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Pan African Resources PLC (PAF)

  Print      Mail a friend       Annual reports

Tuesday 31 August, 2010

Pan African Resources PLC

Audited Full Year Results & Dividend Recomm...


31 August 2010

                           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                               

   Audited Full Year Results and Dividend Recommendation for the Year Ended    
                                 30 June 2010                                  

Pan African Resources PLC ("Pan African" or the "Company" or the "Group") (AIM:
PAF, JSE: PAN) is pleased to report its audited full year results and dividend
recommendation for the year ended 30 June 2010.

 a. Highlights 2010
   
Corporate

  * Revenue from gold sales increased by 29.25% to GBP68.5 million (2009:
    GBP53.0 million)
   
  * Unhedged and debt free
   
  * Barberton Mines (Proprietary) Limited ("Barberton Mines") is now a wholly
    owned subsidiary (2009: 74%)
   
  * Headline earnings per share ("HEPS") increased by 25.88% to 1.07p (2009:
    0.85p)
   
  * Earnings per share ("EPS") increased by 160.00% to 1.04p (2009: 0.40p)
   
  * Earnings before interest, tax, depreciation, amortisation and impairments
    ("EBITDA") increased by 9.17% to GBP25.0 million (2009: GBP22.9 million)
   
  * Final dividend of GBP5.26 million, 0.3723p (2009: interim dividend of
    0.2555p declared) proposed
   
  * Cash and cash equivalents increased by 435.56% to GBP12.80 million (2009:
    GBP2.39 million)
   
  * Shanduka Gold (Proprietary) Limited ("Shanduka") acquired a 26%
    shareholding in Pan African
   
  * Cyril Ramaphosa appointed as Non-Executive Chairman
   
Mining Operations

  * Underground gold production increased by 2.71% to 97,483oz (2009: 94,909oz)
   
  * Headgrade improved by 2.81% to 10.61g/t (2009: 10.32g/t)
   
  * Measured and indicated resource base increased by 30.22% to 1,814,000oz
    (2009: 1,393,000oz)
   
  * Barberton Mines old order mining rights converted to new order mining
    rights
   
Near-Term Operations

Phoenix Platinum

  * Exclusive terms signed with International Ferro Metals (SA) (Proprietary)
    Limited ("IFM") in terms of the site location of a Chrome Tailings
    Retreatment Plant ("CTRP")
   
  * Resource upgraded by 15.80% to 469,000oz from 405,000oz
   
  * Production expected to commence in the second half of 2011
   
  * Forecast cash cost of less than US$400/oz
   
                                                  Year ended       Year ended
                                                30 June 2010     30 June 2009
                                                                             
                                                         GBP              GBP
                                                                             
Gold Sales                         (GBP)          68,506,394       53,000,352
                                                                             
EBITDA                             (GBP)          25,022,552       22,889,784
                                                                             
Attributable Profit - Owners of    (GBP)          14,277,232        4,403,535
the parent                                                                   
                                                                             
EPS                                (pence)              1.04             0.40
                                                                             
HEPS                               (pence)              1.07             0.85
                                                                             
Weighted average number of shares              1,366,268,709    1,104,367,219
in issue                                                                     

 b. Nature of our Business
   
Pan African is a mining group that produces approximately 100,000oz of gold per
year. Its focus is on developing and operating low cost, high margin production
and near production projects. The Phoenix Platinum project which will extract
Platinum Group Metals ("PGM") from chrome tailings and underground seams will
be the first project that the Group will develop and plant construction is
expected to commence in the second half of 2010. The Group is debt free,
unhedged and is able to fund all of its current on-mine capital from internal
cash flows.

 c. Financial Performance
   
Pan African is incorporated in England and Wales, and its reporting currency is
pounds sterling ("GBP"). Barberton Mines is a South African company, and its
financial statements are prepared in South African Rand ("ZAR" or "Rand"). When
Barberton Mines' financial statements are translated into GBP for the purposes
of Group consolidation and reporting, the annual average and year-end closing
ZAR:GBP exchange rates affect the Group consolidated financial results. In the
current financial year, the average prevailing ZAR:GBP exchange rate was 11.93:
1 (2009: 14.39:1), and the closing ZAR:GBP exchange rate was 11.53:1 (2009:
12.66:1). The year-on-year change in the average and closing exchange rates of
17.10% and 8.93% respectively should be taken into account for the purposes of
comparing year-on-year results.

Gross revenue from gold sales increased by 29.25% to GBP68.5 million (2009:
GBP53.0 million). The increase in revenue was mainly attributed to a 26.64%
increase in the average gold spot price received to US$1,098/oz (2009: US$867/
oz), and the depreciation of the GBP against the ZAR. The average US$:ZAR
exchange rate was 15.95% stronger at ZAR7.59 (2009: ZAR9.03), which negatively
impacted revenue received in ZAR. The effective ZAR gold price was 6.41% higher
at ZAR267,876/kg (2009: ZAR251,740/kg). Mining profit at Barberton Mines grew
by 12.27% to GBP24.7 million (2009: GBP22.0 million).

Cost of production increased by 42.46% to GBP40.6 million (2009: GBP28.5
million). In Rand terms, cost of production increased by 17.97% to ZAR483.8
million (2009: ZAR410.1 million). This increase is mainly attributable to a
42.86% increase in electricity costs to ZAR42.0 million (2009: ZAR29.4
million), security costs increasing by 176.92% to ZAR32.4 million (2009:
ZAR11.7 million) and salary, wages and other staff expenses increasing by
18.41% to ZAR215.5 million (2009: ZAR182.0 million).

Barberton Mines commenced payment of the new South African mining royalty tax
upon its implementation in March 2010. This royalty charge for the year
amounted to GBP0.84 million.

EBITDA for the year under review, excluding impairment charges, was GBP25
million (2009: GBP22.9 million), an increase of 9.17%. Other expenses increased
31.29% to GBP1.93 million (2009: GBP1.47 million), largely due to cancellation
of the Metorex Limited ("Metorex") management agreement for Barberton Mines on
1 July 2009, for a consideration of GBP0.34 million. The Company incurred an
exploration expenditure impairment charge of GBP0.35 million (2009: GBP5.0
million) during the year. This was the final impairment charge related to the
Company's investment in the Central African Republic.

Group income tax decreased by 6.10% to GBP7.7 million (2009: GBP8.2 million),
due to a lower tax rate percentage calculated in accordance with the South
African gold mining tax formula. This tax formula calculates an income tax
rate, based on the ratio of revenues to mining costs and capital expenditure.

The effective tax rate decreased from 50.39% to 34.55% in the current year. In
the prior year the profit after taxation included an impairment charge of
GBP5.0 million, which resulted in the effective Group tax rate being
significantly higher than normal, as the impairment charge was not deductible
for tax purposes.

 d. Review Of Barberton Mine
   
 i. Safety and Training
   
The safety performance of the Barberton mining operations (comprising the
Fairview, Sheba and New Consort sections) showed an improvement year-on-year
with lost time injury frequency rate ("LTIFR") at 4.2 (2009: 6.4) and serious
injury frequency rate ("SIFR") at 1.1 (2009: 1.7). The number of shifts lost
decreased, however the lost day severity rate increased marginally, which
indicates an increase in the severity of injuries experienced. It is with great
regret and sadness that the Company reports the tragic death of Mr. Mngobe
Joseph Ndlovu, who lost his life during a fall of ground incident at the
Fairview section in March 2010. The Fairview section, prior to the fatality in
March 2010, achieved two million fatality free shifts in February 2010, which
was achieved over a six year period.

Barberton Mines has designed and is in the process of implementing a safety,
health, environment and communities ("SHEC") management system that will enable
the Company to improve health and safety and environmental management to
industry leading levels. The full implementation of the SHEC management system
will be completed by the second half of the 2011 financial year. The training
of our employees is done through our South African Mining Qualifications
Authority accredited training facility at the mine, which utilises approved
training programmes to maintain the competence levels of employees.

The Mine Health and Safety Council targets set by the industry, in conjunction
with the South African Department of Mineral Resources ("DMR"), endeavour to
align the health and safety performance of the South African mining industry
with international norms by 2013. The targets are based on rate improvements
for fatalities and noise induced hearing losses and silicosis. The Group has
committed itself to these targets.

ii. Operating Performance
   
Barberton Mines sold 98,091oz of gold during the year, an increase of 0.76%
from the previous year (2009: 97,353oz). Although marginal, the increase is
significant in light of the fact that mining was stopped for a period of two
weeks in December 2009 due to illegal mining activity.

Of further significance is that all gold production was attributable from
underground mining operations, which increased by 2.71% to 97,483oz (2009:
94,909oz). As mentioned in the previous reporting period, production is
expected to continue to increase as a result of increased capital investment
and implementation of an integrated Mineral Resource Management ("MRM")
programme, which is expected to increase mining flexibility. The decrease of
0.25% in the volume of underground mining tons to 313,167t (2009: 313,952t) was
negligible and offset by a 2.81% increase in headgrade to 10.61g/t (2009:
10.32g/t).

iii. Production Summary
   
                                   2010*     2009*     2008*    2007**    2006**
                                                                                
Tons milled          (t)         313,167   313,952   315,305   330,367   313,779
                                                                                
Headgrade            (g/t)         10.61     10.32      8.90      9.20     10.70
                                                                                
Overall recovery     (%)              91        91        91        92        92
                                                                                
Production:          (oz)         97,483    94,909    82,436    90,022    99,281
Underground                                                                     
                                                                                
Production: Calcine  (oz)              -     3,955    13,513         -         -
dump                                                                            
                                                                                
Gold sold            (oz)         98,091    97,353    99,078    89,572    99,924
                                                                                
Average price: spot  (R/kg)      267,876   251,740   193,159   148,151   108,644
                                                                                
Average price: hedge (R/kg)            -         -   105,850    96,067    90,125
                                                                                
Average price: spot  (US$/oz)      1,098       867       823       640       528
                                                                                
Average price: hedge (US$/oz)          -         -       451       415       438
                                                                                
Total cash cost US$/ (US$/oz)        650       469       476       465       429
oz sold                                                                         
                                                                                
Total cash cost R/Kg (R/Kg)      158,711   136,178   111,272   107,656    88,177
sold                                                                            
                                                                                
Total cost per ton   (R/t)         1,537     1,313     1,088       908       873
                                                                                
Total mining cost    (R/t)         1,486     1,256     1,045       858       833
per ton                                                                         
                                                                                
Capital expenditure  (GBP)     5,918,271 4,052,665 2,901,792 1,637,359 1,091,965
                                                                                
Exchange rate -      (ZAR/GBP)     11.93     14.39     14.68     13.95       n/a
average                                                                         
                                                                                
Exchange rate -      (ZAR/GBP)     11.53     12.66     15.56     14.18       n/a
closing                                                                         
                                                                                
Exchange rate -      (ZAR/US$)      7.59      9.03      7.30      7.20      6.40
average                                                                         
                                                                                
Exchange rate -      (ZAR/US$)      7.65      7.72      7.80      7.00      7.20
closing                                                                         

** Pre reverse acquisition of Barberton Mines.

* Post reverse acquisition of Barberton Mines.

Total cash costs increased by 38.59% to US$650/oz (2009: US$469/oz). In Rand
terms, total cash costs increased by 16.55% to ZAR158,711/kg (2009: ZAR136,178/
kg).

Total capital expenditure at the mine increased by 47.50% to GBP5.9 million or
20.71% to ZAR70.4 million (2009: GBP4 million or ZAR58.32 million). Maintenance
capital expenditure of GBP2.9 million (2009: GBP1.9 million) and development
capital expenditure GBP3.0 million (2009: GBP2.1 million) was incurred.

iv. Mining Rights Conversion
   
In terms of the South African Mineral and Petroleum Resources Development Act,
2002 ("MPRDA"), all mining licences issued prior to the MPRDA that came into
effect on 1 April 2004 are described as Old Order Mining Rights ("OOMR").
Holders of such rights were required to have applied to the DMR for the
conversion of these OOMR into New Order Mining Rights ("NOMR") within ½ve years
of the MPRDA coming into effect.

Barberton Mines converted all its OOMR during the 2010 financial year.

Barber ton Mines NOMR relate to the mining licences in respect of Fair view
Mine (old order mining licence 28/2003), New Consort Mine (old order mining
licence 30/2003) and Sheba Mine (old order mining licence 29/2003).

These licences combined comprise the Barberton mining operations.

 v. Capital Expenditure
   
                                        12 months 12 months ended   Potential
                                    ended 30 June    30 June 2009    resource
                                             2010                      target
                                                                             
Key    Project                            Metres developed               (oz)
                                                                             
A      Sheba - 35 ZK Decline                 140m             69m       5,000
                                                                             
B      Sheba - Edwin Bray to Thomas         1056m            740m      15,000
       and Joe's Luck area                                                   
                                                                             
C      Fairview - 60/62 Level                642m            817m     203,000
       Development                                                           
                                                                             
D      Fairview - 3 Shaft deepening           36m     Equipping &     350,000
                                                         cleaning            
                                                        completed            
                                                                             
E      Consort - 40 level Station    29m (Station               -      10,000
       establishment                   break away                            
                                    out of Shaft)                            
                                                                             
F      Consort - 50 level decline            100m            224m      30,000
       west                                                                  
                                                                             
G      Consort - 37 Inter level               97m               -           -
       exploration drive                                                     

A Sheba - 35 ZK Decline

Shaft sinking has been completed up to 36 level and horizontal development has
commenced. The hanging wall contact was intersected and development on this
contact towards the cross fractures is underway.

B Sheba - Edwin Bray to Thomas and Joe's Luck orebodies

Good development rates were achieved during the financial year with the haulage
development reaching its limit. The return airway must still be extended.

Exploration drilling will re-commence to delineate the full extent of the
Thomas fracture.

C Fairview - 60/62 level development

This capital project has been completed with most employees being moved to the
3 shaft capital project. Normal stoping operations have now started in this
area.

D Fairview - 3 Shaft deepening

The cleaning of the shaft up to 64 level has been completed and widening of the
shaft between 62 and 64 level progressed well. At the end of the financial year
approximately 15m of widening remained, after which the shaft equipping will
commence. Thereafter all necessary work to start with the proper sinking will
be done.

E Consort - 40 level exploration drive

The station was blasted out of PC Shaft and has been completed. Equipping of 40
level will commence in the new financial year with the development of the
exploration drive thereafter.

F Consort - 50 level decline West

Sinking progressed to within a few metres from establishing the second station
landing. The focus for the new financial year will be to sink the decline down
to the third level, which will also be the last level.

G Consort - 37 Inter level exploration drive

Excellent progress was made with the development on 37 Inter level and we
managed to achieve the planned advances. The area was handed over for the
commencement of exploration drilling.

Maintenance Capital

The capital expenditure on maintenance of the processing plants at Barberton
Mines amounted to GBP190,813 for the year, as a result of the upgrade to the
plant flotation section and installation of new Jameson cells at the Sheba
section. Work commenced on the extension of the tailings dam at the Fairview
section of Barberton Mines and is planned to be completed over a two year
period. This expenditure for the year under review amounted to GBP440,550. The
installation cost for a water treatment plant at Consort, for the treatment of
excess water from the process plant and tailing dams, amounted to GBP110,719
for the year.

The capital expenditure in the BIOX plant situated at Fairview included the
refurbishment of a number of the secondary tank reactors, the procurement of
critical spares for the plant and the installation of a new BIOX water
treatment circuit. The expenditure on the BIOX plant amounted to GBP214,050 for
the year under review.

The capital expenditure on the maintenance of the engineering equipment and
infrastructure totalled GBP985,478 for the year. The re-building of the load
haul dumps ("LHD's") was a key focus area, in order to upgrade the mining
equipment fleet, and GBP261,504 was spent on this activity during the year. The
rehabilitation of shafts and headgears at the mine amounted to GBP110,244. The
replacement of skips, cages and bridles, together with the upgrading of shaft
safety devices and the installation of hydraulic shaft loading facilities
amounted to GBP217,795. At Sheba the conversion of four battery locos and the
procurement of an all-terrain forklift and maintenance vehicle amounted to
GBP79,066. Expenditure at all three sections of the mine on power factor
correction and solar heating amounted to GBP120,170. The replacement of
obsolete compressors with modern, more efficient units and the upgrade of
pumping and reticulation systems amounted to GBP128,045 for the year.

The installation of a new 250kW booster fan and further upgrades to improve the
ventilation flows at Fairview and Sheba required GBP155,228 in capital
expenditure. The procurement of additional self-contained self-rescuers,
required for Barberton Mines to comply with current legal requirements,
resulted in GBP104,225 expenditure. The combined expenditure on maintenance
totalled GBP2.9 million for Barberton Mines for the year.

vi. Criminal Mining
   
We are pleased to report that the proactive approach to the illegal mining
problem at Barberton Mines has significantly reduced criminal mining activity
in terms of both intensity and severity.

By appointing a dedicated Executive, reporting directly to the Chief Executive
Officer ("CEO") on this issue, an enabling environment has been created, which
has resulted in a significant increase in gold production at the mine.
Significant progress has also been made in engaging all stakeholders in the
surrounding community (including government) to combat this problem.

Despite our success, we need to remain vigilant. However, our security effort
has come at significant cost. Security costs for the financial year have
increased by 237.50% to GBP2.7 million (2009: GBP0.8 million). Our focus in the
coming financial year will therefore be to not compromise our current position,
whilst at the same time reducing security expenditure by 25.93% to GBP2.0
million. This will be achieved through (a) making use of new advances in
security technology, (b) increasing perimeter controls, (c) a new approach to
security management with special reference to contractors and (d) seeking the
co-operation of all stakeholders.

 e. Mineral Resource Management
   
Gold Inventory

The total resource inventory for the Group increased, when measured in terms of
gold content, by 1.16% to 4.635Moz (41.85Mt @ 3.45g/t), compared to 4.582Moz
(41.52Mt @ 3.44g/t) in 2009. The increase is the result of additional drilling
and underground development (at Barberton Mines), resulting in a re-definition
of geological envelopes and resultant geostatistical re-evaluation.

During the year under review, the Group's reserve in gold content that is
attributable to Barberton Mines increased by 6.79% to 661,000oz (2.318Mt @
8.87g/t), compared to 619,000oz (2.38Mt @ 8.01g/t) in 2009. Further, the
increase in the Mineral Reserve grade of 10.74% to 8.87g/t (2009: 8.01g/t) is
extremely encouraging.

A professional mining engineer with 15 years of relevant experience was
appointed on a full-time basis at Barberton Mines as MRM Manager, and the net
result of the MRM initiative at Barberton Mines is not only an improvement in
the Life of Mine ("LOM"), but also an expectation that the LOM will be further
increased in the near future despite current depletion rates. By applying an
85% conversion rate to the Combined Measured and Indicated Resource inventory,
Barberton Mines currently indicates an improved LOM from 10 years (2009) to 15
years.

Focus has also shifted to the identification of shallow, low cost mineral
resources, which can be brought to account in the near term. This approach will
not only see the production profile grow, but should also impact positively on
the cost structure at Barberton Mines.

Our Group Consulting Geologist is turning his attention to accelerating the
exploration activities in the prospecting permit area at Barberton Mines. A
regional airborne geophysical survey was completed over the permit area and a
series of potentially near-surface targets have already been identified. The
Company will focus on drilling these targets in the coming year, as some of the
anomalies identified are equal in size to the current footprint of the Fairview
mine.

Platinum Inventory

The Company is also pleased to report a South African Code for Reporting of
Exploration Results, Mineral Resources and Mineral Reserves ("SAMREC")
compliant Platinum Group Elements ("PGE") ("4E: platinum, palladium, rhodium
and gold") Mineral Resource for the Phoenix Platinum project of 469,000 4E oz
(4.64Mt @3.15g/t).

Previously the Group reported the Mineral Resource inventory as tailing
feedstock volumes, which at the time was estimated at 4.3Mt grading at between
1.1 g/t and 4.18g/t, yielding a total of 360Koz 4E. Subsequently, the company
geostatistically remodelled all resources at Phoenix Platinum.

Of the total Mineral resource 33% is located as surface sources (935Kt @ 2.45g/
t) and 67% (1,277Kt @ 3.66g/t) as current arisings.

Current feasibility work indicates a LOM of 25 years, producing an estimate of
11,000oz 4E per annum.

Group MRM Strategy

The MRM initiative will continue to be a key strategic corporate focus for the
Group enabling management to ensure:

(a) that the economic value of mineral assets is optimally managed and
extracted;

(b) integration of technical and associated functional disciplines along the
business value chain;

(c) increased levels of corporate governance through continued audit and
quality control; and

(d) the creation of shareholder value.

 f. Phoenix Platinum
   
Since the previous reporting period significant milestones have been achieved
on the Phoenix Platinum project. The first of these was the signing of an
exclusive terms of site agreement on 18 February 2010 with IFM. This agreement
sets out the framework for concluding a formal plant site agreement.
Negotiations in this regard are currently being finalised.

In addition the following major technical milestones have been achieved:

  * The completion of a metallurgical competent person's report;
   
  * The compilation of a SAMREC compliant resource estimate resulting in the
    PGM 4E's metal content increasing by 15.80% from 405,000oz to 469,000oz and
    the average grade by 2.60% from 3.07g/t PGM 4E's to 3.15g/t PGM 4E's; and
   
  * Detailed process flow and engineering design was completed in June 2010.
    This will lead to the final capital cost estimate for the supply,
    construction and commissioning of the Phoenix plant in accordance with the
    process design criteria being completed in the third quarter of 2010.
   
Plant construction should commence during the second half of 2010 with
commercial production forecast to start in the second half of 2011.

 g. Manica Gold Project - Mozambique
   
The viability of the project is presently being investigated by applying a
phased approach, of which assessing the oxide mining potential will be the
first phase, followed by a mining option focusing on the sulphide bearing
portion of the Fairbride project. The assessment of the first phase will be
completed by the end of October 2010 as part of a definitive feasibility study
("DFS") to be submitted as part of an application to convert the current
exploration licence to a Mining Concession towards the end of October 2010.

It is expected that the results of the DFS will be released to the market
during the second half of 2010.

 h. New Business
   
The Group reviewed 43 projects during the year under review. None of the
projects reviewed fulfilled the Group investment criteria. Although we remain
committed to growing our asset base, such growth will not come at the expense
of the Statement of Financial Position. This is a strategy that has set the
Company apart from its peer group and will continue to do so going forward.

 i. Corporate Developments
   
On 19 June 2009, the Company announced that it had concluded an agreement with
Shanduka whereby Pan African would acquire Shanduka's 26% shareholding in
Barberton Mines in exchange for the issue of 295,751,549 new ordinary shares to
Shanduka.

This share exchange transaction with Shanduka became effective on 21 August
2009. The board considered it prudent to simplify the Pan African Group
structure by acquiring the entire issued share capital of Barberton Mines, and
in doing so:

  * significantly increasing the attributable gold ounces to Pan African to
    approximately 100,000oz per year; and
   
  * terminating the shareholders' agreement that existed at Barberton Mines
    level, thereby further simplifying the operations of the Group.
   
On 26 June 2009, Metorex announced that it had engaged in a sale of shares
exercise to dispose of its 53.37% shareholding in Pan African. In addition to
its 21% shareholding in Pan African issued via the share exchange transaction
detailed above, Shanduka acquired an additional 5% of the enlarged share
capital of Pan African through the sale of shares exercise. As a result,
Shanduka increased its shareholding in Pan African to 26%. The balance of the
shares sold by Metorex was taken up by institutional investors.

On 1 July 2009, the Company announced that Barberton Mines had cancelled the
Metorex management agreement for a consideration of GBP0.34 million. The
outstanding consideration of GBP954,759 to acquire 100% of Phoenix Platinum was
paid to Metorex on 30 September 2009.

 j. Capital Expenditure and Commitments
   
Capital expenditure at Barberton Mines totalled GBP5.9 million, of which GBP3.0
million was spent on development and drilling to replace current depleted gold
reserves and to grow the resource base. The balance of GBP2.9 million was spent
on equipping the current infrastructure on the mine.

Growth project expenditure at the Group's projects in Mozambique and Phoenix
Platinum totalled GBP976,373 (2009: GBP1,580,349).

At the end of the financial year the Group had contracted capital commitments
of GBP111,905 (2009: GBP62,231).

Operating lease commitments, which fall due within the next year, amount to
GBP204,240 (2009: GBP176,651) whilst no interest bearing commitments existed at
year end (2009: GBP20,669).

The Group had no contingent liabilities in the current financial year, in the
prior year GBP48,976 was recorded as a contingent liability in relation to a
pending legal case, in which a settlement was reached in the current financial
year.

The Group had guarantees of GBP334,044 (2009: GBP225,285) in favour of the
South African electricity public utility company, Eskom, and guarantees of
GBP253,178 (2009: GBP1,579) in favour of the DMR at year end.

 k. Directorship Changes
   
It is with deep regret that the board of Pan African reports the untimely death
of Mr John Hopwood on 19 March 2010. John brought a great deal of wisdom and
experience to the board of Pan African and will be sorely missed. The following
were directors during the year under review:

Mr K C Spencer*

Mr J P Nelson

Mr R G Still*

Mr C M Ramaphosa (appointed 17 September 2009)

M R M Smith (appointed 17 September 2009)

Mr J A J Loots (appointed 26 August 2009)

Mr M Smith (resigned 26 August 2009)

MR J G Hopwood* (deceased 19 March 2010)

* Independent

 l. Basis of Preparation of Financial Statements
   
Investors should consider non-Generally Accepted Accounting Principles ("GAAP")
financial measures shown in this preliminary announcement in addition to, and
not as a substitute for or as superior to, measures of financial performance
reported in accordance with International Financial Reporting Standards
("IFRS"). The IFRS results reflect all items that affect reported performance
and therefore it is important to consider the IFRS measures alongside the
non-GAAP measures.

JSE Limited listing

The Company has a dual primary listing on JSE Limited ("JSE") and the
Alternative Investment Market ("AIM") of the London Stock Exchange. The company
previously maintained a secondary listing on the Alternative Exchange (Altx")
market of the JSE. The transfer to the Main Board of the JSE was implemented on
1 December 2009.

The preliminary announcement has been prepared in accordance with the framework
concepts and the measurement and recognition requirements of IFRS, the AC 500
standards as issued by the Accounting Practices Board ("APB") and the
information as required by International Accounting Standards ("IAS") 34:
Interim Financial Reporting.

The Group's South African external auditors have issued their opinion on the
Group's Annual Financial Statements for the year ended 30 June 2010. The audit
was conducted in accordance with International Standards on Auditing. They have
expressed an unmodified opinion on the Annual Financial Statements from which
the Group's preliminary announcement was derived. A copy of their audit report
is available for inspection at the Company's registered office. Any reference
to future financial performance included in these Group Financial Statements
has not been reviewed or reported on by the Group's South African external
auditors.

AIM Listing

The financial information for the year ended 30 June 2010 does not constitute
statutory accounts as defined in sections 435 (1) and (2) of the United Kingdom
("UK") Companies Act 2006. Statutory accounts for the year ended 30 June 2009
have been delivered to the Registrar of Companies and those for 2010 will be
delivered following the Company's annual general meeting. The UK external
auditors have reported on these accounts. Their report was unqualified, did not
include a reference to any matters to which auditors draw attention by way of
emphasis of matter and did not contain a statement under section 498 (2) or (3)
of the Companies Act 2006.

The Group announcement (the Group's financial statements) has been prepared in
accordance with IFRS and International Financial Reporting Interpretation
Committee ("IFRIC") interpretations adopted for use by the European Union, with
those parts of the Companies Act 2006 applicable to companies reporting under
IFRS.

Approval and Annual Report

The Group expects to publish full financial statements which comply with IFRS
in September 2010. The Group's preliminary announcement was approved by the
board on 30 August 2010.

 m. Accounting Policies
   
The preliminary announcement has been prepared using accounting policies that
comply with IFRS which are consistent with those applied in the financial
statements for the year ended 30 June 2010 (prior year end) 2009, except for
the following changes:

  * IAS 1: Presentation of Financial Statements. This standard now requires the
    disclosure of a Statement of Comprehensive Income. Consequently, certain
    income and expense items previously reported in the Statement of Recognised
    Income and Expense are now included in the Statement of Comprehensive
    Income. In addition, a Statement of Changes in Equity has also been
    disclosed in terms of the revised standard. Any other new standards and
    interpretations issued by the International Accounting Standards Board
    ("IASB") not yet effective for the period under review will have no impact
    on the Group's financial results.
   
  * IFRS 8: Operating Segment, this standard replaces IAS 14 Segment Reporting,
    and now requires the disclosure on information about the components of the
    Group and Company that management use to make decisions about operating
    matters.
   
  * Mining exploration - Change in Accounting Policy on Greenfield prospects:
   
Previously expenditure on exploration activities on Greenfield prospects was
capitalised until the viability of the mining venture was proven. If the mining
venture was subsequently considered non-viable, the expenditure was charged
against income when that fact became known.

Exploration expenditure is now expensed in the year in which it is incurred.
When a decision is taken by the directors that a mining property/project is
potentially commercially viable (normally when the project has reached the
prefeasibility stage, once it is considered probable that future economic
benefits will be realised and that development may be commissioned) all further
directly attributable pre-production expenditure is capitalised. Capitalisation
of the pre-production expenditure ceases when commercial levels of production
are achieved, at which stage the respective assets are depreciated.

The change in Mining Exploration accounting policy did not impact current-year
or prior-year financial results.

 n. Segment Reporting
   
A segment is a distinguishable component of the Group that is engaged in
providing products or services in a particular business sector (operating
segment), which is subject to risk and rewards that are different to those of
other segments. The Group's business activities were conducted through three
business segments, firstly in Barberton Mines located in Barberton South Africa
, and the Group's corporate and exploration activities and Phoenix Platinum.
The Chief Executive Officer reviews the operations in this manner.

 o. Share Capital Changes
   
On 21 August 2009, 295,751,549 ordinary shares were issued in terms of the
share exchange agreement between Pan African Resources and Shanduka at 65 cents
per share.

On 10 June 2010, 1,200,000 ordinary shares were issued at 4.0p per share for
cash in relation to share options exercised.

 p. Directors' Dealings
   
As at 30 June 2010 the CEO, Mr J P Nelson held 122,442 shares in Pan African
Resources. Mr J P Nelson, purchased 75,134 shares at 95 cents per share on 16
October 2009.

As at 30 June 2010 the Financial Director, Mr J A J Loots, held 130,000 shares,
purchased at 76 cents per share on 24 February 2010.

Mr R G Still is a director of Pangea Exploration (Proprietary) Limited
("Pangea") and a trustee of a family trust which owns 33.33% of Pangea. Mr R G
Still, an independent Non-Executive Director of Pan African, is therefore
deemed to have an indirect, non-beneficial interest in Pangea's holding in the
Company. Pangea holds 2.67% of the current issued share capital of Pan African.

 q. Going Concern
   
The board confirms that the business is a going concern and that it has
reviewed the business' working capital requirements in conjunction with its
future funding capabilities for at least the next 12 months and has found them
to be adequate.

The Group is debt free and has a profit margin of approximately 27.47% after
capital expenditure and depreciation at Barberton Mines. Should the need arise
the Group can cease most exploration and capital activities, and by doing so
conserve cash.

 r. Events After the Reporting Period
   
Subsequent to the year end, an additional 4,000,000 ordinary shares have been
issued at 4.0p per share on 25 August 2010 for cash, in relation to share
options exercised.

 s. Dividends
   
The board of Directors proposes a final dividend for the year ended 30 June
2010 of GBP5.26 million, which calculated on 1,413,540,711 issued shares
currently outstanding, equates to 0.3723p per share (2009: interim dividend of
0.2555p declared), to be approved by shareholders at the forthcoming annual
general meeting of the Company.

 t. Statement of Directors' Responsibilities
   
The Directors are responsible for preparing the Annual Report and the financial
statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each
financial year. The Directors are required by the IAS Regulation to prepare the
Group financial statements under IFRS as adopted by the European Union and have
also elected to prepare the parent company financial statements in accordance
with IFRS's as adopted by the European Union. The financial statements are also
required by law to be properly prepared in accordance with the UK Companies Act
2006.

IAS 1 requires that financial statements present fairly for each financial year
the Group's financial position, financial performance and cash flows. This
requires the faithful representation of the effects of transactions, other
events and conditions in accordance with the definitions and recognition
criteria for assets, liabilities, income and expenses set out in the IASB's
`Framework for the preparation and presentation of financial statements'. In
virtually all circumstances, a fair presentation will be achieved by compliance
with all applicable IFRS. However, directors are also required to:

  * properly select and apply accounting policies;
   
  * present information, including accounting policies, in a manner that
    provides relevant, reliable, comparable and understandable information; and
   
  * provide additional disclosures when compliance with the specific
    requirements in IFRSs are insufficient to enable users to understand the
    impact of particular transactions, other events and conditions on the
    entity's financial position and financial performance.
   
The Directors are responsible for keeping proper accounting records that
disclose with reasonable accuracy at any time the financial position of the
Group and enable them to ensure that the financial statements comply with the
UK Companies Act 2006. They are also responsible for safeguarding the assets of
the Group and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.

 u. The Future
   
We believe that one can only build a house that can weather the storm on a
strong foundation. We further believe that the building of such a house is a
process and not an event, and that the process requires a systematic approach.
Building a mining house is no different and therefore, let us reflect on the
foundation that the Group has completed:

  * Strong operational management team that continues to deliver strong
    operational performance;
   
  * Experienced project development team;
   
  * Experienced board that ensures the requisite technical and financial
    controls are in place;
   
  * High quality assets with low-cost base and significant upside potential;
   
  * Strong Statement of Financial Position that allows a platform for further
    growth; and
   
  * Strategic alignment to Shanduka in terms of sustainable growth.
   
How has our approach translated into shareholder value Allow the numbers to
speak for themselves over a three year period:

  * Increase in profit after tax over three years of 91.32%;
   
  * Increase in HEPS over three years of 109.80%;
   
  * Increase in underground gold production over three years of 18.25%;
   
  * Decrease in serious accident rate over three years of 64.52%;
   
  * Increase in capital expenditure over three years of 103.95%;
   
  * Increase in measured and indicated resource over three years of 58%;
   
  * Acquisition of Barberton Mines for less than US$200/oz at current
    prevailing gold price of US$1,200/oz;
   
  * Acquisition of near term CTRP business for less than US$140/oz at current
    prevailing 4 PGM basket price of US$1,350/oz; and
   
  * Cash in bank growing by 435.56% and no debt.
   
Turning the Company around from a loss making explorer to a gold producer,
which soon will also yield platinum production, has taken only three years in a
challenging global environment. During this period the share price has remained
unchanged. However, management has focused on getting the basics right. This
clearly sets the Company apart from its peers. In addition, the ability to
continue the payment of a dividend should in the future further realise the
value in an increased share price.

Our success is the result of a team effort and the continued support and
patience from our shareholders. The foundation is solid and we are now able to
take advantage of major growth opportunities to build Pan African into a
significant mining house.

By order of the Board,

J P Nelson                             J A J Loots                           
                                                                             
Chief Executive Officer                Financial Director                    

30 August 2010

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE    
2010                                                                         
                                                                             
                                                30 June 2010     30 June 2009
                                                                             
                                                   (Audited)        (Audited)
                                                                             
                                                         GBP              GBP
                                                                             
REVENUE                                                                      
                                                                             
Gold sales                                        68,506,394       53,000,352
                                                                             
Realisation costs                                  (162,791)        (140,546)
                                                                             
On - mine revenue                                 68,343,603       52,859,806
                                                                             
Cost of production                              (40,553,886)     (28,504,686)
                                                                             
Depreciation                                     (3,125,093)      (2,360,431)
                                                                             
Mining Profit                                     24,664,624       21,994,689
                                                                             
Other (expenses) / income                        (1,929,787)      (1,465,336)
                                                                             
Impairment costs                                   (335,401)      (5,025,463)
                                                                             
Royalty costs                                      (837,378)                -
                                                                             
Net income before finance income and              21,562,058       15,503,890
finance costs                                                                
                                                                             
Finance income                                       661,645          816,754
                                                                             
Finance costs                                       (67,915)          (9,933)
                                                                             
Profit before taxation                            22,155,788       16,310,711
                                                                             
Taxation                                         (7,655,913)      (8,219,425)
                                                                             
Profit after taxation                             14,499,875        8,091,286
                                                                             
                                                                             
                                                                             
OTHER COMPREHENSIVE INCOME:                                                  
                                                                             
Foreign currency translation differences           2,379,762        3,649,901
                                                                             
Total comprehensive income for the year           16,879,637       11,741,187
                                                                             
PROFIT ATTRIBUTABLE TO:                                                      
                                                                             
Owners of the parent                              14,277,232        4,403,535
                                                                             
Non-controlling interest                             222,643        3,687,751
                                                                             
                                                  14,499,875        8,091,286
                                                                             
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE                                      
TO:                                                                          
                                                                             
Owners of the parent                              16,809,093        7,485,801
                                                                             
Non-controlling interest                              70,544        4,255,386
                                                                             
                                                  16,879,637       11,741,187
                                                                             
Earnings per share (pence)                              1.04             0.40
                                                                             
Diluted earnings per share (pence)                      1.03             0.40
                                                                             
Weighted average number of shares in issue     1,366,268,709    1,104,367,219
                                                                             
Diluted number of shares in issue              1,379,880,423    1,107,248,663
                                                                             
Headline earnings per share is calculated                                    
:                                                                            
                                                                             
Basic earnings                                    14,277,232        4,403,535
                                                                             
Add : Impairment Cost                                335,401        5,025,463
                                                                             
Headline earnings                                 14,612,633        9,428,998
                                                                             
Headline earnings per share (pence)                     1.07             0.85
                                                                             
Diluted headline earnings per share                     1.06             0.85
(pence)                                                                      

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2010              
                                                                             
                                                 30 June 2010    30 June 2009
                                                                             
                                                    (Audited)       (Audited)
                                                                             
                                                          GBP             GBP
                                                                             
ASSETS                                                                       
                                                                             
Non-current assets                                                           
                                                                             
Property, plant and equipment and mineral          37,495,010      31,801,235
rights                                                                       
                                                                             
Other intangible assets                            13,087,880      12,038,616
                                                                             
Goodwill                                           21,000,714      21,000,714
                                                                             
Rehabilitation trust fund                           2,740,546       2,357,266
                                                                             
                                                   74,324,150      67,197,831
                                                                             
Current assets                                                               
                                                                             
Inventories                                         1,126,374         358,363
                                                                             
Trade and other receivables                         3,794,659       2,201,213
                                                                             
Cash and cash equivalents                          12,756,262       2,389,301
                                                                             
                                                   17,677,295       4,948,877
                                                                             
TOTAL ASSETS                                       92,001,445      72,146,708
                                                                             
EQUITY AND LIABILITIES                                                       
                                                                             
Capital and reserves                                                         
                                                                             
Share capital                                      14,095,406      11,125,891
                                                                             
Share premium                                      49,732,830      37,899,997
                                                                             
Translation reserve                                 4,495,865       1,964,004
                                                                             
Share option reserve                                  754,394         549,690
                                                                             
Retained income                                    25,814,783      11,537,551
                                                                             
Realisation of equity reserve                    (10,701,093)               -
                                                                             
Merger reserve                                   (10,705,308)    (10,705,308)
                                                                             
Equity attributable to owners of the parent        73,486,877      52,371,825
                                                                             
Non-controlling interest                                    -       3,988,577
                                                                             
Total equity                                       73,486,877      56,360,402
                                                                             
Non - Current liabilities                                                    
                                                                             
Long term provisions                                3,338,198       2,933,105
                                                                             
Deferred taxation                                   8,092,332       6,752,432
                                                                             
                                                   11,430,530       9,685,537
                                                                             
Current liabilities                                                          
                                                                             
Trade and other payables                            5,041,754       3,719,787
                                                                             
Short term liabilities - Interest bearing                   -          20,669
                                                                             
Short term provisions                               1,465,299       1,151,895
                                                                             
Payable to other group companies                            -         954,759
                                                                             
Current tax liability                                 576,985         253,659
                                                                             
                                                    7,084,038       6,100,769
                                                                             
TOTAL EQUITY AND LIABILITIES                       92,001,445      72,146,708

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2010             
                                                                             
                                                 30 June 2010    30 June 2009
                                                                             
                                                    (Audited)       (Audited)
                                                                             
                                                          GBP             GBP
                                                                             
NET CASH FROM OPERATING ACTIVITIES                 18,325,307       8,567,361
                                                                             
INVESTING ACTIVITIES                                                         
                                                                             
Additions to property, plant and equipment,       (5,935,346)     (4,318,425)
mineral rights                                                               
                                                                             
Additions to intangibles                            (976,373)     (1,580,349)
                                                                             
Funding of rehabilitation trust fund                  147,458         193,347
                                                                             
Cash outflow on acquisition of subsidiary                   -     (4,205,144)
                                                                             
NET CASH USED IN INVESTING ACTIVITIES             (6,764,261)     (9,910,571)
                                                                             
FINANCING ACTIVITIES                                                         
                                                                             
Borrowings Raised                                           -       1,145,710
                                                                             
Borrowings repaid                                   (954,759)       (190,952)
                                                                             
Shares issued                                          48,000               -
                                                                             
Share issue costs                                     (5,866)               -
                                                                             
NET CASH (USED BY)/FROM FINANCING ACTIVITIES       (912,625 )         954,758
                                                                             
NET INCREASE /(DECREASE) IN CASH AND CASH          10,648,421       (388,452)
EQUIVALENTS                                                                  
                                                                             
Cash and cash equivalents at the beginning of       2,389,301       5,419,489
the year                                                                     
                                                                             
Effect of foreign exchange rate changes             (281,460)     (2,641,736)
                                                                             
CASH AND CASH EQUIVALENTS AT THE END OF THE        12,756,262       2,389,301
YEAR                                                                         

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY                     
                                                                
                Share      Share Translation   Share    Retained
              capital    premium     reserve  option    earnings
                         account             reserve            
                                                                
Balance at 10,998,664 37,267,475 (1,118,262) 285,312   9,946,021
                                                                
30 June                                                         
2008                                                            
                                                                
Issue of      127,227    632,522           -       -           -
shares                                                          
                                                                
Current             -          -   3,082,266       -           -
year                                                            
movement                                                        
                                                                
Profit for          -          -           -       -   4,403,535
the year                                                        
                                                                
Dividend            -          -           -       - (2,812,005)
Paid                                                            
                                                                
Share               -          -           - 264,378           -
Based                                                           
payment -                                                       
Charge for                                                      
the year                                                        
                                                                
Balance at 11,125,891 37,899,997   1,964,004 549,690  11,537,551
                                                                
30 June                                                         
2009                                                            
                                                                
Issue of    2,969,515 11,838,699           -       -           -
shares                                                          
                                                                
Share               -    (5,866)           -       -           -
issue                                                           
costs                                                           
                                                                
Current             -          -   2,531,861       -           -
year                                                            
movement                                                        
                                                                
Profit for          -          -           -       -  14,277,232
the year                                                        
                                                                
Share               -          -           - 204,704           -
Based                                                           
payment -                                                       
Charge for                                                      
the year                                                        
                                                                
Balance at 14,095,406 49,732,830   4,495,865 754,394  25,814,783
                                                                
30 June                                                         
2010                                                            

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)           
                                                                  
              Realisation       Merger Non-controlling       Total
                of equity      reserve        interest            
                  reserve                                         
                                                                  
Balance at              - (10,705,308)       3,694,869  50,368,771
                                                                  
30 June 2008                                                      
                                                                  
Issue of                -            -               -     759,749
shares                                                            
                                                                  
Current year            -            -         567,635   3,649,901
movement                                                          
                                                                  
Profit for              -            -       3,687,751   8,091,286
the year                                                          
                                                                  
Dividend                -            -     (3,961,678) (6,773,683)
Paid                                                              
                                                                  
Share Based             -            -               -     264,378
payment -                                                         
Charge for                                                        
the year                                                          
                                                                  
Balance at              - (10,705,308)       3,988,577  56,360,402
                                                                  
30 June 2009                                                      
                                                                  
Issue of     (10,701,093)            -     (4,059,121)      48,000
shares                                                            
                                                                  
Share issue             -            -               -     (5,866)
costs                                                             
                                                                  
Current year            -            -       (152,099)   2,379,762
movement                                                          
                                                                  
Profit for              -            -         222,643  14,499,875
the year                                                          
                                                                  
Share Based             -            -               -     204,704
payment -                                                         
Charge for                                                        
the year                                                          
                                                                  
Balance at   (10,701,093) (10,705,308)               -  73,486,877
                                                                  
30 June 2010                                                      

CONSOLIDATED SEGMENT REPORT FOR THE YEAR ENDED 30 JUNE 2010                  
                                                                             
                                            30 JUNE 2010                     
                                                                             
                            Barberton     Phoenix Corporate and         Group
                                Mines    Platinum        growth              
                                                       projects              
                                                                             
                                  GBP         GBP           GBP           GBP
                                                                             
REVENUE                                                                      
                                                                             
Gold sales                 68,506,394           -             -    68,506,394
                                                                             
Realisation costs           (162,791)           -             -     (162,791)
                                                                             
On - mine revenue          68,343,603           -             -    68,343,603
                                                                             
Cost of production       (40,553,886)           -             -  (40,553,886)
                                                                             
Depreciation              (3,125,093)           -             -   (3,125,093)
                                                                             
Mining Profit              24,664,624           -             -    24,664,624
                                                                             
Other (expenses) /          (173,988)           -   (1,755,799)   (1,929,787)
income                                                                       
                                                                             
Impairment costs                    -           -     (335,401)     (335,401)
                                                                             
Royalty costs               (837,378)           -             -     (837,378)
                                                                             
Net income before          23,653,258           -   (2,091,200)    21,562,058
finance income and                                                           
finance costs                                                                
                                                                             
Finance income                193,155           -       468,490       661,645
                                                                             
Finance costs                (67,836)           -          (79)      (67,915)
                                                                             
Profit before taxation     23,778,577           -   (1,622,789)    22,155,788
                                                                             
Taxation                  (7,655,913)           -             -   (7,655,913)
                                                                             
Profit after taxation      16,122,664           -   (1,622,789)    14,499,875
                                                                             
OTHER COMPREHENSIVE                                                          
INCOME:                                                                      
                                                                             
Foreign currency            1,936,738     443,024             -     2,379,762
translation                                                                  
differences                                                                  
                                                                             
Total comprehensive        18,059,402     443,024   (1,622,789)    16,879,637
income for the year                                                          
                                                                             
Segmental Assets           43,420,283   4,858,063    22,722,385    71,000,731
                                                                             
Segmental Liabilities      18,049,443      85,206       379,919    18,514,568
                                                                             
Goodwill                            -           -             -    21,000,714
                                                                             
Net Assets                 25,370,840   4,772,857    22,342,466    52,486,163
                                                                             
Capital Expenditure         5,918,271           -        17,075     5,935,346

CONSOLIDATED SEGMENT REPORT FOR THE YEAR ENDED 30 JUNE 2010 (continued)      
                                                                             
                                            30 JUNE 2009                     
                                                                             
                            Barberton     Phoenix Corporate and         Group
                                Mines    Platinum        growth              
                                                       projects              
                                                                             
                                  GBP         GBP           GBP           GBP
                                                                             
REVENUE                                                                      
                                                                             
Gold sales                 53,000,352           -             -    53,000,352
                                                                             
Realisation costs           (140,546)           -             -     (140,546)
                                                                             
On - mine revenue          52,859,806           -             -    52,859,806
                                                                             
Cost of production       (28,504,686)           -             -  (28,504,686)
                                                                             
Depreciation              (2,360,431)           -             -   (2,360,431)
                                                                             
Mining Profit              21,994,689           -             -    21,994,689
                                                                             
Other (expenses) /          (100,324)           -   (1,365,012)   (1,465,336)
income                                                                       
                                                                             
Impairment costs                    -           -   (5,025,463)   (5,025,463)
                                                                             
Royalty costs                       -           -             -             -
                                                                             
Net income before          21,894,365           -   (6,390,475)    15,503,890
finance income and                                                           
finance costs                                                                
                                                                             
Finance income                703,549           -       113,205       816,754
                                                                             
Finance costs                 (9,244)           -         (689)       (9,933)
                                                                             
Profit before taxation     22,588,670           -   (6,277,959)    16,310,711
                                                                             
Taxation                  (8,219,425)           -             -   (8,219,425)
                                                                             
Profit after taxation      14,369,245           -   (6,277,959)     8,091,286
                                                                             
OTHER COMPREHENSIVE                                                          
INCOME:                                                                      
                                                                             
Foreign currency            3,301,475     348,426             -     3,649,901
translation differences                                                      
                                                                             
Total comprehensive        17,670,720     348,426   (6,277,959)    11,741,187
income for the year                                                          
                                                                             
Segmental Assets           31,965,438   4,447,159    14,733,397    51,145,994
                                                                             
Segmental Liabilities      14,619,687      31,585     1,135,034    15,786,306
                                                                             
Goodwill                            -           -             -    21,000,714
                                                                             
Net Assets                 17,345,751   4,415,574    13,598,363    35,359,688
                                                                             
Capital Expenditure         4,052,655   4,831,606       265,770     9,150,031

CORPORATE INFORMATION

Corporate Office                       Registered Office                     
                                                                             
Cradock Heights                        St James's Corporate Services         
                                                                             
21 Cradock Avenue                      6 St James's Place                    
                                                                             
Rosebank                               London                                
                                                                             
Johannesburg                           SW1A 1NP                              
                                                                             
South Africa                           Office: + 44 (0) 207 499 3916         
                                                                             
Office: + 27 (0) 11 243 2900           Facsmile: + 44 (0) 207 491 1989       
                                                                             
Facsmile: + 27 (0) 11 880 1240                                               

                                     ENDS                                      

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

ENQUIRIES

Pan African Resources                                                          
                                                                               
Jan Nelson (CEO)                +27 (0) 11 243 2900                            
                                                                               
Chief Executive Officer         jnelson@paf.co.za                              
                                                                               
Cyril Ramaphosa                 +27 (0) 11 243 2900                            
                                                                               
Non-Executive Chairman                                                         
                                                                               
Nicole Spruijt                  +27 (0) 11 243 2900                            
                                                                               
Public Relations &              nicole@paf.co.za                               
Administration                                                                 
                                                                               
RBC Capital Markets                                                            
                                                                               
Martin Eales /Brett Jacobs      +44 (0) 20 7029 7881                           
                                                                               
Nominated Advisor & Broker (UK) martin.eales@rbccm.com                         
                                                                               
Macquarie First South Advisers                                                 
                                                                               
Melanie de Nysschen / Annerie   +27 (0) 11 583 2000                            
Britz                                                                          
                                melanie.denysschen@macquarie.com               
JSE Sponsor                                                                    
                                                                               
St James's Corporate Services                                                  
Limited                                                                        
                                                                               
Phil Dexter                     +44 (0) 20 7499 3916                           
                                                                               
Company Secretary & Investor    phil.dexter@corpserv.co.uk                     
Relations                                                                      
                                                                               
Hansard Communications          +44 (0) 20 7245 1100                           
                                                                               
Justine James                   jjames@hansardcomms.com