration and intangible assets.
4 Adjusted EBITDA comprises earnings before interest, tax, depreciation, amortisation and impairment losses.
190
191
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
8. REVENUE
Accounting policy
Revenue from contracts with customers
Sale of precious metals
The Group sells precious metals, mainly gold, into the market through commodity trading transactions with financial institutions. Revenue
from metal sales is recognised when the Group satisfies its performance obligations under its contracts with financial institutions, by
transferring such metals to the financial institutions’ control. Transfer of control is at a point in time when risk and title to the metals passes to
the customer, being the date of delivery of the precious metals to Rand Refinery Proprietary Limited (Rand Refinery).
Revenue is recognised based on the current prevailing gold price and the ounces delivered to Rand Refinery. There is no element of
financing as payment is received shortly after delivery of the gold to Rand Refinery.
Revenue from the sale of slag is recognised at a point in time when the product is delivered to the customer and at the prevailing rate at the
transaction date.
Sale of blueberries
The Group sells blueberries in the market through Berryworld South Africa on consignment. The blueberries are subject to a quality review
by the purchaser, and the price is determined based on the quality and grade in line with the prevailing market price. Revenue is recognised
at a point in time based on the prevailing market price and the quantities delivered. There is no element of financing as payment is received
shortly after delivery.
Management fees
The Company has entered into service level agreements with its subsidiaries, whereby its directors and employees provide management
services to subsidiaries in the Group. These services are recovered based on time spent managing the subsidiaries (input method) and the
fees are recognised in profit or loss as revenue when the services are rendered.
Other revenue
Dividend received
The dividend from a subsidiary is recognised as revenue of the Company at a point in time which is when the Company’s right, as
shareholder, to receive payment has been established.
Disaggregation of revenue
US$ thousand
2023
2022
2023
2022
Group
Company
Revenue from contracts with customers
Gold revenue
Silver revenue
Blueberries revenue1
Management fees
Other revenue
Dividend received from subsidiary
Total revenue
1 Revenue amounting to US$216,000 (2022: US$ nil) was earned through export sales.
320,822
375,673
478
306
–
–
698
–
–
–
321,606
376,371
–
–
–
–
–
–
4,646
7,355
12,904
17,550
24,761
32,116
8. REVENUE continued
Contract liability
Significant judgement
The Group entered into a forward sale contract on 13 March 2023 with RMB, whereby 4,846oz of gold will be delivered monthly to RMB at
a fixed price of ZAR1,025,000/kg (US$1,723/oz) per month for a period of 24 months. The Group received consideration of US$21.6 million
(ZAR400 million) in advance which has been recognised as a contract liability. Revenue is recognised monthly on a straight-line basis.
Significant judgement has been applied in accounting for the transaction as IFRS 15: Revenue from Contracts with Customers as opposed
to IFRS 9: Financial Instruments given the valuation methodology applied in pricing the transaction. Promised consideration has been
adjusted for the time value of money as the period between payment by RMB and transfer of the promised goods by the Group exceeds
12 months and, as such, contains a significant financing component. The financing component has been presented as part of finance costs.
US$ thousand
Balance as at 1 July
Advance consideration received
Unwinding of finance costs
Recognised as revenue
Foreign currency translation movement
Balance as at 30 June
Less: current portion
Non-current portion
Group
Company
2023
2022
2023
2022
–
21,600
629
(4,381)
(146)
17,702
(10,621)
7 081
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
9. COST OF PRODUCTION
Cost of production is summarised by the nature of its components and consists of the following:
US$ thousand
Salaries and wages
Electricity
Mining
Processing and metallurgy
Engineering and technical services
Administration and other
Realisation costs
Security
Fuel costs
Group
Company
Note
2023
2022
2023
2022
(51,040)
(28,508)
(31,463)
(51,494)
(18,787)
(9,027)
(993)
(7,436)
(42)
(56,864)
(33,844)
(40,280)
(55,978)
(21,423)
(8,852)
(1,085)
(8,119)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Cost of production before depreciation and amortisation
(198,790)
(226,445)
Depreciation and amortisation
Total cost of production
15
(20,399)
(219,189)
(26,428)
(252,873)
192
193
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
10. OTHER INCOME/(EXPENSES)
US$ thousand
Other income
Gain on foreign exchange
Gain arising from unrealised derivatives
Gain arising from realised derivatives
Change in estimate on environmental rehabilitation obligation
Fair value gain on environmental rehabilitation obligation funds
Insurance compensation
South African Revenue Service (SARS) diesel refunds
Consulting fees
Other
Total other income
Other expenses
Loss arising from unrealised derivatives
Loss arising from realised derivatives
Expenses relating to short-term leases
Expenses relating to leases of low-value assets
Non-mining depreciation and amortisation
Non-executive directors' emoluments
Executive directors' emoluments
Cash-settled share-based payment expense
Auditors' remuneration1
– current year audit fee
– Over/(under) provision of audit fee
– Non-audit fees for other assurance services rendered
Salaries corporate office
Investor and public relations costs
Travel costs
Office costs
Business development costs
Consulting fees
Legal fees
Corporate social expenditure
Other
Total other expenses
Net other expenses
Group
Company
Notes
2023
2022
2023
2022
35
27
21
35
15
37
37
30
284
–
347
888
1,936
675
428
223
1 125
5,906
(209)
(111)
(53)
(6)
(504)
(334)
(1,845)
(894)
(437)
(442)
19
(14)
291
565
145
4,712
563
–
469
75
445
255
209
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
8,501
255
209
–
(163)
(742)
(104)
(266)
(357)
(1,625)
(5,617)
(408)
(323)
(59)
(26)
–
–
–
–
–
(334)
(1,845)
(678)
(229)
(231)
2
–
(3,477)
(3,275)
(1,042)
(226)
(279)
(310)
(87)
(665)
(200)
(1,486)
(2,130)
(13,253)
(7,347)
(171)
(212)
(120)
(208)
(734)
(352)
(1,771)
(2,204)
(18,329)
(9,828)
(93)
(12)
–
–
(51)
(62)
–
(412)
(4,758)
(4,503)
–
–
–
–
–
(356)
(1,625)
(3,078)
(279)
(244)
(35)
–
(835)
(122)
(4)
–
(17)
(16)
(149)
–
(708)
(7,189)
(6,980)
11. EMPLOYEE COSTS AND COMPLEMENT
Accounting policy
Short-term employment benefits
Salaries, wages, annual leave, incentives and non-monetary benefits are recognised in the period in which the related services are rendered
by employees. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay
this amount as a result of past service provided by an employee and the obligation can be estimated reliably.
Defined contribution plans
Payments to the Group’s defined contribution retirement benefit plans are recognised as an expense as they fall due. Payments made to
state-managed schemes are accounted for as defined contribution plans where the Group’s obligations under the schemes are equivalent to
those arising in a defined contribution retirement benefit plan and are recognised as an expense as they fall due.
US$ thousand
2023
2022
2023
2022
Salaries and wages included in profit or loss
56,362
61,764
2,887
2,460
Included in employee costs above are contributions to
the defined contribution plans
Salaries and wages capitalised to property, plant and equipment
3,987
4,075
2,132
3,347
18
–
18
–
Group
Company
Number of employees
Corporate
Barberton Blue
MTR project
Evander Mines
Barberton Mines
Total number of employees
Group
2023
Average
2023
Closing
2022
Average
2022
Closing
23
27
2
247
2,005
2,304
24
25
6
247
2,167
2,469
23
24
–
250
1,860
2,157
26
26
–
257
1,889
2,198
The majority of employees are required to be members of either the Barberton Pension Umbrella Fund, the Sentinel Retirement Fund, the
Mine Workers Provident Fund or the Alexander Forbes Group Provident Fund. These are defined contribution funds which are registered
under and governed by the South African Pension Funds Act, 24 of 1956, as amended. The assets of the schemes are held separately
from those of the Group in independent funds and they are under the control of the funds trustees. This cost represents the employer’s
contributions payable to the respective schemes by the Group and Company at rates specified in the rules of each scheme.
1 All audit fees are paid locally in South Africa with the exception of the PwC UK audit fee of US$184,000 (2022: US$152,000). Details of the Company’s policy
on the use of the statutory auditors’ non-audit services and the safeguards to ensure their independence and objectivity are disclosed in the audit and risk
committee report on pages 168 to 171.
194
195
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
12. FINANCE (COSTS)/INCOME
Accounting policy
Finance income comprises interest income received on cash deposits, loans receivable, attorney’s trust account and SARS.
Finance costs comprise interest on borrowings, lease liabilities, contract liability, instalment sale obligations, environmental rehabilitation
obligation, SARS and modification gains or losses on borrowings.
13. EARNINGS PER SHARE
Basic and diluted earnings per share is based on the Group’s profit or loss for the year attributable to owners of the Company, divided by the
weighted average number of shares outstanding during the year. Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares outstanding on the assumption that all potentially dilutive ordinary shares are converted to ordinary shares. There
was no dilutive impact on the weighted average number of shares in issue during the current or previous reporting period.
Finance income and costs are recognised using the effective interest method.
Reconciliation of weighted average number of ordinary shares
The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the
financial instrument to:
•
•
the gross carrying amount of the financial asset
the amortised cost of the financial liability.
In calculating finance income and costs, the effective interest rate is applied to the gross carrying amount of the asset or to the amortised
cost of the liability.
US$ thousand
Finance income
Finance income in respect of:
– Cash and cash equivalents
– Loans receivable
– Attorney's trust account
– SARS
– Other
Total finance income
Finance costs
Finance costs in respect of:
– Borrowings
– Modification (loss)/gain on borrowings
– Lease liabilities
– Environmental rehabilitation obligation
– Contract liability
– SARS
– Instalment sale obligation
– Other
Total finance costs
Net finance (costs)/income
Group
Company
2023
2022
2023
2022
991
8
134
6
–
601
352
–
139
3
99
28
–
–
–
–
–
–
–
–
1,139
1,095
99
28
(6,351)
(995)
(389)
(1,267)
(629)
–
–
(61)
(9,692)
(8,553)
(3,885)
956
(478)
(1,878)
–
(17)
(9)
(15)
(5,326)
(4,231)
–
–
–
–
–
–
–
–
–
99
–
–
–
–
–
(16)
–
(12)
(28)
–
Number of shares in issue in thousands
Ordinary shares in issue
Treasury shares
Ordinary shares outstanding
Adjustment for weighting of ordinary shares outstanding as a result of the share buy-back
Weighted average number of ordinary shares outstanding at the reporting date
Basic and diluted earnings per share
The calculation of basic and diluted earnings per ordinary share is based on the following:
US$ thousand
Profit attributable to owners of the Company
Basic and diluted earnings per share (US cents)
Group
2023
2022
2,222,862
2,222,862
(306,358)
(306,358)
1,916,504
1,916,504
–
9,562
1,916,504
1,926,066
Group
2023
2022
61,139
75,137
3.19
3.90
Headline earnings per share
Headline earnings per share is based on the Group’s headline earnings, determined in accordance with SAICA Circular 2023/1 which forms
part of the JSE Listings Requirements, divided by the weighted average number of shares outstanding during the reporting period.
The reconciliation between earnings and headline earnings is as follows:
US$ thousand
Profit attributable to owners of the Company
Adjusted for:
Insurance compensation
Tax on insurance compensation
Impairment loss on plant and equipment
Tax on impairment loss on plant and equipment
Headline earnings
Headline and diluted headline earnings per share (US cents)
Net asset and tangible net asset value
US cents
Net asset value
Net asset value per share1
Tangible net asset value
Tangible net asset value per share2
Group
2023
2022
61,139
75,137
(675)
–
–
–
60,464
3.15
–
–
467
–
75,604
3.93
Group
2023
2022
294,596
15.37
234,215
12.22
294,609
15.37
222,338
11.60
1 Net assets equates to the total assets less total liabilities.
2 Tangible net assets represent total assets less total liabilities, mineral rights, goodwill, mining properties, exploration assets and intangible assets.
The net asset and tangible net asset value per share is calculated by dividing the net asset and tangible net asset value by the number
of ordinary shares outstanding at the end of the reporting period. This information is not required by IFRS but is presented as additional
information to the users of the financial statements.
196
197
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
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INFORMATION
14. DIVIDENDS
Accounting policy
Final dividends are recognised as a liability on the date on which such dividends are declared.
Dividends withholding tax is a tax withheld on dividends paid to shareholders that are subject to this tax at a rate applicable in terms of
legislative requirements. The Group withholds dividend tax on behalf of its shareholders, as a representative taxpayer, at the applicable
rate on dividends paid. Amounts withheld are not recognised as part of the Group’s tax expense but rather as part of the dividend paid,
recognised in equity.
Cash flows from dividends paid and the reciprocal dividend are classified under operating activities in the statement of cash flows.
Dividends declared and paid
The board has proposed a final dividend of ZAR400.1 million for the 2023 reporting period (approximately US$21.2 million), equal to
ZA 18.00000 cents per share or approximately US 0.95592 cents per share (0.75219 pence per share). The dividend is subject to approval
by shareholders at the AGM, which is convened for 23 November 2023.
The British pound (GBP) and US$ proposed final dividend were calculated based on a total of 2,222,862,046 shares in issue and an
illustrative exchange rate of US$/ZAR:18.83 and GBP/ZAR:23.93, respectively.
In light of the results for the current reporting period and the favourable financial prospects for the operations in the 2024 reporting period,
the board has applied its discretion and has proposed a dividend consistent with the Company’s dividend policy guidelines, which provide
for a 40% to 50% payout ratio of free cash flow.
A final dividend of ZA 18.00000 cents per share equating to US 1.05820 cents per share (0.86915 pence per share) was approved for the
2022 financial year at the AGM held on 24 November 2022.
15. PROPERTY, PLANT AND EQUIPMENT
Accounting policy
Property, plant and equipment comprises all properties, plant and equipment, mineral rights and mining properties, exploration assets,
right-of-use assets (refer below), capital under construction and bearer plants. These assets (excluding exploration assets and capital
under construction) are initially measured at cost whereafter they are measured at cost less accumulated depreciation and accumulated
impairment losses. Exploration assets and capital under construction are initially measured at cost, whereafter they are measured at cost
less accumulated impairment losses.
Costs include expenditure that is directly attributable to the acquisition or construction of the asset, borrowing costs capitalised, as well as
the costs of dismantling and removing an asset and restoring the site on which it is located. Subsequent costs are included in the asset’s
carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be measured reliably. Exploration and evaluation costs are expensed in the year
in which they are incurred until they result in projects that the Group evaluates as being technically or commercially feasible, have sufficient
resources to complete development and can demonstrate that the projects will generate future economic benefits.
Exploration assets consist of the costs of acquiring rights and activities associated with converting a Mineral Resource to a Mineral Reserve.
The process thereof includes drilling, sampling and other processes necessary to evaluate the technical feasibility and commercial viability
of a Mineral Resource to prove whether a Mineral Reserve exists. Exploration assets also include geological, geochemical and geophysical
studies associated with prospective projects and tangible assets which comprise property, plant and equipment used for exploratory
activities. Costs are capitalised to the extent that they are a directly attributable exploration expenditure and classified as a separate class of
assets on a project-by-project basis. Once a Mineral Reserve is determined, or the project is ready for development, the asset attributable
to the Mineral Reserve or project is tested for impairment and then reclassified to the appropriate class of assets. Depreciation commences
when the assets are available for use.
The blueberry plants are recognised as bearer plants as they are used in the supply of agricultural produce (blueberries) and are expected to
bear produce for more than one period and have a remote likelihood of being sold as agricultural produce, except for incidental scrap sales.
15. PROPERTY, PLANT AND EQUIPMENT continued
Accounting policy continued
Depreciation
Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using
appropriate methods over their estimated useful lives, and is generally recognised in profit or loss. Land and capital under construction are
not depreciated.
Mining rights and mining property, plant and machinery, shafts and exploration assets are depreciated over the estimated life-of-mine to their
residual values using the units-of-production method based on estimated Proven and Probable Mineral Reserves.
Buildings and infrastructure and items of plant and machinery for which consumption is not linked to production are depreciated to their
residual values at varying rates on a straight-line basis over their estimated useful lives or the life-of-mine, whichever is shorter. The estimated
useful lives may vary between five and 20 years.
Other non-mining assets are depreciated on the straight-line basis over their expected useful lives which may vary between three and
10 years.
Right-of-use assets are depreciated on a straight-line basis from the lease commencement date over the useful life of the asset if ownership
of the underlying asset will transfer to the Group at the end of the lease term.
Bearer plants are depreciated on a straight-line basis over their estimated useful lives, being 10 years.
When capital under construction assets are capable of operating in the manner as intended by management, they are transferred to the
appropriate asset class and depreciated in line with their respective asset class.
Depreciation methods, residual values and estimated useful lives are reviewed annually at each reporting date and adjusted if appropriate.
Right-of-use assets
The Group recognises a right-of-use asset and a corresponding lease liability at each lease commencement date with respect to all lease
arrangements in which it is the lessee. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date, less any lease incentives received and any initial direct costs
which comprise the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or
the site on which it is located, less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated
depreciation and accumulated impairment losses. The Group assesses right-of-use assets for impairment when such indicators exist and
right-of-use assets are adjusted for certain remeasurements of the lease liability.
Derecognition
Property, plant and equipment are derecognised on disposal or when no future economic benefits are expected from their use or disposal.
Any gain or loss on the derecognition of an item of property, plant and equipment (calculated as the net proceeds from disposal and the
carrying amount of the item) is recognised in profit or loss.
Significant judgements
Impairment and impairment reversals
The Group assesses at each reporting date whether there are any indicators that its assets and CGUs may be impaired or require previously
recognised impairment losses to be reversed. Operating and economic assumptions which could affect the valuation of assets using
discounted cash flow models are regularly reviewed and updated as part of the Group’s monitoring of operational and financial performance
and forecasting processes. Judgement is required in determining if operating and economic changes are significant and impact the
performance potential of an asset or CGU, and are therefore an indication of an impairment loss or an impairment reversal.
198
199
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
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ENVIRONMENTAL, SOCIAL AND
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OTHER
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15. PROPERTY, PLANT AND EQUIPMENT continued
Significant judgements continued
Cash-generating units
The Group defines a CGU as the smallest identifiable group of assets that generate cash flows largely independent of cash flows from other
assets or a group of assets. The allocation of assets to a CGU requires judgement.
The Group’s CGUs have been determined as follows:
• Barberton Mines’ underground operations: Underground operations (Fairview, Sheba and Consort) are reliant on the Fairview BIOX®
plant for processing and these operations have been grouped together as a single CGU
• BTRP: The BTRP has the ability to treat and smelt gold independently of the Fairview BIOX® plant and is independent of the
underground operations resulting in the BTRP representing a single CGU
• Egoli project: A drilling programme and feasibility study were completed in September and November 2017, respectively. Dewatering in
accordance with the phased development approach has commenced. The Egoli project will be developed as a project independent of
Evander Mines’ underground operations resulting in the project representing a separate CGU
• Elikhulu: The surface mining operation has been constructed in a manner such that it is independent of Evander Mines’ underground
operations resulting in Elikhulu being determined as a single CGU
• Evander Mines’ underground operations: This CGU includes 7 Shaft, 8 Shaft and the run-of-mine circuit at the Kinross metallurgical
plant and 8 Shaft pillar mining, which are independent of Elikhulu and the Egoli project, resulting in them representing a single CGU
• Agricultural ESG projects: This CGU comprises Barberton Blue as well as other small-scale agricultural projects in Barberton Mines’
host community areas
• Solar projects: This CGU currently consists of the solar plant located at Evander Mines
• MTR project: This CGU comprises MTR, Mogale Gold and MSC in which the construction of the tailings retreatment plant has
commenced
• Sudan: This CGU consists of exploration assets and five prospecting concessions (or exploration licences) in north-eastern Sudan.
Depreciation – units-of-production method
The calculation of the units-of-production rate of depreciation could be affected if actual production in the future varies significantly from
current forecast production. This would generally arise when there are significant changes in any of the factors or assumptions used in
estimating Mineral Reserves and Mineral Resources. These factors could include:
• changes in Mineral Reserves and Mineral Resources
•
the grade of Mineral Reserves and Mineral Resources
• differences between actual commodity prices and commodity price assumptions
• unforeseen operational issues at mine sites including planned extraction efficiencies
• changes in capital, operating, mining processing and reclamation costs, discount rates and foreign exchange rates.
15. PROPERTY, PLANT AND EQUIPMENT continued
Significant judgements continued
Cash flow projections and key assumptions
Expected future cash flows used in discounted cash flow models are inherently uncertain and could materially change over time. Cash flow
projections are significantly affected by a number of factors including Mineral Resources and Mineral Reserves together with economic
factors such as commodity prices, foreign exchange rates and discount rates and estimates of production costs and future capital
expenditure.
Cash flow projections are based on financial forecasts and life-of-mine plans incorporating key assumptions (refer to page 205) as
detailed below:
• Mineral Resources and Mineral Reserves: Mineral Resources and, where considered appropriate, Mineral Reserves, are reflected within
projected cash flows, based on Mineral Resources and Mineral Reserves statements (in accordance with the SAMREC Code for South
African properties) and exploration and evaluation work undertaken by appropriately qualified persons. Mineral Resources are included
where management has a high degree of confidence in their economic extraction, despite additional evaluation still being required prior to
meeting the required confidence to convert to Mineral Reserves. Refer to the abridged Mineral Resources and Mineral Reserves report on
pages 103 to 115 or our website at
for further disclosure of the Group’s Mineral Resources and Mineral Reserves and life-of-mine plans
https://www.panafricanresources.com/operations-at-a-glance-2/mineral-resource-mineral-reserve-2/
• Commodity prices: Commodity prices are based on the latest internal forecasts, benchmarked with external sources of information,
to ensure that they are within the range of available analyst forecasts. Where existing sales contracts are in place, the effects of such
contracts or hedging arrangements are considered in determining future cash flows
• Discount rates: Value in use and fair value less cost of disposal projections are sensitive to changes in the discount rate
• Operating costs, capital expenditure and other operating factors: Operating costs and capital expenditure are based on financial
budgets. Cash flow projections are based on life-of-mine plans and internal management forecasts. Cost assumptions incorporate
management experience and expectations, as well as the nature and location of the operation and the risk associated therewith
(for example, the grade of Mineral Resources and Mineral Reserves varying significantly over time and unforeseen operational issues).
Impairment considerations
There was no change in the composition of the Group’s CGUs other than the addition of the MTR project CGU (note 36). No impairment
indicators were identified in the Group’s CGUs for impairment testing in the current and previous reporting periods.
The Sudan exploration project is located in the Red Sea State of Sudan, near the key coastal city of Port Sudan. This area is not affected by
the conflict, and the assets remain unscathed.
Following the outbreak of violence in Sudan, all expatriate employees working on the exploration project were safely repatriated. All of the
Group’s assets situated in Sudan, including the fire assay multi-element analytical laboratory, are currently guarded and have been placed
under care and maintenance. The return of the expatriate workforce was initiated during August 2023 to resume exploration activities. The
carrying amount of the Group’s investment in the Sudan exploration project to date, including the acquisition of the exploration concessions
and other assets, amounts to approximately US$5.0 million.
200
201
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
15. PROPERTY, PLANT AND EQUIPMENT continued
US$ thousand
GROUP
Cost
Balance as at 1 July 2021
Transfers to intangible assets
Additions
Disposals
Borrowing costs capitalised
Decrease in environmental rehabilitation obligation asset5
Foreign currency translation reserve movement
Balance as at 30 June 2022
Additions – right-of-use asset
Acquisition6
Additions
Disposals
Transfers
Foreign currency translation reserve movement
Balance as at 30 June 2023
Accumulated depreciation and
accumulated impairment losses
Balance as at 1 July 2021
Transfers to intangible assets
Depreciation
Impairment loss7
Disposals
Decrease in environmental rehabilitation obligation asset5
Foreign currency translation reserve movement
Balance as at 30 June 2022
Depreciation
Disposals
Transfers
Foreign currency translation reserve movement
Balance as at 30 June 2023
Carrying amount
As at 30 June 2022
As at 30 June 2023
–
–
–
–
–
–
–
–
–
–
(5,558)
39,685
(4,051)
28,923
–
–
–
–
–
(316)
2,253
–
18
3,221
–
–
–
–
138
–
598
(488)
5,004
(5,416)
35,005
–
–
–
–
–
–
–
–
–
–
–
–
–
(20,954)
–
(804)
–
–
–
2,627
(19,131)
(487)
–
(562)
2,650
(17,530)
–
–
–
–
(54)
(3,914)
24,955
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,500
600
–
–
–
(98)
1,402
–
–
–
–
–
(39)
561
–
–
282
260
–
–
(115)
1,569
–
–
248
1,069
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(82)
–
–
(3)
(85)
561
984
Mineral rights
and mining
property
Exploration
assets –
other2
Exploration
assets
– Sudan
Land1
Leasehold
improvements
Buildings
and
infrastructure
– owned
Buildings
and
infrastructure
– right-of-use
assets
Plant and
machinery –
owned
Plant and
machinery –
right-of-use
assets
Capital
under
construction3
Shafts
and
exploration
Bearer
plants
Other4
Total
2,569
45,243
32,974
85,869
606
302,269
5,401
21,984
114,949
–
6,158
1,640
–
(812)
(11,004)
81,851
–
–
2,772
–
13,997
(12,028)
86,592
–
–
–
–
–
(74)
532
312
–
–
–
–
(89)
755
(53)
11,244
17,093
–
–
(38,975)
291,578
–
–
11,038
(75)
12,134
(40,542)
274,133
–
127
–
–
–
(672)
4,856
–
–
(3)
–
(39)
(655)
4,159
(34,299)
(314)
(155,988)
(1,223)
–
(99)
–
–
–
45
(368)
(189)
–
–
61
(496)
–
(17,519)
(467)
1,377
–
20,245
(152,352)
(13,439)
55
3,914
21,156
–
(407)
–
–
–
177
(1,453)
(582)
–
13
229
(140,666)
(1,793)
–
(5,291)
–
–
81
4,553
(34,956)
(3,486)
–
(6,610)
5,302
(39,750)
46,895
46,842
7,249
87,644
42
1,292
–
12,442
–
–
(14,934)
112,499
–
–
–
–
–
–
–
–
–
(84)
1,208
–
–
7
–
–
(20,169)
179,974
(164)
1,051
(52,156)
–
(2,347)
–
–
–
6,560
(47,943)
(2,341)
–
2,968
6,457
–
–
(22)
–
–
–
1
(21)
(111)
–
–
9
–
50,688
(22,005)
558
–
(4,605)
46,620
–
–
–
(26,575)
(5,226)
22,068
–
–
–
–
–
–
–
–
–
–
–
–
633
612,497
–
51
(2)
–
–
(81)
601
–
–
351
(102)
(5)
(95)
750
(53)
82,810
(1,940)
558
(812)
(80,491)
612,569
312
18
112,959
(177)
56
(88,653)
637,084
(641)
(265,575)
99
(77)
–
–
–
76
(543)
(96)
–
27
77
99
(26,566)
(467)
1,377
81
34,284
(256,767)
(20,813)
55
(250)
35,938
(40,859)
(123)
(535)
(241,837)
2,253
5,004
20,554
17,475
28,923
24,955
1,402
1,569
164
259
139,226
133,467
3,403
2,366
46,620
22,068
64,556
139,115
1,187
928
58
215
355,802
395,247
1 Land registers are maintained at the offices of Barberton Mines and Evander Mines, which may be inspected by a member or their duly authorised agents.
2 Exploration assets comprising Evander South, Rolspruit and Poplar were recognised on 1 March 2013 at their respective fair values in terms of
IFRS 3: Business Combinations.
3 Capital under construction represents ongoing capital projects within the Group.
4 Other assets include computer equipment and furniture and fittings.
5 Refer to note 27.
6 Refer to note 36.
7 The impairment loss relates to a slurry tank that failed.
Refer to note 28 for property, plant and equipment pledged as security for the Group’s senior debt.
202
203
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
15. PROPERTY, PLANT AND EQUIPMENT continued
Reconciliation of depreciation and amortisation as included in cost of production:
US$ thousand
Depreciation on property, plant and equipment
Amortisation of intangible assets
Add back: other depreciation and amortisation
Total depreciation and amortisation included in cost of production
Group
Notes
2023
2022
17
10
9
(20,813)
(26,566)
(90)
504
(128)
266
(20,399)
(26,428)
16. GOODWILL
Accounting policy
Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses.
Impairment
The Group tests its goodwill annually for impairment or more frequently if events or circumstances indicate a potential impairment.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that
are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or
groups of CGUs that are expected to benefit from the synergies of the combination.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal. An impairment loss is
recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognised in profit or loss.
They are allocated firstly to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of
the other assets in the CGU on a pro rata basis.
An impairment loss in respect of goodwill is not reversed.
US$ thousand
Goodwill1
Group
Company
2023
2022
16,117
18,642
2023
–
2022
–
1 The movement is due to the translation at the closing rate of US$/ZAR:18.83 (2022: US$/ZAR:16.28).
The Group’s goodwill was historically recognised on the acquisition of Barberton Mines in July 2007 and was allocated to Barberton Mines’
mining operations’ CGU from which the expected benefit from the business combination will arise.
Barberton Mines’ impairment assessment was performed in accordance with the Group’s accounting policies and no impairment of the
goodwill was identified.
The recoverable amount of Barberton Mines’ CGU is determined from a discounted life-of-mine cash flow model to indicate fair value less
cost to sell. The key assumptions for the fair value less cost to sell calculation include the discount rate, changes to the gold price and
direct costs expected over the life-of-mine.
16. GOODWILL continued
Impairment assessment assumptions
The Group determines the recoverable amounts of goodwill by calculating the fair value less cost to sell from the discounted life-of-mine
model cash flows of the respective CGUs. The fair value was categorised as Level 3 as the valuation technique depends to a significant
extent on unobservable valuation inputs. The Group prepares cash flow projections derived from the most recent financial forecasts
approved by management. Fair value less cost to sell is derived by discounting future cash flows of the CGU on a nominal basis using the
following key assumptions.
Nominal discount rate (post-tax) (%)
Gold price (ZAR/kg) – initial year1
Long-term cost inflation (%)
Life-of-mine (years)
2023
16.4
2022
15.5
1,139,656
953,003
5.1
20
5.1
20
1 The forecast nominal gold price used in the discounted life-of-mine cash flow model for impairment testing purposes is determined for each year by
management’s best estimate of future gold prices, based on historical and market data from both internal and external sources. In determining the forecast
gold price for each year, management used consensus forecast prices and forward US$/ZAR exchange rates from various market sources.
There is a degree of uncertainty associated with the estimation of the long-term gold price forecast and to provide for this risk,
management has estimated a reasonable downside scenario by considering a possible decline in the nominal gold price to ZAR954,000/kg
(June 2022: ZAR869,000/kg) with a 4.55% annual growth over the life-of-mine, assuming all other variables remain constant. The outcome
of this sensitivity analysis would result in an impairment loss on goodwill of US$16.1 million (2022: US$18.6 million).
The following table addresses additional sensitivities in respect of the impairment of goodwill:
Unit
Sensitivity
Adjusted
inputs
(Decrease)/
increase in
recoverable
amount
US$
thousand
Resultant
goodwill
impairment
US$
thousand
ZAR/kg
5% decrease in
US$ gold price1
% 1% point increase
in discount rate1
US$/ZAR
US$/ZAR
5% stronger
3% weaker1
ZAR/kg
5% decrease in
US$ gold price1
%
1% point increase
in discount rate1
US$/ZAR
US$/ZAR
5% stronger
3% weaker1
1,082,673
(27,334)
16,117
17.40
17.39
18.85
(4,850)
(27,334)
15,754
–
16,117
–
905,353
(44,310)
18,642
16.50
16.06
17.41
(8,041)
(44,310)
25,328
–
18,642
–
2023
Gold price – initial year
Nominal post-tax discount rate
South African rand
South African rand
2022
Gold price – initial year
Nominal post-tax discount rate
South African rand
South African rand
1 The annual inputs in the life-of-mine cash flow model for impairment testing purposes were adjusted to reflect the change as per the sensitivities.
204
205
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
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INTANGIBLE ASSETS
17.
Accounting policy
Intangible assets comprise software costs and are measured at cost less accumulated amortisation and accumulated impairment losses.
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates.
All other expenditure is recognised in profit or loss as incurred. These intangible assets are amortised over their estimated useful lives,
usually between three and five years, or the duration of the licences. Amortisation methods, residual values and estimated useful lives are
reviewed at each reporting date.
US$ thousand
Software costs
Balance as at 1 July
Gross carrying amount
Accumulated amortisation
Accumulated impairment losses
Transfer from property, plant and equipment
Additions
Amortisation
Foreign currency translation reserve movement
Balance as at 30 June
Gross carrying amount
Accumulated amortisation
Accumulated impairment losses
Group
Company
2023
2022
2023
2022
281
1,282
(973)
(28)
–
113
(90)
(39)
265
1,215
(926)
(24)
505
1,403
(866)
(32)
(46)
2
(128)
(52)
281
1,282
(973)
(28)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
No changes were made to the useful lives of the intangible assets based on the review in the current and previous reporting periods.
No indicators of impairment were present in the current or previous reporting period and therefore no impairment loss was recognised.
LOAN RECEIVABLE
18.
Accounting policy
Refer to note 4.5 for the policy addressing financial assets at amortised cost.
US$ thousand
Other loan receivable1
Total loan receivable
Non-current portion
Current portion
Total loan receivable
Group
Company
2023
2022
2023
2022
–
–
–
–
–
271
271
–
271
271
–
–
–
–
–
–
–
–
–
–
1
Other loan receivable accrued interest at the prevailing prime rate with a 2% margin with repayment terms of up to 24 months. The loan receivable was
settled on 31 December 2022.
INVESTMENTS IN SUBSIDIARIES
19.
Accounting policy
The Company, in its separate financial statements, measures investments in subsidiaries at cost less accumulated impairment losses, if any.
The subsidiaries listed as follows are incorporated in South Africa, which is also their principal place of business except for Pan African
Resources Minerals DMCC which is registered in Dubai and Pan African Resources Minerals Co. Limited which is registered in Sudan.
The registered address of the Company is 2nd Floor, 107 Cheapside, London, EC2V 6DN. The registered address of the Company’s
South African subsidiaries is The Firs Building, 2nd Floor, Office 204, corner Biermann and Cradock Avenues, Rosebank, Johannesburg, 2196.
The registered address of the Dubai company is Dubai Multi Commodities Centre, DMCC Business Centre, AG Tower, Dubai. The registered
address of the Sudan company is Khartoum, Khartoum 2, Block No 5, House No 8.
19.
INVESTMENTS IN SUBSIDIARIES continued
The Company has investments in the following subsidiaries:
Statutory holding
2023
%
2022
%
Effective
holding
of the
Company
%
Company
Carrying amount
US$ thousand
2023
2023
Principal activity
Gold mining
95.00
95.00
100.00
Gold mining
100.00
100.00
100.00
Gold mining
100.00
100.00
100.00
Gold mining
100.00
100.00
100.00
Gold mining
Gold mining
100.00
100.00
–
–
100.00
100.00
Treasury services
100.00
100.00
100.00
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Holding company
100.00
100.00
100.00
82,416
95,324
Administration services
100.00
100.00
100.00
1,062
1,229
B-BBEE company
100.00
100.00
100.00
Investing
49.90
49.90
100.00
Employee share ownership
plan (ESOP) arrangement
ESOP arrangement
ESOP arrangement
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Solar plant
100.00
100.00
100.00
Agricultural ESG project
80.00
80.00
80.00
Agricultural ESG project
100.00
100.00
100.00
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Property company
100.00
100.00
100.00
56
64
Holding company of the
operations in Sudan
80.00
80.00
80.00
Exploration – Sudan
100.00
100.00
100.00
20
1
11
2
83,555
96,630
South Africa
Barberton Mines Proprietary Limited
(Barberton Mines)1
Evander Gold Mines Proprietary
Limited (Evander Gold Mines)1
Evander Gold Mining Proprietary
Limited (Evander Mines)
Mogale Tailings Retreatment
Proprietary Limited (MTR)2
Mogale Gold Proprietary Limited
(Mogale Gold)2
Mintails SA Soweto Cluster
Proprietary Limited (MSC)2
Pan African Resources Funding
Company Limited (Funding Company)3
Pan African Resources SA Holding
Company Proprietary Limited
(PAR SA Holdings)4
Pan African Resources Management
Services Company Proprietary Limited
(PAR Management Services)5
Concrete Rose Proprietary Limited
(Concrete Rose)6
PAR Gold Proprietary Limited
(PAR Gold)7
Barberton Mines BEE Company
Proprietary Limited (Barberton
Mines BEE Company)8
Barberton Mines ESOP Trust8
Evander Mines ESOP Trust9
Evander Solar Solutions Proprietary
Limited (Evander Solar Solutions)10
Barberton Blue Proprietary Limited
(Barberton Blue)
Barberton Green Proprietary Limited
(Barberton Green)
Pan African Resources Properties
Proprietary Limited (PAR Properties)11
Other
Pan African Resources Minerals
DMCC12
Pan African Resources Minerals
Co. Limited12
Total investments in subsidiaries
206
207
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19.
INVESTMENTS IN SUBSIDIARIES continued
US$ thousand
Movement in investments in subsidiaries
Balance as at 1 July
Investment in Pan African Resources Minerals Co. Limited
Investment in Pan African Resources Minerals DMCC
Foreign currency translation reserve movement
Total investments in subsidiaries
Company
2023
2022
96,630
110,150
–
12
(13,087)
83,555
2
11
(13,533)
96,630
1 Employees own 5% of the issued share capital of Barberton Mines and Evander Mines through an ESOP. During the 2018 reporting period, the Group’s
South African investments were restructured resulting in Barberton Mines and Elikhulu being transferred to PAR SA Holdings. The ESOP at Evander Mines is
being reviewed to ensure compliance with B-BBEE share ownership programme requirements. Refer to note 26.
2 MTR is the Group holding company for the MTR project operations.
3 Funding Company centrally provides treasury services to the Group entities. It was converted to a public company in October 2022 as part of the JSE Debt
Listing Requirements.
4 PAR SA Holdings is the Group’s holding company for the mining investments in Mpumalanga province.
5 The purpose of PAR Management Services is to provide management services to the mining operations.
6 The Group’s B-BBEE transaction was unwound during the previous reporting period.
7 During the 2016 reporting period, the Group concluded a share buy-back transaction in which 49.9% of PAR Gold’s issued share capital was acquired.
The transaction translated to a share buy-back for accounting purposes due to Funding Company receiving the majority of the economic benefits of
PAR Gold. Following the conclusion of the B-BBEE restructure on 15 January 2018, PAR Gold’s shareholders now comprise 49.9% Funding Company and
50.1% K2015200726 Proprietary Limited (K Company), of which 49.5% of the shares held by K Company derive no economic benefit although all the shares
are entitled to a voting right. PAR Gold disposed of 130 million shares in the Company on 30 May 2018, resulting in its shareholding in the Company reducing
to 13.8% (2022:13.8%). Refer to note 26.
8 The Barberton Mines ESOP arrangement was established through two entities which are effectively controlled by the Group. These entities are Barberton
Mines BEE Company which owns 5% of the issued share capital in Barberton Mines and the Barberton Mines ESOP Trust which holds all the issued share
capital in Barberton Mines BEE Company. Barberton Mines’ employees are beneficiaries of the ESOP Trust. The Barberton Mines ESOP Trust and B-BBEE
company are consolidated into the Group. Refer to note 33.
9 The Evander Mines ESOP arrangement was established through two entities which are effectively controlled by the Group. These entities are Evander Mines
BEE Company which owns 5% of the issued share capital in Evander Mines and the Evander Mines ESOP Trust which holds all the issued share capital in
Evander Mines BEE Company. Evander Mines’ employees are beneficiaries of the ESOP Trust. The Evander Mines ESOP Trust and B-BBEE company are
consolidated into the Group. The ESOP at Evander Mines is being reviewed to ensure compliance with B-BBEE share ownership programme requirements.
Evander Mines BEE Company was deregistered in the previous reporting period and the 5% shares are now held by the ESOP Trust.
10 The purpose of Evander Solar Solutions is to establish a solar plant to provide electricity to the mining operations.
11 PAR Properties owns a historical building in Barberton.
12 Pan African Resources Minerals DMCC registered in Dubai is the holding company of Pan African Resources Minerals Co. Limited registered in Sudan.
The Group, through Pan African Minerals secured five prospecting concessions (or exploration licences) in north-eastern Sudan during the previous
reporting period.
INVESTMENTS – OTHER
20.
Accounting policy
The investment in equity interest is measured at fair value through other comprehensive income. Refer to note 4.5 for the policy addressing
financial assets measured at fair value through other comprehensive income.
US$ thousand
Principal activity
MC Mining Limited (MC Mining)1
Coal mining
Group
Company
2023
–
2022
1,127
2023
–
2022
1,127
The registered address of the investment is Suite 8, 7 The Esplanade, Mt Pleasant WA 6153, Australia.
US$ thousand
Movement in investment
Balance as at 1 July
Fair value adjustment through other comprehensive income
Disposal of investment
Foreign currency translation reserve movement
Total investments – other
Group
Company
2023
2022
2023
2022
1,127
1,563
(2,485)
(205)
–
1,064
208
–
(145)
1,127
1,127
1,563
(2,485)
(205)
–
1,064
208
–
(145)
1,127
1 During the reporting period, the Company disposed of its investment in MC Mining for an amount of US$2.5 million. The Company previously held
15,432,581 of MC Mining’s issued share capital representing a 9.3% shareholding. MC Mining is an emerging coal exploration, development and mining
company operating in South Africa.
21. ENVIRONMENTAL REHABILITATION OBLIGATION FUND
Accounting policy
These investments are classified as financial assets at fair value through profit or loss. Refer to note 4.5 for the policy addressing financial
assets measured at fair value through profit or loss.
Funds held in insurance investment products
US$ thousand
Balance as at 1 July 2021
Drawdowns
Fair value gain recognised in profit or loss
Foreign currency translation reserve movement
Balance as at 30 June 2022
Acquisition
Drawdowns
Fair value gain recognised in profit or loss
Foreign currency translation reserve movement
Balance as at 30 June 2023
Notes
Barberton
Mines
Evander
Mines
Mogale
Gold
10
37
10
4,326
(30)
94
(536)
3,854
–
(30)
325
(539)
3,610
21,484
(121)
469
(2,662)
19,170
–
(100)
1,611
(2,681)
18,000
–
–
–
–
–
18
–
–
(1)
17
Total
25,810
(151)
563
(3,198)
23,024
18
(130)
1,936
(3,221)
21,627
The Group invests in an insurance investment product held by Cenviro Solutions Proprietary Limited (Cenviro Solutions) underwritten by
Centriq Insurance Company Limited. Contributions are made in the form of premiums paid to Cenviro Solutions and funds are held in
insurance investment products. The insurance policies are held in the respective names of the mining operations, Evander Mines and
Barberton Mines.
Cenviro Solutions has issued guarantees to the Department of Mineral Resources and Energy (DMRE) in support of the Group’s
environmental rehabilitation obligation. The Group’s environmental rehabilitation obligation is fully funded by the investments held in the
investment products.
Refer to note 27 for details of the environmental rehabilitation obligation.
208
209
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
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22.
INVENTORY
Accounting policy
Inventory is measured at the lower of cost, determined on a weighted average basis, and net realisable value. Costs include direct mining
costs and mine overheads.
An allowance for obsolete or damaged inventory is maintained by the Group. The level of the allowance for obsolete inventory is equivalent
to the value of the difference between the cost of the inventory and its net realisable value or current replacement cost at the reporting date.
Movement in this allowance is recognised in cost of production.
US$ thousand
Consumables stores
Current portion of long-term inventory
Allowance for obsolete inventory
Current inventory
Long-term inventory1
Total inventory
Inventory recognised in cost of production
Group
Company
2023
2022
2023
2022
10,197
10,585
78
(708)
9,567
5,992
15,559
26,446
113
(721)
9,977
189
10,166
22,303
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 The long-term inventory increased in the current reporting period as a result of the Mogale Gold and MSC acquisition (refer to note 36). Previously the long-
term inventory related to a holding of tailings contained in Barberton Mines’ Harper tailings storage facility (TSF).
There was no write-down of inventory to net realisable value or any reversal of write-downs in the current or previous reporting period.
23. TRADE AND OTHER RECEIVABLES
Accounting policy
Trade and other receivables are measured at initial recognition at fair value plus transaction costs. They are subsequently measured at
amortised cost, less an allowance for ECLs. Refer to note 4.5 for the policy addressing financial assets measured at amortised cost.
US$ thousand
Trade receivables
Net other receivables
– Other receivables1
– Loss allowance
Total financial assets
Prepayments
Value-added tax (VAT) receivable
Total non-financial assets
Total trade and other receivables
Group
Company
2023
6,946
2,218
2,489
(271)
9,164
1,315
4,703
6,018
2022
8,020
2,870
2,930
(60)
10,890
1,150
5,235
6,385
15,182
17,275
2023
2022
–
–
–
–
–
32
58
90
90
–
–
–
–
–
53
–
53
53
1
Other receivables arise from transactions outside the usual operating activities of the Group and consist mainly of sundry debtors of US$1.9 million
(2022: US$2.9 million) of Evander Mines and Barberton Mines.
It is the Group’s policy to only sell gold to and transact its foreign exchange with reputable South African financial institutions. The sale of
gold and foreign exchange is executed on behalf of the Group by TreasuryOne Proprietary Limited, an independent treasury consultancy
firm. Due to the creditworthiness of these institutions, the Group has not recognised an allowance for ECLs on trade receivables. Proceeds
from the sale of gold are received within seven days of delivery from these institutions. These financial institutions are the major customers
representing more than 95% of the trade receivable balance for the gold mining subsidiaries, namely Barberton Mines and Evander Mines.
The loss allowance on other receivables is estimated by the Group’s management based on the current economic environment and the
individual debtor’s circumstances.
Trade receivables have been pledged as security in terms of the Group’s senior debt as disclosed in note 28.
24. CASH AND CASH EQUIVALENTS
Accounting policy
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily
convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Cash and cash equivalents are classified
as financial assets measured at amortised cost.
Refer to note 4.5 for the policy addressing financial assets measured at amortised cost.
US$ thousand
Cash and cash equivalents
Restricted cash1
Total cash and cash equivalents net of restricted cash
Group
Company
2023
2022
34,771
(240)
34,531
26,993
(277)
26,716
2023
2,435
–
2,435
2022
2,457
–
2,457
1 Restricted cash relates to funds withdrawn from the environmental rehabilitation obligation fund and COVID-19 Temporary Employee Relief Scheme funds.
SHARE CAPITAL
25.
Accounting policy
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue or repurchase of ordinary shares are recognised
as a deduction from equity, net of tax.
When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is
recognised as a deduction from equity. Repurchased shares, which have not been cancelled, or shares held internally by the Group in
PAR Gold, are classified as treasury shares and are presented as a reduction in share capital. When treasury shares are subsequently sold
or reissued, the amount received is recognised as an increase in equity and the resulting surplus or deficit on the transaction is presented
within share capital. Repurchased and cancelled shares are presented as a reduction in share capital and the share buy-back reserve.
Authorised and issued share capital
Number of shares
2023
2022
2023
2022
Issued number of ordinary shares
2,222,862,046
2,222,862,046
2,222,862,046
2,222,862,046
Group
Company
Reconciliation of the number of shares
Number of ordinary shares in issue at the beginning
of the reporting period
Shares delisted (share buy-back)1
Total number of shares in issue
Treasury shares
2,222,862,046
2,234,687,537
2,222,862,046
2,234,687,537
–
(11,825,491)
–
(11,825,491)
2,222,862,046
2,222,862,046
2,222,862,046
2,222,862,046
(306,358,058)
(306,358,058)
(306,358,058)
(306,358,058)
Number of ordinary shares outstanding and fully paid
1,916,503,988
1,916,503,988
1,916,503,988
1,916,503,988
1 The Company completed a share buy-back programme which resulted in the total issued shares of the Company decreasing by 11,825,491 shares during
the previous reporting period.
The movement on share capital for the reporting period is as follows:
US$ thousand
Balance as at 1 July
Shares delisted (share buy-back)
Balance as at 30 June
Group
Company
2023
2022
2023
2022
38,002
–
38,002
38,151
(149)
38,002
38,002
–
38,002
38,151
(149)
38,002
Repurchase of shares in the previous reporting period
As announced on the Stock Exchange News service (SENS) on 12 May 2022, the Company completed its share buy-back programme
(the programme) during the previous reporting period. During the period 1 April to 9 May 2022, the Company repurchased an aggregate of
11,825,491 ordinary shares at 0.01 pence each for a total consideration of ZAR50.3 million (US$3.2 million), inclusive of transaction costs.
A total number of 7,568,744 ordinary shares were bought back on the LSE at a volume-weighted average price (VWAP) of 21.67 pence
per share. A total number of 4,256,747 ordinary shares were bought back on the JSE at a VWAP of ZA418.21 cents per share. All shares
purchased under the programme were paid for in cash and have been cancelled.
210
211
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
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26.
RESERVES
26.
RESERVES continued
Group
Company
US$ thousand
Foreign
currency
translation
reserve1
Share-
based
payment
reserve2
Realisation
of equity
reserve3
Treasury
share
reserve4
Merger
reserve5
Share
buy-back
reserve6
Fair value
reserve7
Total
reserves
Balance as at 1 July 2021
(132,480)
2,620
(18,122)
(24,872)
(21,638)
–
(6,345)
(200,837)
Share buy-back
Unwinding of B-BBEE structure
share-based payment
Fair value adjustment of
investment – other
Foreign currency translation
reserve movement
–
–
–
(40,136)
–
(8)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(3,073)
–
–
–
–
–
(3,073)
(8)
162
162
767
(39,369)
Balance as at 30 June 2022
(172,616)
2,612
(18,122)
(24,872)
(21,638)
(3,073)
(5,416)
(243,125)
Fair value adjustment of
investment – other
Foreign currency translation
reserve movement
–
(41,741)
–
–
–
–
–
–
–
–
–
–
203
203
717
(41,024)
US$ thousand
Foreign
currency
translation
reserve1
Share-
based
payment
reserve2
Merger
reserve3
Share
buy-back
reserve4
Fair value
reserve5
Total
reserves
Balance as at 1 July 2021
(119,379)
1,481
3,153
–
(6,345)
(121,090)
Share buy-back
Fair value adjustment of
investments – other
Foreign currency translation
reserve movement
Balance as at 30 June 2022
Share buy-back
Disposal of investments – other
Foreign currency translation
reserve movement
Balance as at 30 June 2023
–
–
(27,809)
(147,188)
–
–
(23,857)
(171,045)
–
–
–
–
–
–
(3,073)
–
(3,073)
–
–
162
162
767
(27,042)
1,481
3,153
(3,073)
(5,416)
(151,043)
–
–
–
–
–
–
–
–
–
–
203
–
203
717
(23,140)
1,481
3,153
(3,073)
(4,496)
(173,980)
1 The translation reserve comprises all foreign exchange differences arising from the translation of the Company’s financial statements to its presentation
Balance as at 30 June 2023
(214,357)
2,612
(18,122)
(24,872)
(21,638)
(3,073)
(4,496)
(283,946)
currency of US$.
1 The translation reserve comprises all foreign exchange differences arising from the translation of the Group’s annual financial statements to its presentation
currency of US$ and the translation of the financial statements of foreign operations.
2 The share-based payment reserve consists of historical costs relating to the equity-settled share-based payment arrangement established by the Company
on 1 September 2005 to specific employees, officers, directors and qualifying consultants as approved by the board. On 15 January 2018, the Group
concluded a B-BBEE restructuring exercise with Concrete Rose as the Group’s new B-BBEE entity (refer to note 19). Concrete Rose’s issued share capital
is held 49.9% by Funding Company, and 50.1% by strategic B-BBEE partners through a vendor-financed arrangement. The nature of the restructuring
transaction gave Concrete Rose a 22.11% ownership in PAR SA Holdings. The B-BBEE entity’s ultimate shareholding in PAR SA Holdings will be determined
by reference to the value of PAR SA Holdings and the increase in the vendor loan on expiry of the scheme. On the effective date of the transaction, the
implied option in this scheme was valued at US$608.3 thousand. The incremental value arose due to an extension of the B-BBEE scheme’s original term
from 31 December 2018 to 31 December 2021, and an increase in the trickle dividend from 5% to 10%. The Group’s B-BBEE transaction was unwound
during the previous reporting period.
3 The realisation of equity reserve was created in June 2009 through the acquisition of PAR Gold’s 26% shareholding in Barberton Mines, in exchange for the
issue of new ordinary shares in the Company to PAR Gold.
4 The treasury share reserve was created on 7 June 2016. The Group purchased shares in PAR Gold, representing 23.83% or 436.4 million of its issued share
capital at the time. The accounting effect of this transaction was similar to that of a share buy-back as the Group acquired shares in a company that held
an investment in the Company. On 30 May 2018, PAR Gold publicly disposed of 130 million shares in the Company resulting in its shareholding reducing to
13.8% (2022:13.8%).
5 The merger reserve was created through the historical publicly reverse acquisition of Barberton Mines in July 2007.
6 As announced on SENS on 12 May 2022, the Company completed its share buy-back programme. All shares purchased under the programme have
been cancelled.
7 The fair value reserve comprises gains and losses recognised on financial assets measured at fair value through other comprehensive income.
2 The share-based payment reserve consists of historical costs relating to the equity-settled share-based payment arrangement established by the Company
on 1 September 2005 to specific employees, officers, directors and qualifying consultants as approved by the board. On 15 January 2018, the Group
concluded a B-BBEE restructuring exercise with Concrete Rose as the Group’s new B-BBEE entity (refer to note 19). Concrete Rose’s issued share capital
is held 49.9% by Funding Company, and 50.1% by strategic B-BBEE partners through a vendor-financed arrangement. The nature of the restructuring
transaction gave Concrete Rose a 22.11% ownership in PAR SA Holdings. The B-BBEE entity’s ultimate shareholding in PAR SA Holdings will be determined
by reference to the value of PAR SA Holdings and the increase in the vendor loan on expiry of the scheme. On the effective date of the transaction, the
implied option in this scheme was valued at US$608.3 thousand. The incremental value arose due to an extension of the B-BBEE scheme’s original term
from 31 December 2018 to 31 December 2021, and an increase in the trickle dividend from 5% to 10%. The Group’s B-BBEE transaction was unwound
during the previous reporting period.
3 The merger reserve was created through the historical reverse acquisition of Barberton Mines in July 2007.
4
As announced on SENS on 12 May 2022, the Company completed its share buy-back programme. All shares purchased under the programme have
been cancelled.
5 The fair value reserve comprises gains and losses recognised on financial assets measured at fair value through other comprehensive income.
212
213
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ENVIRONMENTAL REHABILITATION OBLIGATION
27.
Accounting policy
An obligation to incur environmental restoration, rehabilitation and decommissioning costs arises when disturbance is caused by the
development or ongoing production of a mining asset.
These obligations are based on the mining operations’ environmental plans, in compliance with current environmental and regulatory
requirements. The obligation is based on the net present value of the estimated cost of restoring the environmental disturbance that has
occurred up to the reporting date.
These costs are initially capitalised to property, plant and equipment and are subsequently recognised in profit or loss over the life of the
operation through depreciation of the asset and the unwinding of the discount on the obligation.
Annual changes in the obligation consist of finance costs relating to the change in the present value and changes in estimates. Increases
due to additional environmental disturbances are capitalised to property, plant and equipment and depreciated over the remaining lives of
the mines.
The estimates are reviewed annually by the Group and are discounted using a risk-free rate that is adjusted to reflect the current market
assessments of the time value of money and the risks specific to the obligation.
The Group provides for the present value of decommissioning costs other than rehabilitation costs, if any, when the directors have prepared
a detailed plan for closure of the particular operation, the remaining life of which is such that significant changes to the plan are unlikely,
and the directors have raised a valid expectation in those affected that it will carry out the closure by starting to implement that plan or
announcing its main features to those affected by it.
Significant assumptions and estimates
The amount recognised as an obligation represents management’s best estimate of the consideration required to complete the restoration
and rehabilitation activity. These estimates are inherently uncertain and could materially change over time.
At each reporting date, the Group estimates the environmental rehabilitation obligation. There is judgement in the assumptions used in
determining the estimated obligation which include:
• closure costs, which are determined in accordance with regulatory requirements
the inflation rate of 6% (2022: 5%), which has been adjusted for a long-term view
•
the risk-free rate, which is compounded annually and linked to the life-of-mine
•
the life-of-mine and related Mineral Resources and Mineral Reserves. Refer to the unaudited abridged Mineral Resources and Mineral
•
Reserves report on pages 103 to 115.
An assessment of the Group’s environmental rehabilitation plan identified a risk relating to the potential pollution of groundwater at Barberton
Mines. As a result of the amendments to the Financial Closure Provision Regulations promulgated in terms of the National Environmental
Management Act 107 of 1998, the Group is required to include an obligation for all latent and residual environmental liabilities, including
water pollution, as part of the obligation for environmental rehabilitation and decommissioning costs from September 2023. The Group
has undertaken several detailed assessments, including a geohydrological study at Barberton Mines, to ascertain the latent and residual
environmental liability as a result of the amendments and to quantify the impact of the amendments. Based on the current closure cost
estimate, the amendments will result in an increase to the current obligation of approximately US$2.8 million (US$0.8 million on a discounted
basis) for environmental and decommissioning costs in real terms, once the amendments become effective.
While not a member of the International Council on Mining and Metals (ICMM), the Group is working towards conformance with the Global
Industry Standard for Tailings Management (GISTM) as far as reasonably practicable, with respect to its TSFs. The Group is currently
progressing with its gap analysis of its tailings governance and management framework, with reference to the ICMM Conformance Protocols
for the GISTM.
While this work is ongoing, it is not currently possible to reliably estimate the value of incremental costs required to achieve conformance
with the new standard and hence no additional provision has been recorded in this respect.
The movement in the Group’s environmental rehabilitation obligation is as follows:
Group
Company
Balance as at 1 July
Acquisition
Change in estimate – recognised in profit or loss
Change in estimate – capitalised
Change in estimate – write-off of rehabilitation asset
Unwinding of finance costs
Foreign currency translation reserve movement
Balance as at 30 June
36
10
15
12
8,603
2,391
(888)
138
–
1,267
(1,426)
10,085
13,609
–
(4,712)
–
(731)
1,878
(1,441)
8,603
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
ENVIRONMENTAL REHABILITATION OBLIGATION continued
27.
The movement in the Group’s environmental rehabilitation obligation has been impacted by changes noted in the table below, relative to the
previous reporting period.
US$ thousand
Barberton Mines (Fairview)
Barberton Mines (Sheba)
Barberton Mines (Consort)
Barberton Mines (BTRP)
Evander Mines (8 Shaft and Kinross plant)
Evander Mines (Elikhulu)
Mogale Gold
MSC
28. BORROWINGS
US$ thousand
RCF
Term loan facility
DMTN bonds
Redink Rentals (RF) Limited loan (Redink facility)
Non-current portion
Current portion
Total borrowings
28.1 Revolving credit facility
The movement on the RCF is as follows:
US$ thousand
Balance as at 1 July
Drawdowns
Finance costs incurred
Unwinding of non-refundable fees
Modification adjustment1
Restructuring of the facility
Repayment of capital
Repayment of finance costs
Balance as at 30 June
Less: current portion
Non-current portion
2023
2022
Period
to
rehabilitation
(years)
Risk-free
rate
(nominal)
%
Period
to
rehabilitation
(years)
Risk-free
rate
(nominal)
%
20.00
20.00
9.00
9.00
13.00
10.00
16.00
19.00
14.26
14.26
14.95
14.95
14.45
15.67
17.61
14.26
20.00
20.00
9.00
2.00
14.00
11.00
–
–
12.23
12.23
14.28
8.28
12.58
14.10
–
–
Group
Company
Notes
2023
2022
2023
2022
28.1
28.2
28.3
28.4
10,628
26,192
–
42,725
–
53,353
42,485
10,868
53,353
–
–
8,420
34,612
33,293
1,319
34,612
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Group
Company
Note
2023
2022
2023
2022
28.2
26,192
48,382
2,161
273
995
–
(61,779)
(2,181)
(3,415)
10,628
(10,628)
–
16,669
12,903
1,999
337
(956)
34,835
(37,810)
(1,802)
17
26,192
(17)
26,175
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 The terms of the RCF were renegotiated on 17 November 2021 (refer to the terms below). The restructure of the RCF resulted in a modification gain being
recognised in the prior reporting period. The modification gain as disclosed in finance costs (note 12) was calculated as the difference between the original
carrying amount at the date of the renegotiation and the present value of the renegotiated term. In the current reporting period, the repayment of the facility
was accelerated, which resulted in the realisation of the modification adjustment.
US$ thousand
Notes
2023
2022
2023
2022
Foreign currency translation reserve movement
214
215
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
28. BORROWINGS continued
28.1 Revolving credit facility continued
The terms of the facility are as follows:
Facility amount
ZAR1 billion
Lenders
Borrower
Interest rate
Rand Merchant Bank (a division of FirstRand Bank Limited) and Nedbank Limited
Funding Company
Depending on the rollover period based on one-month, three-month or six-month
JIBAR
Interest rate margin
2.75%
Commitment fee
Term of loan
Commitment reduction dates/
repayment period
0.9625% of the aggregate of the available commitment, payable quarterly in arrears
32 months effective from 17 November 2021
The commitment on the facility reduces as follows:
• ZAR850 million on 31 December 2022
• ZAR700 million on 31 December 2023
Final maturity date
30 June 2024
Securities
Bonds as security for the facility:
The following bonds were registered in favour of the lenders:
• Mortgage bond B3644/2015 – Barberton Mines/Bowwood on Main No. 40 (RF) Proprietary Limited
• Mortgage bond B1163/2016 – Evander Gold Mining/Bowwood on Main No. 40 (RF) Proprietary Limited
• Mortgage bond B4673/2015 – Evander Gold Mining/Bowwood on Main No. 40 (RF) Proprietary Limited
• Mortgage bond B7829/2015 – Evander Gold Mining/Bowwood on Main No. 40 (RF) Proprietary Limited
• Mortgage bond B3701/2015 – Evander Township Limited/Bowwood on Main No. 40 (RF) Proprietary Limited
• Mortgage bond B6665/2015 – Evander Township Limited/Bowwood on Main No. 40 (RF) Proprietary Limited
• General notarial bond BN15110/2015 – Barberton Mines/Bowwood on Main No. 40 (RF) Proprietary Limited
• General notarial bond BN15357/2015 – Evander Gold Mining/Bowwood on Main No. 40 (RF) Proprietary Limited
• General notarial bond BN20757/2017 – Evander Gold Mining/Bowwood on Main No. 40 (RF) Proprietary Limited
• General notarial bond BN20755/2017 – Barberton Mines/Bowwood on Main No. 40 (RF) Proprietary Limited
• Special notarial bond BN15563/2015 – Evander Gold Mining/Bowwood on Main No. 40 (RF) Proprietary Limited
• Special notarial bond BN15616/2015 – Barberton Mines/Bowwood on Main No. 40 (RF) Proprietary Limited
• Special notarial bond BN20758/2017 – Evander Gold Mining/Bowwood on Main No. 40 (RF) Proprietary Limited
• Special notarial bond BN20756/2017 – Barberton Mines/Bowwood on Main No. 40 (RF) Proprietary Limited
• Special notarial bond BN12838/2018 – Evander Gold Mining/Bowwood on Main No. 40 (RF) Proprietary Limited.
Ceded rights to the lenders as security for the facilities:
• Bank accounts
• Trade debtors
•
•
Insurance proceeds
Immovable property
• Shares held in subsidiaries.
28. BORROWINGS continued
28.2 Term loan facility
The term facility was settled during the previous reporting period as part of the restructure referred to in note 28.1.
US$ thousand
Balance as at 1 July
Finance costs incurred
Repayment of capital
Repayment of finance costs
Settlement due to restructuring of RCF facility
Foreign currency translation reserve movement
Balance as at 30 June
Less: current portion
Non-current portion
28.3 DMTN bonds
US$ thousand
Balance as at 1 July
Notes issued
Finance costs incurred
Repayment of finance costs
Foreign currency translation reserve movement
Balance as at 30 June
Less: current portion
Non-current portion
Group
Company
2023
2022
2023
2022
–
–
–
–
–
–
–
–
–
42,017
1,159
(3,312)
(751)
(34,835)
(4,278)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Group
Company
2023
–
46,323
2,724
(2,383)
(3,939)
42,725
(240)
42,485
2022
2023
2022
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
During the current reporting period, the Group issued two listed bonds to the cumulative value of ZAR800 million (US$46.3 million) at an
exchange rate of US$/ZAR:17.27.
216
217
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
28. BORROWINGS continued
28.3 DMTN bonds continued
The terms of the bonds issued under the DMTN programme are as follows:
Debt security code
PARS01
PARS02
ZAG000192758
Senior second ranking secured
Sustainability segment of the JSE
13 December 2022
100%
ZAR1 million
ZAR585 million
Three-month JIBAR
3.60%
ISIN
Type of debt security
Listing
Issue date
Issue price
Nominal amount per note
Aggregate nominal amount
Reference rate
Margin
Interest commencement date 13 December 2022
Interest payment basis
First interest payment date
Interest payment terms
Maturity date
Final maturity amount
Guarantors
Floating rate
13 March 2023
Quarterly
13 December 2025
100%
Pan African Resources PLC, Evander Gold Mining
Proprietary Limited, Barberton Mines Proprietary
Limited, Evander Gold Mines Proprietary Limited
and Pan African Resources SA Holdings
Proprietary Limited
Rand Merchant Bank, a division of FirstRand Bank
Limited
Dealer
ZAG000192766
Senior second ranking secured
Sustainability segment of the JSE
13 December 2022
100%
ZAR1 million
ZAR215 million
Three-month JIBAR
3.75%
13 December 2022
Floating rate
13 March 2023
Quarterly
13 December 2027
100%
Pan African Resources PLC, Evander Gold Mining
Proprietary Limited, Barberton Mines Proprietary
Limited; Evander Gold Mines Proprietary Limited
and Pan African Resources SA Holdings
Proprietary Limited
Rand Merchant Bank, a division of FirstRand Bank
Limited
The following KPIs are applicable to both PARS01 and PARS02:
KPI
Renewable energy
Land rehabilitation
Employee safety
-3bps margin adjustment per
reporting period, commencing
30 June 2023
+3bps margin adjustment per
reporting period, commencing
30 June 2023
6.10%
-2bps margin adjustment per
reporting period, commencing
30 June 2024
+2bps margin adjustment per
reporting period, commencing
30 June 2024
n/a
-1bps margin adjustment per
reporting period, commencing
30 June 2023
+1bps margin adjustment per
reporting period, commencing
30 June 2023
7.96%
Achieved
n/a
Achieved
Sustainability target met
Penalty threshold level not
achieved
Realised value at
reporting date
Sustainability performance
target
Refer to our sustainability-linked finance framework on page 72 for further information on the respective ESG targets.
Financial covenants
The financial covenants listed below are in place for the RCF and DMTN bonds and are calculated for a 12-month period at each
reporting date.
• The net debt-to-equity ratio must be less than 1:1
• The interest cover ratio must be greater than the ratios below:
Measurement date
30 June 2022
30 June 2023
30 June 2024 until maturity date
Ratio
4:1
4:1
4:1
• The net debt-to-EBITDA ratio must be less than the ratios below:
Measurement date
30 June 2022
30 June 2023
30 June 2024 until maturity date
Ratio
2:1
2:1
2:1
• The debt service cover ratio, measured semi-annually, must be more than 1.3 times.
The financial covenants were met for the current and previous reporting periods.
218
28. BORROWINGS continued
28.4 Redink facility
US$ thousand
Balance as at 1 July
Advance received
Finance costs incurred
Repayment of capital
Repayment of finance costs
Foreign currency translation reserve movement
Balance as at 30 June
Less: current portion
Non-current portion
Group
Company
2023
8,420
–
578
(7,497)
(688)
(813)
–
–
–
2022
9,921
–
679
(300)
(671)
(1,209)
8,420
(1,302)
7,118
2023
2022
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Evander Solar Solutions entered into a loan with Redink Rentals (RF) Limited to fund the solar plant located at Evander Mines. The loan is a
rand facility and bears interest at three-month JIBAR plus a margin of 3.5%. Interest repayments are settled quarterly. Principal repayments
commenced on 30 April 2022 and the loan was fully settled during the current reporting period.
A general notarial bond was registered over the borrower’s movable property.
28.5 Credit facilities
The Group has the following credit facilities, guarantees and derivative trading facilities in place:
US$ thousand
RCF
Redink facility
Guarantees1
Eskom Holdings SOC Limited
DMRE – Cenviro Solutions insurance investment product
General banking facility2
Pre-settlement splits
Forward exchange contract limit facility
Precious metals hedging facility
Gold hedging facility
US$ gold and derivatives trading facilities3
Gold loan facility
Credit cards
Other
Total credit facilities
Group
Company
2023
2022
2023
2022
53,107
–
1,234
34,687
7,435
2,390
2,124
14,339
32,996
15,401
126
266
61,425
8,308
1,428
23,893
8,600
2,764
2,457
16,585
38,164
17,813
146
307
164,105
181,890
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
266
266
307
307
1 The guarantees issued to Eskom Holdings SOC Limited relate to the supply of electricity. The guarantees issued to the DMRE relate to the Group’s
environmental rehabilitation obligation.
2 The Nedbank Limited and RMB general banking facilities are unsecured and were unutilised in the current and previous reporting periods. These facilities
when utilised bear interest at rates linked to the South African prime interest rate.
3 The US$ gold and derivative trading facilities are used by the Group for the purpose of trading gold inventory and subsequent conversion of US$ sales
proceeds into rand. The facilities are held at Absa Bank Limited, Nedbank Limited, Rand Merchant Bank Limited and Investec Bank Limited.
219
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
28. BORROWINGS continued
28.5 Credit facilities continued
The Group has access to the following available facilities as at the reporting date:
US$ thousand
2023
2022
2023
2022
Group
Company
General banking facilities
Utilisation of the general banking facilities
RCF
Utilisation of the RCF1
Redink facility
Utilisation of the Redink facility1
Total available debt facilities
1 Excludes accrued interest on the facility as at 30 June.
7,435
–
53,107
(10,674)
–
–
49,868
8,600
–
61,425
(27,607)
8,308
(8,308)
42,418
–
–
–
–
–
–
–
–
–
–
–
–
–
–
29. LEASES
Accounting policy
The Group as a lessee
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee,
except for short-term leases and leases of low-value assets. For these leases, the Group recognises the lease payments as an expense on a
straight-line basis over the term of the lease.
Measurement and recognition of leases as a lessee
The right-of-use asset is measured at cost, which includes the initial measurement of the corresponding lease liability. Refer to note 15 for
the policy on right-of-use assets.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date,
discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments, variable payments based on an index or
rate and payments arising from options reasonably certain to be exercised.
Lease payments to be made under reasonably certain extension options have been included in the measurement of the lease liability.
The lease liability is subsequently measured at amortised cost (using the effective interest method). It is remeasured to reflect any
reassessment or modification. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset,
or profit or loss if the right-of-use asset is reduced to zero.
Right-of-use assets have been included in property, plant and equipment (note 15).
Contracts may contain both lease and non-lease components. The Group has elected not to separate non-lease components, and instead
account for any lease and non-lease components as a single lease component in respect of office buildings.
Leased assets may not be used as security for borrowing purposes.
Judgements and estimates
Management applies judgement in assessing the likelihood of exercising termination or extension options in determining the lease term.
Termination and extension options are included to provide operational flexibility should the economic outlook for an asset be different to
expectations. Management considers all facts and circumstances including past practice and any cost that will be incurred to change the
asset if an option to extend is not exercised, to assist in determining the lease term. All extension options available have been assessed as
reasonably certain to be exercised and included in lease liabilities.
The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which
affects this assessment, and that is within the control of the lessee. No revisions were made to the lease terms determined at inception of
the leases.
Management used the incremental borrowing rate for all leases. Incremental borrowing rates are determined monthly and based on the
aggregate of JIBAR and the margin applicable to the RCF.
29. LEASES continued
The movement in the lease liabilities is as follows:
US$ thousand
Balance as at 1 July
Additions
Reassessment
Repayments
Finance costs
Foreign currency translation reserve movement
Balance as at 30 June
Less: current portion
Non-current portion
Group
Company
2023
4,348
312
(42)
(951)
389
(573)
3,483
(634)
2,849
2022
5,303
127
–
(931)
478
(629)
4,348
(553)
3,795
2023
2022
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
The total cash outflow for leases including low-value asset leases and short-term leases was US$1.0 million (2022: US$1.8 million).
30. SHARE-BASED PAYMENT OBLIGATIONS
Accounting policy
Equity-settled share-based payment arrangements
All equity-settled share-based payments to employees are measured at the fair value of the equity instruments at the grant date. The fair
value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period,
based on the Group’s estimate of equity instruments that will eventually vest. At each reporting date, the Group revises its estimate of the
number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised estimate, with corresponding adjustments to the equity-settled share-based payment
reserve (refer to note 26).
Cash-settled share-based payment arrangements
The fair value of the amount payable to employees in respect of cash-settled share-based payments, which are settled in cash,
is recognised as an expense with a corresponding increase in the liabilities, over the period during which the employees become
unconditionally entitled to payment. The liability is remeasured at each reporting date and at the settlement date based on the fair value of
the cash-settled share-based payment liability. Any changes in the liability are recognised in profit or loss.
Significant assumptions and estimates
The determination of the fair value of a cash-settled share-based payment obligation is subject to management applying key assumptions
and estimates. The fair value is calculated using actuarial valuations. The following tables provide details regarding the cash-settled share-
based payment liabilities and the inputs used in the models.
US$ thousand
Cash-settled share-based payment obligation
Post-retirement benefits1
Balance as at 30 June
1 All post-retirement benefits are classified as non-current liabilities.
Group
Company
Notes
30.1
30.2
2023
4,279
9
4,288
2022
9,563
18
9,581
2023
2022
–
–
–
–
–
–
220
221
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
30. SHARE-BASED PAYMENT OBLIGATIONS continued
30.1 Cash-settled share-based payment obligation
The reconciliation of the cash-settled share-based payment obligation is as follows:
30. SHARE-BASED PAYMENT OBLIGATIONS continued
30.1 Cash-settled share-based payment obligation continued
Group cash-settled share options – PASABP continued
Fair values were calculated using the binomial pricing model with the following key inputs:
US$ thousand
Balance as at 1 July
Expense for the period
Payments made
PAR Gold loan
Foreign currency translation reserve movement
Balance as at 30 June
Less: current portion
Non-current portion
Group
Company
2023
2022
2023
2022
9,563
894
(5,262)
–
(916)
4,279
2,404
1,875
21,389
5,617
(15,456)
–
(1,987)
9,563
5,559
4,004
–
678
(141)
–
(537)
–
–
–
205
3,078
(105)
(3,166)
(12)
–
–
–
Weighted average share price (ZAR)
Weighted average exercise/strike price (ZAR)
Exercise price (ZAR)
Expected volatility (%)
Expected life (years)
Weighted average remaining life (years)
Risk-free rate (%)
Expected dividend yield (%)
Group
2023
1.21
3.12
2022
1.21
1.73
1.36 – 4.42
1.36 – 4.42
46 – 62
44 – 66
3 – 6
3.87
3 – 6
3.09
9.3 – 10.3
7.0 – 9.6
3
3
The Group recognised cash-settled share-based payment expenses on each scheme as follows:
Refer to pages 160 and 161 of the remuneration report for further details on the Group‘s cash-settled share-based payment arrangements.
US$ thousand
2023
2022
2023
2022
• The historical volatility of the share price over the most recent period that is commensurate with the expected option term (taking into
Group
Company
Expected volatility is impacted by the following factors:
Group cash-settled share options – Pan African Share
Appreciation Bonus Plan (PASABP)
ESOP transactions
PAR Gold Long-term Incentive Plan (PGLIP)
– Par Gold C Shares
– Par Gold D Shares
– Par Gold E Shares
– Par Gold F Shares
Total expense recognised in profit or loss
Group cash-settled share options – PASABP
Details of the share options outstanding are as follows:
Outstanding as at 1 July
Granted
Exercised
Forfeited
Outstanding as at 30 June
Exercisable as at 30 June
241
(40)
–
775
(156)
74
894
1,019
–
2,992
990
616
–
5,617
141
–
–
595
(101)
43
678
(88)
–
2,163
604
399
–
3,078
2023
2022
Weighted
average
exercise
price (ZAR)
3.85
4.03
3.27
Number of
options
38,009,138
6,483,231
(14,479,743)
(8,762,537)
21,250,089
3,131,325
Weighted
average
exercise
price (ZAR)
3.19
4.03
2.57
Number of
options
32,120,675
18,747,805
(8,245,146)
(4,614,196)
38,009,138
5,395,730
account the remaining contractual life of the scheme and the effect of expected early exercise)
• The length of time an entity’s shares have been publicly traded.
Participation in share-based and other long-term incentive (LTI) schemes is restricted to employees as described in the remuneration report.
The Group has introduced ESOPs at Barberton Mines and Evander Mines which have been recognised as cash-settled share-based
payment arrangements. Refer to note 33.
PAR Gold Long-term Incentive Plan (PGLIP)
To incentivise and retain the Group’s executive directors and corporate senior management and to align their interests with those of the
Group’s stakeholders, and LTI was introduced and was in issue as at 30 June 2023. Refer to the remuneration report on pages 153 to 156
for further details of this scheme.
Details of the shares outstanding as at the reporting date are as follows:
Number of PAR Gold shares
PAR Gold B shares1
Outstanding as at 1 July
Shares acquired by participants
Shares repurchased by PAR Gold
Shares in issue as at 30 June
PAR Gold C shares
Outstanding as at 1 July
Shares acquired by participants
Shares in issue as at 30 June
PAR Gold D shares
Outstanding as at 1 July
Shares acquired by participants
Shares in issue as at 30 June
PAR Gold E shares
Outstanding as at 1 July
Shares acquired by participants
Shares in issue as at 30 June
PAR Gold F shares
Outstanding as at 1 July
Shares acquired by participants
Shares in issue as at 30 June
Group
2023
2022
48,700,619
–
–
48,700,619
52,159,310
–
(3,458,691)
48,700,619
16,160,564
–
16,160,564
16,160,564
–
16,160,564
11,259,168
–
11,259,168
11,259,168
–
11,259,168
9,785,729
–
9,785,729
–
9,785,729
9,785,729
–
10,109,130
10,109,130
–
–
–
222
223
1 Dividends declared during the reporting period amounted to US$3.5 million (2022: US$13.5 million).
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
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ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
30. SHARE-BASED PAYMENT OBLIGATIONS continued
30.1 Cash-settled share-based payment obligation continued
PAR Gold long-term incentive plan (PGLIP) continued
Fair values were calculated using the Monte Carlo simulation with the following key inputs:
PAR Gold
B shares
PAR Gold
C shares
PAR Gold
D shares
PAR Gold
E shares
PAR Gold
F shares
Number of shares
Grant date
Vesting date
48,700,619
16,160,564
11,259,168
9,785,729
10,109,130
1 July 2020
1 July 2019
1 July 2020
1 July 2021
1 July 2022
31 December 2021
1 July 2022
1 July 2023
1 July 2024
1 July 2025
Share price at grant date (based on 90-day
VWAP (ZAR)
90-day VWAP as at 30 June 2023 (ZAR)
90-day VWAP as at 30 June 2022 (ZAR)
Probability of vesting as at 30 June 2023 (%)
Probability of vesting as at 30 June 2022 (%)
Fair value per option as at 30 June 2023 (ZAR)
Fair value per option as at 30 June 2022 (ZAR)
1.21
n/a
n/a
n/a
n/a
n/a
n/a
1.80
n/a
4.18
n/a
100
n/a
4.18
2.86
3.60
4.19
100
67
3.60
2.80
3.67
3.59
4.19
28
69
1.01
2.88
4.19
3.59
n/a
11
n/a
0.39
n/a
30.2 Post-employment medical aid benefits
Historically, Barberton Mines and Evander Mines provided retirement benefits by way of medical aid scheme contributions for certain
employees. The practice has been discontinued for several years. The net present value of estimated future costs of each company’s
contributions towards medical aid schemes for these retirees is recognised as a liability. The calculation of the liability for post-retirement
medical benefits is performed internally by management using SARS’ life expectancy tables as the benefits payable are a fixed amount per
pensioner. The liability is reviewed annually with movements therein recognised in profit or loss.
31. TRADE AND OTHER PAYABLES
US$ thousand
Trade payables
Other payables
Financial liabilities
Accrual for employee benefits and leave pay liability
VAT payable
Non-financial liabilities
Group
Company
2023
2022
2023
2022
36,361
10,530
46,891
5,132
49
5,181
30,003
13,754
43,757
6,218
249
6,467
139
239
378
925
–
925
281
247
528
897
244
1,141
1,669
Total trade and other payables
52,072
50,224
1,303
32.
INCOME TAX
Accounting policy
The income tax expense comprises current and deferred tax. It is recognised in profit or loss, other comprehensive income or directly in
equity.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the period and any adjustment to the
tax payable or receivable in respect of previous periods. The amount of current tax payable or receivable is the best estimate of the tax
amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or
substantively enacted at the reporting date.
Deferred tax
Deferred tax is recognised in respect of temporary differences arising from differences between the carrying amount of assets and
liabilities in the financial statements and the corresponding amounts used for tax purposes. Deferred tax liabilities are recognised for
taxable temporary differences, and deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that taxable profit will be available against which they can be utilised. Deferred tax assets and
liabilities are not recognised if the temporary differences arise from goodwill, from the initial recognition (other than a business combination)
of other assets and liabilities in a transaction which affects neither tax nor accounting profit or relates to investments in subsidiaries, to the
extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in
the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or parts of the assets to be recovered.
Capital expenditure not deducted is carried forward, to be deducted from future taxable income.
Significant assumptions and estimates
Deferred tax
South African income tax on gold mining income is determined according to the gold formula that takes into account the taxable income and
revenue from gold mining operations. Judgement was applied in determining the future expected deferred tax rates of the Group’s mining
entities. The Group prepares nominal cash flow models to calculate the expected average income tax rate over the life-of-mine. The key
assumptions in the cash flow models are the same as those noted in the cash flow projections and key assumptions disclosed in note 16.
224
225
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
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CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
32.
INCOME TAX continued
US$ thousand
Income tax expense
South African normal tax
– Current year
– Prior year
Securities transfer tax
Deferred tax
– Current year
– Prior year
– Rate change1
Total income tax expense recognised in profit or loss
Profit before tax
Tax rate reconciliation
Tax at the domestic tax rate
Tax rate differential2
Rate change3
Exempt income4
Non-deductible expenses
Securities transfer tax
Accelerated wear and tear
Under/(over) provision – prior year
Assessed losses for which no deferred tax asset was recognised
Tax effects on the utilisation of assessed losses
Group
Company
2023
2022
2023
2022
5,536
5,550
(14)
7
19,274
19,285
(11)
–
24,817
85,554
23,100
414
–
(431)
1,060
7
573
(25)
187
(68)
6,964
6,563
401
–
24,960
24,882
–
78
344
341
3
–
(28)
(28)
–
–
1,311
977
334
–
(158)
(228)
–
70
31,924
106,876
316
13,145
1,153
25,136
29,925
(2,417)
3,786
(1,573)
1,402
–
–
401
406
(6)
3,549
7,038
–
–
(3,484)
248
–
–
3
–
–
–
70
(6,933)
644
–
–
334
–
–
Total income tax expense recognised in profit or loss
24,817
31,924
316
1,153
1 The South African corporate normal tax rate has reduced to 27% for the years of assessment ended on or after 1 March 2023.
2 The tax rate differential is the difference between the statutory company tax rate of 27% and the effective gold mining tax rate calculated in terms of the gold
mining formula.
3 The rate change is as a result of a change in the deferred tax rates applied to the taxable and deductible temporary differences prevailing at the reporting
date in respect of changes in the tax rates applied as per the gold mining formula and the reduction in the South African normal tax rate.
4 In the Company, other exempt income comprises intra-Group dividend received.
32.
INCOME TAX continued
%
Tax rate reconciliation
Effective tax rate
South African statutory rate
Tax rate differential1
Rate change2
Other exempt income3
Other non-deductible expenses
Securities transfer tax
Accelerated wear and tear
Under/(over) provision – prior year
Assessed losses for which no deferred tax asset was recognised
Tax effects on the utilisation of assessed losses
Effective tax rate
Group
Company
2023
2022
2023
2022
27.0
0.5
–
(0.5)
1.2
–
0.7
–
0.2
(0.1)
29.0
28.0
(2.2)
3.5
(1.5)
1.3
–
–
0.4
0.4
–
29.9
27.0
–
–
(26.5)
1.9
–
–
–
–
–
2.4
28.0
–
0.3
(27.6)
2.6
–
–
1.3
–
–
4.6
1 The tax rate differential is the difference between the statutory company tax rate of 27% and the effective gold mining tax rate calculated in terms of the gold
mining formula.
2 The rate change is as a result of a decrease in the deferred tax rates applied to the taxable and deductible temporary differences prevailing at the reporting
date in respect of changes in the tax rates applied as per the gold mining formula.
3
In the Company, other exempt income comprises intra-Group dividend received.
Current tax
US$ thousand
Current tax asset
Current tax liability
The current tax asset and liability of the Group and Company relate to SARS.
Group
Company
2023
1,292
(732)
2022
751
(1,334)
2023
188
–
2022
–
(366)
226
227
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
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ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
INCOME TAX continued
32.
Deferred tax
US$ thousand
Deferred tax liabilities
Arising from temporary differences relating to:
Property, plant and equipment
Environmental rehabilitation obligation
Prepayments
Assessed loss
Other
Net deferred tax liabilities
Reconciliation of deferred tax liabilities
Net deferred tax liabilities as at 1 July
Deferred tax recognised in profit or loss
Transferred from deferred tax assets1
Foreign currency translation reserve movement
Net deferred tax liabilities as at 30 June
Deferred tax assets
Arising from temporary differences relating to:
Property, plant and equipment
Other payables
Assessed loss
Prepayments
Other
Net deferred tax assets
Reconciliation of deferred tax assets
Net deferred tax assets as at 1 July
Deferred tax recognised in profit or loss
Deferred tax recognised in other comprehensive income
Transferred to deferred tax liability1
Foreign currency translation reserve movement
Net deferred tax assets as at 30 June
Group
Company
2023
2022
2023
2022
69,635
(2,393)
(69)
(1,670)
(930)
64,573
53,781
19,104
46
(8,358)
64,573
(96)
408
–
–
116
428
2,074
(170)
(1,360)
46
(162)
428
57,427
(3,566)
–
(79)
(1)
53,781
34,515
25,143
–
(5,877)
53,781
(1,494)
488
1,330
(15)
1,765
2,074
2,217
183
(46)
–
(280)
2,074
–
–
–
–
–
–
–
–
–
–
–
–
309
–
–
–
309
1,774
28
(1,360)
–
(133)
309
–
–
–
–
–
–
–
–
–
–
–
–
302
–
(10)
1,482
1,774
1,904
158
(46)
–
(242)
1,774
1
In the current reporting period, the deferred tax balance moved from a deductible to a taxable temporary difference in Evander Solar Solutions.
US$ thousand
Evander Mines
Assessed loss
carried forward
Unredeemed capital
carried forward
2023
401
2022
2023
2022
289
77,259
90,432
Deferred tax assets have been recognised on the basis that the individual Group companies will be able to generate future taxable economic
benefits to utilise current deductible temporary differences.
INCOME TAX continued
32.
Deferred tax rates applied within the Group
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised, or the liability is settled, based
on tax rates and laws that have been enacted or substantively enacted by the reporting date. The rates used to calculate deferred tax are
based on the current estimate of future profitability when temporary differences will be utilised. The respective rates are calculated based on
management’s best estimate through which the temporary difference will be realised over the life of the mining operations.
Barberton Mines
Evander Mines (other and mining rights)
Other Group companies1
Group
2023
%
21.00
28.00
27.00
2022
%
19.00
28.00
27.00
1 The South African corporate normal tax rate reduced to 27% for the year of assessment ended on or after 31 March 2023.
33. BARBERTON MINES ESOP TRANSACTIONS
The ESOP has been classified as a cash-settled share-based payment transaction as the ESOP agreement provides for the mines to
acquire the shares at the end of the agreement.
On 1 June 2015, Barberton Mines entered into an agreement with Barberton Mines BEE Company and the Barberton Mines BEE Trust. The
agreement provided that Barberton Mines would issue 5% of its authorised share capital for a consideration of ZAR99.5 million to Barberton
Mines BEE Company which is 100% held by the Barberton Mines BEE Trust. The beneficiaries of the Barberton Mines BEE Trust are all
Barberton Mines’ employees of a Paterson Grading C5 level and below.
The share issue was vendor-financed by Barberton Mines by means of preference shares issued by Barberton Mines BEE Company to
Barberton Mines for ZAR99.5 million.
Notional preference share subscription terms:
• Real interest rate of 2% per annum
• Vesting period of the B-BBEE scheme is 10 years.
The ESOP allows for a portion of the dividends declared by Barberton Mines to be set off against the preference share liability.
The retention percentages applied to dividends for repayment are summarised as follows:
Year 1
%
Year 2
%
Year 3
%
Year 4
%
Years 5 to 10
%
Percentage of ordinary dividends withheld for
redemption of the preference share liability
Percentage of dividends accruing to the
Barberton Mines BEE Trust
Total dividend percentage
50
50
100
50
50
100
60
40
100
70
30
100
80
20
100
Barberton Mines’ ordinary dividend policy provides for 80% of the mine’s net cash generated during a reporting period to be declared as
a dividend subject to compliance with the liquidity and solvency requirements of the South African Companies Act, 71 of 2008.
The cash-settled share-based payment is valued independently by actuaries at each reporting date.
228
229
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
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33. BARBERTON MINES ESOP TRANSACTIONS continued
Reconciliation of the ESOP liability
34. CASH FLOW INFORMATION continued
34.2 Income tax paid
Group
Company
2023
2022
US$ thousand
US$ thousand
Balance as at 1 July
Fair value loss recognised in profit or loss
Foreign currency translation reserve movement
Balance as at 30 June
Statement of profit or loss and other comprehensive income
Cash-settled share-based payment expense recognised in
profit or loss
34. CASH FLOW INFORMATION.
34.1 Cash flow from operating activities
2023
1,196
(40)
(122)
1,034
2022
1,413
(46)
(171)
1,196
130
210
–
–
–
–
–
–
–
–
–
–
Group
Company
US$ thousand
Notes
2023
2022
2023
2022
Profit before tax
Adjusted for:
Impairment loss on plant and equipment
Cash-settled share-based payment expense
Finance income
Finance costs
Royalty costs
Fair value loss/(gain) on financial instruments
Change in estimate of the environmental rehabilitation
obligation
Contract liability recognised as revenue
Fair value gain on environmental rehabilitation obligation fund
Depreciation and amortisation
85,554
24,317
–
894
(1,139)
9,692
963
209
(888)
(4,381)
(1,936)
20,903
106,876
33,265
467
5,617
(1,095)
5,326
2,096
(565)
(4,712)
–
(563)
26,694
13,145
580
–
678
(99)
1
–
–
–
–
–
–
25,136
3,078
–
3,078
(28)
28
–
–
–
–
–
–
15
10
12
12
34.3
10
10
8
10
15
Operating cash flows before working capital changes
109,871
140,141
13,725
28,214
Working capital
(Increase)/decrease in inventories
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Settlement of cash-settled share-based payment obligation
Contract liability – advanced consideration received
Loan repayments in terms of Group share schemes
Net cash from operating activities before dividend,
tax, royalties and net finance costs
30
8
6,732
(938)
(235)
7,905
(5,262)
21,600
6,930
94
4,412
2,424
(15,456)
–
–
11,264
(195)
–
(48)
(147)
(141)
–
–
333
–
1,117
(784)
(105)
–
–
132,941
142,879
13,389
28,442
Income tax expense recognised in profit or loss
Less: deferred tax expense
Security transfer tax
Current tax payable as at 1 July
Current tax receivable/(payable) as at 30 June
Accrued finance costs
Finance costs paid
Accrued finance income
Foreign currency translation reserve movement
Tax paid during the reporting period
34.3 Royalty costs paid
US$ thousand
Royalty costs receivable as at 1 July
Royalty costs receivable at 30 June
Royalty costs recognised in profit or loss
Accrued finance income
Foreign currency translation reserve movement
Royalty costs paid during the reporting period
Group
Company
2023
2022
2023
24,817
(19,274)
(7)
5,536
836
143
–
(1)
(6)
13
31,924
(24,960)
–
6,964
448
(836)
16
–
(73)
246
6,521
6,765
316
28
–
344
366
188
–
–
–
(15)
883
2022
1,153
158
–
1,311
224
(366)
16
–
–
(77)
1,108
Group
Company
2023
(253)
417
963
–
67
2022
(445)
253
2,096
(65)
(83)
1,194
1,756
2023
2022
–
–
–
–
–
–
–
–
–
–
–
–
230
231
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
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ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
34. CASH FLOW INFORMATION continued
34.4 Reconciliation of liabilities arising from financing activities
US$ thousand
Balance as at 1 July 2021
Changes from financing cash flows
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Other changes
Finance costs incurred
Finance costs paid
Restructuring fees
Modification gain on borrowings
Additions
Foreign currency translation reserve movement
Balance as at 30 June 2022
Changes from financing cash flows
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Other changes
Finance costs incurred
Finance costs paid
Restructuring fees
Modification loss on borrowings
Additions
Reassessment
Foreign currency translation reserve movement
Balance as at 30 June 2023
Group
Lease
liabilities
Borrowings
68,607
(28,519)
12,903
(41,422)
–
(5,476)
3,837
(3,224)
337
(956)
–
(5,470)
34,612
25,429
94,705
(69,276)
–
(6,688)
5,463
(5,252)
273
995
–
–
(8,167)
53,353
5,477
(616)
–
–
(616)
(513)
487
(487)
–
–
127
(640)
4,348
(562)
–
–
(562)
(303)
389
(389)
–
–
312
(42)
(573)
3,483
Total
74,084
(29,135)
12,903
(41,422)
(616)
(5,989)
4,324
(3,711)
337
(956)
127
(6,110)
38,960
24,867
94,705
(69,276)
(562)
(6,991)
5,852
(5,641)
273
995
312
(42)
(8,740)
56,836
35. FINANCIAL RISK MANAGEMENT
Capital management
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the sustainable return to
shareholders through the optimisation of the debt and equity ratios. The Group’s overall strategy remained unchanged during the previous
reporting period.
US$ thousand
Components of capital and financial covenants
Cash and cash equivalents
RCF
Redink facility
DMTN bond
Add: net derivative financial liability/(asset)
Lease liabilities
Restricted cash
Refinancing modification adjustment1
Facility arranging fees adjustment1
Net debt1
Total equity
Net debt-to-equity ratio
Finance costs paid
RCF
Term loan facility
Redink facility
DMTN bond
General banking facility
Finance costs – interest-bearing facilities
Adjusted EBITDA2
Fair value gain on derivatives
Net adjusted EBITDA
Interest cover ratio
Net debt
Net adjusted EBITDA3
Net debt-to-net adjusted EBITDA
Net adjusted EBITDA3
Net working capital change
Add: non-cash flow items
Total capital expenditure less capital funded through permitted indebtedness
Less: income, royalties and securities transfer taxes paid
Free cash flow
Finance costs on interest-bearing facilities
Obligatory debt principal repayments
Debt service obligation
Debt service cover ratio
Group
Notes
2023
2022
24
28
28
28
35
29
24
(34,771)
10,628
–
42,725
(396)
3,483
240
–
46
21,955
294,596
0.07
2,181
–
688
2,383
1,001
6,253
(26,993)
26,192
8,420
–
(686)
4,348
277
749
684
12,991
294,609
0.04
1,802
751
671
–
818
4,042
115,010
(26)
114,984
138,268
(547)
137,721
18.4
34.1
21,955
114,984
0.2
114,984
6,732
5,349
(64,327)
(7,722)
55,016
6,253
1,125
7,378
7.5
12,991
137,721
0.1
137,721
6,930
2,440
(82,810)
(8,520)
55,761
4,042
3,611
7,653
7.3
1 The Group’s net debt excludes the unaccrued refinancing modification and unaccrued facilities’ arranging fees.
2 Adjusted EBITDA represents earnings before interest, tax, depreciation and amortisation and impairment losses.
3 Net adjusted EBITDA is the adjusted EBITDA excluding realised and unrealised gains and losses on financial instruments.
Refer to note 28 for a summary of the financial covenants limits.
232
233
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
35. FINANCIAL RISK MANAGEMENT continued
Categories of financial instruments
US$ thousand
Notes
2023
2022
2023
2022
Group
Company
Financial assets
At amortised cost
Cash and cash equivalents
Loan receivable
Receivables from Group companies
Trade and other receivables
At fair value through other comprehensive income
Investments – other
At fair value through profit or loss
Environmental rehabilitation obligation fund
Derivative financial asset
Financial liabilities
At amortised cost
Trade and other payables
Borrowings
At fair value through profit or loss
Derivative financial liability
24
18
23
20
21
35
31
28
35
34,771
–
–
9,164
26,993
271
–
10,890
2,435
–
61,050
–
–
1,127
21,627
451
23,024
686
46,891
53,353
43,757
34,612
55
–
–
–
–
378
–
–
2,457
–
79,594
–
1,127
–
–
528
–
–
Financial risk management
The Group seeks to minimise the adverse impact of financial risks by using derivative financial instruments to hedge risk exposure where
appropriate. The use of any financial derivatives is approved by the board, which provides guidance on a continuous basis on managing
foreign exchange, interest rate, credit and liquidity risk in line with the Group’s treasury policy. Exposure limits are reviewed regularly. The
Group does not enter into derivative instrument transactions for speculative use.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group
has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of
mitigating the risk.
The combined maximum credit risk exposure of the Group is as follows:
US$ thousand
Loan receivable
Trade and other receivables
Cash and cash equivalents
Guarantees to the DMRE and Eskom
Loan receivable
Group
Notes
2023
2022
18
23
24
28
–
9,164
34,771
35,921
271
10,890
26,993
25,321
The Group’s credit risk is deemed to be minimal given the nature of the counterparty and the historically low levels of credit default. There is
no current observable data to indicate a material future default risk and as a result the credit quality at the reporting date is considered high.
Trade and other receivables
Credit risk is deemed to be minimal as the Group only sells refined gold to highly reputable South African financial institutions. Given the
creditworthiness of these institutions, there is no ECL pertaining to trade receivables. Other receivables net of ECLs are estimated by the
Group’s management based on the current economic environment and individual debtor circumstances (note 23).
35. FINANCIAL RISK MANAGEMENT continued
Financial risk management continued
Credit risk continued
Cash and cash equivalents
Cash and cash equivalents are held with banks and financial institution counterparties, which are AA- to AA+ rated. Impairment on cash and
cash equivalents has been measured on a 12-month ECL basis and reflects the short maturities of the exposures. The Group considers that
its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties.
Guarantees to the DMRE and Eskom
The guarantees in favour of the DMRE are represented by funds held by Cenviro Solutions in an insurance investment product and are
invested in interest-bearing and equity instruments within the insurance product. Cenviro Solutions is a reputable and vetted counterparty
which is also underwritten by Centriq Insurance Company Limited. Based on the nature of the counterparty, credit default is considered
minimal at the reporting date.
The guarantees in favour of Eskom are represented by funds held by rated South African institutions. The credit risk on liquid funds is limited
due to these funds being invested with reputable financial institutions.
Market risk
The risk is that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. The Group’s
activities expose it primarily to the financial risks of changes in foreign currency exchange rates, commodity prices and interest rates.
Foreign currency risk
The Group undertakes certain transactions in foreign currencies exposing the Group to foreign exchange rate fluctuations. Exchange rate
exposures are managed within approved policy parameters. The Group specifically ensures US$ gold sale receipts are converted into rand
as efficiently as possible.
The closing foreign exchange rate applied to the statement of financial position and the average rate applied to profit or loss is as follows:
Currency rates
US$/ZAR exchange rate
Sensitivity analysis – foreign currency
2023
2022
Closing rate Average rate
Closing rate Average rate
18.83
17.77
16.28
15.22
A movement in the US$ exchange rate relative to the rand of 10% during the reporting period would have affected the translation of profit for
the period, current assets and liabilities as shown below. The analysis assumes that all other variables remain constant.
Impact on profit for the period
US$ thousand
2023
2022
Impact on current assets and liabilities
US$ thousand
2023
Current assets
Current liabilities
2022
Current assets
Current liabilities
As presented
10% increase 10% decrease
60,737
74,952
(5,502)
(6,805)
6,719
8,315
As presented
10% increase 10% decrease
61,263
77,386
55,953
58,989
(5,569)
(7,035)
(5,086)
(5,364)
6,807
8,598
6,217
6,556
234
235
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
35. FINANCIAL RISK MANAGEMENT continued
Financial risk management continued
Market risk continued
Commodity price risk
The Group is affected by the gold price volatility. The Group may enter into forward contracts to hedge its exposure to fluctuations in gold
prices and exchange rates on specific transactions. The contracts are matched with anticipated future cash flows from gold sales receipts.
Sensitivity analysis – commodity price
A movement in the average rand gold price during the reporting period of 10% on the Group’s revenue exposed to this risk would have
increased/(decreased) profit or loss by the amounts shown below. The analysis assumes that all other variables remain constant.
Average gold spot price received (US$/oz)
Average gold spot price received (ZAR/kg)
Impact on profit for the period
US$ thousand
2023
2022
2023
1,836
1,048,823
2022
1,824
892,431
As presented
10% increase/
(decrease)
60,737
74,952
22,769
26,164
Interest rate risk
The Group is exposed to interest rate risk as Funding Company, on behalf of the Group, borrows and invests funds at both fixed and
floating interest rates. Fluctuations in interest rates impact short-term investment and financing activities, giving rise to interest rate risk. In
the ordinary course of business, the Group receives cash proceeds from its operations and is required to fund working capital and capital
expenditure requirements. Cash is managed to ensure that surplus funds are invested to maximise returns while ensuring that capital
is safeguarded to the maximum extent by only investing with reputable financial institutions. Contractual arrangements for committed
borrowing facilities are maintained to meet the Group’s normal and contingent funding needs.
Sensitivity analysis – interest rate
The Group’s borrowings incur interest based on JIBAR (refer to note 28). A reasonably possible change in interest rates during the reporting
period as noted in the table would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes
that all other variables remain constant.
Impact on finance costs – borrowings
US$ thousand
2023
2022
As presented
10% increase/
(decrease)
6,351
3,885
635
389
35. FINANCIAL RISK MANAGEMENT continued
Derivative financial instruments
Interest rate hedge
US$ thousand
Asset
Balance as at 1 July
Unrealised fair value (loss)/gain
Foreign currency translation reserve movement
Balance as at 30 June
Fixed interest rate hedge terms
Notional amount
Trade date
Termination date
Group entity
Financial institution
Fixed rate (yield)
Floating rate option
Floating rate designated maturity
Diesel hedge
US$ thousand
Liability
Balance as at 1 July
Unrealised fair value loss
Foreign currency translation reserve movement
Balance as at 30 June
Diesel price hedge terms
Total quantity (litres)
Trade date
Duration
Period
Group entity
Financial institution
Average swap price (ZAR/litre)
Group
2023
2022
686
(151)
(84)
451
180
565
(59)
686
Group
2023
2022
–
(58)
3
(55)
–
–
–
–
ZAR300 million
21 February 2021
19 February 2024
Funding Company
Nedbank and Rand Merchant Bank
4.625%
ZAR-JIBAR-SAFEX
Three months
1,377,510
1 December 2022
10 months
January to October 2023
Funding Company
Rand Merchant Bank
22.3778
236
237
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
35. FINANCIAL RISK MANAGEMENT continued
Liquidity risk
Ultimate responsibility for liquidity risk management rests with the board, but is delegated to the executive management, which has an
established liquidity risk management framework for the Group’s short-term funding and liquidity requirements. This framework involves daily
monitoring of the Group’s cash position, regular review of cash flow forecasts and maturity profiles of financial assets and liabilities. Liquidity
risk is managed by maintaining adequate working capital reserves and borrowing capacity on banking facilities.
The Group expects to meet its obligations from its operating cash flows and the borrowing capacity on its existing banking facilities.
The following table details the Group’s undiscounted contractual maturities for its financial liabilities:
US$ thousand
Notes
Carrying
amount
Less than
12 months
Year 2
Year 3
Year 4
and
longer
Total
contractual
cash flows
Group
June 2023
Trade and other payables
Borrowings
Lease liabilities
Derivative financial liability
June 2022
Trade and other payables
Borrowings
Lease liabilities
Company
June 2023
31
28
29
35
31
28
29
46,891
53,353
3,483
55
43,757
34,612
4,348
46,891
15,792
701
55
43,757
3,936
978
–
5,149
799
–
–
–
34,345
671
–
13,514
1,420
–
–
–
–
3,924
1,007
30,480
969
4,978
2,806
Trade and other payables
31
378
378
June 2022
Trade and other payables
31
528
528
–
–
–
–
–
–
Fair value of financial instruments
The directors consider the carrying amounts of financial assets and liabilities to approximate their fair values.
46,891
68,800
3,591
55
43,757
43,318
5,760
378
528
Fair value hierarchy
Financial instruments measured at fair value are classified in the fair value hierarchy based on the extent to which fair value is observable.
The levels are determined as follows:
Level 1
Level 2
– Fair value is based on quoted prices in active markets for identical financial assets or liabilities.
– Fair value is determined using inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (i.e. prices) or indirectly (i.e. derived from prices).
Level 3
– Fair value is determined using inputs not based on observable market data.
US$ thousand
June 2023
Environmental rehabilitation obligation fund1
Derivative financial asset
Derivative financial liability
June 2022
Investments – other2
Environmental rehabilitation obligation fund1
Derivative financial asset
Notes
Level 1
Level 2
Total
21
35
35
21
22
35
–
–
–
1,127
–
–
21,627
21,627
451
(55)
–
23,024
686
451
(55)
1,127
23,024
686
1 The environmental rehabilitation obligation fund is classified as Level 2 as the premiums are invested in interest-bearing short-term deposits and equity share
portfolios held in an insurance investment product which is managed by independent fund managers.
2 The fair value of the listed investment is classified as Level 1 as its share price is quoted on a stock exchange.
36. ACQUISITIONS AND DISPOSALS
As announced on SENS on 6 October 2022, the Company closed the transaction whereby Mogale Tailings Retreatment Proprietary Limited
(MTR), a wholly owned subsidiary of the Company, would acquire the total share capital and claims of Mogale Gold and MSC, (collectively,
the sale transaction). Both Mogale Gold and MSC were previously 100% owned by Mintails Mining SA Proprietary Limited, which was
placed in provisional liquidation during 2018. The sale transaction’s aggregate cash consideration of ZAR50.0 million (approximately
US$2.9 million at an exchange rate of US$/ZAR:17.01) was settled on closing. The details of the sale transaction, Mineral Resources
potential and strategic rationale for the acquisition were outlined in the Company’s announcement of 6 November 2020. The Company
completed a definitive feasibility study on the Mogale Gold TSFs and announced the results of this study on 30 June 2022 (the study). The
study demonstrated compelling economics and the potential to significantly increase the Group’s gold production (an increase in excess of
25% compared to current Group annual production) over an initial life-of-mine of 13 years. Remining of the MSC TSFs has the potential to
add further production upside and extend the life-of-mine to 21 years.
Following the completion of the definitive feasibility study, the Company commenced detailed engineering optimisation studies and the
impact assessments required for the environmental authorisation process, stakeholder engagements and permitting. Construction is
currently underway.
Significant judgement
IFRS 3: Business Combinations requires an entity to determine whether a transaction or event is a business combination by applying the
definition of a business. A business is an integrated set of activities and assets that is capable of being conducted and managed for the
purpose of generating income from ordinary activities and consists of inputs and processes applied to those inputs that have the ability
to contribute to the creation of outputs. In this case, both Mogale Gold and MSC had no active operations, assets or a skilled workforce
to extract gold from the tailings, therefore the acquisition did not constitute the acquisition of a business as there was no integrated set of
activities in place capable of being managed to convert the acquired input (the TSF) into outputs (gold).
On acquisition, the acquirer, MTR, was required to identify and recognise the individual assets and liabilities acquired. The purchase
price was allocated to the assets acquired and liabilities assumed based on their relative fair values at the date of acquisition. Since the
transaction did not constitute the acquisition of a business, no goodwill has been recognised.
Purchase price allocation
US$ thousand
Property, plant and equipment
Long-term inventory (TSFs)
Trade and other receivables
VAT receivable
Environmental rehabilitation obligation fund
Environmental rehabilitation obligation
Trade and other payables
Trade payables
Other payables
Net assets acquired
Cash consideration
Mogale Gold
18
5,387
23
18
(1,995)
(1,235)
(11)
2,205
2,205
MSC
–
1,127
3
–
(396)
–
–
734
734
Total
18
6,514
26
18
(2,391)
(1,235)
(11)
2,939
2,939
There were no disposals during the current or previous reporting period.
37. DIRECTORS’ AND PRESCRIBED OFFICERS’ EMOLUMENTS
The key management personnel for which remuneration has been disclosed below are executive directors, non-executive directors and
prescribed officers:
US$ thousand
Executive directors
Emoluments
Executive directors' emoluments
Non-executive directors
Emoluments
Non-executive directors' emoluments
Total directors' emoluments
Group
Company
2023
2022
2023
2022
1,845
1,845
334
334
2,179
1,625
1,625
357
357
1,982
1,845
1,845
334
334
2,179
1,625
1,625
357
357
1,982
238
239
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
37. DIRECTORS’ AND PRESCRIBED OFFICERS’ EMOLUMENTS continued
Executive directors
US$ thousand
remuneration Allowances
Basic
Leave
payout
Retention1
payment
Total
remuneration
Incentives2
PGLIP4
Total single
figure
remuneration5
2023
Mr JAJ Loots
Mr GP Louw
Total
US$
thousand
2022
Mr JAJ Loots
Mr GP Louw
Total
407
370
777
10
–
10
10
–
10
250
222
472
677
592
1,269
350
226
576
1,043
855
1,898
2,070
1,673
3,743
Basic
remuneration Allowances
Leave
payout
Total
remuneration Incentives3
Loan
repayment
PGLIP4
PGLIP4
net
payment
received
Total
single
figure
remuneration5
443
404
847
13
–
13
13
–
13
469
404
873
457
295
752
(4,042)
(2,713)
(6,755)
4,537
3,124
7,661
495
411
906
1,421
1,111
2,532
1 Retention payments are made in accordance with the employees’ employment contracts. See details on page 161.
2 These incentives, paid in the 2023 reporting period, relate to the 2022 annual short-term incentive (STI) achievement consistent with the approved qualifying criteria.
3 These incentives, paid in the 2022 reporting period, relate to the 2021 annual STI achievement consistent with the approved qualifying criteria.
4
In terms of the rules of the Pan African Corporate Option Scheme (PACOS) restructured scheme (PGLIP B shares), participants were entitled to an advance,
on market-related terms (South African repo rate plus a margin of 1%) once a monetary value had vested and locked-in. This rate has been applied to all
participants of the scheme. Subsequent PGLIP issues (C, D and future share issues) do not allow for any advances to participants. Advances from PAR
Gold amounting to US$12.3 million were made to scheme participants in the 2021 reporting period. These advances were offset against dividends when
declared by PAR Gold, as per the rules of the restructured scheme. As detailed in the 17 September 2020 and 30 June 2021 announcements, all listings and
regulatory requirements were complied with in the restructure of these incentive schemes and loans advanced to scheme participants. With the inception of
PACOS (converted to PGLIP B shares) the Pan African 30-day VWAP share price was ZAR1.21, and at the measurement date for the PGLIP B shares, the
Pan African 30-day VWAP share price was ZAR5.65.
5 Total remuneration and incentives represent short-term employee benefits. The PGLIP represents share-based payments.
Non-executive directors
Non-executive directors are entitled to the following emoluments as approved annually by Remco for services rendered, which are based on
the subcommittees on which they serve:
37. DIRECTORS’ AND PRESCRIBED OFFICERS’ EMOLUMENTS continued
Non-executive directors continued
US$ thousand
Board of directors
Remuneration
committee
Audit and risk
committee
(Mrs D Earp as
chairperson)
SHEQC committee
Nomination
committee
Social and ethics
committee
Mr KC Spencer
(Chairman)
Mrs D Earp1
77
–
–
12
5
–
94
24
–
15
8
5
–
52
2022
Mr TF
Mosololi
Mr CDS
Needham
Mrs YN
Themba
Total
38
8
10
–
5
12
73
38
8
10
–
5
–
61
38
229
12
28
–
–
5
8
63
35
20
25
20
357
Mrs HH
Hickey1
14
–
–
–
–
–
14
1
During the previous reporting period, Mrs HH Hickey stepped down from the board of directors effective 16 September 2021 and was replaced by
Mrs D Earp effective 21 September 2021.
There were no changes to the board of directors in the current reporting period.
No retirement fund contributions are made by the Company on behalf of non-executive directors.
The Group has directors’ and public officers’ liability insurance in place that provides insurance cover in the event of a claim or legal action.
The insurance cover was in place throughout the reporting period and remains in place.
Prescribed officers
Mr EB Thorne was appointed 1 July 2022 as Group Mining Engineer. Mr J Irons and Mrs M Kok have been included due to increased
responsibilities within the Group.
During the current reporting period, the following charges were made to the prescribed officers:
2023
US$ thousand
Mr KC Spencer
(Chairman)
Mrs D Earp
Mr TF
Mosololi
Mr CDS
Needham
Mrs YN
Themba
2023
36
–
36
7
36
7
36
11
Total
216
25
Board of directors
72
Remuneration
committee
Audit and risk
committee
(Mrs D Earp as
chairperson)
Safety, health,
environmental,
quality and
community (SHEQC)
committee
Nomination
committee
Social and ethics
committee
–
–
11
5
–
88
14
9
9
–
32
7
5
–
62
–
5
11
68
–
5
–
57
–
5
7
59
18
25
18
334
Basic
remu-
neration
Retire-
ment
fund
Life
and
disability
plan
Allow-
ances
Leave
payout
Total
remu-
neration
Incentives
PGLIP
US$ thousand
Mr JD Symington
Mr H Pretorius
Mr J Irons
Mr EB Thorne
Mrs M Kok
US$ thousand
Mr JD Symington
Mr H Pretorius
191
170
170
192
127
850
–
23
6
–
17
46
–
4
–
–
3
7
7
4
11
12
1
35
Basic
remu-
neration
Retire-
ment
fund
Life
and
disability
plan
Allow-
ances
Leave
payout
10
–
8
18
2022
Total
remu-
neration Incentives
186
138
324
–
18
18
–
3
3
8
6
14
–
6
6
194
171
365
88
73
161
Total
single
figure
remu-
neration1
473
378
500
204
210
1,765
198
201
197
204
156
956
68
56
67
–
54
245
207
121
236
–
–
564
PGLIP
net
payment
received
Total
single
figure
remu-
neration1
200
80
280
482
324
806
PGLIP
799
319
1,118
Loan
repay-
ment
(599)
(239)
(838)
240
241
1 Total remuneration and incentives represent short-term employee benefits. The PGLIP LTI represents share-based payments.
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
37. DIRECTORS’ AND PRESCRIBED OFFICERS’ EMOLUMENTS continued
Directors’ dealings in shares
All the shares held by directors are direct and indirect beneficial interests.
Reporting period 30 June 2023
Mr JAJ Loots entered into the following Company share transactions:
• On 26 May 2023: purchased 200,000 ordinary shares at GBP0.132 and 200,000 contracts for differences (CFDs) at GBP0.1377.
Mr JAJ Loots held 5,048,504 indirect beneficial shares, representing 0.2271% of the Company’s issued share capital, and 1,873,982 direct
beneficial shares, representing 0.0843% of the Company’s issued share capital and 314,280 CFDs at 30 June 2023.
Mr GP Louw entered into the following Company share transactions:
• On 26 May 2023: purchased 230,000 ordinary shares at VWAP ZAR3.2913.
Mr GP Louw held 3,122,349 indirect beneficial shares, representing 0.1405% of the Company’s issued share capital, and 998,112 direct
beneficial shares outstanding, representing 0.0445% of the Company’s issued share capital at 30 June 2023.
Mr TF Mosololi held 160,000 shares, representing 0.0072% of the Company’s issued share capital at 30 June 2023.
Mr KC Spencer held 3,000,000 shares, representing 0.1342% of the total issued shares of the Company at 30 June 2023.
Mr CDS Needham held 25,000 shares, representing 0.001% of the total issued shares of the Company at 30 June 2023.
No dealings in the securities of the Company by the directors took place between the reporting date and the date of approval of the annual
financial statements.
Reporting period 30 June 2022
Mr JAJ Loots entered into the following Company share transactions:
• On 15 September 2021: purchased 200,000 ordinary shares at GBP0.167 per share and 100,000 ordinary shares at GBP0.173.
Mr JAJ Loots held 5,048,504 indirect beneficial shares, representing 0.2259% of the Company’s issued share capital, and 1,673,982 direct
beneficial shares, representing 0.0749% of the Company’s issued share capital and 114,280 CFDs at 30 June 2022.
Mr GP Louw entered into the following Company share transactions:
• On 15 September 2021: purchased 220,000 ordinary shares at ZAR3.42 per share.
Mr GP Louw held 3,122,349 indirect beneficial shares, representing 0.1397% of the Company’s issued share capital, and 758,112 direct
beneficial shares outstanding, representing 0.0339% of the Company’s issued share capital at 30 June 2022.
Mr TF Mosololi entered into the following Company share transactions:
• On 21 September 2021: purchased 50,000 ordinary shares at ZAR3.15 per share.
Mr TF Mosololi held 160,000 shares, representing 0.0072% of the Company’s issued share capital at 30 June 2022.
Mr KC Spencer entered into the following Company share transactions:
• On 1 October 2021: transferred 3,000,000 ordinary shares between nominee accounts with no change in beneficial interest.
Mr KC Spencer held 3,000,000 shares, representing 0.1342% of the total issued shares of the Company at 30 June 2022.
Mr CDS Needham held 25,000 shares, representing 0.001% of the total issued shares of the Company at 30 June 2022.
No dealings in the securities of the Company by the directors took place between the year-end and the date of approval of the annual
financial statements.
37. DIRECTORS’ AND PRESCRIBED OFFICERS’ EMOLUMENTS continued
LTI scheme
Issued during
the reporting
period
Dividend
measurement
date
Grant date
Forfeited/
repurchased
during the
reporting period
Total
number of
shares
30 June 2023
Total
number
of shares
1 July 2022
2,848,556
2,337,972
–
2,335,468
1,916,851
–
566,082
610,492
–
420,057
438,791
–
644,093
528,645
–
462,781
427,526
–
Shares granted
but not yet vested
Mr JAJ Loots
– PAR Gold D shares
– PAR Gold E shares
– PAR Gold F shares
Mr GP Louw
– PAR Gold D shares
– PAR Gold E shares
– PAR Gold F shares
Mr JD Symington
– PAR Gold D shares
– PAR Gold E shares
– PAR Gold F shares
Mr H Pretorius
– PAR Gold D shares
– PAR Gold E shares
– PAR Gold F shares
Mr J Irons
– PAR Gold D shares
– PAR Gold E shares
– PAR Gold F shares
Ms M Kok
– PAR Gold D shares
– PAR Gold E shares
– PAR Gold F shares
Mr E Thorne
– PAR Gold F shares
Total number of shares
not yet vested
1 July 2020
1 July 2021
1 July 2022
1 July 2020
1 July 2021
1 July 2022
1 July 2020
1 July 2021
1 July 2022
1 July 2020
1 July 2021
1 July 2022
1 July 2020
1 July 2021
1 July 2022
1 July 2020
1 July 2021
1 July 2022
–
–
2,190,419
–
1,795,876
–
–
636,363
–
–
636,363
–
–
540,909
–
–
413,637
1 July 2023
1 July 2024
1 July 2025
1 July 2023
1 July 2024
1 July 2025
1 July 2023
1 July 2024
1 July 2025
1 July 2023
1 July 2024
1 July 2025
1 July 2023
1 July 2024
1 July 2025
1 July 2023
1 July 2024
1 July 2025
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,848,556
2,337,972
2,190,419
2,335,468
1,916,851
1,795,876
566,082
610,492
636,363
420,057
438,791
636,363
644,093
528,645
540,909
462,781
427,526
413,637
636,363
20,387,244
–
1 July 2022
636,363
1 July 2025
13,537,314
6,849,930
These are cash-settled shares issued under the PGLIP scheme. These shares receive dividends only if the specified measurement criteria
are fulfilled at the end of a three-year measurement period.
Vested shares
Mr JAJ Loots
– PAR Gold B shares
– PAR Gold C shares
Mr GP Louw
– PAR Gold B shares
– PAR Gold C shares
Mr JD Symington
– PAR Gold B shares
– PAR Gold C shares
Mr H Pretorius
– PAR Gold B shares
– PAR Gold C shares
Mr J Irons
– PAR Gold B shares
– PAR Gold C shares
Total number of
vested shares
Total
number
of shares
1 July 2022
Issued during
the reporting
period
Dividend
measurement
date
Grant date
Forfeited/
repurchased
during the
reporting period
Total
number of
shares
30 June 2023
17,107,580
4,434,380
1 July 2020
1 July 2019
11,523,153
3,635,648
1 July 2020
1 July 2019
2,920,661
881,227
1 July 2020
1 July 2019
1,152,893
514,093
1 July 2020
1 July 2019
3,766,116
1,002,668
1 July 2020
1 July 2019
–
–
31 December 2021
1 July 2022
– 31 December 2021
1 July 2022
–
– 31 December 2021
1 July 2022
–
– 31 December 2021
1 July 2022
–
– 31 December 2021
1 July 2022
–
46,938,419
–
–
–
–
–
–
–
–
–
–
–
–
17,107,580
4,434,380
11,523,153
3,635,648
2,920,661
881,227
1,152,893
514,093
3,766,116
1,002,668
46,938,419
Shares to be repurchased at a nominal amount and cancelled by PAR Gold during the 2024 financial year, no further dividend payment will
be made on these shares as per the rules of the PGLIP scheme.
242
243
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
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OTHER
INFORMATION
38. RELATED PARTY TRANSACTIONS
2023
2023
PAR
Evander
Evander
US$ thousand
Company
Company
Services
entity
Mines
Mines1
Mines
Holdings
Funding
Management
Consolidation
Barberton
Evander
Gold
PAR SA
Solar
Project
PAR
Concrete
Barberton
Mogale
K Company
Solutions
Kite3
Properties
Rose
Blue
MTR
Gold
MSC
Sudan
Dubai
4,645
(113)
7,417
(2,254)
(5,784)
(3,471)
12,904
–
–
(3,103)
(12,904)
–
4,651
(2,915)
(397)
2,166
(2,519)
Transactions
Management fee
received/(paid)
Dividends received from/
(paid to) fellow Group
companies2
Intra-Group finance
income/(costs)
Revenue
Cost of production
Gold purchases from
Evander Gold Mines
Proprietary Limited
Cost of gold production
income invoiced to
Evander Mines
Balances
Company receivables/
(payables)
Funding Company
receivables/(payables)
PAR Management
Services receivables/
(payables)
Barberton Mines
receivables/(payables)
Evander Mines
receivables/(payables)
MTR project receivables/
(payables)
–
–
–
–
–
–
–
–
–
–
–
–
–
61,059
(52,309)
(14,757)
52,309
(2,708)
(35,603)
14,757
35,603
(2,398)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(2,198)
(93,986)
93,986
93,055
(93,055)
–
–
–
–
–
(4)
61,961
(51,590)
(25,503)
(28,259)
883
–
–
–
(55,854)
55,688
–
–
PAR
Gold
–
3,103
–
–
–
–
–
–
–
–
–
–
–
–
–
10,369
6
2,926
–
–
–
–
6,650
–
–
–
–
–
(29)
–
–
–
–
–
(169)
(34)
–
–
(299)
2,198
–
–
–
–
(140)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(68)
–
–
–
(383)
(135)
–
–
–
–
–
–
–
–
–
–
(285)
(8,278)
(1,286)
(14)
4
(3,779)
(13,663)
–
–
–
–
(518)
(37)
(4)
(883)
166
–
–
–
–
–
–
–
–
–
–
–
(73)
–
–
–
–
–
–
11,312
(11,221)
(91)
Pan African
Pan African
Resources
Resources
Minerals –
Minerals –
(169)
–
–
–
–
–
–
(4,358)
–
(218)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1
Evander Gold Mines Limited and Evander Gold Mining Proprietary Limited are collectively referred to as Evander Mines due to an interim mining arrangement
being in place since 1 March 2013, and until such time that the intra-Group mining right transfer occurs.
2 Dividends received from subsidiaries related to the PAR Gold reciprocal dividend. Refer to the statement of changes in equity and additional disclosures
relating to PAR Gold in note 19.
3 Project Kite relates to an agricultural Group project which is held in a previously dormant Group entity.
244
245
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
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38. RELATED PARTY TRANSACTIONS continued
2022
2022
Funding
Company
PAR
Management
Services
Company
Consolidation
entity
Barberton
Mines
Evander
Mines1
Evander
Gold
Mines
PAR SA
Holdings
PAR Gold K Company
Evander
Solar
Solutions
Project
Kite3
Concrete
Rose
Barberton
Blue
MTR
Pan African
Resources
Minerals –
Sudan
Pan African
Resources
Minerals –
Dubai
US$ thousand
Transactions
Management fee received/(paid)
7,355
(131)
5,425
(394)
(5,700)
(6,240)
Dividends received from/
(paid to) fellow Group companies2
Intra-Group finance income/(costs)
Revenue
Cost of production
Gold purchases from Evander Gold
Mines Proprietary Limited
Cost of gold production income
invoiced to Evander Mines
Balances
24,763
–
–
–
–
–
279
3,631
–
–
–
–
(1,521)
–
–
–
–
Company receivables/(payables)
79,594
(68,021)
(19,352)
Funding Company receivables/
(payables)
PAR Management Services
receivables/(payables)
Barberton Mines receivables/
(payables)
Evander Mines |receivables/
(payables)
68,021
(25,076)
(25,812)
19,352
25,812
(3,127)
–
–
–
–
–
–
–
(3,623)
(25,322)
–
1,718
(3,430)
–
(308)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(112,078)
112,078
110,969
(110,969)
–
59,122
(72,194)
(21,980)
(25,734)
409
–
–
(63,340)
63,273
–
–
–
–
–
–
–
–
–
3,623
–
–
–
–
–
11,407
–
–
(23)
–
–
–
–
–
(197)
(39)
–
(79)
–
(27)
308
–
–
–
(2)
–
(96)
–
–
–
–
–
280
–
–
–
–
–
–
–
(252)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(35)
(3,602)
11
7
3,811
(297)
(3,079)
(1,266)
5
(3,242)
–
–
–
–
7,522
–
–
–
–
–
(389)
(42)
(406)
(3)
67
–
–
–
–
(85)
(1,329)
–
–
–
–
–
–
–
–
–
–
–
–
1
2
Evander Gold Mines Limited and Evander Gold Mining Proprietary Limited are collectively referred to as Evander Mines due to an interim mining arrangement
being in place since 1 March 2013, and until such time that the intra-Group mining right transfer occurs.
Dividends received from subsidiaries related to the PAR Gold reciprocal dividend. Refer to the statement of changes in equity and additional disclosures
relating to PAR Gold in note 19.
3 Project Kite relates to an agricultural Group project which is held in a previously dormant Group entity.
Refer to investments in subsidiaries (note 19) for the relationships of the related parties to the Company.
All key management personnel involved in related party transactions are directors and prescribed officers whose remuneration is
disclosed in note 37.
Intra-Group loans provided by Funding Company have no specific repayment terms but bear interest in relation to treasury services rendered.
246
247
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
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39. COMMITMENTS
The Group had contracted outstanding open orders at the reporting date of US$34.4 million (2022: US$27.4 million).
Board-approved commitments for the next reporting period, not yet contracted for, amount to US$155.6 million (2022: US$82.1 million).
40. CONTINGENT LIABILITIES
The Group identified no material contingent liabilities in the current or previous reporting period.
41. GOING CONCERN
The Group closely monitors and manages its liquidity risk by means of a centralised treasury function. Cash forecasts are regularly produced
and sensitivities run for different scenarios including, but not limited to, changes in commodity prices and different production profiles
from the Group’s operations. The Group had US$49.9 million (2022: US$42.4 million) of available debt facilities and US$34.7 million
(2022: US$26.7 million) of cash and cash equivalents at 30 June 2023. The Group has considered the going concern forecast through to
30 June 2025, using a base case rand gold price of ZAR1,050,000/kg (US$1,838/oz) and a downside rand gold price of ZAR954,000/kg
(US$1,670/oz). The Group’s forecasts based on the board-approved budgets demonstrate that it will have sufficient liquidity headroom to
meet its obligations, under both scenarios, in the ordinary course of business and will comply with financial covenants for the 12 months
from the authorisation date of the financial statements; in the downside case, this includes mitigating actions which are in management’s
control.
42. EVENTS AFTER THE REPORTING PERIOD
Subsequent to the current reporting period, the Group entered into a ZAR1.3 billion (US$70.3 million) senior debt facility, designated for
the funding of the Group’s MTR project and a refinance of the existing RCF of ZAR1 billion (US$54.1 million) with a new repayment date
of 30 June 2026. The senior debt facility and RCF were underwritten by RMB, with Nedbank Limited (acting through its Nedbank Corporate
and Investment Banking division) as co-financier.
The new RCF has a three-year term and provides the Group with access to flexible and cost-effective working capital. The senior debt
facility has a six-year term, with quarterly repayments commencing two years after the financial close date. The financial close date for this
agreement for both facilities became effective on 31 July 2023.
Mechanised mining equipment at Fairview Mine
248
249
NOTES TO THE FINANCIAL STATEMENTS continuedfor the reporting period ended 30 JunePAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 2,000
gold atoms per nanoparticle
Shareholders’ analysis
Alternative performance measures
Glossary
Corporate information
Shareholders’ diary
252
254
262
IBC
IBC
OTHER
INFORMATION
500 unit cells per nanoparticle. 5Pan African has again
expanded its shareholder
base in the past year.
The crystal structure of gold reveals that there are
four atoms per unit cell and approximately
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SHAREHOLDERS’ ANALYSIS
for the year ended 30 June 2023
Register date:
30 June 2023
Issued share capital:
2,222,862,046 shares
SHAREHOLDER SPREAD
2023
2022
Number
of share-
holders
4,937
2,216
1,655
495
190
%
52.01
23.34
17.43
5.21
2.01
Number
of shares
768,436
9,630,796
56,664,701
159,826,334
%
0.04
0.43
2.55
7.19
1,995,971,779
89.79
Number
of share-
holders
4,777
2,298
1,633
519
210
%
50.62
24.35
17.30
5.50
2.23
Number of
shares
741,271
10,051,803
55,492,031
164,097,707
%
0.03
0.45
2.50
7.38
1,992,479,234
89.64
1 – 1,000 shares
1,001 – 10,000 shares
10,001 – 100,000 shares
100,001 – 1,000,000 shares
1,000,001 shares and over
Total
9,493
100.00
2,222,862,046
100.00
9,437
100.00
2,222,862,046
100.00
DISTRIBUTION OF SHAREHOLDERS
2023
2022
7,979
84.05
101,161,142
Number
of share-
holders
255
26
39
20
–
%
2.69
0.27
0.41
0.21
–
24
10
6
177
268
46
511
125
7
0.25
0.11
0.06
1.86
2.82
0.48
5.38
1.33
0.08
Number
of shares
Number
of share-
holders
%
828,707,727
37.28
273
56,299,843
2,509,203
10,528,716
–
31,359,043
1,186,658
6,286,585
2.53
0.11
0.47
–
4.55
1.41
0.05
0.28
506,004,728
22.76
17,878,575
942,318
326,557,426
330,514,591
2,925,491
0.80
0.04
14.70
14.88
0.14
%
2.89
0.26
0.35
0.26
0.01
25
33
25
1
8,012
84.90
29
7
5
195
264
57
392
111
8
0.31
0.07
0.05
2.07
2.80
0.60
4.15
1.18
0.1
Number of
shares
%
805,737,677
36.25
42,155,676
2,220,769
10,876,662
94,500
94,603,649
38,431,746
763,878
5,219,253
1.90
0.10
0.49
–
4.26
1.73
0.03
0.23
532,489,245
23.96
17,548,900
1,535,627
337,113,638
331,005,715
3,065,111
0.79
0.07
15.17
14.89
0.13
9,493
100.00
2,222,862,046
100.00
9,437
100.00
2,222,862,046
100.00
Banks
Brokers
Close corporations
Endowment funds
Hedge funds
Individuals
Insurance companies
Investment companies
Medical aid schemes
Mutual funds
Nominees and trusts
Other corporations
Pension funds
Private companies
Public companies
Total
PUBLIC/NON-PUBLIC SHAREHOLDERS
2023
2022
Number
of share-
holders
13
11
2
9,480
9,493
%
0.14
0.12
Number
of shares
721,371,735
14,217,947
0.02
707,153,788
99.86
1,501,490,311
%
32.45
0.64
31.81
67.55
100.00
2,222,862,046
100.00
Number
of share-
holders
13
11
2
9,424
9,437
%
0.14
0.12
Number of
shares
736,408,851
13,787,947
0.02
722,620,904
99.86
1,486,453,195
%
33.13
0.62
32.51
66.87
100.00
2,222,862,046
100.00
Non-public shareholders
Directors
Strategic holders (more
than 10%)
Public shareholders
Total
BENEFICIAL SHAREHOLDERS’ HOLDING OF 3% OR MORE
PAR Gold
South African state-controlled entities
Allan Gray Balanced Fund
LF Ruffer Gold Fund
2023
Number
of shares
306,358,058
228,671,312
145,358,460
94,424,183
2022
Number of
shares
306,358,058
204,234,290
145,358,460
100,158,862
%
13.78
10.29
6.54
4.25
SHAREHOLDERS’ HOLDING OF 5% OR MORE
Allan Gray Investment Management
PAR Gold
MandG Investment Managers Proprietary Limited
2023
Number
of shares
400,795,730
306,358,058
127,885,647
2022
%
18.03
13.78
5.75
Number of
shares
416,262,846
306,358,058
–
%
13.78
9.19
6.54
4.51
%
18.73
13.78
–
252
253
PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
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ALTERNATIVE PERFORMANCE MEASURES
INTRODUCTION
When assessing and discussing Pan
African’s reported financial performance,
financial position and cash flows,
management makes reference to
alternative performance measures (APMs)
of historical or future financial performance,
financial position or cash flows that are not
defined or specified under IFRS.
The APMs include financial APMs, non-
financial APMs and ratios, as described
below.
• Financial APMs: These financial
measures are usually derived from
the annual financial statements which
have been prepared in accordance
with IFRS. Certain financial measures
cannot be directly derived from the
annual financial statements as they
contain additional information, such as
financial information from earlier periods
or profit estimates or projections. The
accounting policies applied when
calculating APMs are, where relevant
and unless otherwise stated, the same
as those disclosed in the consolidated
annual financial statements for the year
ended 30 June 2023.
• Non-financial APMs: These
measures incorporate certain non-
financial information that management
believes is useful when assessing the
performance of the Group.
• Ratios: Ratios may be calculated using
any of the APMs referred to above,
IFRS measures or a combination of
APMs and IFRS measures. APMs are
not uniformly defined by all companies
and may not be comparable with APM
disclosures made by other companies,
and they exclude:
– measures defined or specified by an
applicable reporting framework such
as revenue, profit or loss or earnings
per share
– physical or non-financial measures
such as number of employees,
number of subscribers, revenue per
unit measure (when the revenue
figures are extracted directly from
the annual financial statements) or
social and environmental measures
such as gas emissions, breakdown
of workforce by contract or
geographical location
–
–
information on major shareholdings,
acquisition or disposal of own shares
and total number of voting rights
information to explain the compliance
with the terms of an agreement or
legislative requirements such as
lending covenants or the basis of
calculating director or executive
remuneration.
APMs should be considered in addition to,
and not as a substitute for or as superior
to, measures of financial performance,
financial position or cash flows reported in
accordance with IFRS.
PURPOSE OF APMs
The Group uses APMs to improve the
comparability of information between
reporting periods and reporting segments
by adjusting for uncontrollable or once-off
factors which impact IFRS measurements
and disclosures to aid the user of the
integrated annual report in understanding
the activity taking place across the Group’s
portfolio. The directors are responsible for
preparing and ensuring the APMs comply
with Practice Note 4/2019 (Performance
Measures) of the JSE Listings
Requirements.
Their use is driven by characteristics
particularly visible in the mining sector.
• Earnings volatility: The sector is
characterised by significant volatility
in earnings driven by movements in
macroeconomic factors, primarily
commodity prices and foreign
exchange rates.
• This volatility is outside the control
of management and can mask
underlying changes in performance.
As such, when comparing year-on-year
performance, management excludes
certain non-recurring items to aid
comparability and then quantifies
and isolates uncontrollable factors
to improve understanding of the
controllable portion of variances.
• Nature of investment: Investments
in the sector are typically capital-
intensive and occur over several years
requiring significant funding before
generating cash. These investments
are often made through debt and
equity providers and the nature of the
Group’s ownership interest affects how
the financial results of these operations
are reflected in the Group’s results, for
example, whether full consolidation
(subsidiaries), consolidation of the
Group’s attributable assets and liabilities
(joint operations) or equity-accounted
(associates and joint ventures).
• Portfolio complexity: At year-end, the
Group’s operating portfolio remains
largely in commodities, mainly gold,
which accounts for 99.8% of the
Group’s revenue at year-end. The
cost, value of and return from each
saleable unit (such as tonne or ounce)
therefore does not differ materially
between each operating business. This
makes understanding both the overall
portfolio performance, and the relative
performance of each mining operation
on a like-for-like basis, less challenging.
Consequently, APMs are used by the
board and management for planning
and reporting. A subset is also used
by management in setting director and
management remuneration. The measures
are also used in discussions with the
investment analyst community and credit
rating agencies.
Financial APMs
Group APM
Performance
All-in
sustaining
costs (AISC)
Related IFRS
measure
Adjustments to reconcile to primary statements
Rationale for adjustment
Cost of
production
• Other related costs as defined by the World Gold Council,
including royalty costs, community costs, sustaining and
development capital (excluding non-gold operations)
The objective of AISC and all-in cost (AIC)
metrics is to provide key stakeholders
with comparable metrics that reflect,
as close as possible, the full cost of
producing and selling an ounce of gold,
and which are fully and transparently
reconcilable back to amounts reported
under IFRS
As per the above for AISC with additional
expansionary capital and once-off
non-production-related cost adjustments
Excludes the impact of non-recurring
items or certain accounting adjustments
that can mask underlying changes in
performance
Excludes the impact of non-recurring
items or certain accounting adjustments
that can mask underlying changes in
performance
Reflects available cash flow to service
debt obligations
All-in cost
Cost of
production
• Once-off capital costs
Adjusted
EBITDA
Net adjusted
EBITDA
Profit after tax
• Taxation
• Depreciation and amortisation
• Net finance costs
•
Impairment loss or impairment reversals
Profit after tax
• Taxation
• Depreciation and amortisation
• Net finance costs
•
Impairment loss or impairment reversals
• Unrealised fair value gains or losses on financial derivative
instruments undertaken in the normal course of business
Free cash flow
Profit after tax
• Taxation
• Depreciation and amortisation
• Net finance costs
•
Impairment loss or impairment reversals
• Profit/loss after tax from discontinued operations
• Unrealised fair value gains or losses on financial derivative
instruments undertaken in the normal course of business
• Adjusted for working capital changes
• Adjusted for non-cash flow items as determined in
accordance with IAS 7
• Less capital expenditure funded through permitted
indebtedness
• Less tax paid
Attributable
cash flow per
share
Cash generated
by operating
activities
• Less capital expenditure
• Less capital funded through permitted indebtedness
• Less obligatory debt repayments
Headline
earnings
Profit after tax
• Profit on disposal of property, plant and equipment
• Tax on profit on disposal of property, plant and equipment
and mineral rights
•
Impairment or impairment reversals
• Tax on impairment or impairment reversals
Statement of financial position
Net debt
Borrowings
from financial
institutions less
cash and related
hedges
•
•
IFRS 9 accounting adjustments
IFRS 16 lease liabilities
• Restricted cash
•
Instalment sale obligations
Net senior debt Borrowings
from financial
institutions less
cash
•
•
IFRS 9 accounting adjustments
IFRS 16 lease liabilities
• Restricted cash
•
Instalment sale obligations
Indicates the extent of the Group’s
normalised earnings to shareholders
based on SAICA’s Circular 2021/1
Excludes the impact of accounting
adjustments from the net debt obligations
of the Group
Refer to note 35
Excludes the impact of accounting
adjustments from the net debt obligations
of the Group
254
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OTHER
INFORMATION
ALTERNATIVE PERFORMANCE MEASURES continued
All-in sustaining costs
Incorporates costs related to sustaining current production. AISC are defined by the World Gold Council as operating costs plus costs
not already included therein relating to sustaining the current production, including sustaining capital expenditure. The value of by-product
revenue is deducted from operating costs as it effectively reduces the cost of gold production.
All-in costs
Includes additional costs which relate to the growth of the Group. AIC starts with AISC and adds additional costs which relate to the
growth of the Group, including non-sustaining capital expenditure not associated with current operations and costs such as voluntary
severance pay.
AISC and AIC are reported on the basis of a rand per kilogramme of gold and US$ per ounce of gold. The US$ equivalent is converted at
the average exchange rate applicable for the current financial year as disclosed in the Group’s operational production table on pages 94 and
95. A kilogramme of gold is converted to an ounce of gold at a ratio of 1:32.1509.
The following tables set out a reconciliation of Pan African’s cost of production as calculated in accordance with IFRS to AISC and AIC for
the financial years ended 30 June 2023 and 30 June 2022. The equivalent of a rand per kilogramme and US$ per ounce basis is disclosed
in the Group’s operational production table on pages 94 and 95.
Mining operations
Tailings operations
Total operations
Year ended
30 June 2023
ZAR million
Bar-
berton
Mines
Evander
Mines
Total
Bar-
berton
Mines
BTRP
Evander
Mines’
surface
sources
Bar-
berton
Mines
total1
Evander
Mines
total1
Group
total1
Elikhulu
Total
Cost of
production
1,647.2
639.4
2,286.6
247.9
201.8
819.1
1,268.8
1,895.1
1,660.3
3,555.4
3,555.4
Royalties
10.6
5.3
15.9
0.1
–
–
–
–
–
–
1.2
1.3
10.7
6.5
17.2
17.2
–
–
–
–
21.1
4.2
25.3
25.3
(1.8)
(6.7)
(8.5)
(8.5)
57.6
57.6
101.8
104.1
205.9
205.9
–
–
–
–
(6.0)
(4.3)
(10.3)
(10.3)
128.9
–
128.9
128.9
–
–
–
–
–
21.1
4.2
25.3
(1.8)
(6.7)
(8.5)
101.8
46.5
148.3
(6.0)
(4.3)
(10.3)
128.9
128.9
175.2
–
–
Community cost
related to gold
operations
By-products
credits
Corporate,
general and
administrative
costs
Reclamation
and remediation
– accretion and
amortisation
(operating sites)
Sustaining
capital –
development
Sustaining
capital –
maintenance
All-in sustaining
costs1
Expansion
capital – capital
expenditure
175.2
5.2
9.4
27.9
42.5
180.4
37.3
217.7
217.7
2,076.9
684.4
2,761.3
253.1
211.2
905.9
1,370.2
2,330.0
1,801.5
4,131.5
4,131.5
46.7
1,077.8
1,124.5
6.4
–
304.5
310.9
53.1
1,382.3
1,435.4
1,435.4
Mining operations
Tailings operations
Total operations
Year ended
30 June 2022
ZAR million
Bar-
berton
Mines
Evander
Mines
Total
BTRP
Evander
Mines’
surface
sources
Elikhulu
Total
Bar-
berton
Mines
total1
Evander
Mines
total1
Group
total1
Cost of
production
1,495.6
768.4
2,264.0
256.7
226.3
694.2
1,177.2
1,752.3
1,688.9
3,441.2
Royalties
23.3
6.8
30.1
0.8
–
–
–
–
–
–
1.0
1.8
24.1
7.8
31.9
–
–
–
–
24.1
1.1
25.2
(1.5)
(9.1)
(10.6)
54.3
54.3
75.7
115.3
191.0
–
–
–
–
(2.0)
(1.3)
(3.3)
113.1
–
113.1
24.1
1.1
25.2
(1.5)
(9.1)
(10.6)
75.7
61.0
136.7
(2.0)
(1.3)
(3.3)
113.1
113.1
167.6
–
–
–
–
–
–
–
Community cost
related to gold
operations
By-products
credits
Corporate,
general and
administrative
costs
Reclamation
and remediation
– accretion and
amortisation
(operating sites)
Sustaining
capital –
development
Sustaining
capital –
maintenance
All-in sustaining
costs1
Expansion
capital – capital
expenditure
167.6
7.7
7.8
47.9
63.4
175.3
55.7
231.0
1,895.9
827.0
2,722.9
265.2
234.1
797.5
1,296.8
2,161.1
1,858.6
4,019.7
144.1
410.4
554.5
–
All-in costs1
2,040.0
1,237.4
3,277.4
265.2
1 This total may not reflect the sum of the line items due to rounding.
11.9
246.0
120.5
918.0
132.4
144.1
542.8
686.9
1,429.2
2,305.2
2,401.4
4,706.6
All-in costs1
2,123.6
1,762.2
3,885.8
259.5
211.2
1,210.4
1,681.1
2,383.1
3,183.8
5,566.9
5,566.9
1 This total may not reflect the sum of the line items due to rounding.
256
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
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OTHER
INFORMATION
ALTERNATIVE PERFORMANCE MEASURES continued
Sustaining capital
Sustaining capital is the capital needed to sustain the current production base.
Expansion capital
Expansion capital relates to capital expenditure for the growth of the production base.
Sustaining capital
Expansion capital
Total capital
2023
US$ million
2022
US$ million
2023
US$ million
2022
US$ million
2023
US$ million
2022
USS million
Mining
operations
BTRP
Barberton
Mines total
Mining
operations
Surface
sources
Elikhulu
Evander
Mines total
Agricultural
ESG projects
Solar projects
Exploration
assets
Corporate
Barberton
Mines
Evander
Mines
MTR project
Corporate
Group total
17.1
0.3
17.4
–
0.5
1.6
2.1
–
0.4
–
–
0.3
20.2
18.4
0.5
18.9
–
0.5
3.1
3.6
–
–
–
–
0.6
23.1
2.6
0.4
3.0
60.7
–
17.1
77.8
8.8
–
2.3
0.9
–
92.8
9.5
–
9.5
26.9
0.8
7.9
35.6
–
1.0
8.8
3.6
1.2
59.7
19.7
0.7
20.4
60.7
0.5
18.7
79.9
8.8
0.4
2.3
0.9
0.3
113.0
27.9
0.5
28.4
26.9
1.3
11.0
39.2
–
1.0
8.8
3.6
1.8
82.8
Net debt
Net debt is calculated as total borrowings from financial institutions (before IFRS 9 accounting adjustments less cash and cash equivalents
(including derivatives that are entered into in connection with protection against, or benefit from, fluctuations in exchange rates or commodity
prices)). A reconciliation to the consolidated statement of financial position is provided in note 35 to the annual financial statements.
Net senior debt
Net senior debt includes secured, interest-bearing debt provided by financial institutions, net of available cash.
US$ million
Cash and cash equivalents
Restricted cash
Borrowings
Refinancing modification adjustment
Facilities arranging fees adjustment
Net senior debt
2023
(34.8)
0.2
53.4
–
0.1
18.9
2022
(27.0)
0.3
34.6
0.7
0.7
9.3
Adjusted EBITDA
Adjusted EBITDA is a measure of the Group’s operating performance and is calculated as net profit or loss for the Group before finance
income and finance costs and tax, before any amount attributable to the amortisation of intangible assets and the depreciation of tangible
assets and before any extraordinary items or the impairment of non-financial assets. A reconciliation of the Group’s adjusted EBITDA is
provided in note 7 to the annual financial statements.
A reconciliation of the adjusted EBITDA by operation has been provided below.
Mining operations
Tailings operations
Total operations
Bar-
berton
Mines
Evander
Mines
Total
BTRP
Evander
Mines’
surface
sources
Evander
Mines
Total
Bar-
berton
Mines
total
Evander
Mines
total
Group
total
447.4
503.0
950.4
263.3
11.3
669.9
944.5
710.7
1,184.2
1,894.9
110.0
557.4
127.5
237.5
630.5
1,187.9
46.5
309.8
–
11.3
66.3
736.2
112.8
1,057.3
156.5
867.2
193.8
350.3
1,378.0
2,245.2
557.4
630.5
1,187.9
309.8
11.3
736.2
1,057.3
867.2
1,378.0
2,245.2
636.1
545.5
1,181.6
160.1
30.6
700.8
891.5
796.2
1,276.9
2,073.1
101.5
737.6
–
59.4
160.9
604.9
1,342.5
–
–
57.7
217.8
–
–
30.6
–
183.0
883.8
7.1
240.7
1,132.2
7.1
159.2
955.4
–
242.4
401.6
1,519.3
2,474.7
7.1
7.1
737.6
604.9
1,342.5
217.8
30.6
890.9
1,139.3
955.4
1,526.4
2,481.8
ZAR million
Net income
before finance
income and
finance costs
Depreciation
and amortisation
EBITDA
Adjusted
EBITDA – 2023
Net income
before finance
income and
finance costs
Depreciation
and amortisation
EBITDA
Impairment
Adjusted
EBITDA – 2022
Net adjusted EBITDA
Net adjusted EBITDA starts with adjusted EBITDA adjusted for any entries made to unrealised fair value gains or losses on financial
derivative instruments that are entered into in the normal course of business as part of the Group’s financial risk management process.
A reconciliation from adjusted EBITDA to net adjusted EBITDA is provided in note 35 to the annual financial statements.
Total finance costs on interest-bearing facilities
Is defined as interest payable on the Group’s debt facilities and has been calculated in note 35 to the annual financial statements.
Free cash flow
Free cash flow starts with adjusted EBITDA and is adjusted for changes in net working capital, non-cash flow items as determined by IAS 7,
capital expenditure less capital funded through permitted indebtedness and tax payments.
A reconciliation from adjusted EBITDA to free cash flow has been calculated in note 35 to the annual financial statements.
Headline earnings
Headline earnings, a JSE-defined performance measure (as defined by Circular 2021/1 issued by SAICA), are reconciled from profit/(loss)
after tax in note 13 to the annual financial statements.
258
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OTHER
INFORMATION
ALTERNATIVE PERFORMANCE MEASURES continued
RATIOS
Return on shareholder funds
This ratio measures returns to equity shareholders as a percentage of the capital invested in the Group. It is calculated as profit/(loss) after
tax expressed as a percentage of the average total equity for the current and previous financial years.
Net debt-to-equity ratio
This ratio measures the degree to which the Group finances its operations through debt relative to equity and is calculated as net debt
divided by total equity. This ratio has been calculated in note 35 to the annual financial statements.
Net debt-to-net adjusted EBITDA ratio
This ratio measures the number of years it would take the Group to repay its net debt from net adjusted EBITDA assuming both variables
are held consistent and is calculated as net debt divided by net adjusted EBITDA. This ratio has been calculated in note 35 to the annual
financial statements.
Interest cover ratio
This ratio measures the Group’s ability to pay interest on its outstanding senior debt from net adjusted EBITDA and is calculated as total net
adjusted EBITDA divided by finance costs incurred on interest-bearing debt. This ratio has been calculated in note 35 to the annual financial
statements.
Debt service cover ratio
This ratio measures the cash flow available for debt service relative to the Group’s obligatory principal and interest debt obligations and is
calculated as free cash flow available for debt service divided by principal and interest-debt obligations. This ratio has been calculated in
note 35 to the annual financial statements.
Net asset value per share
Is calculated as total equity divided by the total number of shares in issue less treasury shares held by the Group.
Total equity
Shares in issue
Treasury shares
Net asset value per share
Unit
2023
2022
US$ million
million
million
US cents
294.6
2,222.9
(306.4)
15.37
294.6
2,222.9
(306.4)
15.37
Attributable cash flow per share
Is calculated as net cash generated by operating activities adjusted for additions to property, plant and equipment and mineral rights less
capital funded through permitted debt less obligatory borrowings repaid divided by the total number of shares in issue less treasury shares
held by the Group.
Net cash from operating activities
Capital expenditure less capital funded through permitted indebtedness
Obligatory debt capital repayments
Attributable cash flow
Shares in issue
Treasury shares
Total
Attributable cash flow per share
Unit
2023
2022
US$ thousand
US$ thousand
US$ thousand
US$ thousand
100,123
(64,327)
(7,722)
55,016
110,006
(82,810)
(3,611)
23,585
Number thousand
2,222,862
2,222,862
Number thousand
(306,358)
(306,358)
Number thousand
1,916,504
1,916,504
US cents per share
1.46
1.23
Cash flow yield per share
Is calculated as the attributable cash flow per share expressed as a percentage of the price per Pan African share at 30 June.
Attributable cash flow per share
Price per Pan African share1
Cash flow yield per share
Unit
US cents per share
US cents per share
%
2023
1.46
16.09
9.1
2022
1.23
24.20
5.1
1 Amounts converted at the 30 June 2023 closing exchange rate of US$/ZAR:18.83 (2022: US$/ZAR:16.28).
Return on capital employed
This ratio measures the profitability of the capital employed by the Group in its operations. It demonstrates how effectively profits are
generated on both debt and equity capital and is calculated by dividing earnings before finance costs and tax by the sum of the average
equity for the current and previous financial years and the average debt provided by financial institutions for this same period.
Net income before finance income and finance costs
Average equity
Average borrowings
Return on capital employed
Adjusted EBITDA margin
Is calculated as adjusted EBITDA divided by revenue.
Gross profit margin
This is calculated as gross profit divided by revenue.
Unit
US$ million
US$ million
US$ million
%
2023
94.1
294.6
44.0
27.8
2022
111.1
289.1
51.6
32.6
Current ratio
The liquidity ratio that measures the Group’s ability to pay its current liabilities from current assets and is calculated as current assets divided
by current liabilities and has been calculated in the Group’s five-year overview on pages 70 and 71.
Price earnings ratio
Is calculated as the last sale price (refer to the Group’s five-year overview on pages 70 and 71) for the year divided by the earnings per share
either in ZA cents or in GB pence per the table below.
2023
cents
2023
pence
2022
cents
2022
pence
2021
cents
2021
pence
2020
cents
2020
pence
2019
cents
2019
pence
Earnings per share
56.69
2.65
59.16
2.92
59.65
2.88
36.0
1.82
27.89
1.54
Dividend yield at the last traded share price
Is calculated as the dividend per share either in ZA cents or GB pence per the table below expressed as a percentage of the last price per
share traded per the Group’s five-year overview on pages 70 and 71.
2023
cents
2023
pence
2022
cents
2022
pence
2021
cents
2021
pence
2020
cents
2020
pence
2019
cents
2019
pence
Dividends per share
18.00
0.75
18.00
0.90
18.00
0.92
14.00
0.65
2.24
0.13
260
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PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023
OUR BUSINESS
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OTHER
INFORMATION
GLOSSARY
DEFINITIONS OF TERMS AND ABBREVIATIONS USED IN THIS REPORT
Parts per hundred/percentage
COVID-19
%
ºC
um
79
3D
A2X
ADR
AGM
AIM
APMs
Au
CRM
CSI
DMRE
DMTN
Elikhulu
Degrees Celsius
Micrometre
The atomic number of gold
Three-dimensional
The A2X Market is a licensed stock exchange
authorised to provide a secondary listing
venue for companies and is regulated by
the Financial Sector Conduct Authority and
the South African Reserve Bank’s Prudential
Authority, in terms of the Financial Markets
Act, 19 of 2012
American Depository Receipt programme
through the Bank of New York Mellon
Annual general meeting
Alternative Investment Market, the LSE’s
international market for smaller growing
companies
Alternative performance measures
Gold
B-BBEE
Broad-based black economic empowerment
Barberton Blue
Barberton Blue Proprietary Limited
Barberton Green
Barberton Green Proprietary Limited
Barberton Mines
Barberton Mines Proprietary Limited
Barberton Mines
BEE Company
Barberton Mines BEE Company Proprietary
Limited
BIOX®
Blyvoor
the board
Brownfield
project
BTRP
CCTV
cm
cmg/t
CO2
CO2 e/t
The Biological Oxidation (BIOX®) gold
extraction process was developed at
Barberton Mines. It is an environmentally
friendly process of releasing gold from the
sulphide that surrounds it by using bacteria
Blyvoor Gold Operations Proprietary Limited
The board of directors of Pan African, as set
out on pages 140 and 141
Project based on prior work or rebuilt from a
previous one
Barberton Tailings Retreatment Plant, a gold
recovery tailings plant owned by Barberton
Mines, which reached steady-state production
in June 2013
Closed-circuit television
Centimetre
Centimetre grammes per tonne
Carbon dioxide
Carbon dioxide emissions per tonne
The Elikhulu Tailings Retreatment Plant in
Mpumalanga province, with its inaugural gold
pour in August 2018
ESG
Environmental, social and governance
ESG report
Eskom
Pan African’s environmental, social and
governance report
Electricity Supply Commission, South Africa
electricity supplier
ESOP
Employee share ownership plan
Evander Gold
Mines
Evander Gold Mines Proprietary Limited
Evander Mines
Evander Gold Mining Proprietary Limited
Evander Mines
BEE Company
Evander Mines BEE Company Proprietary
Limited
Evander Solar
Solutions
Evander Solar Solutions Proprietary Limited
Exco
FIFR
FRC
Executive committee of Pan African
Resources
Fatal injury frequency rate
The UK Financial Reporting Council
Funding
Company
Pan African Resources Funding Company
Proprietary Limited
g
GBP
GHG
GISTM
GJ
GRI
g/t
ha
HDP
HDSA
HODs
IAS
IFRS
Gramme
British pound
Greenhouse gas
Global Industry Standard on Tailings
Management
Gigajoule
Global Reporting Initiative
Grammes/tonne
Hectare
Historically disadvantaged person
Historically disadvantaged South African
Heads of departments
International Accounting Standards
International Financial Reporting Standards
Companies Act
2006
An act of the Parliament of the UK which
forms the primary source of UK company law
Concrete Rose
Concrete Rose Proprietary Limited
Framework
International Integrated Reporting Framework
of the IFRS Foundation
Coronavirus disease 2019, an infectious
disease caused by severe acute respiratory
syndrome coronavirus 2 (SARS-CoV-2)
Certified reference material
Corporate social investment
Department of Mineral Resources and Energy
ISAs (UK)
International Standards on Auditing (UK)
ISIN
ITRB
JSE
International Securities Identification Number
Independent tailings review board
JSE Limited incorporating the Johannesburg
Stock Exchange, the main bourse in South
Africa
Domestic Medium-term Note
juwi South Africa
juwi Renewable Energies Proprietary Limited
K Company
K2015200726 Proprietary Limited
kg
King IV™
km
km2
Koz
KPIs
kt
ktCO2e
LED
LSE
LTIFR
m
Kilogramme
King IV Report on Corporate Governance for
South Africa, 2016™
Kilometres
Square kilometre
Thousand ounces
Key performance indicators – a set of
quantifiable measures that a company
or industry uses to gauge or compare
performance in terms of meeting their
strategic and operational goals
Thousand tonnes
Please define (from the ESG report)
Local economic development
London Stock Exchange
Lost-time injury frequency rate
Metre
Manco
Management committee on operations
MC Mining
MC Mining Limited (previously known as
Coal of Africa Limited)
Metorex
Metorex Limited
Mintails
transaction
ML
MMR
Pan African entered into conditional sale of
shares agreements to acquire Mogale Gold
and MSC
Megalitre
Main Muiden Reef
Mogale Gold
Mogale Gold Proprietary Limited
MW
MWh
n
NEMA
NPC
Opsco
OTCQX
oz
p
PACOS
Pan African
Resources PLC
Megawatt
Megawatt hour
Neutron
National Environmental Management Act, 127
of 1998
Non-profit company
Operations committee of Pan African
Resources
OTCQX Best Market in the United States of
America
Ounce
Proton
Pan African Corporate Option Scheme
(new revised scheme for corporate senior
managers, effective from 1 July 2018)
Holding company – Pan African
PAR Gold
PAR Gold Proprietary Limited
PAR
Management
Services
PAR Properties
Pan African Resources Management Services
Company Proprietary Limited
Pan African Resources Properties Proprietary
Limited
PAR SA Holdings Pan African Resources SA Holding Company
PASABP
PC
PGLIP
pm
Proprietary Limited
Pan African Share Appreciation Bonus
Plan (previous scheme for corporate senior
managers)
Barberton Mines’ Prince Consort Shaft
PAR Gold Long-term Incentive Plan
Picometre
Prescribed officer A person is a prescribed officer of the
Company for all purposes of the South
African Companies Act if that person
exercises general executive control over and
management of the whole, or a significant
portion, of the business and activities of the
Company
Project Kite relates to an agricultural Group
project which is held in a previously dormant
Group entity
PricewaterhouseCoopers LLP/
PricewaterhouseCoopers Inc.
Moz
MRC
MRE
MSC
Mt
MTR
MTR project or
plant
Million ounces
Main Reef Complex
Project Kite
Mineral Resources estimation
Mintails SA Soweto Cluster Proprietary Limited
PwC
Megatonne
Mogale Tailings Retreatment Proprietary
Limited
The Mogale Tailings Retreatment project is
located in the Mogale district. A plant is being
constructed to process gold tailings deposited
onto the Mogale Gold and MSC TSFs
QA/QC
Quality assurance and quality control
Rand Refinery
Rand Refinery Proprietary Limited
Redink facility
Redink Rentals (RF) Limited loan
REMchannel®
Internet-based remuneration survey providing
data across a wide variety of industries in
South Africa
262
263
PAN AFRICAN RESOURCES PLC Integrated annual report 2023PAN AFRICAN RESOURCES PLC Integrated annual report 2023 OUR BUSINESS
AND STRATEGY
PERFORMANCE
REVIEW
ENVIRONMENTAL, SOCIAL AND
CORPORATE GOVERNANCE
ANNUAL FINANCIAL
STATEMENTS
OTHER
INFORMATION
GLOSSARY continued
Remco
RIFR
RMB
RoM
SA
SAFEX
SAICA
Remuneration committee of Pan African
Resources
Reportable injury frequency rate
Rand Merchant Bank, a division of FirstRand
Bank Limited
Run-of-mine
South Africa
South African Futures Exchange
South African Institute of Chartered
Accountants
SAMREC Code
South African Code for the Reporting of
Exploration Results, Mineral Resources and
Mineral Reserves, 2016 edition
SANS
SARS
SBLF
SCADA
SENS
South African National Standard
South African Revenue Service
Sustainability Bond Linked Finance
Supervisory control and data acquisition
Stock Exchange News Service
SGS Barberton
SGS Barberton assay laboratory
SGS
Performance
SHEQC
SLP
South African
Companies Act
t
TCFD
SGS Performance assay laboratory located in
Randfontein
Safety, health, environment, quality and
community
Social and Labour Plan, required in terms of
Regulation 46 of the Mineral and Petroleum
Resources Development Act, 28 of 2002
South African Companies Act, 71 of 2008
Tonne
Task Force on Climate-related Financial
Disclosures
TCFD report
Pan African’s Task Force on Climate-related
Financial Disclosures report
tCO2e
tonnes (t) of carbon dioxide (CO2) equivalent
The financial year ended 30 June 2023
the current
financial year or
the year under
review
the Group or the
Company or Pan
African
Pan African Resources PLC, listed on the
LSE’s AIM and on the JSE in the Gold Mining
sector
the prior or
previous financial
year
The financial year ended 30 June 2023
the report
TJ
TRIFR
TSF
UK
UN SDGs
US
USA
US$
VAT
ZAR
ZK
Pan African Resources PLC’s 2023 integrated
annual report
Terajoule (Tera = 1012) or a trillion joules
Total recordable injury frequency rate
Tailings storage facility
United Kingdom
United Nations Sustainable Development
Goals
United States
United States of America
United States dollar
15% value-added tax in South Africa
South African rand
Zwartkoppie
FREQUENTLY USED FINANCIAL TERMS
AIC
AISC
bps
CFD
CGU
All-in cost
All-in sustaining costs
Basis points
Contract for difference
Cash-generating unit
EBITDA
Earnings before interest, income taxation
expense, depreciation and amortisation
ECL
GDP
IBOR
JIBAR
LTI
RCF
ROSF
STI
TGP
TSR
Expected credit loss/es
Gross domestic product
Interbank offered rate
Johannesburg Interbank Average Rate
Long-term incentive
Revolving credit facility
Return on shareholders’ funds
Short-term incentive
Total guaranteed pay
Total shareholder returns
VWAP
Volume-weighted average price
264
CORPORATE
INFORMATION
CORPORATE OFFICE
The Firs Building
2nd Floor, Office 204
Corner Cradock and Biermann Avenues
Rosebank, Johannesburg
South Africa
Office: +27 (0) 11 243 2900
Email: info@paf.co.za
REGISTERED OFFICE
107 Cheapside
2nd floor
London EC2V 6DN
United Kingdom
Office: +44 (0) 20 7796 8644
CHIEF EXECUTIVE OFFICER
Cobus Loots
Office: +27 (0) 11 243 2900
FINANCIAL DIRECTOR
AND DEBT OFFICER
Deon Louw
Office: +27 (0) 11 243 2900
HEAD INVESTOR RELATIONS
Hethen Hira
Office: +27 (0) 11 243 2900
COMPANY SECRETARY
Jane Kirton
St James’s Corporate Services Limited
Office: +44 (0) 20 7796 8644
JSE SPONSOR
Ciska Kloppers
Questco Corporate Advisory
Proprietary Limited
Office: +27 (0) 11 011 9200
NOMINATED ADVISER
AND JOINT BROKERS
Ross Allister/David McKeown
Peel Hunt LLP
Office: +44 (0) 20 7418 8900
JOINT BROKERS
Thomas Rider/Nick Macann
BMO Capital Markets Limited
Office: +44 (0) 20 7236 1010
Matthew Armitt/Jennifer Lee
Joh. Berenberg, Gossler & Co KG
Office: +44 (0) 20 3207 7800
SHAREHOLDERS’
DIARY
Financial year-end
Results announcement
30 June 2023
13 September 2023
Integrated annual report released on website
13 September 2023
Notice of AGM distributed
Annual general meeting
Interim results announcement
31 October 2023
23 November 2023
14 February 2024
FORWARD-LOOKING
STATEMENTS
Statements in this report that address
exploration activities, mining potential
and future plans and objectives of Pan
African are forward-looking statements
and forward-looking information that
involve various risks, assumptions and
uncertainties and are not statements
of fact.
The directors and management of
Pan African believe that the expectations
expressed in such forward-looking
statements or forward-looking information
are based on reasonable assumptions,
expectations, estimates and projections.
These statements, however, should not
be construed as being guarantees or
warranties (whether expressed or implied)
of future performance.
There can be no assurance that such
statements will prove to be accurate
and actual values, results and future
events could differ materially from
those anticipated in these statements.
Important factors that could cause actual
results to differ materially from statements
expressed in this report include among
others, the actual results of exploration
activities, technical analysis, the lack of
availability to Pan African of necessary
capital on acceptable terms, general
economic, business and financial market
conditions, political risks, industry trends,
competition, changes in government
regulations, delays in obtaining
governmental approvals, interest rate
fluctuations, currency fluctuations,
changes in business strategy or
development plans and other risks.
Although Pan African has attempted
to identify important factors that could
cause actual results to differ materially,
there may be other factors that cause
results not to be as anticipated,
estimated or intended. Pan African
is not obliged to publicly update any
forward-looking statements included
in this report, or revise any changes in
events, conditions or circumstances on
which any such statements are based,
occurring after the publication date of
this report, other than as required by
regulation.
PAN AFRICAN RESOURCES PLC Integrated annual report 2023 www.panafricanresources.com
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