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Pan African Resources PLC (PAF)

  Print      Mail a friend       Annual reports

Tuesday 22 February, 2011

Pan African Resources PLC

Interim results for the six months ended 31 Dec...

Pan African Resources plc

(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

("Pan African" or the "Company" or the "Group")

Interim Results For the six months ended 31 December 2010

Pan African is pleased to report its interim results for the six months ended
31 December 2010.


A Corporate

- Earnings per share increased by 56% to 0.53 pence (2009: 0.34 pence)

- Earnings before interest, taxes, depreciation and amortisation (`EBITDA')
increased by 51% to £12.95 million (2009: £8.60 million)

- Revenue increased by 32% to £38.33 million (2009: £29.04 million

- Unhedged and debt-free

- Attributable profit increased by 70% to £7.58 million (2009: £4.47 million)

B Mining Operations

- Gold sold increased 1.5% to 46,655oz (2009: 45,971oz)

- Head grade remains sustainable at 10.55g/t (2009: 10.11g/t)

- Total cash cost of ZAR176,199/kg (2009: ZAR164,697/kg)

C Near-Term Project

- Resource base at Phoenix Platinum Mining (Pty) Ltd (`Phoenix Platinum')
increased by 16% to 469,000oz (2009: 405,000oz)

On the results, Chief Executive Officer of Pan African, Jan Nelson commented:
"We are pleased to announce a strong set of financial and operational results.
Despite the inflationary cost pressure and abnormal security expenditure, Pan
African has increased attributable earnings 70% to £7.58 million. We have
benefitted from a sustained high gold price but we continue to stress test with
a long term forecast of."

"Barberton remains our core asset, producing increased gold sales whilst our
platinum project at Phoenix is well underway, on schedule and within budget for
production later this year."

"We continue to remain focused on further productivity and cost improvements.
Organic growth will continue to improve margins whilst we leverage our balance
sheet and strategic partnership with Shanduka to realise further growth

Interim Statement

A Nature of Business

Pan African is an African focused precious metals mining group which produces
approximately 100,000oz of gold per year, with production of platinum group
metals forecast to commence by the end of the 2011 calendar year. It's focus is
on low cost, high margin production and near production projects. The group is
debt free, unhedged and is able to fund all current capital expenditure from
internal cash flows.

B Financial Performance

Pan African is incorporated in England and Wales, and its reporting currency is
pound sterling (`£'). Barberton Mines (Pty) Ltd (`Barberton Mines') is a South
African Company and its financial statements are prepared in South African Rand
(`ZAR'). When Barberton Mines' financial statements are translated into pound
sterling for the purpose of Group consolidation and reporting, the average and
closing ZAR:£ exchange rates for the period affect the Group consolidated
financial results. During the current period, the average ZAR:£ exchange rate
was ZAR11.18 (2009: ZAR12.48) and the closing ZAR:£ exchange rate was ZAR10.28
(2009: ZAR11.94). The period-on-period change in the average and closing
exchange rates of 10.4% and 13.9% respectively should be taken into account
when comparing the period-on-period results.

Gross revenue from gold sales increased by 32% to £38.33 million (2009: £29.04
million). The increase in revenue was mainly attributed to a 24.6%
period-on-period increase in the average gold spot price received to US$1,286/
oz (2009: US$1,032/oz) and the depreciation of the pound sterling against the
ZAR. Revenue expressed in ZAR terms increased by 18.2% to ZAR428.49 million
(2009: ZAR362.48 million). The average ZAR:US$ exchange rate was 6.5% stronger
at ZAR7.14 (2009: ZAR7.64) which had a negative impact on the ZAR revenue. The
effective ZAR gold price was 16.5% higher at ZAR295,281/kg (2009: ZAR253,510/
kg). Mining profit at Barberton Mines increased by 54% to £13.4 million (2009:
£8.7 million).

Other expenses were £1.35 million (2009: £1.12 million). There were no
impairments in the current reporting period (2009:0.34 million).

Cost of production increased by 21.5% to £22.95 million (2009: £18.89 million).
In ZAR terms the cost of production increased by 8.8% to ZAR256.58 million
(2009: ZAR235.86 million). The increase in costs is mainly attributable to
increases in security costs by 97.6% to ZAR18.17 million, electricity by 18% to
ZAR24.74 million and salaries, wages and other staff expenses by 8.3% to
ZAR118.25 million.

The Royalty tax charge was £1.01 million (2009: nil) and the income tax expense
for the period was £3.75 million (2009: £2.68 million). The Royalty charge was
nil in the prior period due to the implementation of the Royalty tax only in
March 2010. The increase in the income tax charge is due to the increase in the
pre-tax profits.

EBITDA increased by 50.6% to £12.95 million (2009: £8.60 million) and
attributable profit increased by 70% to £7.58 million (2009: £4.47 million).

The increase in attributable profit is primarily due to the favourable gold
price and the fact that there is no longer an outside shareholding at Barberton
Mines. The profit margin in South African Rand terms increased by 34.1% to
ZAR119,082/kg (2009: ZAR88,813/kg). The total unit production cash cost
increased by 7% to ZAR176,199/kg (2009: ZAR 164,697/kg).

Basic earnings per share increased by 56% to 0.53 pence (2009: 0.33 pence) and
basic headline earnings per share increased by 47% to 0.53 pence (2009: 0.36
pence). In ZAR terms the basic earnings per share increased by 41.8% to 5.97
cents (2009: 4.21 cents), and basic headline earnings per share increased by
31.5% to 5.97 cents (2009: 4.54 cents).

Pan African's accounting records are compiled using a pound sterling functional
currency. It is management's intention to change the Group's functional
currency from pound sterling to ZAR, which is the currency of the primary
economic environment in which the Company now operates.

                                              six months ended six months ended
                                                   31 Dec 2010      31 Dec 2009
                                                   (Unaudited)      (Unaudited)
Revenue                             (GBP)           38,326,410       29,044,934
EBITDA                              (GBP)           12,947,012        8,597,517
Attributable profit                 (GBP)            7,584,317        4,467,939
EPS                                 (pence)             0.5336           0.3374
HEPS                                (pence)             0.5336           0.3638
Weighted average number of shares                1,421,399,407    1,324,071,776
in issue                                                                       

C Review of Barberton Mines

i) Safety & Training

The safety performance at Barberton Mines continued to improve with results of
Lost Time Injury Frequency rate (`LTIFR') at 2.61 (2009: 3.6) and Reportable
Injury Frequency Rate (`RIFR') at 0.33 (2009: 1.1).

We are pleased to report no fatalities for the period under review. To date
fatality free shifts totalled 608,947.

In October 2010, the South African Department of Minerals Resources (`DMR')
conducted a two day audit on safety systems as well as a workplace inspection
as a follow up to the nationwide Presidential Audit. This audit revealed no
fatal flaws and concluded that the safety system at Barberton Mines meets the
DMR's standard.

In addition to the already robust Safety, Health, Environment and Community
(`SHEC') system in place at the mine, the Company, through the involvement of
all role players, has designed additional SHEC elements, in line with best
practice, which are being implemented through a safety awareness programme.

ii) Operating Performance

A total of 46,655oz (2009: 45,971oz) of gold was sold from Barberton Mines
(which comprises the Fairview, Sheba and New Consort sections), an increase of
1.5% from the previous year. Total underground production decreased marginally
by 0.4% to 45,209oz (2009: 45,385oz). Tons milled decreased by 2.2% to 149,231t
(2009: 152,584t) and the head grade increased by 4.4% to 10.55g/t (2009: 10.11g

iii) Production Summary

                                               six months six months six months
                                                 ended 31   ended 31   ended 31
                                                 December   December   December
                                                     2010       2009       2008
Tons Milled                       (t)             149,231    152,584    159,919
Headgrade                         (g/t)             10.55      10.11      11.40
Overall Recovery                  (%)                  91         91         91
Production: Underground           (oz)             45,209     45,385     47,634
Production: Calcine Dump          (oz)                  -          -      3,545
Gold Sold                         (oz)             46,655     45,971     51,186
Average price: spot               (US$/oz)          1,286      1,032        824
Average price: hedge              (US$/oz)              -          -          -
Average price: spot               (ZAR/KG)        295,281    253,510    235,338
Total cash cost                   (US$/oz)            767        670        451
Total cash cost                   (ZAR/KG)        176,199    164,697    134,581
EBITDA                            GBP `000         12,947      8,598      8,552
Depreciation                      GBP `000          1,909      1,375      1,066
Capital Expenditure               GBP `000          4,076      2,199      2,282
Exchange rate - average           ZAR/GBP           11.18      12.48      15.13
Exchange rate - closing           ZAR/GBP           10.28      11.94      13.78
Exchange rate - average           (R/US$)            7.14       7.64       8.88
Exchange rate - closing           (R/US$)            6.65       7.39       9.55

(Production Summary continued)

                                                      six months     six months
                                                        ended 31       ended 31
                                                        December  December 2006
Tons Milled                         (t)                  161,455        166,377
Headgrade                           (g/t)                   9.05           9.24
Overall Recovery                    (%)                       92             92
Production: Underground             (oz)                  43,145         45,332
Production: Calcine Dump            (oz)                   3,601              -
Gold Sold                           (oz)                  47,486         45,749
Average price: spot                 (US$/oz)                 721            567
Average price: hedge                (US$/oz)                 460            406
Average price: spot                 (ZAR/KG)             165,782        144,564
Total cash cost                     (US$/oz)                 521            516
Total cash cost                     (ZAR/KG)             114,640        104,471
EBITDA                              GBP `000               4,001          3,049
Depreciation                        GBP `000                 806          1,077
Capital Expenditure                 GBP `000               1,532            867
Exchange rate - average             ZAR/GBP                14.05          13.68
Exchange rate - closing             ZAR/GBP                13.77          13.78
Exchange rate - average             (R/US$)                 6.94           7.22
Exchange rate - closing             (R/US$)                 6.86           6.99

v) Capital Expenditure

Organic Growth Projects

Key  Project              Category               Metres % Complete    Potential
                                             developed/            Resource(oz)
a    Sheba - 35 ZK        Development           151.7           57        5,000
b    Sheba - Edwin Bray   Development           277.9          100       15,000
     to Thomas                                                                 
c    Sheba - Eureka Reef  Development               -            -            -
d    Fairview - 3 Shaft   Development              74           25      350,000
e    Fairview - 60/62     Development               -          100      376,000
f    Fairview - 54 Level  Equipping              13.8           50       11,000
g    Consort - 37 Level   Equipping                 -           52       12,000
h    Consort - 37 Inter   Development/          0/743           45       10,000
     level exploration    Drilling                                             
i    Consort - 45 Level   Development/        113/972           80       10,000
j    Consort - 50 Level   Development            45.3           40       30,000
     Decline West                                                              
k    Fairview 46-42       Ventilation            13.8           55            -
     Return Airway                                                             

a Sheba - 35 ZK Decline

Access development has reached the target areas. Development is now following
the hanging wall contact of the ZK geological structures to evaluate the cross
fractures for mineralisation.

b Sheba - Edwin Bray to Thomas

This project to exploit the Thomas orebody has reached the expected orebody
position some 40 metres below the intersection position as interpreted from
diamond drilling results. No mineralisation was exposed at this position, thus
the development has been redirected via two incline raises towards the lowest
drilled intersection.

c Sheba - Eureka Reef Zone

The Eureka reef orebody (exposed enroute to the Thomas orebody) is being
developed with reef drives and raises to evaluate the stoping potential.

d Fairview - 3 Shaft deepening

The sliping, support and equipping of the shaft between 62 and 64 levels are
complete. Development to establish the hoist chamber is underway and once
completed and equipped, the 3 Shaft sinking will commence.

e Fairview - 60/62 Level

This project is complete and stoping is in progress.

f Fairview - 54 Level

The sliping and equipping of this level is 90% complete. Due to excessive water
ahead of the planned development the necessary cover drilling and cementation
has been completed and the overall project is on schedule.

g Consort - 37 Level East

The re-equipping of 37 level at the PC Shaft is being done to access and
explore the upward extension of the eastern section of Consort being mined
below 45 level.

h Consort - 37 Inter level exploration

A total of 743m of exploration drilling was completed during the reporting
period with some significant results.

i Consort - 45 Level

The exploration drive being developed is used as a drilling platform and 972m
of exploration drilling was completed with significant results. This area will
be blocked as new reserves.

j Consort - 50 Level Decline West

Development being done to establish reserves below 50 level in the 51 West Area
of Consort.

k Fairview 46-42 Return Airway

Development required to establish a return airway in the 3 Shaft area

Maintenance Projects

Metallurgical           Cost          Category             Impact on production
Consort - Knelson        ZAR1,200,000   Replacement    Improve gold recovery at
Concentrator                                                            Consort
Fairview - Complete      ZAR8,200,000   Replacement Tailings facility at end of
Tailings Extention                                           life potential for
                                                              re-mining old dam
Biox - Purchase mobile   ZAR2,600,000   Replacement      Safety and maintenance
crane                                                              improvements
Biox - Refurbish           ZAR440,000   Maintenance  Reactor tanks repaired and
secondary reactors                                                      relined
Biox - Three compressed   ZAR2368,000   Replacement          Reduction in power
air blowers                                         consumption and elimination
                                                        of oil contamination in
Engineering             Cost          Category             Impact on production
Load Haul Dumpers        ZAR1,443,000   Maintenance        Required to maintain
(`LHD') major rebuilds                                   underground production
Replace obsolete           ZAR770,000   Replacement          Reduction in power
compressors and                                                     consumption
overhaul 3000cfm                                                               
Replace twenty off 2.5     ZAR586,000   Replacement    Underground tramming ore
ton hoppers                                                    flow improvement
New 12-ton Tipper truck    ZAR712,000   Replacement Replaces 50 year old tipper

vi) Illegal Mining

The Company is pleased to report that the illegal miners and leaders of 11
syndicates responsible for coordinating illegal mining activity at Barberton
Mines have been arrested by the police. As a result the Company is not aware of
illegal mining activity during the period under review. What is more pleasing
is that the total cost of security has reduced by 21.6% to ZAR18,167,575 when
compared to the last 6 months of the 2010 financial year (ZAR23,184,654),
without compromising overall security at Barberton Mines. For the six month
period ending 30 June 2011 we expect a further reduction in security costs.

Despite this reduction in security costs, the total cash cost of ZAR176,199/kg
for the reporting period included abnormal security expenditure during Q1,
which resulted in a cash cost of ZAR195,552/kg for the quarter. The Company is
however pleased to report that the cash cost has been reduced to ZAR157,622 for
the last quarter of the reporting period.

The Company would like to commend its partners; the South African Police
Service, Barberton prosecuting team, local communities, security contractors
and our employees for their support and commitment in assisting us in
eradicating this problem from Barberton Mines.

D Mineral Resources Management

During the period under review a total of 7,604.5m of exploration drilling was
completed underground at Barberton Mines and the following significant
intersections are reported:

ShebaNew Consort

Mine Section       Borehole    Drill   Grade                Mineralisation Type
                     Number    Width                                           
                                (cm)   (g/t)                                   
     Fairview       Bh 5803      693    65.8           Down-dip of 64 MRC block
                    Bh 5809      277     5.3              Footwall of 60 MRC 25
                  24-20ST07      282    60.6                Stockwork extension
                  24-20ST04      296    56.4                Stockwork extension
                  24-20ST04      297    28.7                Stockwork extension
                29 Stock 09       73     5.1                          Stockwork
                29 Stock 09      101    12.2                          Stockwork
                     20XC-3      100   224.7    New target in MMR deep footwall
                    3#Dec-2      100     5.9              3# resource extension
                    3#Dec-3      200    17.2              3# resource extension
                    3#Dec-4      100    11.7              3# resource extension
                    3#Dec-6      100    70.7              3# resource extension
                    3#Dec-9      100    10.3              3# resource extension
                    3#Dec-9      200    21.8              3# resource extension
                     37XC-5      200    21.8       Mineralisation within schist
                     37XC-8      100    24.4       Mineralisation within schist
                     37XC-9      100   220.4       Mineralisation within schist
                      45H36      100    27.1      Intersection in footwall lens
                      45H39      200     7.0      Intersection in footwall lens
                     50W1-5      200    43.5   Intersection ahead of stope face

A total of 1,636.7m of development was completed on working cost and 661.90m on
capital development. A total of 65% (429.60m) of capital development was
completed at the Sheba section, targeting 16% of the resource at an in situ
grade of 9,96g/t. At the Consort section 24% (158.30m) of total capital metres
were completed targeting 16% of Barberton Mines resource at a grade of 10.59g/
t. The remaining 11% (74m) of total capital development was focused at the
Fairview section, targeting 68% of Barberton resource at a grade of 12.47g/t.
Although development at the Fairview section is low compared to the size of the
resource, the capital development completed represents a deepening of the
number 3# sub-vertical shaft, which will open up access to 350koz on several

                           New Consort          Fairview            Sheba      
                           Metres      g/t    Metres      g/t   Metres      g/t
Reef                        278.8     3.45     368.8     3.57      392     3.14
Stope Development           318.6     8.08        77     6.41       75    15.78
Capital                     157.7              140.7             429.5         
Waste working cost          378.6              408.3             849.8         
Waste total                 536.3                549           1,279.3         

E Review of Phoenix Platinum

Milestones achieved for the period under review

On 5 November 2010 a formal Chrome Tailings Retreatment Plant (`CTRP')
agreement was concluded with International Ferro Metals SA (Pty) Ltd (`IFM'),
which enables Phoenix Platinum, Pan African's 100% owned subsidiary, to
construct and commission the CTRP on IFM's Lesedi Mine property. The
consideration of ZAR80 million (GBP7.2 million), payable to IFM, will be funded
from existing Pan African cash resources. On signature of the CTRP agreement a
payment of ZAR25 million (GBP2.24 million) was made, with the balance of the
consideration to be paid in tranches. A further ZAR25 million (GBP2.24 million)
is payable on commencement of the bulk earthworks to prepare for construction
of the CTRP and ZAR29.5 million (GBP2.64 million) becomes payable on
commissioning of the CTRP. The balance of ZAR500,000 (GBP0.05 million) is to
purchase the property on which the CTRP is to be constructed and is payable on
transfer of the property.

This agreement enables Phoenix Platinum to purchase the property on which the
plant is to be sited, as well as the right to leverage off IFM's existing
mining permits and licenses and to gain access to, and the use of, existing
infrastructure and services, substantially accelerating the commissioning of
the project from three years to one year. Phoenix Platinum is permitted to
expand the planned CTRP tonnage throughput of 20,000 tons to 40,000 tons per
month, placing it in a position to secure and treat additional tailings
resources from the area. Furthermore, the agreement terminates the 25% net
profit interest held by IFM in respect of the platinum group metals (`PGM's').

On 18 November 2010, Matomo Projects (Pty) Ltd, a subsidiary of TWP Holdings
(Pty) Ltd, was contracted on a fixed price lump sum turnkey basis to design,
supply and construct the CTRP.

Outlook for 2011

The procurement of all major equipment and long lead items (feed thickener,
ultra fine grind mill and flotation cells) has been prioritised to be completed
by end February 2011, in order to finalise construction drawings and diagrams.
Civil construction is planned to commence with bulk earthworks during mid March
2011 and mechanical construction and erection starting in mid May 2011. Plant
commissioning is to commence in October 2011 with the CTRP full production rate
of 20,000 tons per month being achieved in the first quarter of 2012.

F Review of Manica Gold

The application to convert the prospecting licence to a mining licence was
submitted to the Mozambican government on 20 October 2010. The Company has been
informed that the application is in the process of being reviewed and that
conversion should be in 2011.

The pre-feasibility study on mining the oxide and some of sulphide bearing
mineralized material has been completed on schedule (December 2010). A detailed
pre-feasibility is being completed on the remainder of the sulphide bearing
mineralised material, which will include a detailed three dimensional
underground mine design. This study is expected to be completed by Q2 of 2011
and results of both studies will be made available towards the beginning of Q3
of 2011.

G New Business

Although it continues to review new business opportunities, the Company has
shifted the new business team resources to focus on major projects at Barberton
Mines that have the potential to significantly increase the production profile
of the mine.

The first project that the team is working on is the viability of the Fairview
tailings dam, which has been in use since 1986. A new tailings facility has
been established which presents the Company with the opportunity to drill the
Fairview tailings dam in order to determine the grade profile. The tailings dam
represents a total of 3,5Mt and 449 holes at an average depth of 24m are
planned to be drilled on a 20m x 20m grid. To date 120 holes have been
completed and assays received from 120 samples out of a total of 2,000 have
yielded grades of between 0,6g/t and 2,5g/t.

Drilling, sampling and assaying will be complete by Q2 of 2011. Metallurgical
test work will commence towards the end of Q2 and feasibility is expected to be
completed by Q3 of 2011. If viable, and depending on the grade profile, this
project could increase the Barberton Mines production profile.

H Capital Expenditure and Commitments

Capital expenditure at Barberton Mines totalled £4.08 million, of which
development capital was £1.45 million and maintenance capital was £2.63

Capital expenditure on growth projects totalled £0.42 million, and £3.96
million was incurred on the development of Phoenix Platinum.

There were £0.69 million in outstanding orders contracted for capital
commitments at the end of the period.

Operating lease commitments, which fall due within the next year, amounted to £
0.179 million (2009: £0.156 million).

I Directorship Change

No changes have occurred during the period under review.

J Shares Issued

During the period under review the Company announced the issue and allotment of
34,500,000 new ordinary shares in respect of share options exercised:

On 25 August 2010 4,000,000 shares issued to N Steinberg at 4 pence per share.

On 6 October 2010 6,000,000 shares issued to J Nelson at 2 pence per share.

On 4 November 2010 4,000,000 shares issued to R Still at 4 pence per share.

On 4 November 2010 7,500,000 shares issued to Pangea Exploration (Pty) Ltd
("Pangea") at 4 pence per share.

On 10 November 2010 3,000,000 shares issued to J Yates at 5.5 pence per share.

On 25 November 2010 4,000,000 shares issued to M Bevelander at 7 pence per

On 25 November 2010 4,000,000 shares issued to E Victor at 5.5 pence per share.

On 25 November 2010 2,000,000 shares issued to E Victor at 7 pence per share.

K Dividend

The Company has adopted a policy whereby dividends are considered, and where
deemed appropriate by the Board, declared, on an annual basis. The
consideration of any dividend will take account of cashflow requirements and
growth plans, whilst recognising that where possible, a consistent dividend
policy increases shareholder value.

During the period under review the Company approved and paid a dividend of
0.3723 pence per share totalling £5.38 million.

L Going Concern

The directors are satisfied that the Group is a going concern for the
foreseeable future, and have adopted the going-concern basis in preparing these
interim results.

M 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 2010.

The interim results have been prepared and presented in accordance with, and
containing the information required by International Financial Reporting
Standards (`IFRS') on Interim Financial Reporting, IAS 34. The financial
information included in the interim results 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 interim results have not been reviewed or reported on by the Company's
external auditors.

N Directors' Dealings

Please see the detailed table for Directors' Dealings in Section 21.

O Pan African Outlook

The team at Barberton Mines continues to not only deliver results on target,
but improve on previous achievements. This, together with significant cost
reductions in spite of inflationary pressures and abnormal security
expenditure, continues to highlight the strength of our team at Barberton Mines
and the quality of our asset.

Our journey towards platinum production has begun and we are on schedule to
start production in Q4 of 2011. We have grown our in-house project development
capability and re-focussed our new business team on sourcing additional
production ounces from our near-term growth projects at Barberton Mines.

We continue to remain focused on further productivity and cost improvements.
Organic growth will continue to improve margins whilst we leverage our balance
sheet and strategic partnership with Shanduka to realise further growth

The recent rerating of the Company's stock rewards stakeholders for the team's
consistent record of delivery. The journey has just started and the team is far
from finished.

We are looking forward to an exciting 2011

By order of the Board,

Jan Nelson                              Cobus Loots                            
Chief Executive Officer                 Financial Director                     

17 February 2011

Consolidated Statement of Comprehensive Income for the six months ended 31
December 2010

                                            six months ended   six months ended
                                            31 December 2010   31 December 2009
                                                 (Unaudited)        (Unaudited)
                                                           £                  £
Gold sales                                        38,326,410         29,044,934
Realisation costs                                   (75,604)           (82,410)
On - mine revenue                                 38,250,806         28,962,524
Cost of production                              (22,949,762)       (18,898,789)
Depreciation                                     (1,908,836)        (1,374,753)
Mining Profit                                     13,392,208          8,688,982
Other expenses                                   (1,346,045)        (1,117,303)
Impairment                                                 -          (348,915)
Royalty costs                                    (1,007,987)                  -
Net income before finance income and              11,038,176          7,222,764
finance costs                                                                  
Finance income                                       414,657            152,607
Finance costs                                       (19,868)            (1,588)
Profit before taxation                            11,432,965          7,373,783
Taxation                                         (3,848,648)        (2,683,201)
Profit after taxation                              7,584,317          4,690,582
Other comprehensive income:                                                    
Foreign currency translation differences           4,676,586          2,216,274
Total comprehensive income for the year           12,260,903          6,906,856
Profit attributable to:                                                        
Owners of the parent                               7,584,317          4,467,939
Non-controlling interest                                   -            222,643
                                                   7,584,317          4,690,582
Earnings per share                                    0.5336             0.3374
Diluted earnings per share                            0.5318             0.3360
Weighted average number of shares in           1,421,399,407      1,324,071,776
Diluted weighted average number of shares      1,426,159,912      1,329,710,617
in issue                                                                       
Headline earnings per share is calculated                                      
Basic earnings                                     7,584,317          4,467,939
Adjustments: Impairment                                    -            348,915
Headline earnings                                  7,584,317          4,816,854
Headline earnings per share                           0.5336             0.3638
Diluted headline earnings per share                   0.5318             0.3622

Consolidated Statement of Financial Position as at 31 December 2010

                                            31 December 2010       30 June 2010
                                                 (Unaudited)          (Audited)
                                                           £                  £
Non-current assets                                                             
Property, plant and equipment and                 44,422,134         37,495,010
mineral rights                                                                 
Other intangible assets                           17,247,371         13,087,880
Goodwill                                          21,000,714         21,000,714
Rehabilitation trust fund                          3,073,793          2,740,546
                                                  85,744,012         74,324,150
Current assets                                                                 
Inventories                                        1,740,777          1,126,374
Trade and other receivables                        4,886,229          3,794,659
Cash and cash equivalents                         10,630,963         12,756,262
                                                  17,257,969         17,677,295
TOTAL ASSETS                                     103,001,981         92,001,445
EQUITY AND LIABILITIES                                                         
Capital and reserves                                                           
Share capital                                     14,440,406         14,095,406
Share premium                                     50,752,830         49,732,830
Translation reserve                                9,172,451          4,495,865
Share option reserve                                 807,924            754,394
Retained income                                   28,022,935         25,814,783
Realisation of equity reserve                   (10,701,093)       (10,701,093)
Merger reserve                                  (10,705,308)       (10,705,308)
Equity attributable to owners of the              81,790,145         73,486,877
Non-controlling interest                                   -                  -
Total equity                                      81,790,145         73,486,877
Non - Current liabilities                                                      
Long term provisions                               3,735,682          3,338,198
Deferred taxation                                  9,717,443          8,092,332
                                                  13,453,125         11,430,530
Current liabilities                                                            
Trade and other payables                           5,437,913          5,041,754
Short term provisions                              1,689,122          1,465,299
Current tax liability                                631,676            576,985
                                                   7,758,711          7,084,038
TOTAL EQUITY AND LIABILITIES                     103,001,981         92,001,445

Consolidated Cash flow Statement for the six months ended 31 December 2010

                                              six months ended six months ended
                                              31 December 2010 31 December 2009
                                                   (Unaudited)      (Unaudited)
                                                             £                £
Cash Generated by operations                        15,928,379        7,776,767
Taxation paid                                      (3,587,061)      (2,537,000)
Royalty paid                                       (1,065,267)                -
Dividends paid                                     (5,376,165)                -
Net finance income                                     394,789          151,019
Cash inflow from operating activities                6,294,675        5,390,786
Cash outflow from investing activities             (8,500,858)      (2,429,578)
Cash inflow / (outflow) from finance                 1,365,000        (954,759)
Net (decrease) / increase in cash                    (841,183)        2,006,449
Cash at the beginning of period                     12,756,262        2,389,301
Effect of foreign currency rate changes            (1,284,116)        (160,273)
Cash at end of year                                 10,630,963        4,235,477

Consolidated Statement of Changes in Equity for the six months ended 31
December 2010

                                        six months ended 31 six months ended 31
                                              December 2010       December 2009
                                                (Unaudited)         (Unaudited)
                                                          £                   £
Shareholders' equity at start of                 73,486,877          56,360,402
Share issue                                       1,365,000          14,754,348
Share option reserve                                 53,530              79,128
Other comprehensive income                        4,676,586           2,216,274
Profit for the period                             7,584,317           4,467,939
Dividend                                        (5,376,165)                   -
Realisation of equity reserve                             -        (10,701,093)
Non-controlling interest                                  -         (3,988,577)
Total Equity                                     81,790,145          63,188,421

Consolidated Segment Report for the six months ended 31 December 2010

                           Barberton       Phoenix    Corporate           Group
                               Mines      Platinum   and Growth                
                                   £             £            £               £
Gold sales                38,326,410             -            -      38,326,410
Realisation costs           (75,604)             -            -        (75,604)
On - mine revenue         38,250,806             -            -      38,250,806
Cost of production      (22,949,762)             -            -    (22,949,762)
Depreciation             (1,908,836)             -            -     (1,908,836)
Mining Profit             13,392,208             -            -      13,392,208
Other (expenses)/          (772,076)             -    (573,969)     (1,346,045)
Impairment costs                   -             -            -               -
Royalty costs            (1,007,987)             -            -     (1,007,987)
Net income before         11,612,145             -    (573,969)      11,038,176
finance income and                                                             
finance costs                                                                  
Finance income                10,252             -      404,405         414,657
Finance costs               (19,868)             -            -        (19,868)
Profit before             11,602,529             -    (169,564)      11,432,965
Taxation                 (3,848,648)             -            -     (3,848,648)
Profit after taxation      7,753,881             -    (169,564)       7,584,317
* Costs directly attributable to Phoenix Platinum, along with attributable     
overheads, are capitalised to intangible assets.                               
Segmental Assets          43,136,356     5,592,221    33,272,690     82,001,267
Segmental Liabilities     20,686,361       238,990       286,485     21,211,836
Goodwill                           -             -             -     21,000,714
Net Assets (excluding     22,449,995     5,353,231    32,986,205     60,789,431
Capital Expenditure        4,075,674             -        15,102      4,090,775

Consolidated Segment Report for the six months ended 31 December 2010

                     Barberton Mines       Phoenix Corporate and          Group
                                          Platinum        Growth               
                                   £             £             £              £
Gold sales                29,044,934             -             -     29,044,934
Realisation costs           (82,410)             -             -       (82,410)
On - mine revenue         28,962,524             -             -     28,962,524
Cost of production      (18,898,789)             -             -   (18,898,789)
Depreciation             (1,374,753)             -             -    (1,374,753)
Mining Profit              8,688,982             -             -      8,688,982
Other (expenses)/          (595,064)             -     (522,239)    (1,117,303)
Impairment costs                   -             -     (348,915)      (348,915)
Royalty costs                      -             -             -              -
Net income before          8,093,918             -     (871,154)      7,222,764
finance income and                                                             
finance costs                                                                  
Finance income                70,686                      81,921        152,607
Finance costs                (1,532)                        (56)        (1,588)
Profit before              8,163,072             -     (789,289)      7,373,783
Taxation                 (2,683,201)             -             -    (2,683,201)
Profit after               5,479,871             -     (789,289)      4,690,582
* Costs directly attributable to Phoenix Platinum, along with attributable     
overheads, are capitalised to intangible assets.                               
Segmental Assets          37,757,322     4,591,649     15,859,269    58,208,240
Segmental Liabilities     15,783,514        25,768        211,251    16,020,533
Goodwill                           -             -              -    21,000,714
Net Assets (excluding     21,973,808     4,565,881     15,648,018    42,187,707
Capital Expenditure        2,199,471             -         10,484     2,209,955

Directors' Dealings

Name                Relationship to     Date                Strike Price (if   
                    Company                                 applicable)        
JP Nelson           CEO                 6 October           2 pence per share  
                                        12 October                             
                                        8 November                             
R Still             Non-Executive       4 November          4 pence per share  
                                        14 December                            
                                        30 December                            
J Yates             Immediate family    9 November                             
                    member of R Still 1                                        
                                        26 November                            
                                        1 December                             
                                        3 December                             
                                        6 December                             
                                        7 December                             
C Loots             Financial Director  11 November                            
Pangea Exploration  2                   4 November          4 pence per share  
(Pty) Limited                                                                  
                                        10,11 November                         
                                        17, 18 November                        
                                        17, 18 November                        
                                        19, 22 November                        
                                        23 November                            

1 Mr R Still, a non-executive director of the Company, is an immediate family
member of Mrs J Yates. Mr R Still is therefore deemed to have an indirect,
non-beneficial interest in Mrs Yates's holding in the Company.

2 Mr R Still, a non-executive director of the Company, is also a director of
Pangea and a trustee of a family trust which owns 33.33% of Pangea. Mr Still is
therefore deemed to have an indirect, non-beneficial interest in Pangea's
holding in the Company.

Directors' Dealings CONTINUED

Name                   Shares Issued in  No. of shares sold   Remaining holding
                      relation to share                                   share
                         options issued                                        
JP Nelson                     6,000,000                   -                   -
                                      -           2,500,000           3,622,442
                                      -           2,500,000           1,122,442
R Still                       4,000,000                   -                   -
                                      -           1,300,000           2,700,000
                                      -             700,000           2,000,000
J Yates                       3,000,000                   -                    
                                      -             450,000           2,550,000
                                      -             600,000           1,950,000
                                      -             542,268           1,407,732
                                      -             661,289             746,443
                                      -             746,443                   -
C Loots                               -              65,000              65,000
Pangea Exploration            7,500,000                   -                   -
(Pty) Limited                                                                  
                                                  1,250,000          44,993,798
                                                    567,126          43,743,798
                                                  1,021,071          43,176,672
                                                    331,193          42,155,601
                                                    132,807          41,824,408

For further information on Pan African Resources plc, please visit the website


22 February 2011

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