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Pan African Resources PLC (PAF)

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Thursday 26 February, 2009

Pan African Resources PLC

Unaudited Interim Results for the 6mths ended 3...


Regulatory announcement                                                        
                                                                               
Company                      Pan African Resources plc                         
                                                                               
TIDM                         PAF                                               
                                                                               
Headline                     Unaudited Interim Results                         
                                                                               
Released                     26 February 2009                                  

                           Pan African Resources PLC                           

                       (`Pan African' or the `Company')                        

(Incorporated and registered in England and Wales under Companies Act 1985 with
                registered number 3937466 on 25 February 2000)                 

                            Share code on AIM: PAF                             

                            Share code on JSE: PAN                             

                              ISIN: GB0004300496                               

                           Unaudited Interim Results                           

                   For the six months ended 31 December 2008                   

Pan African Resources PLC (AIM: PAF, Altx: PAN), the African gold mining
company, is pleased to report its unaudited interim results for the six-months
ended 31 December 2008.

Highlights

  * Gross gold production up 7.8% to 51,186 oz (2007: 47,486 oz)
   
  * Cash-flow positive with gold sales of £24.9m up 71%.
   
  * EBITDA up 114% to £8.5 million (2007: £4.0m)
   
  * Headline earnings of £3.9 million (2007: £1.29m), an increase of 202%
   
  * Headline EPS 0.36 pence (2007: 0.13 pence), an increase of 173%
   
  * Total cash cost of US$451/oz sold (2007: US$514/oz sold), down 12%
   
  * Significant improvement in safety
   
  * Total Manica resource increased to 2.571Moz (2007 : 1.701Moz), an increase
    of 51%
   
  * Dividend of 0.2555 pence per share declared
   
Financial review for six-months ending 31 December 2008

                                                   Six months   Six months 
                                                      ended      ended 31  
                                                                 December  
                                                   31 December     2007    
                                                      2008      (Unaudited)
                                                   (Unaudited)             
                                                                           
                                                                           
                                                                           
Revenue                                   (GBP**)    24,940,383  14,596,037
                                                                           
EBITDA                                    (GBP**)     8,552,011   4,000,872
                                                                           
Attributable profit                       (GBP**)     2,569,804   1,294,286
                                                                           
EPS                                       (pence)          0.23        0.13
                                                                           
HEPS*                                     (pence)          0.36        0.13
                                                                           
Weighted average number of                        1,100,517,684 965,777,998
shares in issue                                                            
                                                                           
                                                                           
                                                                           
                                                                           
                                                                           
* HEPS - Headline Earnings Per Share (refer to calculation under           
Consolidated Income Statement)                                             
                                                                           
**GBP - Pounds Sterling                                                    
                                                                           

Nature of the business

Pan African is a self-funding, unhedged gold mining and development company
increasingly focusing on mining and near-term-production assets that will yield
low-cost, high-margin projects on the African continent.

In addition to its 74% stake in Barberton (Shanduka Resources is a 26%
shareholder), Pan African has been exploring and developing concessions in
Mozambique, the Central African Republic and Ghana.

Financial Results

We were pleased that for the six months under review EBITDA increased by 114%
up to £8.5 million. This resulted in a profit after tax of £4.2 million despite
a £1.3 million impairment arising from the decision to terminate exploration
activity in Ghana. The Company's profit is a result of higher grades and a
robust gold price achieved at Barberton Mines.

The Company's tax charge increased from £1.3 million to £3.7 million, equating
to an effective tax rate of 37%.

Capital expenditure increased by 49% to £2.2 million and exploration costs
increased by 32% to £1.7 million.

Safety and Training

We are pleased to report no fatalities were recorded in the period under
review, with the operations achieving 556,669 (2007: 95,226) fatality-free
shifts. Reportable incidents for the period were zero (2007: 4). This
improvement resulted from more active communication and training for employees
and a more determined focus by management on accountability across the mines.

In addition, the Presidential Safety Audit was completed and the mine has
addressed all outstanding issues.

Overview

MINING

Review of the Barberton Mining Operations

Production at Barberton Mines remained unhedged and an average spot gold price
of US$824/oz was received (2007: US$721/oz). Total cash cost of US$451/oz* was
down 12% (2007: US$514). Tons milled were slightly down on plan and an
unsustainable, exceptionally high grade was achieved. Recovered grade is
expected to be more in line with the historic average going forward.

The three operating mines in the Barberton area, Fairview, Sheba and New
Consort, together with final production from the calcine dump retreatment
operation produced 51,186 oz of gold, an improvement on the previous comparable
period. Gold production from underground mining resulted in 47,634 oz and
surface operations delivering 3,545 oz.

*Total cash cost excludes depreciation and capital expenditure

Reserve replacement projects

Sheba - Southwell adit

The capital project was completed during the period and is now at the
working-cost development stage.

Sheba - 35 ZK Decline

The winder installation has been completed and the decline was advanced 17.9
meters from the uppermost level - sinking continues.

Sheba - Edwin Bray to Thomas & Joe's Luck area

Total development on the two ends amounted to 385 metres. The target area of
Joe's Luck requires a further 600 meters advance on each end.

Consort - 50 Level Declines

Development and equipping of the two declines totalled 55.3 metres below the
uppermost level. The installation and commissioning of the winders was
completed in the previous reporting period. The project remains on schedule.

Fairview - MRC development

Total development of 376.5 metres was completed, enabling access to the
62-level ore bodies. Forty metres of the 3 sub-incline shaft bottom, below 62
level has been cleaned out, on completion of the cleaning this shaft will be
deepened to 68 level to provide future access to the MRC ore-body.

Production Summary                                                                      
                                                                                        
                             6months 6monthsended 6monthsended 6monthsended 6monthsended
                                                                                        
                               ended                                                    
                                                                                        
                           31-Dec-08    31-Dec-07    31-Dec-06    31-Dec-05    31-Dec-04
                                                                                        
TonsMilled           (t)     159,919      161,455      166,377      157,452      161,980
                                                                                        
Headgrade           (g/t)      11.40         9.05         9.24        11.44        10.24
                                                                                        
OverallRecovery      (%)          91           92           92           92           91
                                                                                        
Production:          (oz)     47,634       43,145       45,332       53,369       48,547
Underground                                                                             
                                                                                        
Production:          (oz)      3,545        3,601            -            -            -
CalcineDump                                                                             
                                                                                        
Sold                (USD/     51,186       47,486       45,749       52,983       50,186
                     oz)                                                                
                                                                                        
AveragePrice:Spot   (USD/        824          721          567          464          412
                     oz)                                                                
                                                                                        
AveragePrice:Hedge  (USD/          -          460          406          430          502
                     oz)                                                                
                                                                                        
TotalCashcostUSD/   (USD/        451          514          450          394          434
ozsold               oz)                                                                
                                                                                        
EBITDA               GBP       8,552        4,001        3,049        2,153        1,157
                                                                                        
                    (000)                                                               
                                                                                        
Depreciation         GBP       1,066          806        1,077        1,042        1,011
                                                                                        
                    (000)                                                               
                                                                                        
Capital Expenditure  GBP       2,282        1,532          867          569          452
                                                                                        
                     (000                                                               
                                                                                        
Exchange rate -                15.13        14.05        13.68        11.48        11.38
average                                                                                 
                                                                                        
Exchange rate -                13.78        13.77        13.78        11.06        11.00
closing                                                                                 

* 74% of the 2007 & 2008 results are attributable to the equity shareholders of
Pan African; 2004 - 2006 results were attributable to Metorex Limited

EXPLORATION PROJECTS

Due to the global economic uncertainty and disappointing drilling results in
Ghana, the management and board of Pan African have decided not to exercise the
Company's rights to the Kyereboso and U&N projects and are negotiating the sale
and retention of a free-carry of the Akrokerri project. The termination of
these projects results in a £1.3 million impairment on the balance sheet.

In the Central African Republic (`CAR'), at Bogoin, two targets have been
identified. The shear zone target and the banded-iron formation target. A
gold-in-soil sampling programme was completed on the shear zone target which
was followed up by an RC drilling programme totalling 16,213m. No significant
gold intersections were made. Adjacent to the shear-zone target, 12 kilometres
of banded-iron formation still remain untested and a gold-in-soil sampling
programme has been initiated over this target. At Dekoa, also in the Central
African Republic, infill gold and soil sampling has confirmed the presence of
gold anomalies presenting a strike-length in excess of 25 kilometres. A
bulk-sampling programme is being initiated over these anomalies.

Pan African has increased its stake in the CAR projects to a significant
majority as a result of the JV partner not contributing to the project funding.
The final dilution percentage is currently being audited and will be released
once finalised. Future planned expenditure in the CAR has declined for the next
six months to £173,600 on both projects as a result of the nature of
exploration work being carried out.

At Manica in Mozambique, preliminary work completed on the pre-feasibility
study indicates that the project is extremely sensitive to capital expenditure
and requires additional ore to be mined in the first 2 years to address this
issue. The resource estimate has been upgraded from 1.70Moz (11.5Mt @ 4.61g/t)
to 2.57Moz (33.8Mt @ 2.36g/t) encouraging a drive to try to consolidate further
oxide resources adjacent to the project, in an effort to make it more robust. £
1.04 million has been allocated for this consolidation process over the next 10
months, after which the viability of the project will be reviewed.

After the period under review, the company acquired an exclusive,
non-refundable option to purchase 100% of the shares in Phoenix Platinum Mining
(Pty) Limited (`Phoenix') from Metorex Limited (`Metorex'). This is a platinum
dump retreatment project. Test work is progressing and is expected to be
completed within the allocated four month period.

Estimates show the capital expenditure is expected to be £6.9 million,
resulting in a pay-back of less than one year; life of operation is estimated
to be between five and seven years from existing surface tailings, which can be
extended to 18 years with the addition of underground arisings. 4PGE*
production is anticipated at between 10,000 - 15,000 oz/annum, assuming
conservative 4PGE basket prices.

* PGE = Platinum Group Elements (4PGE = Platinum, Palladium, Rhodium and Gold)

Capital expenditure and commitments

Capital expenditure at Barberton mines totalled £2.28 million (this excludes
surface exploration costs at Barberton Mines) of which roughly half was spent
on underground development and the rest on engineering, maintenance and repair.

Exploration expenditure on all our projects totalled £1.68 million.

There were no material contracted capital commitments at the end of the period.

Operating lease commitments, which fall due within the next year, amount to £
48,010.

Shares Issued July 2008 - December 2008

722,274 shares were issued to Goldiam SARL at 5.5 pence per share for the
acquisition of gold exploration licences in the Central African Republic.

Directorship Change

Mr Simon Malone retired from the Pan African Board on 20 January 2009. The
Company would like to thank him for his valued efforts and assistance and
wishes him all the best for his retirement.

Accounting Policies

The financial information set out in this announcement does not constitute the
Company's statutory accounts for the half year ended 31 December 2008.

The financial information included in this preliminary announcement has been
prepared in accordance with the recognition and measurement criteria of IFRS.
This announcement does not itself contain sufficient disclosure information to
comply fully with IFRS.

The unaudited interim results have been prepared and presented in accordance
with, and containing the information required by IFRS on Interim Financial
Reporting, IAS 34.

Dividend declaration

Dividend No 1 of 0.2555 pence per share has been declared in respect of the six
months ended 31 December 2008. The last day to trade ("cum" the dividend) on
the JSE in order to participate in the dividend will be Friday, 13 March 2009.
The shares will commence trading "ex" the dividend from the commencement of
business on Wednesday, 18 March 2009 on the LSE and on Monday, 16 March 2009 on
the JSE. The record date on the LSE and JSE will be Friday 20 March 2009.

The dividend is declared in the currency of the United Kingdom and will be paid
on Wednesday, 8 April 2009. Shareholders whose shares are held on the United
Kingdom register will receive payment in sterling. Shareholders whose shares
are held on the South African register will receive payment in South African
rand at the ruling rate on Thursday, 5 March 2009.

Share certificates may not be lodged with the South African transfer
secretaries for dematerialisation / rematerialisation from Monday, 16 March
2009 to Friday, 20 March 2009, both dates inclusive.

Future Prospects

The focus of Pan African continues to move up the value chain to projects at
the point of pre-feasibility to assets near / in production. The Company's
mining operations at Barberton provide funding to find and develop new projects
and advanced-staged mining opportunities.

The Directors believe global macroeconomic fundamentals support a favourable
gold price in the medium-term and the combination of activities at our mining,
and more advanced exploration assets are expected to deliver satisfactory
results for the next reporting period. Production plan is sustainable and the
Company remains on track to produce 100,000 oz/annum.

The Company continues to evaluate and acquire projects that will deliver high
margins and low costs with significant upside potential and believe that in the
current environment of tight credit, the strong balance sheet compares Pan
African favourably to its peers.

By order of the Board

K C Spencer                             J P Nelson                             
                                                                               
Chairman                                Chief Executive Officer                

26 February 2009

Consolidated Income Statement                                                  
                                                                               
                                                6 months ended  6 months ended 
                                                                               
                                                  31 Dec 08        31 Dec 07   
                                                                               
                                                 (Unaudited)      (Unaudited)  
                                                                               
                                                      £                £       
                                                                               
Revenue                                                                        
                                                                               
Gold sales                                           24,940,383      14,596,037
                                                                               
Realisation costs                                        63,532          70,630
                                                                               
On - mine revenue                                    24,876,851      14,525,407
                                                                               
Cost of production                                   14,099,512       9,995,471
                                                                               
Depreciation                                          1,065,720         806,369
                                                                               
Mining Profit                                         9,711,619       3,723,567
                                                                               
Other (expenses) / income                             (885,413)       (529,064)
                                                                               
Operating income before finance costs                 8,826,206       3,194,503
                                                                               
Finance income                                          434,700          99,479
                                                                               
Finance costs                                           (6,007)         (9,696)
                                                                               
Impairment of Intangible Asset                      (1,339,915)                
                                                                               
Profit before taxation                                7,914,984       3,284,286
                                                                               
Taxation                                              3,705,065       1,347,912
                                                                               
Profit after taxation                                 4,209,919       1,936,374
                                                                               
Attributable to:                                                               
                                                                               
Equity holders of the parent                          2,569,804       1,294,286
                                                                               
Minority interests                                    1,640,115         642,088
                                                                               
                                                                               
                                                                               
                                                      4,209,919       1,936,374
                                                                               
Earnings per share (pence)                                 0.23            0.13
                                                                               
Diluted earnings per share (pence)                         0.23            0.11
                                                                               
Weighted average number of shares in issue        1,100,517,684     965,777,998
                                                                               
Diluted number of shares in issue                 1,111,517,684   1,136,689,165

Headline earnings per share is calculated                                      
using the following :                                                          
                                                                               
Headline earnings                                     3,909,719       1,294,286
                                                                               
Headline earnings per share (pence)                        0.36            0.13
                                                                               
Diluted headline earnings per share (pence)                0.35            0.11

Consolidated Balance Sheet

                                                6 months ended     Year ended  
                                                                               
                                               31 December 2008   30 June 2008 
                                                                               
                                                 (Unaudited)       (Audited)   
                                                                               
                                                      £                £       
                                                                               
ASSETS                                                                         
                                                                               
Non-current assets                                                             
                                                                               
Property, plant and equipment                         24,031,808     20,069,814
                                                                               
Rehabilitation trust fund                              1,964,278      1,739,522
                                                                               
Intangible assets                                     13,311,565     12,837,045
                                                                               
Goodwill                                              21,000,714     21,000,714
                                                                               
                                                      60,308,365     55,647,095
                                                                               
Current assets                                                                 
                                                                               
Inventories                                              374,345        377,974
                                                                               
Trade and other receivables                            3,138,027      2,972,776
                                                                               
Cash and cash equivalents                              7,717,725      5,419,489
                                                                               
                                                      11,230,097      8,770,239
                                                                               
Total Assets                                          71,538,462     64,417,334
                                                                               
EQUITY AND LIABILITIES                                                         
                                                                               
Capital and reserves                                                           
                                                                               
Share capital                                         11,005,891     10,998,664
                                                                               
Share Premium                                         37,299,997     37,267,475
                                                                               
Translation Reserve                                    1,046,373     -1,118,262
                                                                               
Share Option Reserve                                     363,812        285,312
                                                                               
Retained income                                       12,515,825      9,946,021
                                                                               
Merger Reserve                                      (10,705,308)   (10,705,308)
                                                                               
Equity attributable to equity holders of              51,526,590     46,673,902
parent                                                                         
                                                                               
Minority interest                                      4,444,153      3,694,869
                                                                               
Total Equity                                          55,970,743     50,368,771
                                                                               
Non - Current liabilities                                                      
                                                                               
Long term liabilities - Interest bearing                       -         16,822
                                                                               
Long term Provisions                                   2,500,017      2,219,954
                                                                               
Deferred Taxation                                      6,150,434      5,201,245
                                                                               
 Total Non-Current Liabilities                         8,650,451      7,438,021
                                                                               
Current liabilities                                                            
                                                                               
Trade and other payables                                ,048,417      2,754,795
                                                                               
Short term liabilities - Interest bearing                 48,010         89,269
                                                                               
Short term Provisions                                  1,011,417        711,085
                                                                               
Financial Instruments                                                         -
                                                                               
Current Tax Liabilities                                2,809,425      3,055,393
                                                                               
Total Current Liabilities                              6,917,269      6,610,542
                                                                               
TOTAL EQUITY AND LIABILITIES                          71,538,463     64,417,334

Condensed Consolidated Cash Flow Statement

                                             Six months ended  Six months ended
                                                                               
                                             31 December 2008  31 December 2007
                                                                               
                                               (Unaudited)       (Unaudited)   
                                                                               
                                                    £                 £        
                                                                               
Cash Generated by operations                        10,401,503        4,604,148
                                                                               
Minorities Distributions                             (890,831)         (49,379)
                                                                               
Taxation Paid                                      (4,240,562)        (607,085)
                                                                               
Finance Cost, net                                      428,693           89,783
                                                                               
Cash inflow from operating activities                5,698,803        4,037,467
                                                                               
Cash outflow from investing activities             (4,056,420)      (3,982,702)
                                                                               
Cash (outflow) from finance activities                (44,374)         (69,668)
                                                                               
Net Increase/ (Decrease) in cash                     1,598,009         (14,903)
equivalents                                                                    
                                                                               
Cash at the beginning of period                      5,419,489          326,847
                                                                               
Reverse Acquisition                                          -          733,101
                                                                               
Effect of Foreign Currency rate changes                700,227                -
                                                                               
Cash at end of year                                  7,717,725        1,045,045

Condensed Statement of Changes in Equity

                                          Six months ended  Six months ended
                                          31 December 2008  31 December 2007
                                             (Unaudited)      (Unaudited)   
                                                                            
                                                                            
                                                                            
Shareholders equity at start of period           50,368,771        5,906,749
                                                                            
Share Issue                                          39,749                -
                                                                            
Reverse Acquisition                                       -       24,818,679
                                                                            
Translation and Share Option Reserve              2,243,135        - 313,850
                                                                            
Net Income for the period                         2,569,804        1,294,286
                                                                            
Minorities Interest                                 749,284        2,632,217
                                                                            
Total Equity                                     55,970,743       34,338,081

                                     ENDS                                      

Martin Bevelander: a registered competent person with the South African Council
for Natural Science Professions (`SACNASP'), signed off on the resource
statement for Manica.

Deon van der Heever: an independent competent person registered with SACNASP,
signed off on the block and geostatistical model for Manica

Frans Chadwick: a professional surveyor and registered with the Professional
Land and Technical Surveyors (`PLATO') signed off on the resource statement for
Barberton Mines Limited.

For further information on Pan African Resources plc, please visit the website
at www.panafricanresources.com

Enquiries:

Pan African Resources

Jan Nelson, CEO

+27 (0) 11 243 2900

Keith Spencer, Chairman

+27 (0) 11 880 3155

Nicole Spruijt, Public Relations

+27 (0) 11 243 2900

RBC Capital Markets

Martin Eales

+44 (0) 20 7029 7881

Macquarie First South Advisers (Pty) Limited

Thato Morojele

+27 (0) 11 583 2379

Annerie Britz

+27 (0) 11 583 2328

Melanie de Nysschen

+27 (0) 11 583 2316

St James's Corporate Services Limited

Phil Dexter

+44 (0) 20 7499 3916

FDBeachhead Media & Investor Relations

Jennifer Cohen

+27 (0) 11 214 2401

Louise Brugman

+27 (0) 83 504 1186