Update on Evander & Progress on Elikhulu Fi...
Pan African Resources PLC
(Incorporated and registered in England and Wales under
Companies Act 1985 with registered number 3937466 on 25 February 2000)
AIM Code: PAF
JSE Code: PAN
ISIN: GB0004300496
(“Pan African Resources†or “group†or “companyâ€)
UPDATE ON EVANDER GOLD MINING PROPRIETARY LIMITED (“EVANDER MINESâ€) REFURBISHMENT AND COST OPTIMISATION PROGRAMME AND PROGRESS ON ELIKHULU TAILING RETREATMENT PLANT (“ELIKHULUâ€) FINANCING
Update on the Evander shaft refurbishment programme and cost optimisation programme
Shareholders are referred to the announcement of 20 February 2017, in which the company communicated the suspension of the Evander Mines underground mining operations to allow for critical refurbishment and maintenance on no. 7 and no. 8 shaft infrastructure. The company is pleased to report that these repairs are progressing on schedule and are still expected to be completed within the 55 day period previously communicated. During the suspension of the underground mining operations the processing and tailings retreatment plants have utilised available plant capacity to continue processing tailings and additional surface sources.
In conjunction with the refurbishment, Evander Mines management has implemented a number of initiatives to reduce the Evander Mines underground operation’s fixed cost base, once mining recommences.
Following a productivity and human capital assessment, initiated some time ago, Evander Mines has concluded a retrenchment agreement (the “agreementâ€) with the National Union of Mineworkers on 10 March 2017, with the facilitation of the South African Commission for Conciliation, Mediation and Arbitration. In terms of this agreement, approximately 30 percent of Evander Mines employees will be retrenched at an estimated cost of approximately R54 million (US$4.1 million). These personnel were designated as redundant for Evander Mines to meet production targets. Pan African Resources wishes to express its gratitude to the parties involved for the responsible manner in which the retrenchment agreement was concluded.
In order to minimise the number of job losses, Evander Mines will seek to re-engage a number of retrenched employees when site activities for Elikhulu commences.
Progress on Elikhulu financing
On 9 February 2017, the company confirmed the approval by shareholders to disapply statutory pre-emption rights to allow the company to carry out a general issue of ordinary shares for cash. Proceeds from any general issue may or maybe not be used for the construction of Elikhulu. The company can confirm that it has been seeking out investor support for raising equity to fund the remaining portion of capital required for the Elikhulu construction.
The company is pleased with the interest it has had from investors and has built a book of demand that is in excess of the 291,480,983 shares it was given authority to issue at its shareholder meeting. In terms of the JSE Limited Listings Requirements, a company cannot issue shares at a price that is in excess of a 10% discount to the 30 day volume weighted average price, which is currently at a premium to the current share price in South African rand terms. Given current market conditions and market volatility, the company has elected not to complete an equity issuance at this time. The company will however continue to progress the Elikhulu development from cash and banking facilities, until the final Elikhulu funding package is secured.
Johannesburg
10 March 2017
| Contact information | |
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 Facsimile: + 27 (0) 11 880 1240 |
Registered Office Suite 31, Second Floor 107 Cheapside London EC2V 6DN United Kingdom Office: + 44 (0) 207 796 8644 Facsimile: + 44 (0) 207 796 8645 |
| Cobus Loots Pan African Resources PLC Chief Executive Officer Office: + 27 (0) 11 243 2900 |
Deon Louw Pan African Resources PLC Financial Director Office: + 27 (0) 11 243 2900 |
Phil Dexter St James's Corporate Services Limited Company Secretary Office: + 44 (0) 207 796 8644 |
John Prior / Paul Gillam Numis Securities Limited Nominated Adviser and Joint Broker Office: +44 (0) 20 7260 1000 |
Sholto Simpson One Capital JSE Sponsor Office: + 27 (0) 11 550 5009 |
Matthew Armitt / Ross Allister Peel Hunt LLP Joint Broker Office: +44 (0) 207 418 8900 |
Julian Gwillim Aprio Strategic Communications Public & Investor Relations SA Office: +27 (0)11 880 0037 |
Jeffrey Couch/Neil Haycock/Thomas Rider BMO Capital Markets Limited Joint Broker Office: +44 (0) 207 236 1010 |
Bobby Morse/Chris Judd Buchanan Communications Public & Investor Relations UK Office: +44 (0) 207 466 5000 |
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