Pan African Resources PLC

Trading Statement


                           Pan African Resources PLC                           

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

(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                               

TRADING STATEMENT, OPERATIONAL AND CORPORATE UPDATE, ACQUISITION OF A PRODUCING
             SOUTH AFRICAN COAL MINE AND 2016 PRODUCTION GUIDANCE              

1. TRADING STATEMENT

In terms of paragraph 3.4(b) of the Listings Requirements of JSE Limited
("JSE") ("Listings Requirements"), a listed company is required to publish a
trading statement as soon as it is satisfied that a reasonable degree of
certainty exists that the financial results for the period to be reported on
next, will differ by at least 20 per cent from those of the previous
corresponding period.

Pan African is incorporated in England and Wales under Companies Act 1985 and
accordingly its presentation currency is Pound Sterling.

The annual average Rand ("ZAR"):Pound Sterling ("GBP") exchange rates affect
reporting of results in GBP. For the reporting period to the date of this
announcement, the average prevailing ZAR:GBP exchange rate of 17.89:1 (30 June
2014: 16.88:1) was used to translate earnings per share ("EPS") and headline
earnings per share ("HEPS") from ZAR to GBP. This 6.2%  year-on-year change in
the average exchange rate should be taken into account for the purposes of a
comparison with the prior reporting period.

Pan African advises shareholders that it's Group EPS and HEPS for the year
ended 30 June 2015, calculated in ZAR, is expected to be between 40 per cent
and 60 per cent lower than the 24.74 cents EPS and HEPS for the period ended 30
June 2014. Calculated in ZAR, EPS and HEPS are therefore expected to be between
9.93 cents and 14.87 cents.  EPS and HEPS denominated in GBP are expected to be
between 43 per cent and 63 per cent lower than the 1.47 pence EPS and HEPS
reported for the year ended 30 June 2014. In GBP, EPS and HEPS are therefore
expected to be between 0.54 pence and 0.84 pence.

The primary reasons for the decrease in EPS and HEPS are as follows:

Low grade mining cycle at Evander Gold Mines (Pty) Ltd ("Evander Mines")

Pan African previously communicated that Evander Mines was in a low grade
mining cycle. This cycle had reduced gold production and resulted in reduced
profit margins and net profits generated by Evander Mines, in comparison to the
previous corresponding reporting period.

Pan African has previously guided shareholders that the low grade mining cycle
at Evander Mines was expected to continue until February 2015, after which the
operation would return to a higher grade mining cycle.  Pan African can confirm
that mining in higher grade areas has now commenced. The turnaround in
production has however been slower than previously anticipated, principally due
to challenges related to underground mining operations and infrastructure
constraints, with the situation exacerbated by Eskom power interruptions and a
Department of Mineral Resources section 54 stoppage. These issues adversely
impacted on production output.  Evander Mines has effected corrective actions,
including improved maintenance protocols, strengthening of the on site
management team and a renewed management focus on achieving operational and
production targets.

Evander Mines has also commenced implementing measures to ensure future lower
grade mining cycles will be less pronounced than that experienced in the
previous cycles. One such measure is to advance the main decline from 25 level
to 26 level to access high grade reserves in the lower section of the mine. In
addition to increasing Evander Mines' life of mine, the development will
alleviate mining flexibility constraints by creating additional stoping areas.

Barberton Mines' Biox® plant issues

As previously reported, Barberton Mines' Biox® plant was subject to an oil
contamination from a breakdown at the Fairview primary crusher during
               May 2014. This remained a challenge during the first six month
reporting period; however the Biox® plant recoveries had improved to 96%
(planned 97%) by December 2014. Management now believe the recovery to be
nearly complete. Operational and maintenance systems have been implemented to
mitigate the risk of future contamination.

2. OPERATIONAL AND CORPORATE UPDATE

Exploration results at Barberton Mines

Pan African is pleased to announce infill and extensional exploration drilling
results of the Main Reef Complex ("MRC") orebody at its flagship Fairview Mine
in Barberton. Recent drilling at Fairview Mine has yielded extremely positive
results confirming the down dip extension of the high grade 11 Block of the MRC
orebody by a further 170 metres. This extension of the MRC orebody has resulted
in an increase in the gold mineral resource by 317,500 ounces, thereby
extending the life-of-mine of Barberton Mines in excess of 19 years (a detailed
mineral resource and mineral reserve report is expected to be released in
September 2015).

Recent borehole results of the 11 Block:

Borehole number           Reef width (m)            Grade (g/t)              
                                                                             
Bh 5940                   6.87                      53.30                    
                                                                             
Bh 5816                   6.91                      120.03                   
                                                                             
Bh 5849                   16.26                     50.22                    
                                                                             
Bh 5864                   13.83                     43.82                    

Evander tailings retreatment plant ("ETRP") performance

Pan African remains focused on creating shareholder value through unlocking the
potential of its organic surface and brownfields exploration projects.

In this regard, shareholders are referred to the announcement dated 12 February
2015, which announced the successful commissioning of the ETRP and the first
gold poured from the ETRP in January 2015.

The total construction capital spend on the ETRP was approximately R175
million, which is substantially below the original R200 million project budget.

The ETRP has now successfully ramped-up processing to its capacity of 180,000
to 200,000 tonnes per month at 0.31 g/t. Gold production from the ETRP remains
on target and Pan African is pleased to announce recoveries in line with the
42% planned recoveries.

Growth projects at Evander Mines

In light of the positive results of the ETRP, the Company will undertake a
preliminary economic assessment on the viability of constructing "Elikhulu", a
tailings retreatment plant which can potentially treat slimes at a processing
capacity of up to 12 million tonnes per annum at a head grade of 0.28g/t from
the Winkelhaak, Leslie and Kinross tailings storage facilities. The total
mineral resource for Elikhulu is 165Mt at 0.28g/t (1.5Moz).

Furthermore, an internal technical team from Evander Mines has been assigned to
assess the merits of progressing the Evander South brownfield project to the
level of a preliminary economic assessment. The Evander South Project is an
attractive mining opportunity whereby the Kimberley reef can potentially be
exploited at shallow depths, commencing at 300 metres below surface.

The Company's current internal growth projects are summarised hereunder:

Evander Mine     Category   Tonnes     Grade      Ounces     Depth below       
Projects                    (million)  (g/t       (Moz)      surface           
                                                             (m)               
                                                                               
Elikhulu         Resource   165.0      0.28       1.5        0                 
                                                                               
Evander South    Resource   21.2       7.66       5.2        300-1,200         

Phoenix Platinum

Overall plant recoveries at Phoenix Platinum have increased significantly to
36% (2014: 27%). The cessation of International Ferro Metals Limited's
operations at Skychrome resulted in an improvement in the quality of the
feedstock being treated and the introduction of new reagents in the
metallurgical process are the main contributors to the higher recoveries.

Refinancing of Group Revolving Credit Facility ("RCF")

Transaction agreements have been entered into with Pan African's current
consortium of South African banks to refinance its existing RCF.  The new
facility has a tenure of 5 years, and increases the available RCF from R600
million to R1.1 billion at a reduced margin and facility fees. This new
facility provides Pan African with access to a long-term debt facility with
flexible terms at a competitive rate to fund its organic and acquisitive growth
aspirations.

Group Cash Generation

The Group continues to be profitable and cash flow generative, which has
resulted in group net debt being reduced from R459 million at December 2014 to
R315 million (including R142 million outstanding on the ABSA gold loan) at the
announcement date.

3. ACQUISITION OF UITKOMST COLLIERY

The Company has entered into agreements to acquire the Uitkomst colliery (the
"Colliery"), a high grade thermal export quality coal deposit (with further
metallurgical applications) located in the Utrecht coalfields in KwaZulu Natal,
South Africa, for a cash consideration of R200 million from Oakleaf Investments
Holding 109 Proprietary Limited and Shanduka Resources (Proprietary) Limited
("Shanduka").

The Colliery is an existing operational mine and the acquisition is expected to
be immediately earnings and cash flow accretive to Pan African.

The Colliery is located close to the town of Newcastle, South Africa and
contains a coal mineral resource of 25.7 million tonnes of which 22.1 million
tonnes can be classed as  measured or indicated (in accordance to the SAMREC
code). The area also has additional exploration potential.

Current operations at the Colliery demonstrate that underground extraction of
the mineral resource is viable and that the run-of-mine coal can readily be
beneficiated to produce excellent yields of high grade coal suitable for export
or local metallurgical markets. The Colliery currently yields and sells
approximately 400,000 tonnes of coal per annum.

Resources           12% Ash Product                                               
                                                                                  
Class     MTIS (Mt) Yield (%) IM (%)  Ash (%)  VM (%)   FC (%)  CV (MJ/Kg) TS (%) 
                                                                                  
Measured  17.13     73.9      2.7     12.0     28.1     57.2    28.94      0.96   
                                                                                  
Indicated 4.99      76.2      2.8     12.0     27.4     57.9    28.97      0.96   
                                                                                  
Inferred  3.59      79.4      2.6     12.0     26.6     58.9    29.12      0.93   
                                                                                  
Total     25.72     75.1      2.7     12.0     27.7     57.6    28.97      0.96   

   

IM - Inherent moisture     VM - Volatile matter      FC - Fixed carbon                 
                                                                                       
CV - Calorific value       TS - Total sulphur        MTIS - Mineable tonnes in situ    

Pan African therefore believes there are opportunities to increase production
and improve the operational performance of the mine with a view to improve the
long term productivity and economics.

The Colliery's acquisition will be funded from existing debt facilities and
internally generated cash flows. The acquisition is subject to final due
diligence, regulatory approvals and other suspensive conditions typical for a
transaction of this nature.

The Colliery's acquisition is categorised as a category 2 transaction in terms
of section 9.5(a) of Listings Requirements and accordingly no shareholder
approval is required.

In terms of section 10 of the Listings Requirements, Shanduka is a related
party to Pan African. Shanduka's interest in the Colliery's acquisition is
considered to be a small related party transaction. As such a fairness opinion,
from an expert acceptable to the JSE, will be completed and shareholders will
be updated in due course.

4. PRODUCTION GUIDANCE - FINANCIAL YEAR 30 JUNE 2016

Pan African is expecting gold production in excess of 110,000oz at Barberton
Mines, in excess of 100,000oz at Evander Mines, and platinum group metal
production of approximately 10,000oz at Phoenix Platinum.

5. EXECUTIVE DIRECTORS' REMUNERATION

Given the challenging economic and operating environment experienced during the
current financial year, Pan African executive directors have resolved that they
will forfeit their annual salary increase for the forthcoming financial year.

6. DIVIDEND POLICY

The Company's progressive dividend policy is expected to be unaffected by the
trading statement and acquisition referred to in this announcement.

Cobus Loots, the CEO of Pan African, commented as follows: "The 2015 financial
year has been extremely challenging for Pan African, and even though we are
disappointed that Evander Mines' turnaround has not happened more rapidly, the
operation is now established in higher grade mining areas. Having implemented
corrective strategies, the Group is well positioned to deliver an improved
performance in 2016.

The extension of Fairview's life of mine, in conjunction with Evander Mines'
development of the main decline from 25 level to 26 level and exploration
projects, underpins our confidence in the longevity of the Company's gold
production and resources.

Refinancing our debt facilities enables the Group to continue growing and
investing appropriately. It secures long term funding at a competitive rate,
and provides the Group with a flexible financing package to manage its capital
structure and liquidity.

We remain committed to providing our shareholders with an appropriate cash
return on investments and based, on current forecasts, we believe that the
Company will maintain its dividend pay-out and industry leading dividend yield.

Pan African remains a precious metal focused company and, in addition to
ensuring that our current operations perform in line with shareholders'
expectations, Elikhulu and Evander South present exciting organic growth
opportunities for the Group.  The acquisition of the Uitkomst colliery does not
change our precious metals focus, however our robust financial position in a
difficult resources market allows us to take advantage of selective
opportunities within South Africa that we believe can be immediately earnings
accretive to shareholders whilst not affecting our dividend policy."

The financial information contained in this trading statement has neither been
reviewed nor audited by the Company`s auditors. Pan African anticipates
releasing its audited results for the year ending 30 June 2015 on or about 23
September 2015.

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

8 June 2015

Contact Details

Corporate Office
The Firs Office Building
1st Floor, Office 101
Cnr. Cradock and Biermann Avenues
Rosebank, Johannesburg
South Africa
Office:   + 27 (0) 11 243 2900
Facsmile: + 27 (0) 11 880 1240

Registered Office
Suite 31
Second Floor
107 Cheapside
London
EC2V 6DN
United Kingdom
Office:   + 44 (0) 207 796 8644
Facsmile: + 44 (0) 207 796 8645

Cobus Loots                                  Deon Louw                                 
                                                                                       
Pan African Resources PLC                    Pan African Resources PLC                 
                                                                                       
Chief Executive Officer                      Financial Director                        
                                                                                       
Office: + 27 (0)11 243 2900                  Office: + 27 (0) 11 243 2900              

   

Phil Dexter                                  Peter Stewart                             
                                                                                       
St James's Corporate Services Limited        Canaccord Genuity Limited                 
                                                                                       
Company Secretary                            Nominated Adviser                         
                                                                                       
Office: + 44 (0)207 796 8644                 Office: +44 (0)207 523 8350               

   

Nigel Gordon                                 Sholto Simpson                            
                                                                                       
Fasken Martineau LLP                         One Capital                               
                                                                                       
Solicitors in the UK                         JSE Sponsor                               
                                                                                       
Office: +44 (0)207 917 8500                  Office: + 27 (0)11 550 5009               

   

Julian Gwillim                               Daniel Thole                              
                                                                                       
Aprio Strategic Communications               Bell Pottinger PR                         
                                                                                       
Public & Investor Relations SA               Public & Investor Relations UK            
                                                                                       
Office: +27 (0)11 880 0037                   Office: + 44 (0)203 772 2500              

Matthew Armitt / Ross Allister
Peel Hunt LLP
Joint Broker
Office: +44 (0)020 7418 8900

www.panafricanresources.com