2024 INTEGRATED ANNUAL REPORT for the year ended 30 June MINING FOR A FUTURE ENTER > The following tools will assist you throughout this report: Integrated thinking in action Find more information on our website, www.panafricanresources.com/ Alternative performance measures (APMs) as reconciled on pages 282 to 291. Limited assurance obtained CAPITALS Financial capital Human capital Manufactured capital Social and relationship capital Intellectual capital Natural capital Refer to pages 8 and 9. STAKEHOLDERS Providers of capital Communities Customers Governments and regulatory bodies Suppliers Collaboration partners Employees and unions The environment Refer to pages 57 to 65. MATERIAL MATTERS Execution efficiency Innovation and opportunity Growth aspirations Safety, security, health and wellness Cost consciousness Skills attraction and retention Energy management Social licence to operate Infrastructural constraints Tailings management Water management Climate change, decarbonisation and biodiversity Refer to pages 30 to 47. About our report IFC OUR BUSINESS AND STRATEGY About Pan African 4 Timeline 6 Value created and distributed in 2024 8 Reasons to invest in Pan African 10 Chairman’s statement 14 Our value-creating strategy 16 Our strategic objectives and initiatives 18 Our business model 22 Our material matters 30 Our primary risks and opportunities 48 Our key stakeholder relationships 57 Our operating environment 66 PERFORMANCE REVIEW Our key performance indicators 72 Chief executive officer’s review 74 Five-year financial overview 84 Financial director’s review 86 Our sustainability-linked finance framework 94 Operational performance review 96 – Barberton Mines 98 – Evander Mines 101 – Elikhulu 102 – Tailings management 103 Operational production 104 Abridged Mineral Resources and Mineral Reserves report 106 ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE Non-financial and sustainability information 122 Environmental overview 133 Social overview 136 Corporate governance overview 139 Board of directors 144 Remuneration report 149 ANNUAL FINANCIAL STATEMENTS Statement of directors’ responsibilities 186 Chief executive officer’s and financial director’s responsibility statement 187 Certificate of the company secretary 187 Directors’ report 188 Audit and risk committee report 190 Independent auditors’ report to the members of Pan African Resources PLC 194 Statements of financial position 200 Statements of profit or loss and other comprehensive income 201 Statements of cash flows 202 Statements of changes in equity 203 Notes to the financial statements 204 OTHER INFORMATION Shareholders’ analysis 280 Alternative performance measures 282 Sustainability reporting boundary 292 Glossary 293 Corporate information IBC Shareholders’ diary IBC REPORT NAVIGATION CONTENTS General view of Wadi Dirut in Block 12A South ABOUT OUR REPORT INTEGRATED THINKING Our business model embraces 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 (ESG) considerations into our day-to-day activities and strategic initiatives, rather than treating them as separate silos. 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. OUR REPORTING SUITE MINING FOR A FUTURE 2024 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/ 2024 MINERAL RESOURCES AND MINERAL RESERVES REPORT for the year ended 30 June MINING FOR A FUTURE 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/african-mines/mineral-resource-mineral-reserve/ 2024 SUSTAINABLE DEVELOPMENT REPORT for the year ended 30 June MINING FOR A FUTURE Our sustainable development report contains additional non-financial disclosures and is available on our website at: https://www.panafricanresources.com/investors/gri-and-sustainability/ 2024 CLIMATE CHANGE REPORT for the year ended 30 June MINING FOR A FUTURE Our climate change report is available on our website at: https://www.panafricanresources.com/investors/gri-and-sustainability/ 2024 CORPORATE GOVERNANCE REPORT for the year ended 30 June MINING FOR A FUTURE Our corporate governance report, including a comprehensive King IVTM index, is available on our website at: https://www.panafricanresources.com/about/corporate-governance/ 2024 NOTICE OF ANNUAL GENERAL MEETING for the year ended 30 June MINING FOR A FUTURE Our notice of annual general meeting will be available on our website on 30 October 2024 at: https://www.panafricanresources.com/investors/shareholder-announcements/ REPORTING COMPLIANCE Compiling this report has been guided by but not limited to the following: • London Stock Exchange’s (LSE) AIM Market (AIM) Rules • JSE Limited (JSE) Listings Requirements • Global Reporting Initiative (GRI) Standards • IFRS® Accounting Standards (IFRS) • United Kingdom (UK)-adopted International Accounting Standards • International Integrated Reporting Framework (Framework) of the IFRS Foundation • IFRS® Sustainability Disclosure Standards S1 and S2 of the International Sustainability Standards Board • JSE Sustainability Disclosure Guidance • King IV Report on Corporate Governance for South Africa, 2016™ (King IV™) DOUBLE MATERIALITY Materiality is central to our reporting; it enables us to present information that is reasonably expected to influence stakeholder decisions. Our double materiality approach involves identifying, evaluating and prioritising matters based on their potential to impact our ability to create and preserve value over the short (one year), medium (two to three years) and long term (more than three years) horizons (financial materiality) as well as our impact on society, communities and the environment (impact materiality). Our double materiality process is outlined on page 30 Our operating environment is discussed on pages 66 to 69 Our material matters are analysed under each of our capitals on pages 33 to 47 Management is not aware of any material information that was unavailable or subject to legal publication prohibitions. 1 2 3 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. This report encompasses our strategy, operations, financial and non-financial performance and environmental and social responsibility initiatives. 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 improved this report by: • establishing it as the ‘umbrella’ report which brings together our reporting suite with summaries of the information contained in our sustainable development, Mineral Resources and Mineral Reserves, climate change and corporate governance reports • introducing a double materiality assessment to ensure that all material sustainability topics are addressed • improving consistency and comparability with a listing of all key performance indicators (KPIs) – both financial and non- financial – in a single table • further enhancing our balanced reporting • reducing duplication of information with improved cross- references, thereby enhancing conciseness. • 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 • UK Companies Act 2006 (Companies Act 2006) • United Nations Sustainable Development Goals (UN SDGs) • Task Force on Climate-related Financial Disclosures (TCFD) recommendations • Non-financial and sustainability information statement (NFSIS) disclosure requirements. ™ Copyright and trademarks are owned by the Institute of Directors South Africa NPC and all of its rights are reserved. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION STRATEGIC REPORT Our strategic report, including our investment case, on pages 2 to 148, was reviewed and approved by the board on 11 September 2024. 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 2024 including the remediation actions proposed in light of the restatement of the prior year financial statements to prevent a recurrence, 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 186 • The PricewaterhouseCoopers LLP (PwC) opinion on our 2024 annual financial statements is set out on pages 194 to 199 • Key sustainability reported values, containing the gold seal of approval , indicate limited assurance granted by PricewaterhouseCoopers Inc. (PwC Inc.) The limited assurance report from PwC Inc. can be found on pages 69 to 71 in the sustainable development report • The execution of our combined assurance plan is monitored by the audit and risk committee which reports to the board, on an annual basis, on its execution. 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 282 to 291, and a reconciliation to the equivalent IFRS Accounting Standards measures is also 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 Accounting Standards. Also, these APMs may not be comparable with similarly titled measures by other companies, including those in the gold mining industry. 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 2024 financial year. The report is also an accurate reflection of our strategic commitments for the short, medium and long term. The board is of the opinion that the 2024 integrated annual report complies in all material respects with the relevant statutory and regulatory requirements – particularly the Framework, IFRS Accounting Standards, the UK-adopted international standards 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. On the recommendation of the audit and risk committee, the board approved the integrated annual report and the Group’s annual financial statements on 11 September 2024. Keith Spencer Chairman Dawn Earp Lead independent Thabo Mosololi Independent Charles Needham Independent Yvonne Themba Independent Cobus Loots Chief executive officer Deon Louw Financial director Signatures were removed to protect the security and privacy of the signatories. ABOUT OUR REPORT continued BOUNDARY AND SCOPE This report covers material information about our strategic initiatives, operating environment and operational performance for the period 1 July 2023 to 30 June 2024 (the 2024 reporting period) and summarises material information from the sustainable development, Mineral Resources and Mineral Reserves, climate change and corporate governance reports. Details of our financial performance are available in the annual financial statements section of this report. Our integrated reporting boundary Integrated annual report Sustainable development report Mineral Resources and Mineral Reserves report Climate change report Corporate governance report Notice of annual general meeting 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 (Barberton Mines) 100% Pan African Resources Funding Company Proprietary Limited 100% Evander Gold Mining Proprietary Limited (Evander Mines) 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) 70% Mogale Clay Proprietary Limited Agricultural, solar and ESG projects Exploration programmes 80% Barberton Blue Proprietary Limited (Barberton Blue) 80% Pan African Resources Minerals DMCC 100% Evander Solar Solutions Proprietary Limited 100% Pan African Resources Minerals Co Limited 100% Barberton Green Proprietary Limited SUSTAINABILITY REPORTING BOUNDARY Our sustainability reporting boundary is outlined on page 292. FORWARD-LOOKING STATEMENTS Certain statements in this integrated annual report may be regarded as forward-looking statements or forecasts, but do not constitute 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 auditors. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 1 About Pan African 4 Timeline 6 Value created and distributed in 2024 8 Reasons to invest in Pan African 10 Chairman’s statement 14 Our value-creating strategy 16 Our strategic objectives and initiatives 18 Our business model 22 Our material matters 30 Our primary risks and opportunities 48 Our key stakeholder relationships 57 Our operating environment 66 Pan African is a sustainable, safe, high-margin and long-life gold producer. We are strategically transitioning towards a portfolio focused on long-life assets, with a combination of low-cost surface mining and high-grade underground mines. Production (oz/annum) 2024 (2023) Mineral Reserves 2024 (2023) Mineral Resources 2024 (2023) Production (tonnes milled and processed) 2024 (2023) Recovered grade (g/t) 2024 (2023) AISC (US$/oz) 2024 (2023)1 Life-of-mine (years) 2024 (2023) OUR OPERATIONS BARBERTON MINES (UNDERGROUND MINING OPERATIONS) A long-life, high-grade operation comprising three underground mines: Fairview, Sheba and Consort 71,470 (64,586) 5.8Mt at 5.87g/t 1.09Moz (5.5Mt at 6.49g/t) (1.14Moz) 13.8Mt at 6.22g/t 2.77Moz (24.1Mt at 4.14g/t) (3.20Moz) 358,936 (342,622) 6.2 (5.9) 1,777 (1,800) 20 (20) BARBERTON TAILINGS RETREATMENT PLANT The plant was completed in June 2013 and adds high-margin and low-risk ounces to our production profile 18,888 (19,875) 3.6Mt at 1.63g/t 0.19Moz (3.9Mt at 3.03g/t) (0.38Moz) 20.7Mt at 1.11g/t 0.74Moz (22.7Mt at 1.25g/t) (0.91Moz) 828,392 (921,753) 0.7 (0.7) 669 (721) 22 (3) ELIKHULU This plant exploits tailings deposited on the Kinross, Leslie/Bracken and Winkelhaak tailings storage facilities (TSFs) in Evander. It commenced production in 2018 54,812 (50,573) 130.6Mt at 0.27g/t 1.12Moz (140.9Mt at 0.27g/t) (1.24Moz) 155.4Mt at 0.27g/t 1.34Moz (163.4Mt at 0.27g/t) (1.42Moz) 14,198,865 (13,587,371) 0.1 (0.1) 1,034 (989) 9 (10) 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 38,285 (33,256) 4.29Mt at 7.08g/t 0.98Moz (3.5Mt at 6.82g/t) (0.77Moz) 30.6Mt at 8.82g/t 8.68Moz (24.0Mt at 10.28g/t) (7.95Moz) 192,050 (159,063) 6.2 (6.4) 1,307 1,113 11 (13) EVANDER MINES (SURFACE SOURCES) The purchase of gold-bearing material from third parties – leveraging the excess capacity of Evander Mines’ metallurgical plants 2,584 (6,919) Not reported Not reported 104,157 (248,575) 0.8 (0.9) 2,174 (1,718) Not reported 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 for the Mogale Cluster – for the initial five years 12,000,000 including the Soweto Cluster – from year six onwards 0.1 <1,000 21 1 Restated due to prior period adjustments, refer to note 40. 2 Subsequent to the reporting period, the Group was able to extend the life-of-mine for the BTRP to seven years following positive Mineral Reserves studies. OUR OPERATING GOLD MINES Our operations offer a unique combination of South African underground and surface remining operations: • Barberton Mines, with a history spanning over 130 years, and Evander Mines are our primary underground operations with remaining life-of-mine estimates of 20 and 11 years, respectively • Additionally, our surface remining operations include the Elikhulu Tailings Retreatment Plant (Elikhulu), the Barberton Tailings Retreatment Plant (BTRP) and the Mogale Tailings Retreatment Project (MTR project), with commissioning and first gold production anticipated ahead of schedule in October 2024 and steady-state production expected during December 2024. 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 GEOGRAPHICAL REPRESENTATION of our shareholders at 30 June 2024 ABOUT PAN AFRICAN WHO WE ARE Pan African is a mid-tier, African-focused gold producer. Our shares trade as follows: • In the UK on the AIM market 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 16 and 17. A unique combination of African underground and surface mining operations Mpumalanga Gauteng FAIRVIEW MINE AND BTRP Ermelo Emalahleni ELIKHULU Pretoria Johannesburg EVANDER MINES Middelburg Mbombela SHEBA MINE AND ROYAL SHEBA Barberton CONSORT MINE Khartoum Port Sudan BLOCK 12 SUDAN SOUTH AFRICA Gold mining in South Africa South Africa, renowned for its gold reserves, has been a major gold producer since the late 19th century. It features well-established infrastructure, advanced mining technologies and substantial expertise. The sector significantly contributes to the nation’s gross domestic product (GDP), creates employment opportunities and attracts continued investment. MTR PROJECT South Africa 60.8% UK 26.6% USA 7.0% Denmark 2.1% Switzerland 0.9% France 0.6% Other 2.0% OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 4 5 Total gold production (oz) Market capitalisation (US$ million)2 TIMELINE 2024 • Secured a green loan facility • Barberton Mines – completed construction and mechanical assembly of the 8.75MW solar plant • MTR project – a feasibility study is in progress for a 20MW solar plant 2000 to 20061 • Incorporated • Exploration phase 2007 to 2009 • Acquired Barberton Mines • AIM listing • JSE listing 2019 • Egoli project and Evander Mines’ 8 Shaft pillar mining – commissioned feasibility studies 2021 • Entered into conditional agreements to acquire Mogale Gold and MSC • Evander Mines – commenced construction of the solar plant • Evander Mines – completed the water treatment plant feasibility study • Barberton Blueberries project – commissioned the project 2023 • 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 of the tailings retreatment plant in July 2023 • Barberton Mines – commenced construction of the 8.75MW solar plant • Evander Mines – commissioned the 3ML water treatment plant 1 The timeline represents the period spanning the start of one financial year to the end of the subsequent financial year. 2 Source: JSE’s Trading and Market Services. Calculated at the end of each calendar year at quoted prices and the closing US$/ZAR exchange rate. 3 Source: JSE’s Trading and Market Services. Calculated at 30 June 2024 using the quoted price and the closing US$/ZAR exchange rate at that date. 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 • 130,493 • 388.2 • 175,209 • 186,039 • 188,179 • 307.0 • 175,857 • 206.9 • 364.7 • 433.0 • 248.7 • 344.7 • 733.5 • 540.0 • 438.0 • 497.0 • 744.73 • 204,928 • 173,285 • 160,444 • 172,442 • 201,777 • 205,688 • 179,457 2020 • 8 Shaft pillar – production commenced • ADR programme established • COVID-19 – proactive management response • Egoli project – feasibility study completed • Evander Mines – construction of the solar plant approved • Barberton Blueberries project – approved the project 2022 • Sudan – commenced gold exploration • Sudan – established a gold laboratory • Completed a definitive feasibility study on the Mogale Gold and MSC TSFs • Barberton Mines – completed the solar plant feasibility study • Evander Mines – completed the solar plant expansion feasibility study, commissioned the 9.9MW solar plant and commenced construction of the water treatment plant • Barberton Blueberries project – first commercial harvest 2013 to 2018 • Acquired Evander Mines • Commissioned the BTRP • Constructed and commissioned Elikhulu OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 6 7 VALUE CREATED AND DISTRIBUTED IN 2024 Our capitals Capitals defined SDGs Value created and distributed 2024 2023 %Δ FINANCIAL CAPITAL Equity, debt and surplus cash from our operating activities Revenue US$373.8 million US$319.9 million1 16.8 Finance income US$1.9 million US$1.1 million 72.7 Finance costs paid US$11.6 million US$6.3 million 84.1 Dividend paid US$21.2 million US$23.2 million (8.6) MANUFACTURED CAPITAL Infrastructure, orebodies and tailings retreatment operations at Barberton Mines, Evander Mines and the MTR project All-in sustaining cost (AISC) US$1,354/oz US$1,309/oz1 3.4 Infrastructure investment US$166.2 million US$112.7 million 47.5 • Including: Solar plants – Solar plant US$10.3 million US$2.3 million >100 – Water treatment plant US$0.1 million US$2.0 million (95.0) INTELLECTUAL CAPITAL More than 130 years of mining the unique Barberton Greenstone Belt orebodies and an established track record in surface tailings remining and successful project delivery 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 13,361m 16,665m (19.8) Integrated security plan and modernisation of security technology • Security costs US$7.2 million US$5.6 million1 (28.6) Collaboration with government bodies and peer companies to combat illegal mining and criminality. Refer to page 137 for more information HUMAN 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 Employee salaries, wages and benefits paid2 US$59.0 million US$48.7 million1 21.1 Employees 2,887 2,469 16.9 Contractors 4,751 4,388 8.3 Safety initiatives US$1.4 million US$1.4 million – Skills and development training US$1.8 million US$2.2 million (18.2) Health and wellness initiatives US$0.5 million US$0.3 million 66.7 SOCIAL AND RELATIONSHIP CAPITAL 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 Value-added tax (VAT) received US$60.0 million US$35.7 million 68.1 Royalties and income taxes paid US$15.5 million US$7.7 million >100 Withholding tax paid US$1.7 million US$2.3 million (26.1) Employee taxes paid US$13.0 million US$11.9 million 9.2 Corporate social investment (CSI) US$2.5 million US$1.7 million 47.1 Alternative employment opportunities through the Barberton Blueberries project • Permanent jobs 22 25 (12.0) • Seasonal jobs 149 272 (45.2) • Salaries and wages paid US$0.3 million US$0.3 million – NATURAL CAPITAL The responsible use of fuel, energy, water, air and land resources while aspiring to do minimal harm to the environment Water consumption 9,184.8ML 10,304.4ML3 (10.9) Energy consumption 1,503.77TJ 1,447.17TJ 3.9 Carbon emissions intensity per ounce produced 1.88tCO2e/oz Au 1.91tCO2e/oz Au 1 (1.6) Direct greenhouse gas (GHG) emissions Scope 1 5.0ktCO2e 3.7ktCO2e 35.1 Direct GHG emissions Scope 2 348.0ktCO2e 332.5ktCO2e 4.7 A detailed review of our performance in contributing to the UN SDGs is provided in our separate sustainable development report. https://www.panafricanresources.com/investors/gri-and-sustainability/ 1 Restated due to prior period adjustments, refer to note 40. 2 Excludes employee-related taxes paid to the South African government. 3 Prior reporting period water consumption figures have been restated to include water usage from third-party private sources and the Barberton Blueberries project. 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. Performance Positive increase Positive decrease Negative increase Negative decrease Unchanged OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 8 9 REASONS TO INVEST IN PAN AFRICAN FINANCIAL CAPITAL Diversified operations A unique combination of South African underground and surface remining operations • 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) Low production cost One of the lowest-cost gold producers in South Africa • AISC of US$1,170/oz (2023: restated US$1,132/oz) for our lower-cost operations, comprising all operations, excluding Sheba Mine and Consort Mine, which account for 84.0% (2023: restated 81.5%) of annual production • AISC of US$1,354/oz (2023: restated US$1,309/oz) for total operations • Return on shareholders’ funds of 24.0% (2023: restated 20.7%) INTELLECTUAL CAPITAL 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 SOCIAL AND RELATIONSHIP CAPITAL 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 MANUFACTURED CAPITAL High and expanding production capacity Ability to meet and exceed our production guidance, with an increasing production profile • Production capacity >200,000oz of gold per annum • 2024 production: 186,039oz (2023: 175,209oz) • 2025 production guidance: 215,000oz to 225,000oz HUMAN CAPITAL Focus on safety, security, health and wellness 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 NATURAL CAPITAL 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 Responsible and sustainable water use Moving towards zero use of potable water at the Group’s operations • 3ML water treatment plant at Evander Mines complex 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. Evander Mines’ 7 and 7A Shaft headgear and related infrastructure OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 11 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 10 REASONS TO INVEST IN PAN AFRICAN continued ALL-IN SUSTAINING COSTS (US$/oz) The Group’s AISC of US$1,354/oz is below the peer group average of US$1,415/oz. Read more on page 96. 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Sibanye-Stillwater2, 3 Iamgold3 Caledonia Mining AngloGold Ashanti3 OceanaGold DRD Gold2, 4 New Gold Wesdome Gold Mines Galiano Gold3 Perseus Mining4 Harmony4 Resolute3 Hochschild Mining Pan African– Group3 Gold Fields – South Deep3 Hummingbird3 Thor Explorations Gold Fields – Group3 B2Gold3 Centamin3 Pan African – lower-cost operations1, 4 West African Resources3 Endeavour Mining3 Dundee Precious Global producers Pan African's operations Entities with operations in South Africa Average US$1,415/oz 849 1,170 1,331 1,257 1,349 1,354 1,454 1,469 1,500 1,313 1,522 1,503 1,529 1,545 1,587 1,575 1,652 1,762 1,735 1,904 1,295 1,205 1,136 967 1 All of Pan African’s operations excluding Sheba Mine and Consort Mine. 2 South African operations. 3 AISC for the respective company at 31 December 2023. 4 AISC for the respective company at 30 June 2024. Source: Individual company websites and presentations. RETURN ON SHAREHOLDERS’ FUNDS (%) Our return on shareholders’ funds comfortably exceeds the peer group average. Read more on page 58. (60) (50) (40) (30) (20) (10) 0 10 20 30 Pan African Resources6 Harmony6 Perseus Mining6 DRD Gold6 West African Resources5 Dundee Precious Resolute Mining5 Gold Fields5 Centamin5 Galiano Gold5 Thor Explorations OceanaGold Iamgold5 Hochschild Mining B2Gold5 Caledonia Mining Wesdome Gold Mines Endeavour Mining5 AngloGold Ashanti5 New Gold Hummingbird5 Sibanye-Stillwater5 (3.8) (5.7) (7.4) (15.5) (52.5) 24.0 22.9 22.7 20.2 20.0 18.3 18.1 14.5 14.3 13.9 10.3 1.4 1.2 4.9 4.6 (0.3) (1.7) 5 The respective companies have a 31 December 2023 financial year-end. 6 The respective companies have a 30 June 2024 financial year-end. Source: Individual company websites and presentations. PRODUCTION PROFILE (oz) We aim to steadily increase our production profile with a pipeline of organic and expansionary projects. Read more on pages 78 and 79. 0 50,000 100,000 150,000 200,000 250,000 20257 2024 2023 2022 2021 2020 2019 2018 160,444 172,442 179,457 201,777 205,688 175,209 225,000 186,039 7 2024 production guidance is expected to be between 215,000oz and 225,000oz. CAPITAL EXPENDITURE (US$ 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. Read more on page 80. 0 50 100 150 200 20258 2024 2023 2022 2021 2020 2019 2018 128.4 56.6 41.1 49.1 82.8 113.0 122.7 172.4 8 Forecast capital expenditure converted at an exchange rate of US$/ZAR:18.50. SAFETY PERFORMANCE (per million man hours) Read more on page 41. Pan African RIFR10 Industry RIFR Pan African FIFR11 Industry FIFR 0 0.2 0.4 0.6 0.8 1.0 1.2 20249 20239 2022 2021 2020 2019 2018 0.05 1.08 0.88 0.51 0.02 0.90 1.02 0.80 0.75 0.63 0.71 0.35 0.78 – – – 0.03 – 0.04 0.08 0.02 – 0.05 – 0.81 – 0.06 – 9 2023 and 2024 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. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 12 13 CHAIRMAN’S STATEMENT SOUTH AFRICA’S ECONOMIC LANDSCAPE South Africa’s economy is poised to respond to the emergent optimism, following the general election and the formation of a Government of National Unity (GNU). The new administration is committed to addressing challenges such as the energy crisis, infrastructure inefficiencies, high unemployment, crime, high borrowing costs and issues stemming from state-owned enterprise bailouts. The African Development Bank’s outlook for South Africa is cautiously optimistic, with GDP growth projected at 1.3% for 2024 and 1.6% for 2025. This growth is supported by new infrastructure investments that are expected to bolster the construction sector and other areas of the economy. Inflation is expected to stabilise at 4.8% in 2024, and the fiscal deficit is projected to decline to about 4.3% of GDP as tax revenue collections improve. However, the current account trade deficit is anticipated to widen to 3.0% of GDP, due to slower export growth relative to imports, constrained by transport sector issues and power shortages. Gold continues to prove its value as a safe haven and low-risk asset class for investors, with the high rand gold price boosting Pan African’s margins and profitability. For a more detailed analysis of our operating environment and its impact on Pan African, refer to pages 66 to 69. OUR OPERATIONAL AND FINANCIAL PERFORMANCE Pan African’s robust operations have delivered outstanding financial and operational results. Despite a challenging operational environment, we achieved a 6.2% increase in gold production to 186,039oz, highlighting the operational flexibility and resilience of our producing assets. Adjusted earnings before interest, income tax expense, depreciation and amortisation (adjusted EBITDA ) increased by 22.7% to US$141.2 million (2023: restated US$115.1 million), yielding a return on capital employed of 28.5% (2023: restated 28.0%). Our operations generated cash flows of US$90.8 million (2023: US$100.1 million). Net senior debt increased to US$102.8 million (2023: US$18.9 million), primarily attributable to capital expenditure for the MTR project and Evander Mines’ expansionary projects. For more details, refer to the financial director’s review on page 86 and to the operational performance review on page 96. SAFETY The Group deeply regrets the fatal accident that occurred at Elikhulu during the year. Despite this tragic setback, we are encouraged by the progress made in improving our overall safety rates compared to the previous financial year. This improvement is attributable to the implementation of various awareness and other initiatives aimed at further enhancing our safety performance. Refer to page 41 for more details. OUR ESG PERFORMANCE Pan African’s commitment to ESG extends beyond compliance and forms a core part of its business strategy. The Group’s renewable energy strategy aims to secure a reliable energy supply, reduce carbon dioxide emissions and realise cost savings through large- scale renewable energy projects. The key components of this strategy include: • a 9.9MW solar plant at Evander Mines, the first utility-scale, grid- tied solar plant commissioned in South Africa. An independent bankable feasibility study is underway for phase 2 of this solar plant which aims to expand the facility by 12MW • the construction of an 8.75MW solar plant at Barberton Mines’ Fairview Mine, with construction and mechanical assembly, including installation of the solar trackers, completed in June 2024. First power generation was achieved in August 2024 • financial close of the 75MW Sturdee Energy Bela-Bela solar project is anticipated during September 2024; Pan African will wheel 40MW from this project over a period of up to 15 years. First power is expected in the 2026 calendar year • an independent feasibility study is in progress for a 20MW solar plant at the MTR project’s site. Other components include: • the Evander Mines water treatment plant, commissioned in March 2023, now provides potable water to Elikhulu’s processing plant and the 8 Shaft underground infrastructure. A feasibility study is in progress to expand this from 3ML to 6ML per day • ongoing studies exploring ways to enhance water sustainability including the treatment of water from Barberton Mines’ processing plants and TSFs • conducting a Task Force on Nature-related Financial Disclosures (TNFD) maturity assessment and developing a roadmap to guide our implementation of these recommendations • established rehabilitation targets are in place for the MTR project. This year, 122.3ha is in the process of rehabilitation and the project achieved its sustainability-linked bond target • Barberton Mines continuing its partnership with the Barberton Nature Reserve and the Mpumalanga Tourism and Parks Agency as well as sponsoring orphaned rhinos at the Care for Wild Rhino Sanctuary • rehabilitation liabilities related to Barberton Mines and Evander Mines that are fully funded at an estimated US$24.8 million (2023: US$21.6 million). The rehabilitation liabilities related to the MTR project of US$10.2 million (2023: restated US$8.4 million) will be funded over the project’s life. Read more in our online sustainable development 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, enabling management to execute its strategy effectively. We are confident in the board’s balance of skills, experience and diversity to fulfil its fiduciary responsibilities and provide the necessary oversight of the Group’s strategic direction. Deon Louw, appointed as the Group’s financial director in March 2015, has informed the Company of his intention to retire on 30 September 2024. Deon has contributed significantly to Pan African’s operations and growth throughout his tenure. We would like to thank him for his invaluable contribution. Marileen Kok will succeed Deon as the Group’s financial director and will be appointed to the Company’s board. Marileen joined Pan African as Group financial manager in January 2020 and has extensive experience in financial reporting, corporate finance, governance and regulatory compliance. We look forward to her continued contribution to the Group. STRATEGY AND OUTLOOK The Group is committed to optimally and consistently extracting gold from mineral deposits to create sustainable value for its stakeholders. We continue to position Pan African as a sustainable, safe, high-margin and long-life gold producer. Refer to pages 16 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 215,000oz to 225,000oz for the 2025 financial year • proactively managing unit production cost increases • commissioning the MTR project in accordance with the planned schedule and within budget • advancing our ESG initiatives • executing our capital and growth projects to position the Group for increased future gold production • evaluating potential acquisitions and capital projects against our stringent investment criteria and capital allocation priorities • increasing returns to shareholders through dividends and other means of distribution. APPRECIATION I extend my gratitude to my fellow board members, executive management and to all Pan African employees for their commitment and dedication in achieving the Group’s long-term value-creation aspirations. Keith Spencer Chairman 11 September 2024 As the global economy grapples with ongoing geopolitical tensions, gold has reaffirmed its importance as a safe haven in uncertain times. In South Africa, a change in government has sparked renewed optimism for growth in our local economy. The year ahead will be an exciting one for Pan African as we commission our MTR project. KEITH SPENCER | Chairman OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 14 15 W E A RE C OM MI TT ED T O T HE H IG HE ST S TA ND AR DS O F GO VE RN AN CE , E TH IC S AN D I NT EG RI TY OUR VALUE- CREATING STRATEGY 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. Integrated thinking is essential to delivering our strategy, managing our risks and identifying opportunities. It informs our strategic initiatives, which are annually approved by the board. MATERIAL MATTERS Given our strategic pillars, we identify material matters that influence our ability to create value in the short, medium and long term. Execution efficiency Innovation and opportunity Growth aspirations Safety, security, health and wellness Cost consciousness Skills attraction and retention Energy management Social licence to operate Infrastructural constraints Tailings management Water management Climate change, decarbonisation and biodiversity Our material matters are described on pages 33 to 47. OPERATING ENVIRONMENT Our operating environment has a material impact on our strategy and business activities. Gold price US$/ZAR exchange rate South African economy Crime, corruption and social cohesiveness Economic and political uncertainty Activism, special interest groups and regulatory uncertainty Refer to pages 66 to 69. RISKS AND OPPORTUNITIES We manage and assess our risks and opportunities, understand and address key stakeholder concerns and execute value-creating growth projects. 01 Operational execution 06 Skills 02 Constrained electricity 07 Capital allocation and execution 03 Social instability 08 Geological variability 04 Safety breaches 09 Macroeconomic volatility 05 Ageing infrastructure 10 Cost inflation 11 Tailings dam failure Our primary risks and opportunities are described on pages 48 to 56. In executing our strategy and business activities (as described on pages 18 to 21), we prioritise the integration of the six capitals (as defined on page 8) to achieve our strategic objectives. Annually, we review our strategic initiatives to ensure they uphold our purpose, vision and commitment to sustainable value creation, effectively utilising our resources to benefit all stakeholders. Our strategic pillars and values guide this process. Our strategic initiatives are crafted to align with each capital, fostering sustainable value creation. We carefully weigh trade-offs between capitals to sustainably enhance stakeholder value, ensuring a holistic consideration of value creation, environmental stewardship and employee well-being throughout our operations. MA N UF A CT UR ED C AP IT AL SO CI AL A ND R EL AT IO NS HI P CA PI TA L NA TU RA L C AP IT AL HU MA N CA PI TA L IN TE LL EC TU AL C AP IT AL FI NA N CIA L CA PIT AL Ex pl or e De ve lo p Mi ne Pr oc es s R efi ne Su st ain ab ili ty R es po ns ib le m in e OUR VALUES OUR SUSTAINABILITY COMMITMENT OUR VISION OUR PURPOSE Mo ne ti se INTEGRATED THINKING Our purpose is clearly articulated. It is embraced by our board, management, employees, customers, suppliers and local communities as we work together towards the Group’s long- term sustainability. Management reviews and updates the Group’s strategic initiatives based on insights gained from the integrated planning process. 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. OUR COMMITMENT TO SUSTAINABLE VALUE CREATION Our commitment 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 and water recycling. OUR STRATEGIC PILLARS Profitability We maintain a strong focus on profitability by being one of the highest-margin producers of gold in Southern Africa. Sustainability Our sustainability is centred on creating long-term value for all stakeholders by balancing economic, environmental and social considerations. Stakeholders 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 VALUES • Action and delivery • Teamwork • Excellence • Ownership • Resilience • Integrity • Courageous conversations • Care • Innovation • Attitude. cl os ur e pr ac ti ce s OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 16 17 OUR STRATEGIC OBJECTIVES AND INITIATIVES Our strategic initiatives are designed to align with each of the six capitals, enabling us to meet our strategic 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. Strategic objectives Strategic initiatives Time horizon Value created 2024 2023 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 Further strengthen the capital structure and funding flexibility Net senior debt US$102.8 million US$18.9 million Ensure adequate liquidity for operational requirements and debt redemptions Net cash from operating activities US$90.8 million US$100.1 million Ensure appropriate and innovative medium-term funding for organic growth, exploration and acquisition opportunities Available debt facilities US$68.7 million US$49.9 million In June 2024, a US$19.2 million green loan facility was secured for the construction of Barberton Mines’ solar plant Prioritise sustainable returns to shareholders Dividend paid US$21.2 million US$23.2 million 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 Efficiently execute capital projects, operational restructuring and maintenance programmes as well as other initiatives to increase and sustain gold production run rates, thereby ensuring long-term growth and sustainability Capital expenditure US$172.4 million US$113.0 million Construction of the MTR project commenced in July 2023 and is proceeding on schedule and within budget For more information, refer to the chief executive officer’s review on page 74 Progressed various other capital projects, restructuring programmes and other initiatives to increase the production run rate For more information, refer to the chief executive officer’s review on page 74 and the operational performance review on page 96 Achieve production guidance of 180,000oz to 190,000oz of gold per annum Gold production 186,039oz 175,209oz Diversify the renewable energy sources and enhance water management strategies to improve power security, optimise resource utilisation, reduce costs and promote environmental stewardship Financial close of the 75MW Sturdee Energy Bela-Bela solar project is anticipated during September 2024, with first power expected in the 2026 calendar year Progressed with the construction of Barberton Mines’ 8.75MW solar plant. First power generation was achieved in August 2024 A bankable feasibility study is in progress for the expansion of Evander Mines’ solar plant by 12MW Initiated a feasibility study to extend Evander Mines’ water treatment plant from 3ML to 6ML A feasibility study is in progress for a 20MW solar plant at the MTR project Achieve AISC guidance of between US$1,325/oz and US$1,350/oz (assuming an exchange rate of US$/ZAR:18.50) AISC US$1,354/oz US$1,309/oz1 Time horizon Short-term focus (one year) Medium-term focus (two to three years) Long-term focus (three years or more) Progress Substantially achieved Moderate progress Not achieved INTEGRATED THINKING Management reviews and updates the Group’s strategic objectives based on insights gained from the integrated planning process. 1 Restated due to prior period adjustments, refer to note 40. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 18 19 OUR STRATEGIC OBJECTIVES AND INITIATIVES continued Strategic objectives Strategic initiatives Time horizon Value created 2024 2023 INTELLECTUAL CAPITAL Optimise the use of technology and harness the expertise of our teams to consistently deliver safe, reliable, efficient and responsible mining operations Use technology to improve mine production, efficiency, safety and security The Group employed modern exploration techniques and advanced mine planning systems and enhanced our surveillance technology Evaluate organic and acquisitive growth opportunities and exploration projects to increase our annual production profile to 250,000oz Acquired a strategic equity interest in Tennant Consolidated Mining Group Proprietary Limited (TCMG) Investigate potential exploration and mining opportunities outside South Africa that meet the Group’s stringent investment criteria Continued the gold exploration programme in north-eastern Sudan. For more information, refer to page 79 HUMAN CAPITAL Attract, cultivate and retain exceptional talent while fostering a culture of safety, respect and continuous learning Strive for zero fatalities and an average annual improvement of 3.86% in the total recordable injury frequency rate (TRIFR) Fatalities 1 1 TRIFR (per million man hours) 6.52 Target: 8.08 7.96 Target: 8.5 Develop employee skills and introduce retention programmes for scarce skills Skills and development training US$1.8 million US$2.2 million Maintain an entrepreneurial and performance-driven culture Continued progress in fostering an entrepreneurial and results-driven culture Promote employee health and well-being by advocating for wellness, nutrition and fitness programmes designed to raise awareness among employees SOCIAL AND RELATIONSHIP CAPITAL Engage stakeholders to build positive relationships, maintain our social licence to operate and create sustainable value Curtail illegal mining and property theft through cooperation between all stakeholders and law enforcement agencies Reduced illegal mining through partnerships with law enforcement, surveillance and enhanced technology applications Maintain compliance with Social and Labour Plan (SLP) requirements while seeking opportunities to go beyond ESG regulatory requirements for the benefit of our stakeholders Successfully handed over the computer and science laboratories at the Thomas Nhlabathi High School and Thistle Grove Combined School to the Department of Basic Education during November 2023 Granted full scholarships to 25 high-achieving students from Barberton’s local communities Created alternative employment opportunities through the Barberton Blueberries project Implemented phase 1 of a formal health and wellness programme at Barberton Mines Operate TSFs in line with the Global Industry Standard on Tailings Management (GISTM) as far as reasonably practicable Continued to implement operational measures to progress the Group’s TSFs in line with the GISTM as far as reasonably practicable Continue to enhance, improve and refine sustainability performance and reporting Continued to address ESG readiness gaps identified in the 2022 PwC Inc. report Increased the number of assured ESG KPIs from 11 to 16 Published our second climate change report in alignment with the three-year roadmap, reinforcing and strengthening our climate change strategy The TNFD maturity assessment is being conducted and a roadmap is being developed to benchmark the Group’s alignment with the TNFD recommendations NATURAL CAPITAL Manage our operations with climate- conscious practices that preserve and protect natural resources and promote sustainability Rehabilitate 41% of the MTR project’s surface area by 2030, while concurrently conducting remining operations MTR project area rehabilitated 122.3ha – Achieve a renewable energy mix of 15% by 2027 Renewable energy mix 6.1% Target: 7% 6.1% Target: 5% Reduce the Group’s carbon footprint and advance its decarbonisation strategy Scope 1 and 2 emissions 353.0ktCO2e 336.2ktCO2e Carbon intensity per ounce sold 1.88tCO2e/oz Au 1.91tCO2e/oz Au Progress the implementation of TSF audit recommendations and advance compliance with the GISTM, as far as reasonably practicable Action plans and remedial activities are being implemented to mitigate high-risk safety and environmental issues Time horizon Short-term focus (one year) Medium-term focus (two to three years) Long-term focus (three years or more) Progress Substantially achieved Moderate progress Not achieved OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 20 21 OUR BUSINESS MODEL Our activities align with our strategy to safely and efficiently extract value from our mineral deposits while prioritising the long-term sustainability of our business. 1 2 3.1 3.2 4 7 Read more in the abridged Mineral Resources and Mineral Reserves report on page 106. 1. EXPLORE On-mine growth projects and greenfield exploration contribute to our Mineral Resources, which potentially extend the life of our mining operations. 2. DEVELOP Successful development of our orebodies and execution of our capital projects improve our costs and production profile and increase the economic life of our operations. 3. MINE 3.1 Surface remining operations We remine gold-bearing tailings through hydro-mining. 3.2 Underground mining 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. 4. PROCESS Gold is extracted from tailings sources and concentrated after being processed through our plants at Elikhulu and the BTRP utilising industry best practice. 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. INTEGRATED THINKING Our integrated view of all aspects of our business assists in making informed choices when considering capital trade-offs in pursuit of value creation and preservation in the short, medium and long term. This approach and resultant experience have endowed us with a competitive advantage. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 23 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 22 OUR BUSINESS MODEL continued 5 6 7 7 8 8 8 7 8. RESPONSIBLE MINE CLOSURE Consultation with affected communities is necessary during a mine’s life to ensure social and economic stability after mine closure. These consultations help develop initiatives through the mine’s SLP and CSI initiatives for post-closure economic sustainability. When the mine reaches the end of its life, the Group will manage its closure responsibly and safely to minimise disruption to natural resources and communities. 5. REFINE Gold doré is transported to Rand Refinery Proprietary Limited (Rand Refinery) where it is refined into gold bullion. 6. MONETISE Gold sales transactions are entered into with authorised bullion banks and other credible parties. Our customers include the major South African banks. 7. SUSTAINABILITY PRACTICES, PROJECTS AND PARTNERSHIPS These projects include renewable energy projects which are intended to stabilise electricity supply and water treatment projects intended to provide potable water. They result in cost savings and assist in reducing our overall long-term AISC while contributing to achieving our sustainability targets by measurably reducing carbon emissions and municipal water consumption. We also invest in agricultural projects such as the Barberton Blueberries project, which is aimed at fostering a sustainable local economy and reducing high unemployment rates which have historically led to operational disruptions and protests. We aspire to do minimal harm to the environment. Key practices include land rehabilitation, biodiversity protection and nature conservation partnerships. These efforts aim to preserve and protect natural resources and promote sustainability. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 24 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 25 INPUTS OUTCOMES Our capital resources 2024 2023 Trade-offs made What we want to achieve Stakeholders affected Value created, preserved or eroded 2024 2023 %Δ FINANCIAL CAPITAL Shareholders’ equity US$364.1 million US$291.9 million1 • We have no control over the US$ gold price or the US$/ZAR exchange rate and therefore mitigate potential adverse impacts through disciplined financial capital management, strict cost control and hedging • Achieve production targets and optimise performance through disciplined capital allocation • Manage financial risk • Meet stakeholder expectations • Enhance shareholder returns • Providers of capital • Customers • Suppliers • Governments and regulatory bodies Revenue US$373.8 million US$319.9 million1 16.8 Available debt facilities US$68.7 million US$49.9 million Profit for the period US$78.8 million US$60.5 million1 30.2 Net cash from operating activities US$90.8 million US$100.1 million (9.3) Net debt US$106.4 million US$22.0 million >100 MANUFACTURED CAPITAL Mineral Resources 41.18Moz gold 40.50Moz gold • Investment in our mining assets ensures long-term sustainability • Balancing organic growth and value-enhancing acquisitions to increase our production profile • Excellent safety performance • Cost-effectiveness • Progress exploration and mining projects • Rehabilitate land • Increase Mineral Reserves • Providers of capital • Customers • Suppliers • Employees and unions • Communities AISC US$1,354/oz US$1,309/oz1 3.4 Mineral Reserves 12.64Moz gold 12.81Moz gold Investment in infrastructure US$166.2 million US$112.7 million Production costs before depreciation and amortisation US$221.2 million US$198.91 million INTELLECTUAL CAPITAL Mining and prospecting rights Sudanese exploration licences Key personnel with requisite skills Management and board expertise Expansion and integration of technologies at our operations Increasing our investor outreach to new markets Sudanese gold assay laboratory • Investing in technology and efficiency-improving processes • Growing tailings and processing expertise • Competitive advantage in mining applications • Efficient extraction of gold from mined ore • Increased production portfolio • Sudanese gold exploration • Investment in an Australian prospect • Improve valuation and expand our shareholder base • Employees and unions • Providers of capital • Collaboration partners Maximised resource utilisation Increased annual production ounces to improve our profile and attract larger fund managers Effective and efficient technology application at Elikhulu to further improve yields Diversified the Group’s Mineral Resources base outside of South Africa in a value-enhancing manner Improved trading liquidity HUMAN CAPITAL Employees and contractors 7,638 6,857 • Tailings retreatment lends itself to automation, is less labour- intensive and inherently safer • Employee earnings supplement the local community’s income • Multi-year wage agreements concluded at Barberton Mines, contributing to employee stability and cost-containment • Safe working environment • Create employment opportunities • Employees and unions • Providers of capital • Governments and regulatory bodies Fatalities 1 1 _ Women permanently employed 458 406 TRIFR (per million man hours) 6.52 7.96 (18.1) Percentage of women in mining 17.1 16.1 Employee remuneration US$72.0 million US$60.6 million1 18.8 Skills development and training US$1.8 million US$2.2 million 1 Restated due to prior period adjustments, refer to note 40. OUR BUSINESS MODEL continued Performance Positive increase Positive decrease Negative increase Negative decrease Unchanged OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 26 27 INPUTS OUTCOMES Our capital resources 2024 2023 Trade-offs made What we want to achieve Stakeholders affected Value created, preserved or eroded 2024 2023 %Δ SOCIAL AND RELATIONSHIP CAPITAL CSI, local economic development (LED) projects and bursaries Enterprise development programmes in place at Barberton Mines and Evander Mines US$2.5 million US$1.7 million • Investing in socio-economic 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 • Well-established stakeholder engagement forums in place in communities to address issues before they escalate • Build trust with local communities • Secure social licence to operate through SLP and ‘beyond compliance’ initiatives • Create new employment opportunities to sustain communities • Suppliers • Employees and unions • Communities • Governments and regulatory bodies 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 US$30.2 million 35.9% 49.9% US$21.9 million 37.6% 40.5% 37.9 (4.5) 23.2 Preferential procurement US$118.2 million US$66.8 million 76.9 Socio-economic development of host communities Refer to page 136 for more information NATURAL CAPITAL Energy consumption 1,503.77TJ 1,447.17TJ • Our environmental footprint reduces as surface tailings remining operations are expanded • Rehabilitation expenditure supports local supplier development and creates job opportunities • Reduce environmental footprint and carbon emissions • Responsible extraction of ore and rehabilitation • Land for housing and agriculture to sustain communities after surface remining • The environment • Communities • Governments and regulatory bodies • Providers of capital Carbon emission intensity per ounce of gold sold 1.88tCO2e/oz Au 1.91tCO2e/oz Au (1.6) Water consumption 9,184.8ML 10,304.4ML1 Independent rehabilitation closure cost assessments conducted at all operations Tonnes milled and processed 15,682,400t 15,259,384t Reduced TSF footprint through the combined Elikhulu and Kinross TSFs and the rehabilitation of the Leslie/Bracken and Winkelhaak TSF footprints Electricity generated by solar plants at our operations 24.6GWh 23.8GWh 1 Prior period water consumption figures have been restated to include water usage from third-party private sources and the Barberton Blueberries project. OUR BUSINESS MODEL continued OUTPUTS GOLD PRODUCED 186,039oz (2023: 175,209oz) SCOPE 1 AND SCOPE 2 CARBON EMISSIONS 353.0ktCO2e (2023: 336.2ktCO2e) SOLAR RENEWABLE ENERGY PRODUCED 24.6GWh (2023: 23.8GWh) HAZARDOUS WASTE 1,391.3t (2023: 1,109t2) VOLUME OF WATER TREATED 747.5ML (2023: nil) NON-HAZARDOUS WASTE 10.5t (2023: 12.2t2) 2 Prior reporting period waste consumption figures have been restated to align with GRI waste standards. Performance Positive increase Positive decrease Negative increase Negative decrease Unchanged OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 28 29 Elikhulu process water pumped to the process water dam by the Kinross TSF OUR MATERIAL MATTERS Identifying and addressing our material matters is essential to our performance and ability to create or preserve value in the short, medium and long term. We prioritise understanding our impact on society, communities and the environment. Integrating these considerations into our strategic planning and reporting activities ensures a comprehensive approach to sustainability. HOW WE DEFINE OUR MATERIAL MATTERS 1 Review and analyse our business model, operating environment and risks and opportunities 2 Engage with our key stakeholders through various platforms 3 Brainstorm with executive and senior management in a dedicated, externally facilitated double materiality workshop 4 Collate, analyse and categorise information to identify and prioritise all matters identified 5 Present the identified material matters annually to the board for review 6 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 18 to 21). Performance against the strategic objectives is tracked through clearly identified KPIs set by the remuneration committee (Remco) and monitored by the board. DOUBLE MATERIALITY Our material matters are shown on the graph on page 32. It reflects: Impact materiality – our impact on society, the community and the environment Financial materiality – Pan African’s ability to create value in the short, medium and long term INTEGRATED THINKING We identify our material matters and assess their impact on our business model and our strategic execution. Through double materiality, we also consider the impact our business can have on external stakeholders and the environment. 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. FINANCIAL CAPITAL Gold price The price of gold in US$ has a significant impact on our overall profitability and cash flows US$/ZAR exchange rate As the rand is our functional currency, US$/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 South African economy 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 SOCIAL AND RELATIONSHIP CAPITAL Crime, corruption and social cohesiveness Illegal mining and vandalism have necessitated measures to protect the Group’s employees and assets, leading to increased security-related operational costs. Within the context of further challenges, such as poor service delivery, social unrest and political corruption prevalent in South Africa, there is a growing societal expectation for both businesses and the government to address these systemic issues Economic and political uncertainty Globally, the economic and political environments remain uncertain. The recent South African national elections saw the African National Congress (ANC) lose its 30-year majority, highlighting the country’s evolving political landscape. The ongoing Russia-Ukraine conflict and escalating tensions in the Middle East, particularly the Israel-Palestine conflict, have increased gold’s status as a safe-haven asset but have also contributed to slow global growth, rising inflation and supply chain disruptions NATURAL CAPITAL Activism, special interest groups and regulatory uncertainty Gold plays a distinct role in the global economy, ensuring financial stability while contributing to innovation across industries. Responsible gold mining enables socio-economic growth by creating jobs, generating tax revenues, supporting local communities and aligning with sustainability goals. Stakeholders expect transparent, assured non-financial sustainability disclosure and reporting For an in-depth discussion on our operating environment, refer to pages 66 to 69. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 31 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 30 OUR MATERIAL MATTERS continued EXECUTION EFFICIENCY Our profitability is influenced by several factors, including production levels, cost-containment measures, efficiency in extracting high-grade gold and maintaining a robust capital structure Why this is important • Effective execution enhances profitability, maintains operational efficiency and secures our competitive advantage • Maintaining a robust capital structure enhances our operational resilience, facilitates growth and enables us to return capital to shareholders through dividends or share buy-backs • It also ensures our ability to navigate commodity cycles and macroeconomic volatility, allowing us to fund operations and access capital for organic and acquisitive growth opportunities Strategic initiatives Progress in 2024 • Further strengthen the capital structure and funding flexibility • Ensure adequate liquidity for operational requirements and debt redemptions • Ensure appropriate and innovative medium-term funding for organic growth, exploration and acquisition opportunities • Prioritise sustainable returns to shareholders • Achieve production guidance of 180,000oz to 190,000oz of gold per annum • Achieve AISC guidance of between US$1,325/oz and US$1,350/oz • Use technology to improve mine production, efficiency, safety and security • In June 2024, a US$19.2 million green loan facility was secured for the construction of Barberton Mines’ solar plant • Gold produced increased to 186,039oz (2023: 175,209oz) • Group AISC increased to US$1,354/oz (2023: restated US$1,309/oz) For further metrics, refer to the financial capital KPIs on page 72 Related risks Long-term objective • Constrained electricity • Operational execution • Social instability • Safety breaches • Skills • Ageing infrastructure • Geological variability • Capital allocation and execution • Cost inflation • Macroeconomic volatility • Tailings dam failure • Establish a sustainable and resilient business model that consistently delivers profitable operations, drives operational efficiency, maintains a competitive advantage and maximises shareholder value through effective execution and a robust capital structure FINANCIAL CAPITAL Lice nce to o per ate Social licence to operate Climate change, decarbonisation and biodiversity Op er ati on al e xe cu tio n Skills attraction and retention Tailings management Safety, security, health and wellness Infrastructural constraints Cost consciousness Water management Innovation and opportunity Energy management MATERIAL MATTERS The results of our double materiality assessment are depicted in this graph. Material matters with an environmental and social impact are discussed in greater detail in the sustainable development report, which is available on our website at https://www. panafricanresources. com/investors/gri-and- sustainability/ We analysed these material matters in terms of our ability to exert influence over them. The graphic reflects our material matters according to our spheres of influence, listing the capitals affected by each of these material matters. For a discussion of the key aspects related to each of these material matters, structured according to the primary capital affected, refer to pages 33 to 47. MATERIAL MATTERS IMPACT MATERIALITY High Medium Low Low Medium High FINANCIAL MATERIALITY Safety, security, health and wellness Tailings management Execution efficiency Social licence to operate Climate change, decarbonisation and biodiversity Water management Energy management Infrastructural constraints Innovation and opportunity Growth aspirations Cost consciousness Skills attraction and retention V al u e c r e a ti o n Growth aspirations Execution efficiency Time horizon Short-term focus (one year) Medium-term focus (two to three years) Long-term focus (three years or more) Link to ESG E Environmental impact S Social impact OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 32 33 GROWTH ASPIRATIONS 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 Why this is important • Successfully executing capital growth projects allows the Group to increase annual production, advance its position among mid-tier gold producers and deliver long-term value to shareholders Strategic initiatives Progress in 2024 • Efficiently execute capital projects, operational restructuring and maintenance programmes as well as other initiatives to increase and sustain gold production run rates, thereby ensuring long-term growth and sustainability • Achieve production guidance of 180,000oz to 190,000oz of gold per annum • Evaluate organic and acquisitive growth opportunities and exploration projects to increase our annual production profile to 250,000oz • Investigate potential exploration and mining opportunities outside South Africa that meet the Group’s stringent investment criteria • Evander Mines’ 24 and 25 Level project – Development of the 24 and 25 Levels is progressing well, with ramped-up mining operations at 24 Level – Refrigeration plant phase 2 completed – Ventilation shaft and associated conveyor systems to be commissioned during the first quarter of the 2025 financial year • Barberton Mines’ underground operations – Increased reserve delineation drilling to further improve orebody definition, optimise resource models and increase confidence in the Mineral Reserves – Grout plant at Fairview completed – Increased lateral development within the Zwartkoppie (ZK) orebody to open more ground for the continuation of down-dip mining – Development into the up-dip area of the Western Cross orebody is progressing well – Mining underway on the 258, 259, 260 and 261 Platforms within the high-grade Main Reef Complex (MRC) orebody • Barberton Mines’ consolidated Royal Sheba and Western Cross projects (Sheba Fault project) – Advancing studies to optimise mining and transport of resources from the Sheba Fault project to the BTRP • The MTR project (refer to page 118) is expected to achieve steady- state production by December 2024 • Acquired a strategic equity interest in TCMG • The Sudanese exploration programme (refer to page 119) resumed in August 2023 For further metrics, refer to the manufactured capital KPIs on page 72 Related risks Long-term objectives • Constrained electricity • Operational execution • Skills • Ageing infrastructure • Geological variability • Capital allocation and execution • Cost inflation • Macroeconomic volatility • Tailings dam failure • Strategically leverage growth projects and expansion opportunities to extend the life of our operations, diversify the portfolio to mitigate risks associated with a single sovereign jurisdiction and utilise expertise in exploration and surface tailings retreatment to construct and operate similar facilities in other jurisdictions • Maintain robust returns across commodity cycles by adopting a disciplined investment strategy focused on projects within the lower half of the cost curve. By mitigating market volatility and aligning execution risks with our capabilities, we aim to ensure sustained profitability and enhance shareholder value • Increase the annual gold production profile to exceed 300,000oz and expand the investor base in global markets to enhance liquidity and investor confidence COST CONSCIOUSNESS We prioritise sustainable profitability, growth and expansion through disciplined cost and cash flow management, strategic capital allocation and prudent capital spending Why this is important • Delivering on annual cost and production guidance ensures profitable operations and the cash flows to meet capital expenditure and debt obligations, thereby improving investor confidence in the Group’s sustainability • Effective cost management further supports long-term sustainability and growth Strategic initiatives Progress in 2024 • Efficiently execute capital projects, operational restructuring and maintenance programmes as well as other initiatives to increase and sustain gold production run rates, thereby ensuring long-term growth and sustainability • Achieve production guidance of 180,000oz to 190,000oz of gold per annum • Achieve AISC guidance of between US$1,325/oz and US$1,350/oz • Diversify the renewable energy sources and enhance water management strategies to improve power security, optimise resource utilisation, reduce costs and promote environmental stewardship • Use technology to improve mine production, efficiency, safety and security • Barberton Mines’ underground operations experienced a 10.7% increase in production attributable to the implementation of continuous shift operations at Fairview and Sheba Mines • Approximately US$2.2 million (2023: US$1.9 million) in cost savings has been achieved through Evander Mines’ solar plant, which was commissioned in May 2022 • Approximately US$0.3 million (2023: US$0.1 million) in cost savings has been achieved through various energy efficiency projects • Construction, mechanical assembly and installation of solar trackers at Fairview Mine’s solar plant were completed in June 2024, with initial power generation achieved in August 2024 • Evander Mines’ water treatment plant, commissioned in March 2023, realised cost savings of approximately US$0.5 million • Cost of production before depreciation and amortisation increased by 11.2% to US$221.2 million (2023: restated US$198.9 million) For further metrics, refer to the manufactured capital KPIs on page 72 Related risks Long-term objective • Constrained electricity • Operational execution • Social instability • Safety breaches • Skills • Ageing infrastructure • Geological variability • Capital allocation and execution • Cost inflation • Macroeconomic volatility • Tailings dam failure • Maintain a culture of disciplined cost and cash flow management as well as strategic capital allocation, ensuring that all capital allocation decisions undergo rigorous analysis and adhere to predefined risk- adjusted return parameters OUR MATERIAL MATTERS continued Time horizon Short-term focus (one year) Medium-term focus (two to three years) Long-term focus (three years or more) Link to ESG E Environmental impact S Social impact FINANCIAL CAPITAL OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 34 35 ENERGY MANAGEMENT E The availability and cost of electricity are critical input factors in achieving our production targets and maintaining profitability. They drive our ongoing efforts to enhance the efficient utilisation of electricity across our operations Why this is important • Proactively managing the migration to renewable energy sources enhances the sustainability of the Group’s future gold production and contributes to anticipated cost reductions while addressing electricity supply issues Strategic initiatives Progress in 2024 • Diversify the renewable energy sources and enhance water management strategies to improve power security, optimise resource utilisation, reduce costs and promote environmental stewardship • Achieve production guidance of 180,000oz to 190,000oz of gold per annum • Achieve AISC guidance of between US$1,325/oz and US$1,350/oz • Reduce the Group’s carbon footprint and advance its decarbonisation strategy • The Group’s electricity costs increased by 66.3% to US$31.1 million (2023: restated US$18.7 million) • Construction and mechanical assembly including the installation of solar trackers at Barberton Mines’ Fairview solar plant were completed by the end of June 2024. First power generation was achieved in August 2024 • Financial close of the 75MW Sturdee Energy Bela-Bela solar project is anticipated during September 2024, with first power expected in the 2026 calendar year • Evander Mines’ solar plant realised cost savings of approximately US$2.2 million (2023: US$1.9 million) • The Group achieved a 6.1% (2023: 6.1%) renewable energy mix • Several energy efficiency projects are currently in progress. Refer to the climate change report for more information • The feasibility study is in progress for a 20MW solar plant at the MTR project • Conducted a comprehensive strategic review to determine the optimal wind and solar renewable energy mix. Initial findings indicate the potential for the integration of high levels of renewable energy into our operations For further metrics, refer to the natural capital KPIs on page 73 Related risks Long-term objective • Constrained electricity • Operational execution • Skills • Capital allocation and execution • Cost inflation • Transition to renewable energy sources to enhance sustainability, reduce costs and address electricity supply disruptions at our operations • Through proactive management, we aim to optimise the utilisation of renewable energy across our operations, ensuring long-term environmental stewardship and financial resilience Renewable energy strategy We set a target to generate 15% of our energy requirements from renewable sources by 2027 Renewable energy as a percentage of total energy consumption 0 2 4 6 8 10 12 14 16 0 6.1 6.1 14 15 15 2025 2024 2022 2026 2028 2027 2023 % 12 5 Achieved Target 7 INFRASTRUCTURAL CONSTRAINTS The nature of underground mining operations results in higher temperatures, longer travel times and logistical challenges. This necessitates increased capital expenditure and maintenance costs to sustain operational efficiencies and reliability of infrastructure Why this is important • Continuous infrastructure investment is essential to ensure the safety and profitability of our mines, thereby safeguarding our overall performance and long-term sustainability Strategic initiatives Progress in 2024 • Efficiently execute capital projects, operational restructuring and maintenance programmes as well as other initiatives to increase and sustain gold production run rates, thereby ensuring long-term growth and sustainability • Achieve production guidance of 180,000oz to 190,000oz of gold per annum • Achieve AISC guidance of between US$1,325/oz and US$1,350/oz • Strive for zero fatalities and an average annual improvement of 3.86% in the TRIFR Barberton Mines • Installed a more reliable primary crusher and removed the obsolete Watson crusher, resulting in improved availability • Parts and equipment for Fairview Mine’s 3 Shaft winder upgrade were purchased, with the upgrade completed in August 2024 • Redesign of Fairview Mine’s water reticulation system completed, with installation scheduled for completion by the end of the 2025 financial year • Engineering department restructured • Prince Consort (PC) Shaft rehabilitation is expected to be completed in the first quarter of the 2025 financial year Evander Mines • Ventilation shaft equipping is expected to be completed in the first quarter of the 2025 financial year with commissioning of the hoisting shaft thereafter • The main conveyor system will be managed as a dual ore handling system until the ventilation shaft hoisting system achieves steady– state production. Thereafter, the conveyor system is planned to be decommissioned in stages, this will also include vamping of the decline in the vicinity of the decommissioned conveyor system • Phase 2 of the refrigeration project was completed in August 2024 with commissioning to follow once the ventilation shaft has been fully commissioned Related risks Long-term objective • Operational execution • Safety breaches • Skills • Ageing infrastructure • Capital allocation and execution • Cost inflation • Macroeconomic volatility • Implement continuous infrastructure maintenance programmes to ensure the safety of our employees as well as the profitability and long-term sustainability of our mines OUR MATERIAL MATTERS continued Time horizon Short-term focus (one year) Medium-term focus (two to three years) Long-term focus (three years or more) Link to ESG E Environmental impact S Social impact MANUFACTURED CAPITAL OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 36 37 WATER MANAGEMENT E Water management is pivotal for operational efficiency and environmental sustainability. Our focus on effective wastewater treatment and efficient water utilisation aims to reduce costs, drive sustainability and optimise performance Why this is important • Our water recycling projects support future gold production and AISC reductions • Our water treatment plant initiatives reduce reliance on municipal water, resulting in environmental benefits and cost savings Strategic initiatives Progress in 2024 • Diversify the renewable energy sources and enhance water management strategies to improve power security, optimise resource utilisation, reduce costs and promote environmental stewardship • Achieve AISC guidance of between US$1,325/oz and US$1,350/oz • Evander Mines’ water treatment plant realised cost savings of approximately US$0.5 million and reduced municipal water consumption by 45.6% to 747ML • Initiated a feasibility study to expand Evander Mines’ water treatment plant from 3ML to 6ML • Completed a desktop study for a water treatment plant at the MTR project. A feasibility study will commence once the project is operational • Partnered with the National Cleaner Production Centre of South Africa (NCPC-SA) on the Industrial Water Efficiency (IWE) Project to reduce water use, wastewater generation and costs. The NCPC-SA completed a due diligence process prior to starting the IWE Project For further metrics, refer to the natural capital KPIs on page 73 Related risks Long-term objective • Constrained electricity • Operational execution • Skills • Capital allocation and execution • Cost inflation • Enhance water management practices, focusing on effective wastewater treatment and efficient water utilisation, in order to drive operational efficiency, environmental sustainability and cost optimisation Water reuse TSFs are remined through hydro-mining using processed water from return water dams or underground dewatering. By reusing water, we minimise water abstraction demonstrating our dedication to water conservation OUR MATERIAL MATTERS continued Time horizon Short-term focus (one year) Medium-term focus (two to three years) Long-term focus (three years or more) Link to ESG E Environmental impact S Social impact MANUFACTURED CAPITAL Water withdrawal Our operations utilise water primarily for metallurgical processing, remining, domestic use and dust control. We source water for these essential functions from groundwater, rainwater and municipal water. Our proactive water management strategies, including the recent implementation of automated water meters, have resulted in a 10.3% decrease in our water withdrawal 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Water withdrawal (ML) 10,569.4 8,716.2 12,170.0 12,650.0 9,476.4 2024 2023¹ 2022 2021 2020 Water discharge Our mining operations responsibly discharge surface water through controlled releases while adhering to regulatory requirements and our water use licences. Our water discharge has remained steady for 2024 0 100 200 300 400 500 Water discharge (ML) 265 484 – 242 292 2024 2023 2022 2021 2020 Water consumption Our water conservation initiatives continue to produce positive results. The steady-state production of recycled water at Evander Mines’ water treatment plant has reduced the Group’s water consumption. Additionally, water stewardship practices including measuring, monitoring and reporting, have optimised the Group’s water resources, resulting in a 10.9% reduction 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2024 2023¹ 2022 2021 2020 Water withdrawal (ML) 10,304.4 8,232.2 12,170.0 12,408.0 9,184.8 1 Prior reporting period figures have been restated to include water usage from third-party private sources and the Barberton Blueberries project. Evander Mines’ 3ML per day water treatment plant OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 39 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 38 INNOVATION AND OPPORTUNITY Our entrepreneurial and performance-driven culture fosters innovation. Diversifying our portfolio and investing in sustainable solutions enhance long-term profitability and contribute to a sustainable future Why this is important • Embracing an entrepreneurial and performance-driven culture, complemented by leveraging technology as a tool for employee engagement, education and self-development, enhances decision-making and fosters improved employee retention, communication and safety within the working environment Strategic initiatives Progress in 2024 • Maintain an entrepreneurial and performance-driven culture • Use technology to improve mine production, efficiency, safety and security • Evaluate organic and acquisitive growth opportunities and exploration projects to increase our annual production profile to 250,000oz • Investigate potential exploration and mining opportunities outside South Africa that meet the Group’s stringent investment criteria • Curtail illegal mining and property theft through cooperation between all stakeholders and law enforcement agencies • Integrated, technology-driven security strategy in place to prevent and combat illegal mining, crime and other security-related incidents • Upgraded Group ERP (enterprise resource planning) systems which integrate finance and supply chain management and went live in July 2024 • Signed a memorandum of understanding with the Council for Scientific and Industrial Research as part of Barberton Mines’ waste management programme. The collaboration aims to explore and investigate innovative techniques for enhancing energy, waste and water efficiency • Pan African won the 2023 Chartered Governance Institute of Southern Africa’s Integrated Reporting Award in the Small Cap category Related risks Long-term objectives • Constrained electricity • Operational execution • Social instability • Safety breaches • Skills • Ageing infrastructure • Geological variability • Capital allocation and execution • Cultivate and sustain an entrepreneurial and performance-driven culture that fosters innovation and embraces sustainable solutions, thereby enhancing long-term profitability and contributing to a sustainable future • By investing in innovative technologies, we aim to enhance employee engagement, communication and safety INTELLECTUAL CAPITAL HUMAN CAPITAL OUR MATERIAL MATTERS continued SAFETY, SECURITY, HEALTH AND WELLNESS S We prioritise employee health, safety and wellness to cultivate employee trust and confidence Why this is important • Promoting and providing a safe working and operating environment is key to the well-being of our employees and the sustainability of our operations • Read more about safety, security, health and wellness in the social overview on page 136 Strategic initiatives Progress in 2024 • Strive for zero fatalities and an average annual improvement of 3.86% in the TRIFR • Maintain an entrepreneurial and performance-driven culture • Use technology to improve mine production, efficiency, safety and security • Curtail illegal mining and property theft through cooperation between all stakeholders and law enforcement agencies • Barberton Mines achieved 4 million fatality-free shifts during the 2024 financial year • Implemented in-stope lighting to enhance underground visibility and prevent fall of ground incidents • Educating employees on lifestyle diseases and enhancing the health and wellness programme • Revitalised safety awareness campaigns across all operations • Continued focus on preventing unsafe activities, addressing non- compliant equipment and ensuring safe work environments • Underground training centre constructed at Fairview Mine on 20 Level as a practical training hub, enabling employees to attain Level A and B competency certifications • New chief safety officer and several additional safety officers appointed with the expansion of mining operations to 24 Level at Evander Mines • Safety, health, environment and quality (SHEQ) management team appointed for the MTR project to assist in implementing the health and safety management system for this project For further metrics, refer to the human capital KPIs on page 73 Related risks Long-term objective • Operational execution • Social instability • Safety breaches • Skills • Ageing infrastructure • Tailings dam failure • Maintain a culture of safety, security, health and wellness that prioritises the well-being of our employees and contractors, aiming to achieve zero harm in our operations Safety performance Our safety performance improved compared to the 2023 financial year. Regrettably, one fatality was recorded 0 0.08 0 0 2 4 6 8 10 2024 2023 2022 2021 2020 1.86 1.70 9.12 1.41 7.36 1.04 8.95 7.96 0.06 1.82 6.52 0.05 Per million man hours Our safety commitment is evident in our Sustainability Bond Linked Finance (SBLF) framework. We strive for an average annual improvement of 3.86% in safety performance 5 6 7 8 9 10 7.75 7.22 7.44 Per million man hours 8.08 8.95 8.50 6.52 7.96 8.95 7.00 6.79 2025 2024 2022 2026 2029 2027 2023 2028 Achieved Target Time horizon Short-term focus (one year) Medium-term focus (two to three years) Long-term focus (three years or more) Link to ESG E Environmental impact S Social impact OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 40 41 Mechanised mining equipment at Fairview Mine OUR MATERIAL MATTERS continued Time horizon Short-term focus (one year) Medium-term focus (two to three years) Long-term focus (three years or more) Link to ESG E Environmental impact S Social impact HUMAN CAPITAL SKILLS ATTRACTION AND RETENTION S We prioritise attracting, developing and training talent through transparent and constructive relationships with our employees and unions Why this is important • Ongoing, effective talent development and succession planning are essential to ensure we have the necessary skills to meet our strategic objectives and operational needs Strategic initiatives Progress in 2024 • Develop employee skills and introduce retention programmes for scarce skills • Maintain an entrepreneurial and performance-driven culture • Skills and development training expenditure increased to US$1.8 million (2023: US$2.2 million) • Performance management system implemented at Evander Mines and Barberton Mines to achieve sustainable performance improvement, including formalisation of individual development plans for employees • Barberton Mines has: – provided an engineering learnership programme to 22 (2023: seven) students – provided a blasting learnership programme to 15 (2023: 13) employees – provided workplace exposure to 13 (2023: one) university graduates – provided adult education to six (2023: 27) employees • Evander Mines’ skills development strategy has: – provided an engineering learnership programme to four (2023: six) employees and six (2023: six) community members – continued the formal mentorship programme involving five participants across several fields of study – offered workplace exposure to 19 (2023: 15) university graduates in both technical and support functions through its internship and graduate programmes – continued to assist 17 (2023: 17) employees in furthering their studies – provided adult education and training to 10 (2023: nil) employees, including five mine employees and five contractor employees Also refer to the KPIs on page 73 Related risks Long-term objective • Operational execution • Safety breaches • Skills • Capital allocation and execution • Develop leadership and technical skills by cultivating an internal pipeline of successors for critical roles, ensuring readiness for key positions, fostering continuity and resilience across our operations Employee turnover This includes voluntary resignations and dismissals and informs strategic decisions aimed at improving both collective retention rates and individual employee retention and effectiveness. In 2024, we had a turnover rate of 12.9% (2023: 12.9%) for the Group 0 2 4 6 8 10 12 14 % 2023 2022 2020 2024 2021 12.3 8.5 12.9 6.0 12.9 Training and development We strive to prepare employees to execute our business strategy and cultivate an empowering environment for leaders. Our continuous investments in skills development and training include technical assessments, structured development plans for leadership and career advancement and mentorship within the local talent pool. We provide diverse learning opportunities, grants, portable skills, craft training, adult education and other skills transfer programmes aligned with Mining Charter III criteria. Performance reviews for full-time employees assess training and professional development opportunities 0 5 10 15 20 25 30 29 28 29 27 Hours 20 2023 2022 2020 2024 2021 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 43 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 42 Blueberry farming is both socially and environmentally sustainable OUR MATERIAL MATTERS continued Time horizon Short-term focus (one year) Medium-term focus (two to three years) Long-term focus (three years or more) Link to ESG E Environmental impact S Social impact SOCIAL AND RELATIONSHIP CAPITAL SOCIAL LICENCE TO OPERATE We manage community expectations and mitigate social unrest through local sourcing, development projects, infrastructure delivery, employment opportunities and our ‘beyond compliance’ approach to exceed regulatory requirements for the benefit of our stakeholders Why this is important • A significant portion of our employees are from local communities. Through the implementation of SLP initiatives and ‘beyond compliance’ projects, we actively contribute to the sustainability of these areas, thereby fostering a more stable operating environment • By investing in improved infrastructure and creating job opportunities, we aim to establish a sustainable economy outside of mining, mitigating the risk of ghost towns once mining activities cease • Read more about our social licence to operate in the social overview on page 136 Strategic initiatives Progress in 2024 • Maintain compliance with SLP requirements while seeking opportunities to go beyond ESG regulatory requirements for the benefit of our stakeholders • Curtail illegal mining and property theft through cooperation between all stakeholders and law enforcement agencies • Handed over computer and science laboratories to the Department of Basic Education at Thomas Nhlabathi High School and Thistle Grove Combined School in November 2023 • Barberton Mines initiated a high school scholarship programme in January 2022, granting full scholarships to 25 learners which is ongoing • 22 (2023: 25) permanent and 149 (2023: 276) seasonal jobs created by the Barberton Blueberries project • The Barberton Blueberries project partnered with a local HDP bee farmer for cross-pollination services as part of its supplier development programme • Barberton Mines and Evander Mines continued their enterprise supplier development programmes • Barberton Mines continued its partnership with Elangeni Generations Outreach, a renowned film-making institution, which provides technical support for the performing arts • Implemented phase 1 of a formal health and wellness programme at Barberton Mines • The running club at Barberton Mines, introduced in 2023 as a health and wellness initiative, remains ongoing • Our sponsored pro-elite running team achieved two top-20 placements in the prestigious Comrades Marathon, with 17 athletes participating For further metrics, refer to the social and relationship capital KPIs on page 73 Related risks Long-term objectives • Operational execution • Social instability • Uphold and strengthen our social licence to operate by proactively managing community expectations through ongoing engagement and education, mitigating the risk of social unrest through job creation and fostering sustainable development in the areas where we operate • We are committed to ensuring ongoing compliance with all relevant legislative and regulatory requirements Community investment1 We are committed to delivering meaningful direct and indirect social benefits for local communities through targeted investments and the localisation of employment and procurement practices 1 Includes investment in bursaries, CSI and LED projects. 0 0.5 1.0 1.5 2.0 2.5 1.8 1.3 1.9 1.7 US$ million 2.5 2023 2022 2020 2024 2021 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 44 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 45 TAILINGS MANAGEMENT E 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 Why this is important • Responsible tailings management is important for environmental protection, risk mitigation, regulatory compliance and stakeholder trust • Read more about tailings management in the environmental overview on page 133 Strategic initiatives Progress in 2024 • 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 • Audit action list developed as part of the implementation plan following the independent tailings review board (ITRB) audit and report released in June 2023 • Assessed the Group’s TSFs for compliance with the ‘as low as reasonably practicable’ (ALARP) principle in the GISTM and currently reviewing the report released in June 2024 • Phase 2 of Elikhulu’s TSF extension commissioned in January 2024 • Construction of phases 3 and 4 of the Elikhulu extension commenced in December 2023, with completion anticipated in the second quarter of the 2025 financial year • Design proposals for the MTR project’s TSF received for evaluation during the first quarter of the 2025 financial year Related risks Long-term objective • Operational execution • Skills • Tailings dam failure • Commit to ongoing progress in responsible tailings management practices, to minimise the impact on the environment and to ensure safety compliance for our mining operations, employees and surrounding communities We remain committed to working with stakeholders to ensure the maintenance and implementation of statutory TSF management standards Total tonnes milled and processed 0 5 10 15 20 14.0 14.1 14.6 15.3 Tonnes million 15.7 2023 2022 2020 2024 2021 CLIMATE CHANGE, DECARBONISATION AND BIODIVERSITY E We uphold environmental preservation 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 Why this is important • To protect ecosystems, mitigate climate risks and ensure long-term sustainability, while also enhancing stakeholder value through environmental stewardship and positive community relationships • Read more about climate change, decarbonisation and biodiversity in the environmental overview on page 133 Strategic initiatives Progress in 2024 • Diversify the renewable energy sources and enhance water management strategies to improve power security, optimise resource utilisation, reduce costs and promote environmental stewardship • Continue to enhance, improve and refine sustainability performance and reporting • Rehabilitate 41% of the MTR project’s surface area by 2030, while concurrently conducting remining operations • Achieve a renewable energy mix of 15% by 2027 • Reduce the Group’s carbon footprint and advance its decarbonisation strategy • Generated 24.6GWh (2023: 23.8GWh) of renewable energy and purchased electricity amounting to 376.6GWh (2023: 366.0GWh ), achieving a 6.1% (2023: 6.1%) renewable energy mix • Carbon emissions intensity decreased to 1.88tCO2/oz Au sold (2023: 1.91tCO2/oz Au sold) • Published the Group’s second climate change report • Conducted an overall climate change risk assessment and scenario analysis • Conducting a TNFD maturity assessment and developing a roadmap • 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 • No reportable environmental incidents have been reported at Barberton Mines and Evander Mines For further metrics, refer to the natural capital KPIs on page 73 Related risks Long-term objective • Constrained electricity • Operational execution • Cost inflation • Advance environmental preservation and sustainability by protecting vital natural resources and ensuring energy security. Through the adoption of a renewable energy mix, we aim to significantly reduce GHG emissions, decarbonise gold production and effectively manage GHG emissions intensity OUR MATERIAL MATTERS continued Time horizon Short-term focus (one year) Medium-term focus (two to three years) Long-term focus (three years or more) Link to ESG E Environmental impact S Social impact NATURAL CAPITAL OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 46 47 OUR PRINCIPAL RISKS We identified the top 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. Our principal risks have also been benchmarked relative to risks identified by our mining peers to ascertain whether these risks are industry-specific. 1 Tailings dam failure risk was disclosed as part of ageing infrastructure in the 2023 and 2022 financial years. OUR PRIMARY RISKS AND OPPORTUNITIES Pan African’s management follows a collective risk assessment approach. The assessment of the identified risks and the effectiveness of the risk- mitigating controls is, to a large extent, subjective. Pan African’s risk management process endeavours to mitigate risk, improving our ability to deliver on our strategic objectives while protecting stakeholder value and promoting long-term sustainability. RISK MANAGEMENT PROCESS Risk management is integrated into Pan African’s culture and business activities. Our risk management process is fundamental to managing the uncertainties we face. It 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 in relation to the strategy. The board monitors the effectiveness of the risk management process and the implementation of risk-mitigating strategies. Board committees The audit and risk committee supports the board and is complemented by the SHEQ 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. Executive management Operational management implements and monitors 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. Risk management process Communicate and consult with internal and external stakeholders at each stage of the risk management process All steps in the risk management process are monitored and reviewed to ensure continuous improvement Board Audit and risk committee Establish the context Long-term value protection Identify and record risks Mitigate, monitor and review risks Analyse risks Evaluate risks Operations 2022 2023 2024 Internal/ external RESIDUAL RISK RANKING 1 1 1 Operational execution 2 2 2 Constrained electricity 3 3 3 Social instability 4 4 4 Safety breaches 5 5 5 Ageing infrastructure 6 6 6 Skills 7 7 7 Capital allocation and execution 8 8 8 Geological variability 9 9 9 Macroeconomic volatility 10 Climate change 10 10 Cost inflation 11 Tailings dam failure1 RESIDUAL RISK HEAT MAP IMPACT Rare Unlikely Possible Likely Almost certain RESIDUAL RISK LIKELIHOOD 11 10 8 9 7 1 2 6 3 Minor Serious Severe Major Catastrophic Tailings dam failure Cost inflation Geological variability Skills Social instability Constrained electricity Safety breaches Macroeconomic volatility Capital allocation and execution Operational execution 4 5 Ageing infrastructure Capitals Financial capital Manufactured capital Intellectual capital Human capital Social and relationship capital Natural capital Residual risk High Medium to high Low to medium Medium Low Internal External OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 48 49 INTEGRATED THINKING The Group has a robust cross-functional risk management process. Management identifies future opportunities during a strategic planning process and assesses these opportunities in the context of the associated strategic risks. OUR PRIMARY RISKS AND OPPORTUNITIES continued Capitals Financial capital Manufactured capital Intellectual capital Human capital Social and relationship capital Natural capital Residual risk High Medium to high Low to medium Medium Low Risk trend Increase Decrease Unchanged CONSTRAINED ELECTRICITY 02 Adverse production impact, safety concerns and increased operating costs Cause • Constrained electricity supply, power surges and power curtailment • Unstable electricity supply and increasing electricity rates Potential impact • Threat to the health and safety of employees and contractors • Damage to electrical equipment and infrastructure • Production and operational interruptions • Increases in the cost of production • Stakeholder pressure to transition to renewable energy Mitigating actions • Migration to renewable energy • Strengthen our relationship with Eskom (South African state-owned utility) • Flexible scheduling of operations • Implemented initiatives to improve energy efficiency Refer to energy management on page 36 for more information Opportunities • Invest in renewable energy • Reduce reliance on Eskom • Improve energy efficiency • Initiatives to reduce the cost of electricity • Initiatives to reduce carbon emissions Outlook • Constrained electricity supply by Eskom is monitored closely despite absence of power curtailment since March 2024 • Increased investment in renewable energy infrastructure is expected to alleviate electricity supply constraints Material matters linked • Execution efficiency • Growth aspirations • Cost consciousness • Energy management • Water management • Innovation and opportunity • Climate change, decarbonisation and biodiversity Governance responsibility • Board • SHEQ committee • Social and ethics committee • Exco Capitals impacted Short- to medium- term trend OPERATIONAL EXECUTION 01 Not achieving guided production and cost targets Cause • Above-inflationary input cost increases • Deeper orebodies and longer travel times reduce mining efficiencies • Logistics bottlenecks and infrastructure constraints • Depletion of high-grade reserves • High demand on aged infrastructure • Unplanned events such as safety-related incidents, community protests or regulatory production stoppages • Power curtailment • Eskom infrastructure failures and unplanned power outages Potential impact • These adversely affect: – operational and financial results – shareholder returns – investor confidence – long-term business sustainability – the ability to fund growth projects • Production stoppages • Increased unit production costs • Possible mine closure • Not meeting shareholder expectations Mitigating actions • Implemented cost savings and production improvement initiatives • Repaired and upgraded the decline infrastructure at Fairview Mine to alleviate bottlenecks in the constrained 3 Shaft decline • Commenced stoping activities at the Sheba Mine Western Cross development project to create flexibility and the opportunity to displace lower-grade surface sources • Progressed the infrastructure upgrade strategy to improve efficiencies and support continuous shift operations Refer to Barberton Mines’ operational review on page 98 for more information Opportunities • Reduce AISC and increase production • Achieve the Group’s strategic objectives • Meet investor expectations and increase shareholder value • Consistently achieve and sustain production targets Outlook • 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 a production management and reporting system integrated with the planning and scheduling software enabling efficient decision-making and adjustments to the mine design as required • In addition to the computer-assisted drawing and three-dimensional (3D) systems implemented in the 2023 financial year, the geological department is now integrating an underground mapping suite which utilises georeferenced high-resolution photographs of the mining face. These systems reduce the turnaround time for geological and grade model updates Material matters linked • Execution efficiency • Growth aspirations • Cost consciousness • Energy management • Infrastructural constraints • Water management • Innovation and opportunity • Safety, security, health and wellness • Skills attraction and retention • Social licence to operate • Tailings management • Climate change, decarbonisation and biodiversity Governance responsibility • Board • Executive committee (Exco) Capitals impacted Short- to medium-term trend SOCIAL INSTABILITY 03 Heightened social instability, political tension and criminality Cause • Low economic growth • Poor socio-economic conditions • Poverty, unemployment and inequality • Social discord and unrest • Unrealistic community expectations for procurement and job opportunities • Criminal mining activities Potential impact • Production and operational interruptions • Increased security costs • Potential financial losses and damage to assets • Reputational damage • Strained relations with host communities Mitigating actions • Well-established stakeholder engagement forums • Community liaison managers • SLP, CSI and ‘beyond compliance’ ESG initiatives • 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 Opportunities • Enhance our relationships with host communities and related stakeholders • Job creation • Create economic opportunities for host communities Outlook • Geopolitical risk is expected to increase interest rates, inflation, commodity price volatility and unemployment • Poor socio-economic conditions are expected to worsen • Constrained electricity supply is expected to impact business and investor confidence Material matters linked • Execution efficiency • Cost consciousness • Innovation and opportunity • Safety, security, health and wellness • Social licence to operate Governance responsibility • Board • SHEQ committee • Social and ethics committee • Exco Capitals impacted Short-term trend OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 50 51 OUR PRIMARY RISKS AND OPPORTUNITIES continued SKILLS 06 Shortage of adequate and appropriate skills or the inability to retain critical skills Cause • Failure to attract skilled employees and the loss of key employees • A shortage of employees with specialised skills • Ageing staff complement • Global mining and engineering talent pool shrinkage makes attracting and retaining skills in South Africa challenging • Skills migration to more favourable jurisdictions Potential impact • Impedes our ability to meet production targets which may adversely affect: – operational and financial results – shareholder returns – investor confidence • Increase in safety incidents and accidents Mitigating actions • Career progression, succession planning and talent management and development • Focusing on retention of employees in critical operational roles • Competitive and incentive-focused remuneration packages to attract and retain sought-after skills Opportunities • Promote, attract, retain and develop our employees • Establish an internal talent management framework to improve staff retention Outlook • The macroeconomic and political environments contribute to many professionals emigrating from South Africa, prompting a strong focus on succession planning and identifying, developing and recruiting for critical roles Material matters linked • Execution efficiency • Growth aspirations • Cost consciousness • Energy management • Infrastructural constraints • Water management • Innovation and opportunity • Safety, security, health and wellness • Skills attraction and retention • Tailings management Governance responsibility • Board • Remco • Exco Capitals impacted Short- to medium-term trend AGEING INFRASTRUCTURE 05 Infrastructure dependency and constraints due to the ageing nature of infrastructure Cause • Breakdowns or failures in mining infrastructure which may result in fire, explosions or flooding Potential impact • Loss of life • Increase in safety incidents and accidents • Production and operational interruptions • Costly and time-consuming repairs • Reputational damage • Increased insurance premiums and/or limited appetite from a reducing number of insurers prepared to underwrite the Group’s risk exposures Mitigating actions • Limited insurance for all underground operations, with specific deemed high-risk exclusions • Planned and proactive maintenance programmes • Ongoing capital expenditure and prioritisation of maintenance • Infrastructure undergoes independent audits annually or as necessary, after which a repair programme is implemented • Independently audited procedures to prevent fires and explosions Opportunities • Safer working environment and improved safety performance • Improved productivity • Reduce costs • Increase flexibility • Reduce unplanned stoppages Outlook • Prioritise capital expenditure and enhance the use of technology Material matters linked • Execution efficiency • Growth aspirations • Cost consciousness • Infrastructural constraints • Innovation and opportunity • Safety, security, health and wellness Governance responsibility • Board • SHEQ committee • Audit and risk committee • Exco Capitals impacted Short- to medium-term trend Capitals Financial capital Manufactured capital Intellectual capital Human capital Social and relationship capital Natural capital Residual risk High Medium to high Low to medium Medium Low Risk trend Increase Decrease Unchanged SAFETY BREACHES 04 Increase in safety incidents and accidents Cause • Inherent safety risks in mining • Fall of ground incidents • Negligent employee actions • Explosion or fire incidents • Breakdowns, failures or incorrect use of mining infrastructure or equipment • Shortage of adequate and appropriate skills Potential impact • Loss of life and injuries • Increase in safety incidents and accidents • Human suffering • Production and operational interruptions • Reputational damage • Difficulty attracting capital to fund growth • Increased insurance premiums Mitigating actions • Targeted safety campaigns and incentives: – Fatality prevention – Road safety and road accident prevention – Encouraging employees to avoid taking shortcuts in safety protocols and procedures – Prevention of fall of ground incidents, alcohol and substance abuse and fatigue • Ongoing safety training, with an underground training centre opened at Barberton Mines this year • Implemented incentives to encourage safe behaviour and recognise safety achievements • Independent compliance reviews by regulators and safety experts • Compliance with operational safety standards • Safety audits Opportunities • Provide a safe working environment for our employees and contractors • Incentivise safe behaviour and reward safety achievements Outlook • Continue to enhance safety through the combined efforts of our people in pursuit of our ultimate goal of zero harm Material matters linked • Execution efficiency • Cost consciousness • Infrastructural constraints • Innovation and opportunity • Safety, security, health and wellness • Skills attraction and retention Governance responsibility • Board • SHEQ committee • Exco Capitals impacted Short- to medium-term trend OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 52 53 OUR PRIMARY RISKS AND OPPORTUNITIES continued COST INFLATION 10 Increasing mining costs and capital expenditure due to inflation Cause • Above-inflationary price increases • Supply chain disruptions • Geopolitical risks and uncertainty • Commodity price volatility Potential impact • Increased interest rates may have a negative impact on the cost of capital funding • Increased AISC • Reduced profitability, cash flows and shareholder returns • Not meeting shareholder expectations Mitigating actions • Monthly operational and cost reviews • 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 Opportunity • Reduce AISC Outlook • Aim to reduce AISC of US$1,350/oz to US$1,400/oz in 2025 assuming an exchange rate of US$/ZAR:18.50 Material matters linked • Execution efficiency • Growth aspirations • Cost consciousness • Energy management • Infrastructural constraints • Water management • Climate change, decarbonisation and biodiversity Governance responsibility • Board • Audit and risk committee • Exco Capitals impacted Short-term trend MACROECONOMIC VOLATILITY 09 Specifically, the gold price and currency fluctuations 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 Refer to our operating environment on pages 66 to 69 for more information Potential impact • A decline in the US$ gold price or an appreciation in the US$/ZAR exchange rate will adversely affect revenue, cash flow generation, operating margins and shareholder returns Mitigating actions • US$ gold price and/or US$/ZAR exchange rate hedging, as governed by the Group’s financial risk policy • Monitoring gold market trends • Cost management and production efficiency improvement initiatives to reduce unit costs • Disciplined capital expenditure • Ensuring sufficient and appropriate funding facilities Opportunities • Protect margins and cash flows • Ensure adequate liquidity Outlook • The US$/ZAR exchange rate is anticipated to remain volatile due to global geopolitics, macroeconomic developments and specific South African challenges • The current outlook for the gold price is bullish, with records expected in the short and medium term Material matters linked • Execution efficiency • Growth aspirations • Cost consciousness • Infrastructural constraints Governance responsibility • Board • Audit and risk committee • Exco Capitals impacted Short-term trend Capitals Financial capital Manufactured capital Intellectual capital Human capital Social and relationship capital Natural capital Residual risk High Medium to high Low to medium Medium Low Risk trend Increase Decrease Unchanged GEOLOGICAL VARIABILITY 08 Inherent geological variability in Mineral Resources and Mineral Reserves Cause • Inherent risk in the estimation of Mineral Resources and Mineral Reserves • Geological complexity of orebodies in the hydrothermal lode gold deposits of the Barberton Greenstone Belt Potential impact • Not achieving guided production in the short to medium term may adversely affect: – operational and financial results – shareholder returns – investor confidence Mitigating actions • 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 • An 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 Opportunity • Maintain a pipeline of Mineral Resources and Mineral Reserves to ensure sustainable future production Outlook • Geological complexity inherently holds opportunities in the project pipeline for exploration and delineation of additional ore deposits Material matters linked • Execution efficiency • Growth aspirations • Cost consciousness • Innovation and opportunity Governance responsibility • Board • Audit and risk committee • Exco Capitals impacted Medium-term trend CAPITAL ALLOCATION AND EXECUTION 07 Suboptimal allocation of capital resources Cause • Poor capital allocation decisions • Delays in executing capital projects timeously and cost overruns Potential impact • Suboptimal return on capital and value destruction adversely impact stakeholder value creation and investor confidence • Adverse impact on operational and financial performance as well as strategic growth Mitigating actions • Rigorous investment and capital allocation analysis • Ensuring that investment decisions have appropriate oversight • Predefined risk-adjusted return parameters which take into account execution risk • Monitor ongoing projects to effectively manage execution risks Opportunities • Ensure the continued sustainability of our mines • Maximise the value of our assets and shareholder returns Outlook • Macroeconomic pressures and capital scarcity raise the importance of ensuring optimal capital allocations Material matters linked • Execution efficiency • Growth aspirations • Cost consciousness • Energy management • Infrastructural constraints • Water management • Innovation and opportunity • Skills attraction and retention Governance responsibility • Board • Audit and risk committee • Exco Capitals impacted Short- to medium-term trend OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 54 55 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 business 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. Our guiding principles encompass ethical, transparent and lawful stakeholder engagement, emphasising ongoing and constructive interaction rather than isolated initiatives. We prioritise maintaining integrity and openness in our interactions with stakeholders, ensuring that our engagement processes are not only compliant with legal requirements but also characterised by ethical conduct. By fostering continuous dialogue and collaboration with our stakeholders, we aim to build trust, enhance understanding and achieve mutually beneficial outcomes that align with our values and objectives. 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 17). Authentic engagement at all levels of the Group is essential for shaping our strategy, managing risks, identifying opportunities and safeguarding our reputation. Refer to pages 58 to 65 for an analysis of our key stakeholder relationships. Refer to page 136 for more information related to our suppliers. For each of these key relationships, we reflect on the strength of the relationship and discuss their significance, key concerns and the actions we have taken to address these concerns. We show how they link to our residual risks, material matters and strategic initiatives. OUR STAKEHOLDERS Suppliers The environment Providers of capital Employees and unions Communities Governments and regulatory bodies Collaboration partners Customers OUR PRIMARY RISKS AND OPPORTUNITIES continued Capitals Financial capital Manufactured capital Intellectual capital Human capital Social and relationship capital Natural capital Residual risk High Medium to high Low to medium Medium Low Risk trend Increase Decrease Unchanged TAILINGS DAM FAILURE 11 The breach or collapse of a tailings dam structure Cause • Structural failure caused by poor design, inadequate construction, overtopping for an extended period or deterioration over time • Incorrect operation • Excessive deposition rates exceeding designs (excessive rates of rise) • Catastrophic rainfall events exceeding the design parameters such as the 1-in-100-year design threshold Potential impact • Loss of life • Production and operational interruptions • Damage to property, surrounding communities and the environment • Costly repairs and rehabilitation • Reputational damage • Difficulty attracting capital investment • Increased insurance premiums and/or limited appetite from a reducing number of insurers prepared to underwrite the Group’s risk exposure Mitigating actions • 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 (Engineer of Record) • Implementing controls to ensure ongoing progression to compliance with the GISTM as far as reasonably practicable • Continuous technical reviews and studies to ensure ongoing compliance with tailings dam safety standards • In line with the GISTM recommendations, the following appointments have been made: – an executive accountable for tailings management – a tailings facility engineer – an ITRB Opportunities • Ensure regulatory compliance • Ensure long-term sustainability of our operations and surrounding environment • Improve safety performance and reduce the environmental impact • Enhance our reputation as operators of safe TSFs through demonstrated efforts to address compliance and review gaps Refer to page 51 in the sustainable development report for more information regarding our experience in building, maintaining and operating tailings dams Outlook • Continue to implement action plans and remedial activities identified through internal and external reviews to address high-risk safety and environmental concerns • Our goal is to ensure safety compliance for our mining operations, employees and neighbouring communities Material matters linked • Execution efficiency • Growth aspirations • Cost consciousness • Safety, security, health and wellness • Social licence to operate • Tailings management Governance responsibility • Board • SHEQ committee • Audit and risk committee • Exco Capitals impacted Short-term trend OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 56 57 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. PROVIDERS OF CAPITAL CUSTOMERS 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 Value created, preserved or eroded 2024 2023 %Δ Related residual risks • Constrained electricity • Operational execution • Social instability • Safety breaches • Skills • Ageing infrastructure • Geological variability • Capital allocation and execution • Cost inflation • Macroeconomic volatility • Tailings dam failure Material matters linked • Execution efficiency • Growth aspirations • Cost consciousness • Energy management • Infrastructural constraints • Water management • Innovation and opportunity • Safety, security, health and wellness • Skills attraction and retention • Social licence to operate • Tailings management • Climate change, decarbonisation and biodiversity Strategic initiatives • Further strengthen the capital structure and funding flexibility • Ensure adequate liquidity for operational requirements and debt redemptions • Ensure appropriate and innovative medium-term funding for organic growth, exploration and acquisition opportunities • Prioritise sustainable returns to shareholders • Efficiently execute capital projects, operational restructuring and maintenance programmes as well as other initiatives to increase and sustain gold production run rates, thereby ensuring long-term growth and sustainability • Achieve production guidance of 180,000oz to 190,000oz of gold per annum • Achieve AISC guidance of between US$1,325/oz and US$1,350/oz Dividend paid to shareholders US$21.2 million US$23.2 million (8.6) Net senior debt US$102.8 million US$18.9 million >100 Finance cost paid US$11.6 million US$6.3 million1 84.1 Headline earnings per share US 4.15 cents US 3.14 cents1 32.2 Return on shareholders’ funds 24.0% 20.7%1 15.9 AISC US$1,354/oz US$1,309/oz1 3.4 Key stakeholder concerns during the year Actions to address stakeholder concerns Outcomes 2024 2023 %Δ • Consistent financial and operational performance which enables sustainable shareholder returns • Increasing debt levels • Implemented optimisation initiatives to improve and sustain operational performance, including the adoption of a continuous operating cycle at Barberton Mines’ Fairview and Sheba Mines during the previous financial year. Refer to the operational performance review for more information on the Group’s operations and optimisation initiatives • The increased debt levels are attributed to the construction of the MTR project aligning closely with our strategic objective of expanding production capacity and improving profitability Revenue US$373.8 million US$319.9 million1 16.8 Cash generated from operating activities US$90.8 million US$100.1 million (9.3) Net debt US$106.4 million US$22.0 million >100 Gold produced 186,039oz 175,209oz 6.2 Proposed a final dividend of ZAR489.0 million or US$26.8 million at the prevailing exchange rate • Growth opportunities • Investigated acquisition opportunities meeting investment criteria, earning a return exceeding our cost of capital, adjusted for project-specific and sovereign risks, while minimising shareholder dilution • Acquired a strategic equity interest in TCMG refer to page 228 for more information • The strategic acquisition of an equity interest in TCMG was approved • The Group is strategically positioning itself to increase production capacity to 250,000oz in the short to medium term to increase shareholder value and attract larger fund managers • Distributions made in contravention of the Companies Act 2006 • Pan African’s share premium account was cancelled, effective 18 July 2024, after a Court confirmation was obtained • A special resolution was passed by shareholders at a general meeting held on 10 June 2024. Refer to page 188 for more information • Technical issues identified were historical and did not affect the Company’s financial position or net asset value • The Company has and continues to implement measures to ensure sufficient distributable income and compliance with the net assets test in the future • Power curtailment • Implemented a renewable energy strategy to stabilise the electricity supply to our operations and reduce costs • Refer to the material matters section where energy management is discussed on page 36 • Share liquidity and valuation • Management is exploring alternative liquid markets in alignment with industry peers Market capitalisation US$744.7 million2 US$497.0 million3 49.8 Average traded price per share traded JSE ZA 450 cents ZA 365 cents 23.3 AIM GB 19.1 pence GB 16.9 pence 13.0 Price earnings ratio JSE 7.8 5.4 44.4 AIM 7.7 5.3 45.3 1 Restated due to prior period adjustments, refer to note 40. 2 Source: JSE’s Trading and Market Services. Calculated at 30 June 2024 using the quoted price and the closing US$/ZAR exchange rate at that date. 3 Source: JSE’s Trading and Market Services. Calculated at 31 December 2023 using the quoted price and the closing US$/ZAR exchange rate at that date. OUR KEY STAKEHOLDER RELATIONSHIPS continued Capitals Financial capital Social and relationship capital Human capital Natural capital Performance Positive increase Negative increase Unchanged Positive decrease Negative decrease The strength of our key stakeholder relationships is determined by the quality of interactions our relationship managers have with them over the reporting period Positive Stable Challenging OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 58 59 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 61 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 60 EMPLOYEES AND UNIONS Employees and unions Their significance and why we engage • Strong and constructive relationships with employees are fundamental to our business’ sustainability • To achieve our strategic objectives, we focus on building a strong productive culture and upskilling our employees Value created, preserved or eroded 2024 2023 %Δ Related residual risks • Constrained electricity • Operational execution • Safety breaches • Skills • Ageing infrastructure Material matters linked • Execution efficiency • Energy management • Infrastructural constraints • Water management • Innovation and opportunity • Safety, security, health and wellness • Skills attraction and retention • Social licence to operate Strategic initiatives • Strive for zero fatalities and an average annual improvement of 3.86% in the TRIFR • Maintain an entrepreneurial and performance-driven culture • Use technology to improve mine production, efficiency, safety and security • Curtail illegal mining and property theft through cooperation between all stakeholders and law enforcement agencies Employee remuneration US$72.0 million US$60.6 million1 18.8 Skills and development training US$1.8 million US$2.2 million (18.2) Employees and contractors 7,638 6,857 11.4 Women permanently employed 471 406 16.0 Key stakeholder concerns during the year Actions to address stakeholder concerns Outcomes 2024 2023 %Δ • Employee safety • The safety strategy aims to achieve zero harm by implementing targeted safety campaigns and programmes that promote safe operational practices with a special emphasis on new employees and continuous reinforcement of safe practices • Introduced several programmes to address safety performance shortcomings at underground operations, including pre-emptive safety stoppages to reinforce safety protocols, strengthening the on-site safety teams and conducting third-party safety audits 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 52 for the mitigating actions taken to address the Group’s safety risks Fatalities 1 1 – Safety initiatives US$1.4 million US$1.4 million – TRIFR (per million man hours) 6.52 7.96 (18.1) Lost-time injury frequency rate (LTIFR) (per million man hours) 1.82 1.86 (2.2) RIFR (per million man hours) 0.78 0.81 (3.7) • Wage negotiations • Wage negotiations are closely monitored by Exco and Remco • Closely monitored the employee relations environment amid national and provincial election campaigns • Various approaches were followed to secure a multi-year wage agreement peacefully and avoid operational disruptions • A five-year wage agreement was secured with the National Union of Mineworkers (NUM) at Barberton Mines • Continuously improving working conditions to enhance employee communication and engagement remains a key focus • Maturation of Barberton Mines’ employee share ownership plan (ESOP) • Early settlement of the scheme (31 March 2024) was negotiated with employees and unions • More than 2,200 employees qualified to receive final maturity payments, with payments dependent on the number of completed years of service • Diversity and transformation • The Group aims to foster a culture of action and accountability, teamwork and compassion through its human capital strategy and core values • Through its ESOP, Barberton Mines paid a dividend of US$0.1 million (2023: US$0.3 million) to employees and a final settlement of US$1.8 million • Women make up 17.4% (2023: 16.4%) of the permanent employees in the Group • The percentage of women in mining has increased to 17.1% (2023: 16.1%) 1 Restated due to prior period adjustments, refer to note 40. OUR KEY STAKEHOLDER RELATIONSHIPS continued Capitals Financial capital Social and relationship capital Human capital Natural capital Performance Positive increase Negative increase Unchanged Positive decrease Negative decrease The strength of our key stakeholder relationships is determined by the quality of interactions our relationship managers have with them over the reporting period Positive Stable Challenging Installation of underground rock support at Evander Mines’ 8 Shaft pillar mining OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 60 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 61 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 Value created, preserved or eroded 2024 2023 %Δ Related residual risk • Social instability Material matters linked • Social licence to operate • Tailings management • Climate change, decarbonisation and biodiversity Strategic initiatives • Curtail illegal mining and property theft through cooperation between all stakeholders and law enforcement agencies • Maintain compliance with SLP requirements while seeking opportunities to go beyond ESG regulatory requirements for the benefit of our stakeholders • Rehabilitate 41% of the MTR project’s surface area by 2030, while concurrently conducting remining operations Transformation trust collections for communities US$1.3 million US$1.1 million 18.2 HDP procurement expenditure US$118.2 million US$66.8 million 76.9 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 2024 2023 %Δ • Socio-economic support and opportunities through job creation and infrastructure development • Effective stakeholder engagement forums maintained in Barberton and Evander, comprising representatives from host communities and other pertinent community-based structures • Regular public participation meetings held with Mogale community stakeholders • Prioritising education, healthcare and job creation as part of socio-economic development initiatives and focusing on meeting legal compliance requirements as part of ‘beyond compliance’ initiatives • Improved communication with communities through social media CSI, LED programmes and bursary expenditure US$2.5 million US$1.7 million 47.1 Barberton Blueberries permanent jobs 22 25 (12.0) Seasonal jobs 149 272 (45.2) • Proactive engagement between operations and host communities has notably reduced community unrest incidents and strengthened relationships Refer to the social overview on page 136 for more information GOVERNMENTS AND REGULATORY BODIES The governments of South Africa, the UK and Sudan, the JSE, A2X, AIM, 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 Value created, preserved or eroded 2024 2023 %Δ Related residual risks • Constrained electricity • Social instability • Safety breaches Material matters linked • Energy management • Water management • Safety, security, health and wellness • Social licence to operate • Tailings management • Climate change, decarbonisation and biodiversity Strategic initiatives • Maintain compliance with SLP requirements while seeking opportunities to go beyond ESG regulatory requirements for the benefit of our stakeholders • Curtail illegal mining and property theft through cooperation between all stakeholders and law enforcement agencies • Operate TSFs in line with the GISTM as far as reasonably practicable • Continue to enhance, improve and refine sustainability performance and reporting South African government taxes paid (excluding VAT but including employee taxes) US$30.2 million US$21.9 million 37.9 VAT received from government US$60.0 million US$35.7 million 68.1 Electricity cost US$31.1 million US$18.7 million1 66.3 Electricity consumption 1,444.22TJ 1,403.02TJ 2.9 Evander Mines’ five-year SLP for July 2023 to June 2028 was resubmitted to the DMRE in March 2024 for approval Key stakeholder concern during the year Actions to address stakeholder concern Outcomes • Compliance with regulatory requirements • Engagement with the Department of Mineral Resources and Energy (DMRE) for approval of Evander Mines’ SLP submitted in January 2023 and resubmitted in March 2024 • Engagement with the DMRE on the MTR project’s SLPs • Barberton Mines’ SLP for the five-year period 2024 to 2029 was submitted to the DMRE in July 2024. Management continues to engage with the DMRE to obtain approval • Strengthened the Group’s compliance management function • Ongoing engagement with regulatory authorities to address outstanding matters and ensure compliance • Implementation plan submitted to the DMRE to close the approved MTR project SLP for the 2009 to 2013 reporting period. Awaiting DMRE feedback on revised SLPs submitted for the 2014 to 2018 and 2019 to 2023 reporting periods • Awaiting DMRE approval for the MTR project’s SLP for the 2024 to 2028 reporting period 1 Restated due to prior period adjustments, refer to note 40. Capitals Financial capital Social and relationship capital Human capital Natural capital Performance Positive increase Negative increase Unchanged Positive decrease Negative decrease The strength of our key stakeholder relationships is determined by the quality of interactions our relationship managers have with them over the reporting period Positive Stable Challenging OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 62 63 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 65 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 64 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 Value created, preserved or eroded 2024 2023 %Δ Related residual risks • Constrained electricity • Tailings dam failure Material matters linked • Energy management • Water management • Social licence to operate • Tailings management • Climate change, decarbonisation and biodiversity Strategic initiatives • Diversify the renewable energy sources and enhance water management strategies to improve power security, optimise resource utilisation, reduce costs and promote environmental stewardship • Continue to enhance, improve and refine sustainability performance and reporting • Rehabilitate 41% of the MTR project’s surface area by 2030, while concurrently conducting remining operations • Achieve a renewable energy mix of 15% by 2027 • Progress the implementation of TSF audit recommendations and advance compliance with the GISTM, as far as reasonably practicable Carbon emissions intensity per ounce sold 1.88tCO2e/oz Au 1.91tCO2e/oz Au (1.6) Water consumption 9,184.8ML 10,304.4M1 (10.9) Energy consumption 1,503.775TJ 1,447.17TJ 3.9 We are in the process of rehabilitating 122.3ha of the MTR project’s surface area, including the restoration of the wetland north of Lancaster Gold Mine. On 25 July 2024, a wild fire occurred in the wetlands. This full extent of the fire’s impact is not yet known and the wetlands regrowth will be closely monitored and assessed after the upcoming rainy season. In response, mitigation measures are being put in place to reduce the risk of future fires. Key stakeholder concerns during the year Actions to address stakeholder concerns Outcomes • Sustainability performance and reporting • Tailings management • A TNFD maturity assessment is underway and a roadmap is being developed to better understand the Group’s position with respect to TNFD recommendations and to inform the Group’s implementation of its recommendations • Pan African has increased the number of assured ESG KPIs from 11 to 16 • We prioritise the safety, operations and regulatory compliance of our TSFs as far as reasonably practicable, conducting regular investigations to assess their safety, stability and other pertinent issues • The Group commissioned independent technical studies of its historical tailings dams. These assessments found that the facilities are not at risk of collapse. However, recommendations were made to remediate facilities damaged by erosion due to excessive rainfall and illegal community settlements For further details on our progress, refer to the material matters section on page 47 • For our biodiversity and rehabilitation progress, refer to the chief executive officer’s review on page 81 • Technical study recommendations are in the process of being implemented • Community engagement and awareness campaigns on illegal settlements near historical TSFs are underway and are being conducted in partnership with local non-governmental organisations. We are also actively curtailing illegal mining activities in close proximity to the TSFs 1 Prior period water consumption figures have been restated to include water usage from third-party private sources and the Barberton Blueberries project. OUR KEY STAKEHOLDER RELATIONSHIPS continued Capitals Financial capital Social and relationship capital Human capital Natural capital Performance Positive increase Negative increase Unchanged Positive decrease Negative decrease The strength of our key stakeholder relationships is determined by the quality of interactions our relationship managers have with them over the reporting period Positive Stable Challenging The regional Elikhulu TSF at Evander Mines which will contain all the future underground and Elikhulu processed residues OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 65 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 64 OUR OPERATING ENVIRONMENT US$/ZAR EXCHANGE RATE The exchange rate influences our revenue and our costs How this affects the macroeconomic environment The rand strengthened during the last quarter of our financial year after experiencing marked volatility around the 2024 general election, however, the formation of the GNU has been viewed positively. The closing US$/ZAR exchange rate was US$/ZAR:18.19 (2023: US$/ZAR:18.83). How it affects us During the 2024 financial year, the average US$/ZAR exchange rate was US$/ZAR:18.71 (2023: US$/ZAR:17.77). The average rand gold price received increased by 17.2% from ZAR1,034,586/kg to ZAR1,212,252/kg. The Group is directly impacted by fluctuating commodity cost prices, including fuel and other materials, affecting operating costs and profitability. SOUTH AFRICAN ECONOMY 2024 South African general election and what lies ahead How this affects the macroeconomic environment General elections were held in South Africa on 29 May 2024 to elect a new National Assembly and the provincial legislature in each of the nine provinces. This was the seventh fully democratic general election held since 1994. Support for the ruling ANC significantly declined. While it remained the largest party, it lost its parliamentary majority for the first time since 1994. On 14 June 2024, the ANC, the Democratic Alliance (DA), the Inkatha Freedom Party and the Patriotic Alliance agreed to form a GNU, with Cyril Ramaphosa re-elected as President. President Ramaphosa unveiled a new 32-member cabinet on 30 June, with the ANC holding 20 positions, the DA holding six and the remainder allocated to other coalition members. Additionally, 42 deputy ministers were named from coalition parties. Markets responded positively to the election process, the GNU structure and the reappointment of the President. How it affects us According to Investec, investor confidence depends on a pro- economic growth cabinet capable of addressing South Africa’s ongoing freight and logistics crisis, including inadequate rail capacity and persistent port blockages, as well as resolving the ongoing water crises and high levels of crime and corruption. A weaker US$/ZAR exchange rate may increase the rand gold price per ounce, increasing revenue but also increasing the import cost of equipment and consumables. Further higher interest rates will elevate the cost of capital, negatively affecting profitability and potentially deterring investments in capital projects. South Africa’s electricity crisis, especially the challenges faced by Eskom, poses significant production obstacles, leading to production delays and increased costs. These challenges require careful management and strategic planning to mitigate their impact on the Group’s performance. Our response To mitigate volatility in the US$/ZAR exchange rate and commodity prices, we use zero-cost collars and foreign exchange contracts. To address rising interest rates, the Group implemented an interest rate hedge strategy using variable or fixed interest rate swaps. This allows the Group to lock in fixed interest rates, protecting against potential increases in the Johannesburg Interbank Average Rate thus reducing the adverse impact of rising interest rates on its financial performance and profitability. We have made significant progress in our renewable energy strategy aiming for long-term sustainability through stable energy supply and cost savings through large-scale renewable energy projects. 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. The gold price The price of gold reached multiple all-time highs in May 2024. Several factors influence the gold price: • The gold price typically increases in times of perceived stock market risk when investors view it as a safe-haven investment and during periods of high inflation • Recent gold price increases have been driven by geopolitical and economic risks such as the US-China trade war, Brexit, COVID-19 and tensions in Ukraine and Palestine • Central bank buying and rising incomes in emerging markets such as China and India are driving consumer demand for gold. In South Africa, the gold price in rand is also affected by the US$/ZAR exchange rate. The rand is volatile, reflecting sentiment towards emerging markets and commodities. It often experiences significant fluctuations in value, due to macroeconomic and geopolitical factors which impact investors’ risk appetite, but then also tends to quickly revert to its weakening long-term trend relative to the US$. According to the Bureau for Economic Research, the rand’s depreciation is primarily due to South Africa’s high inflation rate relative to its global peers. This results in an implied depreciation over time to keep South Africa’s exports competitive. The country’s current account deficit, due to imports exceeding exports, results in money flowing out of the country, reducing the demand for the rand, which in turn further weakens demand. A major driver of the increasing current account deficit has been the declining output of South Africa’s mining sector, historically the country’s largest exporter. Capitals Financial capital Social and relationship capital Natural capital 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 risks and strategic opportunities. GOLD PRICE The US$ gold price affects our profitability and value creation How this affects the macroeconomic environment Gold is widely regarded as a safe-haven investment during periods of geopolitical tension, economic uncertainty, market volatility and high inflation. The current outlook for the gold price is bullish, with Goldman Sachs recently having raised its forecast to US$2,700/oz by the end of the 2024 calendar year and Citibank predicting that gold will trade at US$3,000/oz within the next six to 18 months. How it affects us Pan African’s profitability and value-creation ability are directly influenced by revenue from gold sales which benefit from the rising gold price. During the 2024 financial year, our mines received an average gold price of US$2,015/oz, 11.3% higher than the average received in 2023 of US$1,811/oz1. 1 Restated due to prior period adjustments, refer to note 40. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 66 67 OUR OPERATING ENVIRONMENT continued CRIME, CORRUPTION AND SOCIAL COHESIVENESS Adverse economic conditions have fuelled criminal elements in the mining and other sectors How this affects the macroeconomic environment In the 2023 Corruption Perceptions Index, which assesses perceived levels of public sector corruption in 180 countries, South Africa experienced a decline in its ranking. With a score of 41 (down from 43 in 2023), the country now ranks in 83rd position falling from 72nd in 2023. The decline over the past five years dampens hopes for an end to corruption and the establishment of a just governmental system. 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 a significant 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$7.2 million (2023: restated US$5.6 million) during the year on security costs. Our response Pan African has an established code of ethical conduct and commercial malpractice policy, setting clear standards of behaviour for employees, contractors and stakeholders. 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. The Group has made strategic investments in communities to foster positive relationships with host communities, focusing on creating employment opportunities, developing local suppliers and making socio-economic contributions, thereby increasing engagement and reducing community unrest. ECONOMIC AND POLITICAL UNCERTAINTY Global economic outlook How this affects the macroeconomic environment According to the International Monetary Fund, global growth estimated at 3.2% in 2023 is projected to continue at the same pace in the 2024 and 2025 calendar years. This growth rate is low by historical standards due to near-term factors such as high borrowing costs and the withdrawal of fiscal support as well as longer- term effects from the COVID-19 pandemic, Russia’s invasion of Ukraine, weak productivity growth and increasing geoeconomic fragmentation. Global headline inflation is expected to decrease from an annual average of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025. Advanced economies are anticipated to return to their inflation targets sooner than emerging markets and developing economies. However, new price spikes from geopolitical tensions, such as the war in Ukraine and the conflict in Palestine, could raise interest rate expectations and reduce asset prices. Geoeconomic fragmentation could intensify slowing the flow of goods, capital and people thereby implying a supply-side slowdown. Advances in artificial intelligence and stronger-than-expected structural reforms could increase productivity. How it affects us Trade disruptions exacerbate market volatility, potentially adversely impacting demand and sentiment for gold, which directly affects its price. The Group’s operations rely on various inputs such as equipment, machinery, fuel and chemicals. Any supply chain disruptions can adversely affect the availability and cost of these essential inputs, ultimately impacting profitability. Increased geopolitical uncertainty and economic challenges often lead to a more cautious approach from investors, insurers and financial institutions, potentially reducing investment appetite and curtailing the Group’s expansion and exploration initiatives. Geopolitical tensions can also lead to changes in the regulatory and political environments, with governments possibly implementing stricter regulations, changing tax policies or imposing new trade barriers, all of which directly influence the Group’s operations and profitability. Our response The Group’s financial risk management policy includes gold price and US$/ZAR exchange rate hedging strategies to mitigate transactional risk, stabilise cash flows during periods of elevated debt levels and ensure 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. The Group focuses on 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 delays in lead times. The Group maintains strong and established relationships with its network of financial institutions and insurers. ACTIVISM, SPECIAL INTEREST GROUPS AND REGULATORY UNCERTAINTY Adverse effect on investor confidence and capital allocation decisions How this affects the macroeconomic environment Gold plays a unique role in the global economy, safeguarding the financial security of nations, investors and communities, while driving advancements in medical, environmental and communication technologies. The public’s trust is crucial to sustaining the positive roles that gold plays in society. Responsible gold mining fosters sustainable socio-economic development in the countries where gold is extracted. It creates well-paying jobs and generates valuable tax revenues for host governments, contributing to 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 Pan African’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. Our response The Group’s commitment to sustainability is evident as Pan African 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 incremental improvements in environmental and social areas that are relevant, core and material to its overall business. During the 2024 financial year, the Group secured a green loan facility for the construction of Barberton Mines’ solar plant. Aligned with its sustainability goals, Pan African’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 projects are 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. The climate change report along with the sustainable development report are available for download on our website. The Group is currently conducting a TNFD maturity assessment and developing a roadmap to guide its implementation of these recommendations. Capitals Financial capital Social and relationship capital Natural capital OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 68 69 Our key performance indicators 72 Chief executive officer’s review 74 Five-year financial overview 84 Financial director’s review 86 Our sustainability-linked finance framework 94 Operational performance review 96 – Barberton Mines 98 – Evander Mines 101 – Elikhulu 102 – Tailings management 103 Operational production 104 Abridged Mineral Resources and Mineral Reserves report 106 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. OUR KEY PERFORMANCE INDICATORS Performance Positive increase Positive decrease Negative increase Negative decrease Unchanged Unit 2024 2023 %Δ 2022 2021 2020 FINANCIAL CAPITAL Revenue5 US$ million 373.8 319.91 16.8 376.4 368.9 274.1 Net cash from operating activities US$ million 90.8 100.1 (9.3) 110.0 75.8 53.8 Net debt US$ million 106.4 22.0 >100 13.0 39.0 76.4 Dividend paid US$ million 21.2 23.2 (8.6) 25.0 20.6 3.4 Profit for the period5 US$ million 78.8 60.51 30.2 75.0 74.7 44.3 Adjusted EBITDA 2, 5 US$ million 141.2 115.11 22.7 138.3 144.1 86.5 Attributable earnings – owners of the Company5 US$ million 79.4 60.91 30.4 75.1 74.7 44.3 Headline earnings5 US$ million 79.5 60.21 32.1 75.6 74.7 44.2 Earnings per share5 US cents 4.14 3.181 30.2 3.90 3.87 2.30 Headline earnings per share 5 US cents 4.15 3.141 32.1 3.93 3.87 2.29 Net asset value per share 5 US cents 19.00 15.231 24.7 15.37 14.71 9.52 Return on shareholders’ funds 5 % 24.0 20.71 15.9 25.9 32.0 24.1 Net debt-to-equity ratio ratio 0.29 0.07 >100 0.04 0.1 0.4 Net debt-to-net adjusted EBITDA ratio ratio 0.8 0.2 >100 0.1 0.3 0.7 Interest cover ratio ratio 12.2 28.21 (56.7) 34.1 23.0 10.1 Debt service cover ratio ratio 3.8 7.5 (49.3) 7.3 3.0 3.4 Current ratio ratio 0.71 0.761 (6.6) 0.95 0.80 0.68 MANUFACTURED CAPITAL Mineral Resources Moz Au 41.2 40.5 1.7 38.7 39.2 37.6 Mineral Reserves Moz Au 12.6 12.8 (1.6) 11.3 10.8 10.9 Investment in infrastructure US$ million 166.2 112.7 47.5 82.7 44.4 34.6 Gold mining tonnes milled t 442,794 394,091 12.4 381,148 376,118 285,016 Gold tailings processed t 15,131,414 14,757,699 2.5 14,901,683 14,315,881 14,339,922 Gold production oz 186,039 175,209 6.2 205,688 201,777 179,457 Average gold price received5 US$/oz 2,015 1,8111 11.3 1,824 1,826 1,574 Average gold price received5 ZAR/kg 1,212,252 1,034,5861 17.2 892,431 903,849 793,121 Total sustaining capital expenditure US$ million 13.8 20.2 31.7 23.1 16.7 16.4 Total capital expenditure US$ million 172.4 113.0 52.6 82.8 49.1 41.1 Cash costs 5 US$/oz 1,199 1,1361 5.5 1,099 1,035 911 Cash costs 5 ZAR/kg 721,161 649,0181 11.1 537,879 512,394 459,151 AISC 3, 5 US$/oz 1,354 1,3091 3.4 1,284 1,261 1,147 AISC 3, 5 ZAR/kg 814,243 748,0151 8.9 628,292 624,519 577,887 All-in-costs (AIC) 3, 5 US$/oz 1,782 1,7681 0.8 1,503 1,401 1,289 AIC 3, 5 ZAR/kg 1,071,926 1,009,8981 6.1 735,670 693,478 649,480 Unit 2024 2023 %Δ 2022 2021 2020 HUMAN CAPITAL Employees number 2,887 2,469 16.9 2,198 2,104 2,126 HDP employees % 92.0 90.7 1.4 89.29 Employee remuneration US$ million 72.0 60.61 18.8 65.1 62.1 52.5 Skills development and training US$ million 1.8 2.2 (18.2) 0.8 1.1 1.7 TRIFR per million man hours 6.52 7.96 (18.1) 8.95 7.36 9.12 RIFR per million man hours 0.78 0.81 (3.7) 0.35 0.63 0.8 LTIFR per million man hours 1.82 1.86 (2.2) 1.04 1.41 1.70 Fatalities number 1 1 – – 1 – SOCIAL AND RELATIONSHIP CAPITAL CSI and LED initiatives and bursaries US$ million 2.5 1.7 47.1 1.9 1.8 1.3 South African government taxes paid excluding VAT US$ million 30.2 21.9 37.9 24.2 33.1 16.1 NATURAL CAPITAL Energy consumption TJ 1,503.77 1,447.17 3.9 1,405.44 1,468.68 1,395.25 Water consumption ML 9,184.8 10,3044 (10.9) 8,232 12,408 12,170 Scope 1 emissions ktCO2e 5.0 3.7 35.1 4.1 4.7 3.7 Scope 2 emissions ktCO2e 348.0 332.5 4.7 341.0 374.9 345.6 Carbon emissions intensity per ounce sold tCO2e/oz Au 1.88 1.911 (1.6) 1.68 1.88 2.01 Environmental rehabilitation obligation US$ million 19.7 16.71 18.0 8.6 13.6 9.2 1 Restated due to prior period adjustments, refer to note 40. 2 Adjusted EBITDA comprises earnings before interest, tax, depreciation and amortisation and impairment. 3 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 Accounting Standards to AISC and AIC . 4 Prior period water consumption figures have been restated to include water usage from third-party private sources and the Barberton Blueberries project. 5 The financial results for the 2022 reporting period and prior periods have not been restated as it is impracticable to determine the period specific effects of the error. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 72 73 CHIEF EXECUTIVE OFFICER’S REVIEW The South African economy faced the consequences of power curtailment, state capture and low levels of investor confidence. Social upheaval reached a boiling point during the riots of July 2021, the worst and most disruptive incident of violence that South Africa experienced since the end of Apartheid. The global status quo is one of bipolarity fragile financial systems, ever- increasing sovereign debt levels, as well as concerns about the next economic downturn. GOLD REAFFIRMING ITS STATUS AS A SAFE-HAVEN ASSET Gold has regained its safe-haven status amid ongoing higher-than- expected worldwide inflation and anxiety over geopolitics, elections and monetary policy – all predictable reasons for the value of gold to appreciate. Gold has historically been considered an inflation hedge, however, cooling inflation and the expected reduction in worldwide interest rates should also support gold’s investment case. The perceived ‘weaponisation’ of the US$, following the outbreak of war in Ukraine, appears to have expedited moves by central banks in many countries to accumulate gold reserves in support of their respective economies and currencies. Gold has demonstrated its ability to act as a strong hedge against uncertainty and as a currency to preserve real purchasing power. Gold has a track record of millennia in this regard, an attribute that sets it apart from speculative cryptocurrency alternatives such as Bitcoin. We believe that investing in a gold equity, such as Pan African, has several advantages to a direct gold holding. The Company provides its shareholders with a cash return in the form of dividends, increased leverage to the gold price, substantial near-term production growth and a number of internal growth opportunities, evidenced by our project pipeline. A DECADE AS CHIEF EXECUTIVE OFFICER In the early 2010s, Pan African was a single-asset company, holding only the Barberton Mines underground operations. Over the past 10 years, the Group has successfully diversified into a long-life, high-margin operator, with multiple assets, improved flexibility and reduced volatility. We have also increased profitable production and investor returns. Shareholders have received excellent returns through both substantial capital growth and an increasing annual dividend. Pan African has consistently over the past few years featured in the Top 10 of the JSE’s Top 100 performing companies. More recently in 2024, it has been the best- performing gold stock on the JSE, with the share price increasing by over 80% since the beginning of the calendar year and 100% year- on-year. The AIM recorded a similar performance. Value-adding projects completed by the Group’s incumbent management team and board during our tenure include: • Securing, funding, construction and operation of transformative surface assets – BTRP – Evander Tailings Retreatment Plant – Elikhulu – the MTR project • Evander Mines’ underground restructuring – 8 Shaft pillar mining – Level 24 to 26 development • Group renewable energy initiatives – Evander Mines’ solar plant – Barberton Mines’ solar plant. While South African gold mining is often seen as a sunset industry, we believe that the country still presents attractive opportunities. In 2022, we acquired large Mineral Resources from Mogale Gold and MSC for US$1.12/oz and then applied our extensive surface tailings expertise to bring the project to account. We have also accumulated considerable underground mining expertise, which we are applying to benefit from value from our Evander Mines’ and Barberton Mines’ underground assets. Pan African is proud of its demonstrated record of delivering large projects on time and within budget, in an industry where this is lacking at times. The gold price is at an all-time high, and this trend is expected to continue in the foreseeable future. Pan African has over 30Moz of SAMREC-compliant gold resources within its mining rights, secured in Barberton and Evander to 2051 and 2038, respectively. The Group’s unique value proposition of surface and underground mining, high-margin long-life production, blend of financial strength, growth potential, gold resource base, dividend track record and unwavering dedication to ESG principles makes it a compelling choice for investors seeking to achieve sustainable returns while making a meaningful positive impact on all stakeholders. INTRODUCTION We find ourselves in a very favourable gold price environment, with the metal appreciating by more than 20% in US$ terms in the past year, and generally positive sentiment on its near-term prospects. However, we also recognise that, although fortuitous, the commodity price tailwinds may not last indefinitely. We therefore have to use this opportunity to ensure our business model remains robust and continue to position our assets for long-term sustainability. The fact that gold equities continue to underperform the gold price reflects investor concerns pertaining to capital allocation and sustainable value creation in the sector. Certainly, the recent escalations in AISC globally (now around US$1,400/oz on average) suggest that producer margins and profits are being eroded by cost pressures and by a general underinvestment in capital expenditure and mining development over many years. Pan African can demonstrate a track record of sector-leading returns to shareholders and dividends, despite occasional challenging operating conditions and the age of our underground operations (Barberton Mines has been producing for almost 140 years). Our enviable record is reflective of the quality of and optionality inherent in our portfolio, and also of management’s unrelenting focus on disciplined capital allocation and cost control. With the additional production from the MTR project, our Group will be firmly positioned as a mid-tier producer, with production growing by approximately 25% and a commensurate reduction in the Group’s unit costs of production – a feat that the larger gold mines may find difficult to emulate, given the scale of their operations. This year marks the tenth time that I am reporting in my capacity as chief executive officer and, in reflecting on the past and where the Group is now, I believe that Pan African has attractive prospects and is well-positioned to continue ‘Mining for a Future’. THE LAST DECADE AND THE WORLD IN WHICH WE NOW OPERATE Economically and politically, the world has been tumultuous and volatile during this time. Economically, it had to deal with challenging financial cycles and the impact of COVID-19. The pandemic and subsequent escalating geopolitical conflicts, especially in Ukraine and the Middle East, have threatened lives and economies, while the impact of climate change affects the planet and its inhabitants. I am extremely pleased to report on Pan African’s achievements and outstanding financial results for the past year. Furthermore, the Group is now poised to deliver on our next phase of value-accretive production growth at the MTR project, a testament to Pan African’s ability to continue to create value for all its stakeholders. COBUS LOOTS | Chief executive officer OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 74 75 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 77 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 76 CHIEF EXECUTIVE OFFICER’S REVIEW continued THIS YEAR’S FINANCIAL RESULTS Pan African has delivered an outstanding set of operational and financial results for the 2024 financial year. Notably: • Revenue increased by 16.8%, supported by a 4.9% increase in gold sales to 184,885oz (2023: restated 176,216oz) and an 11.3% increase in the average US$ gold price received during this period. The increased production and revenue demonstrate that steps taken to improve operational efficiencies are yielding positive results • The Group has made significant progress in advancing its growth projects, with the development of Evander Mines’ 24 to 25 Level project and the commissioning of the MTR project being prioritised • Total capital expenditure for the year amounted to US$172.4 million (2023: US$113.0 million), which resulted in an increase in net debt to US$106.4 million, relative to net debt of US$22.0 million in the previous financial year • AISC has increased marginally to US$1,354/oz (2023: restated US$1,309/oz), resulting in an AISC margin of 32.8% (2023: restated 27.7%) earned on the average 2024 financial year gold price of US$2,015/oz (2023: restated US$1,811/oz) • Cash holdings declined to US$26.3 million (2023: US$34.8 million) due to project-specific capital expenditure, while net cash from operating activities declined to US$90.8 million (2023: US$100.1 million) as a result of the payment of increased income tax and finance costs • Liquidity remains healthy, with access to immediately available cash and undrawn debt facilities at financial year-end of US$95.0 million (2023: US$84.7 million). These outstanding results are largely attributable to Pan African’s culture of strict capital allocation discipline and circumspect investment decisions. Refer to the financial director’s review on pages 86 to 93 for more details on this year’s financial results. Near-term growth projects Surface remining operations • The MTR project’s commissioning is in progress, with steady- state production expected by latest December 2024. This US$135.1 million project is expected to be delivered under budget and ahead of schedule • The BTRP’s life-of-mine has been extended from two to seven years (subsequent to the reporting period) following a successful internal project to reassess feedstock sources, further enhancing the Group’s high-margin, long-life surface remining operations. Underground operations • Evander Mines’ 8 Shaft 24 and 25 Level underground expansion project is now scheduled to be completed by the end of September 2024, following delays in the equipping of the ventilation shaft for hoisting – Equipping the 17 to 24 Level subvertical hoisting shaft will significantly increase efficiencies by reducing reliance on the current cumbersome conveyor belt infrastructure for ore transport – 24 Level’s refrigeration plant will be commissioned in phases to facilitate mining at depth – 25 Level mining area access development has commenced. Production guidance • 2025 financial year production guidance of 215,000oz to 225,000oz, with the expected increase in production largely attributable to the contribution from the Group’s new MTR project, but potentially impacted by: – The delay in the commissioning of Evander Mines’ subvertical shaft, scheduled to be completed during September 2024, could impact guidance by approximately 5,000oz – Evander Mines’ underground vamping operations and earlier production from the MTR project may offset the impact of the above-mentioned delay. KEY FEATURES Production • Group gold production increased by 6.2% to 186,039oz (2023: 175,209oz), in line with guidance • Operational enhancements and optimisation initiatives resulted in significant enhancements at Barberton Mines’ underground and Elikhulu’s surface operations: – Gold production from Fairview and Sheba Mines increased by 13.5% to 65,580oz (2023: 57,778oz) – Elikhulu’s gold production increased by 8.4% to 54,812oz (2023: 50,573oz). Safety • Significant improvement in the Group’s industry-leading safety statistics across all operations. Costs and cost outlook • AISC for the current reporting period of US$1,354/oz (2023: restated US$1,309/oz) at an average exchange rate of US$/ZAR:18.71, marginally above guidance of between US$1,325/oz to US$1,350/oz, with the delay in commissioning of Evander Mines’ subvertical hoisting shaft negatively impacting unit costs • AISC of US$1,170/oz (2023: restated US$1,132/oz) for our lower-cost operations, which account for more than 84.0% (2023: restated 81.5%) of annual production • 2025 AISC guidance of between US$1,350/oz and US$1,400/oz (assuming an exchange rate of US$/ZAR:18.50), with the MTR project’s low-cost production offsetting inflationary pressures. Financial • Revenue increased by 16.8% to US$373.8 million (2023: restated US$319.9 million) • Profit for the year increased by 30.2% to US$78.9 million (2023: restated US$60.5 million) • Headline earnings increased by 32.1% to US$78.8 million (2023: restated US$60.2 million) • Earnings per share increased by 30.2% to US 4.14 cents per share (2023: restated US 3.18 cents per share) and headline earnings per share increased by 32.2% to US 4.15 cents per share (2023: restated US 3.14 cents per share) • Net cash generated from operating activities declined by US$9.3 million to US$90.8 million (2023: US$100.1 million) • Net debt increased to US$106.4 million, mainly as a result of the construction of the MTR project (2023: US$22.0 million) • Available cash and undrawn debt facilities at year-end of US$95.0 million (2023: US$84.7 million). Proposed dividend • Sector-leading final dividend of ZA 22.00000 cents per share (or US 1.20946 cents per share at an illustrative exchange rate of US$/ZAR:18.19) proposed for approval at the upcoming annual general meeting (AGM). ESG initiatives • The Group continues to lead the way on renewable energy initiatives and establishing a roadmap to decarbonisation – Construction of Fairview Mine’s solar facility was completed at Barberton Mines in June 2024 and hot-commissioned in July 2024 – Renewed power purchase agreement with Sturdee Energy, subject to certain suspensive conditions, with ground clearing for construction having commenced • Evander Mines’ 3ML/day water recycling plant capacity to be doubled in the next two years • Rehabilitation at the MTR project’s Mogale Cluster and Soweto Cluster sites in progress. The BTRP metallurgical plant at Barberton Mines OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 77 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 76 CHIEF EXECUTIVE OFFICER’S REVIEW continued OPERATIONAL PERFORMANCE, OPTIMISATION INITIATIVES AND GROWTH PROJECTS The Group produced 186,039oz (2023: 175,209oz) of gold for the current reporting period, in line with the revised production guidance. The gold production split per operation is as follows: 30 June 2024 oz 30 June 2023 oz Fairview Mine 44,325 38,849 Sheba and Consort Mines 27,145 25,737 BTRP 18,888 19,875 Elikhulu 54,812 50,573 Evander Mines 40,869 40,175 Total ounces produced 186,039 175,209 Barberton Mines These flagship high-grade underground mines are established operations with a capacity to produce approximately 80,000oz of gold per year, with an excellent long-term safety record. Significant progress has been made in enhancing mining flexibility through several strategic initiatives in recent years, including: • Targeted development at Fairview Mine, resulting in the establishment of multiple high-grade mining platforms on the MRC and Rossiter orebodies • Transition to continuous operations at Fairview’s and Sheba’s operations has led to an increase in mined tonnages and grades, thereby improving mining efficiencies and reducing operating costs – The continuous operating cycle implemented at Fairview and Sheba Mines during the previous financial year has also seen a 27% reduction in lower-grade surface sources treated during the 2024 financial year – Improved run-of-mine (RoM) volumes, with gold production increasing by 13.5% to 65,580oz (2023: 57,778oz) and tonnes milled increasing by 3.9% to 255,981t (2023: 246,463t). At Fairview and Sheba Mines, mining operations are being conducted on the 258, 259 and 260 Platforms within the high- grade MRC orebody. The 261 Platform intersected the reef in May 2024, with grades of approximately 27g/t being higher than expected. Optimisation of the Rossiter Reef mining methodology has led to improved production, reducing dilution and improving ore grades, enabling Rossiter ore to supplement production from the MRC orebody. Progress is ongoing on projects aimed at further improving hoisting time and reducing logistical constraints in the 3 Decline. Exploration remains focused on the down-dip extensions of existing orebodies, specifically the MRC and Rossiter orebodies. At Consort Mine, geotechnical challenges encountered on 42 and 43 Levels in the PC Shaft restricted the mining contractor’s access to the higher-grade areas on these and lower levels, with the following initiatives underway: – The PC Shaft’s rehabilitation works are progressing well, while cement pumping into the shaft lining continues concurrently Evander Mines Development of 8 Shaft’s 24 and 25 Levels is progressing well: • Ramped-up mining operations on 24 Level is continuing • Production in 2024 increased marginally to 40,869oz (2023: 40,175oz), adversely impacted by a delay in commissioning the subvertical hoisting shaft in the last two months of the year • Significant capital expenditure has been invested in these mining levels to improve and optimise infrastructure and to ensure sustainable production of approximately 65,000oz annually over the mine’s life, currently estimated at 11 years • The newly commissioned 24 Level refrigeration plant will provide chilled water to a bulk air cooler on 24 Level, with a nominal cooling capacity of 3.5MW to create improved working conditions on 24 and 25 Levels • Development of the existing 24 Level footwall infrastructure to access 25 Level, through an on-reef decline layout, is planned to commence in the 2025 financial year. The Egoli project at Evander Mines’ 7 Shaft is a stand-alone underground operation which will utilise existing mining and metallurgical infrastructure, including 7 Shaft’s hoisting systems and processing facilities at Kinross’ metallurgical plant. • Egoli will be accessed directly from 7 Shaft’s 15 Level using existing declines to 19 Level, where a new on-reef decline will be established to access the orebody to 23 Level • All the required permits for the Egoli project, including Evander Mines’ mining right, being valid until 2038, have been approved • Leveraging existing infrastructure, Egoli can increase Evander Mines’ production profile with relatively low capital costs and within a relatively short time frame. Egoli’s first phase development involved dewatering the 3 Decline infrastructure to 19 Level, which was completed in the 2024 financial year • The second phase includes establishing a drilling platform on 19 Level, in the first quarter of the 2025 financial year, from which long-inclined boreholes will be drilled to accurately define short-term grade variability and geological structures. MTR project Exceptional progress has been made with the MTR project’s construction, which is nearing its final stages. Plant commissioning and first gold production are anticipated ahead of schedule in October 2024, with steady-state production expected during December 2024. Furthermore, the project is expected to be completed below budget. During the current construction phase, the MTR project has over 1,000 workers on site, of which some 95% are from the local communities, while a number of local businesses (small and medium enterprises) have been involved in the supply chain. A small enterprise supplier development programme is in the planning stages to develop local suppliers for the MTR project. In March 2024, we updated the MTR project’s 2022 definitive feasibility study financial model with the latest operating cost and production estimates, the forecast US$/ZAR exchange rate and the gold price, resulting in a material decline in the upfront capital’s payback period – post commencement of production. – Crews have commenced mining within the Main Muiden Reef (MMR) Shaft 17 Level and PC Shaft 33 Level with further equipping in progress. Raise development and equipping activities within the MMR section remain on track to increase RoM tonnage in the coming months. While these issues are being resolved, a revised mine plan has been implemented to access lower-grade mining areas on 17 and 37 Levels, which is expected to enhance operational performance during the first half of the 2025 financial year. The BTRP produced 18,888oz (2023: 19,875oz) for the 2024 financial year, at an AISC of US$669/oz (2023: restated US$721/oz). Although a reduced 828,392Mt of tailings material (2023: 921,753Mt) was processed, the BTRP achieved an improved overall recovery rate of 52.8% (2023: 47.3%), with a recovered grade of 0.71g/t (2023: 0.67g/t). Additional feed sources, including historical tailings material from the Fairview top area and other low-grade tailings material from the Fairview solar plant site, supplemented feed to this plant. Following an internal project to reassess feedstock sources for the BTRP, the final drilling and metallurgical test work results were retrieved from the Bramber dormant TSF, post the closure of the current reporting period. These Mineral Resources will increase the life-of-mine of the BTRP from the current two years to seven years. • The Bramber dormant TSF contains 6Mt of previously treated BTRP and Fairview Mine residue at an average grade of 1.0g/t • The BTRP has deposited its residues on this Bramber dormant footprint since inception in 2013. In November 2017, a regrind mill was added to the slurry receiving section and, in the 2023 calendar year, phase 2 of the Aachen Assisted Leach (AAL) reactor was commissioned • The impact on expected gold recoveries following the addition of the regrind mill and AAL, post the inception of the BTRP, was used to test the Bramber dormant mine residue – Metallurgical test work indicates that recoveries of between 18% and 27% of the remaining gold content in this resource are achievable – Utilising the 90th percentile of the recoveries achieved (25% recovery) in the financial model, this source of tailings material will extend the BTRP’s tailings feed life from two to seven years, producing approximately 11,000oz per year at an average real AISC of US$1,485/oz. This tailings feedstock mitigates the need to process RoM material from the Sheba Fault project in the near term and enables Pan African to focus on the decline development in the Sheba Fault project to access the high-grade Mineral Reserves, which will have a positive impact on Barberton Mines’ production in the medium term and long term. Elikhulu This flagship tailings retreatment operation, commissioned in 2018, remains one of the lowest-cost gold mining operations in Southern Africa and is a testament to Pan African’s ability to conceptualise, plan and construct substantial growth projects ahead of schedule and within budget. In 2024, it produced 54,812oz (2023: 50,573oz) at an AISC of US$1,034/oz (2023: restated US$989/oz). Input parameters Original model output Revised model output US$/ZAR exchange rate: US$/ZAR:15.50 US$/ZAR:19.00 Gold price – US$: US$1,750/oz US$2,200/oz Payback – US$135 million: 3.5 years 2 years Group TSFs 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 benchmarking its TSF management to global standards. Pan African is committed to the Principles for Responsible Investment with the intention that all its tailings facilities adhere to the GISTM within the context of principle 4.7 also known as the ALARP (as low as reasonably practicable) principle. The Group has assessed its TSFs and its adherence to the ALARP principle in the GISTM. The assessment was completed in June 2024, and the findings are currently under review. Phase 2 of the expanded Elikhulu TSF was completed on time and within budget in January 2024, and construction is currently underway for phases 3 and 4, constituting the final stages of Elikhulu’s TSF extension and ensuring adequate capacity for the Group’s future remining operations, including residues from Evander Mines’ underground operations. Gold exploration programme in Sudan During August 2023, the Group’s expatriate workforce returned to Sudan to recommence exploration activities. Work programmes focused on stream sediment sampling, soil sampling and trench sampling on the Kishi and Turkish Ridge targets in Block 12A North and the Sataib target in Block 12A South, as previously reported. The results from these sampling exercises identified target areas for follow-up investigations in Blocks 12A North and South, which are currently in progress. No Mineral Resources or Mineral Reserves are currently reported for any of the targets identified. The Group continues to monitor and evaluate the in-country security and risk situation. SUCCESSFULLY DEALING WITH COST PRESSURES The Group’s AISC per ounce has increased by 3.4% to US$1,354/oz (2023: restated US$1,309/oz), only marginally above the guidance for 2024 of between US$1,325/oz to US$1,350/oz. An AISC of US$1,170/oz (2023: restated US$1,132/oz) was achieved at our lower-cost operations, which account for more than 84.0% (2023: 81.5%) of annual production. These low-cost operations exclude Sheba Mine and Consort Mine and the now discontinued Evander Mines surface sources operations. Our efforts to contain cost increases continue, and these initiatives include: • a focus on low-cost surface retreatment operations • initiatives to increase gold production from underground operations, reducing unit costs of production • reinforcing a culture of cost consciousness OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 78 79 CHIEF EXECUTIVE OFFICER’S REVIEW continued MINERAL RESOURCES AND MINERAL RESERVES Pan African has one of the industry’s best track records for grade consistency. The Group’s estimated Mineral Resources of 41.18Moz and Mineral Reserves of 12.64Moz at 30 June 2024, in compliance with Table 1 of the SAMREC Code, are summarised as follows: Gold Mineral Resources Gold Mineral Reserves Tonnes Mt Grade g/t Gold t Gold Moz Tonnes Mt Grade g/t Gold t Gold Moz Barberton Mines hard rock 13.8 6.22 86.0 2.77 5.8 5.87 33.8 1.09 BTRP and stockpiles 20.7 1.11 23.0 0.74 3.6 1.63 5.9 0.19 Elikhulu 155.4 0.27 41.5 1.34 130.6 0.27 34.7 1.12 Evander Mines underground 123.1 8.54 1,051.8 33.82 31.1 8.17 254.1 8.17 MTR project 259.8 0.30 78.5 2.52 227.7 0.29 64.6 2.08 Total – 2024 572.8 2.24 1,280.9 41.18 398.8 0.91 393.2 12.64 Total – 2023 581.0 2.17 1,259.8 40.50 408.3 0.90 398.35 12.81 Pan African’s long-life assets and organic growth potential are underpinned as follows: • Barberton Mines’ Fairview Mine, with a remaining life-of-mine of 20 years • Consort Mine and the BTRP, with remaining mine lives of nine and two years (tailings only) (extended to seven years subsequent to the reporting period), respectively. Once the BTRP’s tailings resources are depleted, it is planned to convert the plant to process hard rock feedstock from the Sheba Fault project, comprising the Western Cross and Royal Sheba orebodies, which have a current estimated life-of- mine of six and eight years, respectively, with the orebodies open at depth • Elikhulu, the Group’s flagship tailings retreatment operation in Evander, has a remaining life-of-mine of nine years • Evander Mines’ 8 Shaft operation has a remaining life-of-mine of 11 years (8 Shaft pillar and 24, 25 and 26 Levels), excluding the Egoli project • The MTR project’s TSF resources have a modelled 21-year life-of-mine, which includes both the Mogale and Soweto Clusters. Mineral Reserve increases were recorded for Barberton Mines’ Consort Mine and Evander Mines’ 8 Shaft. Marginal decreases, mainly due to mining depletion, were recorded at the BTRP, Fairview and Sheba operations at Barberton Mines, as well as at Elikhulu. For a summary of Pan African’s Mineral Resources and Mineral Reserves, refer to pages 106 to 119. The full report is available on our website at: https://www.panafricanresources.com/operations-at-a-glance-2/mineral-resource-mineral-reserve-2/ ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE Pan African continues to focus on its ‘beyond compliance’ ESG approach. The Group acknowledges the importance of protecting the environment and preserving its social licence to operate by delivering long-term and sustainable value creation. Our sustainability performance in reducing our environmental footprint and positively impacting our social landscape is detailed in our annual sustainable development and climate change reports. The Group has invested in development projects and initiatives that have impacted our business’ sustainability and community stakeholders in a positive manner. These initiatives 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. Environment Renewable energy Pan African’s renewable energy strategy is critical 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 real overall AISC. Our progress during the current reporting period includes: • steady-state renewable solar energy generation at Evander Mines’ 9.9MW solar plant, commissioned in May 2022, which provided 24.6GWh (2023: 23.8GWh) of renewable energy for the 2024 financial year, generating approximately 30% of Elikhulu’s energy requirements and an estimated saving of US$2.2 million (2023: US$1.9 million) in annual electricity costs at current tariffs • completed construction of Barberton Mines’ 8.75MW solar plant in June 2024, which is expected to deliver cost savings of approximately US$2.4 million1 at current tariffs • the power purchase agreement with Sturdee Energy was renewed in the current year for off-site provision of 40MW wheeled renewable energy. Ground clearing for construction of the facility has commenced with first power expected during 2026 • feasibility studies for a 20MW capacity solar plant at the MTR project and a 10MW solar plant expansion at Evander Mines are being concluded. The Group achieved a renewable electricity mix of 6.1% , compared to the 7% sustainability-linked bond benchmark. This is lower than the benchmark due to a short delay in the commissioning of Fairview’s solar plant and an increase in our GHG boundary. The Fairview solar plant commenced electricity generation in August 2024, and we are now on track to meeting our future renewable energy targets. 1 Converted at an exchange rate of US$/ZAR:18.00. GROUP CAPITAL EXPENDITURE BUDGET The Group continues to invest in its assets and growth projects to ensure sustainability and generate attractive shareholder returns and value for our stakeholders. The capital budget for the 2025 financial year is: Sustaining US$ million1 Expansion US$ million1 Operation Barberton Mines 12.9 11.5 Elikhulu 2.0 4.5 Evander Mines – 39.9 MTR project – final plant construction costs – 51.9 Total 14.9 107.8 1 Budgeted capital converted to US$ at an exchange rate of US$/ZAR:18.50. As part of our commitment to increasing the percentage of renewable energy in our overall energy mix, we are committed to achieving a 15% renewable energy mix by 2027, in compliance with our sustainability-linked bond finance framework. However, our ambitious target is 39% by 2030 and 50% by 2050, conditional on a material expansion of our renewable energy initiatives in pursuit of our decarbonisation strategy. The Group is also actively investigating opportunities to secure renewable energy power purchase agreements from wind energy, hydropower and battery storage solution providers in order to reduce our power dependency on Eskom and their increasing tariff regime. Water Evander Mines’ water treatment plant, commissioned in March 2023, resulted in significant cost savings and a reduction in water withdrawals from municipal sources, thereby reducing our environmental footprint. The reverse osmosis water treatment plant: • provides 3ML of potable water per day to the Elikhulu processing plant and Evander Mines’ 8 Shaft underground infrastructure, with plans to expand the facility in the short term • supports the local municipality’s efforts in ensuring an adequate water supply to its expanding network of users in the area • will deliver expected estimated annual savings of US$0.5 million for the Group. Additional feasibility studies are underway at Barberton Mines and the MTR project to assess whether the Group can further enhance its water sustainability performance. Biodiversity and land rehabilitation Pan African contributes to programmes aimed at promoting biodiversity and conservation. It continued 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. Our ongoing rehabilitation of land during 2024 extended to an additional 85ha of land previously disturbed by mining at Barberton Mines (2023: 23ha). The rehabilitation liabilities related to Barberton Mines and Evander Mines of US$9.5 million (2023: US$8.3 million) are fully funded. Besides extracting gold at attractive margins, tailings reprocessing assists in rehabilitating mining sites to reduce water and air pollution. Pan African plans to address the legacy of environmental pollution at the MTR project by rehabilitating the mining area and returning the land to a state where it can be used for agriculture, solar power farms or housing projects. The MTR project’s closure rehabilitation liabilities of US$10.2 million (2023: restated US$8.4 million) will be funded over the project’s life. At the MTR project, significant progress has already been achieved in this regard: • Wetland rehabilitation activities were completed on 36.5ha, with historical slime spillages removed, which was subsequently destroyed following a wildfire. Refer to page 65 for more information • Roads and berms transecting the wetland were cleared, the surface area was profiled and the wetland area was reseeded and revegetated • savings amounting to US$2.2 million (2023: US$1.9 million) arising from our extensive use of renewable energy generated by Evander Mines’ solar plant, which will further increase once the recently constructed Fairview solar facility is fully commissioned • concluding a five-year wage agreement to 1 June 2029 for increases of about 5.3% a year with the NUM at Barberton Mines. The current five-year wage agreement with the United Association of Southern Africa (UASA), the other representative union at Barberton Mines, for an increase of 5% or Consumer Price Index, whichever is higher, capped at 6%, is still valid until 30 June 2026. Our AISC guidance for 2025 is between US$1,350/oz and US$1,400/oz (assuming an exchange rate of US$/ZAR:18.50) and we continue to monitor our progress very closely as this is critical in a mining industry experiencing cost increases above inflation. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 80 81 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 82 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 83 CHIEF EXECUTIVE OFFICER’S REVIEW continued • Local community members were provided with skills training to identify and remove alien invasive plants on an initial 80ha around the MTR project’s TSFs. These community members were then formally certified for the removal of alien invasive plants, empowering them to start their own businesses in this field. Social During construction of our Fairview solar plant, we employed a total of 235 workers, with 190 unskilled workers from the local communities engaged in roles such as construction labour and 45 skilled workers in roles such as engineering and project management. While the nature of renewable energy projects invariably results in the workforce decreasing post-construction, we were able to retain 11 workers on a permanent basis for the continued operation of the solar plant. The remainder of the employees benefited from the skills transfer to assist in securing alternative employment opportunities. While the procurement of large renewable energy projects is often based on a global value chain, we are committed to promoting local content. This approach not only supports the Just Energy Transition (JET) Framework and skills transfer but also ensures that the benefits of these projects are impactful at a local level. As a result, almost 70% of the project’s total spend was local content, equivalent to an estimated spend of US$9.2 million on local suppliers. Pan African has raised dedicated funding of ZAR2.5 billion to construct the MTR plant, which is one of the most significant investments by a single South African company in recent times in the Mogale area, and a major boost to employment and small businesses. Pan African has a commendable track record of establishing sustainable development projects in the areas in which we operate, resulting in improved living standards for the surrounding communities. Of the 1,000 employees currently employed for the MTR project’s construction phase, approximately 95% are from the local communities, as will be most of the approximately 400 future permanent staff. During the year, we invested US$2.5 million (2023: US$1.7 million) in CSI and LED initiatives and bursaries, including the following: • The Barberton Blueberries project delivered its second commercial harvest of 220t of blueberries, of which 150t are exported. The project employs 22 permanent staff and provides 149 seasonal jobs • Health and wellness initiatives facilitated by dedicated healthcare professionals and nutrition programmes: – The running club at Barberton Mines, with its professional coaches, encourages the fitness and well-being of employees and community members • Barberton Mines initiated a five-year high school scholarship development programme in January 2022, granting full scholarships to 25 high-achieving learners from local communities in need of financial assistance • Evander Mines completed the building of the computer and science laboratories at the Thomas Nhlabathi High School and Thistle Grove Combined School, benefiting over 1,000 learners. The facilities were handed over to the Department of Basic Education as part of our school infrastructure SLP commitments. Corporate governance Our ‘beyond compliance’ approach to corporate governance remains the cornerstone of our sustainability approach amid evolving ESG regulations and standards. Our progress is monitored through external assurance. To enhance the governance of our tailings facilities, we have appointed an ITRB consisting of members from independent, credible tailings consultancies, as required by the GISTM requirements. Our sustainable development report, containing details of our ESG initiatives and compliance, and our climate change report, providing our stakeholders with visibility of our approach to managing climate- related risks and opportunities, are available on our website at: https://www.panafricanresources.com/investors/gri-and-sustainability/ SAFETY The Group’s emphasis on safety consciousness and ongoing initiatives to enhance its safety performance contributed to significant improvements in its already industry-leading safety statistics across all operations, with highlights as follows: • the TRIFR reduced to 6.52 (2023: 7.96) per million man hours • the LTIFR improved to 1.82 (2023: 1.86) per million man hours • the RIFR improved to 0.78 (2023: 0.81) per million man hours. The Group regrettably experienced one fatality during the 2024 financial year (2023: one). We wish to again express our condolences to the family, friends and co-workers of our colleague who was fatally injured in an accident at Elikhulu on 1 February 2024. Pan African remains steadfast in its resolve to achieve a zero-harm working environment in the coming years. OUR STAKEHOLDERS We are conscious that Pan African does not operate in isolation and we will therefore continue our involvement in the communities where we operate through dedicated stakeholder engagement forums. We are grateful that we experienced no significant labour or community protest actions which we attribute to the strong, mutually respectful relationships we have with our staff and their unions, as well as the effectiveness of our proactive community engagement structures and initiatives. Our community involvement in the Mogale and Soweto areas is already highly impactful, through the creation of direct employment opportunities, environmental remediation and restoration, small business development and training programmes, as well as efforts to eradicate illegal mining. DIVIDENDS The board has proposed a final dividend of ZAR489.0 million for the 2024 financial year (approximately US$26.8 million), equal to ZA 22.00000 cents per share or approximately US 1.20946 cents per share (0.95611 pence per share). The dividend is subject to approval by shareholders at the AGM, which is to be convened on Thursday, 21 November 2024. OUTLOOK AND PROSPECTS Pan African views the broad macroeconomic environment as positive, given its status as one of the lowest-cost, long-life producers of high-quality gold ounces in Southern Africa. Our primary focus for the short term is safely delivering into our production guidance and successfully executing capital projects that will sustain and increase future gold production. In particular, we are: • monitoring the Group’s initiatives intended to further reduce costs and increase underground production at Evander Mines • executing capital projects designed to sustain and increase future gold production to approximately 250,000oz per year and ensuring adequate liquidity to fund the Group’s capital programmes • managing debt levels as the MTR project’s capital expenditure is funded • continuing to progress the Group’s ESG initiatives • maintaining the focus on generating sustainable shareholder returns with the prospect of increased dividends as the Group de-gears in the next year • exploring local and international growth opportunities in a responsible and circumspect manner. APPRECIATION I appreciate the commitment of our motivated leadership and dedicated staff and contractors. In particular, I want to thank Deon Louw for his valuable contribution to the team over the past almost 10 years and wish him the best in his retirement. I am grateful for the steadfast support and guidance from our trusted board in managing challenges and preparing for the exciting broadening of our horizons in the future. Cobus Loots Chief executive officer 11 September 2024 Aerial view of the 1L8 Mineral Resource of the Mogale Cluster OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION 82 83 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 FIVE-YEAR FINANCIAL OVERVIEW US$ million 2024 2023 %Δ 2022 2021 2020 Statement of profit or loss Revenue2 373.8 319.91 16.8 376.4 368.9 274.1 Cost of production before depreciation and amortisation2 (221.2) (198.9)1 11.2 (226.4) (208.8) (158.5) Gross profit2 131.4 100.61 30.6 123.5 128.0 94.1 Adjusted EBITDA 2 141.2 115.11 22.7 138.3 144.1 86.5 Impairment (cost)/reversal – – – (0.5) – 0.1 Profit for the period2 78.8 60.51 30.2 75.0 74.7 44.3 Headline earnings 2 79.5 60.21 32.1 75.6 74.7 44.2 Dividend paid (21.2) (23.2) (8.6) (25.0) (20.6) (3.4) Statement of financial position Non-current assets 625.7 445.81 40.4 401.1 398.5 315.0 Current assets2 60.4 58.91 2.5 56.0 84.6 53.6 Total equity2 364.1 291.91 24.7 294.6 283.6 183.6 Non-current liabilities 237.1 135.41 75.1 103.5 93.5 106.3 Current liabilities 84.9 77.41 9.7 59.0 106.0 78.7 Statement of cash flows Net cash from operating activities 90.8 100.1 (9.3) 110.0 82.2 53.8 Investment in property, plant and equipment 166.2 112.7 47.5 82.7 44.4 34.6 Net (decrease)/increase in cash and cash equivalents (9.6) 12.3 >100 (3.7) (6.4) 26.5 Financial indicators Average exchange rate (ZAR per US$) 18.71 17.77 5.3 15.22 15.40 15.67 Closing exchange rate (ZAR per US$) 18.19 18.83 (3.4) 16.28 14.28 17.33 Share statistics Unit 2024 2023 %Δ 2022 2021 2020 Shares in issue million 2,222.9 2,222.9 – 2,222.9 2,234.7 2,234.7 Weighted average number of shares in issue million 1,916.5 1,916.5 – 1,926.1 1,928.3 1,928.3 Earnings per share 2 US cents 4.14 3.181 30.2 3.90 3.87 2.30 Headline earnings per share 2 US cents 4.15 3.141 32.2 3.93 3.87 2.29 Net asset value per share 2 US cents 19.00 15.231 24.8 15.37 14.71 9.52 Dividend paid per share US cents 0.96 1.04 (8.1) 1.27 0.84 0.15 1 Restated due to prior period adjustments, refer to note 40. 2 The financial results for the 2022 reporting period and prior periods have not been restated as it is impracticable to determine the period specific effects of the error. 2024 2023 2022 2021 2020 Shares traded 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 Value of shares traded 3,233.1 282.4 2,854.2 140.4 4,018.9 194.6 5,294.3 164.5 1,742.7 50.6 2024 2023 2022 2021 2020 Shares traded Unit JSE AIM JSE AIM JSE AIM JSE AIM JSE AIM Volume of shares traded million 717.7 1,577.2 782.3 834.0 1,056.3 1,015.7 1,192.6 773.4 680.5 397.7 Volume traded as percentage of number in issue % 32.3 82.3 35.2 43.5 47.5 46.9 53.4 34.6 30.5 17.8 Number of transactions number 99,309 65,250 102,319 68,708 99,368 97,950 173,253 70,163 71,233 35,211 Price:earnings ratio 7.8 7.7 5.4 5.3 6.6 7.0 5.7 6.0 10.3 9.7 Dividend yield at the last traded share price % 3.6 3.7 5.9 6.0 4.6 4.3 5.3 5.3 3.8 3.7 2024 2023 2022 2021 2020 Shares traded JSE ZA cents AIM GB pence JSE ZA cents AIM GB pence JSE ZA cents AIM GB pence JSE ZA cents AIM GB pence JSE ZA cents AIM GB pence Last sale in year 605.0 26.1 303.0 12.5 394.0 20.8 341.0 17.2 370.0 17.6 High 640.0 27.6 485.0 21.2 476.0 24.0 642.0 27.1 398.0 18.0 Low 293.0 12.1 283.0 12.0 295.0 15.1 311.0 15.4 150.0 9.0 Average traded price per share 450.0 19.1 365.0 16.9 374.6 19.2 440.0 21.3 245.1 8.8 Performance Positive increase Positive decrease Negative increase Negative decrease Unchanged OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 84 85 FINANCIAL DIRECTOR’S REVIEW Pan African has demonstrated its resilience over the past 10 years, successfully overcoming operational challenges experienced during 2017 and in 2018 when underground operations at Evander Mines were curtailed. In 2019, the Group recovered strongly with revenue increasing by more than 49%, while profit for the period from continuing operations increased by more than 100% from US$16 million to US$38 million and cash generated from operations increased from US$13 million to more than US$38 million, following the commissioning of Elikhulu in September 2018. Since the repositioning of the Group in 2019, its share price has increased by more than 178% over the five-year period. The Group’s ability to adapt to changing operating circumstances was further demonstrated during the COVID-19 pandemic, which commenced in the 2020 financial year. This flexibility inherent in our operations contributes to the quality of our mines and their ability to withstand short-term disruptions. The Group also addressed power supply challenges during this period, with the construction of a 9.9MW solar plant at Evander Mines, to ensure a reliable and stable power supply while contributing to operational cost savings. Since its commissioning in May 2022, this plant has saved more than US$4 million in electricity costs and generated 48,393MWh of renewable energy. The Group’s carbon emissions intensity has also decreased to 1.88tCO2/oz Au sold compared to 1.91tCO2/oz Au sold in 2023. In August 2024, the Group commissioned a second solar plant at Barberton Mines, enforcing our commitment to operational efficiency and sustainability. In 2022, the Group made significant progress in both its operational and growth projects, delivering a solid financial performance and record gold production of 205,688oz, from its portfolio of underground and surface remining operations. Over the past decade, the Group’s total assets have increased by more than 77% to US$686.1 million, demonstrating the acumen to effectively deploy capital in a disciplined and value-accretive manner. The Group has distributed US$166 million in dividends over the past 10 years, evidencing our ongoing commitment to consistently delivering returns to shareholders while continuing to reinvest in the business. Looking ahead, we remain focused on maintaining our strong financial performance, executing strategic initiatives and pursuing sustainable growth projects to create lasting value for our shareholders and other stakeholders. OVERVIEW The Group’s results include a restatement. During the current reporting period, the Group reassessed the timing of its revenue recognition on gold sales. Historically, the Group recognised revenue on delivery of gold to Rand Refinery. The Group’s view was that control had transferred to the customer on delivery of gold to Rand Refinery as control had at this point in time passed to the customer. Following the reassessment, the Group established that control does not pass to the customer on delivery to Rand Refinery but rather on settlement with the customer. The impact resulted in the Group recognising revenue at the reporting date, in respect of gold delivered to Rand Refinery, although the customer had not yet obtained control of the gold and settlement had yet taken place. As a consequence, revenue, cost of production and trade receivables have been overstated and inventory understated. The nature of the error further impacted other expenses, royalty costs and income tax expense and the related asset or liability. The error has been corrected by restating the 2023 and 2022 financial results. Furthermore, it was determined that the Mogale Gold and MSC environmental rehabilitation obligations had on initial recognition in 2023 been incorrectly measured. As a consequence, the environmental rehabilitation obligation, finance costs and long- term inventory were understated. This error has been corrected by restating the 2023 financial results. The Group’s 2023 retained earnings was restated lower by US$2.8 million, the reserves balance was restated higher by US$0.2 million. The 2023 profit for the period was restated lower by US$0.2 million. For 2023 there was a US 0.1 cent decrease in both basic earnings per share and headline earnings per share. Pan African has delivered an outstanding set of operational and financial results for the 2024 financial year. Notably, revenue increased by 16.8%, supported by a 4.9% increase in gold sales Pan African has delivered an excellent financial performance for the year, driven by its robust operations and the elevated gold price. The Group continues to reinvest in its assets and growth projects, prioritising capital expenditure on the development of the MTR project and Evander Mines’ 24 and 25 Level project. DEON LOUW | Financial director to 184,885oz (2023: restated 176,216oz) and an 11.3% increase in the average US$ gold price received during this period. The increased gold sales demonstrate that steps taken during the year to address operational issues are yielding positive results. Refer to the operational performance review on page 96 for further details. The Group has made significant progress in advancing its growth projects, with the development of Evander Mines’ 24 to 25 Level project and the commissioning of the MTR project being prioritised. Total capital expenditure for the year amounted to US$172.4 million (2023: US$113.0 million), which resulted in an increase in net debt to US$106.4 million, relative to net debt of US$22.0 million in the prior reporting period. AISC has increased marginally to US$1,358/oz (2023: restated US$1,309/oz), resulting in an AISC margin of 32.8% (2023: restated 27.7%) earned on the average gold price of US$2,015/oz (2023: restated US$1,811/oz) received during the 2024 reporting period. Cash holdings declined to US$26.3 million (2023: US$34.8 million) due to project-specific capital expenditure, while net cash from operating activities decreased to US$90.8 million (2023: US$100.1 million) as a result of increased income tax and finance costs paid. Liquidity remains healthy, with access to immediately available cash and undrawn debt facilities of US$95.0 million (2023: US$84.7 million), at financial year-end. Highlights for the year 2024 2023 %Δ FINANCIAL CAPITAL Revenue US$373.8 million US$319.9 million1 16.8 Profit for the period US$78.8 million US$60.5 million1 30.2 Headline earnings US$79.5 million US$60.2 million1 32.1 Basic earnings per share US 4.14 cents US 3.18 cents1 30.2 Net cash from operating activities US$90.8 million US$100.1 million (9.3) Net debt US$106.4 million US$22.0 million >100 Adjusted EBITDA US$141.2 million US$115.1 million1 22.7 Dividend proposed per share US 1.20946 cents US 0.95592 cents 26.5 1 Restated due to prior period adjustments, refer to note 40. Revenue Profit/(loss) for the period – including discontinued operations Reflection on the past 10 years2 0 50 100 150 200 250 300 350 400 -150 -100 -50 0 50 100 150 89 2024 2023 2022 2021 2015 US$ million US$ million 86 Profit for the period – continuing operations Cash generated from operations 2016 2017 2018 2019 2020 8.4 40.1 3.6 37.7 90.8 13.4 53.8 82.2 100.1 110.0 221.8 238.6 158.8 146.0 217.7 274.1 368.9 376.4 313.92 373.8 18.4 37.7 22.8 38.0 78.8 15.6 44.3 74.7 60.53 75.0 18.4 37.7 22.8 38.0 78.8 (122.8) 44.3 74.7 60.53 75.0 2 The financial results for the 2022 reporting period and prior periods have not been restated as it is impracticable to determine the period specific effects of the error. 3 Restated due to prior period adjustments, refer to note 40. Performance Positive increase Positive decrease Negative increase Negative decrease Unchanged OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 86 87 FINANCIAL DIRECTOR’S REVIEW continued Revenue increased due to gold sold increasing by 4.9% to 184,885oz (2023: restated 176,216oz) and the average US$ gold price received increasing by 11.3% to US$2,015/oz (2023: restated US$1,811/oz). Production costs are incurred in rand, the functional currency of the Group’s main operating entities, with translations to US$ impacted by the US$/ZAR exchange rate which depreciated by 5.3% relative to the previous financial year. The Group’s production costs increased in US$ terms by 11.2%. • Mining and processing costs increased largely due to an increase in mining and contractor costs, following the implementation of a contractor mining model at Consort Mine, inflation-related cost increases as well as an increase in underground tonnes milled. • Salaries and wages: The Group’s average annual salary increase was approximately 6%. The increase in salaries and wages exceeded the annual adjustment because of a 7.6% increase in Barberton Mines’ employee headcount following the implementation of continuous operations. • Electricity costs increased following a 13.9% regulatory increase and higher electricity consumption at Evander Mines, due to an increase in underground milled tonnes. These increases were partially offset by reduced electricity usage due to a decrease in surface source tonnes processed at Evander Mines, as well as electricity savings through tailings dam pump optimisation initiatives at the BTRP. • Engineering and technical costs increased due to inflation-related cost increases, increased repairs and maintenance on shaft winders, compressors and conveyor belts and a decrease in costs capitalised to Evander Mines’ 24 Level project compared to the prior reporting period. The increase was also driven by higher engineering costs after the implementation of continuous operations at Barberton Mines, kiln repairs and upgrades to Elikhulu’s carbon-in-leach plant. The depreciation and amortisation charge increased by 3.9%, primarily due to the 6.2% increase in gold production. This charge is calculated based on actual RoM production relative to RoM mining tonnes contained in the operations’ Mineral Reserve lives. Additionally, the 5.3% depreciation in the average US$/ZAR exchange rate, relative to the previous financial year, offset the increase in depreciation in US$ terms, to some extent. The gross profit margin increased to 35.2% (2023: restated 31.4%) for the reasons explained above. Other income decreased by US$1.8 million largely due to: • a US$0.9 million decline in the estimation of the Group’s rehabilitation obligation • a US$0.7 million decline in insurance compensation • a US$0.3 million gain arising from realised derivatives • a US$0.4 million increase in the fair value of the environmental rehabilitation fund. The fair value movement recognised in the current reporting period was US$2.3 million compared to US$1.9 million recognised in the previous financial year. Other expenses increased by US$3.1 million mainly due to a US$4.4 million increase in costs incurred on the Group’s employee incentive scheme to US$5.3 million (2023: US$0.9 million) offset by a decrease in corporate office salary costs, which decreased by US$2.7 million to US$0.8 million (2023: US$3.5 million), following the capitalisation of the costs to the MTR project. Finance costs increased by US$1.5 million largely due to an increase in the Group’s borrowings to fund its capital expenditure programmes. Specifically, finance costs on the Group’s borrowings increased by US$5.2 million to US$11.6 million (2023: US$6.4 million), of which borrowing costs of US$3.8 million have been capitalised to the MTR project. The income tax expense for the current reporting period gave rise to an effective tax rate of 28.0%, which is slightly lower than the prior reporting period’s restated rate of 28.9%. The 24.4% year-on-year increase in the Group’s income tax expense is primarily attributable to the tax charge increasing to US$12.5 million (2023: restated US$5.5 million), following an increase in the Group’s taxable profit. The deferred tax expense decreased to US$18.0 million (2023: restated US$19.0 million). PROFITABILITY Adjusted EBITDA increased to US$141.2 million, and the EBITDA margin increased to 37.8% (2023: restated 36.0%), following a US$53.9 million revenue increase and a US$22.3 million increase in production costs. 0 50 100 150 200 June 2024 Royalty costs Other expenses² Other income Cost of production Revenue June 2023 115.11 53.9 Adjusted EBITDA for the year ended 30 June 2024 (US$ million) (22.3) (1.8) (0.7) 141.2 (3.0) 1 Restated due to prior period adjustments, refer to note 40. 2 The movement excludes non-mining depreciation and amortisation. FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2024 US$ million 2024 Restated 2023 %Δ Revenue 373.8 319.9 16.8 Cost of production (221.2) (198.9) 11.2 Mining and processing costs (89.6) (66.9) 33.9 Salaries and wages (55.2) (51.2) 7.8 Electricity costs (31.1) (18.7) 66.3 Engineering and technical costs (25.6) (44.5) (42.5) Other (19.7) (17.6) 11.9 Depreciation and amortisation (21.2) (20.4) 3.9 Gross profit 131.4 100.6 30.6 Other income 4.1 5.9 (30.5) Other expenses (14.5) (11.4) 27.2 Royalty costs (1.7) (0.9) 88.9 Net income before finance income and finance costs 119.3 94.2 26.6 Finance income 1.9 1.1 72.7 Finance costs (11.8) (10.2) 15.7 Profit before tax 109.4 85.1 28.6 Income tax expense (30.6) (24.6) 24.4 Profit for the period 78.8 60.5 30.2 Adjusted EBITDA 141.2 115.1 22.7 Headline earnings 79.5 60.2 32.1 Performance Positive increase Positive decrease Negative increase Negative decrease Unchanged OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 88 89 FINANCIAL POSITION AS AT 30 JUNE 2024 US$ million 2024 Restated 2023 %Δ ASSETS Property, plant and equipment 567.6 395.2 43.6 Goodwill 16.7 16.1 3.7 Long-term inventory 12.3 12.1 1.7 Investment 3.4 – >100 Environmental rehabilitation obligation fund 24.8 21.6 14.8 Other 0.9 0.8 12.5 Non-current assets 625.7 445.8 40.4 Inventory 16.4 13.9 18.0 Trade and other receivables 15.2 8.5 78.8 Cash and cash equivalents 26.3 34.8 (24.4) Other 2.5 1.7 47.1 Current assets 60.4 58.9 2.5 Total assets 686.1 504.7 35.9 EQUITY AND LIABILITIES Share capital and premium 273.1 273.1 – Retained earnings 364.6 303.1 20.3 Reserves (272.5) (283.8) (4.0) Non-controlling interests (1.1) (0.5) >100 Total equity 364.1 291.9 24.7 Environmental rehabilitation obligation 19.7 16.7 18.0 Borrowings 123.1 42.5 >100 Contract liability – 7.1 (>100) Share-based payment obligations 6.5 1.9 >100 Deferred tax 85.4 64.3 32.8 Other 2.4 2.9 (17.2) Non-current liabilities 237.1 135.4 75.1 Trade and other payables 66.4 52.1 27.4 Borrowings 4.7 10.9 (56.9) Contract liability 7.3 10.6 (31.1) Share-based payment obligations 4.5 2.4 87.5 Other 2.0 1.4 42.9 Current liabilities 84.9 77.4 9.7 Total liabilities 322.0 212.8 51.3 Total equity and liabilities 686.1 504.7 35.9 CASH FLOW FOR THE YEAR ENDED 30 JUNE 2024 US$ million 2024 2023 %Δ Cash from operating activities 90.8 100.1 (9.3) Cash used in investing activities (169.4) (112.7) 50.3 Cash from financing activities 69.0 24.9 >100 Net (decrease)/increase in cash and cash equivalents (9.6) 12.3 (>100) Cash and cash equivalents at the beginning of the year 34.8 27.0 28.9 Effect of foreign exchange rate changes 1.1 (4.5) >100 Cash and cash equivalents at the end of the year 26.3 34.8 (24.4) FINANCIAL DIRECTOR’S REVIEW continued Capital expenditure on property, plant and equipment amounted to US$172.4 million (2023: US$113.0 million), which included sustaining capital expenditure of US$13.8 million (2023: US$20.2 million) and expansion capital expenditure of US$158.6 million (2023: US$92.8 million). The increased capital expenditure related mainly to the MTR project’s construction and Evander Mines’ 24 to 25 Level project, offset by depreciation of US$21.2 million (2023: US$20.4 million). The increase in investment is attributable to the acquisition of a strategic equity interest in TCMG. The return on capital employed increased by 28.5% (2023: restated 28.0%) due to a 26.6% increase in earnings before interest and taxes and a corresponding 24.5% increase in capital employed. The increase in return on capital employed demonstrates the Group’s efficiency in deploying capital to generate profits. The Group’s net assets increased to US$364.1 million (2023: restated US$291.9 million). Equity increased by the profit for the period, offset by: • the net dividend payments to shareholders of US$18.3 million (2023: US$20.0 million), which related to the 2023 and 2022 financial years, respectively • a comprehensive gain of US$11.7 million (2023: US$40.8 million (loss)), due to the recognition of a foreign translation gain of US$11.7 million (2023: US$41.0 million (loss)), as a consequence of the closing exchange rate appreciating from US$/ZAR:18.83 to US$/ZAR:18.19 at the financial year-ends. The environmental rehabilitation obligation increased by US$3.0 million, mainly as a result of a US$2.2 million (2023: restated US$1.8 million) increase associated with the unwinding of the obligation as well as a US$0.6 million (2023: restated US$2.1 million (gain)) foreign currency translation reserve loss movement. While net cash from operating activities before dividend, tax, royalties and net finance costs increased by US$1.4 million to US$134.3 million (2023: US$132.9 million), consistent with the improved operational performance, cash from operating activities decreased by US$9.3 million mainly as a result of income tax paid which increased by US$6.5 million to US$13.0 million (2023: US$6.5 million) and finance costs paid which increased by US$5.3 million to US$11.6 million (2023: US$6.3 million) offset by a US$1.7 million decrease in net dividends paid to US$18.3 million (2023: US$20.0 million). Borrowings increased to US$127.8 million (2023: US$53.4 million), which is attributable to the expansionary capital expenditure on the MTR project and Evander Mines’ 24 Level project. The Group is obligated to redeem principal debt of US$4.7 million during the 2025 financial year. Cash used in investing activities includes capital expenditure on property, plant and equipment of US$166.2 million (2023: US$112.7 million). The contract liability relates to an upfront consideration of US$21.6 million, received in March 2023, from the synthetic gold forward sale transaction. This liability is recognised as revenue over a 24-month period and has decreased to US$7.3 million (2023: US$17.7 million). Cash from financing activities includes proceeds from borrowings of US$114.2 million (2023: US$94.7 million), partially offset by the repayment of senior debt facilities of US$42.9 million (2023: US$69.3 million). The share-based payment obligations increased primarily as a result of an increase in the number of cash-settled share options issued, coupled with an increase in the Group’s share price. Trade and other payables increased by US$14.3 million to US$66.4 million (2023: US$52.1 million), primarily as a result of a US$11.1 million increase in accruals associated with the MTR project’s construction. Performance Positive increase Positive decrease Negative increase Negative decrease Unchanged OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 90 91 FINANCIAL DIRECTOR’S REVIEW continued Pan African raised a green loan facility of US$19.2 million during June 2024, to fund its renewable energy projects and further strengthen its liquidity position. The sustainability-linked bond, RCF, green loan and term loan facility are tied to specific sustainability-linked KPIs, independently verified annually, over a seven-year period. An improvement in these metrics will result in a reduction of the interest rates levied by these instruments. For further details on these KPIs and our sustainability-linked finance framework, refer to page 95. DIVIDENDS In balancing our aspiration to return cash to shareholders with the Group’s strategy of organic 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 2025 financial year given the favourable gold price environment, robust 2025 cash flows and the encouraging prospects for the 2025 financial year. Proposed dividend for the financial year ZAR489.0 million for the 2024 financial year (approximately US$26.8 million, at an exchange rate of US$/ZAR:18.19), equal to ZA 22.00000 cents per share or approximately US 1.20946 cents per share (0.95611 pence per share). The dividend is subject to approval by shareholders at the AGM in November 2024 and will be declared on the financial results at 31 July 2024 to ensure compliance with section 831 of the Companies Act of 2006 and net asset value test. Refer to dividend note 15 for more information. The proposed dividend equates to a dividend yield of 3.6% based on the closing share price at 30 June 2024. The net proposed dividend constitutes a payout ratio of 53.2% of the Group’s discretionary cash flows. The payout ratio is indicative of the board’s assessment of the sustainability of operations and favourable prospects for the 2025 financial year. Shareholder returns as at 30 June Unit 2024 2023 %Δ Levered free cash flow per share US cents per share 1.36 1.13 20.0 Dividend yield at the last traded price % 3.6 5.9 40.0 Levered free cash flow yield per share % 4.08 7.02 41.9 Return on shareholders’ funds % 24.0 20.71 15.9 Return on capital employed % 28.5 28.01 1.8 1 Restated due to prior period adjustments, refer to note 40. Over the past financial year, the Group generated levered free cash flow of US$26.0 million (2023: US$21.7 million), which was adversely impacted by increased finance costs paid, income tax paid and capital expenditure. The levered free cash flow yield per share also decreased due to the increase in the share price by 106.7% to US 33.26 cents over the 2024 financial year. LOOKING AHEAD Our primary focus for the coming year is delivering high-margin ounces, in line with our production guidance, and successfully executing capital projects that will sustain and increase gold production in the future. This approach achieves a balance between financial stability, distributions to shareholders and pursuing growth opportunities. For the upcoming 2025 financial year, our financial focus areas are: • Monitor the Group’s operational 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 including cash dividends. Deon Louw Financial director 11 September 2024 Pan African has sufficient liquidity at the end of the financial year with access to cash and undrawn debt facilities of US$95.0 million (2023: US$84.7 million). Available cash and undrawn debt facilities (US$ million) Cash and cash equivalents 26.3 Available general banking facilities 7.7 Available RCF 44.0 Available term loan facility 17.0 GOLD PRICE HEDGING The Group’s senior debt facilities require that the gold price is hedged on a two-year rolling basis, with the intent of locking in cash flow (available for debt service) of ZAR300 million, to reduce the Group’s exposure to volatile movements in the gold price. The Group currently has the following gold price hedges in place: • Synthetic gold forward sale transaction: An obligation 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), for which the Group received an upfront premium of US$21.6 million1 (ZAR400 million). The effective price at which the Group sold the 3,617kg of gold, over the 24 months, is ZAR1,135,604/kg (US$1,909/oz1) • Zero-cost collars: The following gold price hedges were entered into for the 2025 financial year: July 2024 to February 2025 March 2025 to June 2025 Notional quantity 1,991oz per month 12,577oz per month Total notional quantity 15,928oz 50,308oz Cap price ZAR1,663,477/kg US$2,844/oz2 ZAR1,839,663/kg US$3,146/oz2 Floor price ZAR1,250,000/kg US$2,137/oz ZAR1,250,000/kg US$2,137/oz 1 Converted at an exchange rate of US$/ZAR:18.50. 2 Converted at an exchange rate of US$/ZAR:18.19. 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 requisite 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 commodity price 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. CAPITAL STRUCTURE AND FINANCING ARRANGEMENTS The Group entered into a term loan and revolving credit facility (RCF) agreement, which provides for a term loan facility amounting to ZAR1.3 billion (US$70.3 million), designated to fund the MTR project and refinance the existing RCF of ZAR1 billion (US$54.1 million) with a new maturity date of 30 June 2026. The RCF has a three-year term and provides the Group with access to flexible and cost-effective working capital. The term loan facility has a six-year term, with quarterly repayments. Performance Positive increase Positive decrease Negative increase Negative decrease Unchanged OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 92 93 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 95 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 94 OUR SUSTAINABILITY- LINKED FINANCE FRAMEWORK Pan African was one of the first mining companies to issue a sustainability-linked bond in the South African market. 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 Year ending on or before redemption date Net debt-to-equity ≤ 1:1 Debt service cover > 1.3:1 Net debt-to-EBITDA ≤ 2:1 Interest cover > 4:1 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: In December 2022, Pan African announced its medium-term note programme, with the potential to issue instruments with a value 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 annually verifies them using a recognised and established methodology, ensuring their accuracy and reliability. Target KPI 2022 2023 2024 2025 2026 2027 2028 2029 2030 Renewable energy as a percentage of total energy consumption (%) –B 5 7 12 14 15 15 15 – Land rehabilitated as a percentage of total area to be rehabilitated (%) –B – 8 16 24 32 36 39 41 TRIFR (per million man hours) 8.95B 8.50 8.08 7.75 7.44 7.22 7.00 6.79 – B Baseline. 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 a 15% renewable energy mix by 2027 2024 milestone: 6.1% renewable energy mix was attained versus the SPT of 7.0% Land in the process of 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 2024 milestone: Achieved the SPT of 9.4% versus 8.0% 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 2024 milestone: Achievement of the SPT of 6.52 per million man hours versus 8.08 per million man hours 1 2 3 INTEGRATED THINKING The sustainability-linked finance framework is the endorsement of our common belief in delivering on our purpose in a sustainable manner. Aerial view of Evander Mines’ 9.9MW solar plant OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 95 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 94 OPERATIONAL PERFORMANCE REVIEW 184,885 176,2161 205,688 201,777 173,864 Gold sold – total operations (oz) 2020 2021 2022 2023 2024 92.6 100.3 67.6 44.7 40.5 Capital expenditure2 – total operations3 (US$ million) 2020 2021 2022 2023 2024 550,986 501,685 451,125 445,463 388,840 Tonnes milled and processed – mining operations (tonnes) 2020 2021 2022 2023 2024 15,131,414 14,757,699 14,901,683 14,315,881 14,339,922 Tonnes milled and processed – tailings operations (tonnes) 2020 2021 2022 2023 2024 6.2 6.1 8.6 8.4 7.1 Overall recovered grade – mining operations (g/t) 2020 2021 2022 2023 2024 0.2 0.2 0.2 0.2 0.2 Overall recovered grade – tailings operations (g/t) 2020 2021 2022 2023 2024 1,354 1,3091 1,284 1,261 1,147 AISC – total operations (US$/oz) 2020 2021 2022 2023 2024 221.2 198.91 226.4 208.8 158.5 Cost of production before depreciation and amortisation (US$ million) 2020 2021 2022 2023 2024 1 Restated due to prior period adjustments, refer to note 40. 2 Converted to US$ at the average exchange rate prevailing for the respective period. 3 Includes the Group’s current gold mining operations (Barberton Mines and Evander Mines). KEY OPERATIONAL FEATURES • Barberton Mines: Production increased by 7.0% which is attributable to the implementation of continuous shift operations at Fairview and Sheba Mines as well as several key initiatives designed to sustain production rates and further optimise mining operations • Evander Mines: Development of the 8 Shaft’s 24 and 25 Levels is progressing well, with ramped-up mining operations at 24 Level already contributing to the replacement of ounces as mining from the 8 Shaft’s pillar is depleted • AISC : The Group’s AISC per ounce has increased by 3.4% compared to the prior reporting period, reaching US$1,354/oz (2023: restated US$1,309/oz). In response, the Group is actively implementing various initiatives to continually improve gold production and reduce unit costs. Future low-cost production from the MTR project is expected to further reduce the Group’s unit costs • MTR project: The project is on schedule for commissioning in October 2024, ahead of schedule, and steady-state production is anticipated in December 2024. The capital cost remains on budget, with no expenditure overruns expected. The project’s financial model, based on its definitive feasibility study, was updated to include the latest operating cost estimates, The Group’s operational performance in the current reporting period highlights the flexibility and resilience of its gold-producing assets. Production increased by 6.2% to 186,039oz (2023: 175,209oz), demonstrating that steps taken during the financial year to address underlying operational challenges have been effective. This enabled the Group to increase production, reflecting its commitment to operational excellence and its ability to continue delivering value to its stakeholders. the forecast US$/ZAR exchange rate and the US$ gold price. An internal prefeasibility study for the Soweto Cluster was also completed in March 2024. For the outcome of these studies, refer to the Stock Exchange News Service announcement of 9 May 2024 • 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 pages 15 and 81 for further details • Security: The detrimental impact of illegal mining on gold production remains a significant challenge. The economic climate and rising unemployment rates have contributed to an increase in syndicated criminal activities and theft of infrastructure and consumables such as copper, steel and diesel. The implementation of a multifaceted and integrated security strategy, along with improved collaboration with law enforcement, has significantly enhanced our ability to combat the effects of illegal mining and other security risks. The Group’s risk and security team remains committed to introducing new technologies, integrated security strategies and collaborative partnerships to safeguard our operations. 2024 2023 %Δ Employees1 2,620 2,414 8.5 Contractors1 4,746 4,111 15.5 Fatalities 1 1 – TRIFR (per million man hours) 6.52 7.96 (18.1) LTIFR (per million man hours) 1.82 1.86 (2.2) RIFR (per million man hours) 0.78 0.81 (3.7) 1 Includes only Barberton Mines and Evander Mines employees and contractors. Our employees and contractors are fundamental to the sustainability of our business and creating long-term value, and we are deeply saddened by the fatal accident that occurred at Elikhulu during the year. Our employees and contractors are key enablers in the execution of our strategy, which makes it imperative that they are part of an organisational culture that prioritises safety. We continue to encourage and reward safe practices through targeted safety campaigns and incentives in pursuit of our ultimate goal of achieving zero harm. Performance Positive increase Positive decrease Negative increase Negative decrease Unchanged OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 96 97 OPERATIONAL PERFORMANCE REVIEW continued 1 Converted at an exchange rate of US$/ZAR:18.00. BARBERTON MINES Several key initiatives have been implemented to sustain production rates and further optimise mining operations: • Increased reserve delineation drilling to enhance orebody definition, refine resource models and increase confidence in the Mineral Reserves – Drilled 3,568m (2023: 5,986m) in the high-grade MRC mining platforms at Fairview Mine, with 14,113m (2024: 12,255m) planned for the 2025 financial year across Barberton Mines – Completed diamond core drilling of 1,565m (2023: 2,370m) into the Sheba high-grade ZK orebody – Conducted exploration drilling of 2,766m (2023: 1,390m) at Consort, as part of the strategy to locate resources for potential replacement of lower-grade surface sources – Explored the Southwall Adit mining block at Sheba Mine to enhance mining flexibility and reduce reliance on lower-grade surface sources. • Infrastructure improvements and mining efficiencies – Introduced and trialled bagged emulsion explosives, with full roll-out across operations planned for the 2025 financial year, aiming to improve development face advance rates and ore fragmentation in stopes, while reducing the cost of explosives going forward and minimising the risk of theft – Initiated an advanced centralised blasting system at Fairview, Sheba and Consort Mines, to optimise blasting practices. Full implementation is anticipated to be finalised during the 2025 financial year – Installed a grout plant at Fairview to enable underground cement support pumping and reduce the need for bulk transport using the shaft’s capacity. OVERVIEW OF OPERATIONS The Barberton Mines complex 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. These flagship underground mines are regarded as high-grade gold operations that can produce approximately 80,000oz of gold per year, with an excellent long-term safety record. Sheba Mine is recognised as one of the oldest working gold mines in the world, having commenced its operations in 1885 according to the earliest available records. Fairview Mine is recognised as 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. Barberton Mines also includes the BTRP surface retreatment operation which is located within Fairview Mine’s mining right footprint. The BTRP was designed to treat 100,000t of tailings monthly and adds low-cost and low-risk ounces to our production profile. Significant progress has been made to enhance mining flexibility through several strategic initiatives in recent years. These efforts include targeted development at Fairview Mine, resulting in the establishment of multiple high-grade mining platforms on the MRC and Rossiter orebodies. The transition to continuous operations has led to increased tonnages and grades mined from Fairview’s and Sheba’s operations, thereby improving mining efficiencies and reducing operating costs. MOGOTSI MOKGOJWA General manager • Three underground gold mines: Fairview Mine, Sheba Mine and Consort Mine • One tailings retreatment operation: BTRP • Increased lateral development – Completed geological drilling which resulted in increased lateral development within the ZK orebody to open more ground for the continuation of down-dip mining – Progressed development into the up-dip area of the Western Cross orebody, establishing drill platforms for down-dip drilling – Established the initial cross-cut, to access the Western Cross orebody, above the Southwall Adit level. FAIRVIEW AND SHEBA MINES Continuous operations have improved RoM volumes to an average of 10,666tpm (2023: 10,269tpm), with gold production increasing by 13.5% to 65,580oz (2023: 57,778oz) and tonnes milled increasing by 3.9% to 255,981t (2023: 246,463t). Exploration remains focused on the down-dip extensions of existing orebodies, specifically the MRC and Rossiter orebodies. Diamond core drilling confirmed the down-dip extensions of the high-grade MRC, Rossiter and Hope Reef orebodies. Consultants were engaged to produce a deformation and structural model for the MRC orebody, aiding in identifying orebody extensions and additional exploration targets. Mining operations are active on the 258, 259 and 260 Platforms within the high-grade MRC orebody. The top access of the 261 Platform intersected reef during May 2024. Optimisation of the Rossiter Reef mining methodology has led to improved production, reducing dilution and improving ore grades, enabling Rossiter ore to supplement the higher-grade MRC orebody. Progress is ongoing on projects aimed at further improving hoisting time and reducing logistical constraints in the 3 Decline. A review of the proposed chairlift installation project, scheduled for completion by the end of the 2025 financial year, identified an opportunity to rehabilitate connected mining ramp infrastructure from 38 to 70 Level adjacent to the 3 Decline. Infrastructure for the grout backfilling for 11 Level mining has also been completed, extending the system up to the 260 Platform in the MRC orebody. CONSORT MINE Geotechnical challenges encountered on 42 and 43 Levels in the PC Shaft restricted the mining contractor’s access to the higher- grade areas on these and lower levels. While these issues are being resolved, a revised mine plan has been implemented to access lower-grade mining areas on 17 and 37 Levels. This revised mine plan is expected to enhance operational performance during the first half of the 2025 financial year. COST-SAVING AND PRODUCTION IMPROVEMENT INITIATIVES Commissioning an 8.75MW solar plant We have constructed an 8.75MW solar plant, located at the Fairview operation. This solar plant is expected to yield significant benefits, including annual cost savings and reducing carbon dioxide emissions by approximately 14,000t to 15,000t annually. With an economic life exceeding 25 years, the plant is expected to generate power well beyond the mine’s current 20-year life-of-mine, based on existing Mineral Reserves estimates. All the necessary permits, including water use licences, environmental approvals and registration with the National Energy Regulator of South Africa have been secured. Construction, mechanical assembly and installation of solar trackers were completed by June 2024 as scheduled. Test work to ensure compliance with operational standards and regulatory requirements is underway, with initial power generation achieved in August 2024. The solar plant is expected to fulfil 15% of Barberton Mines’ energy requirements, with annual electricity cost savings of approximately US$2.4 million1 at current Eskom tariffs. The project is being funded through a green loan facility finalised in June 2024, which also provides an appropriate option for funding requirements of future renewable energy projects. Optimised infrastructure plans for an improved production profile Rehabilitation of existing mining ramp infrastructure from 38 to 70 Level adjacent to the 3 Decline at Fairview Mine will enable efficient transport of employees and material using trackless mechanised utility vehicles. This improvement increases RoM hoisting capacity in the 3 Decline, thereby also increasing capacity for mining activities in the deeper sections of Fairview Mine. A grout backfill plant has been installed at Fairview Mine, allowing the pumping of backfill from the surface down the decline system, replacing the historical method of transporting cement bags, thereby alleviating logistical constraints on the 3 Decline and improving hoisting time for high-grade ore from the MRC and Rossiter orebodies. An integrated drilling and production plan has been formulated to align exploration and grade control drilling with the short-, medium- and long-term mine plans, mitigating risks and improving the conversion of Mineral Resources to Mineral Reserves. The implementation of electronic radio frequency waste and reef tagging systems at Fairview and Sheba Mines enables real-time ore tracking from underground to the processing plant. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 98 99 OPERATIONAL PERFORMANCE REVIEW continued Underground mining and surface sources operations EVANDER MINES EGOLI PROJECT 7 Shaft’s Egoli project is a stand-alone underground operation which will utilise existing mining and metallurgical infrastructure, including 7 Shaft’s hoisting systems and processing facilities at the Kinross metallurgical plant. Egoli will use a mining method similar to 8 Shaft’s 25 Level, which combines mechanised trackless on-reef development and conventional breast mining. Egoli will be accessed directly from 7 Shaft’s 15 Level using existing declines down to 19 Level, where a new on-reef decline will be established to access the orebody down to 23 Level. All the required permits for the Egoli project, valid until 2038 under Evander Mines’ mining right, have been approved. Leveraging existing infrastructure, Egoli can increase Evander Mines’ production profile with relatively low capital costs and within a relatively short time frame. Egoli’s first phase development involved dewatering the 3 Decline infrastructure to 19 Level, which was completed in the 2024 financial year. The second phase includes establishing a drilling platform on 19 Level, in the first quarter of the 2025 financial year, from which long-inclined boreholes will be drilled to accurately define short-term grade variability and geological structures. FOCUS FOR 2025 Our primary objective for the upcoming year is to achieve optimal performance at our underground operations. We are committed to maximising the value extracted from our orebody through continuous optimisation, adherence to mine plans and diligent management of capital expenditure which is aligned with mining requirements and our organic growth objectives. To accomplish these goals, we have identified several key focus areas for the year ahead: • Commissioning the ventilation shaft for hoisting • Prioritising the development of the raise lines on 24 Level to extract the ore to sustain the 24 Level steady-state production • Initiating development towards the 25 Level orebody • Commencing with Egoli’s long-inclined borehole drilling delineation programme • 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. OVERVIEW OF OPERATIONS Evander Mines’ underground operations are focused on mining the 24 Level, substituting production volumes from 8 Shaft’s pillar, consistent with the mine plan. Steady-state production from 24 Level is anticipated to reach approximately 35,000oz annually. Once development of 25 Level is completed in the 2026 financial year, Evander Mines’ underground production, excluding projected production from Egoli, is expected to increase to an average of approximately 65,000oz annually over the remaining 11-year life of the 8 Shaft. Plans are also in place for sweeping and vamping operations in 7 Shaft, with the gold from these operations included in the scheduled production plan over the next two years. 24 AND 25 LEVELS Development of 8 Shaft’s 24 and 25 Levels is progressing well, with ramped-up mining operations at 24 Level already contributing to the replacement of ounces as mining from the 8 Shaft’s pillar is depleted. Significant capital expenditure has been invested in these levels to improve and optimise infrastructure, and to ensure sustainable production of an average of approximately 65,000oz annually over the mine’s life. Phase 2 of the refrigeration plant’s construction was completed and successfully commissioned during the 2024 financial year. This plant will provide chilled water to a bulk air cooler on 24 Level, with a nominal cooling capacity of 3.5MW to create improved working conditions on 24 and 25 Levels. To further optimise operations, conversions are underway to the existing ventilation shaft between 8 Shaft’s 17 and 24 Levels to enable hoisting of rock capacity. The design capacity is 40,000t per month, and this will reduce the reliance on the ageing conveyor belt system and simplify the ore handling process. The ventilation shaft and associated conveyor systems for rock hoisting are scheduled for commissioning during the first quarter of the 2025 financial year. Development of the existing 24 Level footwall infrastructure to access 25 Level, through an on-reef decline layout, is planned to commence in the 2025 financial year. The planned mining method for 25 Level combines mechanised trackless on-reef and conventional breast mining. ITUMELENG PHOSHOKO General manager Installation of the Mineware Syncromine production reporting and management system has been completed, enhancing production insights and facilitating expedient decision-making through detailed reporting on production data and labour-related information. An underground training centre was constructed at Fairview Mine’s 20 Level. The new training centre is a practical hub enabling employees to attain Level A and B competency certifications and provides a realistic underground environment where employees can gain hands-on experience and develop essential skills required for efficient and safe mining operations. By achieving these certifications, employees demonstrate their proficiency in fundamental mining skills, ensuring they meet the standards necessary for productive and safe work in the mine. Exploration drilling for target identification remains a key focus at Barberton Mines, which faces operational challenges due to the geological variability and the complexity inherent in its greenstone orogenic orebodies. These orebodies, 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 reporting period, up to four large high-grade platforms (258, 259, 260 and 261 Platforms) were available for mining or on-reef development in the MRC orebody, along with two platforms within the Rossiter orebody. Development towards the down-dip 262 Platform in the MRC orebody is also progressing as planned. BARBERTON TAILINGS RETREATMENT PLANT The BTRP produced 18,888oz (2023: 19,875oz) for the 2024 financial year at an AISC of US$669/oz (2023: restated US$717/oz). Processing 828,392Mt of tailings material (2023: 921,753Mt), it achieved an improved overall recovery rate of 52.8% (2023: 47.3%), with a recovered grade of 0.71g/t (2023: 0.67g/t). Additional feed source, including historical tailings material from the Fairview top area and other low-grade tailings material from the Fairview solar plant site, supplemented feed to the BTRP plant. The BTRP has access to near-term surface sources that will sustain production for another two years, albeit at a reduced production profile, during which time the development of the Sheba Fault project and other initiatives will provide for the BTRP’s longer-term supply needs. SHEBA FAULT PROJECT Studies are currently advancing to optimise the mining and transport of resources from the Sheba Fault project to the BTRP. Progress to date includes: • optimisation of the current eight-year Royal Sheba life-of- mine plan, targeting estimated production of approximately 235,000oz of gold at an average mining grade of 3g/t. The orebody remains open at depth, indicating the potential for a further extension of the mineralisation • the Western Cross orebody is open at depth and currently only mined above the Southwall Adit elevation at Sheba Mine. This 10m-wide orebody is a lower-grade (3g/t to 4g/t), free- milling deposit and is suitable for bulk mining. This will further supplement feed material to the BTRP. Drilling planned for the 2025 financial year will inform an update to the geological model, defining available Mineral Resource blocks and support revisions of the feasibility study. FOCUS FOR 2025 Our objective is to continually enhance our industry-leading safety performance while consistently delivering high- margin 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 Sheba Fault project, to further bolster the sustainability and longevity of our operations. For the upcoming 2025 financial year, our key focus areas are: • Reducing underground unit costs • Increasing production flexibility • Enhancing infrastructure utilisation by advancing the Sheba Fault project • Commencing rehabilitation of the connected mining ramp infrastructure, adjacent to Fairview Mine’s 3 Decline, from 38 to 70 Level • Extending the mines’ Mineral Reserves through comprehensive definition and infill drilling programmes • Identifying additional exploration targets using advanced modelling and geophysical techniques, followed by exploration drilling • Rolling out bagged emulsion explosives across the operations • Installing and implementing an advanced centralised blasting system • Commissioning the Fairview Mine solar plant early in the first quarter of the 2025 financial year to reduce carbon emissions and operating costs, while ensuring a reliable electricity supply for Barberton Mines. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 100 101 TAILINGS MANAGEMENT ELIKHULU Pan African prioritises effective tailings dam management across its operations. Each TSF site appoints a competent person from a recognised tailings management company to oversee monitoring and ensure compliance with legislation and the Group’s internal codes of practice. Following the GISTM recommendations, Pan African made the following appointments: • An executive accountable for tailings management in June 2022 • A tailings facility engineer in June 2022, responsible for the robust management of the TSFs • The Engineer of Record for Barberton Mines, who also serves as the Engineer of Record for Evander Mines. 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 the following: • Phase 2 of Elikhulu’s TSF extension was commissioned in January 2024 • The construction of phases 3 and 4 of the extension commenced in December 2023; construction is expected to be completed in the second quarter of the 2025 financial year • Design proposals for the MTR project’s TSF will be evaluated during the first quarter of the 2025 financial year. FOCUS FOR 2025 Our focus areas for the year ahead include: • constructing and commissioning phases 3 and 4 of Elikhulu’s TSF extension • continued assessment and addressing critical issues, in line with our implementation plan, in response to the ITRB’s audit findings • developing an action list and implementation plan that prioritise critical issues, in response to the ALARP principle assessment • design proposals for the MTR project’s TSF will be evaluated during the first quarter of the 2025 financial year. The design of Elikhulu’s TSF entailed a significant expansion and construction effort from 2017 and thereafter phase 1 expansion during 2019. This expansion coincided with the construction of the plant and its associated infrastructure. As part of the phase 2 expansion, the existing Kinross TSF footprint will be reutilised once the reclamation process is completed. Phase 2 of the Elikhulu TSF was commissioned in January 2024, and construction is currently underway for phases 3 and 4, constituting the final stages of Elikhulu’s TSF extension. In May 2022, Pan African became the first South African mining company to commission a utility-scale, grid-tied solar plant at Evander Mines. The solar plant, with a capacity of 9.9MW, supplies clean energy to Elikhulu, meeting approximately 30% of its annual power needs. This solar plant significantly reduces Elikhulu’s GHG footprint. Climate change has disrupted traditional rainfall patterns, leading to more intense rainfall and electrical storms over shorter periods, compelling operations to adapt to managing increased water volumes. The national grid’s unreliable electricity supply has caused operational disruptions and process interruptions, resulting in production delays. Unplanned power outages and ageing infrastructure exacerbate these challenges, leading to production losses, which may result in missed production targets in the short term. While excess rainwater is manageable, severe lightning and subsequent power outages adversely impact production by reducing pumping capacity and hindering water removal from mining areas, which may take hours to drain after power is restored and production can commence. Despite these challenges, Elikhulu has increased its production levels compared to the previous financial year, demonstrating management’s ability to deal with production challenges. The installation of Evander Mines’ solar plant has, however, significantly alleviated electricity supply constraints, reducing the operation’s reliance on the national grid. FOCUS FOR 2025 Our goal for the coming year is to maintain our performance at the surface operations. Our focus areas for the year ahead include: • completing the construction of phases 3 and 4 of Elikhulu’s TSF extension • the installation of a briquette cyanide make-up facility, which will ensure cyanide availability in the event of supplier logistical constraints • continuing to invest in sustaining capital projects, focused on maintaining Elikhulu’s infrastructure. OVERVIEW OF OPERATIONS 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. 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 reviews. To ensure continuous progress towards compliance with the GISTM to the extent feasible, Pan African has conducted internal audits and studies in recent years to assess its TSF management against the GISTM standards. In the 2023 financial year, an ITRB, consisting of three qualified external members, was appointed. This board conducted a formal audit of Pan African’s TSFs, and its assessment report was released in June 2023. Notably, certain TSFs operated by Pan African have been categorised as high- impact due to their proximity to local communities and water sources. Following the audit, an action list was developed as part of an implementation plan, which considers budgetary requirements and prioritises critical issues. The majority of the Group’s TSFs were constructed before the implementation of the GISTM. Pan African is committed to the Principles for Responsible Investment with the intention that all its tailings facilities adhere to the GISTM within the context of principle 4.7, also known as the ALARP (as low as reasonably practicable) principle. We have assessed the Group’s TSFs and our adherence to the ALARP principle in the GISTM. The assessment was completed in June 2024, and the findings are currently under review. OVERVIEW OF OPERATIONS Elikhulu, Pan African’s flagship tailings retreatment operation, distinguishes itself as one of Southern Africa’s lowest-cost gold mining operations. In 2024, it produced 54,812oz (2023: 50,573oz) at an AISC of US$1,034/oz (2023: restated US$989/oz), despite challenges such as disruptions to the electricity supply and adverse weather conditions during the rainy season in November and December. Following the successful installation of a 6km pipeline and the commissioning of the Leslie/Bracken pump station in September 2022, gold production is expected to remain unchanged for the 2025 financial year. The operation has a remaining mine life of nine years. The plant currently processes approximately 1.2Mt of historical tailings per month from the existing Leslie/Bracken TSF. By reprocessing these tailings, the operation deposits processed residues into a single, more modern TSF site, thereby reducing its ecological footprint. Phase 2 of the expanded Elikhulu TSF was completed on time and within budget, and this modern facility adheres to the latest global standards for tailings management, ensuring adequate capacity for future remining operations including residues from Evander Mines’ underground operations. The Kinross phase 1 TSF extension is lined to mitigate the risk of underground seepage and pollution underscoring our commitment to addressing the environmental impact of historical tailings depositions. Elikhulu’s operation features a technologically advanced, automated plant with a low labour contingent, high throughput and relatively short pumping distances. Its innovations include a modern extraction process that eliminates the need for regrind mills and thickeners. The plant supplements recirculated process water with non-potable water pumped from nearby underground operations and potable water from our reverse osmosis water treatment plant. 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 a safe working environment while production costs remain low. Elikhulu is a testament to Pan African’s ability to conceptualise, plan and construct substantial growth projects ahead of schedule and within budget. The Group has successfully delivered three such projects of this nature to date with the fourth project, the MTR project, due for commissioning during the next financial year. OPERATIONAL PERFORMANCE REVIEW continued JONATHAN IRONS Group consulting metallurgist and executive accountable for tailings FANIE DE WET General manager OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 102 103 OPERATIONAL PRODUCTION Mining operations Tailings operations Total operations Year ended 30 June Unit Barberton Mines Evander Mines Total BTRP Evander Mines’ surface sources Elikhulu Total Barberton Mines total Evander Mines total Group total Tonnes milled – underground 2024 t 250,744 192,050 442,794 – – – – 250,744 192,050 442,794 2023 235,028 159,063 394,091 – – – – 235,028 159,063 394,091 Tonnes milled – surface 2024 t 108,192 – 108,192 – – – – 108,192 – 108,192 2023 107,594 – 107,594 – – – – 107,594 – 107,594 Tonnes milled – total underground and surface 2024 t 358,936 192,050 550,986 – – – – 358,936 192,050 550,986 2023 342,622 159,063 501,685 – – – – 342,622 159,063 501,685 Tonnes processed – tailings 2024 t – – – 828,392 – 14,198,865 15,027,257 828,392 14,198,865 15,027,257 2023 – – – 921,753 – 13,587,371 14,509,124 921,753 13,587,371 14,509,124 Tonnes processed – surface feedstock 2024 t – – – – 104,157 – 104,157 – 104,157 104,157 2023 – – – – 248,575 – 248,575 – 248,575 248,575 Tonnes processed – total tailings and surface feedstock 2024 t – – – 828,392 104,157 14,198,865 15,131,414 828,392 14,303,022 15,131,414 2023 – – – 921,753 248,575 13,587,371 14,757,699 921,753 13,835,946 14,757,699 Tonnes milled and processed – total 2024 t 358,936 192,050 550,986 828,392 104,157 14,198,865 15,131,414 1,187,328 14,495,072 15,682,400 2023 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 Tonnes capacity 2024 t/annum 432,000 240,000 672,000 1,200,000 Not reported 14,400,000 15,600,000 1,632,000 14,640,000 16,272,000 2023 432,000 138,000 570,000 1,200,000 14,400,000 15,600,000 1,632,000 14,538,000 16,170,000 Head grade – total 2024 g/t 6.8 6.6 6.7 1.3 1.3 0.3 1.3 3.0 0.4 0.6 2023 6.5 6.7 6.5 1.4 1.2 0.4 1.4 2.8 0.4 0.6 Overall recovered grade 2024 g/t 6.2 6.2 6.2 0.7 0.8 0.1 0.2 2.4 0.2 0.4 2023 5.9 6.4 6.1 0.7 0.9 0.1 0.2 2.1 0.2 0.4 Overall recovery – underground 2024 % 92 94 93 – – – – 92 94 93 2023 91 96 93 – – – – 91 96 93 Overall recovery – tailings 2024 % – – – 53 60 35 39 53 60 39 2023 – – – 47 74 32 37 47 74 37 Gold produced – underground 2024 oz 67,513 38,285 105,798 – – – – 67,513 38,285 105,798 2023 60,477 33,256 93,733 – – – – 60,477 33,256 93,733 Gold production – surface operations 2024 oz 3,957 – 3,957 – – – – 3,957 – 3,957 2023 4,109 – 4,109 – – – – 4,109 – 4,109 Gold produced – tailings 2024 oz – – – 18,888 – 54,812 73,700 18,888 54,812 73,700 2023 – – – 19,875 – 50,573 70,448 19,875 50,573 70,448 Gold produced – surface feedstock 2024 oz – – – – 2,584 – 2,584 – 2,584 2,584 2023 – – – – 6,919 – 6,919 – 6,919 6,919 Gold produced – total 2024 oz 71,470 38,285 109,755 18,888 2,584 54,812 76,284 90,358 95,681 186,039 2023 64,586 33,256 97,842 19,875 6,919 50,573 77,367 84,461 90,748 175,2091 Capacity 2024 oz/annum 110,000 40,000 150,000 25,000 Not reported 75,000 100,000 135,000 115,000 250,000 2023 110,000 40,000 150,000 25,000 75,000 100,000 135,000 115,000 250,000 Gold sold – total 2024 oz 70,732 38,477 109,209 18,827 2,584 54,265 75,676 89,559 95,326 184,885 20232 64,941 32,898 97,839 20,087 6,919 51,371 78,377 85,028 91,188 176,216 1 Includes gold equivalent production of osmiridium concentrate. 2 Restated due to prior period adjustments, refer to note 40. Mining operations Tailings operations Total operations Year ended 30 June Unit Barberton Mines Evander Mines Total BTRP Evander Mines’ surface sources Elikhulu Total Barberton Mines total Evander Mines total Group total Average ZAR gold price received 2024 ZAR/kg 1,242,415 1,138,564 1,205,824 1,245,920 1,107,365 1,218,492 1,221,521 1,243,151 1,183,222 1,212,252 20232 1,049,525 1,074,812 1,058,026 1,009,466 1,002,305 1,004,120 1,005,330 1,040,061 1,029,482 1,034,586 Average US$ gold price received 2024 US$/oz 2,065 1,893 2,005 2,071 1,841 2,026 2,031 2,067 1,967 2,015 20232 1,837 1,881 1,852 1,767 1,754 1,758 1,760 1,820 1,802 1,811 ZAR cash cost 2024 ZAR/kg 896,195 745,000 842,925 388,448 1,307,957 563,605 545,443 789,455 656,999 721,161 20232 815,858 610,129 746,682 403,671 937,904 520,041 527,104 718,481 584,247 649,018 ZAR AISC 2024 ZAR/kg 1,068,831 785,928 969,157 402,151 1,307,957 621,943 590,685 928,680 706,729 814,243 20232 1,028,634 635,728 896,519 412,041 981,523 565,106 562,636 882,967 622,180 748,015 ZAR AIC 2024 ZAR/kg 1,156,771 1,635,585 1,325,470 404,526 1,307,957 781,983 706,036 998,632 1,140,786 1,071,926 20232 1,051,737 1,689,006 1,266,019 422,281 981,523 755,697 690,180 903,031 1,109,545 1,009,898 US$ cash cost 2024 US$/oz 1,490 1,238 1,401 646 2,174 937 907 1,312 1,092 1,199 20232 1,428 1,068 1,307 707 1,642 910 923 1,258 1,023 1,136 US$ AISC 2024 US$/oz 1,777 1,307 1,611 669 2,174 1,034 982 1,544 1,175 1,354 20232 1,800 1,113 1,569 721 1,718 989 985 1,545 1,089 1,309 US$ AIC 2024 US$/oz 1,923 2,719 2,203 672 2,174 1,300 1,174 1,660 1,896 1,782 20232 1,841 2,956 2,216 739 1,718 1,323 1,208 1,581 1,942 1,768 ZAR cash cost 2024 ZAR/t 5,493 4,643 5,197 275 1,009 67 85 1,852 134 264 20232 4,810 3,925 4,529 274 812 61 87 1,503 118 233 Capital expenditure 2024 ZAR million 401.6 1,016.9 1,418.5 9.3 – 304.9 314.2 410.9 1,321.8 1,732.7 2023 350.8 1,077.9 1,428.7 11.6 9.4 332.5 353.5 362.4 1,419.8 1,782.2 Revenue 2024 ZAR million 2,733.3 1,362.6 4,095.9 729.6 89.0 2,056.6 2,875.2 3,462.9 3,508.2 6,971.1 20232 2,119.9 1,099.8 3,219.7 630.7 215.7 1,604.4 2,450.8 2,750.6 2,919.9 5,670.5 Cost of production 2024 ZAR million 1,971.6 891.6 2,863.2 227.5 105.1 951.3 1,283.9 2,199.1 1,948.0 4,147.1 20232 1,647.9 624.3 2,272.2 252.2 201.8 830.9 1,284.9 1,900.1 1,657.0 3,557.1 AISC 2024 ZAR million 2,351.4 940.6 3,292.0 235.5 105.1 1,049.7 1,390.3 2,586.9 2,095.4 4,682.3 20232 2,077.7 650.5 2,728.2 257.4 211.2 902.9 1,371.5 2,335.1 1,764.6 4,099.7 AIC 2024 ZAR million 2,544.9 1,957.4 4,502.3 236.9 105.1 1,319.8 1,661.8 2,781.8 3,382.3 6,164.1 20232 2,124.4 1,728.3 3,852.7 263.8 211.2 1,207.5 1,682.5 2,388.2 3,147.0 5,535.2 Adjusted EBITDA 2024 ZAR million 765.6 520.3 1,285.9 409.2 (16.1) 1,041.6 1,434.7 1,174.8 1,545.8 2,720.6 20232 520.5 544.5 1,065.0 307.1 11.3 736.5 1,054.9 827.6 1,292.3 2,119.9 Average exchange rate 2024 US$/ZAR 18.71 18.71 18.71 18.71 18.71 18.71 18.71 18.71 18.71 18.71 2023 17.77 17.77 17.77 17.77 17.77 17.77 17.77 17.77 17.77 17.77 Employees 2024 number 2,257 125 2,282 74 4 160 238 2,331 289 2,620 2023 2,094 95 2,189 73 13 139 225 2,167 247 2,414 Contractors 2024 number 1,815 2,335 4,150 21 – 575 596 1,836 2,910 4,746 2023 1,397 2,382 3,779 32 4 296 332 1,429 2,682 4,111 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 104 105 ABRIDGED MINERAL RESOURCES AND MINERAL RESERVES REPORT This is an abridged version of Pan African’s Mineral Resources and Mineral Reserves report 2024 which was prepared in accordance with the SAMREC Code and reflects the Group’s position at 30 June 2024. To obtain a complete understanding, it should be read in conjunction with the entire reporting suite available on our website at: www.panafricanresources.com. Estimated Mineral Reserves At 30 June 2024 At 30 June 2023 Contained gold Contained gold Category Tonnes million Grade g/t Tonnes gold Moz Tonnes million Grade g/t Tonnes gold Moz Proved 38.0 1.07 40.6 1.30 42.6 0.97 41.3 1.33 Probable 360.8 0.89 352.6 11.33 365.7 0.89 357.0 11.48 Total 398.8 0.91 393.2 12.64 408.3 0.90 398.3 12.81 Mineral Reserves decreased by 1.3% due to mining depletion evident at the BTRP, Fairview and Sheba operations at Barberton Mines as well as at Elikhulu. Increases in the Mineral Reserves were observed for Barberton Mines’ surface marginal-grade stockpiles, Consort Mine and Evander Mines’ 8 Shaft. GROUP OVERVIEW This report only includes attributable Mineral Resources and Mineral Reserves for Pan African and does not consider any exploration targets. The Mineral Resources component in this report includes Mineral Reserves, unless otherwise indicated. Estimated Mineral Reserves are reported inclusive of diluting and contaminating material delivered to the respective metallurgical plant for treatment and beneficiation. GROUP MINERAL RESOURCES Estimated Mineral Resources At 30 June 2024 At 30 June 2023 Contained gold Contained gold Category Tonnes million Grade g/t Tonnes gold Moz Tonnes million Grade g/t Tonnes gold Moz Indicated 57.1 1.68 96.2 3.09 61.0 1.77 107.7 3.46 Measured 409.1 1.72 704.9 22.66 413.0 1.67 688.6 22.14 Measured and Indicated 466.3 1.72 801.2 25.76 474.0 1.68 796.3 25.60 Inferred 106.6 4.50 479.7 15.42 107.0 4.33 463.5 14.90 Total 572.8 2.24 1,280.9 41.18 581.0 2.17 1,259.8 40.50 Estimated Mineral Resources increased by 1.7%, mainly as a result of the drilling campaign at the Sheba dormant TSF for the BTRP and changes in the cut-off grade applied at the Evander Mines areas. 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 as well as an increase in the gold price assumed (June 2024: ZAR1,100,000/kg Au – June 2023: ZAR950,000/kg Au). HENDRIK PRETORIUS Executive: technical services and new business COMPETENT PERSON Hendrik is Pan African’s competent person and signs off on the estimated Mineral Resources and Mineral Reserves report for the Group. Hendrik is a member of the South African Council for Natural Scientific Professions (SACNASP No. 400051/11) and a member in good standing of the Geological Society of South Africa (GSSA No. 965978). He has 21 years of experience in economic geology, mineral resource management and mining (surface mining and shallow to ultra-deep underground mining). 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 abridged Mineral Resources and Mineral Reserves report 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. Gold ounces (Moz) 0 5 10 15 20 25 30 35 40 45 41.18 0.19 0.86 40.50 Estimated Mineral Resources reconciliation Change Mined 30 June 2023 Mineral Resources at the reporting date Decrease in Mineral Resources Increase in Mineral Resources 30 June 2024 Estimated Mineral Reserves reconciliation Mineral Reserves at the reporting date Decrease in Mineral Reserves Increase in Mineral Reserves Gold ounces (Moz) 0 2 4 6 8 10 12 14 12.64 0.19 0.01 12.81 Change Mined 30 June 2023 30 June 2024 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 106 107 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, 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. These 3D models can be adjusted as new data becomes available. These systems are used to visualise grade continuity and assist in 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, Elikhulu and 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 assets and Evander assets to the SGS Barberton assay laboratory (SGS Barberton) located close to Barberton Mines. The West Rand asset’s 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 CRMs 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 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 Fairview and the Sheba Fault project (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. 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 areas. 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 probability plots. The capped high-grade samples are employed for the MRE of each orebody and aim to limit the possible overestimation of grade by reducing uncommonly high-grade values during the MRE. Mineral Resources classification 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 Measured Resources estimated through an inverse distance weighted method are generally 20m on strike and 10m in the dip direction of actual mining. Blocks of Indicated Resources are defined where sampling values and local geological information are available. Both the grades and orebody widths are either estimated using 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. 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. 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. Assumptions Unit 30 June 2024 30 June 2023 Mineral Resources gold price US$/oz 1,850 1,663 ZAR/kg 1,100,000 950,000 Mineral Reserves gold price US$/oz 1,598 1,488 ZAR/kg 950,000 850,000 Exchange rate US$/ZAR 18.50 17.77 ORGANIC GROWTH Pan African has an exceptional pipeline of attractive growth opportunities, both in established projects and in brownfield resource definition prospects. 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 and 25 Level project, the Egoli project, Consort Mine’s PC Shaft remnant blocks and the Sheba Fault project. Near-mine growth projects Barberton Mines’ growth projects Evander Mines’ growth projects West Rand targets Sudan targets Egoli project EXPLORATION DEVELOPMENT PROJECT DESKTOP STUDY DISCOVERY CONFIDENCE PROJECT VALUE MINE PRODUCTION MINE CONSTRUCTION Mineral Resources Mineral Reserves Evander South Poplar Inferred Probable Proved Rolspruit Royal Sheba east extension Barberton Mines’ near-mine exploration Consort PC remnant blocks Sheba Hills exploration Evander Mines’ near-mine exploration Sataib Kishi Hamash Measured Indicated Sheba Fault Mogale Cluster Soweto Cluster Barberton Mines Evander Mines’ 8 Shaft pillar BTRP PROJECT COMMISSIONING FEASIBILITY STUDY Elikhulu Evander Mines’ 8 Shaft 25 Level and 26 Level Evander Mines’ 8 Shaft 24 Level Mirudaab Turukti Jebel Karyous OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 108 109 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 111 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 110 ABRIDGED MINERAL RESOURCES AND MINERAL RESERVES REPORT continued Operational execution • Achieved the revised production guidance of 186,000oz to 190,000oz for the year by producing 186,039oz – Barberton Mines: 71,470oz – BTRP: 18,888oz – Evander Mines: 40,869oz (including toll treatment) – Elikhulu: 54,812oz Safety • The Group’s LTIFR improved from 1.86 to 1.82 per million man hours • The Group’s RIFR improved from 1.81 to 0.78 per million man hours • One fatal accident was recorded during the year ended 30 June 2024 (2023: one) • Evander Mines’ LTIFR improved to 2.70 (2023: 3.64) and the RIFR to 0.42 (2023: 2.43) per million man hours • Evander Mines’ (including Elikhulu) LTIFR improved to 1.94 (2023: 3.09) and the RIFR to 0.45 (2023: 1.89) per million man hours • Barberton Mines achieved 4 million fatality-free shifts during the 2024 financial year • Barberton Mines’ LTIFR regressed to 1.88 (2023: 1.26) and the RIFR to 1.03 (2023: 0.26) per million man hours • Sheba Mine achieved 12 years’ fatality-free shifts • Consort Mine achieved 23 years’ fatality-free shifts • The Group will continue with ongoing safety initiatives to further improve safety rates and strive for zero harm 2024 IN REVIEW Some of the Group’s achievements for the year ended 30 June 2024 are presented below. Mineral Resources • The Group’s estimated Mineral Resources increased by 1.7% year-on-year to 41.18Moz (572.8Mt at 2.24g/t) • The successful exploration drilling programme at Consort Mine and the Sheba dormant TSF in order to identify further feed sources for the BTRP generated additional Mineral Resources and Mineral Reserves, post mining depletion of 186Koz • Commenced a long-inclined borehole drilling campaign at Evander Mines’ 8 Shaft, in order to increase confidence in the medium-term production plan • Sustained positive gold market economics resulted in limited movement in the reported cut-off grades of the Group’s operations and projects Mineral Reserves • The Group’s estimated Mineral Reserves base decreased marginally by 1.3% year-on-year to 12.64Moz (398.8Mt at 0.91g/t), post the mining depletion of 186Koz • Initiatives have been undertaken to improve reserve delineation drilling and increase production in the Barberton region • Optimisation of mining methods and modifying factors • Additional platforms in the high-grade MRC and Rossiter orebodies at Fairview Mine to increase mining flexibility • Optimisation of the BTRP scheduling and rehabilitation to further sustain the plant’s feed sources from tailings material as well as other third-party material located around Barberton Mines • Construction of the MTR plant commenced in June 2023; it will be commissioned by October 2024 Financial metrics • Capital allocation aligned with the Group’s strategic plan • Managed production cash cost to US$1,199/oz (2023: restated US$1,1361/oz) • Group net debt increased to US$106.4 million (2023: US$22.0 million) Environmental, social and corporate governance • Evander Mines’ water treatment plant is in steady-state production of 2.25ML/day • Barberton Mines’ 8.75MW solar plant was commissioned in August 2024 • Achieved the land in process of rehabilitation target of 9.4% versus the 8% target for the MTR project as per the RMB Sustainability Bond Performance Targets for 2024 • Constructed and commissioned the arsenic treatment plant at the Fairview BIOX® plant • Achieved safety targets of 6.52 for the Group’s TRIFR as per the RMB Sustainability Bond Performance Targets for 2024 • Successful handover of science and technology laboratory schools to the Department of Basic Education by Evander Mines • Successful implementation of a formal health and wellness programme at Barberton Mines – phase 1 • PwC Inc. assurance certificate of 16 ESG disclosures in the sustainable development report 2024 • Scheduling the GISTM recommendations with the implementation of high-risk findings from the TSF audit report Licence to operate • Barberton Mines’ mining rights are valid until May 2051. It should be noted that a section 102 amendment on the three Barberton Mines’ mining rights has been lodged with the DMRE to include specific farm names in the mining right table that were erroneously omitted during the approval process. Additionally, Sheba Mine’s water use licence is in the process of appeal after being declined by the Department of Water and Sanitation (DWS) due to the Sheba TSF return water dam not being lined although it was constructed well before the promulgation of the National Environment Management Act, 107 of 1998. There is ongoing correspondence with the DMRE and DWS with regard to the status of the applications, which remain valid until they are granted as per the Mineral and Petroleum Resources Development Act, 28 of 2022 • Evander Mines’ mining right is valid until April 2038 Projects • Commenced the construction of the MTR plant in the West Rand • Ramp-up in production from Evander Mines’ 8 Shaft 24 Level mining areas • Progressed and completed Evander Mines’ 8 Shaft phase 2 underground refrigeration plant construction, 24 Level development and the planning of the 25 Level to 26 Level mining phases • Continued with the dewatering of the 3 Decline at the Egoli project to below 19 Level • Developed additional target blocks at the Consort Mine Ivaura and MMR orebodies as well as at the Sheba MRC orebody • Development progressed towards an additional high-grade platform (261 Platform) in the MRC orebody at Fairview Mine, with the top access being established during June 2024 and the bottom access expected to intersect the reef by the end of this calendar year • Steady-state production at the Leslie/Bracken TSF by the Elikhulu operation • Commenced and completed construction of Barberton Mines’ 8.75MW solar plant Hydro remining of the Kinross TSF OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 111 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 110 ABRIDGED MINERAL RESOURCES AND MINERAL RESERVES REPORT continued PAN AFRICAN’S OPERATIONAL FOOTPRINT GROUP MINERAL RESOURCES Estimated Mineral Resources At 30 June 2024 At 30 June 2023 Contained gold Contained gold Category Tonnes million Grade g/t Tonnes gold Moz Tonnes million Grade g/t Tonnes gold Moz Moz % Barberton assets 35.51 3.16 109.09 3.51 46.77 2.74 128.13 4.12 (14.8) Fairview Mine 4.49 9.82 44.07 1.42 4.91 9.88 48.53 1.56 (9.0) Sheba Mine 1.17 7.90 9.22 0.30 1.15 8.27 9.55 0.31 (3.2) Consort Mine 0.97 9.03 8.80 0.28 0.84 9.70 8.12 0.26 7.7 BTRP 20.87 1.15 24.09 0.77 22.70 1.25 28.41 0.91 (15.4) Sheba Fault project 7.02 3.26 22.91 0.74 17.17 1.95 33.52 1.08 (31.5) Evander assets 278.55 3.92 1,093.32 35.15 274.46 3.84 1,053.17 33.86 3.8 8 Shaft 30.59 8.82 269.86 8.68 24.05 10.28 247.27 7.95 9.2 Elikhulu 155.44 0.27 41.54 1.33 163.40 0.27 44.19 1.42 (6.3) Egoli project 9.65 9.68 93.41 3.00 9.65 9.68 93.41 3.00 – Rolspruit project 25.89 11.57 299.52 9.63 25.87 11.58 299.45 9.63 – Poplar project 28.04 7.06 197.94 6.36 26.38 7.22 190.46 6.12 3.9 Evander South project 28.93 6.60 191.04 6.14 25.10 7.11 178.39 5.74 7.0 West Rand assets 259.76 0.30 78.46 2.52 259.76 0.30 78.46 2.52 – Mogale Cluster 126.27 0.29 36.58 1.18 126.27 0.29 36.58 1.18 – Soweto Cluster 133.49 0.31 41.89 1.35 133.49 0.31 41.89 1.35 – Total1 572.82 2.24 1,280.87 41.18 580.98 2.17 1,259.77 40.50 1.7 1 Totals may not reflect the sum of the lines due to rounding. GROUP MINERAL RESERVES Estimated Mineral Reserves At 30 June 2024 At 30 June 2023 Contained gold Contained gold Category Tonnes million Grade g/t Tonnes gold Moz Tonnes million Grade g/t Tonnes gold Moz Moz % Barberton assets 9.41 4.23 39.77 1.27 9.42 5.04 47.47 1.53 (17.0) Fairview Mine 2.27 9.01 20.44 0.66 1.64 13.22 21.70 0.70 (5.7) Sheba Mine 0.82 4.54 3.70 0.12 0.80 4.77 3.80 0.12 – Consort Mine 0.70 4.75 3.33 0.11 0.55 5.28 2.92 0.09 22.2 BTRP 3.65 1.63 5.94 0.19 3.93 3.03 11.90 0.38 (50.0) Sheba Fault project 1.98 3.22 6.37 0.20 2.49 2.86 7.13 0.23 (13.0) Evander assets 161.72 1.76 288.84 9.29 171.24 1.67 286.28 9.20 1.0 8 Shaft 4.29 7.08 30.40 0.98 3.51 6.82 23.96 0.77 27.3 Elikhulu 130.63 0.27 34.72 1.12 140.93 0.27 38.60 1.24 (9.7) Egoli project 3.44 6.61 22.72 0.73 3.44 6.61 22.72 0.73 – Rolspruit project 23.36 8.60 201.01 6.46 23.36 8.60 201.01 6.46 – Poplar project – – – – – – – – – Evander South project – – – – – – – – – West Rand assets 227.66 0.28 64.60 2.08 227.66 0.28 64.60 2.08 – Mogale Cluster 119.33 0.29 34.04 1.10 119.33 0.29 34.04 1.10 – Soweto Cluster 108.32 0.28 30.55 0.98 108.32 0.28 30.55 0.98 – Total1 398.78 0.91 393.21 12.64 408.31 0.90 398.35 12.81 (1.3) 1 Totals may not reflect the sum of the lines due to rounding. BARBERTON ASSETS EVANDER ASSETS WEST RAND ASSETS SUDAN ASSETS Barberton Mines consists of three underground mines, a tailings retreatment operation and one project 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 assets consist of five exploration concessions totalling 1,088km2 • Fairview Mine • Sheba Mine • Consort Mine • BTRP • Sheba Fault project • 8 Shaft • Elikhulu • Egoli project • Rolspruit project • Poplar project • Evander South project • Mogale Cluster • Soweto Cluster • Block 12A North • Block 12A South • Block 12D • Block 12E • Block 12K Performance Positive increase Positive decrease Negative increase Negative decrease Unchanged Mineral Resources Barberton assets 8% Evander assets 86% West Rand assets 6% Barberton assets 12% Evander assets 72% West Rand assets 16% Mineral Reserves OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 112 113 ABRIDGED MINERAL RESOURCES AND MINERAL RESERVES REPORT continued FAIRVIEW MINE Fairview Mine continues its focus on optimising the extraction and successfully increasing flexibility within the MRC and Rossiter Reef. This was achieved by developing towards down-dip extensions of the orebodies and by increasing the reserve definition drilling rate. Broader-scale exploration drilling is focused on the Hope Reef and Main Reef Top, with desktop studies being conducted on various known but unmined lower- grade blocks in all orebodies. Estimated Mineral Resources affected by: Estimated Mineral Reserves affected by: • Depletion by mining • Geological boundary and structural updates • Mineral Resource block updates (tonnes and grade) • The cut-off grade increased from 1.88g/t for the prior financial year to 2.08g/t for the current reporting period due to a constant gold price and increased costs assumed in the cut-off grade calculation • Depletion by mining • Impact of updated geological structures and boundaries • Update of grades in Mineral Resource blocks Modelled life-of-mine: 20 years SHEBA MINE Sheba Mine continued to focus on the 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 Sheba and Fairview Mines, while mining platforms were accessed above the Southwall adit level at the Western Cross orebody. Estimated Mineral Resources affected by: Estimated Mineral Reserves affected by: • Depletion by mining • Geological boundary and structural updates • Mineral Resource block updates (tonnes and grade) • The cut-off grade decreased to 2.10g/t for the current reporting period relative to 2.60g/t for the prior financial year • Depletion by mining • Impact of updated geological structures and boundaries • Update of grades in Mineral Resource blocks Modelled life-of-mine: 6 years (excluding the Sheba Fault project) CONSORT MINE Development at Consort Mine progressed towards the Consort Bar and MMR orebodies at 14 and 15 Levels, respectively. Specific focus and tasks were centred on remediating and equipping the PC Shaft and remnant blocks and extracting high-grade ore between 42 and 45 Levels. Geotechnical constraints continued to impede the timeous development towards the strike and up-dip continuation of this orebody. Estimated Mineral Resources affected by: Estimated Mineral Reserves affected by: • Depletion by mining • Geological boundary and structural updates • Mineral Resource block updates (tonnes and grade) • The cut-off grade decreased from 3.77g/t for the prior financial year to 2.81g/t for the current reporting period • Depletion by mining • Impact of updated geological structures and boundaries • Update of grades in Mineral Resource blocks Modelled life-of-mine: 9 years BARBERTON TAILINGS RETREATMENT PLANT Mining of the Harper North, Harper South and Vantage dams progressed in accordance with the mine plan. Additionally, the Sheba dormant TSF was successfully drilled during the reporting period and these results were incorporated into an updated Mineral Resource model and included in the Mineral Resource tabulation. It is envisaged that the Sheba Fault project will form part of the BTRP feed sources when this project is commissioned and production is enabled through the construction of a RoM crusher circuit at the BTRP. This will allow the BTRP to treat approximately 35,000tpm of RoM material from the Royal Sheba and Western Cross projects, thereby extending the life of the operation and ensuring its sustained output in future. Estimated Mineral Resources affected by: Estimated Mineral Reserves affected by: • Depletion by mining • Inclusion of screened low-grade stockpile material • Inclusion of the Sheba dormant TSF post a successful drilling campaign • The cut-off grade remained constant year-on-year • Depletion by mining • The plant recovery factor remained at 35.3% in the current reporting period • Inclusion of the Sheba dormant TSF post a successful drilling campaign Modelled life-of-mine: 2 years (excluding the treatment of material from the Sheba Fault project) SHEBA FAULT PROJECT The Group recently initiated preliminary mining activities at the Royal Sheba and Western Cross projects to further define the grades and recoveries expected from this large-scale orebody. These activities included the extraction of a 10,000t bulk sample from historically unmined areas located 6m below surface, between 6 Level and 7 Level, during a previous reporting period at the Royal Sheba project. This trial mining campaign assisted in obtaining valuable information to complete a successful internal feasibility study in order to motivate for the construction of the project. Furthermore, ore from the Western Cross mineralisation supplemented RoM feed to the Sheba metallurgical plant during the reporting period. Estimated Mineral Resources affected by: Estimated Mineral Reserves affected by: • Proposed mining method optimisation to long hole open stoping • The cut-off grade increased year-on-year from 0.8g/t in the prior reporting period to 1.5g/t at Royal Sheba • Long hole open stoping mining method adopted • The cut-off grade remained constant year-on-year at 1.60g/t Modelled life-of-mine: 9 years BARBERTON ASSETS Barberton Mines consists of three underground mines, a tailings retreatment operation and one project. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 114 115 ABRIDGED MINERAL RESOURCES AND MINERAL RESERVES REPORT continued EVANDER ASSETS Evander Mines consists of one underground mine, a tailings retreatment operation and several projects. 8 SHAFT All underground mining development and infrastructure placement for the mining of 24 Level progressed, with the ramp-up of mining activities on 24 Level executed successfully during the reporting period. The phase 1 module of the refrigeration plant, commissioned in the prior reporting period, functioned according to design, while phase 2 of the refrigeration plant construction was completed and successfully commissioned during the reporting period. Phase 1 of the project enables mining of both the 24 Level F line stopes and mining of the 24 Level B, C and D raise lines. Phase 2 allows for additional mining crews to be placed on 24 Level as well as for subsequent mining on 25 Level. Estimated Mineral Resources affected by: Estimated Mineral Reserves affected by: • Depletion by mining • Geological boundary and structural updates • Mineral Resource block updates • The cut-off grade remained constant year-on-year at 670cmg/t • Depletion by mining • Impact of updated geological structures and boundaries • Update of grades in Mineral Resource blocks and inclusion of the 8 Shaft • The mine call factor decreased to 75% from 85% in the prior financial year due to more tonnes being mined from 24 Level Modelled life-of-mine: 11 years ELIKHULU Elikhulu is expected to yield approximately 50Koz of gold per annum over its nine-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. Estimated Mineral Resources affected by: Estimated Mineral Reserves affected by: • Depletion through remining activities • TSF boundary updates for the Leslie/Bracken and Winkelhaak TSFs • Mineral Resource block updates on the Leslie/Bracken TSFs • Depletion through remining activities • Impact of updated TSF limits for the Leslie/Bracken and Winkelhaak TSFs • Update of grades in Mineral Resource blocks in Leslie/Bracken and Winkelhaak estimates • Modifying factors employed as per actual results since the commissioning of Elikhulu Modelled life-of-mine: 9 years 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 similar to the 8 Shaft pillar. Estimated Mineral Resources affected by: Estimated Mineral Reserves affected by: • The cut-off grade decreased slightly due to increases in mining costs and a constant gold price assumed • Modifying factors remained constant year-on-year Modelled life-of-mine: 9 years 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. Estimated Mineral Resources affected by: Estimated Mineral Reserves affected by: • The cut-off grade decreased slightly year-on-year to 397cmg/t • The cut-off grade decreased slightly due to an inflationary increase in mining costs assumed through conventional narrow tabular breast mining at a depth of more than 2,500m to 447cmg/t Modelled life-of-mine: >29 years 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: • The cut-off grade decreased slightly year-on-year due to an inflationary increase in mining costs and an increase in the gold price assumed to 473cmg/t None reported Modelled life-of-mine: 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. Estimated Mineral Resources affected by: Estimated Mineral Reserves affected by: • The cut-off grade decreased slightly year-on-year due to an inflationary increase in mining costs and an increase in the gold price assumed to 319cmg/t None reported Modelled life-of-mine: None reported OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 116 117 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 118 ABRIDGED MINERAL RESOURCES AND MINERAL RESERVES REPORT continued WEST RAND ASSETS The MTR project consists of the Mogale Cluster TSFs and the Soweto Cluster TSFs. MOGALE CLUSTER The Mogale Cluster TSFs are expected to yield an average of approximately 50Koz of gold per annum over the initial 13 years of its life-of-mine, while the last two years are expected to yield an average of approximately 30Koz of gold per year. These production estimates exclude an Inferred Resource of 49Koz of gold estimated at the base of some of the TSFs. Estimated Mineral Resources affected by: Estimated Mineral Reserves affected by: • No change in reported Mineral Resources • No change in reported Mineral Reserves Modelled life-of-mine: 13 years SOWETO CLUSTER The Soweto Cluster TSFs and the related MTR project 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 the newly constructed plant within the Mogale Cluster. Estimated Mineral Resources affected by: Estimated Mineral Reserves affected by: • No change in reported Mineral Resources • No change in reported Mineral Reserves Modelled life-of-mine: 16 years (blending the Mogale and Soweto Cluster material as feed to the MTR plant results in an overall 21-year life-of-mine for the MTR plant) Construction progress at the MTR plant PAN AFRICAN RESOURCES PLC Integrated annual report 2024 119 SUDAN ASSETS The Sudan assets consist of five exploration concessions totalling 1,088km2. SUDAN ASSETS Following the military-led coup d’etat 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 exploration activities. Sampling of the Kishi target in Block 12A North has resulted in elevated copper, cobalt, nickel and gold grades being detected, with an individual sample achieving a copper grade of 9.7%, cobalt at 207.4g/t, nickel of 4.448kg/t and gold of 0.5g/t. Additionally, around 2,226 soil, stream sediment and trench samples have been collected in the Kishi target area to determine the extent of the anomaly. The Group continuously monitors and evaluates the security and risk situation in the country. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 119 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 118 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 119 Non-financial and sustainability information 122 Environmental overview 133 Social overview 136 Corporate governance overview 139 Board of directors 144 Remuneration report 149 As a custodian for future generations, Pan African recognises the importance of protecting the environment and securing its social licence to operate. This will enable the Group to deliver on its long- term sustainable value creation and preservation strategy. PAN AFRICAN RESOURCES PLC Integrated annual report 2024 123 2024 to 2025 • Climate change awareness training • Climate finance training for financial personnel • Pan African’s climate change skills plan • Climate change incorporated into management KPIs 2029 to 2031 • Review skills needs/gaps in alignment with arising risks and reporting needs • Revise/update Pan African’s climate change skills plan • Initiate additional skills training (upskilling) 2032 to 2033 • All Pan African staff are well versed in climate change • All new employees have climate change/ sustainability experience/knowledge relevant to their occupation 2026 to 2028 • Harmonious cross-functional/blended teams to mitigate connected climate- related risks • Implement a climate-related skills training programme (upskilling) OUR CLIMATE CHANGE STATEMENT DEALING WITH CLIMATE CHANGE Pan African has embarked on a journey to integrate the TCFD recommendations into our business model and community stakeholder engagement process to contribute towards a sustainable mining future. This report aligns with the JET Framework, which emphasises addressing climate change challenges while ensuring fairness and equity for all stakeholders, including employees and communities affected by the transition to a low-carbon economy. OUR CLIMATE CHANGE GUIDING FRAMEWORKS Our approach to climate change is informed by the following international frameworks: • Paris Agreement • Kunming-Montreal Global Biodiversity Framework • 2030 Agenda for Sustainable Development and the UN SDGs • International Bill of Human Rights • JET Framework report by the Presidential Climate Commission • GRI Standards • IFRS S1 and S2 • GHG Protocol. The principles that guide our climate change efforts reflect international best practices for sustainable development, adapted for local context: • Application of a mitigation hierarchy • Stakeholder-inclusivity • Respect for human rights • Application of JET Framework principles • Adherence to responsible corporate governance practices • Cost-effectiveness • An evidence-based approach. The NFSIS 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 JET Framework. FUTURE ENDEAVOURS AND ONGOING PROGRESS In our maiden 2023 climate change report, we committed to aligning with the TCFD recommendations on climate-related governance, strategy, risk management and metrics. Since then, we have implemented a strategy covering climate risks and opportunities, capacity building and scenario analysis. While we are still in the process of fully integrating climate-related risks into our operational strategy and core risk management framework, we are working on embedding these considerations into our culture and operations, focusing on production and environmental compliance. We are assessing the transition to GRI 14: Mining Sector 2024 and IFRS S2: Climate-related Disclosures, aiming for adoption in our 2025 reporting. Achieving our climate resilience goals and adapting to new reporting standards requires budget allocations for resource mobilisation as outlined in our climate skills roadmap, which details training initiatives through to 2033. Pan African is exposed to several climate-related risks, including obtaining funding for mitigation and adaptation strategies, the energy-water nexus, supply chain and operations management. Ongoing initiatives and scenario analysis have identified new research and development (R&D) areas, policies and risks to manage. Implementation and tracking of risk controls are ongoing, as risks evolve with changing contexts and new information. NON- FINANCIAL AND SUSTAINABILITY INFORMATION 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 our corporate governance report. CLIMATE CHANGE GOVERNANCE STRUCTURE Climate change-related matters are discussed by the SHEQ committee and the audit and risk committee with the board receiving quarterly updates. While the board is ultimately responsible, climate change-related matters have primarily been delegated to the social and ethics committee. The SHEQ and audit and risk committees consider climate change-related risks. Control of climate change-related matters, including monitoring, reporting and compliance, is performed by the Group ESG manager and Group ESG specialist through a collaborative approach with general managers and senior managers in all operations. For specific examples of the board’s oversight on climate change- related matters, refer to page 143 in the corporate governance overview. Overview of Pan African’s climate change governance Group ESG and SHEQ personnel Social and ethics committee Audit and risk committee SHEQ committee Group ESG manager Group ESG specialist Group SHEQ manager Board OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 122 123 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 124 STRATEGY Our strategy is designed to actively respond to the current and projected impacts of climate change on the Group and meet the increasing demand for disclosure of our approach from primary users of our climate change reports. This scenario presents a promising future for the world and the gold mining sector. With substantial global action and effective GHG emissions control, the projection is for global warming to be less than 2°C by the end of this century. South Africa’s climate change legislation has broadened in scope and rigour, leading to well-planned national GHG mitigation efforts. The implementation of renewable energy and storage technologies has significantly improved energy security and availability, with the promising growth of green hydrogen. Gold demand is on the rise globally, and investors’ sentiments are optimistic. In this scenario, global efforts to reduce GHG emissions stabilise temperatures below 2°C. South Africa also makes strides in reducing domestic GHG emissions, but economic growth and energy availability remain challenging. A lack of investment in adaptation infrastructure makes water shortages a concern. South African exports remain carbon-intensive in the medium term, with attractive carbon border taxes. Globally, gold demand is low, indicating poor global economic growth. Nevertheless, there is still some foreign capital influx, and investor confidence is increasingly optimistic. SCENARIO ANALYSIS To strengthen our understanding of climate change risks and opportunities, we initiated and completed a scenario analysis process during 2023. In this scenario, global efforts to combat climate change have been insufficient, and temperatures are expected to increase to over 2°C by the end of the century. Extreme weather events become more frequent, and more investment capital is diverted to adaptation and resilience measures. Moreover, central banks in many countries are increasing their holdings of gold reserves as a risk mitigation measure, leading to increased gold demand and price. However, global economic growth remains impacted. In South Africa, economic growth remains stagnant, and political stability has declined. Pan African benefits from high gold demand and a favourable exchange rate, but social disruption and extreme weather events negatively impact operations. Overall, investor confidence is neutral. This scenario represents a pessimistic outlook both globally and for the gold mining sector. Due to insufficient climate change mitigation efforts, global temperature increases are significant, and extreme weather events have become more frequent and severe. Resilience measures are eroded over time. Due to a lack of progress in reducing GHG emissions in South Africa, there is a crucial need for more international funding and policy changes. Without international cooperation, neither renewable energy uptake nor adaptation measures can be funded. While domestic policy and planning do not develop significantly, South African exports, including gold, are increasingly subject to carbon border adjustment mechanisms (CBAM) and boycotts. Investor confidence is low, and extreme weather events, social unrest and a shortage of critical skills regularly disrupt operations. It is clear that international cooperation is key to addressing these challenges. Somewhere over the rainbow Here comes the rain again Beautiful day Under pressure <2°C High gold demand >2°C NON-FINANCIAL AND SUSTAINABILITY INFORMATION continued Low gold demand These scenarios were used to assess climate-related risks over the next 10 years. Various impacts were identified, and the team supporting the scenario analysis process categorised these by financial and other impacts driven by climate-related risks and responses. Some of the critical outcomes for each scenario are highlighted below. • High mean temperatures leading to increased automation • Extreme weather events increasing • A decline in water quality and quantity • High interest and exchange rates • Increase in illegal mining • Difficulty in retention of personnel • Increase in self-generation and storage technologies • Increase in adaptation measures and resilience • Adopt automation and the Fourth Industrial Revolution • Uptake of energy efficiency solutions • Exchange rate impact on the Just Energy Transition • Deeper mining conditions increase energy use • High mean temperatures leading to increased automation • Extreme weather events increasing • A decline in water quality and quantity • High interest and exchange rates • Increase in illegal mining • Difficulty in retention of personnel • Lack of automation • Lack of energy diversification skills • Civil unrest and activism • Adapting the business model towards renewable energy • GHG emissions reduction Somewhere over the rainbow Here comes the rain again Under pressure Beautiful day Some issues that were raised as typical across all the scenarios considered include: • Civil unrest in local communities due to climate impacts will affect Pan African • Human performance/BIOX® process and the impact of temperatures increasing over time • Energy efficiency as a mechanism for reducing costs and emissions • Market impacts on carbon-intensive exports • Water availability and quality decreasing • A shift to renewable energy and storage is required. Furthermore, the following high-impact risks were present in fewer scenarios but could potentially have significant impacts: • Boycotting of carbon-intensive gold producers by international fund managers • Volatile currency conversions and high interest rates impact our ability to execute the climate change response plans • Civil unrest and activism, caused by climate-related pressures, such as water availability, would impact Pan African’s operations and stakeholder management processes. The following financial impacts were highlighted: • To reduce climate risk, increased costs may be incurred for purchasing, for example, energy-efficient equipment, lower carbon generation of electricity, adaptation measures to deal with more intense flooding, etc. • Additionally, in relation to human productivity and safety, the surface infrastructure may require equipment and buildings to manage temperatures above ground. For underground operations, increased ventilation and cooling equipment may be necessary. CLIMATE-RELATED RISKS AND OPPORTUNITIES The World Bank identifies drought, floods and wildfires as the primary drivers of climate-related disasters in South Africa. The country faces major challenges due to rising water demand, pollution and limited ability to expand water storage or hydropower infrastructure. South Africa’s National Climate Change Response Policy promotes adaptation measures to mitigate climate impacts on health such as reducing pollutants, raising public awareness and improving health data systems. Expected health impacts include increased heat stress, changes in vector-borne diseases, air pollution and water-borne illnesses. Increased training for healthcare personnel is essential for managing these emerging health issues. South Africa’s reliance on surface water and significant dams means rising temperatures will likely decrease water levels and availability. Groundwater resources will also suffer from over- extraction and saltwater intrusion. Altered rainfall patterns may lead to flash floods and soil erosion or droughts. Energy generation, transmission and expansion are critical to South Africa’s development and economic growth. Rising temperatures may strain electricity infrastructure by increasing demand for cooling. Given that the country’s current infrastructure is already under pressure, ensuring additional energy availability and diversifying energy sources are essential for long-term sustainability. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 124 125 NON-FINANCIAL AND SUSTAINABILITY INFORMATION continued We have assessed our specific climate change risks and opportunities, which are detailed below. Physical climate change risks and opportunities Acute risk Climate-related risk When 1. Increase in severity of extreme weather events, including storms and floods Response • Collaborative R&D into long-range weather forecasting and early warning systems • Flood and mudslide prevention measures, in addition to current measures to deal with increased intensity, at tailings facilities as part of the adaptation plan • Contingency plans, including the availability of input materials and transport considerations Financial and other impacts driven by climate-related risks and responses Risks • Increase in R&D spending as input into an adaptation plan • Increase in capital expenditure to fund an adaptation plan • Decrease in revenue from disruptions in the value chain, up and downstream Opportunities • Increase in climate-related know-how through collaboration and networks for better preparedness • Increase in climate resilience related to flooding • Protect revenue from disruptions in the value chain, up and downstream Chronic risks Climate-related risks 1. Increase in the intensity and duration of droughts Response • Development of a comprehensive Group adaptation plan, including adaptation measures for both physical and softer issues such as information gathering and stakeholder engagement Financial and other impacts driven by climate-related risks and responses Risks • Increase in capital expenditure to fund an adaptation plan • Increase in R&D spend Opportunities • Increase in assets due to the adoption of water purification and efficiency technologies • Decrease in the costs of purchased water 2. Increase in mean temperatures and heatwaves Response • Upgrades and additions to ventilation and cooling systems • Enclosure of processes currently open to the atmosphere Financial and other impacts driven by climate-related risks and responses Risks • Increase in capital expenditure to fund the adaptation plan • Increase in operational costs, including maintenance • Increase in incidents of fatigue, disease and sick leave resulting in reduced productivity Opportunities • Increase in climate-resilience assets • Health sector collaboration to understand climate-related disease prevention, diagnosis and treatment 3. Changes in precipitation patterns adversely impacting water quality Response • Increase in investment in water treatment plants to improve water consumption, withdrawal and discharge • Increase in corrosion control measures Financial and other impacts driven by climate-related risks and responses Risks • Increase in capital expenditure • Increase in operational costs, including maintenance Opportunities • Increase in climate-resilience assets • Innovation in climate-related maintenance techniques Transition climate change risks and opportunities Social risks Climate-related risks When 1. Civil unrest increases Response • Increase in social inclusion projects and stakeholder engagement Financial and other impacts driven by climate-related risks and responses Risks • Increase in CSI expenditure • Increase in security costs • Increase in costs to repair/replace infrastructure due to vandalism • Disruption of operations leading to revenue loss Opportunities • Increase in social inclusion projects and stakeholder engagement • Community well-being and licence to operate sustainably 2. Increase in automation due to extreme weather leading to job losses Response • Invest in R&D to understand areas of potential job losses • Re- and upskilling of employees into new areas aligned with the Just Energy Transition and low-carbon economy • Review of information technology (IT) and digital strategies Financial and other impacts driven by climate-related risks and responses Risk • Increase in capital expenditure to fund an adaptation plan Opportunities • Sustainable communities and job opportunities • Increase in productivity Governance and reputation Climate-related risks 1. Pan African is not perceived as responsive to climate change Response • Increase engagement with material stakeholders, including shareholders, funders and communities • Specify climate-related criteria in procurement policies, processes and procedures Financial and other impacts driven by climate-related risks and responses Risks • Decrease in share price due to negative investor sentiments • Increase in litigation and legal costs Opportunities • Increase in accountability and transparency • Increase in Company valuation • Green procurement strategies aligned with the circular economy and industrial symbiosis 2. Pan African has insufficient or incorrect skills to execute climate change strategies Response • Invest in R&D to understand areas of potential job losses • Re- and upskilling of employees into new areas aligned with the Just Energy Transition and low-carbon economy Financial and other impacts driven by climate-related risks and responses Risk • Increase in human resources training costs Opportunities • Alignment with the JET Framework • Employees with improved skills and climate change awareness 3. Pan African is unable to meet climate-related funding requirements Response • Increase communication and oversight on climate-related funding targets Financial and other impacts driven by climate-related risks and responses Risk • Increase in funding costs for future growth projects Opportunities • Increase in consistency and credibility • Improved overall performance and valuation of the Company Time horizon Short-term focus (one year) Medium-term focus (two to three years) Long-term focus (three years or more) OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 126 127 NON-FINANCIAL AND SUSTAINABILITY INFORMATION continued Policy and legislation Climate-related risks When 1. Implementation of the Sector Adaptation Strategy and Plan and the Sectoral Emissions Targets related to South Africa’s Climate Change Bill Response • Build in-house renewable energy solutions (RES) and storage capabilities while purchasing certified third-party RES • Collaborate to buy or sell offset credits (dependent on emissions cap or budget) • Set an internal carbon price to use in investment and procurement decisions Financial and other impacts driven by climate-related risks and responses Risk • Increase in costs to certify carbon intensity and assurance of emissions Opportunity • Increase in the renewable energy mix 2. Increase in carbon taxes Response • Build in-house RES and storage capabilities while purchasing certified third-party RES • Collaborate to buy or sell offset credits (dependent on emissions cap or budget) • Set an internal carbon price to use in investment and procurement decisions Financial and other impacts driven by climate-related risks and responses Risk • Increase in costs from fines or taxes Opportunity • Increase participation in the carbon credit markets 3. Increase in CBAM negatively impacting gold exports Response • Build in-house RES and storage capabilities while purchasing certified third-party RES • Collaborate to buy or sell offset credits (dependent on emissions cap or budget) • Set an internal carbon price to use in investment and procurement decisions Financial and other impacts driven by climate-related risks and responses Risk • Loss of revenue Opportunity • New internal processes for investments and procurement Reporting compliance Climate-related risks 1. Increase in climate-related disclosures from funders and investors Response • Upskill or acquire resources to deal with compliance • Implement corporate governance processes/policies aligned with funder requirements Financial and other impacts driven by climate-related risks and responses Risks • Increase in compliance costs • Increase in borrowing costs Opportunities • Increase in climate-related resources and skills of the future • Increase in oversight and reporting compliance aligned with stakeholders’ requirements 2. Increase in insurance costs due to lack of climate-related disclosures Response • Increase reporting aligned with international frameworks Financial and other impacts driven by climate-related risks and responses Risk • Increased insurance-related costs Opportunity • Increase in oversight and reporting compliance aligned with stakeholders’ requirements Emissions reduction targets Climate-related risks When 1. Implementation of additional RES Response • Build in-house RES and storage capabilities while purchasing certified third-party RES Financial and other impacts driven by climate-related risks and responses Risk • Increase in assurance costs Opportunity • Increase in energy security and cost savings 2. Implementation of energy efficiency interventions Response • Energy audit to be undertaken to identify priority areas for energy efficiencies • Conduct a business case on high head pump storage using the available head in the mine shaft Financial and other impacts driven by climate-related risks and responses Risk • Increase in assurance costs Opportunities • Increase in energy security and cost savings • Optimal use of available resources 3. Setting targets for emissions reductions Response • Identify opportunities for reduction in emissions Financial and other impacts driven by climate-related risks and responses Risk • Implications on growth Opportunity • Increase in energy efficiency and cost savings Value chain Climate-related risk 1. Increase in input materials due to lack of supply Response • Introduce a value chain forum to share ideas and lessons learnt and look for areas of synergy • Conduct studies to determine the carbon intensity of the gold sold along the value chain in preparation for the CBAM Financial and other impacts driven by climate-related risks and responses Risks • Increase in input costs • Increase in R&D costs Opportunities • Increase in climate-related supplier engagement and inclusive procurement while exploring green procurement strategies • Increase in value chain efficiencies including building energy efficiency as a criterion for procurement Time horizon Short-term focus (one year) Medium-term focus (two to three years) Long-term focus (three years or more) OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 128 129 NON-FINANCIAL AND SUSTAINABILITY INFORMATION continued The opportunities we have recognised align with our strategic goals, which encompass our dedication to decarbonisation, the adoption of green energy and the pursuit of long-term environmental sustainability. Additionally, we strive to reduce our dependence on external providers for drinking water. The strategic endeavours we have actively engaged in include the following: Initiatives Direct impact Financial impact Evander Mines’ 9.9MW solar plant 153,402tCO2e savings over the first 10 years • US$4.4 million was saved since the plant was commissioned in May 2023 Barberton Mines’ 8.75MW solar plant facility (planned) Between 14ktCO2e and 15ktCO2e per annum of carbon dioxide emissions reductions • Cost savings of ZAR26 million in year one before averaging ZAR40 million a year in cost savings over the life of the plant • Expected to provide 15% of Barberton Mines’ energy requirements • Expected cost savings of approximately US$2.4 million1 at current Eskom tariffs Evander Mines’ water treatment plant Reduced water consumption from Rand Water by 45.6% to 747.5ML for the 2024 financial year • Realised cost savings of approximately US$0.5 million for the 2024 financial year 1 Rand amounts converted at an exchange rate of US$/ZAR:18.00. STAKEHOLDER ENGAGEMENT We have collaborated with the NCPC-SA, hosted by the Council for Scientific and Industrial Research, on behalf of the Department of Trade, Industry and Competition. The NCPC-SA is a member of the United Nations Industrial Development Organisation and the United Nations Environmental Programme’s Global Network for Resource Efficient and Cleaner Production and is leading the African Roundtable on Sustainable Consumption and Production. The partnership aims to assist Pan African in lowering costs through energy, water, materials consumption and waste management efficiencies, including facilitating our participation in the circular economy through the industrial symbiosis programme. Our initial engagement activities have focused on partnerships to build our internal knowledge and identify climate risks and opportunities. From now on, our stakeholder engagement efforts will be more focused on community and supplier engagement, development and accredited training. RISK MANAGEMENT Pan African has a comprehensive risk management framework in place. As with our broader ESG priorities, climate risks will increasingly be integrated into our risk management programme. The risk management process includes a clear disclosure strategy. Our approach to defining and managing climate risks has evolved. Our risk management process We utilise a structured 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. Our risks and opportunities are managed on four tiers, which are the board, the board committees, executive management and employees. Refer to page 48 for more information on Pan African’s risk management process. Physical climate-related risks form part of the SHEQ risk assessments and are consolidated into the Group risk register, while transition risks, particularly those related to emerging regulations and policies, are evaluated for their potential financial impacts. Currently, these risks are managed at the operational level, but we are actively working to incorporate climate change considerations into our overall business strategy. We are developing a climate-related transition plan based on the assessments of climate-related risks, opportunities, capacity building and scenario analysis. Future strategies will include mitigation and adaptation plans, with climate considerations integrated into budgeting processes at both corporate and operational levels. Contingency and business continuity planning will also be updated to reflect climate-related risks. To build resilience, we are committed to strengthening our organisation’s skills, knowledge and capacity through ongoing climate-related training. Additionally, where applicable, climate- related risks and opportunities will be incorporated into our Group risk management frameworks for effective monitoring and management. METRICS AND TARGETS Pan African has disclosed its ESG performance consistently 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. Our approach to measuring and managing climate-related risks and opportunities aligns with the GHG Protocol recommended by leading reporting frameworks such as the GRI, TCFD and IFRS S2. We also track other relevant metrics, including water and waste management, that are material to our operations. ENERGY TARGETS We monitor energy capital expenditure to maintain a cost-effective approach when evaluating projects. This aligns with IFRS S2 strategy disclosures on financial performance, position and cash flows related to managing climate-related risks and opportunities. Capital expenditure on energy-related projects primarily relates to Barberton Mines’ Fairview solar plant with US$10.3 million (2023: US$2.3 million) invested for the financial year. Total capital expenditure for the year amounted to US$172.4 million (2023: US$113.0 million). Several projects were implemented during the financial year to enhance energy efficiency and contribute to cost savings while aligning with sustainable practices. Refer to the climate change report for more information on these projects. Through our strategic initiative of diversifying renewable energy sources and enhancing water management strategies, we aim to improve power security, optimise resource utilisation, reduce costs and promote environmental stewardship. Refer to the cost consciousness material matter on page 35 for savings realised from Evander Mines’ solar plant as well as from energy-efficient projects. As part of our commitment to increasing the percentage of renewable energy in our overall energy mix, we have committed to achieving a target of 15% of the total energy consumed being generated from renewable energy by 2027. KPI 2024 2023 Renewable energy (%) = (solar PV (MWh))/ (total electricity consumption (MWh)) Target: 7% Target: 5% Performance: 6.1% Performance: 6.1% We achieved a renewable energy mix of 6.1% instead of 7%. This is attributable to delays in the construction of Barberton Mines’ Fairview solar plant. The plant started generating electricity in August 2024 and we are on track to meet our future renewable energy targets. We are focused on ensuring that we maintain high energy efficiency ratios and low energy intensity ratios. Energy consumption 0 200 400 600 800 1,000 1,200 1,400 1,600 0 1 2 3 4 5 6 7 8 9 1,317.4 8.02 48.4 51.8 7.28 6.83 8.211 1,351.2 44.2 59.5 41.4 1,353.9 1,416.9 88.6 2024 2023 2022 2021 2020 Energy consumption (TJ) 8.02 Energy intensity (GJ/oz) 85.6 5.8 1,355.6 Non-renewable electricity – indirect energy Petrol and diesel – direct energy Renewable electricity – indirect energy Energy intensity per ounce of gold sold 1 Historically, the Group recognised revenue on delivery of gold to Rand Refinery. However, the Group established that control does not pass to the customer on delivery but rather on settlement. As such, revenue and associated intensities have been restated to reflect only gold sales that have been settled at the reporting date, as opposed to gold delivered to Rand Refinery. We do not have a target regarding total energy consumption. As a growing business, we do not aim to reduce our total energy consumption. Instead, we focus on ensuring that we maintain sustainable energy efficiency ratios while lowering our energy intensity rates. The Group’s energy consumption has increased by approximately 3.9%, mainly due to an increase in petrol and diesel consumption following the inclusion of the MTR project into the GRI reporting boundary as well as an increase in indirect energy consumption. However, we have maintained the percentage of energy from renewable sources at 6.1% . We are pleased that our energy intensity has reduced over the year by 2.3%, due to a 4.9% increase in gold sold. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 130 131 NON-FINANCIAL AND SUSTAINABILITY INFORMATION continued CARBON TARGETS We continue to meet the requirements of the mandatory GHG emissions reporting regulations and comply with the Carbon Tax Act, 15 of 2019, in South Africa. Our Scope 1 and Scope 2 emissions have increased by 35.1% and 4.7%, respectively. The increase in Scope 1 emissions is primarily due to including the MTR project, the Sudan exploration and the Barberton Blueberries project into our emissions boundary. We have not established carbon targets although we do monitor and track energy and carbon intensities. Scope 2 – indirect emissions Scope 1 – direct emissions GHG emissions and carbon intensity 0 50 100 150 200 250 300 350 400 1.5 1.6 1.7 1.8 1.9 2.0 2.1 332.5 2.01 4.1 4.7 1.88 1.68 341.0 3.7 5.0 3.7 345.6 374.9 1.88 2024 2023 2022 2021 2020 Scope 1 and Scope 2 emissions (ktCO2e) Emissions per ounce of gold sold (tCO2e/oz) 1.91¹ GHG emissions per ounce of gold sold 348.0 1 Historically, the Group recognised revenue on delivery of gold to Rand Refinery. However, the Group established that control does not pass to the customer on delivery but rather on settlement. As such, revenue and associated intensities have been restated to reflect only gold sales that have been settled at the reporting date, as opposed to gold delivered to Rand Refinery. It is important to note that water treatment plants ensure water discharge at acceptable quality, in line with our water use licence and the resource quality objectives set by the DWS. This not only minimises environmental pollution and reputational risk but also positions us to effectively manage climate-related extreme weather events. We see investing in water treatment plants as a climate-related opportunity that can mitigate water security risks. More importantly, it enables us to discharge water into streams or for third-party use in a responsible and sustainable manner. Furthermore, the use of treated water in our processing plants contributes to our sustainability efforts by reducing our withdrawal from rivers and municipal water. Refer to page 43 in the climate change report for more information on the Group’s water-saving strategies and collaboration efforts on water as a shared resource. CONCLUSION By incorporating the recommendations of the TCFD and NFSIS, we have enhanced our understanding of the potential impacts of climate change on our business and established a foundation for informed decision-making. As we continue to navigate the challenges and opportunities posed by climate change, 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 climate change report for the year ended 30 June 2024, which is available on our website at: www.panafricanresources.com, for further reading. We are making progress in developing and verifying our Scope 3 GHG emissions. We have undertaken work to enhance our Scope 3 reporting to ensure that the figures are aligned with the requirements for both the reporting and target-setting standards. This work consisted of a workshop with finance and procurement personnel on establishing significant criteria for including Scope 3 emissions. The results are being used to assess which Scope 3 emission categories are material to Pan African’s operations. WATER TARGETS Although we have not established formal water targets, we closely monitor water consumption as part of our commitment to sustainability. Effective water management is important to ensure the sustainability of our operations and secure our social licence to operate. Climate change is expected to increase the variability of rainfall patterns, leading to an increased likelihood of water quality issues. Rising temperatures further exacerbate water quality deterioration by reducing oxygen levels. In light of this, we understand that improving water security is closely linked to improved water efficiency, which in turn is connected to energy efficiency and the reduction of associated emissions. For more information, refer to the water management material matter on page 38. Water treatment plants Our strategic focus on water treatment plants ensures that more treated water is discharged, minimising our consumption and evaporation rates. ENVIRONMENTAL OVERVIEW Pan African understands the importance of actively protecting and preserving the environment. We acknowledge that our operations have significant implications for local ecosystems, communities and the broader environment. Therefore, we are committed to implementing robust environmental management practices aimed at ensuring sustainable outcomes. Our sustainable development report contains additional disclosures and is available on our website at: https://www.panafricanresources.com/investors/gri-and-sustainability/ WASTE MANAGEMENT Our mining operations generate waste rock as well as hazardous and non-hazardous waste materials. By responsibly managing these waste streams, the impact on human health and the environment is minimised. Our commitment to responsible waste management and disposal is supported by our standards and procedures. We adhere to strict protocols for handling and transporting materials, including chemical substances such as cyanide and other reagents. Each operation manages mineral and non-mineral waste in accordance with the Group SHEQ policy, the National Waste Management Strategy and other relevant legislation. Total waste generated Our total waste generated, which includes waste diverted from disposal by recovery operations and waste directed to disposal by disposal operations, saw a significant increase in the reporting period. This was primarily due to an irregular surge at Evander Mines, attributed to the construction of new change houses and the removal of underground waste. However, our concerted efforts to align with the GRI waste standard have significantly improved our waste reporting quality and global comparability. Total waste generated 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4.52 8.89 8.16 12.58 2024 20231 2022 2021 2020 Waste generated (tonnes) 20.99 Waste generated per ounce of gold sold (kt/oz) Total waste generated Total waste per ounce of gold sold 786.0 2,217.7 1,678.0 1,793.0 3,881.1 0 5 10 15 20 25 Several environmental matters have been identified as being material and are discussed in the material matters section. Energy management Page 36 Water management Page 38 Tailings management Page 46 Climate change, decarbonisation and biodiversity Page 47 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 132 133 Pan African takes utmost care to preserve the biodiversity of the Makhonjwa Mountain range Hazardous waste The primary types of hazardous waste generated at our operations include used hydrocarbons and oil rags, solvents, e-waste and fluorescent tubes. To manage potentially hazardous waste, safety data sheets are utilised and certified suppliers transport the waste off-site for disposal at licensed hazardous waste facilities. Waste manifest certificates are issued to confirm compliance with applicable legislation. The use of a sodium cyanide solution for gold extraction remains the safest, most effective and economical metallurgical process. The Group ensures proper disposal of all waste cyanide in accordance with the South African Code for Cyanide Management. Environmental risk associated with transporting materials, including cyanide, has been assessed across all operations with no significant environmental impacts identified. All cyanide required by our operations is transported by certified hazardous substances transport providers. Emergency response trailers are stationed on- site at Barberton Mines, the BTRP and Evander Mines to promptly address spillages, should they occur. Cyanide management 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 5,700 6,090 5,543 7,218 5,240 85 2024 2023 2022 2021 2020 Tonnes Total cyanide use ENVIRONMENTAL OVERVIEW continued LAND USE Closure and rehabilitation Preserving biodiversity and the natural heritage of the Makhonjwa Mountains (also known as the Barberton Mountainland) where we operate is paramount to us as more than 90% of Barberton Mines’ mining rights lie within the Barberton Nature Reserve. Our rehabilitation efforts focus on restoring natural balance, preserving water and fostering indigenous flora and fauna. Both Barberton Mines and Evander Mines have developed their annual rehabilitation plans, their final rehabilitation, decommissioning and mine closure plans as well as their environmental risk assessment reports. Evander Mines has already rehabilitated all its old shafts and hostels, leaving only operational areas such as offices and plants. Our goal is to achieve 41% land rehabilitation by 2030 on the MTR project. With 122.3ha rehabilitated in the 2024 financial year amounting to 9.4% of land in the process of rehabilitation, the Group has achieved and exceeded its 2024 targeted rehabilitation percentage of 8%. Targeted rehabilitation Business as usual Actual MTR project land rehabilitation targets 0 10 20 30 40 50 60 Year of mining 2030 2025 2024 2023 2026 2029 2028 2027 % of total land rehabilitation 0 8 16 24 41 36 32 0 0 1 3 2 5 4 36 9.4 AIR QUALITY AND POLLUTION Our primary sources of emissions and air pollution include drilling, blasting, hauling, smelting and the collection and transportation of ore. Temperatures in underground mines at the rock face can range between 60°C and 70°C, which may adversely impact employee safety and productivity. Ventilation and cooling systems help mitigate these risks but may have adverse environmental effects. In the past, ozone-depleting substances (ODSs), such as chlorofluorocarbons (CFCs), were used in cooling systems, however, we do not use CFCs nor do our operations produce, import or export ODSs. Monthly monitoring of ambient air for fallout dust emissions and stack emissions is conducted at our operations to assess the potential impacts on our employees and neighbouring communities. None of our air emissions have reached environmental trigger points. BIODIVERSITY Pan African is dedicated to managing biodiversity impacts and safeguarding ecosystems and habitats within our operational areas. We prioritise preventing the loss and degradation of ecosystems and aim to minimise the impacts on soil erosion. Our operations have direct and indirect effects on biodiversity and ecosystems through pollution and habitat alteration. Achieving a net positive impact on biodiversity in affected areas is important for reducing environmental harm and restoring previously disturbed land. We actively respond to stakeholder expectations and comply with regulatory requirements aimed at mitigating biodiversity loss and adverse ecosystem impacts. Proactively managing our biodiversity impact involves various measures including concurrent rehabilitation of disturbed areas, biomonitoring and erosion control procedures. We rehabilitate previously disturbed land and remove alien invasive vegetation to protect and restore biodiversity in the areas where we operate. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 135 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 134 LOCAL PROCUREMENT AND ENTERPRISE DEVELOPMENT Local procurement and supplier development strategies are critical in reducing operational costs and carbon emissions, enhancing control across our supply chain and supporting community growth by fostering job creation and entrepreneurial opportunities. The overall level of procurement on mining assets in South Africa has increased by 58.4%. Total HDP procurement spend has increased by 76.9%. Our enterprise development programme identifies outsourcing opportunities within the mines’ supply chain and promotes business opportunities for HDP suppliers. Supporting small and medium enterprises is vital for bolstering economically challenged local communities and creating sustainable employment beyond mining supply. SOCIAL OVERVIEW Database development Screening interviews and gap identification Enterprise business skills workshops Enterprise incubation programme Enterprise mentorship programme Enterprise supplier development programme structure Understanding and proactively managing the impacts of mining on communities are essential for the success of our operations and sustainability of communities. As stakeholder demands intensify, creating shared value and maintaining our social licence to operate remain top priorities for the Group. In late 2023, the South African Police Service launched Operation Vala Umgodi and deployed specialised units across mining regions to combat illegal mining and related crimes. This initiative has bolstered our security efforts, showcasing strong partnerships and support from national law enforcement. Security considerations were integral to the planning of the MTR plant and its operations, resulting in a modern security framework equipped with state-of-the-art technology ready for when the plant is operational. 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 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. DIVERSITY AND INCLUSION Our ongoing commitment to improving gender diversity across all levels of the Group aims to strengthen decision-making, governance and financial performance. Over the past year, the percentage of women in mining has increased from 16.1% to 17.1% . Our employee complement is well balanced, with a fairly even age distribution across the Group. Under 30 years (29 and below) 13.9% 30 to 50 years 69.3% Over 50 years (51 and above) 16.8% Permanent employees by age group The following social material matters are discussed in the material matters section. Safety, security, health and wellness Page 41 Skills attraction and retention Page 42 Social licence to operate Page 44 We maintain an inclusive approach to procurement, supplier and enterprise development to ensure that the procurement of consumable goods, services and capital goods aligns with or exceeds the Group’s targets for HDP spend as outlined in our SLPs. We are committed to increasing spend with black-owned and particularly black-women-owned businesses as well as implementing proactive community development projects and strategic sourcing. Our procurement managers actively engage with suppliers throughout the tender process, providing guidance to non- compliant companies on how to achieve compliance. This ongoing effort expands our supplier base to include more local providers, reinforcing our commitment to community upliftment and sustainable economic development. SYNDICATED CRIME Illegal mining poses ongoing challenges, and its impact continues to adversely affect our gold production as well as the safety and security of our employees and communities. These activities not only adversely impact revenue but also increase security costs. The rise in poverty and unemployment in local communities has exacerbated incidents of illegal mining and theft particularly at abandoned, concealed shafts. The increased gold price unfortunately further incentivises such activities. Crime syndicates target local youth, recruiting them into illegal activities. The growing number of individuals and organised groups mining informally and illegally on our mine sites is an ongoing concern. SECURITY At Barberton Mines, measures have been taken to limit the unauthorised access of illegal miners to underground areas and prevent the theft of surface infrastructure. Surveillance technology, combined with specialised tactical security teams, resulted in the arrest of more than 900 individuals for various offences during the reporting period. Notably, more than 40% of those arrested were repeat offenders and more than 60% were foreign nationals, highlighting the security challenges the mine faces as a result of an ineffective criminal justice system. Barberton Mines’ security department further expanded its CCTV network to over 800 cameras of which more than 100 were installed during the financial year. Additionally, X-ray technology, implemented in early 2024 at both the Fairview and Sheba shafts, has significantly reduced internal theft by employees and contractors resulting in numerous arrests. Other technologies employed include seismic movement sensors, long-range thermal cameras and specialised K9 and mounted tactical resources, demonstrating our commitment and innovative approach to security. Our sustainable development report contains additional disclosures and is available on our website at: https://www.panafricanresources.com/investors/gri-and-sustainability/ HDP procurement spend 0 50 100 150 200 250 300 0 10 20 30 40 50 60 2024 2023 170.8 270.5 49.9 Total procurement spend on mining assets in South Africa Total HDP procurement spend on mining assets in South Africa Percentage of the total mining goods procurement spend on South African manufactured goods from 50% + 1 vote HDP-owned and controlled companies Percentage of the total services procurement spend on South African-based companies that are 50% + 1 vote HDP-owned and controlled companies 66.8 40.5 118.2 US$ million % 37.6 35.9 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 136 137 SOCIAL OVERVIEW continued OCCUPATIONAL HEALTH AND HYGIENE Pan African is committed to fostering healthy workplaces for our employees and communities. Our comprehensive occupational hygiene programme is designed to safeguard employees’ long-term health by addressing occupational hazards such as dust inhalation, excessive noise levels and heat stress at their source. Work-related ill-health 0 5 10 15 20 25 30 Noise-induced hearing loss Certified silicosis cases 2024 2023 2022 2020 4 2 7 11 0 26 10 29 2021 Number of cases 6 1 South Africa continues to face HIV/Aids epidemic challenges, and we remain committed to raising awareness and encouraging employees to get to know their status. We offer voluntary counselling and testing for HIV/Aids to prospective and permanent employees, including contractors, with the support of an on-site counsellor who provides guidance on these and other health issues. Our efforts aim to reduce stigmas associated with many of these illnesses and increase awareness. During the past year, the number of HIV tests conducted decreased significantly as well as the number of employees identifying as being HIV positive. HIV/Aids 19 40 104 94 0 1,000 2,000 3,000 4,000 5,000 2024 2023 2022 2021 2020 Total number of tests Employees receiving antiretroviral therapy – cumulative Employees identified as HIV positive – new 0 20 40 60 80 100 120 1,008 459 954 670 1,310 3,113 82 1,528 3,554 2,003 4,649 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. CORPORATE GOVERNANCE FRAMEWORK The board is the custodian of the Group’s corporate governance framework and is supported by its five committees. The board recognises its responsibility to lead the Group ethically and sustainably through the application of King IV™. The Group’s corporate governance framework forms the foundation of how business is conducted and is guided by: 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. SHEQ committee Nomination committee Remuneration committee Social and ethics committee Executive committee Operations committee and management committee Shareholders and other stakeholders Board Board committees Audit and risk committee 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 and water recycling. Our values • Action and delivery • Teamwork • Excellence • Ownership • Resilience • Integrity • Courageous conversations • Care • Innovation • Attitude OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 138 139 Refrigeration plant at Fairview Mine’s 11 Level adit CORPORATE GOVERNANCE OVERVIEW continued The board assumes ultimate responsibility for ensuring that the Group adheres to sound corporate governance standards and makes business decisions with the appropriate diligence, expertise and focus to maximise sustainable value for all stakeholders. The 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 ever-shifting environment shaped by evolving social and political dynamics, and we are committed to maintaining effective and responsible governance structures that safeguard our reputation and social licence to operate. The board delegates certain powers to its committees, which assist it in fulfilling its corporate governance responsibilities per their board-approved charters. Each committee charter outlines the delegated roles and responsibilities of the committee and is subject to periodic review by the board. Refer to page 146 for more information on the composition and role of the board committees. For an overview of board members’ credentials and their committee membership, please refer to pages 144 and 145. The corporate governance framework, which was reviewed in June 2024, is depicted on page 139. STAKEHOLDER CONCERNS, STRATEGIC AREAS OF FOCUS AND ISSUES DISCUSSED AND ACTIONED Our directors are acutely aware of their responsibility to act in the best interests of the Company and its members as a whole, taking into consideration the short-, medium- and long-term success of the Company, as outlined in section 172 of the UK Companies Act 2006. The board assumes responsibility for establishing the strategic direction of the Group, overseeing its overall business conduct and culture and ensuring alignment with the Group’s purpose and values. Meetings are convened by the board at least four times a year, with additional meetings scheduled as deemed necessary. In 2024, the board convened on seven occasions, reflecting its commitment to diligent governance. Stakeholder relations are a fundamental component of the Group’s governance structure and are managed through various channels. The social and ethics committee is responsible for oversight of stakeholder relationships. The chief executive officer, financial director and head of investor relations ensure an inclusive approach to achieving optimal outcomes for all stakeholders in the execution of the Group’s strategy. At an operational level, stakeholder engagement is the responsibility of the general manager, human resources manager and ESG manager. The board prioritises transparency and accountability by ensuring clear and timely communication with shareholders and other stakeholders about the Group’s performance and strategic direction. Inclusivity is central to its approach, with the board reporting annually on ESG performance and maintaining guidelines such as stakeholder relationship and engagement, whistle-blowing and SHEQ policies, which are available on the Group’s website. Refer to our key stakeholder relationships on pages 57 to 65 also, refer to pages 136 and 137 for more information related to our suppliers. PROVIDERS OF CAPITAL | Investors, shareholders, fund managers, analysts and financial institutions Strategic objective 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 Governance activities in 2024 • 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 management of liquidity risk are appropriate and effective • The board, through the audit and risk committee, monitored the Group’s capital reduction process which took effect on 18 July 2024 • The board monitored the Group’s solar funding strategy and approved the funding package for the construction of Barberton Mines’ solar plant and the extension of Evander Mines’ solar plant funding facility which was established during June 2024 • The board monitored the progress of the power purchase agreement entered into with Sturdee Energy • The board reviewed several investment proposals and approved the strategic acquisition of an equity interest in TCMG • The board, through the audit and risk committee, monitored the upgrade of the Group’s ERP system • The board reviewed the status of the Group’s strategic capital projects, ensuring that these projects are being progressed consistent with projected timelines and within the allocated budget • The board discussed the MTR project’s execution risk and mitigating actions, specifically those related to social unrest and illegal mining in the area • The board, through the social and ethics committee, monitored the Group’s progress in meeting the KPIs associated with the sustainability-linked bond • Taking into consideration the Group’s strategic objectives, capital structure and liquidity, the board will recommend the proposed dividend for the year ended 30 June 2024 to shareholders for their approval at the November 2024 AGM Key stakeholder concerns during the year • Consistent financial and operational performance which enables sustainable shareholder returns • Increasing debt levels • Growth opportunities • Distributions made in contravention of the UK Companies Act 2006 • Power curtailment • Share liquidity and valuation Governance responsibility • Board • Audit and risk committee • Exco Looking ahead • Monitor the Group’s operational 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 rights, and further progress the exploration programme in north-eastern Sudan once the in-country political situation stabilises For more information refer to pages 58 and 59. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 140 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 141 CORPORATE GOVERNANCE OVERVIEW continued Employees and unions Strategic objective HUMAN CAPITAL Attract, cultivate and retain exceptional talent while fostering a culture of safety, respect and continuous learning Governance activities in 2024 • The board, assisted by the SHEQ committee, had oversight of the Group’s compliance with safety standards. It monitored the implementation of health and safety measures across operations, with a particular focus on reinforcing fundamental safety behaviours and cultivating a robust safety culture • The board monitored the Group’s response to the fatal accident that occurred at Elikhulu in February 2024 • 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, 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 • The board monitored wage negotiations at Barberton Mines and Evander Mines. In June 2024, Barberton Mines successfully concluded a five-year wage agreement with the NUM. Similarly, a five-year wage agreement was reached with the UASA in July 2021, which is set to expire in June 2026 Key stakeholder concerns during the year • Employee safety • Wage negotiations • Maturation of Barberton Mines’ ESOP • Diversity and transformation Governance responsibility • Board • SHEQ committee • Social and ethics committee • Exco Looking ahead • Continue to drive year-on-year improvements in safety performance • Implement improved safety initiatives at all operations • Continue to maintain a strong focus on talent management, skills development and succession planning For more information refer to pages 60 and 61. Communities Strategic objective SOCIAL AND RELATIONSHIP CAPITAL Engage stakeholders to build positive relationships, maintain our social licence to operate and create sustainable value Governance activities in 2024 • 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 • Feedback from external stakeholders such as host communities, financiers, the South African government and shareholders was discussed by the board • The board, through the SHEQ committee and the social and ethics committee, monitored the progress of the Group’s CSI and local LED projects and was satisfied with the progress made by the Group on these projects Key stakeholder concern during the year • Socio-economic support and opportunities through job creation and infrastructure development Governance responsibility • Board • SHEQ committee • Social and ethics committee • Exco Looking ahead • Continue to engage with communities and stakeholders surrounding our operations • Continue investing in local community socio-economic development projects through Barberton Mines’ and Evander Mines’ SLPs, CSI and our ‘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 For more information refer to pages 62 and 63. Governments and regulatory bodies | The governments of South Africa, the UK and Sudan, the JSE, A2X, AIM, OTCQX and other regulatory authorities Strategic objective SOCIAL AND RELATIONSHIP CAPITAL Engage stakeholders to build positive relationships, maintain our social licence to operate and create sustainable value Governance activities in 2024 • The board, through the audit and risk committee: – reviewed ongoing compliance with King IVTM, the listings requirements (JSE and AIM) and other relevant regulations 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 – monitored investigations emanating from the Group’s whistle-blowing hotline • The board, through the social and ethics committee and SHEQ committee, monitored compliance with SLP commitments • The board monitored progress on the DMRE engagement regarding the MTR project’s SLPs • 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 GISTM compliance as far as reasonably practicable • The board monitored the construction of phase 2 of Elikhulu’s TSF extension on the Kinross footprint • The board monitored the registration and transfer of mining rights associated with the MTR project • The board, through the audit and risk committee, approved the share trading policy, the IT governance policy and the internal irregularities investigation protocols in November 2023 and reviewed other key policies and charters to ensure their relevance, effectiveness and alignment with best practices Key stakeholder concern during the year • Compliance with regulatory requirements Governance responsibility • Board • Audit and risk committee • Social and ethics committee • Exco 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 to ensure that the Group’s TSFs are compliant, to the extent possible For more information refer to pages 62 and 63. The environment | Represented by civil society groups whose primary areas of interest include environmental-related issues Strategic objective NATURAL CAPITAL Manage our operations with climate- conscious practices that preserve and protect natural resources and promote sustainability Governance activities in 2024 • The board monitored land rehabilitation progress linked to the MTR project ensuring alignment with the sustainability-linked bond KPI • The board, through the social and ethics committee, monitored: – the Group’s progress in meeting the KPIs associated with the sustainability-linked bond – the operational performance of Evander Mines’ solar plant – the construction progress of Barberton Mines’ 8.75MW solar plant – biodiversity and conservation collaboration partnerships between Barberton Nature Reserve and Barberton Mines – the sponsorship of the Care for Wild Rhino Sanctuary • The board monitored the Group’s ESG performance including: – the progress of its renewable energy and climate change strategy – the operational performance of Evander Mines’ water treatment plant – the Barberton Blueberries project, tracking the extent of employment opportunities created, remuneration paid to employees and blueberries harvested and sold – the implementation of phase 1 of a health and wellness programme at Barberton Mines – the assurance of ESG disclosures in the 2024 sustainable development report • No reportable environmental incidents were reported • The board, through the SHEQ committee, monitored: – the Group’s carbon footprint and GHG emissions and reviewed initiatives to reduce baseline GHG emissions – the progress of the Group’s rehabilitation initiatives Key stakeholder concerns during the year • Sustainability performance and reporting • Tailings management Governance responsibility • Board • SHEQ committee • Social and ethics committee • Exco 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 the environment and communities surrounding our operations For more information refer to pages 64 and 65 as well as the sustainable development report and the climate change report published on our website. https://www.panafricanresources.com/investors/gri-and-sustainability/ OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 142 143 EXECUTIVE DIRECTORS NON-EXECUTIVE DIRECTORS BOARD OF DIRECTORS Keith Spencer (74) Chairman • Independent BSc Eng (Mining) Date of appointment 8 October 2007 Significant directorships None Skills and 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 Experience • Technical and operational • Risk management • Environmental and sustainability • Business and strategy • Leadership Committee membership • Nomination committee • SHEQ committee Chairman of the nomination committee Chairman of the SHEQ committee Dawn Earp (62) Lead independent BCompt (Hons), CA(SA), CDSA® Date of appointment 16 September 2021 Significant directorships Arcelor Mittal South Africa, Impala Platinum Holdings, Truworths International Limited and South African Guide-dogs Association non-profit organisation Skills and experience Dawn previously held the position of financial director, both at Implats and Rand Refineries. She has served as a non-executive director of various private and listed companies Experience • Finance and accounting • Risk management • Governance and regulation • Business and strategy • Leadership • Taxation Committee membership • Audit and risk committee • Nomination committee • SHEQ committee Chairperson of the audit and risk committee Thabo Mosololi (55) Independent BCom (Hons), CA(SA) Date of appointment 9 December 2013 Significant directorships MFT Investment Holdings, Truworths International Limited, New Season Investment Fund, MalaMala Game Reserve and Roadgrass Investments Skills and 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 Experience • Finance and accounting • Risk management • Governance and regulation • Business and strategy • Leadership • Taxation • Environmental and sustainability Committee membership • Audit and risk committee • Nomination committee • Remuneration committee • Social and ethics committee Chairman of the social and ethics committee Yvonne Themba (59) Independent BA, MBA Date of appointment 17 July 2019 Significant directorships 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 Skills and experience 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 Experience • Technical and operational • Risk management • Governance and regulation • Environmental and sustainability • Business and strategy • Leadership Committee membership • Nomination committee • Remuneration committee • Social and ethics committee Chairperson of the remuneration committee Charles Needham (70) Independent Non-executive 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 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 Experience • Finance and accounting • Risk management • Technical and operational • Governance and regulation • Business and strategy • Leadership Committee membership • Audit and risk committee • Remuneration committee • SHEQ committee Cobus Loots (46) Chief executive officer • Not independent Non-executive CA(SA), CFA® Charterholder Date of appointment 26 August 2009 Significant directorships None Skills and experience 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 Experience • Technical and operational • Finance and accounting • Risk management • Business and strategy • Leadership • Technology • Taxation Committee membership • SHEQ committee Deon Louw (62) Financial director • Not independent Non-executive CA(SA), CFA® Charterholder, HDip (Tax Law), AMCT (UK) Date of appointment 1 March 2015 Significant directorships None Skills and experience 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 Experience • Finance and accounting • Risk management • Business and strategy • Leadership • Technology • Taxation • Environmental and sustainability Committee membership • Social and ethics committee OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 144 145 THE BOARD AND ITS COMMITTEES (AT 30 JUNE 2024) Board of directors Audit and risk committee SHEQ 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 Chairman Chairperson Chairman Chairman Chairman Chairperson KEITH SPENCER DAWN EARP KEITH SPENCER THABO MOSOLOLI KEITH SPENCER YVONNE THEMBA Members: Charles Needham, Thabo Mosololi Other non-executive and executive board members attend as invitees. Members: Dawn Earp, Cobus Loots Members: Yvonne Themba, Deon Louw Members: Dawn Earp, Thabo Mosololi, Yvonne Themba, Charles Needham Members: Charles Needham, Thabo Mosololi 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 five 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. 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 SHEQ committee was established to assist the board in its oversight of the effectiveness of Pan African’s SHEQ 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. 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. 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. MEETING ATTENDANCE Attendance at board and committee meetings is recorded through the completion of an attendance register. Below is a summary of the attendance of these meetings. Keith Spencer Dawn Earp Thabo Mosololi Charles Needham Yvonne Themba Cobus Loots Deon Louw Board meetings 7/7 7/7 7/7 7/7 6/7 7/7 7/7 Audit and risk committee meetings1 6/6 6/6 6/6 6/6 5/6 6/6 6/6 Remuneration committee meetings2 2/2 2/2 2/2 2/2 2/2 SHEQ committee meetings 3/3 3/3 3/3 Social and ethics committee meetings3 3/3 2/3 3/3 2/3 1 Keith Spencer, Yvonne Themba, Cobus Loots and Deon Louw attended as invitees. 2 Cobus Loots and Deon Louw attended as invitees. 3 Cobus Loots attended as an invitee. 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 committee of the board. Members of Exco include: Cobus Loots (chief executive officer); Deon Louw (financial director); Niel Symington (executive: shared services); Marileen Kok (Group finance executive); Edmond Thorne (Group mining engineer manager); Hendrik Pretorius (executive: technical services and new business); and Jonathan Irons (Group consulting metallurgist and executive accountable for tailings). BOARD COMPOSITION The board delegates the director election and appointment process to the nomination committee. The Group’s financial director, Deon Louw, has taken the decision to retire with effect from 30 September 2024 and will continue as a consultant to the Group. Marileen Kok will succeed Deon Louw as Group financial director and will be appointed to Pan African’s board of directors. The board comprises a majority of independent non-executive directors with five independent non-executive directors and two executive directors (non-independent). The executive directors are the chief executive officer and the financial director. Through an annual appraisal process, the board has concluded that it 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. The directors to retire are those who have been longest in office since their last election or re-election. Retiring directors may make themselves available for re-election if they remain eligible, as required by the constitutional documents and in compliance with the AIM Rules and the JSE Listings Requirements. Dawn Earp, Thabo Mosololi and Charles Needham will retire by rotation pursuant to the articles of association. They will again make themselves available for re-election at the November 2024 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. 57% 57% 29% 100% 100% 57% 57% 71% Environmental and sustainability Taxation Technology Leadership Business and strategy Governance and regulation Risk management Technical and operational Finance and accounting 100% 1 Percentage of directors with requisite skills. BOARD OF DIRECTORS continued Director independence 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 material business or other relationship which could 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). Independent non-executive directors 71% Executive directors 29% Diversity of age The board is responsible for implementing a retirement age of 73 for its members. In certain instances, 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. An evaluation of Keith Spencer’s suitability to serve as a director has been conducted, and the board is confident in his capacity to fulfil the role effectively, including serving as the chairman of the board. 40 to 50 years 14% 50 to 60 years 29% Above 60 years 57% Diversity of tenure 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 by the board. 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. Two to six years 43% Six to nine years 14% Above nine years 43% OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 146 147 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 2024. A conflict of interest register is maintained to ensure transparency. Currently, four of the five non-executive directors hold more than two external appointments. Refer to pages 144 and 145 for the external appointments held. The board has considered these external commitments, taking into account the time commitment required for each appointment, and is satisfied that they do not adversely impact the directors’ ability to discharge their responsibilities fully and effectively in fulfilment of their non-executive roles in the Company. As evidenced in the table on page 146, in 2024, the directors attended 95.9% 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. Diversity of gender and employment equity 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 nomination committee is the custodian of the diversity policy as it pertains to director appointment. The board has exceeded the following targets for its director representation: • 25% female • 40% HDSA. Gender (%) 2024 2023 Female Male 29 29 71 71 Historically disadvantaged South Africans (%) 2024 2023 HDSA 43 43 REMUNERATION REPORT On behalf of Remco and the board, I am pleased to present the 2024 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 2024 financial year. Directors’ and prescribed officers’ emoluments and incentives are disclosed in note 38 to the annual financial statements on pages 264 and 265. 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. It 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 are shown in the corporate governance report on page 146. 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. Barberton Mines’ BIOX® plant OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 149 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 148 Some of the key focus areas discussed during the financial year were: Focus area Discussion Setting appropriate short-term incentive (STI) parameters for the 2024 financial year Ensuring appropriate parameters are set for the upcoming financial year Remuneration adjustments and benchmarking 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 Wages negotiations Oversight and approval of the final five-year wage agreement entered into between Barberton Mines and the NUM for the Category 4 to Category 8 bargaining unit employees Maturation of Barberton Mines’ ESOP scheme The maturation of the ESOP has realised meaningful benefits for qualifying employees over its life. After a 10-year term, the scheme was destined to mature on 30 June 2024, but an early settlement of the scheme, at 31 March 2024, was negotiated with employees and unions. Qualifying employees received dividends of more than ZAR40 million during the scheme's tenor, with the final maturity benefits paid to employees during May 2024. More than 2,200 employees qualified to receive final maturity payments, with payments dependent on the number of completed years of service Other areas of focus Internal and external matters considered by Remco during the current reporting period included: • approval of the 2023 financial year STIs which were paid during the 2024 financial year • analysing market-related non-executive directors’ remuneration information provided by management and proposing non-executive directors’ remuneration aligned with industry best practice to the board for approval • approval of annual increases for senior management • together with the board, reviewing and monitoring the performance of senior executives • interaction with large institutional shareholders on their requirements in terms of the Company’s remuneration policy and implementation report and adjusting the policy and implementation report accordingly 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. INTERNAL AND EXTERNAL FACTORS IMPACTING REMUNERATION OUTCOMES In the current reporting period, management continued delivering on the board’s strategic mandate of positioning Pan African as a safe, sustainable, higher-margin gold producer. Value-adding projects completed by the incumbent management team and board during their tenure include: • Securing, funding, construction and operation of transformative surfaces assets: – BTRP – Evander Tailings Retreatment Plant – Elikhulu – MTR project • Evander Mines’ underground restructuring: – 8 Shaft pillar mining – Level 24 to 26 development • Group renewable energy initiatives: – Evander Mines’ solar plant – Barberton Mines’ solar plant. 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 thank management and all our employees for their unrelenting efforts in challenging times. We look forward to the year ahead and further progress in positioning Pan African as a sector-leading gold producer. REMUNERATION REPORT continued ENGAGEMENT WITH SHAREHOLDERS Remco engages with key shareholders on the Group’s remuneration structures. Furthermore, Remco commits to engage with major shareholders if 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 remained relatively unchanged during 2024, with 66.54% (2023: 71.53%) of votes cast being in favour of our remuneration report. The levels of support for our remuneration implementation report decreased to 50.27% (2023: 73.01%) of votes cast 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. Remco has engaged with large institutional and other shareholders on concerns in the past 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. During the current reporting period, Remco requested input from the Group’s larger institutional investors on the Group’s current remuneration policy and implementation report. We received feedback from only one of these investors on their concerns regarding the Group’s remuneration policy and implementation report. To address their concerns, improved disclosure in both the STIs and LTIs paid to executives has been implemented. Over the past years, the Group has also simplified its LTI schemes and abolished transaction incentives. We value constructive engagements and, where appropriate, have addressed concerns and implemented improvements to our remuneration policies and structures. 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. Remuneration is reviewed annually and independently benchmarked against a competitor and peer group, including South African mining and national sectors and international peers, to provide Remco with the requisite insights into the prevailing executive remuneration environment. 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 Looking forward, Remco will continue to ensure that our remuneration policies and practices are aligned with the Company’s strategic priorities and support sustainable value creation. Key focus areas include: • Market trends and best practices: Continuously monitoring and adapting to market trends and best practices to maintain a competitive and effective remuneration framework • Enhanced stakeholder engagement: Strengthening our engagement with shareholders and other stakeholders to gather feedback and ensure our remuneration practices reflect their expectations • Succession planning and talent development: Ensuring that our remuneration policies support the development and retention of key talent and alignment with our succession planning strategies. IN SUMMARY The global economic environment remains volatile, with inflationary pressures, geopolitical tensions and supply chain disruptions affecting business operations and financial performance. The competition for top talent is intense, and companies are finding it increasingly challenging to attract and retain skilled professionals. Regulative requirements across different jurisdictions are becoming increasingly complex, demanding greater transparency and accountability in remuneration practices. Stakeholders are also increasingly focused on how companies integrate ESG factors into their remuneration frameworks. Our commitment to responsible remuneration practices remains resolute. 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. In conclusion, I would like to extend my gratitude to my fellow committee members for their dedication and hard work throughout the year. We remain committed to maintaining a transparent, fair and competitive remuneration framework that supports the long- term success of the Company and aligns with the interests of our stakeholders. On behalf of Remco Yvonne Themba Chairperson of the remuneration committee 11 September 2024 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 150 151 PART TWO: REMUNERATION POLICY REMUNERATION OBJECTIVES The Group’s remuneration framework is structured to support our strategic pillars: Profitability We maintain a strong focus on profitability by being one of the highest-margin producers of gold in Southern Africa Sustainability Our sustainability is centred on creating long-term value for all stakeholders by balancing economic, environmental and social considerations Stakeholders 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 Strategic objectives KPIs 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 • Profitability • Managing senior debt and credit facilities • Cash generated by operating activities • Returns to shareholders 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 • Gold production • Capital spend • Sustaining organic production and developing expansion projects • Evander Mines’ 24, 25 and 26 Level project • Other organic growth projects • Group AISC INTELLECTUAL CAPITAL Optimise the use of technology and harness the expertise of our teams to consistently deliver safe, reliable, efficient and responsible mining operations • Optimisation initiatives • Managing and monitoring TSFs • Mintails’ funding and project execution • Mineral Resources and Mineral Reserves – implementation of the Mineware Syncromine planning and reporting system at Barberton Mines and Evander Mines HUMAN CAPITAL Attract, cultivate and retain exceptional talent while fostering a culture of safety, respect and continuous learning • Zero-harm initiatives • Injury frequency rates • 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 • Barberton Blueberries project • Community clinics and schools • Sponsorships • Curtailing illegal mining NATURAL CAPITAL Manage our operations with climate-conscious practices that preserve and protect natural resources and promote sustainability • Progress on Evander Mines’ 12MW expansion study • Successful construction of Barberton Mines’ 8.75MW solar plant • Progress on the Sturdee Energy power purchase agreement offtake arrangement • Mitigating high-risk safety and environmental issues • Conservation initiatives REMUNERATION REPORT continued ALIGNING REMUNERATION WITH 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 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 can 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 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 that attracts, retains and motivates 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 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 Objective of LTIs 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 Alignment to shareholders 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 Application of discretion 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, except for a change in the 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. SAFETY Benchmarked safety parameters to industry standards and the requirement for continuous improvement SUSTAINABILITY Management of the Group’s operations in a manner which is aligned to current ESG requirements and trends INVESTMENT Disciplined capital allocation to ensure sustaining and expansion capital expenditure that meets the Group’s investment criteria PRODUCTION Optimal extraction combined with cost control, benchmarked against relevant standards and targets COMPELLING RETURNS Generating value consistent with shareholder and other stakeholder expectations R 1 2 3 4 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 152 153 EQUITABLE AND RESPONSIBLE REMUNERATION Remco remains committed to ensuring fair remuneration across all levels of 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 relevant differentiating factors. Senior executives’ remuneration is structured to disincentivise undue risk-taking. Remco, comprising only independent non-executive directors, formulates it with an emphasis on value creation. REMUNERATION REPORT continued 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 practice 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 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, except for employees deployed in foreign countries. TOTAL GUARANTEED PAY Executive and senior management Eligibility • Exco • Operations committee (Opsco) • Management committee (Manco) • Heads of departments (HODs) Pay structure Total guaranteed pay (TGP) Key features • Pensionable salary • Leave • Pension/provident fund contributions (including life and disability cover) • Medical contributions • Travel allowance These items are included in each eligible employee’s total TGP Policy Reviewed annually against competitive industry peer market data supplied by REMchannel®. The Group generally rewards employees between the 25th percentile and market mean, 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 responsibility of the role and value contribution of the individual to the Group 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 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: Performance management Retention and attraction Short-term incentives Long-term incentives Employee growth and development Guaranteed package (including benefits) Employee remuneration components OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 154 155 VARIABLE REMUNERATION CONDITIONS Short-term incentives Framework Executive and senior management Purpose To drive and reward short- and medium-term results, reflecting the level of risk and time horizon Eligibility Exco, Opsco, Manco and HODs Payment period • Exco, Opsco and Manco are paid annually • HODs are paid quarterly Performance measures and STI opportunity Financial and non-financial parameters and metrics at a Group, subsidiary and individual/team level: • Group financial and strategic performance • Business unit (team) financial and strategic performance • 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 STI opportunity parameters (threshold, on-target and stretch parameters) Group-based KPIs Threshold: Threshold parameters for the Group-based KPIs are based on the following: • Safety: The SHEQ committee sets safety ceilings. These ceilings are absolute, so if the achieved safety rates are in excess of the ceiling, no incentive is awarded to participants • Production: The threshold level for participants is set at a 90% achievement of the board-approved budgeted gold ounce production • Costs: The threshold level for participants is set at 90% achievement of the board-approved budgeted AISC On-target: On-target parameters for the Group-based KPIs are based on the following: • Safety: The SHEQ committee sets safety ceilings. These ceilings are absolute, so if the achieved safety rates are in excess of the ceiling, no incentive is awarded to participants • Production: Participants start earning an incentive when they achieve in excess of 90% of the board- approved budgeted gold production, on a sliding scale, up to 100% achievement of the board-approved budgeted gold production • Costs: Participants start earning an incentive when they achieve in excess of 90% of the board-approved budgeted AISC, on a sliding scale, up to 100% achievement of the board-approved AISC Stretch: The Group does not set stretch targets for the safety or cost components of the Group-based KPIs 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 Personal KPIs Employees’ personal KPIs do not contain threshold, on-target or stretch parameters. These KPIs are measurable and clearly defined, and Remco has discretion on pro rata achievement should the parameter not be met in full STI gatekeepers Protect the Company from incentive payments that are unaffordable or inappropriate in the specific circumstances: • 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 REMUNERATION REPORT continued STI performance measures and maximum opportunity KPIs relate to predetermined value drivers designed to enhance shareholder value and are reviewed regularly. For details, see the remuneration framework on page 154. Position Maximum STI1 % Group-based KPIs Parameters Individual KPIs Weight % Weight % Weight % Determined by Chief executive officer 110 60 50 30 20 Gold sold per operating unit (ounces) AISC per kilogramme of gold produced per operating unit Safety record per operation Stretch targets on production per operating unit 40 Remco and the board Financial director 80 60 50 30 20 Gold sold per operating unit (ounces) AISC per kilogramme of gold produced per operating unit Safety record per operation Stretch targets on production per operating unit 40 Remco and the board Executive managers at corporate level 60 60 50 30 20 Gold sold per operating unit (ounces) AISC per kilogramme of gold produced per operating unit Safety record per operation Stretch targets on production per operating unit 40 Chief executive officer in consultation with Remco Senior managers at corporate level 50 60 50 30 20 Gold sold per operating unit (ounces) AISC per kilogramme of gold produced per operating unit Safety record per operation Stretch targets on production per operating unit 40 Chief executive officer in consultation with Remco 1 2024 maximum variable remuneration as a percentage of TGP – qualification criteria at 100% achievement. Long-term incentives PAR Gold Long-term Incentive Plan (PGLIP): • Remco has simplified the Group’s LTI plans and all senior corporate management now only participates in the PGLIP. 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 measurement conditions, dividends from PAR Gold, based on their respective shareholdings, as per the predetermined dividend formula. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 156 157 The BTRP metallurgical plant at Barberton Mines Summary of current PGLIP Details PGLIP Objectives 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 incentives 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 Instrument 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 Corporate senior managers and executive directors Vesting period Three years Performance criteria and vesting percentages • 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 in calculating the dividend qualifying formula • Once dividends have been declared and paid on these shares, PAR Gold reacquires them from the participants at their nominal value Allocation criteria Annual share allocation formula: Current TGP multiplied by the applicable industry benchmark percentage, divided by Pan African’s 90-day volume-weighted average price (VWAP) share price and multiplied by a factor of 95% Current industry benchmarked percentages used: • Chief executive officer – 130% • Financial director – 120% • Executive and senior management – 40% to 80%, depending on seniority Measurement criteria In accordance with dividend formula REMUNERATION REPORT continued Details PGLIP LTI opportunity parameters (threshold, on-target and stretch parameters) – effective from the 2025 financial year Threshold parameters – apply to all three of the measurement criteria as per the dividend formulae; no dividend is declared on a specific parameter if minimum criteria are not met On target parameters – performance as per requirements of the dividend formulae for ROSF, TSR and ESG criteria – results in 100% vesting Stretch parameters – apply only to ROSF and TSR criteria ROSF: Relative – 20%: (ROSF outperformance of peer group by an additional 15%) – resulting in stretch vesting of 150% for this parameter (50% x 20% x 150% = 15% maximum) Absolute – 80%: (ROSF outperformance of the Group’s cost of equity by an additional 10%) – resulting in stretch vesting of 150% for this parameter (50% x 80% x 150% = 60% maximum) TSR: TSR outperformance of peer group by an additional 20% – resulting in stretch vesting of 150% for this parameter (20% x 150% = 30% maximum) Note: No sliding scale applied to stretch parameters, therefore binary measurement. The maximum achievable stretch percentage would therefore be: Parameter Threshold On-target % Stretch (150% of ROSF and TSR criteria) % ROSF – relative to peer group – 10 15 ROSF – versus Group’s cost of equity – 40 60 TSR – relative to peer group – 20 30 ESG – based on deliverables – 30 30 Total – 100 135 Change of control Vesting will occur on a pro rata basis based, on lapsed time Good leaver In the event of death, disability or retirement pro rata vesting will occur Other criteria • 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 Dividend based on Pan African’s 90-day VWAP share price, on measurement date Dilution limit Non-dilutive scheme OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 159 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 158 PGLIP dividend formula criteria • ROSF – 50% weighting (calculated as average ROSF over a three-year period)1 Annual ROSF is calculated as follows: ROSF = Net profit after tax/average shareholder funds (equity and distributable reserves) over the financial year – Relative – 20% (average ROSF outperformance of peer group over a three-year period) – Absolute – 80% (ROSF equal to or higher than the Group’s cost of equity). 1 Adjusted for major projects not yet generating profits at Remco’s discretion. • TSR – 20% weighting (calculated over a three-year period) Shareholders’ returns are calculated as follows: TSR = {(closing 90-day VWAP share price – starting 90-day VWAP share price) + dividends} ÷ starting 90-day VWAP share price – Relative – 100% (average TSR outperformance of peer group over a three-year period) • ESG criteria – 30% weighting Predetermined ESG performance criteria will be set for each measurement period. Example of PGLIP – share awards and dividend formula application Information used for calculation: • Participant TGP: ZAR2,000,000 • Participant multiple based on Paterson E-upper 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 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 REMUNERATION REPORT continued 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 are 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 meeting attendance. When non-executive directors are required to spend significantly more time and effort than is normally expected 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™. Non-executive director remuneration is included in note 38 to the annual financial statements on page 264. EXCO, OPSCO AND MANCO REMUNERATION Remco is responsible for making recommendations to the board regarding the remuneration of the chief executive officer, the financial director as well as executive and senior 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 157. Remuneration comprises fixed and variable (STI and LTI) remuneration components. STIs have certain parameters, disclosed on page 156, 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 38 to the annual financial statements on page 265. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 160 161 PART THREE: REMUNERATION IMPLEMENTATION REPORT The detailed remuneration of the Group’s non-executive directors, executive directors and prescribed officers is disclosed in note 38 to the annual financial statements on pages 263 to 269. SHORT-TERM INCENTIVES – 2024 FINANCIAL YEAR Group operational performance – 2024 financial year Barberton Mines Parameter Weighting % Threshold On-target Stretch Actual achievement Safety rates – per million man hours (20% weighting) RIFR 50 >1.98 <1.98 n/a 0.57 LTIFR 50 >0.92 <0.92 n/a 0.43 Gold production – ounces (50% weighting) Underground production 38.6 69,180 76,867 80,710 71,470 BTRP 11.4 13,917 15,463 16,236 18,888 Total 50.0 83,097 92,330 96,946 90,358 AISC – ZAR/kg (30% weighting) Underground production 23.2 1,047,900 943,100 n/a 1,046,372 BTRP 6.8 620,700 558,600 n/a 389,742 Total 30.0 966,557 878,688 n/a 909,114 Evander Mines Parameter Weighting % Threshold On-target Stretch Actual achievement Safety rates – per million man hours (20% weighting) RIFR 50 >2.14 <2.14 n/a 0.45 LTIFR 50 >3.42 <3.42 n/a 1.94 Gold production – ounces (50% weighting) Underground production 15.9 36,882 40,980 43,029 40,686 Elikhulu 34.1 45,269 50,299 52,814 54,812 Total 50.0 82,151 91,279 95,843 95,498 AISC – ZAR/kg (30% weighting) Underground production 9.5 845,400 760,900 n/a 805,194 Elikhulu 20.5 698,900 629,000 n/a 627,410 Total 30.0 757,059 688,235 n/a 703,153 REMUNERATION REPORT continued Stretch production table Ounces Budget production Actual production Variance % Barberton Mines – underground and surface 76,867 71,470 93 BTRP 15,463 18,888 122 Barberton Mines total 92,330 90,358 98 Evander Mines – underground and surface 40,980 40,686 99 Elikhulu 50,299 54,812 109 Evander Mines total 91,279 95,498 105 Group total 183,609 185,856 101 EXECUTIVE DIRECTORS’ OPERATIONAL AND PERSONAL KPI ANALYSIS – 2024 FINANCIAL YEAR Personal KPI analysis Chief executive officer For the 2024 financial year, the chief executive officer’s personal KPI was calculated as the average achievement of the senior management at corporate level. For the 2024 financial year, the senior management at corporate level achieved an average of 95.38% for their personal KPIs, which was applied to the chief executive officer’s maximum possible achievement, resulting in a personal KPI percentage of 41.97% (maximum possible – 44%). The KPIs of the senior management at corporate level include the following: • Progressing the MTR plant construction on schedule and within budget • Successfully finalising the Group’s renewable energy funding strategy • Progressing Evander Mines’ ventilation shaft equipping and refrigeration upgrade • Completion of Barberton Mines’ solar plant construction • Successful implementation of a new ERP system across the Group. Financial director Key performance area Key performance indicator Weighting % Actual achievement evidence TGP % achieved Total TGP % achieved Finalising Group renewable energy plant funding Funding closed in the second half of the 2024 financial year 25.0 The facility was closed in June 2024 and is fully drawn down 8.0 32.0 Ongoing funding availability for the MTR project and its construction execution Requisite funding, as required by the project 25.0 Funding was available for the full financial year with adequate liquidity to complete the project at all times 8.0 Developing skills and continuity within the finance functions Maturity and proficiency of finance staff 25.0 The finance function is performing well, and the mentoring of the new financial director has been completed 8.0 Ongoing improvements to the integrated annual report Industry recognition 25.0 Integrated annual report award for 2023 report – ongoing improvements are being made to the integrated annual report 8.0 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 162 163 Operational KPI analysis – 2024 financial year Barberton Mines (44% weighting towards total operational KPI)2 Chief executive officer Financial director Parameter Weighting % Actual achieve- ment Actual % of STI Maximum possible % of STI Actual achieve- ment Actual % of STI Maximum possible % of STI Safety – per million man hours (20% weighting of the total 44% weighting of Barberton Mines) RIFR 50 0.57 2.88 2.88 0.57 2.10 2.10 LTIFR 50 0.43 1.44 2.88 0.43 1.05 2.10 Gold production – ounces (50% weighting of the total 44% weighting of Barberton Mines) Underground production 38.6 71,470 3.12 11.13 71,470 2.27 8.10 BTRP 11.4 18,888 3.27 3.27 18,888 2.38 2.38 Total 50.0 90,358 6.39 14.40 90,358 4.65 10.48 AISC – ZAR/kg (30% weighting of the total 44% weighting of Barberton Mines) Underground production 23.2 1,046,372 0.00 6.68 1,046,372 0.00 4.86 BTRP 6.8 389,742 1.96 1.96 389,742 1.43 1.43 Total 30.0 909,114 1.96 8.64 909,114 1.43 6.29 Total production parameter STI 12.67 28.80 9.23 20.97 Production stretch1 1.00 5.80 0.70 4.20 Total production parameter STI including stretch achievement 13.67 34.60 9.93 25.17 1 Stretch production parameter. 2 Based on operations’ budgeted weighted contribution to Group profit after tax. REMUNERATION REPORT continued Evander Mines (56% weighting towards total operational KPI)2 Chief executive officer Financial director Parameter Weighting % Actual achieve- ment Actual % of STI Maximum possible % of STI Actual achieve- ment Actual % of STI Maximum possible % of STI Safety – per million man hours (20% weighting of the total 56% weighting of Evander Mines) RIFR 50 0.45 3.72 3.72 0.45 2.70 2.70 LTIFR 50 1.94 3.72 3.72 1.94 2.70 2.70 Gold production – ounces (50% weighting of the total 56% weighting of Evander Mines) Underground production 15.9 40,686 5.38 5.92 40,686 3.92 4.30 Elikhulu 34.1 54,812 12.68 12.68 54,812 9.22 9.22 Total 50.0 95,498 18.06 18.60 95,498 13.14 13.52 AISC – ZAR/kg (30% weighting of the total 56% weighting of Evander Mines) Underground production 9.5 805,194 1.55 3.55 805,194 1.13 2.58 Elikhulu 20.5 627,410 7.61 7.61 627,410 5.53 5.53 Total 30.0 703,153 9.16 11.16 703,153 6.66 8.11 Total production parameter STI 34.66 37.20 25.40 27.03 Production stretch1 4.10 7.40 3.00 5.40 Total production parameter STI including stretch achievement 38.76 44.60 28.40 32.43 Total production KPI achievement (Barberton Mines and Evander Mines) 52.43 79.20 38.30 57.60 Total personal KPI achievement 41.97 44.00 32.00 32.00 Total STI 2024 financial year 94.36 123.20 70.11 89.60 1 Stretch production parameter. 2 Based on operations’ budgeted weighted contribution to Group profit after tax. Stretch performance (performance above 100% of target) = stretch percentage on a linear sliding scale from 100% achievement onwards, limited to a maximum additional percentage of 5% above on-target performance percentage (i.e. limited to 105% of target performance). Performance above 100% of target will be multiplied by a factor, as per the table below, up to a maximum achievable percentage of 140% of the gold production parameter. Gold production stretch % achieved Factor applied to 100% achievement Adjusted gold production % 101 1.08 108.0 102 1.16 116.0 103 1.24 124.0 104 1.32 132.0 105 1.40 140.0 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 164 165 Therefore, for a 5% outperformance of production targets, the chief executive officer could earn an additional 13.2% of his TGP, and the financial director could earn an additional 9.6% of his TGP as per the table below. Production parameter split % % of TGP at on-target performance % of TGP at maximum stretch performance (140%) Maximum achievable STI % (140% of production) Variance % Chief executive officer (Production KPIs = 60% of 110%) Production 50 33.0 46.2 46.2 13.2 Cost 30 19.8 19.8 19.8 – Safety 20 13.2 13.2 13.2 – Financial director (Production KPIs = 60% of 80%) Production 50 24.0 33.6 33.6 9.6 Cost 30 14.4 14.4 14.4 – Safety 20 9.6 9.6 9.6 – Should maximum stretch production be achieved at all business units, the chief executive officer could receive a maximum of 123.2% compared to 110% for on-target performance, and the financial director a maximum of 89.6% compared to 80% for on-target performance. Stretch achievements are weighted based on the specific business unit’s performance versus the total budgeted performance for each operating company within the Group. The detailed stretch parameter achievement for the chief executive officer and financial director can be seen in the tables below. Chief executive officer – 2024 financial year Ounces Budget production Actual production Variance % Achieve- ment % Weighted allocation % Barberton Mines – underground and surface 76,867 71,470 93 0.0 0.0 BTRP 15,463 18,888 122 13.2 1.0 Barberton Mines total 92,330 90,358 98 1.0 Evander Mines – underground and surface 40,980 40,686 99 0.0 0.0 Elikhulu 50,299 54,812 109 13.2 4.1 Evander Mines total 91,279 95,498 105 4.1 Group total 183,609 185,856 101 5.1 Financial director – 2024 financial year Ounces Budget production Actual production Variance % Achieve- ment % Weighted allocation % Barberton Mines – underground and surface 76,867 71,470 93 0.0 0.0 BTRP 15,463 18,888 122 9.6 0.7 Barberton Mines total 92,330 90,358 98 0.7 Evander Mines – underground and surface 40,980 40,686 99 0.0 0.0 Elikhulu 50,299 54,812 109 9.6 3.0 Evander Mines total 91,279 95,498 105 3.0 Group total 183,609 185,856 101 3.7 Conclusion The chief executive officer qualified for a 2024 financial year STI incentive equal to 94.36% of his TGP, equal to ZAR7,436,127, which will be paid in the 2025 financial year. The financial director qualified for a 2024 financial year STI incentive equal to 70.11% of his TGP, equal to ZAR4,907,508, which will be paid in the 2025 financial year. REMUNERATION REPORT continued SHORT-TERM INCENTIVES – 2023 FINANCIAL YEAR Group operational performance – 2023 financial year Barberton Mines Parameter Weighting % Threshold On-target Stretch Actual achievement Safety rates – per million man hours (20% weighting) RIFR 50 >0.36 <0.37 n/a 0.27 LTIFR 50 >1.07 <1.07 n/a 1.26 Gold production – ounces (50% weighting) Underground production 40.5 74,972 83,302 87,467 64,586 BTRP 9.5 16,168 17,965 18,863 19,875 Total 50.0 91,140 101,267 106,330 84,461 AISC – ZAR/kg (30% weighting) Underground production 24.3 905,900 815,300 n/a 1,027,213 BTRP 5.7 559,100 503,200 n/a 408,916 Total 30.0 835,922 759,929 n/a 881,719 Evander Mines Parameter Weighting % Threshold On-target Stretch Actual achievement Safety rates – per million man hours (20% weighting) RIFR 50 >1.21 <1.21 n/a 1.89 LTIFR 50 >2.22 <2.22 n/a 3.09 Gold production – ounces (50% weighting) Underground production 20.6 39,758 44,175 46,384 40,175 Elikhulu 29.4 45,242 50,269 52,782 50,573 Total 50.0 85,027 94,444 99,166 90,748 AISC – ZAR/kg (30% weighting) Underground production 12.3 897,600 807,900 n/a 863,359 Elikhulu 17.7 552,300 497,100 n/a 530,083 Total 30.0 828,020 752,745 n/a 703,153 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 166 167 Stretch production table Ounces Budget production Actual production Variance % Barberton Mines – underground and surface 83,302 64,586 78 BTRP 17,965 19,875 111 Barberton Mines total 101,267 84,461 83 Evander Mines – underground and surface 42,793 40,175 94 Elikhulu 50,269 50,573 101 Evander Mines total 93,062 90,748 98 Group total 194,329 175,209 90 EXECUTIVE DIRECTORS’ OPERATIONAL AND PERSONAL KPI ANALYSIS – 2023 FINANCIAL YEAR Personal KPI analysis Chief executive officer Key performance area Key performance indicator Weighting % Actual achievement evidence TGP % achieved Total TGP % achieved Renewable energy funding strategy Establish a funding strategy for the Group’s renewable energy projects to ensure sufficient and reasonably priced funding for future projects 16.7 Proposals were received from various parties to refinance Evander Mines’ solar plant and to fund the construction of Barberton Mines’ solar plant, also allowing for funding of future projects under the newly established structure 7.3 44 USA shareholding in Pan African Increase in shareholding by USA institutions/funds 16.7 Increase in institutional shareholding by USA funds from 2.90% at the beginning of 2022 to 5.84% in June 2023 and an increase of 100%. Shareholding by USA retail shareholders is not disclosed in share registers, which would further increase the percentage USA holdings 7.3 Stakeholder and community engagement advisory role, peer group benchmarking and monitoring Reputation management, community and employee relations, ongoing peer group analysis 16.7 Rebuttal of allegations from Carte Blanche (episode not aired), roll-out of employee smartphone app, community engagement strategy at Barberton Mines and the MTR project, regular updates to the chairman and board on market and peer information 7.3 Domestic medium- term note (DMTN) debt programme – inaugural issuance Successful inaugural issuance under the DMTN programme as partial funding for the MTR project 16.7 First mining company in South Africa to issue a sustainability-linked bond. The inaugural issuance was oversubscribed and issued within price guidance 7.3 MTR project Finalise all permitting by 30 June 2023 16.7 Environmental authorisation was finalised on 22 June 2023 7.3 Barberton Mines continuous operations Successful implementation of continuous operations by March 2023 16.7 Continuous operation was implemented by 6 February 2023, ahead of the expected 1 March 2023 completion date. Results evident from March 2023 production month 7.3 REMUNERATION REPORT continued Financial director Key performance area Key performance indicator Weighting % Actual achievement evidence TGP % achieved Total TGP % achieved DMTN debt programme – inaugural issuance Successful inaugural issuance under the DMTN programme as partial funding for the MTR project 25 First mining company in South Africa to issue a sustainability-linked bond. Inaugural issuance oversubscribed and issued within price guidance 100 32.0 MTR project funding package – debt facility and funding of Pan African’s contribution Secure funding package for the MTR project consisting of a debt facility and alternative funding option for Pan African’s contribution 25 Debt facility secured and financial close achieved. Assisted the chief executive officer with the synthetic forward structure to fund Pan African’s contribution in order to complete the funding package 100 Renewable energy funding strategy Establish a funding strategy for the Group’s renewable energy projects to ensure sufficient and reasonably priced funding for future projects 25 Proposals were received from various parties to refinance Evander Mines’ solar plant and to fund the construction of Barberton Mines’ solar plant, also allowing for funding of future projects under the newly established structure 100 Integration and strengthening of Group administration function and compliance with all regulatory and other requirements (ongoing key performance area) Review of Group control environment (where deficiencies have been noted by internal audit and through other means) and implementation of remedial action plans and improvements. Ensuring that all regulatory and other requirements are met 25 Improvements noted in internal audit reports 100 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 168 169 Operational KPI analysis – 2023 financial year Barberton Mines (42% weighting towards total operational KPI)2 Chief executive officer Financial director Parameter Weighting % Actual achieve- ment Actual % of STI Maximum possible % of STI Actual achieve- ment Actual % of STI Maximum possible % of STI Safety – per million man hours (20% weighting of the total 42% weighting of Barberton Mines) RIFR 50 0.27 2.79 2.79 0.27 2.03 2.03 LTIFR 50 1.26 0.00 2.79 1.26 0.00 2.03 Gold production – ounces (50% weighting of the total 42% weighting of Barberton Mines) Underground production 40.5 64,586 0.00 11.33 64,586oz 0.00 8.24 BTRP 9.5 19,875 2.64 2.64 19,875oz 1.92 1.92 Total 50.0 84,461 2.64 13.97 84,461oz 1.92 10.16 AISC – ZAR/kg (30% weighting of the total 42% weighting of Barberton Mines) Underground production 24.3 1,027,213 0.00 6.80 1,027,213 0.00 4.94 BTRP 5.7 408,916 1.59 1.59 408,916 1.15 1.15 Total 30.0 881,719 1.59 8.39 881,719 1.15 6.09 Total production parameter STI 7.02 27.94 5.10 20.31 Production stretch1 1.00 5.60 0.70 4.00 Total production parameter STI including stretch achievement 8.02 33.54 5.80 24.31 1 Stretch production parameter. 2 Based on operations’ budgeted weighted contribution to Group profit after tax. REMUNERATION REPORT continued Evander Mines (58% weighting towards total operational KPI)2 Chief executive officer Financial director Parameter Weighting % Actual achieve- ment Actual % of STI Maximum possible % of STI Actual achieve- ment Actual % of STI Maximum possible % of STI Safety – per million man hours (20% weighting of the total 58% weighting of Evander Mines) RIFR 50 1.89 0.00 3.81 1.89 0.00 2.77 LTIFR 50 3.09 0.00 3.81 3.09 0.00 2.77 Gold production – ounces (50% weighting of the total 58% weighting of Evander Mines) Underground production 20.6 40,175 0.87 11.20 40,175oz 0.63 8.15 Elikhulu 29.4 50,573 7.83 7.83 50,573oz 5.69 5.69 Total 50.0 90,748 8.70 19.03 90,748oz 6.32 13.84 AISC – ZAR/kg (30% weighting of the total 58% weighting of Evander Mines) Underground production 12.3 863,359 2.34 6.72 863,359 1.70 4.89 Elikhulu 17.7 530,083 1.63 4.70 530,083 1.19 3.41 Total 30.0 677,655 3.97 11.42 677,655 2.89 8.30 Total production parameter STI 12.67 38.07 9.21 27.61 Production stretch1 0.80 7.60 0.60 5.50 Total production parameter STI including stretch achievement 13.47 45.67 9.81 33.11 Total production KPI achievement (Barberton Mines and Evander Mines) 21.49 79.20 15.60 57.60 Total personal KPI achievement 44.00 44.00 32.00 32.00 Total STI 2023 financial year 65.49 123.20 47.61 89.60 1 Stretch production parameter. 2 Based on operations’ budgeted weighted contribution to Group profit after tax. Stretch performance (performance above 100% of target) = stretch percentage on a linear sliding scale from 100% achievement onwards, limited to a maximum additional percentage of 5% in excess of on-target performance percentage (i.e. limited to 105% of target performance). Performance in excess of 100% of target will be multiplied by a factor, as per the table below, up to a maximum achievable percentage of 140% of the gold production parameter. Gold production stretch % achieved Factor applied to 100% achievement Adjusted gold production % 101 1.08 108.0 102 1.16 116.0 103 1.24 124.0 104 1.32 132.0 105 1.40 140.0 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 170 171 View from Elikhulu towards the Leslie/Bracken remining site Therefore, for a 5% outperformance of production targets, the chief executive officer could earn an additional 13.2% of his TGP, and the financial director could earn an additional 9.6% of his TGP as per the table below. Production parameter split % % of TGP at on-target performance % of TGP at maximum stretch performance Maximum achievable STI % (140% of production) Variance % Chief executive officer Production 50 33.0 46.2 46.2 13.2 Cost 30 19.8 19.8 19.8 – Safety 20 13.2 13.2 13.2 – Financial director Production 50 24.0 33.6 33.6 9.6 Cost 30 14.4 14.4 14.4 – Safety 20 9.6 9.6 9.6 – The chief executive officer could receive a maximum of 123.2% compared to 110%, for on-target performance and the financial director a maximum of 89.6% compared to 80% for on-target performance. Stretch achievements are weighted based on the specific business unit’s performance compared to the total budgeted performance for each operating company within the Group. The detailed stretch parameter achievement for the chief executive officer and the financial director is disclosed in the tables below. Chief executive director – 2023 financial year Ounces Budget production Actual production Variance % Achieve- ment % Weighted allocation % Barberton Mines – underground and surface 83,302 64,586 78 0.0 0.0 BTRP 17,965 19,875 111 13.2 1.0 Barberton Mines total 101,267 84,461 83 1.0 Evander Mines – underground and surface 42,793 40,175 94 0.0 0.0 Elikhulu 50,269 50,573 101 2.6 0.8 Evander Mines total 93,062 90,748 98 0.8 Group total 194,329 175,209 90 1.80 REMUNERATION REPORT continued Conclusion The chief executive officer qualified for a 2023 financial year STI incentive equal to 65.49% of his TGP, equal to ZAR4,855,991 (US$259,540), which was paid in the 2024 financial year. The financial director qualified for a 2023 financial year STI incentive equal to 47.61% of his TGP, equal to ZAR3,134,402 (US$167,525), which was paid in the 2024 financial year. EXECUTIVE DIRECTORS’ LTI ANALYSIS – 2024 FINANCIAL YEAR Peer group used to benchmark LTI performance During 2022, Remco requested that six analysts/investors who cover Pan African provide the Company with their independent peer group benchmarking information to enable the committee to identify the peer companies against which these analysts/investors benchmark Pan African. The analysts who provided Remco with their independent peer groups were: • Berenberg • BMO • Edison • Investec • Nedbank • Peel Hunt. Based on the results received from the investors/analysts, Remco approved a peer group of 21 companies consisting South African and international gold companies, as proxies for investing in gold mining companies. The peer group is: South African No. Company name 1 Goldfields 2 Harmony Gold 3 DRD Gold 4 Sibanye Stillwater International No. Company name 1 AngloGold Ashanti 2 Centamin 3 Endeavour 4 Resolute Mining 5 B2Gold 6 Caledonia Mining 7 Galiano Gold 8 Hochschild 9 Hummingbird Resources 10 Perseus Mining 11 West African Resources 12 Dundee Precious 13 Iamgold 14 New Gold 15 OceanaGold 16 Thor Explorations 17 Wesdome Gold Mines Financial director – 2023 financial year Ounces Budget production Actual production Variance % Achieve- ment % Weighted allocation % Barberton Mines – underground and surface 83,302 64,586 78 0.0 0.0 BTRP 17,965 19,875 111 9.6 0.7 Barberton Mines total 101,267 84,461 83 0.7 Evander Mines – underground and surface 42,793 40,175 94 0.0 0.0 Elikhulu 50,269 50,573 101 1.9 0.6 Evander Mines total 93,062 90,748 98 0.6 Group total 194,329 175,209 90 1.30 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION 173 172 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 REMUNERATION REPORT continued PGLIP D SHARES DIVIDEND CRITERIA (MEASUREMENT DATE – 30 JUNE 2023, PAID IN JULY 2023) • 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 – Relative – 20% (average ROSF outperformance of peer group over a three-year period) Management requested that Peel Hunt (LSE—AIM nominated adviser and broker) calculate Pan African’s ROSF compared to the Remco-approved peer group. Pan African ROSF Average peer group ROSF Measurement criteria achieved 24% 8% 100% Participants, therefore, qualified for 100% of this portion of the LTI. – Absolute – 80% (ROSF equal to or higher than the Group’s cost of equity) Using BDO’s calculated annual cost of equity (per operation, to provide for specific project/operational risk), as a basis for the preceding three financial years, the Group’s weighted average cost of equity for each of the preceding three years was calculated. Remco then used this average cost of equity for each of the preceding three years to calculate an arithmetic three-year average cost of equity for the Pan African Group. This benchmark cost of equity rate is then compared to the three-year average ROSF actually earned by the Group over this period. Pan African ROSF Group average cost of equity Measurement criteria achieved 24.2% 18.5% 100% Participants, therefore, qualified for 100% of this portion of the LTI. • TSR – 20% weighting (calculated over a three-year period) Shareholders’ returns are calculated as follows: TSR = {(closing 90-day VWAP share price – starting 90-day VWAP share price) + dividends} ÷ starting 90-day VWAP share price – Relative – 100% (average TSR outperformance compared to the peer group, over a three-year period) Management requested both Peel Hunt (LSE—AIM nominated adviser and broker) and Questco (JSE sponsor) to calculate Pan African’s TSR relative to the peer group. Pan African TSR Average peer group TSR Measurement criteria achieved 43% 14% 100% Participants, therefore, qualified for 100% of this portion of the LTI. • ESG criteria – 30% weighting ESG criteria for the 2023 financial year – conditional PGLIP D shares vesting: ESG PERFORMANCE SCORECARD 2023 No. Project Category Progress Comments Progress 1 Successful commissioning of Evander Mines’ water treatment plant with operational performance in line with the feasibility study Environmental Project was commissioned in March 2023 and reached steady-state production in May 2023, consistent with the production capacity detailed in the feasibility study Successful commissioning of Evander Mines’ water treatment plant with operational performance consistent with the feasibility study 2 Commencement of construction of Barberton Mines’ solar plant by June 2023 Environmental Final approval of engineering, procurement and construction (EPC) agreement completed in March 2023, and board approval on 6 April 2023, with construction commencing in June 2023 Construction of Barberton Mines’ solar plant commenced by June 2023 3 Feasibility study on agri-solar projects for Evander Mines’ and Barberton Mines’ plants Social Feasibility study was completed in May 2023 Feasibility study on agri-solar projects for Evander Mines’ and Barberton Mines’ solar plants 4 Successful handover of the Ngwane and Sheba (formerly Kaapvallei) Schools to the Department of Basic Education by Barberton Mines Social Ngwane phase 3 – 100% completed and handed over in June 2023 Sheba phase 3 – 100% completed and handed over in June 2023 Successful handover of the Ngwane and Sheba Schools to the Department of Basic Education by Barberton Mines 5 Addressing gaps identified in the PwC Inc. ESG readiness review report 2022 Governance PwC Inc. recommendations on addressing the ESG assurance gaps were implemented in 2023 Addressing gaps identified in the PwC Inc. ESG readiness review report 2022 6 TCFD report 2023 Governance, environmental TCFD report 2023 completed and released in September 2023 Issuing of initial TCFD report 2023 7 Climate change targets for 2030 as per the RMB Sustainability Bond Performance Targets Environmental, social Climate change target – renewable energy mix of 5% achieved for the 2023 year Climate change targets for 2030 as per the RMB Sustainability Bond Performance Targets 8 Appoint an ITRB consisting of members from independent, credible tailings companies as per the GISTM requirements Governance The ITRB was appointed in 2023 Appointed an ITRB consisting of members from independent, credible tailings companies as per the GISTM requirements 9 Commission 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 Governance Compliance audit completed in 2023 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 At 30 June 2023, all of the above-mentioned ESG measurement criteria were fulfilled. Therefore, the participants achieved 100% of the measurement criteria for this portion of the LTI. Conclusion This summary demonstrates that Pan African achieved 100% of the measurement criteria (ROSF – 50%, TSR – 20%, ESG – 30%). Progress Achieved Not achieved OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 174 175 REMUNERATION REPORT continued PGLIP D SHARE DIVIDEND CALCULATION Based on the previous assessment of the qualifying criteria for the PGLIP D shares dividend, the following calculation was approved by Remco: (PAR Gold shares x Pan African closing 90-day VWAP1) x percentage of dividend calculation criteria achieved = possible dividend Therefore: 1 share x (ZAR3.601 x 100%) = ZAR3.60 per share 1 Based on Pan African’s 90-day VWAP share price, as independently calculated by Questco Corporate Advisory. Therefore, the participants qualify for a dividend of ZAR3.60 per share, before withholding taxation, based on the fulfilment of the conditions pertinent to the dividend calculation. Dividend calculation formula result for PGLIP D shares: Employee PGLIP D shares Dividend per share1 Pre-tax dividend Post-tax dividend1 Cobus Loots 2,848,556 ZAR3.60 ZAR10,254,802 ZAR8,203,841 Deon Louw 2,335,468 ZAR3.60 ZAR8,407,685 ZAR6,726,148 Total 5,184,024 ZAR18,662,487 ZAR14,929,989 1 Paid during the 2024 financial year. PGLIP E SHARES DIVIDEND CRITERIA (MEASUREMENT DATE – 30 JUNE 2024, PAID IN JULY 2024) • 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 – Relative – 20% (average ROSF outperformance of peer group over a three-year period) Management requested that Peel Hunt (LSE—AIM nominated adviser and broker) calculate Pan African’s ROSF compared to the Remco-approved peer group. Pan African ROSF Average peer group ROSF Measurement criteria achieved 22% 6% 100% Participants, therefore, qualified for 100% of this portion of the LTI. – Absolute – 80% (ROSF equal to or higher than the Group’s cost of equity) Using BDO’s calculated annual cost of equity (per operation, to provide for specific project/operational risk), the Group’s weighted average cost of equity for each of the preceding three years was calculated. Remco then used this average cost of equity for each of the preceding three years to calculate an arithmetic three-year average cost of equity for the Pan African Group. This benchmark cost of equity rate is then compared to the three-year average ROSF actually earned by the Group over this period. Pan African ROSF Group average cost of equity Measurement criteria achieved 22% 18.3% 100% Participants, therefore, qualified for 100% of this portion of the LTI. • TSR – 20% weighting (calculated over a three-year period) Shareholders’ returns are calculated as follows: TSR = {(closing 90-day VWAP share price – starting 90-day VWAP share price) + dividends} ÷ starting 90-day VWAP share price – Absolute – 100% (average TSR outperformance compared to the peer group over a three-year period) Management requested both Peel Hunt (LSE—AIM nominated adviser and broker) and Questco (JSE sponsor) to calculate Pan African’s TSR versus a relative peer group. Pan African TSR Average peer group TSR Measurement criteria achieved 35% 13% 100% Participants, therefore, qualified for 100% of this portion of the LTI. • ESG criteria – 30% weighting ESG criteria for the 2024 financial year – conditional PGLIP E shares vesting: ESG PERFORMANCE SCORECARD 2024 No. Project Category Progress Comments Progress 1 Barberton Mines’ solar plant producing first power by June 2024 the MTR project Environmental The Group’s decarbonisation strategy is aligned with the SBLF framework of 15% renewable energy mix by 2027 Mechanical commissioning on target. First power and grid connection forecast during July 2024 2 Achieving the land in the process of rehabilitation targets for the MTR project as per the RMB Sustainability Bond Performance Targets for 2024 Environmental The MTR project to achieve land in the process of rehabilitation of 8% for 2024 as detailed in the SBLF framework The MTR project achieved a total of 122.3ha or 9.4% of the land in the process of rehabilitation 3 Commence construction of the Sturdee Energy power purchase agreement Bela-Bela solar plant by June 2024 Environmental The Group’s decarbonisation strategy for a 30% renewable energy mix by 2030 Power purchase agreement concluded successfully 4 Construction and commissioning of the arsenic treatment plant at the Fairview BIOX® plant by June 2024 Environmental Barberton Mines’ land rehabilitation strategy to reduce the environmental impact of on- site pollutants Plant was commissioned and is operating successfully 5 Achieving the safety targets for the Group’s TRIFR, as per the RMB Sustainability Bond Performance Targets, for 2024 Social Achieving a Group TRIFR of 8.50% for 2024 Group TRIFR recorded at 6.52% thereby achieving the 2024 target 6 Successful handover of science and technology laboratory schools to the Department of Basic Education by Evander Mines by June 2024 Social Implementation of Evander Mines’ SLP 2023, for compliance with social licence to operate Handover of both projects in November 2023 7 Implementation of a formal health and wellness programme at Barberton Mines – phase 1 Social Wellness programmes, with specific emphasis on: KPI 1 – Human resources: Awareness and education on lifestyle diseases in 40% of the workforce. KPI 2 – Social: Increase the number of physically active employees from the baseline number by 25% by promoting the sporting codes of soccer, running and aerobics KPI 1 – 40% achieved KPI 2 – 25% achieved 8 PwC Inc. assurance certificate for 16 KPIs in sustainable development report 2024 disclosures Governance Corporate governance in ESG reporting 16 ESG disclosures were planned for assurance, for which limited assurance has been provided 9 Scheduling the GISTM recommendations with the implementation of high-risk findings from the TSF audit report Governance Tailings management safety and compliance No high-risk outstanding items, identified from the review of the Group’s TSFs are at risk of failure – the Group is following GISTM principle 4.7 At 30 June 2024, only seven of the nine above-mentioned ESG measurement criteria were fulfilled, resulting in the participants only achieving 77.8% of this portion of the LTI. Conclusion This summary demonstrates that Pan African achieved 93.33% of the measurement criteria (ROSF – 50%, TSR – 20%, ESG – 23.33%). Progress Achieved Not achieved OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 176 177 PGLIP E SHARE DIVIDEND CALCULATION Based on the previous assessment of the qualifying criteria for the PGLIP E shares dividend, the following calculation was approved by Remco: (PAR Gold shares x Pan African closing 90-day VWAP1) x percentage of dividend calculation criteria achieved = possible dividend Therefore: 1 share x (ZAR5.471 x 93.33%) = ZAR5.11 per share 1 Based on Pan African’s 90-day VWAP share price, as independently calculated by Questco Corporate Advisory. Therefore, the participants qualify for a dividend of ZAR5.11 per share, before withholding taxation, based on the fulfilment of the conditions pertinent to the dividend calculation. Dividend calculation formula result for PGLIP E shares: Employee PGLIP E shares Dividend per share1 Pre-tax dividend Post-tax dividend1 Cobus Loots 2,337,972 ZAR5.11 ZAR11,947,037 ZAR9,557,630 Deon Louw 1,916,851 ZAR5.11 ZAR9,795,109 ZAR7,836,087 Total 4,254,823 ZAR21,742,146 ZAR17,393,717 * Paid during the 2025 financial year. LOOKING FORWARD PGLIP F shares dividend criteria (Measurement date – 30 June 2025) • ROSF – 50% weighting (calculated as average ROSF over a three-year period)1 Annual ROSF is calculated as follows: ROSF = Net profit after tax/average shareholder funds (equity and distributable reserves) over the financial year – Relative – 20% (average ROSF outperformance of peer group over a three-year period) – Absolute – 80% (ROSF equal to or higher than the Group’s cost of equity). 1 Adjusted for major projects not yet generating profits at Remco’s discretion. • TSR – 20% weighting (calculated over a three-year period) Shareholders’ returns are calculated as follows: TSR = {(closing 90-day VWAP share price – starting 90-day VWAP share price) + dividends} ÷ starting 90-day VWAP share price – Relative – 100% (average TSR outperformance of peer group over a three-year period) REMUNERATION REPORT continued • ESG criteria – 30% weighting Predetermined ESG performance criteria established by Remco for each measurement period. ESG criteria for the 2025 financial year – conditional PGLIP F shares vesting: No. Project Category Details 1 Commence construction on phase 2 of Evander Mines’, water treatment plant by June 2025 Environmental Water stewardship is achieved through the sustainable and efficient utilisation of water resources for operations and the environment. 2 Achieving the land rehabilitation targets for the MTR project as per the sustainability bond performance targets Environmental Target – 102ha for 2025 from a baseline of 0ha in 2023 The MTR project is to achieve land rehabilitation of 16% by 2025, as detailed in the SBLF framework 3 Completion of the feasibility studies for the MTR project and Evander Mines’ phase 2 solar projects. Selection of an EPC contractor. Board decision for the advancement of at least one of the solar projects by June 2025 Environmental The Group’s decarbonisation strategy is aligned to the SBLF framework of 15% renewable energy mix by 2027 4 Achieve the Group’s renewable energy mix penalty threshold level of 5% for 2025 as per the RMB Sustainability Bond performance targets Environmental Implementation of the Group’s renewable energy solar projects to meet the renewable energy mix of 15% by 2027 5 Achieving the safety targets for the Group’s TRIFR as per the RMB Sustainability Bond Performance Targets for 2025 Social Achieving a Group TRIFR of 7.75% for 2025 from a baseline of 8.95% in 2022 6 Submission of SLPs from Barberton Mines, Evander Mines and the MTR project operations to the DMRE, including consultation with relevant stakeholders Social Social licence to operate and sustainable development initiatives for communities and stakeholders 7 Implementation of a formal health and wellness programme at Barberton Mines, Evander Mines and the MTR project – phase 2 Social KPI 1 – Human resources: Awareness of and education on lifestyle diseases for at least 50% of the workforce KPI 2 – Social: Increase the number of physically active employees from the baseline number by 10% by promoting the sporting codes of soccer, running and others KPI 3 – Health: Create baseline data to identify employees with multiple co- morbidities that impact employee wellness and productivity and implement initiatives to manage these conditions 8 Successful implementation of the Equator Principles action plan by June 2025 for RMB funding requirements Governance Environmental compliance reporting requirements for RMB 9 Successful implementation of the remediation action plan for the Soweto Cluster for 2025 Governance Tailings and environmental remediation for managing and mitigating ESG reputation risk OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 178 179 PGLIP G SHARES DIVIDEND CRITERIA (MEASUREMENT DATE – 30 JUNE 2026) • ROSF – 50% weighting (calculated as average ROSF over a three-year period)1 Annual ROSF is calculated as follows: ROSF = Net profit after tax/average shareholder funds (equity and distributable reserves) over the financial year – Relative – 20% (average ROSF outperformance of peer group over a three-year period) – Absolute – 80% (ROSF equal to or higher than the Group’s cost of equity). 1 Adjusted for major projects not yet generating profits at Remco’s discretion. • TSR – 20% weighting (calculated over a three-year period) Shareholders’ returns are calculated as follows: TSR = {(closing 90-day VWAP share price – starting 90-day VWAP share price) + dividends} ÷ starting 90-day VWAP share price – Relative – 100% (average TSR outperformance of peer group over a three-year period) • ESG criteria – 30% weighting As per predetermined ESG performance criteria established by Remco for each measurement period. PGLIP H SHARES DIVIDEND CRITERIA (MEASUREMENT DATE – 2025 FINANCIAL YEAR) Subject to the recommendation of Remco, the board approved an additional once-off tranche under the PGLIP for the successful completion of the MTR project. Measurement in the 2025 financial year. Measurement criteria for this tranche are as follows: Deliverable Measurement Weighting % Commissioning the MTR project on schedule Fully commissioned by no later than 28 February 2025, independently confirmed by the senior debt banker’s technical advisers (The Minerals Corporation (TMC)) 30 Commissioned the MTR project within the approved capital budget Commissioned at or below ZAR2.503 billion (taking into account expenditure provided for in the original base case financial model but not expenditure of a preliminary nature, such as acquisition and establishment costs, excluded from the original base case financial model). The maximum weighting of 60% is achieved if the project is delivered at ZAR100 million or more below the approved capital budget of ZAR2.503 billion Up to 60 The MTR project performing in line with bankable feasibility study (BFS) Tonnage throughput – plant to achieve 90% of designed nameplate throughput capacity (in ktpm) at steady-state (within any three-month continuous period within six months of the base case threshold tests (BCTT) inception date) 10 Safety • TIFR =/<8.0 per million man hours (33.33% weighting) • LTIFR =/<3.0 per million man hours (33.33% weighting) • RIFR =/<1.0 per million man hours (33.33% weighting) 10 Cash cost per kilogramme (as per RCF agreement definition) In line with BFS, taking into account inflationary increases from the base date of the BFS 10 Grade, recoveries and gold Recoveries, grade and gold production – >85% reconciliation of gold produced to mine planning model, over the three-month BCTT period in accordance with BCTT parameters of the senior debt financing, as determined by TMC 10 Total Up to 130 Based on the measurement criteria above, Remco will propose a final dividend to the board for approval once the project has been fully commissioned. REMUNERATION REPORT continued EXECUTIVE DIRECTORS’ REMUNERATION DISCLOSURE Executive directors’ remuneration* US$ thousand Basic remuneration Allowance Leave payment Retention3 payment Total remuneration Incentives1 PGLIP4 Total single figure remuneration 2024 Cobus Loots 412 10 – – 422 260 548 1,230 Deon Louw 374 – – – 374 168 449 991 Total 786 10 – – 796 428 997 2,221 US$ thousand Basic remuneration Allowance Leave payment Retention3 payment Total remuneration Incentives2 PGLIP4 Total single figure remuneration 2023 Cobus Loots 407 10 10 250 677 350 1,043 2,070 Deon Louw 370 – – 222 592 226 855 1,673 Total 777 10 10 472 1,269 576 1,898 3,743 1 These incentives, paid in the 2024 financial year, relate to the 2023 financial year’s annual STI achievement, consistent with the approved qualifying criteria. 2 These incentives, paid in the 2023 financial year, relate to the 2022 financial year annual STI achievement, consistent with the approved qualifying criteria. 3 Retention payments made in accordance with the employees’ employment contracts. Refer to page 183. 4 LTI payments are made per the PGLIP’s rules. PGLIP C shares payment – 2023 financial year, PGLIP D shares payment – 2024 financial year. * Prescribed officers’ remuneration is disclosed in note 38 to the financial statements. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 180 181 EXECUTIVE DIRECTORS’ LTI SCHEME DISCLOSURE The executive directors’ LTI schemes are cash-settled. Based on independent actuarial valuations, these option costs are accrued annually. Payment occurs when qualification criteria are fulfilled and dividends are declared. Shares purchased Executive directors Effective date Opening balance Issued Number of shares exercised and repurchased Forfeited Closing balance 2024 Cobus Loots PGLIP1 – PAR Gold D shares2 1 July 2020 2,848,556 – (2,848,556) – – – PAR Gold E shares3 1 July 2021 2,337,972 – – – 2,337,972 – PAR Gold F shares 1 July 2022 2,190,419 – – – 2,190,419 – PAR Gold G shares 1 July 2023 – 2,711,080 – – 2,711,080 – PAR Gold H shares4 1 July 2023 – 2,845,841 – – 2,845,841 Deon Louw PGLIP1 – PAR Gold D shares2 1 July 2020 2,335,468 – (2,335,468) – – – PAR Gold E shares3 1 July 2021 1,916,851 – – – 1,916,851 – PAR Gold F shares 1 July 2022 1,795,876 – – – 1,795,876 – PAR Gold G shares 1 July 2023 – 2,222,754 – – 2,222,754 – PAR Gold H shares4 1 July 2023 – 2,138,805 – – 2,138,805 2023 Cobus Loots PGLIP1 – PAR Gold D shares2 1 July 2020 2,848,556 – – – 2,848,5562 – PAR Gold E shares 1 July 2021 2,337,972 – – – 2,337,972 – PAR Gold F shares 1 July 2022 – 2,190,419 – – 2,190,419 Deon Louw PGLIP1 – PAR Gold D shares2 1 July 2020 2,335,468 – – – 2,335,4682 – PAR Gold E shares 1 July 2021 1,916,851 – – – 1,916,851 – PAR Gold F shares 1 July 2022 – 1,795,876 – – 1,795,876 1 These are cash-settled shares issued under the PGLIP. These shares receive dividends only if the specified measurement criteria are fulfilled at the end of a three-year measurement period. 2 These shares were repurchased for a nominal value during the 2024 financial year. 3 These shares will be repurchased for a nominal value during the 2025 financial year. 4 Subject to the recommendation of Remco, the board approved an additional tranche under the PGLIP for the successful completion of the MTR project for measurement in the 2025 financial year. REMUNERATION REPORT continued 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 Current contract extended to 30 September 2024 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 • 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 • Remco reviewed the employee’s shareholding during the current reporting period and concluded that the employee maintained an adequate shareholding as at 30 June 2024, comprising: – 5,896,248 indirect beneficial ordinary shares – 1,573,982 direct beneficial ordinary shares – 314,280 contracts for differences • Remco reviewed the employee’s shareholding during the current reporting period and concluded that the employee maintained an adequate shareholding as at 30 June 2024, comprising: – 245,209 indirect beneficial ordinary shares – 4,728,254 direct beneficial ordinary shares OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 182 183 Statement of directors’ responsibilities 186 Chief executive officer’s and financial director’s responsibility statement 187 Certificate of the company secretary 187 Directors’ report 188 Audit and risk committee report 190 Independent auditors’ report to the members of Pan African Resources PLC 194 Statements of financial position 200 Statements of profit or loss and other comprehensive income 201 Statements of cash flows 202 Statements of changes in equity 203 Notes to the financial statements 204 STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS CHIEF EXECUTIVE OFFICER’S AND FINANCIAL DIRECTOR’S RESPONSIBILITY STATEMENT CERTIFICATE OF THE COMPANY SECRETARY The directors are responsible for preparing the 2024 integrated annual report and the financial statements in accordance with applicable laws and regulations. Company law requires the directors to prepare financial statements for each reporting period. Under that law, the directors have prepared the Group and Company financial statements in accordance with UK-adopted International Accounting Standards. In preparing the Group and Company financial statements, the directors have also complied with IFRS® Accounting Standards as issued by the IASB. 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 the Company for that period. In preparing these financial statements, the directors are required to: • select suitable accounting policies and then apply them consistently • state whether applicable UK-adopted International Accounting Standards and IFRS Accounting Standards as issued by the IASB 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 a going concern basis unless it is inappropriate to presume that the Group and Company will continue in business. The directors are responsible for safeguarding the assets of the Group and Company and hence are taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and Company’s transactions, 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 Companies Act 2006. 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 • 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 Deon Louw Chief executive officer Financial director 11 September 2024 Each of the directors, whose names are stated below, hereby confirm to the best of their knowledge that: • the Company is in compliance with the provisions of the Companies Act 2006, specifically relating to its incorporation and is operating in conformity with its articles of association and relevant constitutional documents • the financial statements, set out on pages 186 to 277, prepared in accordance with applicable UK-adopted International Accounting Standards and IFRS Accounting Standards, give a true and fair view of the assets, liabilities, financial position, profit or loss and cash flows of the Group and the Company • 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 Group • 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 Deon Louw Chief executive officer Financial director 11 September 2024 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 11 September 2024 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 186 187 DIRECTORS’ REPORT The directors present the integrated annual report and the audited financial statements for the reporting period ended 30 June 2024. 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) AIM 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 (A2X) exchange. In addition, Pan African Resources Funding Company Limited (Funding Company) issued listed notes on the JSE Debt Board in the previous reporting period (refer to page 241). 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 chairman’s statement (page 14) and chief executive officer’s review (page 74) that accompany these annual financial statements, with financial and non-financial key performance indicators (KPIs) shown on pages 72 and 73. FINANCIAL RESULTS The results for the 2024 reporting period are presented in the Group statement of profit or loss and other comprehensive income on page 201. The key features of these results can be found in the financial director’s review on page 86. 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 96. HISTORICAL DIVIDENDS At the annual general meeting (AGM) of the shareholders held on 24 November 2023, a final dividend of ZA 18.00000 cents per share equating to 0.76239 pence per share (US 0.95491 cents per share) was approved. During the current reporting period, the Financial Reporting Council (FRC) carried out a review of the Group’s integrated annual report and financial statements for the period ended 30 June 2023 in accordance with Part 2 of the FRC Corporate Reporting Review Operating Procedures1. As part of the review, the board became aware that the net assets test required by section 831 of the Companies Act 2006 is required to be performed by the Company on presentation currency amounts and not on functional currency amounts. It came to their attention that the foreign currency translation reserve does not form part of the Company’s undistributable reserves, despite not being realised, and as such cannot be included as undistributable reserves when carrying out the net assets test. This means that dividends paid in respect of the years ended 30 June 2019, 2020, 2021, 2022 and 2023 (together relevant dividends) and the repurchase of ordinary shares by the Company between 1 April and 9 May 2022 have been made otherwise than in accordance with the Companies Act 2006. The consequences of the relevant distributions having been made otherwise than in accordance with the Companies Act 2006 were rectified by way of the cancellation of the Company’s share premium account. That cancellation of share premium was confirmed by the Court on 2 July 2024 and took effect on 18 July 2024. The share capital reduction required (among other actions) a special resolution being passed by shareholders at a general meeting held on 10 June 2024. 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 48 and disclosed in note 37 of the financial statements. 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 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 staff • 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 2024 reporting period and the period up to the date of approval of the financial statements, including remediation actions proposed in light of the restatement of the prior reporting period financial statements to prevent a recurrence, 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$68.7 million (2023: US$49.9 million) of available debt facilities and US$26.3 million (2023: US$34.7 million) of cash and cash equivalents at 30 June 2024. The Group has considered the going concern forecast through to 30 June 2026, using a base case rand gold price of ZAR1,250,000/kg (US$2,141/oz) and a downside rand gold price of ZAR1,064,000/kg (US$1,822/oz), coupled with a 10% decrease in forecast production. The Group’s forecasts based on the board-approved budgets (with production in line with production guidance announced) demonstrate it will have sufficient liquidity headroom to meet its obligations, under both scenarios, in the ordinary course of business (refer to note 43), and will comply with financial covenants for the 24 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 2024 financial statements. 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 Louw1 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 1 As announced on the Stock Exchange News Service (SENS) on 29 July 2024, the Group’s financial director, Deon Louw, informed the Company of his intention to retire with effect from 30 September 2024. He will, however, continue as a consultant to the Group. Marileen Kok will succeed Deon Louw as Group financial director and will be appointed to the Company’s board of directors. 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 38 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 Evander Mines terminated the contract mining agreement (CMA) with its 8 Shaft contractor during the current reporting period due to disputes over specific clauses in the CMA. Evander Mines referred this matter to arbitration and the proceedings are still ongoing. EVENTS AFTER THE REPORTING PERIOD As mentioned in the historical dividends section on the previous page, the reduction of share premium was confirmed by the Court on 2 July 2024 and took effect on 18 July 2024 (refer to note 44). There were no other events that could have a material impact on the financial results of the Group after 30 June 2024 up to the date on which the Group financial statements for the reporting period ended 30 June 2024 were authorised for issue. INDEPENDENT AUDITORS PricewaterhouseCoopers LLP’s (PwC) appointment as external auditor was approved by shareholders at the Company’s AGM on 24 November 2023. Kevin McGhee was the designated audit partner for the reporting period ended 30 June 2024. APPROVAL OF THE ANNUAL FINANCIAL STATEMENTS The board of directors hereby approves the integrated annual report, strategic report, directors’ report and associated annual financial statements. On behalf of the board Cobus Loots Chief executive officer 11 September 2024 1 The FRC noted that their review is based solely on the integrated annual report and financial statements and does not benefit from detailed knowledge of Pan African's business, or an understanding of the underlying transactions entered into, but that it is, however, conducted by staff of the FRC who have an understanding of the relevant legal and accounting framework. The FRC correspondence provides no assurance that Pan African's integrated annual report and financial statements for the period ended 30 June 2023 are correct in all material respects; the FRC's role is not to verify the information provided but to consider compliance with reporting requirements. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 188 189 TM Copyright and trademarks are owned by the Institute of Directors South Africa NPC and all of its rights are reserved. 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 2023. In terms of King IV™, all three members of the audit and risk committee are independent non-executive directors. At 30 June 2024, 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: • Dawn Earp (chairperson of the audit and risk committee) • Thabo Mosololi • Charles Needham. Details on the number of meetings held and attendance by members are included on page 146 of the corporate governance report. 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 • 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 sustainable development, climate change 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 is in place • 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, including assessing the adequacy of the remedial actions proposed in light of the restatement of the prior reporting period financial statements • 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. 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. Kevin McGhee was the designated audit partner for the 2024 reporting period. PwC’s appointment as external auditors for the 2024 reporting period was approved by the shareholders at the Company’s previous AGM held on 24 November 2023. 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 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 2024 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 2024 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 regularly. 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. 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. Audit fees amounting to US$462 thousand (2023: US$437 thousand), were incurred for the current reporting period. Non-audit fees for sustainability assurances rendered amounted to US$129 thousand. The non-audit fee related to the current and previous reporting period. Refer to note 11 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 2024 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, UK-adopted International Accounting Standards and IFRS Accounting Standards. 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, the committee is satisfied with the extent of the Group’s compliance with the King IV™ principles. Ongoing compliance continuously 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. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 190 191 AUDIT AND RISK COMMITTEE REPORT continued SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES Significant judgements, assumptions and estimates 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, assumptions and estimates 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 • Operating costs, capital expenditure and other operating factors. 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 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. Other significant accounting judgements, assumptions and estimates Audit and risk committee response Going concern basis of accounting 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 2024 to 30 June 2026, 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. Deferred tax 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. Rehabilitation and decommissioning obligation 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. Revenue from contracts with customers The committee reviewed management’s judgement applied in accounting for the forward sale contract entered into with Rand Merchant Bank, a division of FirstRand Bank Limited (RMB). The committee considered the recognition, measurement and related disclosures and concluded these to be in compliance with UK-adopted International Accounting Standards and IFRS Accounting Standards. Financial guarantees The committee reviewed management’s judgements and estimates applied in recognising financial guarantees in the Company’s separate financial statements. The committee considered the valuation methodology and inputs applied in measuring the fair value on initial recognition and subsequent 12-month expected credit allowance. The committee considered these to be reasonable. SIGNIFICANT ISSUES CONSIDERED BY THE AUDIT AND RISK COMMITTEE During the current reporting period, the committee reviewed the significant accounting issues below: Significant issues Audit and risk committee response Timing of revenue recognition in respect of gold sales The committee reviewed management’s reassessment in respect of the timing of revenue recognition, indicating that control passes on settlement with the customer as opposed to on delivery to Rand Refinery. The committee, in applying IFRS 15: Revenue from Contracts with Customers, satisfied itself that revenue should only be recognised on settlement as opposed to on delivery to Rand Refinery. The committee reviewed the presentation and disclosures, provided throughout the financial statements, in respect of the prior period error and resultant restatement, and viewed these to be appropriate. Measurement of the Mogale Gold and Mogale Soweto Cluster environmental rehabilitation obligation The committee reviewed the presentation and disclosures, provided throughout the financial statements, in respect of the prior period error and resultant restatement, and viewed these to be appropriate. as Group financial director and will be appointed to the Company’s board of directors. The committee assessed and is satisfied that Marileen Kok 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. 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 48 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 11 September 2024 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 2024 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 (Remco). 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 264 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 As announced on SENS on 29 July 2024, the Group’s financial director, Deon Louw, informed the Company of his intention to retire with effect from 30 September 2024. He will, however, continue as a consultant to the Group. Marileen Kok will succeed Deon Louw OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 192 193 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 2024 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 2024 Integrated Annual Report (the “Annual Report”), which comprise: the group and the company statements of financial position as at 30 June 2024; 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, comprising material accounting policy information and other explanatory information. SEPARATE OPINION IN RELATION TO IFRSs AS ISSUED BY THE IASB As explained in note 2 to the financial statements, the group and company, in addition to applying UK-adopted international accounting standards, have also applied international financial reporting standards (IFRSs) as issued by the International Accounting Standards Board (IASB). In our opinion, the group and company financial statements have been properly prepared in accordance with IFRSs as issued by the IASB. 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 11 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 • Our group audit included full scope audits at four components and an audit of specific account balances at a further six other components. • Taken together, the components at which audit work was performed accounted for 100% of group revenue, 98% of the group’s absolute profit before tax and 99% of group total assets. Key audit matters • Goodwill impairment assessment and impairment indicator assessment of property, plant and equipment (group) • Carrying value of investments in subsidiaries and receivables from group companies (company) Materiality • Overall group materiality: US$5.0 million (2023: US$4.3 million) based on 5% of average profit before tax for the past 3 years (2023: 5% of profit before tax). • Overall company materiality: US$1.5 million (2023: US$1.4 million) based on approximately 1% of total assets. • Performance materiality: US$3.8 million (2023: US$3.2 million) (group) and US$1.1 million (2023: US$1.1 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 indicator 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$16.7 million and property, plant and equipment of US$567.6 million as at 30 June 2024, primarily contained in four cash generating units (“CGUs”). The Barberton Mines’ underground operations CGU has the total goodwill balance of US$16.7 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, albeit the assessment remains sensitive to certain key assumptions such as the long-term gold price. In addition, management has performed an assessment of indicators of impairment and impairment reversal for the other CGUs. Management has determined that there were no indicators of impairment or impairment reversal in any of the other CGUs, having considered factors such as long-term gold prices and life of mine reserves. Refer to notes 16 and 17 to the financial statements. 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 analyses 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 examined the related disclosures in notes 16 and 17 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 indicators of impairment or impairment reversal for any of the other CGUs to be reasonable. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 194 195 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF PAN AFRICAN RESOURCES PLC continued Key audit matter How our audit addressed the key audit matter Carrying value of investments in subsidiaries and receivables from group companies (company) As at 30 June 2024, the company holds investments in subsidiaries amounting to $87.6 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 $51.7 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 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. Refer to notes 20 and 39 to the financial statements. 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 2024. 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. 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, South Africa. In establishing the overall approach to the group audit, we determined the type of work that needed to be performed at each component by us, as the group audit team, or by our component audit team in South Africa operating under our instruction. In determining our audit scope, we considered our overall assessment of risk and materiality, as well as components with specific inherent risks and the overall coverage obtained over each material line item in the group financial statements. We identified four 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 group’s finance company and the parent company. In addition, we performed an audit of specific account balances over six 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 component 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. Our oversight procedures included the issuance of formal written instructions setting out the work to be performed at each component, regular communication throughout the audit cycle including calls through video conferencing, participation in key meetings and review of component auditor work papers. In addition, members of the group audit team visited the component audit team and the head office and local operations in South Africa. Taken together, the components at which audit work was performed accounted for 100% of group revenue, 98% of the group’s absolute profit before tax and 99% of group total assets. This, together with the additional procedures performed centrally by the group audit team, including testing the consolidation process and review of the annual report and financial statements, gave us the evidence we needed for our opinion on the financial statements as a whole. 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 risk of impact of climate change 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 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, and no indicators of impairment were identified by management as disclosed in note 16. 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 reading the group’s Non-Financial and Sustainability Information Statement. Our procedures did not identify any material impact in the context of our audit of the financial statements as a whole, or our key audit matters for the year ended 30 June 2024. 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$5.0 million (2023: US$4.3 million). US$1.5 million (2023: US$1.4 million). How we determined it 5% of average profit before tax for the past 3 years (2023: 5% of profit before tax) Approximately 1% of total assets Rationale for benchmark applied We believe that average profit before tax of the past 3 years is appropriate as an earnings metric is the primary measure used by shareholders in assessing the performance of the group. The adoption of a multi-year average benchmark for materiality in a change to the prior year basis responds to longer term trends in commodity markets and reduces volatility in the measure year-on-year. For the company, we determined our materiality based on total assets, which is considered more relevant than a performance-related measure as the company is an investment holding company for the group. 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$0.3 million and US$4.5 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% (2023: 75%) of overall materiality, amounting to US$3.8 million (2023: US$3.2 million) for the group financial statements and US$1.1 million (2023: US$1.1 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 those charged with governance that we would report to them misstatements identified during our audit above US$251,000 (group audit) (2023: US$214,000) and US$73,000 (company audit) (2023: US$71,000) 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’ assessment of going concern, including 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 debt 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 43 to the financial statements, and concurring that this is sufficient to inform members about the directors’ going concern assessment. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 196 197 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF PAN AFRICAN RESOURCES PLC continued 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. 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 2024 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 environmental regulations and health and safety regulations, 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 UK Companies Act 2006 and applicable South African tax legislation. 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: • Understanding and evaluating the design and implementation of controls designed to prevent and detect irregularities and fraud; • Enquiries of management, those charged with governance and those responsible for legal and compliance matters, including the group’s in-house legal function and internal audit, to identify actual and potential litigation and claims and any known or suspected instances of non‑compliance with laws and regulations and fraud; • Enquiry of staff in the group’s tax function to identify any instances of non-compliance with laws and regulations; • Reviewing minutes of meetings of those charged with governance; • Reviewing internal audit reports; • Assessment of matters reported in the group’s whistleblowing process and the results of management’s investigation of such matters, where appropriate; • Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; • Challenging assumptions and judgements made by management in respect of significant accounting judgements and estimates, and assessing these judgements and estimates for management bias; and • Identifying and testing journal entries based on our risk assessment, in particular any journal entries posted with unusual account combinations. 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. Kevin McGhee (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors London 11 September 2024 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 198 199 STATEMENTS OF FINANCIAL POSITION as at 30 June STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the reporting period ended 30 June GROUP COMPANY US$ thousand Notes 2024 Restated* 2023 Restated* 2022 2024 2023 ASSETS Non-current assets Property, plant and equipment 16 567,588 395,247 355,802 – – Goodwill 17 16,685 16,117 18,642 – – Intangible assets 18 365 265 281 – – Deferred tax assets 34 631 428 2,074 394 309 Long-term inventory 22 12,263 12,120 189 – – Investments 19 3,373 – 1,127 3,373 – Investments in subsidiaries 20 – – – 87,646 83,555 Environmental rehabilitation obligation fund 21 24,773 21,627 23,024 – – Total non-current assets 625,678 445,804 401,139 91,413 83,864 Current assets Inventory 22 16,431 13,917 15,116 – – Trade and other receivables 23 15,175 8,462 9,323 98 90 Current tax assets 34 2,455 1,322 725 – 188 Receivables from Group companies 39 – – – 51,731 61,050 Loan receivable – – 271 – – Derivative financial asset – 451 686 – – Cash and cash equivalents 24 26,332 34,771 26,993 2,851 2,435 Total current assets 60,393 58,923 53,114 54,680 63,763 Total assets 686,071 504,727 454,253 146,093 147,627 EQUITY AND LIABILITIES Share capital 25 38,002 38,002 38,002 38,002 38,002 Share premium 235,063 235,063 235,063 235,063 235,063 Retained earnings 364,657 303,190 262,247 37,766 47,239 Reserves 26 (272,505) (283,772) (242,956) (169,249) (173,980) Equity attributable to owners of the Company 365,217 292,483 292,356 141,582 146,324 Non-controlling interests 20 (1,114) (527) (171) – – Total equity 364,103 291,956 292,185 141,582 146,324 Non-current liabilities Environmental rehabilitation obligation 27 19,688 16,741 8,603 – – Borrowings 28 123,056 42,485 33,293 – – Lease liabilities 30 2,158 2,849 3,795 – – Contract liability 9 – 7,081 – – – Financial liability 31 374 – – – – Share-based payment obligations 32 6,475 1,884 4,022 29 – Deferred tax liabilities 34 85,353 64,345 53,366 – – Total non-current liabilities 237,104 135,385 103,079 29 – Current liabilities Trade and other payables 33 66,388 52,072 50,224 2,197 1,303 Borrowings 28 4,729 10,868 1,319 – – Lease liabilities 30 791 634 553 – – Contract liability 9 7,330 10,621 – – – Financial liability 31 329 – – – – Share-based payment obligations 32 4,494 2,404 5,559 16 – Financial guarantees 29 – – – 1,471 – Derivative financial liability 5 55 – – – Current tax liabilities 34 798 732 1,334 798 – Total current liabilities 84,864 77,386 58,989 4,482 1,303 Total equity and liabilities 686,071 504,727 454,253 146,093 147,627 * The comparative information is restated on account of correction of errors (refer to note 40). The above statements of financial position should be read in conjunction with the accompanying notes. The annual financial statements on pages 186 to 277 were approved by the board of directors and authorised for issue on 11 September 2024 and were signed on its behalf by: Cobus Loots Deon Louw Chief executive officer Financial director GROUP COMPANY US$ thousand Notes 2024 Restated* 2023 2024 2023 Revenue 9 373,796 319,892 21,657 17,550 Cost of production 10 (242,427) (219,287) – – Gross profit 131,369 100,605 21,657 17,550 Other income 11 4,106 5,906 234 255 Other expenses 11 (14,481) (11,373) (8,968) (4,758) Royalty costs (1,687) (956) – – Income before finance income and finance costs 119,307 94,182 12,923 13,047 Finance income 13 1,884 1,139 146 99 Finance costs 13 (11,784) (10,255) – (1) Profit before tax 109,407 85,066 13,069 13,145 Income tax expense 34 (30,581) (24,550) (1,315) (316) Profit for the period 78,826 60,516 11,754 12,829 Other comprehensive income/(loss) Items that may be reclassified to profit or loss Foreign currency translation gain/(loss) 26 11,623 (40,973) 4,731 (23,140) Items that may not be reclassified to profit or loss Fair value adjustment on investment at fair value through other comprehensive income 19 – 1,563 – 1,563 Tax thereon – (1,360) – (1,360) Other comprehensive income/(loss) for the period, net of tax 26 11,623 (40,770) 4,731 (22,937) Total comprehensive income/(loss) for the period 90,449 19,746 16,485 (10,108) Profit/(loss) attributable to: 78,826 60,516 Owners of the Company 79,378 60,918 Non-controlling interests (552) (402) Total comprehensive income/(loss) attributable to: 90,449 19,746 Owners of the Company 91,036 20,102 Non-controlling interests (587) (356) Basic and diluted earnings per share (US cents) 14 4.14 3.18 * The comparative information is restated on account of correction of errors (refer to note 40). The above statements of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 200 201 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 US$ thousand Notes 2024 2023 2024 2023 Cash flows from operating activities Net cash from operating activities before dividend, tax, royalties and net finance costs 36.1 134,310 132,941 17,780 13,389 Dividend paid 15 (21,227) (23,168) (21,227) (23,168) Reciprocal dividend received 2,925 3,193 – – Income tax paid 36.2 (13,007) (6,521) (422) (883) Royalties paid 36.3 (2,469) (1,194) – – Securities transfer tax paid – (7) – – Finance costs paid (11,565) (6,254) – (1) Finance income received 1,834 1,133 146 99 Net cash from/(used in) operating activities 90,801 100,123 (3,723) (10,564) Cash flows from investing activities Purchase of property, plant and equipment (166,241) (112,709) – – Proceeds from disposal of property, plant and equipment 141 160 – – Additions to other intangible assets 18 – (113) – – Consideration for assets acquired, net of cash acquired – (2,939) – – Repayment of long-term loans receivable – 255 – – Receipts from environmental rehabilitation obligation fund 21 – 130 – – Payment for investment 19 (3,280) – (3,280) – Proceeds from disposal of investment 19 – 2,485 – 2,485 Increase in investments in subsidiaries 20 – – – (12) Advances of loans to subsidiaries – – (24,159) (32,547) Repayment of loans to subsidiaries – – 31,315 40,239 Net cash (used in)/from investing activities (169,380) (112,731) 3,876 10,165 Cash flows from financing activities Proceeds from borrowings 36.4 114,198 94,705 – – Repayment of borrowings 36.4 (42,854) (69,276) – – Fees paid on borrowings 36.4 (1,445) – – – Repayment of lease liabilities 36.4 (638) (562) – – Repayment of other liabilities 31 (281) – – – Net cash from financing activities 68,980 24,867 – – Net (decrease)/increase in cash and cash equivalents (9,599) 12,259 153 (399) Cash and cash equivalents at the beginning of the period 34,771 26,993 2,435 2,457 Effect of foreign exchange rate changes 1,160 (4,481) 263 377 Cash and cash equivalents at the end of the period 24 26,332 34,771 2,851 2,435 The above statements of cash flows should be read in conjunction with the accompanying notes. GROUP US$ thousand Share capital Share premium Reserves Retained earnings Equity attributable to the owners of the Company Non- controlling interests Total equity Balance as at 1 July 2022, as previously reported 38,002 235,063 (243,125) 264,840 294,780 (171) 294,609 Correction of errors* – – 169 (2,593) (2,424) – (2,424) Balance as at 1 July 2022 (restated) 38,002 235,063 (242,956) 262,247 292,356 (171) 292,185 Total comprehensive income – – (40,816) 60,918 20,102 (356) 19,746 Profit for the period – – – 60,918 60,918 (402) 60,516 Other comprehensive loss – – (40,816) – (40,816) 46 (40,770) Dividends paid1 – – – (23,168) (23,168) – (23,168) Reciprocal dividend – PAR Gold2 – – – 3,193 3,193 – 3,193 Balance as at 30 June 2023 (restated) 38,002 235,063 (283,772) 303,190 292,483 (527) 291,956 Balance as at 30 June 2023, as previously reported 38,002 235,063 (283,946) 306,004 295,123 (527) 294,596 Correction of errors* – – 174 (2,814) (2,640) – (2,640) Balance as at 30 June 2023 (restated) 38,002 235,063 (283,772) 303,190 292,483 (527) 291,956 Total comprehensive income – – 11,658 79,378 91,036 (587) 90,449 Profit for the period – – – 79,378 79,378 (552) 78,826 Other comprehensive income – – 11,658 – 11,658 (35) 11,623 Dividends paid1 – – – (21,227) (21,227) – (21,227) Reciprocal dividend – PAR Gold2 – – – 2,925 2,925 – 2,925 Reclassification of foreign currency translation reserve3 – – (391) 391 – – – Balance as at 30 June 2024 38,002 235,063 (272,505) 364,657 365,217 (1,114) 364,103 Notes 25 26 * The comparative information is restated on account of correction of errors (refer to note 40). 1 Refer to note 15. 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% (2023: 13.8%) of the issued share capital of the Company. Refer to note 39 in respect of the related party transaction. 3 The reclassification relates to the foreign currency translation reserve previously recognised on the Sudan foreign operation. Refer to note 26 for further details. COMPANY US$ thousand Share capital Share premium Reserves Retained earnings Total equity Balance as at 1 July 2022 38,002 235,063 (151,043) 57,578 179,600 Total comprehensive loss – – (22,937) 12,829 (10,108) Profit for the period – – – 12,829 12,829 Other comprehensive loss – – (22,937) – (22,937) Dividends paid1 – – – (23,168) (23,168) Balance as at 30 June 2023 38,002 235,063 (173,980) 47,239 146,324 Total comprehensive income – – 4,731 11,754 16,485 Profit for the period – – – 11,754 11,754 Other comprehensive income – – 4,731 – 4,731 Dividends paid1 – – – (21,227) (21 227) Balance as at 30 June 2024 38,002 235,063 (169,249) 37,766 141,582 Notes 25 26 1 Refer to note 15. The above statements of changes in equity should be read in conjunction with the accompanying notes. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 202 203 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 previous reporting period (page 241). 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. 2. STATEMENT OF COMPLIANCE The financial statements for both the Group and the Company have been prepared in accordance with UK-adopted International Accounting Standards (UK-IAS) and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The financial statements have also been prepared in accordance with International Financial Reporting Standards as issued by the IASB. As applied to the Group and the Company, there are no material differences between UK-IAS and IFRS as issued by the IASB. Furthermore, these have been prepared in accordance with the SAICA Financial Reporting Practices Committee, Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and the JSE Listings Requirements. 3. BASIS OF PREPARATION The financial statements have been prepared on a going concern basis (refer to note 43) and on the historical cost basis, except for financial assets at fair value through profit or loss (the environmental rehabilitation obligation fund and derivative financial instruments) and fair value through other comprehensive income (equity investments) 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 Accounting Standards. 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 profit or loss. 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 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. Translation to presentation currency The Group’s assets and liabilities are translated into the presentation currency (US$) of the Group at the rate of exchange prevailing at the reporting date. Income and expense items are translated at the exchange rate prevailing at the date of the significant transaction or the average rate for the period. The exchange differences arising on translation for consolidation are recognised in other comprehensive income. 5.3 Impairment of non-financial assets At each reporting date, the Group assesses the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets are impaired. If any such indication exists, the asset’s or CGU’s recoverable Functional and presentation currency The financial statements are presented in US$ 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 the 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 South African rand (refer to note 26 for further details). 4. CHANGES IN MATERIAL ACCOUNTING POLICIES 4.1 Material accounting policy information The Group adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) from 1 July 2023. Although the amendments did not result in changes to the accounting policies themselves, they impacted the accounting policy information disclosed in the financial statements. The amendments require the disclosure of ‘material’, rather than ‘significant’, accounting policies. The amendments also provide guidance on the application of materiality to disclosure of accounting policies, assisting entities to provide useful, entity-specific accounting policy information that users need to understand other information in the financial statements. Management reviewed the accounting policies and made updates to the policy information disclosed in note 5: Material accounting policies (2023: Significant accounting policies) and throughout the financial statements in line with the amendments. 4.2 Deferred tax related to assets and liabilities arising from a single transaction The Group adopted Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendment to IAS 12) from 1 July 2023. The amendments narrow the scope of the initial recognition exemption to exclude transactions that give rise to equal and offsetting temporary differences amount is estimated as the higher of its value in use or fair value less costs of disposal. 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. 5.4 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 and 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. All financial assets not classified as measured at amortised cost or fair value through other comprehensive income as described previously 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. i.e. leases and decommissioning liabilities. For leases and decommissioning liabilities, an entity is required to recognise the associated deferred tax assets and liabilities from the beginning of the earliest comparative period presented, with any cumulative effect recognised as an adjustment to retained earnings or other components of equity at that date. For all other transactions, an entity applies the amendments to transactions that occur on or after the beginning of the earliest period presented. The amendment had no impact on the Group, as it previously recognised a separate deferred tax asset and deferred tax liability on leases and decommissioning liabilities. 5. MATERIAL ACCOUNTING POLICIES 5.1 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 Group 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. 5.2 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. 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. 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. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 204 205 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 5. MATERIAL ACCOUNTING POLICIES continued 5.4 Financial assets continued 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. 5.5 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 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 cost 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 on the statement of financial position when, and only when, the Group currently 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. 5.6 Financial guarantees Financial guarantee contracts are initially recognised at fair value using lifetime ECLs. They are subsequently measured at the higher of the amount of the loss allowance, based on a 12-month ECL, and the initial amount recognised less cumulative amortisation. Financial guarantees are amortised on a straight-line basis over the period that the borrowing facilities are available. Where a guarantee in relation to a loan or other payable of a subsidiary is provided by the Company for no compensation, the fair value is accounted for as a contribution and recognised as part of the cost of the investment. 5.7 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. 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. 5.8 Other accounting policies Further material accounting policies are disclosed within their respective notes. 6. JUDGEMENTS AND ESTIMATES The preparation of the financial statements in accordance with IFRS Accounting Standards 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. Significant 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 9: Revenue • Note 16: Property, plant and equipment. 7. RECENT ACCOUNTING DEVELOPMENTS 7.1 New standards, interpretations and amendments effective for the first time as at 30 June 2024 The following amendments became effective during the current reporting period, which are applicable to the Group: Title Impact Annual period beginning on or after Narrow scope amendments to IAS 1: Presentation of Financial Statements, Practice Statement 2 and IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors1 Refer to note 4.1. 1 January 2023 Amendments to IAS 12: Income Taxes – Deferred Tax related to Assets and Liabilities arising from a Single Transaction1 Refer to note 4.2. 1 January 2023 The following standard and amendment became effective during the current reporting period, which are not applicable to the Group: • IFRS 17: Insurance Contracts • International Tax Reform-Pillar Two Model Rules – amendments to IAS 12. Significant assumptions and estimates Information about other assumptions and estimation uncertainties at 30 June 2024 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 17: Goodwill • Note 34: Tax expense • Note 16: Property, plant and equipment • Note 27: Environmental rehabilitation obligation • Note 29: Financial guarantees. Information about other judgements, assumptions and estimation uncertainties is included in the following notes: • Note 30: Leases • Note 32: Share-based payment obligations. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 206 207 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 7. RECENT ACCOUNTING DEVELOPMENTS continued 7.2 New standards, interpretations and amendments issued but not yet effective as at 30 June 2024 The following standards and amendments applicable to the Group, which were in issue and not yet effective as at 30 June 2024, have not been early adopted by the Group: Title Impact Annual period beginning on or after 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. 1 January 2024 Amendment to IAS 1: Presentation of Financial Statements on Non-current Liabilities with Covenants1 The amendment clarifies that only covenants with which an entity is required to comply on or before the reporting date affect the classification of a liability as current or non-current, with additional guidance to explain how an entity should disclose information in the notes to understand the risk that non-current liabilities with covenants could become repayable within 12 months. 1 January 2024 Amendment to IFRS 9: Financial Instruments and IFRS 7: Financial Instruments: Disclosures on Classification and Measurement of Financial Instruments1 These amendments: • clarify the requirements for the timing of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system • clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest criterion • add new disclosures for certain instruments with contractual terms that can change cash flows (such as some instruments with features linked to the achievement of environmental, social and governance (ESG) targets) • make updates to the disclosures for equity instruments designated at fair value through other comprehensive income. 1 January 2026 IFRS 18: Presentation and Disclosure in Financial Statements2 This standard replaces IAS 1: Presentation of Financial Statements. It carries forward many requirements from IAS 1 unchanged. IFRS 18 introduces three sets of new requirements to improve companies’ reporting of financial performance and provide investors with a better basis for analysing and comparing companies: • improved comparability in the statement of profit or loss through the introduction of three defined categories for income and expenses (operating, investing and financing) to improve the structure of the statement, and a requirement for all companies to provide new defined subtotals, including operating profit • enhanced transparency of management-defined performance measures with a requirement for companies to disclose explanations of those company-specific measures that are related to the statement • more useful grouping of information in the financial statements through enhanced guidance on how to organise information and whether to provide it in the primary financial statements or in the notes, as well as a requirement for companies to provide more transparency about operating expenses. 1 January 2027 IFRS 19: Subsidiaries without Public Accountability Disclosures3 • IFRS 19 permits eligible subsidiaries to use IFRS Accounting Standards with reduced disclosures. Applying IFRS 19 will reduce the costs of preparing subsidiaries’ financial statements while maintaining the usefulness of the information for users of their financial statements. Subsidiaries are eligible to apply IFRS 19 if they do not have public accountability and their parent company applies IFRS Accounting Standards in their consolidated financial statements • A subsidiary does not have public accountability if it does not have equities or debt listed on a stock exchange and does not hold assets in a fiduciary capacity for a broad group of outsiders. 1 January 2027 1 None of the above amendments are expected to have a material impact on the Group and Company. 2 The impact of the new standard is pervasive. Management is currently assessing the aspects of financial statement presentation and disclosure that will be affected. This standard has not yet been endorsed by the UK Endorsement Board. 3 Management is currently assessing earlier adoption of this voluntary standard for eligible subsidiaries within the Group. This standard has not yet been endorsed by the UK Endorsement Board. 7.3 IBOR reform A fundamental reform of major interest rate benchmarks was 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). During the 2022 reporting period, the South African Reserve Bank indicated its intention to move away from JIBAR and has identified a successor in the South African Rand Overnight Index Average Rate (ZARONIA). The new ZARONIA rate was published for observation during 2022 and was endorsed as a successor rate in 2023. The formal announcement of the cessation of JIBAR as a reference rate is expected in 2025, allowing the ZARONIA market a period to develop. The cessation date of the JIBAR as a reference rate is expected to be after 2025. Accordingly, there is uncertainty surrounding the exact 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 currently monitors the Group’s transition to ZARONIA 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. 8. SEGMENT ANALYSIS Accounting policy Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, which is responsible for allocating resources and assessing performance of the operating segments, has been identified as the 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: Mining operations These segments derive their revenue from mining, extraction, production and the sale of gold. • 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 • Mogale Tailings Retreatment project (MTR project): The MTR project located in the Mogale district; a plant is being constructed to process gold tailings deposits of Mogale Gold Proprietary Limited (Mogale Gold) and Mintails SA Soweto Cluster Proprietary Limited (MSC) • Solar projects currently consist of the solar plant located at Evander Mines, the ongoing construction of a solar plant at Barberton Mines and the extension of Evander Mines’ solar plant. Other operations • 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. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 208 209 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 8. SEGMENT ANALYSIS continued The segment results have been presented based on Exco’s reporting format, in accordance with the disclosures presented as follows: 2024 2024 US$ thousand Notes Barberton Mines Evander Mines Solar projects MTR project Mining operations Exploration assets Agricultural ESG projects Corporate Funding Company Group total Revenue 9 185,163 188,074 – – 373 237 – 559 – – 373,796 Cost of production 10 (117,536) (102,454) (448) – (220,438) – (743) – – (221,181) Depreciation and amortisation 16 (8,496) (12,008) (462) (19) (20,985) – (261) – – (21,246) Gross profit/(loss) 59,131 73,612 (910) (19) 131,814 – (445) – – 131,369 Other income1 11 1,447 2,538 – 165 4,150 260 1 (393) 88 4,106 Other expenses1 11 (4,967) (1,914) (30) (132) (7,043) (1,814) (178) (5,195) (251) (14,481) Royalty costs 36.3 (1,319) (368) – – (1,687) – – – – (1,687) Income/(loss) before finance income and finance costs 54,292 73,868 (940) 14 127,234 (1,554) (622) (5,588) (163) 119,307 Finance income1 13 3 6 5 18 32 – 6 203 1,643 1,884 Finance costs1 13 (373) (2,528) – (1,085) (3,986) – – (29) (7,769) (11,784) Profit/(loss) before tax 53 922 71,346 (935) (1,053) 123,280 (1,554) (616) (5,414) (6,289) 109,407 Income tax expense 34 (14,239) (14,429) 3 – (28,665) – – (1,911) (5) (30,581) Profit/(loss) for the period excluding intra-Group transactions 39,683 56,917 (932) (1,053) 94,615 (1,554) (616) (7,325) (6,294) (78,826) Revenue – – 1,661 – 1,661 – 15,916 – 17,577 Cost of production – (1,661) – – (1,661) – – – (1,661) Elimination of dividends received from/(paid to) fellow Group companies – – – – – – (15,916) – (15,916) Management fees (4,422) (3,536) (53) – (8,011) (160) (80) 8,465 (214) – Finance income/(costs) 3,495 (3,705) (665) – (875) – (627) (7,539) 9,041 – Profit/(loss) after tax including intra-Group transactions 38,756 48,015 11 (1,053) 85,729 (1,714) (1,323) (6,399) 2,533 78,826 Segment assets (total assets excluding goodwill) 152,921 352,275 22,636 104,555 632,387 3,683 2,868 8,178 22,270 669,386 Segment liabilities 56,373 100,538 1,468 23,340 181,719 17 62 12,333 127,837 321,968 Net assets (excluding goodwill)2 96,548 251,737 21,168 81,215 450,668 3,666 2,806 (4,155) (105,567) 347,418 Goodwill 17 16,685 – – – 16,685 – – – – 16,685 Capital expenditure3 21,961 70,642 10,318 68,654 171,575 156 66 608 – 172,405 Reconciliation of adjusted EBITDA4 Income/(loss) before tax, finance income and finance costs 54,292 73,868 (940) 14 127,254 (1,554) (622) (5,588) (163) 119,307 Excluding: depreciation and amortisation included in gross profit 16 8,496 12,008 462 19 20,985 – 261 – – 21,246 Excluding: other depreciation and amortisation 16 – – – – – 380 13 268 – 661 Adjusted EBITDA4 62,788 85,876 (478) 33 148,219 (1,174) (348) (5,320) (163) 141,214 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 and amortisation. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 210 211 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 8. SEGMENT ANALYSIS continued Restated* 2023 Restated* 2023 US$ thousand Notes Barberton Mines Evander Mines Solar projects MTR project Mining operations Exploration assets Agricultural ESG projects Corporate Funding Company Group total Revenue 9 154,889 164,697 – – 319,586 – 306 – – 319,892 Cost of production 10 (106,929) (91,052) (238) – (198,219) – (669) – – (198,888) Depreciation and amortisation 16 (8,806) (10,905) (472) (3) (20,186) – (213) – – (20,399) Gross profit/(loss) 39,154 62,740 (710) (3) 101,181 – (576) – – 100,605 Other income1 11 1,021 3,283 – 395 4,699 17 – 486 704 5,906 Other expenses1 11 (1,812) (721) (12) (665) (3,210) (767) (131) (6,912) (353) (11,373) Royalty costs 36.3 (599) (357) – – (956) – – – – (956) Income/(loss) before finance income and finance costs 37,764 64,945 (722) (273) 101,714 (750) (707) (6,426) 351 94,182 Finance income1 13 2 7 2 135 146 – – 117 876 1,139 Finance costs1 13 (430) (1,782) (578) (737) (3,527) – – (40) (6,688) (10,255) Profit/(loss) before tax 37,336 63,170 (1,298) (875) 98,333 (750) (707) (6,349) (5,461) 85,066 Income tax (expense)/benefit 34 (9,323) (14,446) (137) (7) (23,913) – – (487) (150) (24,550) Profit/(loss) for the period excluding intra-Group transactions 28,013 48,724 (1,435) (882) 74,420 (750) (707) (6,836) (5,611) 60,516 Revenue – – 2,198 – 2,198 – – 12,904 – 15,102 Cost of production – (2,198) – – (2,198) – – – – (2,198) Elimination of dividends received from/(paid to) fellow Group companies – – – – – – – (12,904) – (12,904) Management fees (5,784) (3,471) (169) – (9,424) (169) (101) 9,807 (113) – Finance income/(costs) 2,165 (2,519) (299) (135) (788) – (523) (3,340) 4,651 – Profit/(loss) after tax including intra-Group transactions 24,394 40,536 295 (1,017) 64,208 (919) (1,331) (369) (1,073) 60,516 Segment assets (total assets excluding goodwill) 130,867 279,739 11,003 23,305 444,914 4,199 3,060 4,569 31,868 488,610 Segment liabilities 48,755 93,111 1,443 10,943 154,252 1 129 4,923 53,466 212,771 Net assets (excluding goodwill)2 82,112 186,628 9,560 12,362 290,662 4,198 2,931 (354) (21,598) 275,839 Goodwill 16,117 – – – 16,117 – – – – 16,117 Capital expenditure3 20,391 79,889 2,251 8,806 111,337 872 400 350 – 112,959 Reconciliation of adjusted EBITDA4 Net income/(loss) before tax, finance income and finance costs 37,764 64,945 (722) (273) 101,714 (750) (707) (6,426) 351 94,182 Excluding: depreciation and amortisation included in gross profit 16 8,806 10,905 472 3 20,186 – 213 – – 20,399 Excluding: other depreciation and amortisation 16 – – – – – 178 14 312 – 504 Adjusted EBITDA4 46,570 75,850 (250) (270) 121,900 (572) (480) (6,114) 351 115,085 * Refer to note 40. 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 and amortisation. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 212 213 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 9. 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 precious 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 pass to the customer, being the date of settlement. Revenue is recognised based on the current prevailing gold price and ounces settled with financial institutions. There is no element of financing as payment is received on settlement. 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 GROUP COMPANY US$ thousand 2024 Restated* 2023 2024 2023 Revenue from contracts with customers Gold revenue 372,589 319,108 – – Silver revenue 648 478 – – Blueberries revenue1 559 306 – – Management fees – – 8,688 4,646 Other revenue Dividend received from subsidiary – – 12,969 12,904 Total revenue 373,796 319,892 21,657 17,550 * Refer to note 40. 1 Revenue amounting to US$256,000 (2023: US$216,000) was earned through export sales. 9. REVENUE continued Contract liability The Group entered into a forward sale contract in the previous reporting period, with RMB, whereby 4,846oz of gold would 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$21.6 million (ZAR400 million) in advance in the previous reporting period. The advance has been recognised as a contract liability. Revenue is recognised monthly on a straight-line basis. Promised consideration has been adjusted for the time value of money as the period between payment by RMB and transfer of the promised goods by the Group exceeds 12 months and, as such, contains a significant financing component. The financing component has been presented as part of finance costs. Significant judgement The forward sale contract is structured through a combination of put options and call options with the same strike price and time to expiry to create an offsetting synthetic forward position. As such, the derivative funding structure is priced as straight forwards, as opposed to using an option pricing model, in line with the principle of put-call parity as confirmed by RMB. IFRS 9: Financial Instruments indicates that a written option to sell a non-financial item (which is readily convertible to cash) that can be settled net in cash or another financial instrument is within the scope of IFRS 9. Management’s view is that the instrument, although partially structured with written options, is not a written option per se, but rather a synthetic forward derivative instrument. The profile of the combined structure as well as the pricing methodology applied by RMB reaffirm this. As such, the Group has accounted for the forward sale contract in accordance with IFRS 15: Revenue from Contracts with Customers, which has resulted in the recognition of a contract liability, as opposed to IFRS 9, given that the scoping requirements in IFRS 9 are not considered to be met. GROUP COMPANY US$ thousand 2024 2023 2024 2023 Balance as at 1 July 17,702 – – – Advance consideration received – 21,600 – – Interest accrued 1,301 629 – – Recognised as revenue (11,991) (4,381) – – Foreign currency translation movement 318 (146) – – Balance as at 30 June 7,330 17,702 – – Less: current portion (7,330) (10,621) – – Non-current portion – 7,081 – – 10. COST OF PRODUCTION Cost of production is summarised by the nature of its components and consists of the following: GROUP COMPANY US$ thousand Note 2024 Restated* 2023 2024 2023 Salaries and wages (55,194) (51,183) – – Electricity (31,115) (18,698) – – Mining (41,588) (36,914) – – Processing and metallurgy (47,993) (30,022) – – Engineering and technical services (25,568) (44,549) – – Administration and other1 (9,589) (9,029) – – Realisation costs (1,038) (2,845) – – Security (7,157) (5,605) – – Fuel costs2 (1,941) (43) – – Cost of production before depreciation and amortisation (221,183) (198,888) – – Depreciation and amortisation 16 (21,244) (20,399) – – Total cost of production (242,427) (219,287) – – * Refer to note 40. 1 Other costs include leases of low-value assets amounting to US$37,000 (2023: US$61,000) and short-term leases amounting to US$443,000 (2023: US$519,000). 2 As of the current reporting year, fuel costs are disclosed separately. Fuel costs for the comparative period amounted to US$2.0 million and have not been reclassified. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 214 215 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 11. OTHER INCOME/(EXPENSES) GROUP COMPANY US$ thousand Notes 2024 Restated* 2023 2024 2023 Other income Gain on foreign exchange 252 284 – 255 Gain arising from realised derivatives 27 347 – – Change in estimate on environmental rehabilitation obligation 27 62 888 – – Fair value gain on environmental rehabilitation obligation funds 21 2,319 1,936 – – Amortised financial guarantee 29 – – 234 – Insurance compensation – 675 – – South African Revenue Service (SARS) diesel refunds 546 428 – – Consulting fees 56 223 – – Other1 844 1,125 – – Total other income 4,106 5,906 234 255 Other expenses Loss on foreign exchange (78) – (65) – Loss arising from unrealised derivatives (151) (209) – – Loss arising from realised derivatives (56) (111) – – Expenses relating to short-term leases – (53) – – Expenses relating to leases of low-value assets – (6) – – Non-mining depreciation and amortisation 16 (661) (504) – – Loss on disposal of plant and equipment (106) – – – ECL allowance 29, 37 (6) (220) (561) – Non-executive directors' emoluments 38 (339) (334) (339) (334) Executive directors' emoluments 38 (1,224) (1,845) (1,224) (1,845) Cash-settled share-based payment expense 32 (5,313) (894) (4,035) (678) Auditors' remuneration2 (462) (423) (243) (229) Non-audit fees for sustainability assurance services rendered (129) (14) – – Salaries corporate office (786) (3,477) (1,558) (1,042) Investor and public relations costs (419) (226) (190) (93) Travel costs (203) (279) (55) (12) Office costs (200) (310) – – Business development costs (64) (87) – – Consulting fees (666) (665) (108) (51) Legal fees (274) (200) (156) (62) Corporate social expenditure (2,334) (1,486) – – Other1 (1,010) (30) (434) (412) Total other expenses (14,481) (11,373) (8,968) (4,758) Net other expenses (10,375) (5,467) (8,734) (4,503) * Refer to note 40. 1 Other comprises a diverse array of income and expenses that are individually and collectively immaterial in nature and amount. 2 All audit fees are paid locally in South Africa with the exception of the PwC UK audit fee of US$196,482 (2023: US$152,000). An amount of US$43 thousand relates to the non-audit fees for sustainability services rendered in the previous reporting period. Details of the Company’s policy on the use of the statutory auditors’ non-audit services and the safeguards to ensure their independence and objectivity are disclosed in the audit and risk committee report on pages 190 to 193. 12. EMPLOYEE COSTS AND COMPLEMENT GROUP COMPANY US$ thousand 2024 2023 2024 2023 Salaries and wages (short-term employee benefits) included in profit or loss 60,711 56,362 2,782 2,887 Included in employee costs above are contributions to the defined contribution plans 5,258 3,987 49 18 Included in employee costs above are contributions to the Unemployment Insurance Fund 142 133 28 28 Salaries and wages capitalised to property, plant and equipment 11,255 4,075 – – GROUP Number of employees 2024 Average 2024 Closing 2023 Average 2023 Closing PAR PLC 11 12 6 7 Corporate 16 16 17 17 Barberton Blue 22 22 27 25 MTR project 15 59 2 6 Evander Mines 260 260 247 247 Barberton Mines 2,271 2,331 2,005 2,167 Total number of employees 2,595 2,700 2,304 2,469 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 fund 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. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 216 217 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 13. FINANCE (COSTS)/INCOME 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. GROUP COMPANY US$ thousand Notes 2024 Restated* 2023 2024 Restated* 2023 Finance income Finance income in respect of: – Cash and cash equivalents 1,824 991 139 99 – Loans receivable – 8 – – – Attorney's trust account – 134 – – – SARS 36.2 60 6 7 – Total finance income 1,884 1,139 146 99 Finance costs Finance costs in respect of: – Borrowings 28 (11,637) (6,351) – – – Borrowing costs capitalised 28 3,792 – – – – Modification loss on borrowings 28 – (995) – – – Lease liabilities 30 (286) (389) – – – Environmental rehabilitation obligation 27 (2,161) (1,830) – – – Contract liability 9 (1,301) (629) – – – Suppliers (84) (61) – (1) – Financial liability 31 (107) – – – Total finance costs (11,784) (10,255) – (1) Net finance (costs)/income (9,900) (9,116) 146 98 * Refer to note 40. 14. EARNINGS PER SHARE Basic and diluted earnings per share is based on the Group’s profit or loss for the period attributable to owners of the Company, divided by the weighted average number of shares outstanding during the reporting period. 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. Reconciliation of weighted average number of ordinary shares GROUP Number of shares in issue in thousands 2024 2023 Ordinary shares in issue 2,222,862 2,222,862 Treasury shares (306,358) (306,358) Ordinary shares outstanding 1,916,504 1,916,504 Weighted average number of ordinary shares outstanding at the end of the reporting period 1,916,504 1,916,504 14. EARNINGS PER SHARE continued Basic earnings per share The calculation of basic and diluted earnings per ordinary share is based on the following: GROUP US$ thousand 2024 Restated* 2023 Profit attributable to owners of the Company 79,378 60,918 Basic and diluted earnings per share (US cents) 4.14 3.18 * Refer to note 40. Headline earnings per share Headline earnings per share is based on the Group’s headline earnings, determined in accordance with SAICA Circular 1/2023 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: GROUP US$ thousand 2024 Restated* 2023 Profit attributable to owners of the Parent 79,378 60,918 Adjusted for: Loss on disposal of plant and equipment 106 – Tax effect on loss on disposal of plant and equipment – – Insurance compensation – (675) Headline earnings 79,484 60,243 Headline and diluted headline earnings per share (US cents) 4.15 3.14 * Refer to note 40. Net asset and tangible net asset value GROUP US cents 2024 Restated* 2023 Net asset value 364,103 291,956 Net asset value per share1 19.00 15.23 Tangible net asset value 299,816 229,440 Tangible net asset value per share2 15.64 11.97 * Refer to note 40. 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 Accounting Standards but is presented as additional information to the users of the financial statements. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 218 219 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 15. DIVIDENDS Dividends declared and paid The board has proposed a final dividend of ZAR489.0 million for the 2024 reporting period (approximately US$26.8 million), equal to ZA 22.00000 cents per share or approximately US 1.20946 cents per share (0.95611 pence per share) and will be declared on interim accounts (as defined in section 838 of the Companies Act 2006) as at 31 July 2024 to ensure compliance with section 831 of the Companies Act 2006 and the net asset value test for dividend distribution (refer below). The interim accounts as at 31 July 2024 include the effect of the capital reduction (refer to note 44) that became effective on 18 July 2024 and was also approved by the board on 11 September 2024. The interim accounts are available on the Company’s website at https://www.panafricanresources.com. The dividend is subject to approval by shareholders at the AGM, which is convened for 21 November 2024. The British pound (GBP) and US$ 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:18.19 and GBP/ZAR:23.01, respectively. In light of the robust results for the current reporting period and the favourable financial prospects for the operations in the 2025 reporting period, the board has applied its discretion and has proposed a dividend in excess of 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 0.95592 cents per share (0.75219 pence per share) was approved for the 2023 reporting period at the AGM held on 23 November 2023. The dividend was paid on 12 December 2023. Dividend 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. Net asset value test for dividend distribution During the reporting period, the board became aware that the net assets test required by section 831 of the Companies Act 2006 is required to be performed by the Company on presentation currency amounts and not on functional currency amounts. It came to the Company’s attention that the foreign currency translation reserve does not form part of the Company’s non-distributable reserves, despite not being realised, and as such cannot be included as non-distributable reserves when performing the net assets test. This means that dividends paid in respect of the reporting periods ended 30 June 2019, 2020, 2021, 2022 and 2023 (together relevant dividends) and the repurchase of ordinary shares (the share buy-backs) by the Company between 1 April and 9 May 2022 were made otherwise than in accordance with the Companies Act 2006. The consequences of the relevant distributions (the Company’s payment of each of the relevant dividends and the payments made in respect of the purchase of each of the share buy-backs) having been made otherwise than in accordance with the Companies Act 2006 were rectified by way of the cancellation of the Company’s share premium account. That reduction of share premium was confirmed by the Court on 2 July 2024 and took effect on 18 July 2024. Refer to note 44 for further information. The Company has taken and continues to take the necessary steps to ensure adequate distributable income (and the ability of the Company to comply with the net assets test) in the future. 16. PROPERTY, PLANT AND EQUIPMENT Accounting policy Property, plant and equipment comprise 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. 16. PROPERTY, PLANT AND EQUIPMENT continued Accounting policy continued 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. 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 to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term in which case they are depreciated over the useful life of the underlying asset. 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. 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, 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 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 accounting 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. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 220 221 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 16. PROPERTY, PLANT AND EQUIPMENT continued Significant accounting 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: Currently consist of the solar plant located at Evander Mines, the ongoing construction of a solar plant at Barberton Mines and the extension of Evander Mines’ solar plant • 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. Significant assumptions and estimates 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 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. 16. PROPERTY, PLANT AND EQUIPMENT continued Significant assumptions and estimates 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 109) as detailed below: • Mineral Resources and Mineral Reserves: Mineral Reserves and, where considered appropriate, Mineral Resources, 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 106 to 119 or our website at: https://www.panafricanresources.com/operations-at-a-glance-2/mineral-resource-mineral-reserve-2/ for further disclosure of the Group’s Mineral Resources and Mineral Reserves and life-of-mine plans • 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. Impairment considerations There was no change in the composition of the Group’s CGUs. 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. All of the Group’s assets situated in Sudan, including the fire assay multi-element analytical laboratory, are currently guarded. 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$5.0 million. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 222 223 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 16. PROPERTY, PLANT AND EQUIPMENT continued US$ thousand Land1 Mineral rights and mining property Exploration assets – other2 Exploration assets – Sudan Leasehold improve- ments 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 GROUP Cost Balance as at 1 July 2022 2,253 39,685 28,923 1,402 561 81,851 532 291,578 4,856 46,620 112,499 1,208 601 612,569 Additions – right-of-use asset – – – – – – 312 – – – – – – 312 Acquisitions 18 – – – – – – – – – – – – 18 Additions 3,221 138 – 282 260 2,772 – 11,038 (3) 7,249 87,644 7 351 112,959 Disposals – – – – – – – (75) – – – – (102) (177) Borrowing costs capitalised – – – – – – – – – – – – – – Transfers – 598 (54) – – 13,997 – 12,134 (39) (26,575) – – (5) 56 Foreign currency translation reserve movement (488) (5,416) (3,914) (115) 248 (12,028) (89) (40,542) (655) (5,226) (20,169) (164) (95) (88,653) Balance as at 30 June 2023 5,004 35,005 24,955 1,569 1,069 86,592 755 274,133 4,159 22,068 179,974 1,051 750 637,084 Additions – – – – 9 2,893 – 10,244 – 148,925 9,968 57 309 172,405 Disposals – – – – – – – (273) – (1) – – – (274) Increase in environmental rehabilitation obligation – – – – – 276 – – – – – – – 276 Borrowing costs capitalised – – – – – – – – – 3,792 – – – 3,792 Transfers – – – – – 15,887 – 6,570 – (22,639) – – – (182) Derecognition5 – – – – – (8,077) – (32,491) – – (18,209) – – (58,777) Foreign currency translation reserve movement 176 1,232 878 21 (74) 3,591 27 10,031 146 4,495 6,617 39 35 27,214 Balance as at 30 June 2024 5,180 36,237 25,833 1,590 1,004 101,162 782 268,214 4,305 156,640 178,350 1,147 1,094 781,538 Accumulated depreciation and accumulated impairment losses Balance as at 1 July 2022 – (19,131) – – – (34,956) (368) (152,352) (1,453) – (47,943) (21) (543) (256,767) Depreciation – (487) – – (82) (3,486) (189) (13,439) (582) – (2,341) (111) (96) (20,813) Disposals – – – – – – – 55 – – – – – 55 Transfers – (562) – – – (6,610) – 3,914 13 – 2,968 – 27 (250) Decrease in environmental rehabilitation obligation – – – – – – – – – – – – – – Foreign currency translation reserve movement – 2,650 – – (3) 5,302 61 21,156 229 – 6,457 9 77 35,938 Balance as at 30 June 2023 – (17,530) – – (85) (39,750) (496) (140,666) (1,793) – (40,859) (123) (535) (241,837) Depreciation – (473) – – (173) (3,970) (159) (12,625) (520) – (3,675) (106) (123) (21,824) Disposals – – – – – – – 10 – – – – – 10 Transfers – – – – – – – 31 – – – – – 31 Derecognition5 – – – – – 8,077 – 32,491 – – 18,209 – – 58,777 Foreign currency translation reserve movement – (630) – – 3 (1,512) (22) (5,296) (78) – (1,543) (7) (22) (9,107) Balance as at 30 June 2024 – (18,633) – – (255) (37,155) (677) (126,055) (2,391) – (27,868) (236) (680) (213,950) Carrying amount As at 30 June 2023 5,004 17,475 24,955 1,569 984 46,842 259 133,467 2,366 22,068 139,115 928 215 395,247 As at 30 June 2024 5,180 17,604 25,833 1,590 749 64,007 105 142,159 1,914 156,640 150,482 911 414 567,588 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 Items of property, plant and equipment which are fully depreciated were derecognised as they are no longer in use. Refer to note 28 for property, plant and equipment pledged as security for the Group’s senior debt. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 224 225 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 17. GOODWILL continued Sensitivity analysis There is a degree of uncertainty associated with the estimation of the long-term gold price forecast and other assumptions. To provide for this risk, management has estimated reasonable scenarios and sensitivities as follows: Unit Sensitivity Adjusted inputs (Decrease)/ increase in recoverable amount US$ thousand Resultant goodwill impairment US$ thousand 2024 Gold price – initial year ZAR/kg 5% decrease in US$ gold price 1,187,500 (40,370) – Nominal post-tax discount rate % 1% point increase in discount rate 16.80 (10,525) – South African rand US$/ZAR 5% stronger 16.74 (40,370) – South African rand US$/ZAR 3% weaker 18.15 22,468 – 2023 Gold price – initial year ZAR/kg 5% decrease in US$ gold price 1,082,673 (27,334) 16,117 Nominal post-tax discount rate % 1% point increase in discount rate 17.40 (4,850) – South African rand US$/ZAR 5% stronger 17.39 (27,334) 16,117 South African rand US$/ZAR 3% weaker 18.85 15,754 – 18. INTANGIBLE ASSETS Accounting policy Intangible assets comprise software costs and are measured at cost less accumulated amortisation and accumulated impairment losses. These intangible assets are amortised over their estimated useful lives, usually between three and five years, or the duration of the licences. GROUP COMPANY US$ thousand 2024 2023 2024 2023 Software costs Balance as at 1 July 265 281 – – Cost 1,215 1,282 – – Accumulated amortisation (926) (973) – – Accumulated impairment losses (24) (28) – – Additions 169 113 – – Amortisation (81) (90) – – Foreign currency translation reserve movement 12 (39) – – Balance as at 30 June 365 265 – – Cost 1,290 1,215 – – Accumulated amortisation (901) (926) – – Accumulated impairment losses (24) (24) – – Intangible assets no longer in use amounting to US$141,000 (2023: US$nil) were derecognised during the reporting period. 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. 16. PROPERTY, PLANT AND EQUIPMENT continued Reconciliation of depreciation and amortisation as included in cost of production: GROUP US$ thousand 2024 2023 Depreciation on property, plant and equipment (21,824) (20,813) Amortisation of intangible assets (81) (90) Add back: other depreciation and amortisation 661 504 Total depreciation and amortisation included in cost of production (21,244) (20,399) 17. 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. Impairment losses 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. GROUP COMPANY US$ thousand 2024 2023 2024 2023 Goodwill1 16,685 16,117 – – 1 The movement is due to the translation at the closing rate of ZAR18.19 (2023: ZAR18.83). 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 would arise. Barberton Mines’ impairment assessment was performed and no impairment of the goodwill was identified. Impairment assessment and assumptions The Group determines the recoverable amounts of goodwill by calculating the fair value less costs of disposal from the discounted life- of-mine model cash flows of Barberton Mines’ CGU. 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 South African rand denominated cash flows of the CGU on a nominal basis using the following key assumptions. 2024 2023 Nominal discount rate (post-tax) (%) 15.8 16.4 Gold price (ZAR/kg) – initial year1 1,250,000 1,139,656 Long-term cost inflation (%) 5.1 5.1 Life-of-mine (years) 20 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. The estimated recoverable amount of the CGU exceeds its carrying amount by approximately US$46.2 million (2023: US$10.3 million). OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 226 227 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 19. INVESTMENTS Accounting policy Investments in equity interests are measured at fair value through other comprehensive income. Refer to note 5.4 for the policy addressing financial assets measured at fair value through other comprehensive income. GROUP COMPANY US$ thousand 2024 2023 2024 2023 Tennant Consolidated Mining Group Proprietary Limited (TCMG)1 Gold and copper mining 3,373 – 3,373 – MC Mining Limited (MC Mining)2 Coal mining – – – – 3,373 – 3,373 – The registered addresses of the investments are: • TCMG: Level 3/16 Ventnor Ave, West Perth, WA 60005, Australia • MC Mining: Suite 8, 7 The Esplanade, Mt Pleasant WA 6153, Australia. Movement in investments GROUP COMPANY US$ thousand 2024 2023 2024 2023 Balance as at 1 July – 1,127 – 1,127 Acquisition of investment in TCMG3 3,280 – 3,280 – Fair value adjustment through other comprehensive income3 – 1,563 – 1,563 Disposal of investment in MC Mining – (2,485) – (2,485) Foreign currency translation reserve movement 93 (205) 93 (205) Total investments 3,373 – 3,373 – 1 TCMG is a gold and copper-focused resource company with an exploration portfolio of tenements located in Western Australia. The Company acquired 33,333 of TCMG’s issued share capital on 4 April 2024, representing an 8% shareholding. 2 During the previous reporting period, the Company disposed of its investment in MC Mining for an amount of US$2.5 million. The Company previously held 15,432,581 of MC Mining’s issued share capital representing a 9.3% shareholding. MC Mining is an emerging coal exploration, development and mining company operating in South Africa. 3 The fair value of the investment in TCMG was not substantially different to its carrying amount at the reporting date, and as such, no fair value adjustment was recognised (refer to note 37). 20. INVESTMENTS IN SUBSIDIARIES Accounting policy The Company, in its separate financial statements, measures investments in subsidiaries at cost less accumulated impairment losses, if any. The subsidiaries listed in the following table are incorporated in South Africa, which is also their principal place of business except for Pan African Resources Minerals DMCC which is registered in Dubai and Pan African Resources Minerals Co. Limited which is registered in Sudan. The registered address of the Company is 2nd Floor, 107 Cheapside, London, EC2V 6DN. The registered address of the Company’s South African subsidiaries is The Firs Building, 2nd Floor, Office 204, corner Biermann and Cradock Avenues, Rosebank, Johannesburg, 2196. The registered address of the Dubai company is Dubai Multi Commodities Centre, DMCC Business Centre, AG Tower, Dubai. The registered address of the Sudan company is House No 8, Block No 5, Khartoum 2, Khartoum. 20. INVESTMENTS IN SUBSIDIARIES continued The Company has investments in the following subsidiaries: Principal activity Statutory holding Effective holding of the Company % COMPANY Carrying amount US$ thousand 2024 % 2023 % 2024 2023 South Africa Barberton Mines Proprietary Limited (Barberton Mines)1 Gold mining 100.00 95.00 100.00 – – Evander Gold Mines Proprietary Limited (Evander Gold Mines)1 Gold mining 100.00 100.00 100.00 – – Evander Gold Mining Proprietary Limited (Evander Mines) Gold mining 100.00 100.00 100.00 – – Mogale Tailings Retreatment Proprietary Limited (MTR)2 Gold mining 100.00 100.00 100.00 1,166 – Mogale Gold Proprietary Limited (Mogale Gold)2 Gold mining 100.00 100.00 100.00 – – Mintails SA Soweto Cluster Proprietary Limited (MSC)2 Gold mining 100.00 100.00 100.00 – – Mogale Clay Proprietary Limited (Mogale Clay) Clay mining 70.00 – 70.00 – – Pan African Resources Funding Company Limited (Funding Company)3 Treasury services 100.00 100.00 100.00 – – Pan African Resources SA Holdings Proprietary Limited (PAR SA Holdings)4 Holding company 100.00 100.00 100.00 85,315 82,416 Pan African Resources Management Services Company Proprietary Limited (PAR Management Services)5 Administration services 100.00 100.00 100.00 1,100 1,062 Concrete Rose Trading Proprietary Limited (Concrete Rose)6 B-BBEE company 100.00 100.00 100.00 – – PAR Gold Proprietary Limited (PAR Gold)7 Investing 49.90 49.90 100.00 – – Evander Solar Solutions Proprietary Limited (Evander Solar Solutions)8 Solar plant 100.00 100.00 100.00 – – Barberton Blue Proprietary Limited (Barberton Blue) Agricultural ESG project 80.00 80.00 80.00 – – Barberton Green Proprietary Limited (Barberton Green) Agricultural ESG project 100.00 100.00 100.00 – – Pan African Resources Properties Proprietary Limited (PAR Properties)9 Property company 100.00 100.00 100.00 58 56 K2015200726 (South Africa) Proprietary Limited Dormant – – 100.00 – – Evander Township Limited Dormant – – 100.00 – – Other Pan African Resources Minerals DMCC10 Holding company of the operations in Sudan 80.00 80.00 80.00 22 21 Pan African Resources Minerals Co. Limited10 Exploration – Sudan 100.00 100.00 100.00 – – Total investments in subsidiaries 87,646 83,555 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 228 229 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 20. INVESTMENTS IN SUBSIDIARIES continued Movement in investments in subsidiaries COMPANY US$ thousand Note 2024 2023 Balance as at 1 July 83,555 96,630 Investment in Pan African Resources Minerals DMCC – 12 Contribution to MTR – financial guarantees 29 1,166 – Foreign currency translation reserve movement 2,925 (13,087) Total investments in subsidiaries 87,646 83,555 1 During the current reporting period, the employee share ownership plan (ESOP) at Barberton Mines dissolved. Previously, employees owned 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 the broad-based black economic empowerment (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 Listings 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 2022 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% (2023: 13.8%). Refer to note 26. 8 The purpose of Evander Solar Solutions is to establish solar plants to provide electricity to the mining operations. 9 PAR Properties owns a historical building in Barberton. 10 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 Resources Minerals Co Limited, secured five prospecting concessions (or exploration licences) in north-eastern Sudan during the 2022 reporting period. 21. ENVIRONMENTAL REHABILITATION OBLIGATION FUND Accounting policy These investments are classified as financial assets at fair value through profit or loss. Refer to note 5.4 for the policy addressing financial assets measured at fair value through profit or loss. Funds held in insurance investment products US$ thousand Note Barberton Mines Evander Mines Mogale Gold Total Balance as at 1 July 2022 3,854 19,170 – 23,024 Acquisitions – – 18 18 Drawdowns (30) (100) – (130) Fair value gain recognised in profit or loss 11 325 1,611 – 1,936 Foreign currency translation reserve movement (539) (2,681) (1) (3,221) Balance as at 30 June 2023 3,610 18,000 17 21,627 Fair value gain recognised in profit or loss 11 377 1,930 12 2,319 Foreign currency translation reserve movement 138 688 1 827 Balance as at 30 June 2024 4,125 20,618 30 24,773 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, Barberton Mines and Mogale Gold. 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. 22. INVENTORY Accounting policy Inventory includes gold at Rand Refinery, consumable stores and the current portion of long-term inventory. 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 profit or loss in cost of production. GROUP COMPANY US$ thousand 2024 Restated* 2023 2024 2023 Gold at Rand Refinery 6,323 4,350 Consumables stores 10,115 10,197 – – Current portion of long-term inventory 213 78 – – Allowance for obsolete inventory (220) (708) – – Current inventory 16,431 13,917 – – Long-term inventory1 12,263 12,120 – – Total inventory 28,694 26,037 – – Inventory recognised in cost of production 33,862 26,446 – – * Refer to note 40. 1 Long-term inventory relates to a holding of tailings contained in Barberton Mines’ Harper tailings storage facility (TSF), Mogale Gold and MSC. There was no write-down of inventory to net realisable value or any reversal of write-downs in the current or previous reporting period. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 230 231 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 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 5.4 for the policy addressing financial assets measured at amortised cost. GROUP COMPANY US$ thousand 2024 Restated* 2023 2024 2023 Trade receivables1 328 226 – – Net other receivables 3,680 2,218 – – – Other receivables2 3,740 2,489 – – – Loss allowance (60) (271) – – Total financial assets 4,008 2,444 – – Prepayments 825 1,315 98 32 Value-added tax (VAT) receivable 10,342 4,703 – 58 Total non-financial assets 11,167 6,018 98 90 Total trade and other receivables 15,175 8,462 98 90 * Refer to note 40. 1 Trade receivables arise from the sale of by-products. 2 Other receivables arise from transactions outside the normal operating activities of the Group and consist of a large number of small debtor balances of US$1.8 million (2023: US$1.9 million) of Evander Mines and Barberton Mines. The increase in other receivables in 2024 relates to a municipal deposit amounting to US$1.3 million (2023: US$nil) for MTR. The loss allowance on other receivables is estimated on an individual debtor basis. Refer to note 37 for further information on credit risk. 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 Refer to note 5.4 for the policy addressing financial assets measured at amortised cost. GROUP COMPANY US$ thousand 2024 2023 2024 2023 Cash and cash equivalents 26,332 34,771 2,851 2,435 Restricted cash1 (82) (240) – – Total cash and cash equivalents net of restricted cash 26,250 34,531 2,851 2,435 1 Restricted cash relates to funds withdrawn from the environmental rehabilitation obligation fund and COVID-19 Temporary Employee Relief Scheme funds. 25. SHARE CAPITAL Issued share capital GROUP COMPANY Number of shares 2024 2023 2024 2023 Issued number of ordinary shares 2,222,862,046 2,222,862,046 2,222,862,046 2,222,862,046 Reconciliation of the number of shares: Number of ordinary shares in issue at the beginning of the reporting period 2,222,862,046 2,222,862,046 2,222,862,046 2,222,862,046 Total number of shares in issue 2,222,862,046 2,222,862,046 2,222,862,046 2,222,862,046 Treasury shares (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 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 232 233 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 26. RESERVES GROUP US$ thousand Foreign currency translation reserve1 (Restated*) 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 2022 (172,447) 2,612 (18,122) (24,872) (21,638) (3,073) (5,416) (242,956) Fair value adjustment of investment – – – – – – 203 203 Foreign currency translation reserve movement (41,736) – – – – – 717 (41,019) Balance as at 30 June 2023 (214,183) 2,612 (18,122) (24,872) (21,638) (3,073) (4,496) (283,772) Reclassification of foreign currency translation reserve8 (391) – – – – – – (391) Foreign currency translation reserve movement 11,658 – – – – – – 11,658 Balance as at 30 June 2024 (202,916) 2,612 (18,122) (24,872) (21,638) (3,073) (4,496) (272,505) * Refer to note 40. 1 The translation reserve comprises all foreign exchange differences arising from the translation of the Group’s 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$608.3 thousand. The incremental value arose due to an extension of the B-BBEE scheme’s original term from 31 December 2018 to 31 December 2021, and an increase in the trickle dividend from 5% to 10%. The Group’s B-BBEE transaction was unwound during the previous reporting period. 3 The realisation of equity reserve was created in June 2009 through the acquisition of PAR Gold’s 26% shareholding in Barberton Mines, in exchange for the issue of new ordinary shares in the Company to PAR Gold. 4 The treasury share reserve was created on 7 June 2016. The Group purchased shares in PAR Gold, representing 23.83% or 436.4 million of its issued share capital at the time. The accounting effect of this transaction was similar to that of a share buy-back as the Group acquired shares in a company that held an investment in the Company. On 30 May 2018, PAR Gold publicly disposed of 130 million shares in the Company resulting in its shareholding reducing to 13.8% (2023:13.8%). 5 The merger reserve was created through the historical reverse acquisition of Barberton Mines in July 2007. 6 As announced on SENS on 12 May 2022, the Company completed its share buy-back programme. All shares purchased under the programme have been cancelled. 7 The fair value reserve comprises unrealised gains and losses recognised on financial assets measured at fair value through other comprehensive income. 8 During the current reporting period, management established that it had, from inception, incorrectly assessed the Sudanese pound to be the functional currency of the Sudan foreign operation. The foreign operation is assessed as an extension of the Company and as such should apply the same functional currency as the Company, namely the South African rand. The impact of the error was immaterial and corrected in the current reporting period by transferring the foreign currency-related reserve balance to retained earnings. 26. RESERVES continued COMPANY US$ 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 2022 (147,188) 1,481 3,153 (3,073) (5,416) (151,043) Fair value adjustment of investment – – – – 203 203 Foreign currency translation reserve movement (23,857) – – – 717 (23,140) Balance as at 30 June 2023 (171,045) 1,481 3,153 (3,073) (4,496) (173,980) Foreign currency translation reserve movement 4,731 – – – – 4,731 Balance as at 30 June 2024 (166,314) 1,481 3,153 (3,073) (4,496) (169,249) 1 The translation reserve comprises all foreign exchange differences arising from the translation of the Company’s financial statements to its presentation currency of US$. 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. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 234 235 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 27. ENVIRONMENTAL REHABILITATION OBLIGATION 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. However, where no related assets are present, these are recognised in profit or loss. 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% (2023: 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 106 to 119. 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. 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$2.1 million (US$0.4 million on a discounted basis) for environmental and decommissioning costs in real terms, once the amendments become effective. The effective date of the amendments is yet to be determined. Given the uncertainty, no obligation has been recognised at the reporting date. While not a member of the International Council on Mining and Metals (ICMM), the Group is working towards conformance with the Global Industry Standard for Tailings Management (GISTM) as far as reasonably practicable, with respect to its TSFs. The Group is currently progressing with its gap analysis of its tailings governance and management framework, with reference to the ICMM Conformance Protocols for the GISTM. While this work is ongoing, it is not currently possible to reliably estimate the value of incremental costs required to achieve conformance with the new standard and hence no additional provision has been recognised in this respect. 27. ENVIRONMENTAL REHABILITATION OBLIGATION continued The movement in the Group’s environmental rehabilitation obligation is as follows: GROUP COMPANY US$ thousand Notes 2024 Restated* 2023 2024 2023 Balance as at 1 July 16,741 8,603 – – Acquisition – 9,728 – – Change in estimate – recognised in profit or loss 11 (62) (888) – – Change in estimate – capitalised long-term inventory (83) (530) Change in estimate – capitalised to plant and equipment 276 138 – – Unwinding of finance costs 13 2,161 1,830 – – Foreign currency translation reserve movement 655 (2,140) – – Balance as at 30 June 19,688 16,741 – – * Refer to note 40. 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. 2024 2023 US$ thousand Period to rehabilitation (years) Risk-free rate (nominal) % Period to rehabilitation (years) Risk-free rate (nominal) % Barberton Mines (Fairview) 20.00 13.08 20.00 14.26 Barberton Mines (Sheba) 20.00 14.35 20.00 14.26 Barberton Mines (Consort) 9.00 14.87 9.00 14.95 Barberton Mines (BTRP) 8.00 13.08 9.00 14.95 Evander Mines (8 Shaft and Kinross plant) 11.00 14.69 13.00 14.45 Evander Mines (Elikhulu) 10.00 15.62 10.00 15.67 Mogale Gold 16.00 15.73 16.00 17.61 MSC 19.00 14.48 19.00 14.26 28. BORROWINGS GROUP COMPANY US$ thousand Notes 2024 2023 2024 2023 Revolving credit facility (RCF) 28.1 10,842 10,628 – – Term loan 28.2 53,519 – – – Green loan 28.3 19,199 – – – DMTN bond 28.4 44,225 42,725 – – Total borrowings 127,785 53,353 – – Less: current portion (4,729) (10,848) – – Non-current portion 123,056 42,485 – – 127,785 53,353 – – During the current reporting period, the Group entered into a term and RCF agreement underwritten by RMB, with Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) as co-financier. The agreement provides for a term loan amounting to ZAR1.3 billion (US$70.3 million), 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 new RCF has a three-year term and provides the Group with access to flexible and cost-effective working capital. The term loan 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. The term and RCF agreement was amended during the current reporting period to include a rand-denominated term loan facility (green loan) available to the Group amounting to ZAR350 million (US$19.2 million) for purposes of financing or refinancing eligible green projects. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 236 237 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 28. BORROWINGS continued The terms of this agreement are set out below. Lenders Rand Merchant Bank (a division of FirstRand Bank Limited) and Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) Borrower Funding Company Guarantors Pan African Resources PLC; Evander Gold Mining Proprietary Limited; Barberton Mines Proprietary Limited; Evander Gold Mines Proprietary Limited; Pan African Resources SA Holdings Proprietary Limited; Mogale Tailings Retreatment Proprietary Limited; Mogale Gold Proprietary Limited, Mintails SA Soweto Cluster Proprietary Limited and Evander Solar Solutions Proprietary Limited Bonds as security for the facility The following bonds were registered in favour of the lenders: • Mortgage bond B3644/2015 – Barberton Mines/Bowwood and Main No. 40 (RF) Proprietary Limited • Mortgage bond B1163/2016 – Evander Gold Mining/Bowwood and Main No. 40 (RF) Proprietary Limited • Mortgage bond B4673/2015 – Evander Gold Mining/Bowwood and Main No. 40 (RF) Proprietary Limited • Mortgage bond B7829/2015 – Evander Gold Mining/Bowwood and Main No. 40 (RF) Proprietary Limited • General notarial bond BN15110/2015 – Barberton Mines/Bowwood and Main No. 40 (RF) Proprietary Limited • General notarial bond BN15357/2015 – Evander Gold Mining/Bowwood and Main No. 40 (RF) Proprietary Limited • General notarial bond BN20757/2017 – Evander Gold Mining/Bowwood and Main No. 40 (RF) Proprietary Limited • General notarial bond BN20755/2017 – Barberton Mines/Bowwood and Main No. 40 (RF) Proprietary Limited • Special notarial bond BN15563/2015 – Evander Gold Mining/Bowwood and Main No. 40 (RF) Proprietary Limited • Special notarial bond BN15616/2015 – Barberton Mines/Bowwood and Main No. 40 (RF) Proprietary Limited • Special notarial bond BN20758/2017 – Evander Gold Mining/Bowwood and Main No. 40 (RF) Proprietary Limited • Special notarial bond BN20756/201 – Barberton Mines/Bowwood and Main No. 40 (RF) Proprietary Limited • Special notarial bond BN12838/2018 – Evander Gold Mining/Bowwood and 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 28.1 Revolving credit facility The movement on the RCF is as follows: GROUP COMPANY US$ thousand 2024 2023 2024 2023 Balance as at 1 July 10,628 26,192 – – Drawdowns 42,796 48,382 – – Finance costs incurred 2,005 2,161 – – Commitment fees capitalised 91 – – – Non-refundable fees (303) – – – Unwinding of non-refundable fees 140 273 – – Modification adjustment – 995 – – Repayment of capital (42,854) (61,779) – – Repayment of finance costs (1,836) (2,181) – – Foreign currency translation reserve movement 175 (3,415) – – Balance as at 30 June 10,842 10,628 – – Less: current portion (66) (10,628) – – Non-current portion 10,776 – – – 28. BORROWINGS continued 28.1 Revolving credit facility continued The terms of the RCF are as follows: Facility amount ZAR1 billion Interest rate Depending on the rollover period based on one-month, three-month or six-month JIBAR Interest rate margin – Tranche 1 (ZAR600 million) 2.75% as may be adjusted in accordance with the sustainability performance targets and KPIs. The margin was adjusted in the current reporting period to 2.71% Interest rate margin – Tranche 2 (ZAR400 million) 2.75% Commitment fee 0.9625% of the aggregate of the available commitment, payable quarterly in arrears Term of loan 35 months effective from 31 July 2023 Repayment period Bullet repayment at the final maturity date Final maturity date 30 June 2026 28.2 Term loan The movement on the term loan is as follows: GROUP COMPANY US$ thousand 2024 2023 2024 2023 Balance as at 1 July – – – – Drawdowns 52,328 – – – Finance costs incurred 3,160 – – – Non-refundable fees (1,065) – – – Unwinding of non-refundable fees 165 – – – Repayment of finance costs (3,185) – – – Foreign currency translation reserve movement 2,116 – – – Balance as at 30 June 53,519 – – – Less: current portion (33) – – – Non-current portion 53,486 – – – The terms of the loan are as follows: Facility amount ZAR1.3 billion Interest rate Three-month JIBAR Interest rate margin – Tranche 1 (ZAR780 million) 2.85% as may be adjusted in accordance with the sustainability performance targets and KPIs. The margin was adjusted in the current reporting period to 2.81% Interest rate margin – Tranche 2 (ZAR520 million) 2.85% Commitment fee 0.9625% of the aggregate of the available commitment, payable quarterly in arrears Term of loan Six years effective from 31 July 2023 Repayment period Quarterly repayments on 31 March, 30 June, 30 September and 31 December commencing 30 September 2025 Final maturity date 31 July 2029 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 238 239 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 28. BORROWINGS continued 28.3 Green loan The movement on the green loan is as follows: GROUP COMPANY US$ thousand 2024 2023 2024 2023 Balance as at 1 July – – – – Drawdowns 19,074 – – – Finance costs incurred 89 – – – Non-refundable fees (56) – – – Unwinding of non-refundable fees 1 – – – Repayment of finance costs (80) – – – Foreign currency translation reserve movement 171 – – – Balance as at 30 June 19,199 – – – Less: current portion (4,385) – – – Non-current portion 14,814 – – – The terms of the facility are as follows: Facility amount ZAR350 million Interest rate Three-month JIBAR Interest rate margin 2.85% Interest rate margin benefit 0.1% per annum Commitment fee 0.9625% of the aggregate of the available commitment, payable quarterly in arrears Term of loan Five years effective from June 2024 Repayment period Quarterly repayments on 31 March, 30 June, 30 September and 31 December commencing 30 September 2024 Final maturity date 31 July 2029 28.4 DMTN bonds The movement on the DMTN bonds is as follows: GROUP COMPANY US$ thousand 2024 2023 2024 2023 Balance as at 1 July 42,726 – – – Notes issued – 46,323 – – Finance costs incurred 5,145 2,724 – – Repayment of finance costs (5,172) (2,383) – – Foreign currency translation reserve movement 1,526 (3,938) – – Balance as at 30 June 44,225 42,726 – – Less: current portion (245) (240) – – Non-current portion 43,980 42,486 – – During the previous 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. 28. BORROWINGS continued 28.4 DMTN bonds continued The terms of the bonds issued under the DMTN programme are as follows: Debt security code PARS01 PARS02 ISIN ZAG000192758 ZAG000192766 Type of debt security Senior second ranking secured Senior second ranking secured Listing Sustainability segment of the JSE Sustainability segment of the JSE Issue date 13 December 2022 13 December 2022 Issue price 100% 100% Nominal amount per note ZAR1 million ZAR1 million Aggregate nominal amount ZAR585 million ZAR215 million Reference rate Three-month JIBAR Three-month JIBAR Margin 3.60% 3.75% Interest commencement date 13 December 2022 13 December 2022 Interest payment basis Floating rate Floating rate First interest payment date 13 March 2023 13 March 2023 Interest payment terms Quarterly Quarterly Maturity date 13 December 2025 13 December 2027 Final maturity amount 100% 100% Guarantors 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 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 Dealer Rand Merchant Bank, a division of FirstRand Bank Limited Rand Merchant Bank, a division of FirstRand Bank Limited The following KPIs are applicable to the RCF, term loan, green loan and DMTN bonds: KPI KPI Renewable energy Renewable energy Land rehabilitation Land rehabilitation Employee safety Employee safety Sustainability target met -3bps margin adjustment per period, commencing 30 June 2023 -2bps margin adjustment per reporting period, commencing 30 June 2024 -1bps margin adjustment per reporting period, commencing 30 June 2023 Penalty threshold level not achieved +3bps margin adjustment per period, commencing 30 June 2023 +2bps margin adjustment per reporting period, commencing 30 June 2024 +1bps margin adjustment per reporting period, commencing 30 June 2023 KPI reporting 6.1% 9.4% 6.52 per million man hours Sustainability performance target Achieved Achieved Achieved Refer to the Group’s sustainability-linked finance framework on page 94 for further information on the respective ESG targets. Financial covenants The financial covenants listed below are in place for the RCF, term loan, green loan and DMTN bonds and are calculated for a 12-month period at each reporting date. • The debt service cover ratio must be more than 1:3 times • The net debt-to-equity ratio must be less than 1:1 • The net debt-to-EBITDA ratio must be less than 2:1 • The interest cover ratio must be greater than 4:1. The financial covenants were met for the current and previous reporting periods. Refer to note 37 for the covenant calculations. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 240 241 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 28. BORROWINGS continued 28.5 Credit facilities The Group has the following credit facilities, guarantees and derivative trading facilities in place: GROUP COMPANY US$ thousand 2024 2023 2024 2023 RCF 54,975 53,107 – – Term facility 71,468 – – – Green loan 19,241 – – – Guarantees1 Eskom Holdings SOC Limited 1,278 1,234 – – DMRE – Cenviro Solutions insurance investment product 35 963 34,687 – – General banking facility2 7,697 7,435 – – Pre-settlement splits Forward exchange contract limit facility 2,474 2,390 – – Precious metals hedging facility 2,199 2,124 – – Gold hedging facility 14,843 14,339 – – US$ gold and derivatives trading facilities3 34,157 32,996 – – Gold loan facility 15,943 15,401 – – Credit cards 163 126 – – Other 275 266 275 266 Total credit facilities 260,676 164,105 275 266 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. The Group has access to the following funding and undrawn facilities as at the reporting date: GROUP COMPANY US$ thousand 2024 2023 2024 2023 General banking facilities 7,697 7,435 – – Utilisation of the general banking facilities – – – – RCF 54,975 53,107 – – Utilisation of the RCF1 (10,995) (10,674) – – Term loan 71,468 – – – Utilisation of the term loan1 (54,426) – – – Green loan 19,241 – – – Utilisation of the green loan1 (19,241) – – – Total available debt facilities 68,719 49,868 – – 1 Excludes accrued interest on the facility as at 30 June. 29. FINANCIAL GUARANTEES The Company acts as a co-guarantor for certain of Funding Company’s borrowings. The initial fair value and subsequent measurement is determined based on the probability of default (PD), loss given default (LGD) and exposure at default (EAD) on the expected probability of Funding Company defaulting on its obligations. In addition to this, a credit conversion factor is applied, which is the expected probability of drawdowns on undrawn facilities. Significant assumptions and estimates Determining the fair value on initial recognition of financial guarantees requires the use of significant assumptions and estimates, which include the following: • An EAD (maximum of ZAR3,250 million accumulating over time) through credit conversion factors ranging between 75% and 100% • An LGD ranging between 70% and 90% of the EAD • A PD of less than 5% in any 12-month period. GROUP COMPANY US$ thousand Notes 2024 2023 2024 2023 Balance as at 1 July – – – – Issued during the year 20 – – 1,166 – Amortisation 11 – – (234) – ECL adjustment 11 – – 561 – Foreign currency translation reserve movement – – (22) – Balance as at 30 June – – 1,471 – No financial guarantees were recognised in the previous reporting period as they were immaterial. There was no indication that the guarantees would be called upon at either reporting date. The maximum possible exposure is the total amount the Company would have to pay if the guarantee is called on and if none of the other subsidiaries that provided guarantees were able to pay the amount called on. Refer to note 28 for a summary of the Funding Company’s borrowings guaranteed by the Company. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 242 243 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 30. 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 The right-of-use asset is measured at cost, which includes the initial measurement of the corresponding lease liability. Right-of-use assets have been included in property, plant and equipment. Refer to note 16 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 its incremental borrowing rate. Incremental borrowing rates are determined on initial recognition and based on the aggregate of the JIBAR and the margin applicable to the RCF. Lease payments included in the measurement of the lease liability are made up of fixed payments and payments arising from extension options reasonably certain to be exercised. 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. Contracts may contain both lease and non-lease components. The Group has elected to 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 Management applies judgement in assessing the likelihood of exercising extension options in determining the lease term. 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. 30. LEASES continued The movement in the lease liabilities is as follows: GROUP COMPANY US$ thousand 2024 2023 2024 2023 Balance as at 1 July 3,483 4,348 – – Additions – 312 – – Reassessment – (42) – – Repayments (924) (951) – – Finance costs 286 389 – – Foreign currency translation reserve movement 104 (573) – – Balance as at 30 June 2,949 3,483 – – Less: current portion (791) (634) – – Non-current portion 2,158 2,849 – – The total cash outflow for leases including low-value assets leases and short-term leases was US$1.2 million (2023: US$1.0 million). 31. FINANCIAL LIABILITY During the current reporting period, the Group entered into an instalment sale agreement with Electro Hydro World CC for the construction, operation and maintenance of a grout plant at Evander Mines’ 8 Shaft. The effective date of the agreement was 1 July 2023 with a term of three years. The movement in the instalment sale obligation is as follows: GROUP COMPANY US$ thousand 2024 2023 2024 2023 Balance as at 1 July – – – – Additions 963 – – – Finance costs incurred1 107 – – – Repayment of capital (281) – – – Repayment of finance costs (107) – – – Foreign currency translation reserve movement 21 – – – Balance as at 30 June 703 – – – Less: current portion (329) – – – Non-current portion 374 – – – 1 The average effective borrowing rate is 12.75%. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 244 245 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 32. 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 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. 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. GROUP COMPANY US$ thousand Notes 2024 2023 2024 2023 Cash-settled share-based payment obligation 32.1 10,965 4,279 45 – Post-retirement benefits1 32.2 4 9 – – Balance as at 30 June 10,969 4,288 45 – 1 All post-retirement benefits are classified as non-current liabilities. 32.1 Cash-settled share-based payment obligation The reconciliation of the cash-settled share-based payment obligation is as follows: GROUP COMPANY US$ thousand 2024 2023 2024 2023 Balance as at 1 July 4,279 9,563 – – Expense recognised in profit or loss 4,142 894 4,035 678 Expense capitalised to plant and equipment 5,206 – – – Payments made (3,171) (5,262) – (141) PAR Gold loan1 – – (3,991) (537) Foreign currency translation reserve movement 509 (916) 1 – Balance as at 30 June 10,965 4,279 45 – Less: current portion (4,494) (2,404) (16) – Non-current portion 6,471 1,875 29 – 1 The amount of US$537,000 was previously disclosed as a foreign currency translation reserve adjustment, when it should have been allocated to the PAR Gold loan. The comparative disclosure has been corrected in the current reporting period. 32. SHARE-BASED PAYMENT OBLIGATIONS continued 32.1 Cash-settled share-based payment obligation continued The Group recognised cash-settled share-based payment expenses on each scheme as follows: GROUP COMPANY US$ thousand 2024 2023 2024 2023 Group cash-settled share options – Pan African Share Appreciation Bonus Plan (PASABP) 2,389 241 43 141 ESOP transactions (256) (40) – – PAR Gold Long-term Incentive Plan (PGLIP) 2,009 693 3,992 537 Total expense recognised in profit or loss 4,142 894 4,035 678 Group cash-settled share options – PASABP Details of the share options outstanding are as follows: 2024 2023 Weighted average exercise price (ZAR) Number of options Weighted average exercise price (ZAR) Number of options Outstanding as at 1 July 21,250,089 38,009,138 Granted 3.57 30,291,128 3.85 6,483,231 Exercised 4.69 (4,168,988) 4.03 (14,479,743) Forfeited 3.23 (2,404,252) 3.27 (8,762,537) Outstanding as at 30 June 44,967,977 21,250,089 Exercisable as at 30 June 6,094,208 3,131,325 Fair values were calculated using the binomial pricing model with the following key inputs: GROUP 2024 2023 Weighted average share price (ZAR) 3.47 1.21 Weighted average exercise/strike price (ZAR) 3.46 3.12 Exercise price (ZAR) 1.36 – 5.50 1.36 – 4.42 Expected volatility (%) 41 – 58 46 – 62 Expected life (years) 3 – 6 3 – 6 Weighted average remaining life (years) 4.31 3.87 Risk-free rate (%) 8.8 – 10.1 9.3 – 10.3 Expected dividend yield (%) 3 3 Refer to page 157 of the remuneration report for further details on the Group‘s cash-settled share-based payment arrangements. Expected volatility is impacted by the following factors: • The historical volatility of the share price over the most recent period that is commensurate with the expected option term (taking into 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 35. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 246 247 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 32. SHARE-BASED PAYMENT OBLIGATIONS continued 32.1 Cash-settled share-based payment obligation continued 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, an LTI was introduced and was in issue at the reporting date. Refer to the remuneration report on pages 157 to 159 for further details of this scheme. Details of the shares outstanding as at the reporting date and movements during the period are as follows: GROUP Number of PAR Gold shares 2024 2023 PAR Gold B shares1 Outstanding as at 1 July 48,700,619 48,700,619 Shares repurchased by PAR Gold (48,700,619) – Shares in issue as at 30 June – 48,700,619 PAR Gold C shares Outstanding as at 1 July 16,160,564 16,160,564 Shares repurchased by PAR Gold (16,160,564) – Shares in issue as at 30 June – 16,160,564 PAR Gold D shares Outstanding as at 1 July 11,259,168 11,259,168 Shares repurchased by PAR Gold (11,259,168) – Shares in issue as at 30 June – 11,259,168 PAR Gold E shares Outstanding as at 1 July 9,785,729 9,785,729 Shares in issue as at 30 June 9,785,729 9,785,729 PAR Gold F shares Outstanding as at 1 July 10,109,130 – Shares acquired by participants – 10,109,130 Shares in issue as at 30 June 10,109,130 10,109,130 PAR Gold G shares Outstanding as at 1 July – – Shares acquired by participants 14,224,848 – Shares in issue as at 30 June 14,224,848 – PAR Gold H shares Outstanding as at 1 July – – Shares acquired by participants 15,448,697 – Shares in issue as at 30 June 15,448,697 – 1 Dividends declared during the reporting period amounted to US$1.9 million (2023: US$ 3.5 million). 32. SHARE-BASED PAYMENT OBLIGATIONS continued 32.1 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 E shares PAR Gold F shares PAR Gold G shares PAR Gold H shares Number of shares 9,785,729 10,109,130 14,224,848 15,448,697 Grant date 1 July 2021 1 July 2022 1 July 2023 1 July 2023 Vesting date 1 July 2024 1 July 2025 30 June 2025 30 June 2025 Share price at grant date (based on 90-day volume-weighted average price (VWAP) (ZAR) 3.67 4.19 3.59 3.60 90-day VWAP as at 30 June 2024 (ZAR) 3.59 5.47 5.47 5.47 90-day VWAP as at 30 June 2023 (ZAR) 5.11 3.59 n/a n/a Probability of vesting as at 30 June 2024 (%) 100 76 90 90 Probability of vesting as at 30 June 2023 (%) 69 11 n/a n/a Fair value per option as at 30 June 2024 (ZAR) 5.11 3.82 3.82 4.92 Fair value per option as at 30 June 2023 (ZAR) 2.88 0.39 n/a n/a 32.2 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. 33. TRADE AND OTHER PAYABLES GROUP COMPANY US$ thousand 2024 2023 2024 2023 Trade payables 44,776 36,361 110 139 Other payables 14,532 10,530 245 239 Financial liabilities 59,308 46,891 355 378 Accrual for employee benefits and leave pay liability 6,230 5,132 1,279 925 VAT payable 850 49 563 – Non-financial liabilities 7,080 5,181 1,842 925 Total trade and other payables 66,388 52,072 2,197 1,303 The fair value of trade and other payables approximates the carrying amount given their short-term nature. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 248 249 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 34. 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 and does not give rise to equal taxable and deductible temporary differences. Deferred tax assets and liabilities are not recognised for 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. Income tax GROUP COMPANY US$ thousand 2024 Restated* 2023 2024 2023 Income tax expense South African normal tax 12,527 5,511 1,388 344 – Current year 12,504 5,525 1,386 341 – Prior year 23 (14) 2 3 Securities transfer tax 14 7 – – Deferred tax 18,040 19,032 (73) (28) – Current year 16,911 19,043 (73) (28) – Prior year 1,129 (11) – – Total income tax expense recognised in profit or loss 30,581 24,550 1,315 316 * Refer to note 40. 34. INCOME TAX continued GROUP COMPANY % 2024 Restated* 2023 2024 2023 Tax rate reconciliation Effective tax rate South African statutory rate 27.0 27.0 27.0 27.0 Tax rate differential1 (3.5) 0.1 – – Exempt income2 – (0.5) (26.8) (26.5) Non-deductible expenses3 2.3 1.2 9.8 1.9 Accelerated wear and tear – 0.7 – – Under/(over) provision – prior year 1.1 – – – Assessed losses for which no deferred tax asset was recognised 1.1 0.4 – – Utilisation of assessed losses for which no deferred tax asset was recognised – (0.1) – – Effective tax rate 28.0 28.9 10.0 2.4 * Refer to note 40. 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 In the Company, exempt income comprises intra-Group dividend received. 3 In the Company, non-deductible expenses mainly comprise share-based payment expenses. Current tax GROUP COMPANY US$ thousand 2024 Restated* 2023 2024 2023 Current tax asset 2,455 1,322 – 188 Current tax liability (798) (732) (798) – * Refer to note 40. All Group companies are South African tax residents, other than Pan African Resources Minerals Co Limited and Pan African Resources Minerals DMCC. The current tax asset and liability of the Group and Company relate to SARS. The Group is not impacted by the International Tax Reform – Pillar Two Module Rules (global minimum top-up tax) as its revenue is below the minimum threshold. Deferred tax Significant assumptions and estimates 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. 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. GROUP % 2024 2023 Barberton Mines 22.00 21.00 Evander Mines (other and mining rights) 27.00 28.00 Other Group companies 27.00 27.00 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 250 251 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 34. INCOME TAX continued Deferred tax continued Sensitivity analysis A reasonably possible 1% (2023: 1%) change in the estimated deferred tax rate would have impacted profit for the period as shown below. The analysis assumes that all other variables remain constant. Impact on profit for the period: US$ thousand As presented 1% increase 1% decrease 2024 78,826 (3,282) 3,282 2023 60,516 (2,569) 2,569 Deferred tax balances at the reporting date are as follows: GROUP COMPANY US$ thousand 2024 Restated* 2023 2024 2023 Deferred tax liabilities Arising from temporary differences relating to: Property, plant and equipment 91,404 69,416 – – Environmental rehabilitation obligation (3,009) (2,364) – – Prepayments (47) (69) – – Assessed loss (2,075) (1,606) – – Lease liabilities (725) (845) – – Other (195) (187) – – Net deferred tax liabilities 85,353 64,345 – – Reconciliation of deferred tax liabilities Net deferred tax liabilities as at 1 July 64,345 53,366 – – Deferred tax recognised in profit or loss 18,223 18,862 – – Transferred from deferred tax assets1 – 46 – – Foreign currency translation reserve movement 2,785 (7,929) – – Net deferred tax liabilities as at 30 June 85,353 64,345 – – Deferred tax assets Arising from temporary differences relating to: Property, plant and equipment (27) (96) – – Other payables1 617 408 408 309 Lease liabilities 54 111 – – Prepayments (29) – (26) – Cash-settled share-based repayment obligation 16 5 12 – Net deferred tax assets 631 428 394 309 Reconciliation of deferred tax assets Net deferred tax assets as at 1 July 428 2,074 309 1,774 Deferred tax recognised in profit or loss 183 (170) 72 28 Deferred tax raised in other comprehensive income – (1,360) – (1,360) Transferred to deferred tax liability1 – 46 – – Foreign currency translation reserve movement 20 (162) 13 (133) Net deferred tax assets as at 30 June 631 428 394 309 * Refer to note 40. 1 Other payables relate to the temporary difference on the accrual for employee benefits and leave pay liability. 34. INCOME TAX continued Deferred tax continued GROUP Assessed loss carried forward Unredeemed capital carried forward US$ thousand 2024 Restated* 2023 2024 2023 Evander Mines 450 166 96,805 96,004 * Refer to note 40. Deferred tax assets have only been recognised, where applicable, on the basis that the individual Group companies will be able to generate future taxable income to utilise current deductible temporary differences. 35. 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. On 31 May 2024, Barberton Mines repurchased 315,790 ordinary shares (representing 5% of the ordinary shareholding in Barberton Mines) from Barberton Mines BEE Company for an amount of ZAR108 million. The value of the shares was higher than the outstanding notional loan on termination date and qualifying employees were entitled to the positive net difference of the fair value, net of applicable tax. The cash-settled share-based payment is valued by independent actuaries at each reporting date. Reconciliation of the ESOP liability GROUP COMPANY US$ thousand 2024 2023 2024 2023 Balance as at 1 July 1,034 1,196 – – Fair value recognised in profit or loss 785 (40) – – Dividend paid (1,826) – – – Foreign currency translation reserve movement 7 (122) – – Balance as at 30 June – 1,034 – – Statement of profit or loss and other comprehensive income Cash-settled share-based payment expense recognised in profit or loss 256 130 – – OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 252 253 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 36. CASH FLOW INFORMATION 36.1 Cash flow from operating activities GROUP COMPANY US$ thousand Notes 2024 Restated* 2023 2024 2023 Profit before tax 109,407 85,066 13,069 13,145 Adjusted for: 23,771 24,873 3,889 580 Cash-settled share-based payment expenses 11 4,142 894 4,035 678 Finance income 13 (1,884) (1,139) (146) (99) Finance costs 13 11,784 10,255 – 1 Loss on disposal of plant and equipment 11 106 – – – Royalty costs 36.3 1,687 956 – – Unrealised loss and prior period fair value reversals on derivative contracts 11 403 209 – – Change in estimate of the environmental rehabilitation obligation 11 (62) (888) – – Contract liability recognised as revenue 9 (11,991) (4,381) – – Fair value gain on environmental rehabilitation obligation fund 11 (2,319) (1,936) – – Depreciation and amortisation 16 21,905 20,903 – – Operating cash flows before working capital changes 133,178 109,939 16,958 13,725 Working capital 4,303 6,664 822 (195) Increase in inventories (1,777) (840) – – Increase in trade and other receivables (6,058) (401) (64) (48) Increase/(decrease) in trade and other payables 12,138 7,905 886 (147) Settlement of cash-settled share-based payment obligation (3,171) (5,262) – (141) Contract liability – advanced consideration received – 21,600 – – Net cash from operating activities before dividend, tax, royalties and net finance costs 134,310 132,941 17,780 13,389 36.2 Income tax paid GROUP COMPANY US$ thousand 2024 Restated* 2023 2024 2023 Income tax expense recognised in profit or loss 30,581 24,550 1,315 316 Less: deferred tax expense (18,040) (19,032) 72 28 Less: security transfer tax (14) (7) – – 12,527 5,511 1,387 344 Current tax (receivable)/payable as at 1 July (167) 836 (188) 366 Current tax receivable/(payable) as at 30 June 493 167 (798) 188 Accrued finance costs (3) _ (7) – Finance costs paid 3 (1) – – Accrued finance income (60) (6) – – Finance income received 7 – 7 – Foreign currency translation reserve movement 207 14 21 (15) Income tax paid during the reporting period 13,007 6,521 422 883 * Refer to note 40. 36. CASH FLOW INFORMATION continued 36.3 Royalty costs paid GROUP COMPANY US$ thousand 2024 Restated* 2023 2024 2023 Royalty costs payable/(receivable) as at 1 July (423) (253) – – Royalty costs receivable/(payable) as at 30 June 1,180 423 – – Royalty costs recognised in profit or loss 1,687 956 – – Foreign currency translation reserve movement 25 68 – – Royalty costs paid during the reporting period 2,469 1,194 – – * Refer to note 40. 36.4 Reconciliation of liabilities arising from financing activities GROUP US$ thousand Borrowings Lease liabilities Financial liability Total Opening balance as at 1 July 2022 34,612 4,348 – 38,960 Changes from financing cash flows 25,429 (562) – 24,867 Proceeds from borrowings 94,705 – – 94,705 Repayment of borrowings (69,276) – – (69,276) Repayment of lease liabilities – (562) – (562) Other changes (6,688) (303) – (6,991) Finance costs incurred 5,463 389 – 5,852 Finance costs paid (5,252) (389) – (5,641) Non-refundable fees 273 – – 273 Modification loss on borrowings 995 – – 995 New leases – 312 – 312 Reassessment of leases – (42) – (42) Foreign currency translation reserve movement (8,167) (573) – (8,740) Balance as at 30 June 2023 53,353 3,483 – 56,836 Changes from financing cash flows 71,344 (638) 682 71,388 Proceeds from borrowings 114,198 – 963 115,161 Repayment of borrowings (42,854) – – (42,854) Repayment of lease liabilities – (638) (281) (919) Other changes 3,088 104 21 3,213 Finance costs incurred 10,399 286 107 10,792 Finance costs paid (10,273) (286) (107) (10,666) Non-refundable fees (1,027) – – (1,027) Foreign currency translation reserve movement 3,989 104 21 4,114 Balance as at 30 June 2024 127,785 2,949 703 131,437 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 254 255 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 37. FINANCIAL RISK MANAGEMENT 37.1 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 from the previous reporting period. GROUP US$ thousand Notes 2024 Restated* 2023 Components of capital and financial covenants Cash and cash equivalents 24 (26,332) (34,771) RCF 28 10,842 10,628 Term facility 28 53,519 – Green loan 28 19,199 – DMTN bonds 28 44,225 42,725 Add: net derivative financial liability/(asset) 5 (396) Lease liabilities 30 2,949 3,483 Financial liability 31 703 – Restricted cash 24 82 240 Facility arranging fees adjustment1 1,214 46 Net debt1 106,406 21,955 Total equity 364,103 291,956 Net debt-to-equity ratio 0.29 0.08 Finance costs paid RCF 1,836 2,181 Term facility 3,185 – Green loan 80 – Redink facility – 688 DMTN bonds 5,172 2,383 General banking facility 1,292 1,002 Finance costs – interest-bearing facilities 11,565 6,254 Adjusted EBITDA2 141,214 115,085 Fair value gain on derivatives 180 (26) Net adjusted EBITDA 141,394 115,059 Interest cover ratio 12.2 18.4 Net debt 106,406 21,955 Net adjusted EBITDA3 141,394 114,984 Net debt-to-net adjusted EBITDA 0.8 0.2 Net adjusted EBITDA3 141,394 115,059 Net working capital change 4,303 6,732 Add: non-cash flow items 8,543 5,349 Total capital expenditure less capital funded through permitted indebtedness (94,886) (64,327) Less: tax and royalties paid (15,476) (7,722) Free cash flow 43,878 55,091 Finance costs on interest-bearing facilities 11,565 6,253 Obligatory debt principal repayments – 1,125 Debt service obligation 11,565 7,378 Debt service cover ratio 3.8 7.5 * Refer to note 40. 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 covenant limits. 37. FINANCIAL RISK MANAGEMENT continued 37.2 Categories of financial instruments GROUP COMPANY US$ thousand Notes 2024 Restated* 2023 2024 2023 Financial assets At amortised cost Cash and cash equivalents 24 26,332 34,771 2,851 2,435 Receivables from Group companies – – 51,731 61,050 Trade and other receivables 23 4,008 2,444 – – At fair value through other comprehensive income Investment 19 3,373 – 3,373 – At fair value through profit or loss Environmental rehabilitation obligation fund 21 24,773 21,627 – – Derivative financial asset – 451 – – Financial liabilities At amortised cost Trade and other payables 33 59,308 46,891 355 378 Borrowings 28 127,785 53,353 – – Financial liability 31 703 – – – At fair value through profit or loss Derivative financial liability 5 55 – – Not at fair value or amortised cost Financial guarantees 29 – – 1,471 – * Refer to note 40. 37.3 Risks arising from financial instruments 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. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 256 257 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 37. FINANCIAL RISK MANAGEMENT continued 37.3 Risks arising from financial instruments 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: GROUP US$ thousand Notes 2024 Restated* 2023 Trade receivables 23 328 226 Other receivables 23 3,680 2,218 Cash and cash equivalents 24 26,332 34,771 Guarantees to the DMRE and Eskom 28 37,401 35,921 * Refer to note 40. Trade and other receivables The Group has minimal exposure to credit risk as revenue is recognised and cash received on settlement of gold to financial institutions. Other receivables are assessed for credit risk, at the reporting date, on an individual debtor basis. Individual companies within the Group consider factors that might impact the credit risk of its debtors such as default risk, payment history and the nature of the counterparty. An ECL allowance for other receivables has been determined using the simplified approach and reflects the short-term maturities of the exposures. The significant decrease in the ECL allowance in the current reporting period is due to a write-off of debtors in Mogale Gold as they are not recoverable. Movement in the ECL allowance in respect of other receivables is as follows: GROUP US$ thousand Notes 2024 2023 Balance as at 1 July (271) (60) Net remeasurement of loss allowance (6) (220) Amounts written off 219 – Foreign currency translation reserve movement (2) 9 Balance as at 30 June 23 (60) (271) 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 considered to be low due to these funds being invested with reputable financial institutions. 37. FINANCIAL RISK MANAGEMENT continued 37.3 Risks arising from financial instruments continued 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 are as follows: GROUP 2024 2023 Currency rates Closing rate Average rate Closing rate Average rate US$/ZAR exchange rate 18.19 18.71 18.83 17.77 Sensitivity analysis – foreign currency A movement in the US$ exchange rate of 10% during the reporting period would have affected the translation of profit after tax, current assets and liabilities as shown below. The analysis assumes that all other variables remain constant. Impact on profit after tax US$ thousand As presented 10% increase 10% decrease 2024 78,826 (7,166) (8,758) 2023 (restated)* 60,516 (5,501) (6,724) Impact on current assets and liabilities US$ thousand As presented 10% increase 10% decrease 2024 Current assets 60,393 (5,490) 6,711 Current liabilities 84,864 (7,715) 9,429 2023 Current assets (restated)* 58,923 (5,357) 6,547 Current liabilities 77,386 (7,035) 8,598 * Refer to note 40. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 258 259 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 37. FINANCIAL RISK MANAGEMENT continued 37.3 Risks arising from financial instruments continued Commodity price risk The Group is affected by the price volatility of gold. 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. 2024 2023 Average gold spot price received (US$/oz) 2,021 1,836 Average gold spot price received (ZAR/kg) 1,215,827 1,048,823 Impact on profit after tax US$ thousand As presented 10% increase/ (decrease) 2024 78,826 26,732 2023 (restated)* 60,516 22,633 * Refer to note 40. 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 the 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. 37. FINANCIAL RISK MANAGEMENT continued 37.3 Risks arising from financial instruments continued Interest rate risk continued Sensitivity analysis – interest rate continued Impact on finance costs incurred on borrowings US$ thousand As presented 10% increase/ (decrease) 2024 11,637 752 2023 6,351 635 Liquidity risk Ultimate responsibility for liquidity risk management rests with the board, but is delegated to 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 value Less than six months Six to 12 months Year 2 Year 3 Year 4 and longer1 Total contractual cash flows Group June 2024 Trade and other payables 33 59,308 59,308 – – – – 59,308 Borrowings 28 127,785 10,106 11,602 69,800 23,429 51,787 166,724 Lease liabilities 30 2,949 499 510 787 759 929 3,484 Financial liability 31 703 200 200 400 – – 800 Derivative financial liability 5 5 – – – – 5 June 2023 Trade and other payables 33 46,891 46,891 – – – – 46,891 Borrowings 28 53,353 2,582 13,210 5,149 34,345 13,514 68,800 Lease liabilities 30 3,483 343 358 799 671 1,420 3,591 Derivative financial liability 55 55 – – – – 55 Company June 20242 Trade and other payables 33 355 355 – – – – 355 June 2023 Trade and other payables 33 378 378 – – – – 378 1 Final repayment date is 31 July 2029. 2 In respect of financial guarantees, the maximum possible exposure is the total amount the Company would have to pay if the guarantee is called on. Refer to note 28 for a summary of exposure at reporting date. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 260 261 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 37. FINANCIAL RISK MANAGEMENT continued 37.3 Risks arising from financial instruments continued Fair value of financial instruments The directors consider the carrying amounts of financial assets and liabilities to approximate their fair values. 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 – Fair value is based on quoted prices in active markets for identical financial assets or liabilities. Level 2 – 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 on inputs not based on observable market data. US$ thousand Notes Level 1 Level 2 Level 3 Total 2024 Investment1 19 – – 3,373 3,373 Environmental rehabilitation obligation fund2 21 – 24,773 – 24,773 Derivative financial liability – (5) – (5) 2023 Environmental rehabilitation obligation fund1 21 – 21,627 – 21,627 Derivative financial asset – 451 – 451 Derivative financial liability – (55) – (55) 1 The fair value of the TCMG investment was classified as Level 3 as the shares are not quoted on an exchange. An independent valuation specialist was appointed to undertake a detailed valuation of the enterprise value of TCMG. The fair value of TCMG was derived by multiplying the enterprise value with the Company’s 8% shareholding and applying a discount for lack of control and marketability. The fair value of the investment was not substantially different to its carrying amount at the reporting date, and therefore, no fair value adjustment was recognised. 2 The environmental rehabilitation obligation fund is treated as Level 2 per the fair value hierarchy 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. 38. 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. GROUP COMPANY US$ thousand 2024 2023 2024 2023 Executive directors Emoluments 1,224 1,845 1,224 1,845 Executive directors' emoluments 1,224 1,845 1,224 1,845 Non-executive directors Emoluments 335 334 335 334 Non-executive directors' emoluments 335 334 335 334 Total directors' emoluments 1,559 2,179 1,559 2,179 Executive directors US$ thousand Basic remuneration Allowances Total remuneration Incentives1 PGLIP2 Total single figure remuneration5 2024 Mr JAJ Loots 412 10 422 260 548 1,230 Mr GP Louw 374 – 374 168 449 991 Total 786 10 796 428 997 2,221 US$ thousand Basic remuneration Allowances Leave payout Retention payment3 Total remuneration Incentives4 PGLIP2 Total single figure remuneration5 2023 Mr JAJ Loots 407 10 10 250 677 350 1,043 2,070 Mr GP Louw 370 – – 222 592 226 855 1,673 Total 777 10 10 472 1,269 576 1,898 3,743 1 These incentives, paid in the 2024 reporting period, relate to the 2023 annual short-term incentive (STI) achievement consistent with the approved qualifying criteria. 2 The PGLIP represents share-based payments. Refer to note 32. 3 Retention payments are made in accordance with the employees’ employment contracts. Refer to page 183. 4 These incentives, paid in the 2023 reporting period, relate to the 2022 annual STI achievement consistent with the approved qualifying criteria. 5 Total remuneration and incentives represent short-term employee benefits. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 262 263 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 38. DIRECTORS’ AND PRESCRIBED OFFICERS’ EMOLUMENTS continued 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: US$ thousand Mr KC Spencer (Chairman) Mrs D Earp Mr TF Mosololi Mr CDS Needham Mrs YN Themba Total 2024 Board of directors 72 36 36 36 36 216 Remuneration committee – – 7 7 11 25 Audit and risk committee – 15 9 9 – 33 Safety, health, environment and quality (SHEQ) committee 11 7 – – – 18 Nomination committee 5 5 5 5 5 25 Social and ethics committee – – 11 – 7 18 88 63 68 57 59 335 2023 Board of directors 72 36 36 36 36 216 Remuneration committee – – 7 7 11 25 Audit and risk committee – 14 9 9 – 32 SHEQ committee 11 7 – – – 18 Nomination committee 5 5 5 5 5 25 Social and ethics committee – – 11 – 7 18 88 62 68 57 59 334 There were no changes to the board of directors in the current or previous 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 each reporting period and remains in place. 38. DIRECTORS’ AND PRESCRIBED OFFICERS’ EMOLUMENTS continued Prescribed officers The following payments were made to prescribed officers during the reporting period: 2024 US$ thousand Basic remune- ration Retire- ment fund Life and disability plan Allow- ances Total remune- ration Incentives PGLIP Total single figure remune- ration1 Mr JD Symington 193 – – 6 199 56 109 364 Mr H Pretorius 172 23 4 4 203 56 81 340 Mr J Irons 172 6 – 11 189 54 124 367 Mr EB Thorne2 194 – – 21 215 56 – 271 Mrs M Kok 168 27 4 – 199 41 89 329 899 56 8 42 1,005 263 403 1,671 2023 US$ thousand Basic remune- ration Retire- ment fund Life and disability plan Allow- ances Leave payout Total remune- ration Incentives PGLIP Total single figure remune- ration1 Mr JD Symington 191 – – 7 – 198 68 207 473 Mr H Pretorius 170 23 4 4 – 201 56 121 378 Mr J Irons 170 6 – 11 10 197 67 236 500 Mr EB Thorne2 192 – – 12 – 204 – – 204 Mrs M Kok 127 17 3 1 8 156 54 – 210 850 46 7 35 18 956 245 564 1,765 1 Total remuneration and incentives represent short-term employee benefits. The PGLIP represents share-based payments. 2 Mr EB Thorne resigned effective 31 July 2024. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 264 265 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 38. DIRECTORS’ AND PRESCRIBED OFFICERS’ EMOLUMENTS continued Directors’ dealings in shares All the shares held by directors are direct beneficial interests. Reporting period 30 June 2024 Mr JAJ Loots entered into the following Company share transactions: • On 10 October 2023: LTS Ventures Proprietary Limited, an entity associated with Mr JAJ Loots, purchased 136,000 ordinary shares of 1 pence each. • On 14 May 2024: entered into a collar transaction for 3,007,222 ordinary shares of 1 pence each, purchased 711,744 ordinary shares at 1 pence each, and the advance of a loan of ZAR11,340,187.01 for a term of two years with 3,007,222 shares pledged as security for the loan and the dividend on these secured shares sacrificed for the loan’s tenure. • On 27 June 2024: disposed of 300,000 ordinary shares of 1 pence each. • On 28 June 2024: entered into a collar transaction for 500,000 ordinary shares of 1 pence each and the advance of a loan of ZAR2,085,932 for a term of two years with 5,000,000 shares pledged as security for the loan and the dividend on these secured shares sacrificed for the loan’s tenure. Mr JAJ Loots held 5,896,248 indirect beneficial shares, representing 0.2653% of the Company’s issued share capital, and 1,573,982 direct beneficial shares, representing 0.0708% of the Company’s issued share capital and 314,280 contracts for differences (CFDs) at 30 June 2024. Mr GP Louw entered into the following Company share transactions: • On 26 October 2023: purchased 134,748 ordinary shares of 1 pence each. • On 10 May 2024: transferred 877,140 ordinary shares from Figit Proprietary Limited, an entity associated with Mr Louw, into his own name, entered into a collar transaction for 2,728,254 ordinary shares of 1 pence each, purchased 728,254 ordinary shares at 1 pence each, and the advance of a loan of ZAR11,262,492.85 for a term of one year with 2,728,254 shares pledged as security for the loan and the dividend on these secured shares sacrificed for the loan’s tenure. • On 28 June 2024: transferred 2,000,000 ordinary shares from Figit Proprietary Limited, an entity associated with Mr Louw, into his own name, entered into a collar transaction for 2,000,000 ordinary shares of 1 pence each, purchased 728,254 ordinary shares at 1 pence each, and the advance of a loan of ZAR11,122,505 for a term of one year with 2,000,000 shares pledged as security for the loan and the dividend on these secured shares sacrificed for the loan’s tenure. Mr GP Louw held 245,209 indirect beneficial shares, representing 0.0110% of the Company’s issued share capital, and 4,728,254 direct beneficial shares, representing 0.2127% of the Company’s issued share capital at 30 June 2024. Mr TF Mosololi held 160,000 shares, representing 0.0072% of the Company’s issued share capital at 30 June 2024. Mr KC Spencer held 3,000,000 shares, representing 0.1342% of the total issued shares of the Company at 30 June 2024. Mr CDS Needham held 25,000 shares, representing 0.001% of the total issued shares of the Company at 30 June 2024. 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. 38. DIRECTORS’ AND PRESCRIBED OFFICERS’ EMOLUMENTS continued 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 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. Prescribed officers’ dealings in shares All the shares held by prescribed officers are direct beneficial interests. Reporting period 30 June 2024 Mr JD Symington entered into the following Company share transactions: • On 9 November 2023: purchased 10,000 ordinary shares at 1 pence each. • On 10 November 2023: purchased 20,000 ordinary shares at 1 pence each. Mr JD Symington held 30,000 direct beneficial shares, representing 0.0013% of the Company’s issued share capital at 30 June 2024. Mrs M Kok entered into the following Company share transactions: • On 7 November 2023: purchased 10,000 ordinary shares at 1 pence each. • On 9 November 2023: purchased 15,000 ordinary shares at 1 pence each. Mrs M Kok held 25,000 direct beneficial shares, representing 0.0011% of the Company’s issued share capital at 30 June 2024. Mr EB Thorne entered into the following Company share transactions: • On 3 November 2023: purchased 6,900 ordinary shares at 1 pence each. • On 7 November 2023: purchased 10,000 ordinary shares at 1 pence each. Mr EB Thorne held 6,900 direct beneficial shares, representing 0.0003% of the Company’s issued share capital at 30 June 2024. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 266 267 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 38. DIRECTORS’ AND PRESCRIBED OFFICERS’ EMOLUMENTS continued LTI scheme Shares granted but not yet vested 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. Participants Total number of shares 1 July 2023 Grant date Issued during the reporting period Dividend measurement date Forfeited/ repurchased during the reporting period Total number of shares 30 June 2024 Mr JAJ Loots – PAR Gold E shares 2,337,972 1 July 2021 – 1 July 2024 – 2,337,972 – PAR Gold F shares 2,190,419 1 July 2022 – 1 July 2025 – 2,190,419 – PAR Gold G shares – 1 July 2023 2,711,080 1 July 2026 – 2,711,080 – PAR Gold H shares – 1 July 2023 2,845,841 1 July 2026 – 2,845,841 Mr GP Louw – PAR Gold E shares 1,916,851 1 July 2021 – 1 July 2024 – 1,916,851 – PAR Gold F shares 1,795,876 1 July 2022 – 1 July 2025 – 1,795,876 – PAR Gold G shares – 1 July 2023 2,222,754 1 July 2026 – 2,222,754 – PAR Gold H shares – 1 July 2023 2,138,805 1 July 2026 – 2,138,805 Mr JD Symington – PAR Gold E shares 610,492 1 July 2021 – 1 July 2024 – 610,492 – PAR Gold F shares 636,363 1 July 2022 – 1 July 2025 – 636,363 – PAR Gold G shares – 1 July 2023 787,627 1 July 2026 – 787,627 – PAR Gold H shares – 1 July 2023 723,431 1 July 2026 – 723,431 Mr H Pretorius – PAR Gold E shares 438,791 1 July 2021 – 1 July 2024 – 438,791 – PAR Gold F shares 636,363 1 July 2022 – 1 July 2025 – 636,363 – PAR Gold G shares – 1 July 2023 787,627 1 July 2026 – 787,627 – PAR Gold H shares – 1 July 2023 878,451 1 July 2026 – 878,451 Mr J Irons – PAR Gold E shares 528,645 1 July 2021 – 1 July 2024 – 528,645 – PAR Gold F shares 540,909 1 July 2022 – 1 July 2025 – 540,909 – PAR Gold G shares – 1 July 2023 669,483 1 July 2026 – 669,483 – PAR Gold H shares – 1 July 2023 1,335,246 1 July 2026 – 1,335,246 Mrs M Kok – PAR Gold E shares 427,526 1 July 2021 – 1 July 2024 – 427,526 – PAR Gold F shares 413,637 1 July 2022 – 1 July 2025 – 413,637 – PAR Gold G shares – 1 July 2023 787,627 1 July 2026 – 787,627 – PAR Gold H shares – 1 July 2023 981,799 1 July 2026 – 981,799 Mr EB Thorne – PAR Gold F shares 636,363 1 July 2022 – 1 July 2025 – 636,363 – PAR Gold G shares – 1 July 2023 787,627 1 July 2026 – 787,627 – PAR Gold H shares – 1 July 2023 723,431 1 July 2026 – 723,431 Total number of shares not yet vested 13,110,207 18,380,829 – 31,491,036 38. DIRECTORS’ AND PRESCRIBED OFFICERS’ EMOLUMENTS continued LTI scheme continued Vested shares Participants Total number of shares 1 July 2023 Grant date Issued during the reporting period Dividend measurement date Forfeited/ repurchased during the reporting period Total number of shares 30 June 2024 Mr JAJ Loots – PAR Gold B shares 17,107,580 1 July 2020 – 31 December 2021 (17,107,580) – – PAR Gold C shares 4,434,380 1 July 2019 – 1 July 2022 (4,434,380) – – PAR Gold D shares 2,848,556 1 July 2021 – 1 July 2023 (2,848,556) – Mr GP Louw – PAR Gold B shares 11,523,153 1 July 2020 – 31 December 2021 (11,523,153) – – PAR Gold C shares 3,635,648 1 July 2019 – 1 July 2022 (3,635,648) – – PAR Gold D shares 2,335,468 1 July 2021 – 1 July 2023 (2,335,468) – Mr JD Symington – PAR Gold B shares 2,920,661 1 July 2020 – 31 December 2021 (2,920,661) – – PAR Gold C shares 881,227 1 July 2019 – 1 July 2022 (881,227) – – PAR Gold D shares 566,082 1 July 2021 – 1 July 2023 (566,082) – Mr H Pretorius – PAR Gold B shares 1,152,893 1 July 2020 – 31 December 2021 (1,152,893) – – PAR Gold C shares 514,093 1 July 2019 – 1 July 2022 (514,093) – – PAR Gold D shares 420,057 1 July 2021 – 1 July 2023 (420,057) – Mr J Irons – PAR Gold B shares 3,766,116 1 July 2020 – 31 December 2021 (3,766,116) – – PAR Gold C shares 1,002,668 1 July 2019 – 1 July 2022 (1,002,668) – – PAR Gold D shares 644,093 1 July 2021 – 1 July 2023 (644,093) – Mrs M Kok – PAR Gold D shares 462,781 1 July 2020 – 1 July 2023 (462,781) – Total number of vested shares 54,215,456 – (54,215,456) – The vested shares were repurchased at a nominal amount and cancelled by PAR Gold during the current reporting period. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 268 269 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 39. RELATED PARTY TRANSACTIONS 2024 2024 US$ thousand Company Funding Company PAR Management Services Barberton Mines Evander Mines1 Evander Gold Mines PAR SA Holdings PAR Gold K Company Evander Solar Solutions Project Kite3 PAR Properties Concrete Rose Barberton Blue MTR Mogale Gold MSC Pan African Resources Minerals – Sudan Pan African Resources Minerals – Dubai Transactions Management fee received/(paid) 8,688 (213) 9,527 (5,528) (5,637) – – – – (428) (16) – – (64) (6,169) – – (160) – Dividends received from/(paid to) fellow Group companies2 10,044 – – (12,969) – – – 2,925 – – – – – – – – – – – Intra-Group finance income/(costs) – 9,041 (2,698) 3,495 (3,705) – – – (36) (1,551) (162) – – (465) (3,919) – – – – Revenue – – – – – – – – – 1,661 – – – – – – – – – Cost of production – – – – (1,661) – – – – – – – – – – – – – – Gold purchases from Evander Gold Mines Proprietary Limited – – – – (105,581) 105,581 – – – – – – – – – – – – – Cost of gold production income invoiced to Evander Mines – – – – (104,536) 104,536 – – – – – – – – – – – – – Balances Company receivables/(payables) 51,731 (35,362) (25,507) – – – – 14,840 – – – – – – – – – (5,702) – Funding Company receivables/(payables) 35,362 79,110 (33,071) 80,012 (62,747) – 6 4,142 (332) (19,070) (1,558) (209) 4 (4,838) (76,811) – – – – PAR Management Services receivables/(payables) 25,507 33,071 (2,409) (26,773) (29,893) – – 9,171 – (852) (19) (4) – (76) (7,247) – – (476) – Barberton Mines receivables/(payables) – – – 531 – – – – – (531) – – – – – – – – – Evander Mines receivables/(payables) – – – – (58,884) 58,884 – – – – – – – – – – – – – MTR project receivables/(payables) – – – – – – – – – – – – – – 12,033 (11,936) (97) – – 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 20. 3 Project Kite relates to an agricultural Group project which is held in a previously dormant Group entity. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 270 271 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 39. RELATED PARTY TRANSACTIONS continued 2023 2023 US$ thousand Company Funding Company PAR Management Services Barberton Mines Evander Mines1 Evander Gold Mines PAR SA Holdings PAR Gold K Company Evander Solar Solutions Project Kite3 PAR Properties Concrete Rose Barberton Blue MTR Mogale Gold MSC Pan African Resources Minerals – Sudan Pan African Resources Minerals – Dubai Transactions Management fee received/(paid) 4,645 (113) 7,417 (5,490)* (3,471) – – – – (169) (34) – – (68) (235) – – (169) – Dividends received from/(paid to) fellow Group companies2 9,801* – – (12,904) – – – 3,103 – – – – – – – – – – – Intra-Group finance income/(costs) – 4,651 (2,915) 2,166 (2,519) – – – (29) (299) (140) – – (383) (532) – – – – Revenue – – – – – – – – – 2,198 – – – – – – – – – Cost of production – – – – (2,198) – – – – – – – – – – – – – – Gold purchases from Evander Gold Mines Proprietary Limited – – – – (93,986) 93,986 – – – – – – – – – – – – – Cost of gold production income invoiced to Evander Mines – – – – 93,055 (93,055) – – – – – – – – – – – – – Balances Company receivables/(payables) 61,059 (52,309) (14,757) – (4) – – 10,369 – – – – – – – – – (4,358) – Funding Company receivables/(payables) 52,309 (2,708) (35,603) 61,961 (51,590) – 6 2,926 (285) (8,278) (1,286) (14) 4 (3,779) (13,663) – – – – PAR Management Services receivables/(payables) 14,757 35,603 (2,398) (25,503) (28,259) – – 6,650 – (518) (37) (4) – (73) – – – (218) – Barberton Mines receivables/(payables) – – – 883 – – – – – (883) – – – – – – – – – Evander Mines receivables/(payables) – – – – (55,854) 55,688 – – – 166 – – – – – – – – – MTR project receivables/(payables) – – – – – – – – – – – – – – 11,312 (11,221) (91) – – * These amounts were previously disclosed net of capitalised related party costs. 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 20. 3 Project Kite relates to an agricultural Group project which is held in a previously dormant Group entity. Refer to investments in subsidiaries (note 20) 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 38. Intra-Group loans provided by Funding Company have no specific repayment terms but bear interest in relation to treasury services rendered. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 272 273 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 40. CORRECTION OF PRIOR PERIOD ERRORS 40.1 Gold sales – timing of revenue recognition During the current reporting period, the Group reassessed the timing of revenue recognition on gold sales. Historically, the Group recognised revenue, at a point in time, on delivery of gold to Rand Refinery. The Group’s view was that control had transferred to a customer on delivery of gold to Rand Refinery as control had at this point in time passed to the customer. Following the reassessment, the Group established that control does not pass to the customer on delivery to Rand Refinery, but rather on settlement with the customer. The impact of the previous revenue recognition treatment resulted in the Group recognising revenue for the respective period then ended, in respect of gold delivered to Rand Refinery, although the customer had not yet obtained control of the gold and settlement had not taken place. As a consequence, revenue, cost of production and trade receivables had previously been overstated and inventory understated. The nature of the error further impacted other expenses, royalty costs and income tax expense and the related asset or liability. The error has been corrected by restating each of the affected financial statement line items for the 2023 reporting period. In addition, the opening statement of financial position on 1 July 2022 has also been restated. The following tables below summarise the impacts on the Group’s financial statements. There was no impact on the Company’s financial statements. 40.2 Acquisition of Mogale Gold and MSC – measurement of environmental rehabilitation obligation During the current reporting period, it was determined that the Mogale Gold and MSC environmental rehabilitation obligations had, on initial recognition in 2023, been incorrectly measured. As a consequence, the environmental rehabilitation obligation, finance costs and long-term inventory were understated. The error has been corrected by restating each of the affected financial statement line items for the 2023 reporting period. The restatement impacted the purchase price allocated to assets acquired and liabilities assumed based on their relative fair values. The restatement resulted in no change in the net asset value acquired, however, the fair value allocated to the environmental obligation and long-term inventory at acquisition were understated by US$4.3 million in Mogale Gold and US$2.4 million in MSC, respectively. The following tables summarise the impacts on the Group’s financial statements. There was no impact on the Company’s financial statements. 40.3 Impact of prior period errors Statement of financial position GROUP Increase/(decrease) US$ thousand As previously presented 30 June 2022 40.1 Gold sales 40.2 Rehabilitation obligation Restated 1 July 2022 Long-term inventory 355,802 – – 355,802 Inventory 9,977 5,139 – 15,116 Trade and other receivables 17,275 (7,952) – 9,323 Current tax assets 751 (26) – 725 Others 73,287 – – 73,287 Total assets 457,092 (2,839) – 454,253 Environmental rehabilitation obligations 8,603 – – 8,603 Deferred tax liabilities 53,781 (415) – 53,366 Others 100,099 – – 100,099 Total liabilities 162,483 (415) – 162,068 Retained earnings 264,840 (2,593) – 262,247 Reserves (243,125) 169 – (242,956) Others 272,894 – – 272,894 Total equity 294,609 (2,424) – 292,185 40. CORRECTION OF PRIOR PERIOD ERRORS continued 40.3 Impact of prior period errors continued Statement of financial position continued GROUP Increase/(decrease) US$ thousand As previously presented 30 June 2023 40.1 Gold sales 40.2 Rehabilitation obligation Restated 30 June 2023 Long-term inventory 5,992 – 6,128 12,120 Inventory 9,567 4,350 – 13,917 Trade and other receivables 15,182 (6,720) – 8,462 Current tax assets 1,292 30 – 1,322 Others 468,906 – – 468,906 Total assets 500,939 (2,340) 6,128 504,727 Environmental rehabilitation obligations 10,085 – 6,656 16,741 Deferred tax liabilities 64,573 (228) – 64,345 Others 131,685 – – 131,685 Total liabilities 206,343 (228) 6,656 212,771 Retained earnings 306,004 (2,251) (563) 303,190 Reserves (283,946) 139 35 (283,772) Others 272,538 – – 272,538 Total equity 294,596 (2,112) (528) 291,956 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 274 275 NOTES TO THE FINANCIAL STATEMENTS continued for the reporting period ended 30 June 40. CORRECTION OF PRIOR PERIOD ERRORS continued 40.3 Impact of prior period errors continued Statement of profit or loss and other comprehensive income GROUP Increase/(decrease) US$ thousand As previously presented 30 June 2023 40.1 Gold sales 40.2 Rehabilitation obligation Restated 30 June 2023 Revenue 321,606 (1,714) – 319,892 Cost of production (219,189) (98) – (219,287) Gross profit 102,417 (1,812) – 100,605 Other income 5,906 – – 5,906 Other expenses (13,253) 1,880 – (11,373) Royalty costs (963) 7 – (956) Income before finance income and finance costs 94,107 75 – 94,182 Finance income 1,139 – – 1,139 Finance costs (9,692) – (563) (10,255) Profit before tax 85,554 75 (563) 85,066 Income tax expense (24,817) 267 (24,550) Profit for the period 60,737 342 (563) 60,516 Other comprehensive (loss)/income Items that may be reclassified to profit or loss Foreign currency translation (loss)/gain (40,978) (30) 35 (40,973) Items that may not be reclassified to profit or loss Fair value adjustment on investment at fair value through other comprehensive income 1,563 – – 1,563 Tax thereon (1,360) – – (1,360) Other comprehensive (loss)/income for the period, net of tax (40,775) (30) 35 (40,770) Total comprehensive income/(loss) for the period 19,962 312 (528) 19,746 Profit/(loss) attributable to: 60,737 342 (563) 60,516 Owners of the Company 61,139 342 (563) 60,918 Non-controlling interests (402) – – (402) Total comprehensive income/(loss) attributable to: 19,962 312 (528) 19,746 Owners of the Company 20,318 312 (528) 20,102 Non-controlling interests (356) – – (356) Basic earnings per share 3.19 0.02 (0.03) 3.18 Headline earnings per share 3.15 0.02 (0.03) 3.14 The above errors had no impact on the statement of cashflows other than for updating of supporting notes. 41. COMMITMENTS The Company entered into a power purchase agreement (PPA) with Sturdee Energy in the previous reporting period. The PPA is for the supply of wheeled power for 10 years, with the option to extend it for another five years. The PPA was assessed to be an executory contract in both the previous and current reporting period. The Group had contracted outstanding open orders at the reporting date of US$35.1 million (2023: US$34.4 million). Board-approved commitments for the next reporting date, not yet contracted for, amount to US$67.6 million (2023: US$155.6 million). 42. CONTINGENT LIABILITIES The Group identified no material contingent liabilities in the current or previous reporting period. 43. 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$68.7 million (2023: US$49.9 million) of available debt facilities and US$26.3 million (2023: US$34.7 million) of cash and cash equivalents at 30 June 2024. The Group has considered the going concern forecast through to 30 June 2026, using a base case rand gold price of ZAR1,250,000/kg (US$2,141/oz) and a downside rand gold price of ZAR1,064,000/kg (US$1,822/oz) coupled with a 10% decrease in forecast production. The Group’s forecasts based on the board-approved budgets (with production in line with production guidance announced) 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 24 months from the reporting date. In the downside case; this includes mitigating actions which are in management’s control. 44. EVENTS AFTER THE REPORTING PERIOD Capital reduction During the reporting period, the board became aware that the net assets test required by section 831 of the Companies Act 2006 is required to be performed by the Company on presentation currency amounts and not on functional currency amounts. It came to the board’s attention that the foreign currency translation reserve does not form part of the Company’s undistributable reserves, despite not being realised, and as such cannot be included as undistributable reserves when carrying out the net assets test. This means that dividends paid in respect of the reporting periods ended 30 June 2019, 2020, 2021, 2022 and 2023 (together relevant dividends) and the repurchase of ordinary shares (the share buy-backs) by the Company between 1 April and 9 May 2022 have been made otherwise than in accordance with the Companies Act 2006. The consequences of the relevant distributions (the Company’s payment of each of the relevant dividends and the payments made in respect of the purchase of each of the share buy-backs) having been made otherwise than in accordance with the Companies Act 2006 were rectified by way of the cancellation of the Company’s share premium account. That reduction of share premium was confirmed by the Court on 2 July 2024 and took effect on 18 July 2024. The share capital reduction required (among other things) a special resolution being passed by shareholders at a general meeting held on 10 June 2024. Following the share capital reduction taking effect on 18 July 2024, the Company’s share premium account of US$235,063,183 was cancelled, with that amount appropriated to retained earnings to ensure that the Company meets the net assets test for the relevant distributions as well as future distributions to shareholders. The technical issues identified in respect of the relevant distributions were of a historical nature and there has been no change in the Company’s financial position or its net asset value as a consequence. The Company has taken and continues to take the necessary steps to ensure adequate distributable income (and the ability of the Company to comply with the net assets test) in the future. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 276 277 Shareholders’ analysis 280 Alternative performance measures 282 Sustainability reporting boundary 292 Glossary 293 Corporate information IBC Shareholders’ diary IBC Pan African has again significantly expanded its shareholder base in the past year. SHAREHOLDERS’ ANALYSIS for the year ended 30 June 2024 Register date: 28 June 2024 Issued share capital: 2,222,862,046 shares SHAREHOLDER SPREAD 2024 2023 Number of share- holders % Number of shares % Number of share- holders % Number of shares % 1 – 1,000 shares 6,678 59.90 781,333 0.04 4,937 52.01 768,436 0.04 1,001 – 10,000 shares 2,179 19.54 9,683,416 0.44 2,216 23.34 9,630,796 0.43 10,001 – 100,000 shares 1,545 13.86 52,780,802 2.37 1,655 17.43 56,664,701 2.55 100,001 – 1,000,000 shares 521 4.67 171,282,075 7.71 495 5.21 159,826,334 7.19 1,000,001 shares and over 226 2.03 1,988,334,420 89.44 190 2.01 1,995,971,779 89.79 Total 11,149 100.00 2,222,862,046 100.00 9,493 100.00 2,222,862,046 100.00 DISTRIBUTION OF SHAREHOLDERS 2024 2023 Number of share- holders % Number of shares % Number of share- holders % Number of shares % Banks 284 2.55 798,897,925 35.94 255 2.69 828,707,727 37.28 Brokers 22 0.20 55,522,329 2.50 26 0.27 56,299,843 2.53 Close corporations 38 0.34 1,884,529 0.08 39 0.41 2,509,203 0.11 Endowment funds 27 0.24 8,676,718 0.39 20 0.21 10,528,716 0.47 Hedge funds 6 0.05 2,490,601 0.11 – – – – Individuals 7,887 70.74 92,484,616 4.16 7,979 84.05 101,161,142 4.55 Insurance companies 54 0.48 32,273,760 1.45 24 0.25 31,359,043 1.41 Investment companies 9 0.08 1,074,844 0.05 10 0.11 1,186,658 0.05 Medical aid schemes 10 0.09 6,759,362 0.30 6 0.06 6,286,585 0.28 Mutual funds 252 2.26 533,885,173 24.02 177 1.86 506,004,728 22.76 Nominees and trusts 266 2.39 17,684,013 0.80 268 2.82 17,878,575 0.80 Other corporations 38 0.34 1,242,621 0.06 46 0.48 942,318 0.04 Pension funds 2,132 19.12 342,927,635 15.43 511 5.38 326,557,426 14.70 Private companies 115 1.03 324,013,977 14.58 125 1.33 330,514,591 14.88 Public companies 9 0.09 3,043,943 0.13 7 0.08 2,925,491 0.14 Total 11,149 100.00 2,222,862,046 100.00 9,493 100.00 2,222,862,046 100.00 PUBLIC/NON-PUBLIC SHAREHOLDERS 2024 2023 Number of share- holders % Number of shares % Number of share- holders % Number of shares % Non-public shareholders 12 0.11 674,002,820 30.32 13 0.14 721,371,735 32.45 Directors 10 0.09 15,628,693 0.70 11 0.12 14,217,947 0.64 Strategic holders (more than 10%) 2 0.02 658,374,127 29.62 2 0.02 707,153,788 31.81 Public shareholders 11,137 99.89 1,548,859,226 69.68 9,480 99.86 1,501,490,311 67.55 Total 11,149 100.00 2,222,862,046 100.00 9,493 100.00 2,222,862,046 100.00 BENEFICIAL SHAREHOLDERS’ HOLDING OF 3% OR MORE 2024 2023 Number of shares % Number of shares % PAR Gold 306,358,058 13.78 306,358,058 13.78 South African state-controlled entities 231,656,226 10.42 228,671,312 10.29 Allan Gray Balanced Fund 124,509,922 5.60 145,358,460 6.54 LF Ruffer Gold Fund – – 94,424,183 4.25 SHAREHOLDERS’ HOLDING OF 5% OR MORE 2024 2023 Number of shares % Number of shares % Allan Gray Investment Management 352,016,069 15.84 400,795,730 18.03 PAR Gold 306,358,058 13.78 306,358,058 13.78 MandG Investment Managers Proprietary Limited 129,075,629 5.81 127,885,647 5.75 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 280 281 ALTERNATIVE PERFORMANCE MEASURES Financial APMs Group APM Related IFRS Accounting Standards measure Adjustments to reconcile to primary statements Rationale for adjustment Performance All-in sustaining costs (AISC) 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 Accounting Standards All-in cost Cost of production • Once-off capital costs As per the above for AISC with additional expansionary capital and once-off non- production-related cost adjustments Adjusted EBITDA Profit after tax • Taxation • Depreciation and amortisation • Net finance costs • Impairment loss or impairment reversals Excludes the impact of non-recurring items or certain accounting adjustments that can mask underlying changes in performance Net adjusted EBITDA 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 Excludes the impact of non-recurring items or certain accounting adjustments that can mask underlying changes in performance 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 Reflects available cash flow to service debt obligations Levered free cash flow Profit after tax • Taxation • Depreciation and amortisation • Net finance costs • Impairment loss or impairment reversals Adjusted for: • Finance costs paid • Income tax paid • Net working capital changes • Capital expenditure • Proceeds from borrowings • Repayment of borrowings Reflects available cash flow to service debt obligations 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 Accounting Standards. 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 Accounting Standards. 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 2024. • 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 Accounting Standards measures or a combination of APMs and IFRS Accounting Standards 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 Accounting Standards. 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 Accounting Standards 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 99.7% 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. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 282 283 ALTERNATIVE PERFORMANCE MEASURES continued Group APM Related IFRS Accounting Standards measure Adjustments to reconcile to primary statements Rationale for adjustment 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 Indicates the extent of the Group’s normalised earnings to shareholders based on SAICA’s Circular 2021/1 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 Excludes the impact of accounting adjustments from the net debt obligations of the Group Refer to note 37 Net senior debt Borrowings from financial institutions less cash • IFRS 9 accounting adjustments • IFRS 16 lease liabilities • Restricted cash • Instalment sale obligations Excludes the impact of accounting adjustments from the net debt obligations of the Group 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 reporting period as disclosed in the Group’s operational production table on pages 104 and 105. 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 Accounting Standards to AISC and AIC for the financial years ended 30 June 2024 and 30 June 2023. The equivalent of a rand per kilogramme and US$ per ounce basis is disclosed in the Group’s operational production table on pages 104 and 105. Mining operations Tailings operations Total operations Year ended 30 June 2024 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 1,971.6 891.6 2,863.2 227.5 105.1 951.3 1,283.9 2,199.1 1,948.0 4,147.1 Royalties 24.5 6.9 31.4 0.2 – – 0.2 24.7 6.9 31.6 Community cost related to gold operations 29.3 11.8 41.1 – – – – 29.3 11.8 41.1 By-products credits (1.5) (10.7) (12.2) – – – – (1.5) (10.7) (12.2) Corporate, general and administrative costs 127.3 53.5 180.8 – – 63.7 63.7 127.3 117.2 244.5 Reclamation and remediation – accretion and amortisation (operating sites) (8.0) (12.6) (20.6) – – – – (8.0) (12.6) (20.6) Sustaining capital – maintenance 208.2 – 208.2 7.9 – 34.7 42.6 216.1 34.7 250.8 All-in sustaining costs1 2,351.4 940.6 3,292.0 235.5 105.1 1,049.7 1,390.3 2,586.9 2,095.4 4,682.3 Expansion capital – capital expenditure 193.5 1,016.8 1,210.3 1.4 – 270.1 271.5 194.9 1,286.9 1,481.8 All-in costs1 2,544.9 1,957.4 4,502.3 236.9 105.1 1,319.8 1,661.8 2,781.8 3,382.3 6,164.1 1 This total may not reflect the sum of the line items due to rounding. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 284 285 ALTERNATIVE PERFORMANCE MEASURES continued Mining operations Tailings operations Total operations Year ended 30 June 2023 ZAR million1 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 1,647.9 624.3 2,272.2 252.2 201.8 830.9 1,284.9 1,900.1 1,657.0 3,557.1 Royalties 10.6 5.2 15.8 0.1 – 1.2 1.3 10.7 6.4 17.1 Community cost related to gold operations 21.1 4.2 25.3 – – – – 21.1 4.2 25.3 By-products credits (1.8) (6.7) (8.5) – – – – (1.8) (6.7) (8.5) Corporate, general and administrative costs 101.8 27.8 129.6 – – 42.9 42.9 101.8 70.7 172.5 Reclamation and remediation – accretion and amortisation (operating sites) (6.0) (4.3) (10.3) – – – – (6.0) (4.3) (10.3) Sustaining capital – development 128.9 – 128.9 – – – – 128.9 – 128.9 Sustaining capital – maintenance 175.2 – 175.2 5.2 9.4 27.9 42.5 180.4 37.3 217.7 All-in sustaining costs2 2,077.7 650.5 2,728.2 257.4 211.2 902.9 1,371.5 2,335.1 1,764.6 4,099.7 Expansion capital – capital expenditure 46.7 1,077.8 1,124.5 6.4 – 304.5 310.9 53.1 1,382.3 1,435.4 All-in costs2 2,124.4 1,728.3 3,852.7 263.8 211.2 1,207.5 1,682.5 2,388.2 3,147.0 5,535.2 1 This table has been restated due to prior period adjustments, refer to note 40. 2 This total may not reflect the sum of the line items due to rounding. Mining operations Tailings operations Total operations Year ended 30 June 2024 Unit Bar- berton Mines Evander Mines Total BTRP Evander Mines’ surface sources Elikhulu Total Bar- berton Mines total1 Evander Mines total1 Group total1 Gold sold kg 2,200 1,197 3,397 586 80 1,688 2,354 2,786 2,965 5,751 Gold sold oz 70,732 38,477 109,209 18,827 2,584 54,265 75,676 89,559 95,326 184,885 Average exchange rate US$/ZAR 18.71 18.71 18.71 18.71 18.71 18.71 18.71 18.71 18.71 18.71 Cost of production ZAR million 1,971.6 891.6 2,863.2 227.5 105.1 951.3 1,283.9 2,199.1 1,948.0 4,147.1 ZAR cash cost ZAR/kg 896,195 745,000 842,925 388,448 1,307,958 563,605 545,443 789,455 656,999 721,161 US$ cash cost US$/oz 1,490 1,238 1,401 646 2,174 937 907 1,312 1,092 1,199 All-in sustaining costs ZAR million 2,351.4 940.6 3,292.0 235.5 105.1 1,049.7 1,390.3 2,586.9 2,095.4 4,682.3 ZAR AISC ZAR/kg 1,068,831 785,928 969,157 402,151 1,307,957 621,943 590,685 928,680 706,729 814,243 US$ AISC US$/oz 1,777 1,307 1,611 669 2,174 1,034 982 1,544 1,175 1,354 All-in costs ZAR million 2,544.9 1,957.4 4,502.3 236.9 105.1 1,319.8 1,661.8 2,781.8 3,382.3 6,164.1 ZAR AIC ZAR/kg 1,156,771 1,635,585 1,325,470 404,526 1,307,957 781,983 706,036 998,632 1,140,786 1,071,926 US$ AIC US$/oz 1,923 2,719 2,203 672 2,174 1,300 1,174 1,660 1,896 1,782 1 This total may not reflect the sum of the line items due to rounding. Mining operations Tailings operations Total operations Year ended 30 June 20231 Unit Bar- berton Mines Evander Mines Total BTRP Evander Mines’ surface sources Elikhulu Total Bar- berton Mines total1 Evander Mines total1 Group total1 Gold sold kg 2,020 1,023 3,043 625 215 1,598 2,438 2,645 2,836 5,481 Gold sold oz 64,941 32,898 97,839 20,087 6,919 51,371 78,377 85,028 91,188 176,216 Average exchange rate US$/ZAR 17.77 17.77 17.77 17.77 17.77 17.77 17.77 17.77 17.77 17.77 Cost of production ZAR million 1,647.9 624.3 2,272.2 252.2 201.8 830.9 1,284.9 1,900.1 1,657.1 3,557.2 ZAR cash cost ZAR/kg 815,858 610,129 746,682 403,671 937,904 520,041 527,104 718,481 584,247 649,018 US$ cash cost US$/oz 1,428 1,068 1,307 707 1,642 910 923 1,258 1,023 1,136 All-in sustaining costs ZAR million 2,077.7 650.5 2,728.2 257.4 211.2 902.9 1,371.5 2,335.1 1,764.6 4,099.7 ZAR AISC ZAR/kg 1,028,634 635,728 896,519 412,041 981,522 565,106 562,636 882,967 622,180 748,015 US$ AISC US$/oz 1,800 1,113 1,569 721 1,718 989 985 1,545 1,089 1,309 All-in costs ZAR million 2,124.4 1,728.3 3,852.7 263.8 211.2 1,207.5 1,682.5 2,388.2 3,147.0 5,535.2 ZAR AIC ZAR/kg 1,051,737 1,689,006 1,266,019 422,281 981,522 755,697 690,180 903,031 1,109,545 1,009,898 US$ AIC US$/oz 1,841 2,956 2,216 739 1,718 1,323 1,208 1,581 1,942 1,768 1 This table has been restated due to prior period adjustments, refer to note 40. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 286 287 ALTERNATIVE PERFORMANCE MEASURES continued Sustaining capital Sustaining capital is the capital needed to sustain the current production base. Expansion capital Expansion capital relates to capital expenditure for the growth of the production base. Sustaining capital Expansion capital Total capital 2024 US$ million 2023 US$ million 2024 US$ million 2023 US$ million 2024 US$ million 2023 USS million Barberton Mines Mining operations 11.0 17.1 10.3 2.6 21.3 19.7 BTRP 0.4 0.3 0.1 0.4 0.5 0.7 Barberton Mines total 11.4 17.4 10.4 3.0 21.8 20.4 Evander Mines Mining operations – – 54.4 60.7 54.4 60.7 Surface sources – 0.5 – – – 0.5 Elikhulu 2.0 1.6 14.4 17.1 16.4 18.7 Evander Mines total 2.0 2.1 68.8 77.8 70.8 79.9 MTR project – – 68.7 8.8 68.7 8.8 Corporate Agricultural ESG projects 0.1 0.4 – – 0.1 0.4 Solar projects – – 10.3 2.3 10.3 2.3 Exploration assets – – 0.2 0.9 0.2 0.9 Corporate 0.3 0.3 0.2 – 0.5 0.3 Group total 13.8 20.2 158.6 92.8 172.4 113.0 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 37 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 2024 2023 Cash and cash equivalents (26.3) (34.8) Restricted cash 0.1 0.2 Borrowings 127.8 53.4 Facilities arranging fees adjustment 1.2 0.1 Net senior debt 102.8 18.9 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 8 to the annual financial statements. A reconciliation of the adjusted EBITDA by operation has been provided below. Mining operations Tailings operations Total operations ZAR million Bar- berton Mines Evander Mines Total BTRP Evander Mines’ surface sources Elikhulu Total Bar- berton Mines total Evander Mines total Group total Net income before finance income and finance costs 628.8 501.2 1,130.0 387.0 (16.1) 836.0 1,206.9 1,015.8 1,321.1 2,336.9 Depreciation and amortisation 136.8 19.1 155.9 22.2 – 205.6 227.8 159.0 224.7 383.7 EBITDA 765.6 520.3 1,285.9 409.2 (16.1) 1,041.6 1,434.7 1,174.8 1,545.8 2,720.6 Adjusted EBITDA – 2024 765.6 520.3 1,285.9 409.2 (16.1) 1,041.6 1,434.7 1,174.8 1,545.8 2,720.6 Net income before finance income and finance costs1 410.5 514.5 925.0 260.6 11.3 572.7 844.6 671.1 1,098.5 1,769.6 Depreciation and amortisation 110.0 30.0 140.0 46.5 – 163.8 210.3 156.5 193.8 350.3 EBITDA 520.5 544.5 1,065.0 307.1 11.3 736.5 1,054.9 827.6 1,292.3 2,119.9 Adjusted EBITDA – 2023 520.5 544.5 1,065.0 307.1 11.3 736.5 1,054.9 827.6 1,292.3 2,119.9 1 This table has been restated due to prior period adjustments, refer to note 40. 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 37 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 37 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 37 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 14 to the annual financial statements. OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 288 289 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 37 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 37 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 37 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 37 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. Unit 2024 2023 Total equity US$ million 364.1 291.9 Shares in issue million 2,222.9 2,222.9 Treasury shares million (306.4) (306.4) Net asset value per share US cents 19.00 15.23 Levered free cash flow Levered free cash flow measures the cash available after the Group’s financial obligations have been met including interest payments and debt. It represents the cash flow available to shareholders. Unit 2024 2023 Adjusted EBITDA US$ million 141.2 115.1 Finance costs paid US$ million (11.6) (6.3) Income tax paid US$ million (13.0) (6.5) Net working capital change US$ million 4.3 6.7 Capital expenditure US$ million (166.2) (112.7) Proceeds from borrowings US$ million 114.2 94.7 Repayment of borrowings US$ million (42.9) (69.3) Levered free cash flow US$ million 26.0 21.7 Shares in issue number million 2,222.9 2,222.9 Treasury shares number million (306.4) (306.4) Total number million 1,916.5 1,916.5 Levered free cash flow per share US cents per share 1.36 1.13 Levered free cash flow yield per share Is calculated as the levered free cash flow per share expressed as a percentage of the last traded price per Pan African share at 30 June. Unit 2024 2023 Levered free cash flow per share US cents per share 1.36 1.13 Last traded price per Pan African share1 US cents per share 33.26 16.09 Cash flow yield per share % 4.08 7.02 1 Amounts converted at the 30 June 2024 closing exchange rate of US$/ZAR:18.19 (2023: US$/ZAR:18.83). 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. Unit 2024 2023 Net income before finance income and finance costs US$ million 119.3 94.2 Average equity US$ million 328.0 292.1 Average borrowings US$ million 90.6 44.0 Return on capital employed % 28.5 28.0 Adjusted EBITDA margin Is calculated as adjusted EBITDA divided by revenue. Gross profit margin This is calculated as gross profit divided by revenue. 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 84 and 85. Price earnings ratio Is calculated as the last sale price (refer to the Group’s five-year overview on pages 84 and 85) for the year divided by the earnings per share either in ZA cents or in GB pence per the table below. 2024 cents 2024 pence 2023 cents 2023 pence 2022 cents 2022 pence 2021 cents 2021 pence 2020 cents 2020 pence Earnings per share 77.49 3.37 56.48 2.36 59.16 2.92 59.65 2.88 36.0 1.82 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 84 and 85. 2024 cents 2024 pence 2023 cents 2023 pence 2022 cents 2022 pence 2021 cents 2021 pence 2020 cents 2020 pence Dividends per share 22.00 0.96 18.00 0.75 18.00 0.90 18.00 0.92 14.00 0.65 OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 290 291 GLOSSARY SUSTAINABILITY REPORTING BOUNDARY % Parts per hundred/percentage ºC Degrees Celsius μm Micrometre 3D Three-dimensional A2X 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 AAL Aachen Assisted Leach reactor ADR American Depository Receipt programme through the Bank of New York Mellon AGM Annual general meeting Aids Acquired immunodeficiency syndrome AIM AIM Market, the LSE’s international market for smaller growing companies ALARP As low as reasonably practicable ANC African National Congress APMs Alternative performance measures Au 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 BCTT Base case threshold test BFS Bankable feasibility study BIOX® 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 the board The board of directors of Pan African, as set out on pages 144 and 145 BTRP Barberton Tailings Retreatment Plant, a gold recovery tailings plant owned by Barberton Mines, which reached steady-state production in June 2013 CBAM Carbon border adjustment mechanisms CCTV Closed-circuit television CFCs Chlorofluorocarbons cm Centimetre CMA Contract mining agreement cmg/t Centimetre grammes per tonne CO2 Carbon dioxide CO2 e/t Carbon dioxide emissions per tonne 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 COVID-19 Coronavirus disease 2019, an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) CPI Consumer Price Index CRM Certified reference material CSI Corporate social investment DA Democratic Alliance DMRE Department of Mineral Resources and Energy DMTN Domestic medium-term note DWS Department of Water and Sanitation Elikhulu The Elikhulu Tailings Retreatment Plant in Mpumalanga province, with its inaugural gold pour in August 2018 EPC Engineering, procurement and construction ERP Enterprise resource planning ESG Environmental, social and governance Eskom Electricity Supply Commission, South African electricity supplier ESOP Employee share ownership plan Evander Gold Mines Evander Gold Mines Proprietary Limited Evander Mines Evander Gold Mining Proprietary Limited Evander Solar Solutions Evander Solar Solutions Proprietary Limited Exco Executive committee of Pan African Resources FIFR Fatal injury frequency rate FRC The UK Financial Reporting Council Funding Company Pan African Resources Funding Company Proprietary Limited g Gramme GBP British pound GHG Greenhouse gas GISTM Global Industry Standard on Tailings Management GJ Gigajoule GNU Government of National Unity GRI Global Reporting Initiative g/t Grammes/tonne GWh Gigawatt hour DEFINITIONS OF TERMS AND ABBREVIATIONS USED IN THIS REPORT Scope Included Excluded Selected sustainability information Unit of measurement Barberton Mines Evander Mines MTR project Pan African Resources Minerals DMCC and Pan African Resources Minerals Co Limited Barberton Blue Pan African Resources Management Services Company Proprietary Limited Reason for exclusion Non-renewable electricity consumption GWh Renewable electricity consumption GWh Diesel consumption ML Energy consumption TJ Energy intensity (energy consumed per ounce of gold sold) GJ/oz The KPI depends on the ounces of gold sold, the excluded entities are not gold producing operations GHG emissions Scope 1 ktCO2e GHG emissions Scope 2 ktCO2e GHG emissions per ounce of gold sold tCO2e/oz The KPI depends on the ounces of gold sold, the excluded entities are not gold producing operations GHG emissions averted ktCO2e Renewable energy as a percentage of total energy consumed % Land rehabilitation (project level – MTR project) % The KPI is linked specifically to the MTR project Employment equity – historically disadvantaged persons (HDPs) % The KPI is aligned with the Mining Charter III and excludes entities not associated to mining Percentage of women in mining % The KPI is aligned with the Mining Charter III and excludes entities not associated to mining Total recordable injury frequency rate Rate per million man hours The KPI is aligned with the Mine Health and Safety Act and excludes entities not associated to mining Percentage of the total mining goods procurement spend on South African manufactured goods from 50% + 1 vote HDP- owned and controlled companies % The KPI aligned with the Mining Charter III and the procurement of mining goods, which currently includes only gold mining operations Percentage of the total services procurement spend on South African companies that are 50% + 1 vote HDP-owned and controlled companies % The KPI related to Mining Charter III and the procurement of mining services, which currently includes only gold mining operations OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 PAN AFRICAN RESOURCES PLC Integrated annual report 2024 292 293 GLOSSARY continued PASABP Pan African Share Appreciation Bonus Plan (previous scheme for corporate senior managers) PC Barberton Mines’ Prince Consort Shaft PGLIP PAR Gold Long-term Incentive Plan PPA Power purchase agreement 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 Project Kite relates to an agricultural Group project which is held in a previously dormant Group entity PV Photovoltaic PwC PricewaterhouseCoopers LLP/ PricewaterhouseCoopers Inc. PwC Inc. PricewaterhouseCoopers Inc. QA/QC Quality assurance and quality control R&D Research and development 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 Remco Remuneration committee of Pan African Resources RES Renewable energy solutions RIFR Reportable injury frequency rate RMB Rand Merchant Bank, a division of FirstRand Bank Limited RoM Run-of-mine SA South Africa SAICA South African Institute of Chartered Accountants SAMREC Code South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves, 2016 edition SARS South African Revenue Service SBLF Sustainability Bond Linked Finance SDG Sustainable Development Goal SENS Stock Exchange News Service SGS Barberton SGS Barberton assay laboratory SGS Performance SGS Performance assay laboratory located in Randfontein SHEQ Safety, health, environment and quality SLP 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 South African Companies Act, 71 of 2008 SPT Sustainability performance target t Tonne TCFD Task Force on Climate-related Financial Disclosures TCMG Tennant Consolidated Mining Group Proprietary Limited tCO2e tonnes (t) of carbon dioxide (CO2) equivalent the current reporting period The reporting period ended 30 June 2024 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 Pan African Resources PLC’s 2024 integrated annual report TJ Terajoule (Tera = 1012) or a trillion joules TMC The Minerals Corporation TNFD Taskforce on Nature-related Financial Disclosures tpm Tonnes per month TRIFR Total recordable injury frequency rate TSF Tailings storage facility UASA United Association of Southern Africa UK United Kingdom UN SDGs United Nations Sustainable Development Goals US United States USA United States of America US$ United States dollar VAT 15% value-added tax in South Africa ZAR South African rand ZK Zwartkoppie ha Hectare HDP Historically disadvantaged person HDSA Historically disadvantaged South African HIV Human immunodeficiency virus HODs Heads of departments IAS International Accounting Standards ICMM International Council on Mining and Metals IFRS IFRS® Accounting Standards IFRS S1 IFRS S1: General Requirements for Disclosure of Sustainability-related Financial Information IFRS S2 IFRS S2: Climate-related Disclosures Framework International Integrated Reporting Framework of the IFRS Foundation ISAs (UK) International Standards on Auditing (UK) ISIN International Securities Identification Number IT Information technology ITRB Independent tailings review board IWE Industrial Water Efficiency JET Framework Just Energy Transition Framework JSE JSE Limited incorporating the Johannesburg Stock Exchange, the main bourse in South Africa K Company K2015200726 Proprietary Limited kg Kilogramme King IV™ King IV Report on Corporate Governance for South Africa, 2016™ km Kilometres km2 Square kilometre Koz Thousand ounces KPIs 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 kt Thousand tonnes ktCO2e Kilotonne carbon dioxide equivalent LED Local economic development LSE London Stock Exchange LTIFR Lost-time injury frequency rate m Metre Manco Management committee on operations MC Mining MC Mining Limited (previously known as Coal of Africa Limited) Metorex Metorex Limited Mining Charter III Charter to facilitate the sustainable transformation and development of the South African mining industry Mintails transaction Pan African entered into conditional sale of shares agreements to acquire Mogale Gold and MSC ML Megalitre mm Millimetre MMR Main Muiden Reef Mogale Clay Mogale Clay Proprietary Limited Mogale Gold Mogale Gold Proprietary Limited Moz Million ounces MRC Main Reef Complex MRE Mineral Resources estimation MSC Mintails SA Soweto Cluster Proprietary Limited Mt Megatonne MTR Mogale Tailings Retreatment Proprietary Limited MTR project or plant 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 MW Megawatt MWh Megawatt hour NCPC-SA National Cleaner Production Centre of South Africa NFSIS Non-financial and sustainability information statement NPC Non-profit company NUM National Union of Mineworkers ODSs Ozone-depleting substances Opsco Operations committee of Pan African Resources OTCQX OTCQX Best Market in the USA oz Ounce Pan African Resources PLC Holding company – Pan African PAR Gold PAR Gold Proprietary Limited PAR Management Services Pan African Resources Management Services Company Proprietary Limited PAR Properties Pan African Resources Properties Proprietary Limited PAR SA Holdings Pan African Resources SA Holding Company Proprietary Limited OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 294 GLOSSARY continued FREQUENTLY USED FINANCIAL TERMS AIC All-in cost AISC All-in sustaining costs bps Basis points CFD Contract for difference CGU Cash-generating unit EAD Exposure of default EBITDA Earnings before interest, income taxation expense, depreciation and amortisation ECL Expected credit loss/es GDP Gross domestic product IBOR Interbank offered rate JIBAR Johannesburg Interbank Average Rate LGD Loss given default LTI Long-term incentive PD Probability of default RCF Revolving credit facility ROSF Return on shareholders’ funds STI Short-term incentive TGP Total guaranteed pay TSR Total shareholder returns VWAP Volume-weighted average price ZARONIA South African Rand Overnight Index Average Rate Financial year-end 30 June 2024 Results announcement 11 September 2024 Integrated annual report released on website 11 September 2024 Notice of annual general meeting distributed 30 October 2024 Annual general meeting 21 November 2024 Interim results announcement 12 February 2025 SHAREHOLDERS’ DIARY 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. 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 3869 0706 CHIEF EXECUTIVE OFFICER Cobus Loots Office: +27 (0) 11 243 2900 FINANCIAL DIRECTOR AND DEBT OFFICER Deon Louw Office: +27 (0) 11 243 2900 COMPANY SECRETARY Jane Kirton St James’s Corporate Services Limited Office: +44 (0) 20 3869 0706 JSE SPONSOR AND JSE DEBT SPONSOR Ciska Kloppers Questco Corporate Advisory Proprietary Limited Office: +27 (0) 11 011 9200 NOMINATED ADVISER AND JOINT BROKER Ross Allister/Georgia Langoulant 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 HEAD: INVESTOR RELATIONS Hethen Hira Office: +27 (0) 11 243 2900 Email: hhira@paf.co.za CORPORATE INFORMATION OUR BUSINESS AND STRATEGY PERFORMANCE REVIEW ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE ANNUAL FINANCIAL STATEMENTS OTHER INFORMATION PAN AFRICAN RESOURCES PLC Integrated annual report 2024 296 www.panafricanresources.com