Pan African Resources PLC
(Incorporated and registered on 25
February 2000 in England
and Wales under the Companies Act
1985, registration number 3937466)
Share code on AIM : PAF
Share code on JSE : PAN
ISIN
: GB0004300496
(“Pan African” or the “company” or the “group”)
Unaudited interim results for the six
months ended 31 December 2018
Chief executive officer's
statement
Pan African CEO Cobus Loots commented:
“Pan African Resources is pleased to
report a robust operational, financial and safety performance for
the six months ended 31 December
2018. The group is now positioned as a low cost and
long-life gold producer, in line with our stated strategy and our
shareholders’ expectations. Our combined underground and tailings
operations are some of the lowest-cost gold producers in
South Africa and also
internationally competitive, from an all-in sustaining cost
perspective. In the current reporting period, the group’s all-in
sustaining cost per ounce in USD terms improved materially to
USD975/oz (2017: USD1,268/oz), emphasising the quality of our
operations, the impact of low-cost ounces from Elikhulu and also
the other business improvements implemented.
We recorded a significantly improved
group safety performance during the current reporting period, with
Barberton’s Fairview Mine reaching its one-million fatality free
shift milestone during July 2018.
The construction of our flagship
Elikhulu tailings retreatment facility at Evander has been
successfully completed, despite the challenges associated with
delivering a project of this magnitude and complexity, on time and
within budget. The plant is on track to achieve throughput of
approximately 1.2-million tonnes per month in February 2019.
Barberton Mines benefited from
increased underground mining flexibility at its high-grade Fairview
272 and 358 mining platforms. The Barberton tailings retreatment
facility also significantly improved production, following the
successful commissioning of this facility’s regrind mill during May
2018.
Group profit after tax increased by
136.8% to R137.8 million (GBP: 127.3% increase to GBP7.5 million), and group earnings per share
from combined operations increased by 121.4% to 7.15 cents per share (GBP: 116.7% increase to
0.39 pence per share).
Pan African has an attractive
pipeline of near- to medium-term growth projects. The completion of
the drilling programme at Barberton Mines’ Royal Sheba prospect
indicated a near-surface mineral resource of 0.37Moz. We are
excited by the potential to access low-cost, near-surface ounces at
Royal Sheba and will communicate results of the feasibility study
to stakeholders in the near future. Barberton Mines has also
started an extended exploration drilling programme at the New
Consort Mine’s mining right, targeting the Main Maiden Reef orebody
as a potential satellite deposit for the Royal Sheba project. These
projects, together with improvements to our underground ore
handling and processing plant infrastructure, have the potential to
significantly boost Barberton Mines' production in the coming
years.
Management’s key focus areas for the
remainder of the 2019 financial year include a continued focus on
improving our safety performance, delivering quality ounces
consistent with our production guidance, optimising the performance
of Elikhulu, advancing value accretive growth opportunities and
strengthening the group’s statement of financial position by
reducing debt to allow for improved funding flexibility. We remain
on track to achieve our production guidance of approximately
170,000oz for the full 2019 financial year.”
Key features reported in South African
rand (“ZAR” or “R”) and pound sterling (“GBP”)
Operational key features
- Gold production from the group’s continuing mining operations
(note 1) increased by 54.2% to 81,014oz (2017: 52,548oz), with
robust operational performance from Barberton Mines’ underground
operations and the group’s portfolio of tailings retreatment
plants.
- Gold production from the Barberton complex increased
significantly by 24.5% to 50,556oz (2017: 40,611oz).
- The Elikhulu tailings retreatment plant (“Elikhulu”)
contributed 15,292oz (2017: nil) of incremental low-cost ounces to
group production. Elikhulu reached its nameplate capacity of
1-million tonnes throughput in October
2018 and its optimisation is continuing.
- The incorporation of the existing Evander tailings retreatment
plant (“ETRP”) throughput capacity of 0.2-million tonnes per month
into Elikhulu was completed in December
2018, which increased Elikhulu’s processing capacity to
1.2-million tonnes per month.
- Significantly improved group safety performance during the
current reporting period with the lost-time injury frequency rate
improving to 1.77 (2017: 4.05) per million man hours and the
reportable injury frequency rate improving to 0.53 (2017:0.62) per
million man hours, following the cessation of large scale
underground mining at Evander Mines and the commissioning of
Elikhulu.
- The drilling programme at Barberton Mines’ Royal Sheba prospect
was completed, indicating a near-surface mineral resource of
0.37Moz with a 900m strike and
150m down-dip extension. The total
mineral resource is now 0.76Moz (8.97Mt at 2.62g/t) comprising the
near-surface resource of 0.37Moz (5.85Mt at 1.96g/t) and the
underground mineral resource of 0.39Moz (3.12Mt at 3.87g/t). The
feasibility study on the Royal Sheba project, which will now
include a review of possible near-term improvements to underground
ore handling logistics/infrastructure and existing processing plant
throughput capacity, will be completed in the coming months.
- The group has commenced an extended exploration drilling
programme at Barberton Mines’ mining right at New Consort Mine,
targeting the Main Maiden Reef (“MMR”) orebody as a potential
satellite deposit for the Royal Sheba project.
- Evander Mines’ Egoli project remains a viable underground
mining project and the group is currently reviewing and assessing
options to advance this project.
- The group’s detailed operational and financial summaries, per
entity, are disclosed on the Pan African website at
http://www.panafricanresources.com/investors/financial-reports/.
Financial key features
- Group profit after taxation in ZAR terms increased by 136.8% to
R137.8 million (2017: R58.2 million), while in GBP terms, group
profit after taxation increased by 127.3% to GBP7.5 million (2017: GBP3.3 million).
- Group earnings before interest, taxation, depreciation and
losses from discontinued operations (“EBITDA”) in ZAR terms
increased by 92.3% to R342.5 million (2017: R178.1 million), while
in GBP terms it increased by 83.3% to GBP18.7 million (2017: GBP10.2 million).
- Earnings per share (“EPS”) in ZAR terms increased by 121.4% to
7.15 cents per share (2017:
3.23 cents per share), while in GBP
terms, EPS increased by 116.7% to 0.39
pence per share (2017: 0.18
pence per share).
- The effective ZAR gold price received increased by 1.1% to
R557,446/kg (2017: R551,506/kg) although, in USD terms, it
decreased by 4.6% to USD1,222/oz
(2017: USD1,281/oz).
- Group revenue from continuing operations in ZAR terms increased
by 52.8% to R1,383.0 million (2017: R904.9 million) and, in GBP
terms, revenue increased by 46.8% to GBP75.3
million (2017: GBP51.3
million) due to an increase in gold ounces produced by
Barberton Mines’ underground mining operations, the Barberton
tailings retreatment plant (“BTRP”) and also the contribution from
the newly commissioned Elikhulu.
- Cash cost per kilogramme decreased by 14.4% in ZAR terms to
R405,216/kg (2017: R473,187/kg) and, in USD terms, the cash cost
per ounce decreased by 19.2% to USD888/oz (2017: USD1,099/oz).
- All-in sustaining cost per kilogramme decreased significantly
by 18.5% in ZAR terms to R444,946/kg (2017: R545,908/kg) and, in
USD terms, the all-in sustaining cost per ounce decreased by 23.1%
to USD975/oz (2017: USD1,268/oz).
- The group’s continuing operations’ all-in sustaining cost per
kilogramme decreased by 5.8% in ZAR terms to R444,946/kg (2017:
R472,359/kg) and, in USD terms, the all-in sustaining cost per
ounce of continuing operations decreased by 11.1% to USD975/oz (2017: USD1,097/oz).
- Financing Elikhulu’s construction resulted in the group’s net
debt increasing to R1,880.3 million (2017: R653.0 million) and in
GBP terms, the net debt increased to GBP102.7 million (2017:GBP39.2 million).
Salient features |
Units |
Movement |
Six
months ended
31 December 2018 |
Six
months ended
31 December 2017 |
Continuing operations gold produced (note 1) |
(Kilogrammes) |
54.2% |
2,520 |
1,634 |
Combined operations gold produced (note 1) |
(Kilogrammes) |
(5.0%) |
2,520 |
2,653 |
Combined operations gold sold |
(Kilogrammes) |
(6.5%) |
2,481 |
2,653 |
Revenue |
(R
million) |
52.8% |
1,383.0 |
904.9 |
Average
gold price received |
(R/kg) |
1.1% |
557,446 |
551,506 |
Cash
costs (note 4) |
(R/kg) |
(14.4%) |
405,216 |
473,187 |
All-in
sustaining costs (note 2) |
(R/kg) |
(18.5%) |
444,946 |
545,908 |
All-in
costs (note 2) |
(R/kg) |
17.9% |
654,470 |
554,890 |
Adjusted EBITDA (note 3) |
(R
million) |
92.3% |
342.5 |
178.1 |
Attributable earnings (combined operations) |
(R
million) |
136.8% |
137.8 |
58.2 |
Attributable earnings (continuing operations) |
(R
million) |
20.9% |
137.8 |
114.0 |
Headline earnings (note 4) |
(R
million) |
118.7% |
137.8 |
63.0 |
EPS |
(cents) |
121.4% |
7.15 |
3.23 |
Headline earnings per share (“HEPS”) (note 4) |
(cents) |
103.7% |
7.15 |
3.51 |
Net
debt (Note 4) |
(R
million) |
187.9% |
1,880.3 |
653.0 |
Total
sustaining capital expenditure |
(R
million) |
(57.5%) |
66.0 |
155.2 |
Total
capital expenditure |
(R
million) |
(15.8%) |
586.7 |
697.0 |
Net
asset value per share (note 4) |
(cents) |
(41.1%) |
114.4 |
194.3 |
Weighted average number of shares in issue |
(million) |
7.2% |
1,928.3 |
1,798.3 |
Average
exchange rate |
(ZAR:USD) |
6.0% |
14.19 |
13.39 |
Closing
exchange rate |
(ZAR:USD) |
16.2% |
14.36 |
12.36 |
Salient features |
Units |
Six
months ended
31 December 2017 |
Six
months ended
31 December 2018 |
Movement |
Continuing operations gold produced (note 1) |
(Oz) |
52,548 |
81,014 |
54.2% |
Combined operations gold produced (note 1) |
(Oz) |
85,282 |
81,014 |
(5.0%) |
Combined operations gold sold |
(Oz) |
85,282 |
79,765 |
(6.5%) |
Revenue |
(GBP
million) |
51.3 |
75.3 |
46.8% |
Average
gold price received |
(USD/oz) |
1,281 |
1,222 |
(4.6%) |
Cash
costs (note 4) |
(USD/oz) |
1,099 |
888 |
(19.2%) |
All-in
sustaining costs (note 2) |
(USD/oz) |
1,268 |
975 |
(23.1%) |
All-in
costs (note 2) |
(USD/oz) |
1,289 |
1,435 |
11.3% |
Adjusted EBITDA (note 3) |
(GBP
million) |
10.2 |
18.7 |
83.3% |
Attributable earnings (combined operations) |
(GBP
million) |
3.3 |
7.5 |
127.3% |
Attributable earnings (continuing operations) |
(GBP
million) |
6.5 |
7.5 |
15.4% |
Headline earnings (note 4) |
(GBP
million) |
3.6 |
7.5 |
108.3% |
EPS |
(pence) |
0.18 |
0.39 |
116.7% |
Headline earnings per share (“HEPS”) (note 4) |
(pence) |
0.20 |
0.39 |
95.0% |
Net
debt (Note 4) |
(GBP
million) |
39.2 |
102.7 |
162.0% |
Total
sustaining capital expenditure |
(GBP
million) |
8.8 |
3.6 |
(59.2%) |
Total
capital expenditure |
(GBP
million) |
39.5 |
32.0 |
(19.0%) |
Net
asset value per share (note 4) |
(pence) |
11.7 |
6.5 |
(44.6%) |
Weighted average number of shares in issue |
(million) |
1,798.3 |
1,928.3 |
7.2% |
Average
exchange rate |
(ZAR:GBP) |
17.65 |
18.36 |
4.0% |
Closing
exchange rate |
(ZAR:GBP) |
16.67 |
18.32 |
9.9% |
Note 1: The continuing mining operations include:
Barberton Mines’ operations and Evander Mines’ operations
(Elikhulu, ETRP and the mining and vamping of the remnant
high-grade stopes as part of the phased closure of the underground
mining operation). The continuing mining operations excludes the
discontinued Evander Mines’ large-scale underground mining
operation, which produced 32,734oz in the corresponding six-month
period ended 31 December 2017
(“corresponding reporting period”). The group’s corresponding
reporting period’s gold production, including discontinued
operations, was 85,282oz.
Note 2: The all-in sustaining cost per kilogramme
and all-in cost per kilogramme excludes derivative fair value
mark-to-market gains/losses relating to the current gold mining
operations. Refer to the alternative performance measure (“APM”)
summary report for the period ended 31 December 2018.Refer to note
16.
Note 3: Adjusted EBITDA is represented by earnings
before interest, taxation, depreciation, and losses from
discontinued operations. Refer to the APM summary report for the
period ended 31 December 2018. Refer
to note 16.
Note 4: Refer to the APM summary report for the
period ended 31 December 2018. Refer
to note 16.
Group safety
The group has significantly improved its safety performance in
the current reporting period. The group’s safety risk has reduced
following the cessation of large-scale underground mining at
Evander Mines and the commissioning of Elikhulu. Pan African
remains committed to and focused on ensuring the safety of all our
employees, while continuing to work towards a zero-harm
environment.
- Fairview Mine reached its one-million fatality free shift
milestone on 15 July 2018.
- The group had no fatalities during the current and
corresponding reporting periods.
- The group’s lost-time injury frequency rate improved
significantly to 1.77 (2017: 4.05) per million man hours.
- The reportable injury frequency rate improved to 0.53 (2017:
0.62) per million man hours.
Elikhulu
- As previously communicated, Elikhulu was successfully
commissioned ahead of schedule and within budget and achieved a
throughput of 1-million tonnes per month during October 2018.
- The incorporation of the existing ETRP throughput capacity of
0.2-million tonnes per month into Elikhulu was completed in
December 2018, which increased
Elikhulu’s processing capacity to 1.2-million tonnes per
month.
- Elikhulu processed 3,534,278 tonnes in the four months from
September 2018 to December 2018 at a recovered grade of 0.135g/t
and with 15,292oz (475.6kg) of gold sold. This does not include
August 2018 pre-production gold
capitalised of 736oz (22.9kg) and gold inventory held in the
circuit.
- Optimisation of the enlarged Elikhulu is continuing, with
throughput of 1.2-million tonnes expected from February 2019.
Barberton Mines and Barberton tailings
retreatment plant
- Barberton Mines produced 50,556oz (2017: 40,611oz) during the
current reporting period, comprising:
- Underground mining operations, which contributed 38,550oz
(2017: 32,159oz); and
- BTRP, which contributed 12,006oz (2017: 8,452oz).
- Barberton Mines produced 100,573oz during the 2018 calendar
year and remains on track to achieve the market guidance of
approximately 100,000oz for the full 2019 financial year.
- Barberton Mines’ period-on-period increase in production
resulted from:
- Increased tonnages and improved recoveries at the BTRP,
following the successful commissioning of the regrind mill during
May 2018; and
- Increased underground mining flexibility at the Fairview Mine
high-grade 272 and 358 platforms.
- Barberton Mines successfully concluded a three-year wage
agreement during September 2018 with
no industrial action.
Evander Mines
- Evander Mines’ continuing operations: surface operations,
together with the mining and vamping of the remnant high-grade
stopes, produced 15,166oz (2017: 11,937oz) and contributed
positively to the group’s adjusted EBITDA during the current
reporting period.
- The feasibility study into the merits of mining the 8 Shaft
pillar and high-grade areas in proximity to the pillar is expected
to be completed by the end of February
2019, after which a decision will be made on whether to
commence mining in these areas.
Mineral resources and mineral
reserves
The group’s mineral resources and mineral reserves, in
compliance with the South African Code for the Reporting of
Exploration Results, Mineral Resources and Mineral Reserves (the
SAMREC Code, 2016 edition), are summarised as follows:
- Gold mineral resources of 331.2Mt at 3.13g/t for 33.3Moz (2017:
337.9Mt at 3.17g/t for 34.4Moz)
Gold mineral
resources |
Tonnes
Mt |
Grade
g/t |
Gold
t |
Gold
Moz |
Barberton hard
rock |
15.3 |
7.49 |
115.0 |
3.7 |
BTRP |
23.3 |
1.08 |
25.1 |
0.8 |
Evander
underground |
82.7 |
10.08 |
834.0 |
26.8 |
Elikhulu and ETRP |
209.7 |
0.29 |
61.3 |
2.0 |
TOTAL |
331.2 |
3.13 |
1
035.5 |
33.3 |
- Gold mineral reserves of 239.1Mt at 1.46g/t for 11.2Moz (2017:
231.8Mt at 1.50g/t for 11.2Moz)
Gold mineral
reserves |
Tonnes
Mt |
Grade
g/t |
Gold
t |
Gold
Moz |
Barberton hard
rock |
8.5 |
5.66 |
48.2 |
1.5 |
BTRP |
12.5 |
1.36 |
16.9 |
0.5 |
Evander
underground |
27.5 |
8.31 |
228.4 |
7.3 |
Elikhulu and ETRP |
190.6 |
0.29 |
54.8 |
1.8 |
TOTAL |
239.1 |
1.46 |
348.4 |
11.2 |
In determining our mineral resources and mineral reserves, a
gold price of R600,000/kg and R525,000/kg was used for resources
and reserves, respectively. All mineral resources and mineral
reserves are reported as in-situ tonnes at an estimated head grade.
Mining losses, plant recovery factors and costs were used in the
calculation of each respective operations cut-off grade. The
mineral resources and mineral reserves are reported in accordance
with the guidelines of the SAMREC Code, 2016 edition.
Mineral reserves and mineral resources related to discontinued
operations have been excluded from the reported Evander Mines’
underground mineral reserves and resources.
There have been no material changes to the group’s mineral
resource and mineral reserve statement since the year ended
30 June 2018, other than the
additional mineral resources and mineral reserves added following
the Royal Sheba drilling campaign which was previously announced on
30 November 2018.
Refer to the annual Mineral Resource and Mineral Reserve Report,
dated 30 June 2018, as published on
our website www.panafricanresources.com for more detail on the
reported mineral resources and mineral reserves.
Near- to medium-term growth
projects
Barberton Mines’ Royal Sheba
project
As previously communicated, the drilling programme on Barberton
Mines’ Royal Sheba prospect has been completed, indicating a
near-surface mineral resource of 0.37Moz (5.85Mt at 1.96g/t) with
900m strike and 150m down-dip extension.
Barberton Mines’ New Consort MMR
project
The group has commenced an extended exploration drilling
programme at Barberton Mines’ mining right at New Consort Mine,
targeting the MMR orebody as a potential satellite deposit for the
Royal Sheba project.
The first phase has been defined as eight holes testing the
orebody on a single 100m by
100m slice. Six drill holes have been
completed to date, with the final two drill holes of phase 1
progressing according to plan.
The assay results from four of the six holes drilled indicates
discrete zones of mineralisation occurring as lenses within a
40m zone in the footwall of the
Consort bar up to the first serpentinite contact.
Further to this zone, the drill holes also intersected another
amphibolite-serpentinite contact around 70m-80m further in
the footwall. Assay results indicate pay shoots of mineralisation
exist near this contact.
Barberton Mines’ sub-vertical shaft
project at Fairview
Shareholders were previously advised that the Fairview mining
operation is restricted by the hoisting capacity of its No 3
Decline, which is used to access workings below 42 Level and the
high-grade 11-block of the MRC. Development of top and bottom
access is nearly complete with shaft development commencing in due
course. Once the shaft is completed over the next two years, it is
expected to improve production by an additional 7,000oz - 10,000oz
of gold per annum.
Evander Mines’ Egoli project (previously called the
2010 Pay Channel project)
Evander Mines’ Egoli project remains an attractive growth
project, and the group is currently reviewing and assessing options
to advance this project.
Outlook
Key focus areas for the 2019 financial year include:
- continuing to improve our safety performance, and
environmental, social and governance compliance across all
operations;
- delivering on our gold production guidance of approximately
170,000oz;
- ensuring Elikhulu delivers to expectations and fully
incorporating ETRP’s throughput into Elikhulu’s processing
capacity;
- strengthening of the group’s financial position by reducing
debt to allow for improved funding flexibility and increased
capacity; and
- focussing on advancing value accretive growth opportunities
such as:
- Royal Sheba project;
- Evander Mines’ 8 Shaft pillar project;
- Evander Mines’ Egoli project; and
- Barberton Mines’ sub-vertical shaft.
The group continues to evaluate acquisition opportunities,
particularly in other African jurisdictions, in accordance with its
rigorous capital allocation criteria.
FINANCIAL PERFORMANCE
Exchange rates and their impact on
results
All group subsidiaries are incorporated in South Africa and their functional currency is
ZAR. The group’s business is conducted in ZAR and the accounting
records are maintained in this same currency, with the exception of
precious metal product sales, which are conducted in USD prior to
conversion into ZAR. The ongoing review of the operational results
by executive management and the board is also performed in ZAR.
The group’s presentation currency is GBP due to its ultimate
holding company, Pan African, being incorporated in England and Wales and being dual-listed in the
United Kingdom (“UK”) and
South Africa. The group’s
presentation currency is expected to change to USD from GBP for the
30 June 2019 financial results.
During the current reporting period, the average ZAR:GBP
exchange rate was R18.36:1 (2017: R17.65:1) and the closing ZAR:GBP
exchange rate was R18.32:1 (2017: R16.67:1). The period-on-period
change in the average and closing exchange rates of 4.0% and 9.9%,
respectively, must be taken into account for the purposes of
translating and comparing period-on-period results.
The group records its revenue from precious metals sales in ZAR.
The depreciation in the value of the ZAR:USD exchange rate during
the current reporting period positively impacted the USD revenue
received when translated into ZAR. In the current reporting period,
the average ZAR:USD exchange rate depreciated by 6.0% to R14.19:1
(2017: R13.39:1), while the USD gold price received decreased by
4.6% to USD1,222/oz (2017:
USD1,281/oz).
The commentary below analyses the current and corresponding
reporting periods’ results. Key aspects of the group’s ZAR results
appear in the body of this commentary and have been used as the
basis against which its financial performance is measured. The
gross GBP equivalent figures can be calculated by applying the
exchange rates, as detailed above.
Analysing the group’s financial
performance
Discontinued operations
As a result of the sale of Phoenix Platinum Mining Proprietary
Limited (“Phoenix Platinum”) on 6 November
2017, and the cessation of the large-scale underground
mining operations at Evander Mines on 31 May
2018, the corresponding reporting period’s figures have been
restated in accordance with International Financial Reporting
Standards (“IFRS”) 5 Non-current assets held for sale and
discontinued operations. The loss from discontinued operations
in the corresponding reporting period has been separately disclosed
as a line item in the condensed consolidated statement of profit or
loss and other comprehensive income.
Revenue
The group’s total revenue from continuing operations,
period-on-period, increased in ZAR terms by 52.8% to R1,383.0
million (2017: R904.9 million), and in GBP terms increased by 46.8%
to GBP75.3 million (2017:
GBP51.3 million).
Group revenue was mainly impacted by:
- Gold sold from continuing mining operations increased by 51.8%
to 79,765oz (2017: 52,548oz); and
- The average ZAR gold price received increasing by 1.1% to
R557,446/kg (2017: R551,506/kg).
Cost of production
Pan African’s cost of production for continuing operations
increased by 47.1% to R994.9 million (2017: R676.3 million),
primarily impacted by:
- Barberton Mines’ cost of production increasing by 10.1% to
R621.3 million (2017: R564.1 million), largely due to:
- Salary and wages increasing by 7.9% to R288.8 million (2017:
R267.7 million), with the increase attributed to:
- The signing of a three-year wage agreement, with annual
increases over the period of approximately 6.5% and 5.5% for
National Union of Mines Workers and United Association of
South Africa members,
respectively.
- Improved production performances also resulted in mining
operations production incentives increasing period-on-period.
- Electricity costs increasing by 14.1% to R72.2 million (2017:
R63.3 million). Barberton Mines’ electricity costs, excluding the
BTRP, increased by 5.6%, in line with the National Energy Regulator
of South Africa’s average national increase of 5.3% from
1 April 2018. The BTRP’s electricity
costs increased to R13.6 million (2017: R7.8 million) due to
additional electricity consumed following the installation of the
operation’s new regrind mill.
- Mining and processing costs increased by 19.3% to R174.8
million (2017: R146.5 million). The above-inflation increase was
driven primarily by the increased tonnes mined period-on-period:
- The mining operations’ tonnes milled increased by 12.3% to
140,329t (2017: 124,969t); and
- BTRP tonnes processed increased by 23.6% to 567,109t (2017:
458,779t).
- Engineering and technical costs decreased by 6.7% to R43.4
million (2017: R46.5 million), following a reduction in secondary
support costs period-on-period and other cost saving
initiatives.
- Security costs increased materially by 88.1% to R33.1 million
(2017: R17.6 million), with an increased focus on addressing
illegal mining activities and once-off costs incurred during
instances of community unrest.
- Evander Mines’ cost of production increased to R373.6 million
(2017: R112.2 million), mainly due to:
- Elikhulu’s processing costs of R113.4 million during the four
months from 1 September 2018 to
31 December 2018. Elikhulu’s cash
cost per kilogramme during the period was R239,639/kg or
USD517/oz.
- ETRP and surface-source operations costs decreased to R46.1
million (2017: R112.2 million) mainly due to a reduction in surface
feedstock tonnages to 67,832t (2017: 184,161t).
- Remnant mining and vamping of remaining high-grade stopes was
R214.1 million (2017: nil).
Realisation costs
Group realisation costs decreased to R10.4 million (2017: R25.1
million), largely due to the depletion of available gold recovery
projects previously undertaken in the Evander Mines’ Kinross metallurgical plant.
Depreciation costs
Depreciation from continuing operations increased to R97.1
million (2017: R45.1 million). The group incurred an additional
R41.3 million in depreciation, following the commissioning of
Elikhulu on 1 September 2018. The
depreciation charge is calculated based on the available units of
production (tonnes milled and processed) over the life of the
mining operation.
Other expenditure and finance
income/costs
Other expenditure increased to R28.5 million (2017: R22.1
million). In the current reporting period, the group recorded lower
mark-to-market fair-value gains of R8.9 million (2017: R19.4
million) on financial derivatives entered into as part of a gold
price hedging programme.
Finance costs increased to R80.9 million (2017: R14.3 million),
due to an increase in net debt as a result of the construction
spend on Elikhulu.
Taxation
The group’s taxation charge increased to R33.0 million (2017:
R12.1 million), due to an increase in the group’s profitability and
comprised of:
- an increase in the current taxation charge to R25.2 million
(2017: R1.8 million); and
- a decrease in deferred taxation to R7.8 million (2017: R10.3
million).
EPS and HEPS
The group’s combined EPS in ZAR increased by 121.4% to
7.15 cents (2017: 3.23 cents), while in GBP terms, EPS increased by
116.7% to 0.39 pence per share (2017:
0.18 pence per share).
The group’s combined HEPS in ZAR increased by 103.7% to
7.15 cents (2017: 3.51 cents), while in GBP terms, HEPS increased
by 95.0% to 0.39 pence per share
(2017: 0.20 pence per share).
The group’s continuing EPS and HEPS in ZAR increased by 12.8% to
7.15 cents (2017: 6.34 cents), while in GBP terms, continuing EPS
and HEPS increased by 8.3% to 0.39
pence per share (2017: 0.36
pence per share).
For further details refer to the reconciliation between basic
earnings and headlines earnings in the APM summary report. Refer to
note 16.
Net debt and cash flows
The group’s net debt increased to R1,880.3 million (2017: R653.0
million), comprised of:
- Total debt facilities utilised at 31
December 2018 of R1,815.4 million (2017: R771.7
million);
- Gold prepayments of R115.0 million (2017: nil); and
- Cash and cash equivalents of R50.1 million (2017: R118.7
million).
Refer to a detailed summary of the group’s net debt in the APM
summary report. Refer to note 16.
Cash generated by operations after dividends increased to R316.6
million (2017: R22.2 million after dividends), due to an improved
production performance from Barberton Mines and the maiden
production contribution from Elikhulu, which resulted in additional
operational cash flows being generated. In the corresponding
reporting period, the group paid a net dividend of R148.9
million.
The cash outflows from investing activities decreased to R574.1
million (2017: R634.2 million), predominantly due to:
- Capital expenditure
incurred on Elikhulu decreasing to R494.8 million (2017: R511.7
million);
- Capital expenditure
incurred on operations reducing to R91.8 million (2017: R185.3
million), following the cessation of Evander Mines’ underground
mining operation; and
- Cash received from the
sale of Phoenix Platinum of R89.0 million in the corresponding
reporting period.
Net cash inflows from financing activities decreased to R295.0
million (2017: R570.5 million), largely due to a lower utilisation
of the debt facilities to fund the construction of Elikhulu.
Senior debt restructure
The group’s existing revolving credit facility which terminates
in June 2020, is being restructured
with an extended repayment profile to 2022. Under the restructured
revolving credit facility, the available commitment will reduce
over time as follows:
- Up to 15 June 2020: R1
billion
- 15 June 2020: R750 million
- 15 December 2020: R725
million
- 15 June 2021: R700 million
- 15 September 2021: R650
million
- 15 December 2021: R600
million
- 15 March 2022: R550 million
- 15 June 2022: R500 million
Pan African has received credit approval from its lead bank,
First Rand Bank Limited, for the implementation of the restructured
revolving credit facility, which should be effective from
30 June 2019. The facility of R1
billion, used to fund a portion of the construction costs of the
Elikhulu project continues to amortise consistent with its original
redemption profile.
DIRECTORSHIP CHANGES AND DEALINGS
No directorship changes took place during the period under
review.
The following director dealings in securities took place:
Mr JAJ Loots entered into the following contract for difference
derivatives (“CFDs”):
- On 20 September 2018, entered
into a CFD for 64,280 shares at average of 8.25 pence per share.
- On 21 September 2018, entered
into a CFD for 50,000 shares at average of 8.50 pence per share.
Mr JAJ Loots held 668,675 shares and 514,280 CFDs at period end,
representing approximately 0.05% of the total issued shares.
Mr KC Spencer transferred 3,000,000 shares at R1.75 per share in
an off-market transaction from the Strode Trust into his personal
capacity on 17 October 2018.
Following this transaction, Mr KC Spencer held 3,000,000 shares at
period end, representing approximately 0.13% of the total issued
shares.
JSE LIMITED LISTING
The company has a dual primary listing on the main board of the
JSE Limited (“JSE”) and the Alternative Investment Market (“AIM”)
of the London Stock Exchange.
The group interim results have been prepared and presented in
accordance with, and containing the information required by IAS 34
Interim Financial Reporting, as well as the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee
and Financial Pronouncements as issued by Financial Reporting
Standards Council.
AIM LISTING
The financial information for the period ended 31 December 2018 does not constitute statutory
accounts as defined in sections 435 (1) and (2) of the Companies
Act 2006.
The group’s announcement has been prepared in accordance with
IFRS and International Financial Reporting Interpretation Committee
interpretations adopted for use by the European Union, with those
parts of the Companies Act 2006 applicable to companies reporting
under IFRS.
FORWARD-LOOKING INFORMATION
Any forward-looking information
contained in this report is the sole responsibility of the
directors and has not been reviewed or reported on by the group’s
external auditor.
Cobus Loots |
Deon Louw |
Chief Executive Officer |
Financial Director |
20 February 2019
CONDENSED
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the six months
ended 31 December 2018
Contents |
|
|
|
|
Page |
Primary
Statements |
|
|
|
|
|
1. |
Condensed
consolidated statement of financial position |
10 |
2. |
Condensed
consolidated statement of profit or loss and other comprehensive
income |
11 |
3. |
Condensed
consolidated statement of changes in equity |
12 |
4. |
Condensed
consolidated statement of cash flows |
12 |
|
|
|
Notes
to the condensed consolidated interim financial statements |
|
|
|
|
|
1. |
Basis of
preparation of the financial statements and accounting
policies |
13 |
2. |
Critical
accounting judgements and key sources of estimation
uncertainty |
14 |
3. |
Segmental
reporting |
15 |
4. |
Net
finance (expenses)/income |
18 |
5. |
Taxation |
18 |
6. |
Financial
instruments |
19 |
7. |
Borrowings
and financial covenants |
20 |
8. |
Capital
expenditure |
21 |
9. |
Share
capital |
21 |
10. |
Disposals
and acquisitions |
21 |
11. |
Commitments and contingent liabilities |
21 |
12. |
Related
party transactions |
21 |
13. |
Going
concern |
22 |
14. |
Events
after the reporting period |
22 |
15. |
Correction
of prior period errors |
22 |
16. |
Alternative performance measures summary |
23 |
|
|
|
|
|
1. |
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2018 |
|
|
|
Unaudited |
Unaudited |
Audited |
Unaudited |
Unaudited |
Unaudited |
|
|
31 December 2018 |
31 December 2017 |
30
June
2018 |
31 December 2018 |
31 December 2017 |
30
June
2018 |
|
|
GBP
million |
GBP
million |
GBP
million |
R
million |
R
million |
R
million |
ASSETS |
|
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
|
|
Property, plant and
equipment and mineral rights |
|
217.1 |
263.7 |
192.8 |
3,977.2 |
4,396.0 |
3,488.3 |
Goodwill |
|
21.0 |
21.0 |
21.0 |
303.5 |
303.5 |
303.5 |
Other intangible
assets |
|
- |
0.1 |
- |
0.6 |
1.8 |
0.6 |
Deferred taxation |
|
5.1 |
0.5 |
6.2 |
93.0 |
7.7 |
112.3 |
Long-term
inventory |
|
0.6 |
0.7 |
0.6 |
10.3 |
11.6 |
10.3 |
Long-term
receivables |
|
1.3 |
2.6 |
1.3 |
23.4 |
42.8 |
24.0 |
Investments |
|
6.8 |
5.5 |
3.1 |
124.3 |
91.5 |
56.7 |
Rehabilitation
funds |
|
20.2 |
21.4 |
20.1 |
369.8 |
357.5 |
364.3 |
|
|
272.1 |
315.5 |
245.1 |
4,902.1 |
5,212.4 |
4,360.0 |
Current
assets |
|
|
|
|
|
|
|
Inventories |
|
4.1 |
4.0 |
2.7 |
74.7 |
66.0 |
48.9 |
Current taxation
asset |
|
0.5 |
0.8 |
0.7 |
9.3 |
13.5 |
12.5 |
Trade and other
receivables |
|
11.9 |
14.7 |
14.8 |
218.1 |
244.7 |
268.6 |
Current portion of
long-term receivables |
|
1.0 |
- |
0.9 |
19.1 |
- |
17.2 |
Financial instruments
assets |
|
- |
0.3 |
0.2 |
- |
5.8 |
4.0 |
Cash and cash
equivalents |
|
2.7 |
7.1 |
0.7 |
50.1 |
118.7 |
12.6 |
|
|
20.2 |
26.9 |
20.0 |
371.3 |
448.7 |
363.8 |
TOTAL
ASSETS |
|
292.3 |
342.4 |
265.1 |
5,273.4 |
5,661.1 |
4,723.8 |
|
|
|
|
|
|
|
|
EQUITY AND
LIABILITIES |
|
|
|
|
|
|
|
Capital and
reserves |
|
|
|
|
|
|
|
Share capital |
|
22.3 |
22.3 |
22.3 |
318.8 |
318.8 |
318.8 |
Share premium |
|
144.6 |
145.4 |
144.6 |
2,247.4 |
2,261.4 |
2,247.4 |
Translation
reserve |
|
(44.1) |
(34.2) |
(42.8) |
- |
- |
- |
Share option
reserve |
|
1.7 |
1.2 |
1.6 |
24.6 |
17.2 |
24.6 |
Retained earnings |
|
37.5 |
126.6 |
30.0 |
299.2 |
1,776.4 |
161.4 |
Realisation of equity
reserve |
|
(10.7) |
(10.7) |
(10.7) |
(140.6) |
(140.6) |
(140.6) |
Treasury capital
reserve |
|
(15.6) |
(25.4) |
(15.6) |
(385.2) |
(548.6) |
(385.2) |
Merger reserve |
|
(10.7) |
(10.7) |
(10.7) |
(154.7) |
(154.7) |
(154.7) |
Other reserves |
|
(0.1) |
(2.2) |
(3.0) |
(2.5) |
(36.1) |
(55.0) |
Equity attributable to
owners of the parent |
|
124.9 |
212.3 |
115.7 |
2,207.0 |
3,493.8 |
2,016.7 |
Total equity |
|
124.9 |
212.3 |
115.7 |
2,207.0 |
3,493.8 |
2,016.7 |
|
|
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
|
|
Long-term
provisions |
|
13.5 |
11.9 |
15.1 |
248.2 |
198.1 |
273.4 |
Long-term
liabilities |
|
90.5 |
43.7 |
86.5 |
1,657.6 |
729.1 |
1,565.0 |
Deferred taxation |
|
14.4 |
40.3 |
14.3 |
263.0 |
671.1 |
259.5 |
|
|
118.4 |
95.9 |
115.9 |
2,168.8 |
1,598.3 |
2,097.9 |
Current
liabilities |
|
|
|
|
|
|
|
Trade and other
payables |
|
31.5 |
27.7 |
27.7 |
577.3 |
460.2 |
505.2 |
Financial instruments
liability |
|
0.1 |
- |
- |
1.7 |
- |
- |
Current portion of
long-term liabilities |
|
16.7 |
5.6 |
5.2 |
305.3 |
93.3 |
93.5 |
Current taxation
liability |
|
0.7 |
0.9 |
0.6 |
13.3 |
15.5 |
10.5 |
|
|
49.0 |
34.2 |
33.5 |
897.6 |
569.0 |
609.2 |
TOTAL EQUITY AND
LIABILITIES |
|
292.3 |
342.4 |
265.1 |
5,273.4 |
5,661.1 |
4,723.8 |
2. |
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2018 |
|
|
|
|
|
|
|
Unaudited
six months ended
31 December 2018 |
Unaudited and restated
(note 1)
six months ended
31 December 2017 |
Unaudited
six months ended
31 December 2018 |
Unaudited and restated
(note 1)
six months ended
31 December 2017 |
Continuing
operations |
GBP
million |
GBP
million |
R
million |
R
million |
Revenue |
75.3 |
51.3 |
1,383.0 |
904.9 |
Gold sales |
75.3 |
51.3 |
1,383.0 |
904.9 |
Realisation costs |
(0.6) |
(1.4) |
(10.4) |
(25.1) |
Net
revenue |
74.7 |
49.9 |
1,372.6 |
879.8 |
Gold cost of
production |
(54.2) |
(38.3) |
(994.9) |
(676.3) |
Mining
depreciation |
(5.3) |
(2.6) |
(97.1) |
(45.1) |
Mining
profit |
15.2 |
9.0 |
280.6 |
158.4 |
Other expenses |
(1.4) |
(1.2) |
(28.5) |
(22.1) |
Royalty costs |
(0.4) |
(0.2) |
(6.7) |
(3.3) |
Net income before
finance income and finance costs |
13.4 |
7.6 |
245.4 |
133.0 |
Finance income |
0.3 |
0.4 |
6.3 |
7.4 |
Finance costs |
(4.4) |
(0.8) |
(80.9) |
(14.3) |
Profit before
taxation |
9.3 |
7.2 |
170.8 |
126.1 |
Taxation |
(1.8) |
(0.7) |
(33.0) |
(12.1) |
Profit after
taxation - continuing operations |
7.5 |
6.5 |
137.8 |
114.0 |
Loss from discontinued
operations |
- |
(3.2) |
- |
(55.8) |
Profit after
taxation |
7.5 |
3.3 |
137.8 |
58.2 |
|
|
|
|
|
Other comprehensive
income: |
|
|
|
|
Fair value movement
investment measured at fair value through other comprehensive
income |
3.7 |
(2.2) |
67.6 |
(36.1) |
Taxation on investment
measured at fair value through other comprehensive income |
(0.8) |
- |
(15.1) |
- |
Foreign currency
translation differences |
(1.2) |
2.7 |
- |
- |
Total comprehensive
income for the year |
9.2 |
3.8 |
190.3 |
22.1 |
Profit attributable
to: |
|
|
|
|
Owners of the
parent |
7.5 |
3.3 |
137.8 |
58.2 |
|
|
|
|
|
Total comprehensive
income attributable to: |
|
|
|
|
Owners of the
parent |
9.2 |
3.8 |
190.3 |
22.1 |
|
pence |
pence |
cents |
cents |
Earnings per
share |
0.39 |
0.18 |
7.15 |
3.23 |
Diluted earnings per
share |
0.39 |
0.18 |
7.15 |
3.23 |
Earnings per share -
continuing operations |
0.39 |
0.36 |
7.15 |
6.34 |
Diluted earnings per
share - continuing operations |
0.39 |
0.36 |
7.15 |
6.33 |
Weighted average
number of shares in issue |
1,928.3 |
1,798.3 |
1,928.3 |
1,798.3 |
Diluted number of
shares in issue |
1,928.3 |
1,798.9 |
1,928.3 |
1,798.9 |
|
|
|
|
|
Note
1: The corresponding reporting period's figures have been
restated in accordance with IFRS 5. |
3. |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2018 |
|
|
|
|
|
|
Unaudited
six months ended
31 December 2018 |
Unaudited
six months ended
31 December 2017 |
Unaudited
six months ended
31 December 2018 |
Unaudited
six months ended
31 December 2017 |
|
GBP million |
GBP million |
R million |
R million |
Shareholder's equity
at the beginning of the period |
115.7 |
216.6 |
2,016.7 |
3,620.5 |
Other comprehensive
income |
1.7 |
0.4 |
52.5 |
(36.1) |
Profit for the
period |
7.5 |
3.3 |
137.8 |
58.2 |
Dividends paid |
- |
(10.0) |
- |
(185.0) |
Reciprocal dividend -
PAR Gold Proprietary Limited (“PAR Gold”) |
- |
2.0 |
- |
36.2 |
Total
equity |
124.9 |
212.3 |
2,207.0 |
3,493.8 |
4. |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2018 |
|
|
|
|
|
|
Unaudited
six months ended
31 December 2018 |
Unaudited and restated
(note 1)
six months ended
31 December 2017 |
Unaudited
six months ended
31 December 2018 |
Unaudited and restated
(note 1)
six months ended
31 December 2017 |
|
GBP
million |
GBP
million |
R
million |
R
million |
Net cash generated
by operations after taxation, royalty and finance cost and before
dividends |
17.0 |
8.5 |
316.6 |
171.1 |
Dividends paid |
- |
(10.2) |
- |
(185.0) |
Reciprocal dividend -
PAR Gold |
- |
2.1 |
- |
36.1 |
Cash inflow from
operating activities |
17.0 |
0.4 |
316.6 |
22.2 |
Cash outflow from
investing activities |
(31.3) |
(36.2) |
(574.1) |
(634.2) |
Cash inflow from
financing activities |
16.4 |
32.7 |
295.0 |
570.5 |
Net
increase/(decrease) in cash equivalents |
2.1 |
(3.1) |
37.5 |
(41.5) |
Cash at the beginning
of period |
0.7 |
9.4 |
12.6 |
160.2 |
Effect of foreign
currency rate changes |
(0.1) |
0.8 |
- |
- |
Cash and cash
equivalents at end of period |
2.7 |
7.1 |
50.1 |
118.7 |
|
|
|
|
|
|
Note 1: Relates to the correction of a prior period
error, addressing the reclassification of the payment of cash
settled share options from financing activities to operating
activities. Refer to note 15.
1. BASIS OF PREPARATION OF THE
FINANCIAL STATEMENTS AND ACCOUNTING POLICIES
The accounting policies applied in compiling the condensed
consolidated interim financial statements are in accordance with
IFRS adopted by the European Union and South Africa, which are consistent with those
applied in preparing the group’s annual financial statements for
the year ended 30 June 2018.
The financial information set out in this announcement does not
constitute the company’s statutory accounts for the period ended
31 December 2018.
The interim results have been prepared and presented in
accordance with, and containing the information required by IAS
34, as well as the SAICA Financial Reporting Guides as
issued by the Accounting Practices Committee and Financial
Pronouncements as issued by Financial Reporting Standards
Council.
The interim results have not been reviewed or reported on by the
group’s external auditor.
Adoption of new accounting
standards
IFRS 15 Revenue from contracts with
customers
The group has adopted IFRS 15 as of 1
July 2018. The implementation of IFRS 15 has not had any
impact on revenue recognition (timing or quantum) for the sale of
gold by the group.
The standard describes a five step approach for the recognition
of revenue:
- Identify the contract(s) with a customer.
- Identify the performance obligations in the contract.
- Determine the transaction price.
- Allocate the transaction price to the performance obligations
in the contract(s).
- Recognise revenue when (or as) the entity satisfies a
performance obligation.
The group’s only revenue is from the sale of gold, which is a
commodity product and is priced relative to quoted benchmarks.
Sales contracts contain a single obligation to deliver gold at
which time title and risk pass to the purchaser. The quantum and
price of gold ounces traded is agreed upfront between parties.
Sales contracts have a single performance obligation. The price
is based on observable market inputs which are clearly defined
within the contract.
IFRS 9 Financial
instruments
The group has adopted IFRS 9 as of 1 July
2018. The requirements of IFRS 9 represents a change from
IAS 39 Financial instruments: recognition and measurement.
The impact of the change in accounting policy is disclosed
below.
IFRS 9 contains three principal classification categories for
financial instruments: measured at amortised cost, fair value
through other comprehensive income (“FVOCI”) and fair value through
profit and loss (“FVTPL”). The standard eliminates the previous IAS
39 categories of held to maturity, loans and receivables and
available for sale. Refer to the table below for a summary of the
classification changes upon the transition to IFRS 9.
IFRS 9 replaces the “incurred loss model” in IAS 39 with an
“expected loss” model. The new impairment model applies to
financial assets measured at amortised cost and financial assets
measured at FVOCI. Under IFRS 9 credit losses are recognised
earlier than IAS 39. An assessment was performed to determine the
expected credit loss of financial assets. The group has recognised
expected credit losses of R1 million (GBP0.1
million) (2017: nil) in the current reporting period.
IFRS 9 indicates a revised approach to hedge accounting, however
this has not impacted the group as the group does not apply hedge
accounting.
The following table shows the original measurement categories
under IAS 39 and the new measurement categories under IFRS 9 for
each class of the group’s financial assets and liabilities at
31 December 2018.
|
New
classification |
Original classification |
under IFRS 9 |
under IAS 39 |
Financial
assets |
|
|
Cash and cash
equivalents |
Measured
at amortised cost |
Loans
and receivables |
Long-term
receivables |
Measured
at amortised cost |
Loans
and receivables |
Current portion of
long-term receivables |
Measured
at amortised cost |
Loans
and receivables |
Trade receivables |
Measured
at amortised cost |
Loans
and receivables |
Investment |
Measured
at FVTOCI |
Available-for-sale |
Rehabilitation
funds |
Measured
at FVTPL |
Measured
at FVTPL |
Financial instruments
asset |
Measured
at FVTPL |
Measured
at FVTPL |
|
|
|
Financial
liabilities |
|
|
Trade and other
payables |
Measured
at amortised cost |
Measured
at amortised cost |
Revolving credit
facility |
Measured
at amortised cost |
Measured
at amortised cost |
Term loan
facility |
Measured
at amortised cost |
Measured
at amortised cost |
Employee share
ownership plan ("ESOP") liability |
Measured
at FVTPL |
Measured
at FVTPL |
Financial instruments
liability |
Measured
at FVTPL |
Measured
at FVTPL |
Cash settled share
options liability |
Measured
at FVTPL |
Measured
at FVTPL |
Accounting standards issued but not
yet effective
IFRS 16 Leases
The new standard will replace IAS 17 Leases and
eliminates the classification of leases as either operating leases
or finance leases by the lessee. IFRS 16 is effective for the group
for the year ended 30 June 2020.
Classification of leases by the lessor under IFRS 16 continues as
either an operating or finance lease, as was the treatment under
IAS 17. Lease arrangements will give rise to the recognition by the
lessee of an asset, representing the right to use the leased item,
and a related liability for future lease payments. Lease costs will
be recognised in the statement of profit and loss in the form of
depreciation of the right-of-use asset over the lease term, and
finance charges which represents the unwinding of the discount on
the lease liability.
Management has reviewed service contracts within the group and
are currently evaluating the accounting impacts of applying the new
standard.
It is expected that the adoption of IFRS 16 will result in an
increase in lease liabilities representing the present value of
future payments under arrangements currently classified as
operating leases, along with a corresponding increase in property,
plant and equipment for the right-of-use asset, together with an
increase in depreciation and finance costs.
2. CRITICAL ACCOUNTING JUDGEMENTS AND
KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the group’s accounting policies, the
directors are required to make certain judgements, estimates and
assumptions that are not readily apparent from other sources that
may materially affect the carrying amounts of assets and
liabilities, the reported revenue and expense during the reported
period and the related disclosures. The estimates and judgements
are based on historical experience, current and expected future
economic conditions and other factors. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
Critical accounting judgements in
applying the group’s accounting policies
The following are the critical judgement areas, apart from those
involving estimations, that the directors have made in the process
of applying the group’s accounting policies and that have the most
significant effect on the amounts recognised in the condensed
consolidated interim financial statements.
Due to the cessation of mining at Evander Mines’ large-scale
underground operations, which includes 8 Shaft, 7 Shaft and the
run-of-mine circuit in the Kinross
metallurgical plant on 31 May 2018,
the financial results for the six months ended 31 December 2017 from the Evander Mines’
large-scale underground operations were classified as a
discontinued operation. Judgement was required to determine the
allocation of the financial results between Evander Mines’
continuing and discontinuing operations.
Management has performed an assessment to ensure that the
Evander Mines’ large-scale underground operations meets the
requirements to be classified as a discontinued operation and the
financial results have been appropriately allocated for the six
months ended 31 December 2017.
- Elikhulu capitalisation date
Given the nature of Elikhulu, a key area of judgement was the
date of commissioning which required determination of when Elikhulu
was in the location and condition for it to be operating in the
manner intended by management.
Pan African Resources has applied a guiding principle that once
the plant achieves commercial production, it is operating in the
manner as intended by management. At the beginning of the month in
which the project achieved commercial production, the various
assets, by major component, are recorded in the fixed asset
register and are subject to depreciation over their respective
useful lives.
Commercial production is assumed when management can demonstrate
that the plant is able to materially achieve the technical design
parameters established by the feasibility study and it is probable
that future economic benefits will be generated by the plant.
Commercial production was achieved during the month of
September 2018 and thus the
commissioning date of Elikhulu was 1
September 2018. Refer to note 8 for amounts capitalised to
Elikhulu in the current period. In total R1.93 billion
(GBP105.1 million) has been
capitalised to the project since construction commenced.
Other significant sources of
estimation uncertainty
The following are areas of significant estimation:
- Rehabilitation and decommissioning provision:
At each reporting date the group estimates the rehabilitation
and decommissioning provision. A change in estimate will impact the
carrying amount of the liability and corresponding decommissioning
asset. There is judgement in the input assumptions used in
determining the estimated rehabilitation and decommissioning
provision. Inputs used which require judgement include:
- closure costs which are determined in accordance with
regulatory requirements,
- inflation rate, which has been adjusted for a long-term
view, and
- risk-free rate, which is compounded annually and linked
to the life-of-mine.
- Assessing the recoverable amount associated with long-lived
assets
- Mining operations require significant technical and financial
resources to operate. Their value may be sensitive to a range of
characteristics unique to each asset and key sources of estimation
uncertainty which include ore reserve estimates and cash flow
projections.
3. SEGMENTAL REPORTING
A segment is a distinguishable component of the group engaged in
providing products or services in a particular business sector or
segment, which is subject to risks and rewards different from those
of other segments. The group's business activities were conducted
through the following business segments:
Continuing operations
- Barberton Mines (including BTRP), located in Barberton,
South Africa;
- Evander Mines (Elikhulu, ETRP and the mining and vamping of the
remnant high-grade stopes as part of the phased closure
of the underground mining operation), located in Evander,
South Africa;
- Corporate, located in Johannesburg,
South Africa; and
- Pan African Resources Funding Company Proprietary Limited
(“Funding Company”), located in Johannesburg, South Africa.
Discontinued operations
- Phoenix Platinum, located near Rustenburg, South Africa; and
- Evander Mines’ underground operations (including 8 Shaft, 7
Shaft and the run-of-mine circuit in the Kinross Metallurgical
plant), located in Evander, South
Africa.
The executive committee, which is considered the chief operating
decision maker, reviews the operations in accordance with the
disclosures presented above.
CONSOLIDATED UNAUDITED SEGMENT REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2018 |
|
Six months ended
31 December 2018 |
|
Continuing operations |
|
|
Barberton Mines |
Evander Mines
(note 3) |
Corporate |
Funding Company |
Group |
|
GBP
million |
GBP
million |
GBP
million |
GBP
million |
GBP
million |
|
|
|
|
|
|
Revenue |
|
|
|
|
|
Gold sales (note
1) |
46.5 |
28.8 |
- |
- |
75.3 |
Platinum sales |
- |
- |
- |
- |
- |
Realisation costs |
(0.2) |
(0.4) |
- |
- |
(0.6) |
Net
revenue |
46.3 |
28.4 |
- |
- |
74.7 |
Gold cost of
production |
(33.8) |
(20.4) |
- |
- |
(54.2) |
Platinum cost of
production |
- |
- |
- |
- |
- |
Mining
depreciation |
(2.8) |
(2.5) |
- |
- |
(5.3) |
Mining
profit |
9.7 |
5.5 |
- |
- |
15.2 |
Other
(expenses)/income (note 2) |
(0.3) |
1.3 |
(2.4) |
- |
(1.4) |
Adjustment on sale of
asset held for sale |
- |
- |
- |
- |
- |
Royalty costs |
(0.2) |
(0.2) |
- |
- |
(0.4) |
Net income / (loss)
before finance income and finance costs |
9.2 |
6.6 |
(2.4) |
- |
13.4 |
Finance income |
- |
0.1 |
0.1 |
0.1 |
0.3 |
Finance costs |
- |
0.2 |
- |
(4.6) |
(4.4) |
Profit /(loss)
before taxation |
9.2 |
6.9 |
(2.3) |
(4.5) |
9.3 |
Taxation |
(1.5) |
- |
(0.3) |
- |
(1.8) |
Profit /(loss)
after taxation before inter-company charges |
7.7 |
6.9 |
(2.6) |
(4.5) |
7.5 |
Loss after taxation
from discontinued operations |
- |
- |
- |
- |
- |
Profit /(loss)
after taxation before inter-company charges |
7.7 |
6.9 |
(2.6) |
(4.5) |
7.5 |
|
|
|
|
|
|
Inter-company
transactions |
|
|
|
|
|
Management fees |
(0.9) |
(0.7) |
1.7 |
(0.1) |
- |
Inter-company interest
charges |
0.1 |
(4.6) |
(0.2) |
4.7 |
- |
Profit /(loss)
after taxation after inter-company charges |
6.9 |
1.6 |
(1.1) |
0.1 |
7.5 |
Segmental assets
(total assets excluding goodwill) |
78.4 |
179.9 |
10.4 |
2.6 |
271.3 |
Segmental
liabilities |
30.3 |
36.3 |
1.7 |
99.1 |
167.4 |
Goodwill |
21.0 |
- |
- |
- |
21.0 |
Net assets
(excluding goodwill) (note 5) |
48.1 |
143.6 |
8.7 |
(96.5) |
103.9 |
Capital expenditure
(note 6) |
5.0 |
27.0 |
- |
- |
32.0 |
|
|
|
|
|
|
Adjusted EBITDA
(note 7) |
12.0 |
9.1 |
(2.4) |
- |
18.7 |
|
Six months ended
31 December 2017 |
|
Continuing operations |
|
Barberton Mines |
Evander Mines (Continuing operations) (note 3) |
Corporate |
Funding Company |
|
GBP
million |
GBP
million |
GBP
million |
GBP
million |
|
|
|
|
|
Revenue |
|
|
|
|
Gold sales (note
1) |
39.7 |
11.6 |
- |
- |
Platinum sales |
- |
- |
- |
- |
Realisation costs |
(0.2) |
(1.2) |
- |
- |
Net
revenue |
39.5 |
10.4 |
- |
- |
Gold cost of
production |
(32.0) |
(6.3) |
- |
- |
Platinum cost of
production |
- |
- |
- |
- |
Mining
depreciation |
(2.2) |
(0.4) |
- |
- |
Mining
profit |
5.3 |
3.7 |
- |
- |
Other
(expenses)/income (note 2) |
(0.4) |
0.7 |
(1.5) |
- |
Adjustment on sale of
asset held for sale |
- |
- |
- |
- |
Royalty costs |
(0.2) |
- |
- |
- |
Net income / (loss)
before finance income and finance costs |
4.7 |
4.4 |
(1.5) |
- |
Finance income |
0.1 |
0.1 |
0.2 |
- |
Finance costs |
- |
- |
- |
(0.8) |
Profit /(loss)
before taxation |
4.8 |
4.5 |
(1.3) |
(0.8) |
Taxation |
(0.5) |
0.2 |
(0.4) |
- |
Profit /(loss)
after taxation before inter-company charges |
4.3 |
4.7 |
(1.7) |
(0.8) |
Loss after taxation
from discontinued operations |
- |
- |
- |
- |
Profit /(loss)
after taxation before inter-company charges |
4.3 |
4.7 |
(1.7) |
(0.8) |
|
|
|
|
|
Inter-company
transactions |
|
|
|
|
Management fees |
(0.8) |
(0.1) |
1.1 |
(0.1) |
Inter-company interest
charges |
(0.2) |
- |
(0.2) |
0.7 |
Profit /(loss)
after taxation after inter-company charges |
3.3 |
4.6 |
(0.8) |
(0.2) |
Segmental assets
(total assets excluding goodwill) |
75.5 |
230.4 |
10.3 |
5.2 |
Segmental
liabilities |
27.8 |
52.9 |
2.8 |
46.6 |
Goodwill |
21.0 |
- |
- |
- |
Net assets
(excluding goodwill) (note 5) |
47.7 |
177.5 |
7.5 |
(41.4) |
Capital expenditure
(note 6) |
4.1 |
35.1 |
- |
- |
|
|
|
|
|
Adjusted EBITDA
(note 7) |
6.9 |
4.8 |
(1.5) |
- |
|
Six months ended
31 December 2017 |
|
|
Discontinued operations |
|
|
|
Phoenix Platinum
(note 4) |
Evander Mines (Discontinued operations) (note 3) |
Reclassification
(note 8) |
Group |
|
GBP
million |
GBP
million |
GBP
million |
GBP million |
|
|
|
|
|
Revenue |
|
|
|
|
Gold sales
(note 1) |
- |
31.6 |
(31.6) |
51.3 |
Platinum
sales |
1.4 |
- |
(1.4) |
- |
Realisation costs |
- |
(0.1) |
0.1 |
(1.4) |
Net
revenue |
1.4 |
31.5 |
(32.9) |
49.9 |
Gold cost
of production |
- |
(31.3) |
31.3 |
(38.3) |
Platinum
cost of production |
(1.6) |
- |
1.6 |
- |
Mining
depreciation |
- |
(3.4) |
3.4 |
(2.6) |
Mining
profit |
(0.2) |
(3.2) |
3.4 |
9.0 |
Other
(expenses)/income (note 2) |
- |
0.6 |
(0.6) |
(1.2) |
Adjustment
on sale of asset held for sale |
(0.3) |
- |
0.3 |
- |
Royalty
costs |
- |
(0.2) |
0.2 |
(0.2) |
Net
income / (loss) before finance income and finance costs |
(0.5) |
(2.8) |
3.3 |
7.6 |
Finance
income |
- |
0.3 |
(0.3) |
0.4 |
Finance
costs |
- |
- |
- |
(0.8) |
Profit
/(loss) before taxation |
(0.5) |
(2.5) |
3.0 |
7.2 |
Taxation |
0.1 |
(0.3) |
0.2 |
(0.7) |
Profit
/(loss) after taxation before inter-company charges |
(0.4) |
(2.8) |
3.2 |
6.5 |
Loss after
taxation from discontinued operations |
- |
- |
(3.2) |
(3.2) |
Profit
/(loss) after taxation before inter-company charges |
(0.4) |
(2.8) |
- |
3.3 |
|
|
|
|
|
Inter-company transactions |
|
|
|
|
Management
fees |
- |
(0.1) |
- |
- |
Inter-company interest charges |
- |
(0.3) |
- |
- |
Profit
/(loss) after taxation after inter-company charges |
(0.4) |
(3.2) |
- |
3.3 |
Segmental assets (total assets excluding goodwill) |
- |
- |
- |
321.4 |
Segmental liabilities |
- |
- |
- |
130.1 |
Goodwill |
- |
- |
- |
21.0 |
Net
assets (excluding goodwill) (note 5) |
- |
- |
- |
191.3 |
Capital
expenditure (note 6) |
0.3 |
- |
- |
39.5 |
|
|
|
|
|
Adjusted EBITDA (note 7) |
(0.2) |
0.6 |
(0.4) |
10.2 |
|
|
|
|
|
|
|
Note 1: All
gold sales were made in South Africa and the majority of revenue
(more than 90%) was generated from South African financial
institutions. |
|
Note 2: Other
(expenses)/income exclude inter-company management fees and
dividends. |
|
Note 3: During the prior financial reporting period,
Evander Mines underground mining operations ceased mining on 31 May
2018. The Evander Mines’ Elikhulu, ETRP and the mining and vamping
of the remnant
high-grade stopes at Evander, as part of the phased closure of the
underground mining operation, remain as continuing operations. |
Note 4: Phoenix
Platinum was classified as held for sale and as a discontinued
operation at 30 June 2017. The disposal was concluded on 6 November
2017. |
|
Note 5: All
assets are held within South Africa, and the segmental assets and
liabilities presented, exclude inter-company balances. |
|
Note 6: Capital
expenditure comprises of additions to property plant and equipment
and mineral rights and intangible assets. |
|
Note 7:
Adjusted EBITDA is represented by earnings before interest,
taxation, depreciation and losses from discontinued
operations. |
|
Note 8: Relates
to the reclassification of operations as discontinued. |
|
|
Six months ended
31 December 2018 |
|
Continuing operations |
|
|
Barberton Mines |
Evander Mines
(note 3) |
Corporate |
Funding Company |
Group |
|
R
million |
R
million |
R
million |
R
million |
R
million |
|
|
|
|
|
|
Revenue |
|
|
|
|
|
Gold sales (note
1) |
853.8 |
529.2 |
- |
- |
1,383.0 |
Platinum sales |
- |
- |
- |
- |
- |
Realisation costs |
(3.4) |
(7.0) |
- |
- |
(10.4) |
Net
revenue |
850.4 |
522.2 |
- |
- |
1,372.6 |
Gold cost of
production |
(621.3) |
(373.6) |
- |
- |
(994.9) |
Platinum cost of
production |
- |
- |
- |
- |
- |
Mining
depreciation |
(50.9) |
(46.2) |
- |
- |
(97.1) |
Mining
profit |
178.2 |
102.4 |
- |
- |
280.6 |
Other
(expenses)/income (note 2) |
(5.1) |
23.9 |
(47.3) |
- |
(28.5) |
Adjustment on sale of
asset held for sale |
- |
- |
- |
- |
- |
Royalty costs |
(4.1) |
(2.6) |
- |
- |
(6.7) |
Net income / (loss)
before finance income and finance costs |
169.0 |
123.7 |
(47.3) |
- |
245.4 |
Finance income |
0.3 |
1.9 |
2.3 |
1.8 |
6.3 |
Finance costs |
- |
(0.5) |
- |
(80.4) |
(80.9) |
Profit /(loss)
before taxation |
169.3 |
125.1 |
(45.0) |
(78.6) |
170.8 |
Taxation |
(28.1) |
(0.7) |
(3.5) |
(0.7) |
(33.0) |
Profit /(loss)
after taxation before inter-company charges |
141.2 |
124.4 |
(48.5) |
(79.3) |
137.8 |
Loss after taxation
from discontinued operations |
- |
- |
- |
- |
- |
Profit /(loss)
after taxation before inter-company charges |
141.2 |
124.4 |
(48.5) |
(79.3) |
137.8 |
|
|
|
|
|
|
Inter-company
transactions |
|
|
|
|
|
Management fees |
(17.3) |
(12.0) |
30.3 |
(1.0) |
- |
Inter-company interest
charges |
1.6 |
(83.9) |
(3.7) |
86.0 |
- |
Profit /(loss)
after taxation after inter-company charges |
125.5 |
28.5 |
(21.9) |
5.7 |
137.8 |
Segmental assets
(total assets excluding goodwill) |
1,435.5 |
3,295.8 |
190.3 |
48.3 |
4,969.9 |
Segmental
liabilities |
554.3 |
665.9 |
30.9 |
1,815.3 |
3,066.4 |
Goodwill |
303.5 |
- |
- |
- |
303.5 |
Net assets
(excluding goodwill) (note 5) |
881.2 |
2,629.9 |
159.4 |
(1,767.0) |
1,903.5 |
Capital expenditure
(note 6) |
90.9 |
495.0 |
0.8 |
- |
586.7 |
|
|
|
|
|
|
Adjusted EBITDA
(note 7) |
219.9 |
169.9 |
(47.3) |
- |
342.5 |
|
Six months ended
31 December 2017 |
|
Continuing operations |
|
Barberton Mines |
Evander Mines (Continuing operations) (note 3) |
Corporate |
Funding Company |
|
R
million |
R
million |
R
million |
R
million |
|
|
|
|
|
Revenue |
|
|
|
|
Gold sales (note
1) |
700.3 |
204.6 |
- |
- |
Platinum sales |
- |
- |
- |
- |
Realisation costs |
(2.9) |
(22.2) |
- |
- |
Net
revenue |
697.4 |
182.4 |
- |
- |
Gold cost of
production |
(564.1) |
(112.2) |
- |
- |
Platinum cost of
production |
- |
- |
- |
- |
Mining
depreciation |
(38.3) |
(6.8) |
- |
- |
Mining
profit |
95.0 |
63.4 |
- |
- |
Other
(expenses)/income (note 2) |
(7.7) |
11.2 |
(25.6) |
- |
Adjustment on sale of
asset held for sale |
- |
- |
- |
- |
Royalty costs |
(2.9) |
(0.4) |
- |
- |
Net income / (loss)
before finance income and finance costs |
84.4 |
74.2 |
(25.6) |
- |
Finance income |
1.2 |
1.6 |
3.2 |
1.4 |
Finance costs |
- |
- |
(0.2) |
(14.1) |
Profit /(loss)
before taxation |
85.6 |
75.8 |
(22.6) |
(12.7) |
Taxation |
(9.5) |
3.4 |
(5.7) |
(0.3) |
Profit /(loss)
after taxation before inter-company charges |
76.1 |
79.2 |
(28.3) |
(13.0) |
Loss after taxation
from discontinued operations |
- |
- |
- |
- |
Profit /(loss)
after taxation before inter-company charges |
76.1 |
79.2 |
(28.3) |
(13.0) |
|
|
|
|
|
Inter-company
transactions |
|
|
|
|
Management fees |
(14.6) |
(0.9) |
18.9 |
(1.0) |
Inter-company interest
charges |
(4.4) |
- |
(3.0) |
12.4 |
Profit /(loss)
after taxation after inter-company charges |
57.1 |
78.3 |
(12.4) |
(1.6) |
Segmental assets
(total assets excluding goodwill) |
1,258.8 |
3,840.4 |
171.7 |
86.7 |
Segmental
liabilities |
463.9 |
882.3 |
43.8 |
777.3 |
Goodwill |
303.5 |
- |
- |
- |
Net assets
(excluding goodwill) (note 5) |
794.9 |
2,958.1 |
127.9 |
(690.6) |
Capital expenditure
(note 6) |
71.4 |
619.0 |
0.6 |
- |
|
|
|
|
|
Adjusted EBITDA
(note 7) |
122.7 |
81.0 |
(25.6) |
- |
|
Six months ended
31 December 2017 |
|
|
Discontinued operations |
|
|
|
Phoenix Platinum
(note 4) |
Evander Mines (Discontinued operations) (note 3) |
Reclassification
(note 8) |
Group |
|
R
million |
R
million |
R
million |
R million |
|
|
|
|
|
Revenue |
|
|
|
|
Gold sales
(note 1) |
- |
558.1 |
(558.1) |
904.9 |
Platinum
sales |
24.7 |
- |
(24.7) |
- |
Realisation costs |
- |
(2.0) |
2.0 |
(25.1) |
Net
revenue |
24.7 |
556.1 |
(580.8) |
879.8 |
Gold cost
of production |
- |
(551.7) |
551.7 |
(676.3) |
Platinum
cost of production |
(28.2) |
- |
28.2 |
- |
Mining
depreciation |
- |
(59.7) |
59.7 |
(45.1) |
Mining
profit |
(3.5) |
(55.3) |
58.8 |
158.4 |
Other
(expenses)/income (note 2) |
0.7 |
8.6 |
(9.3) |
(22.1) |
Adjustment
on sale of asset held for sale |
(4.9) |
- |
4.9 |
- |
Royalty
costs |
- |
(2.8) |
2.8 |
(3.3) |
Net
income / (loss) before finance income and finance costs |
(7.7) |
(49.5) |
57.2 |
133.0 |
Finance
income |
0.2 |
6.0 |
(6.2) |
7.4 |
Finance
costs |
- |
- |
- |
(14.3) |
Profit
/(loss) before taxation |
(7.5) |
(43.5) |
51.0 |
126.1 |
Taxation |
0.7 |
(5.5) |
4.8 |
(12.1) |
Profit
/(loss) after taxation before inter-company charges |
(6.8) |
(49.0) |
55.8 |
114.0 |
Loss after
taxation from discontinued operations |
- |
- |
(55.8) |
(55.8) |
Profit
/(loss) after taxation before inter-company charges |
(6.8) |
(49.0) |
- |
58.2 |
|
|
|
|
|
Inter-company transactions |
|
|
|
|
Management
fees |
- |
(2.4) |
- |
- |
Inter-company interest charges |
- |
(5.0) |
- |
- |
Profit
/(loss) after taxation after inter-company charges |
(6.8) |
(56.4) |
- |
58.2 |
Segmental assets (total assets excluding goodwill) |
- |
- |
- |
5,357.6 |
Segmental liabilities |
- |
- |
- |
2,167.3 |
Goodwill |
- |
- |
- |
303.5 |
Net
assets (excluding goodwill) (note 5) |
- |
- |
- |
3,190.3 |
Capital
expenditure (note 6) |
6.0 |
- |
- |
697.0 |
|
|
|
|
|
Adjusted EBITDA (note 7) |
(2.8) |
10.2 |
(7.4) |
178.1 |
|
|
|
|
|
|
|
Note 1: All gold sales were made in South Africa and the majority of revenue (more
than 90%) was generated from South African financial
institutions.
Note 2: Other (expenses)/income exclude inter-company
management fees and dividends.
Note 3: During the prior financial reporting period,
Evander Mines underground mining operations ceased mining on
31 May 2018. The Evander Mines’
Elikhulu, ETRP and the mining and vamping of the remnant high-grade
stopes at Evander, as part of the phased closure of the underground
mining operation, remain as continuing operations.
Note 4: Phoenix Platinum was classified as held for sale
and as a discontinued operation at 30 June
2017. The disposal was concluded on 6
November 2017.
Note 5: All assets are held within South Africa, and the segmental assets and
liabilities presented, exclude inter-company balances.
Note 6: Capital expenditure comprises of additions to
property plant and equipment and mineral rights and intangible
assets.
Note 7: Adjusted EBITDA is represented by earnings before
interest, taxation, depreciation and losses from discontinued
operations.
Note 8: Relates to the reclassification of operations as
discontinued.
4. |
NET
FINANCE (EXPENSES)/INCOME |
|
|
|
|
|
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|
six months ended
31 December 2018 |
six months ended
31 December 2017 |
six months ended
31 December 2018 |
six months ended
31 December 2017 |
|
GBP million |
GBP million |
R million |
R million |
Interest
received – bank |
0.1 |
0.3 |
1.6 |
4.8 |
Interest
received – other |
0.1 |
- |
2.8 |
- |
Interest
received - rehabilitation funds |
0.1 |
0.1 |
1.9 |
2.6 |
|
0.3 |
0.4 |
6.3 |
7.4 |
|
|
|
|
|
Interest
expense – bank |
(4.4) |
(0.8) |
(80.4) |
(14.3) |
Interest
expense – other |
- |
- |
(0.5) |
- |
|
(4.4) |
(0.8) |
(80.9) |
(14.3) |
|
|
|
|
|
Net
finance (expenses)/income (note 1) |
(4.1) |
(0.4) |
(74.6) |
(6.9) |
|
|
|
|
|
Note
1: The net finance (expenses)/income from financial
assets and liabilities that are not measured at fair value through
profit or loss except for interest received from rehabilitation
funds. |
|
|
|
|
|
|
|
|
|
|
5. |
TAXATION |
|
|
|
|
|
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|
six months ended
31 December 2018 |
six months ended
31 December 2017 |
six months ended
31 December 2018 |
six months ended
31 December 2017 |
|
GBP million |
GBP million |
R million |
R million |
INCOME
TAXATION EXPENSE |
|
|
|
|
South
African normal taxation |
|
|
|
|
- current
year |
1.4 |
0.1 |
25.2 |
1.8 |
|
|
|
|
|
Deferred
taxation |
|
|
|
|
- current
year |
0.4 |
0.6 |
7.8 |
10.3 |
Total
taxation expense |
1.8 |
0.7 |
33.0 |
12.1 |
|
|
|
|
|
|
|
|
|
|
|
Unredeemed capital and assessed loss expenditure
(note 1) |
|
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|
six months ended
31 December 2018 |
six months ended
31 December 2017 |
six months ended
31 December 2018 |
six months ended
31 December 2017 |
|
GBP million |
GBP million |
R million |
R million |
|
|
|
|
|
Evander
Mines - unredeemed capital |
135.2 |
70.6 |
2,476.1 |
1,176.8 |
Evander
Mines - assessed loss |
27.7 |
10.5 |
507.2 |
174.5 |
|
162.9 |
81.1 |
2,983.3 |
1,351.3 |
|
|
|
|
|
|
|
|
|
|
Note
1: Deferred taxation assets have been recognised in respect of
all assessed losses and unredeemed capital expenditure. |
|
|
|
|
|
|
|
|
|
|
6. |
FINANCIAL INSTRUMENTS |
|
|
|
|
|
|
|
|
|
|
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|
six months ended
31 December 2018 |
six months ended
31 December 2017 |
six months ended
31 December 2018 |
six months ended
31 December 2017 |
|
GBP million |
GBP million |
R million |
R million |
Financial assets and liabilities by category |
|
|
|
|
Financial assets (note 1) |
|
|
|
|
Measured at amortised cost |
|
|
|
|
Cash and
cash equivalents |
2.7 |
7.1 |
50.1 |
118.7 |
Long-term
receivables |
1.3 |
2.6 |
23.4 |
42.8 |
Current
portion of long-term receivables |
1.0 |
- |
19.1 |
- |
Trade
receivables (note 2) |
5.9 |
7.1 |
108.2 |
117.8 |
|
|
|
|
|
Measured at fair value through other comprehensive
income |
|
|
|
|
Investment |
6.8 |
5.5 |
124.3 |
91.5 |
|
|
|
|
|
Designation at fair value through profit and loss |
|
|
|
|
Rehabilitation funds |
20.2 |
21.4 |
369.8 |
357.5 |
Financial
instruments asset |
- |
0.3 |
- |
5.8 |
|
|
|
|
|
Financial liabilities |
|
|
|
|
Measured at amortised cost |
|
|
|
|
Trade and
other payables (note 3) |
31.5 |
27.6 |
577.0 |
460.1 |
Revolving
credit facility |
44.5 |
40.6 |
815.4 |
676.6 |
Term loan
facility |
54.6 |
5.7 |
1,000.0 |
95.1 |
|
|
|
|
|
Measured at fair value through profit or loss |
|
|
|
|
ESOP
liability |
0.5 |
0.1 |
9.9 |
1.9 |
Financial
instruments liability |
0.1 |
- |
1.7 |
- |
Cash
settled share options liability |
1.1 |
2.8 |
20.3 |
46.3 |
|
|
|
|
|
Note
1: At the end of the current reporting period the group did not
have trade receivables that are past overdue and not impaired. |
Note
2: Trade receivables exclude prepayments, taxation and
VAT. |
Note
3: Trade and other payables exclude taxation and VAT. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value
hierarchy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
instruments are measured at fair value and are grouped into levels
1 to 3 based on the extent to which fair value is observable. |
|
The levels
are classified as follows: |
|
|
|
|
|
|
|
|
|
Level 1
- fair value is based on quoted prices in active markets for
identical financial assets or liabilities. |
Level 2
- fair value is determined using inputs other than quoted
prices included within level 1 that are observable for the asset
or liability, either directly (i.e. prices) or indirectly
(i.e. derived from prices). |
Level 3
- fair value is determined on inputs not based on observable
market data. |
|
|
|
|
|
|
|
|
|
Six months ended
31 December 2018
(Unaudited) |
|
Level 1 |
Level 2 |
|
GBP
million |
R
million |
GBP
million |
R
million |
|
|
|
|
|
Investment (note
1) |
6.8 |
124.3 |
- |
- |
Rehabilitation funds
(note 2) |
20.2 |
369.8 |
- |
- |
Cash settled share
option liability (note 3) |
- |
- |
1.1 |
20.3 |
Financial instruments
liability (note 5) |
- |
- |
0.1 |
1.7 |
ESOP liability (note
4) |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 3 |
Total |
|
GBP
million |
R
million |
GBP
million |
R
million |
|
|
|
|
|
Investment (note
1) |
- |
- |
6.8 |
124.3 |
Rehabilitation funds
(note 2) |
- |
- |
20.2 |
369.8 |
Cash settled share
option liability (note 3) |
- |
- |
1.1 |
20.3 |
Financial instruments
liability (note 5) |
- |
- |
0.1 |
1.7 |
ESOP liability (note
4) |
0.5 |
9.9 |
0.5 |
9.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
31 December 2017
(Unaudited) |
|
Level 1 |
Level 2 |
|
GBP
million |
R
million |
GBP
million |
R million |
|
|
|
|
|
Investment (note
1) |
5.5 |
91.5 |
- |
- |
Rehabilitation funds
(note 2) |
21.4 |
357.5 |
- |
- |
Cash settled share
option liability (note 3) |
- |
- |
2.8 |
46.3 |
Derivative financial
assets (note 5) |
- |
- |
0.3 |
5.8 |
ESOP liability (note
4) |
- |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
Level 3 |
Total |
|
GBP
million |
R
million |
GBP
million |
R million |
|
|
|
|
|
Investment (note
1) |
- |
- |
5.5 |
91.5 |
Rehabilitation funds
(note 2) |
- |
- |
21.4 |
357.5 |
Cash settled share
option liability (note 3) |
- |
- |
2.8 |
46.3 |
Derivative financial
assets (note 5) |
- |
- |
0.3 |
5.8 |
ESOP liability (note
4) |
0.1 |
1.9 |
0.1 |
1.9 |
|
|
|
|
|
|
|
|
|
|
Note
1: The fair value of the listed investment is treated as Level
1 per the fair value hierarchy, as its market share price is quoted
on a stock exchange. |
|
Note
2: Rehabilitation funds are treated as Level 1 per the fair
value hierarchy as the contributions are invested in an
interest-bearing short-term deposits and equity share portfolios
held in insurance investment products managed by fund
managers. |
Note
3: The cash settled share option liability is valued on a
mark-to-market basis according to the company's quoted share price
and other inputs which are company specific. |
Note
4: The group’s ESOP liability is accounted for on a cash
settled basis. The valuation of the liability relates to the
group's gold operations, and was performed by independent
consulting actuaries. The liability was valued as a European call
option. |
Note
5: The group is exposed to financial derivatives which comprise
of cost collar hedges. |
|
|
|
|
|
|
7. |
BORROWINGS AND FINANCIAL COVENANTS |
|
|
|
|
|
|
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|
six
months ended
31 December 2018 |
six
months ended
31 December 2017 |
six
months ended
31 December 2018 |
six
months ended
31 December 2017 |
Interest-bearing borrowings |
GBP
million |
GBP
million |
R
millions |
R
millions |
Revolving
credit facility - current portion |
4.5 |
4.0 |
82.5 |
66.1 |
Revolving
credit facility - long-term portion |
40.0 |
36.6 |
732.9 |
610.5 |
Term loan
facility - current portion |
5.5 |
- |
100.0 |
- |
Term loan
facility - long-term portion |
49.1 |
5.7 |
900.0 |
95.1 |
Total
interest-bearing borrowings |
99.1 |
46.3 |
1,815.4 |
771.7 |
|
|
|
|
|
Available facilities |
|
|
|
|
Revolving
credit facility |
10.1 |
19.5 |
185.0 |
325.0 |
Term loan
facility |
- |
54.3 |
- |
905.0 |
General
banking facility |
6.6 |
4.1 |
121.5 |
69.0 |
|
16.7 |
77.9 |
306.5 |
1,299.0 |
|
|
|
|
|
Note
1: Net debt is disclosed as part of the APM summary report.
Refer to note 16. |
|
|
|
|
|
Financial covenants |
|
|
|
|
The
group’s compliance to the revolving credit and term loan
facility debt covenants are summarised below: |
|
|
|
|
|
|
Covenant |
Measurement |
Unaudited |
Unaudited |
six
months ended |
six
months ended |
31
December 2018 |
31
December 2017 |
Net-debt-to-equity
ratio |
|
Must be less than
1:1 |
0.85 |
0.19 |
Net-debt-to-adjusted
EBITDA ratio (note 1) |
|
Must be less than
2.5:1 |
3.24 |
2.25 |
Interest cover
ratio |
|
Must be greater than
2.5 time at 31 December 2018 and 4 times thereafter |
3.64 |
4.62 |
Debt service cover
ratio |
|
Must be greater than
1.3 times |
2.85 |
1.85 |
Note 1: The net debt to adjusted EBITDA covenant is only
measurable in December 2019, as agreed with the consortium of South
African banks given the delay between capital expenditure and
revenue generation. This allows for the measurement period to
appropriately measure the cash flows of Elikhulu following the
conclusion of construction, with the net debt. |
8. |
CAPITAL EXPENDITURE |
|
|
|
|
|
|
|
|
|
|
|
|
Group
capital expenditure for the current and corresponding reporting
periods has been summarised per operation in the table below: |
|
|
|
|
|
|
|
|
|
Unaudited |
Unaudited |
|
|
Development capital |
Maintenance capital |
|
|
GBP
million |
R
million |
GBP
million |
R
million |
Barberton |
31
December 2018 |
1.9 |
34.7 |
1.7 |
31.2 |
Mines |
31
December 2017 |
2.0 |
35.2 |
1.0 |
17.5 |
Evander Mines |
31
December 2018 |
- |
0.1 |
- |
- |
|
31
December 2017 |
1.7 |
30.4 |
4.1 |
72.1 |
Elikhulu |
31
December 2018 |
- |
- |
- |
- |
|
31
December 2017 |
- |
- |
- |
- |
Phoenix |
31
December 2018 |
- |
- |
- |
- |
Platinum |
31
December 2017 |
- |
- |
0.3 |
6.0 |
Corporate |
31
December 2018 |
- |
0.9 |
- |
- |
|
31
December 2017 |
- |
0.6 |
- |
- |
Total |
31
December 2018 |
1.9 |
35.7 |
1.7 |
31.2 |
|
31
December 2017 |
3.7 |
66.2 |
5.4 |
95.6 |
|
|
|
|
|
|
|
|
Unaudited |
Unaudited |
|
|
Expansion
capital |
Total |
|
|
GBP
million |
R
million |
GBP
million |
R
million |
Barberton |
31
December 2018 |
1.4 |
25.0 |
5.0 |
90.9 |
Mines |
31
December 2017 |
1.1 |
18.7 |
4.1 |
71.4 |
Evander Mines |
31
December 2018 |
- |
- |
- |
0.1 |
|
31
December 2017 |
0.3 |
4.8 |
6.1 |
107.3 |
Elikhulu |
31
December 2018 |
27.0 |
494.8 |
27.0 |
494.8 |
|
31
December 2017 |
29.0 |
511.7 |
29.0 |
511.7 |
Phoenix |
31
December 2018 |
- |
- |
- |
- |
Platinum |
31
December 2017 |
- |
- |
0.3 |
6.0 |
Corporate |
31
December 2018 |
- |
- |
- |
0.9 |
|
31
December 2017 |
- |
- |
- |
0.6 |
Total |
31
December 2018 |
28.4 |
519.8 |
32.0 |
586.7 |
|
31
December 2017 |
30.4 |
535.2 |
39.5 |
697.0 |
9. |
SHARE
CAPITAL |
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
|
six months ended
31 December 2018 |
six months ended
31 December 2017 |
year
ended
30 June 2018 |
|
|
Issued |
|
|
|
|
|
Number of
ordinary shares issued (note 1) |
2,234,687,537 |
2,234,687,537 |
2,234,687,537 |
|
|
Treasury
shares in issue (note 2) |
(306,358,058) |
(436,358,058) |
(306,358,058) |
|
|
|
1,928,329,479 |
1,798,329,479 |
1,928,329,479 |
|
|
Ordinary
shares issued of GBP0.01 each |
22,346,875 |
22,346,875 |
22,346,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10. DISPOSALS AND
ACQUISITIONS
There were no disposals or acquisitions noted during the current
reporting period.
Corresponding period
Phoenix Platinum located in the North West province of
South Africa was sold to Sylvania
Platinum Limited on 6 November 2017
for
R89.0 million. Refer to the result announcements for the financial
year ended 30 June 2017 and six
months ended December 2017 for
additional information on this transaction.
11. |
COMMITMENTS AND CONTINGENT LIABILITIES |
|
|
|
|
Unaudited |
Unaudited |
Unaudited |
Unaudited |
|
six
months ended
31 December 2018 |
six months ended
31 December 2017 |
six months ended
31 December 2018 |
six months ended
31 December 2017 |
|
GBP
million |
GBP million |
R million |
R million |
Outstanding open orders |
10.2 |
64.3 |
187.2 |
1,071.2 |
Authorised
commitments not yet contracted for |
4.7 |
10.2 |
86.5 |
170.4 |
Operating
lease commitments - due within the next 12 months |
0.7 |
0.1 |
13.4 |
1.8 |
Guarantees
- Eskom Holdings SOC Limited |
1.3 |
1.5 |
24.6 |
24.6 |
Guarantees
- DMR |
0.8 |
0.8 |
14.0 |
14.0 |
|
|
|
|
|
Outstanding orders in the corresponding reporting period related
primarily to the construction of Elikhulu. |
No material contingent liabilities were identified in the current
or corresponding reporting period. |
|
|
|
|
|
|
|
|
|
12. RELATED PARTY
TRANSACTIONS
The related party transactions have been summarised in the
following notes:
- Inter-company interest and management fees - refer to note 3.
Inter-company loans have no specific repayment terms, are repayable
on demand and bear interest in relation to the treasury function
provided by Funding Company; and
- Inter-company reciprocal dividend - refer to condensed
consolidated statement of changes in equity.
No further major related party transactions occurred, either
with third parties or with group entities, during the current and
corresponding reporting period.
13. GOING CONCERN
The board confirms that the business is a going concern and that
it has reviewed the group’s working capital requirements in
conjunction with its future funding capabilities for at least the
next twelve months from the date of approval of the condensed
consolidated interim financial statements and has found them to be
adequate. The group has a R1 billion revolving credit facility from
a consortium of South African banks as well as access to general
banking facilities of R121 million. At 31
December 2018, the group had available borrowing capacity on
the revolving credit facility of R185 million (GBP10.1 million) to assist in funding working
capital requirements. The group is exposed to a number of
macro-economic risks, including the gold price and the prevailing
ZAR:USD exchange rate. Management is not aware of any other
material uncertainties which may cast significant doubt on the
group’s ability to continue as a going concern. Should the need
arise, the group can cease discretionary exploration and certain
capital expenditure activities to conserve cash on the short to
medium term and curtail loss making operations.
14. EVENTS AFTER THE REPORTING
PERIOD
The group had no material events after the reporting period.
15. CORRECTION OF PRIOR PERIOD
ERRORS
Classification of the settlement of
cash settled share option costs
For the year ended 30 June 2017
and six months ended 31 December
2017, the payment of cash settled share options of
GBP3.3 million (R58.0 million) and
GBP0.4 million (R6.9 million)
respectively, were classified as a financing activity in the
consolidated statement of cash flows. However, since the payment of
cash settled share options related to employees, these payments
should have been classified as an employee cost and included in net
cash flows from operating activities.
As a consequence, net cash flows from financing activities were
overstated and net cash flows from operating activities were
understated. The error was identified through the JSE’s proactive
monitoring process. The error has been corrected by restating each
of the affected financial statement line items for the prior
reporting periods as follows:
Impact on the
statement of cash flows |
Audited |
Unaudited |
Unaudited |
Unaudited |
|
year
ended
30 June 2017* |
six
months ended
31 December 2017 |
year
ended
30 June 2017* |
six
months ended
31 December 2017 |
|
GBP
million |
GBP
million |
R
million |
R
million |
Net cash flows from
operating activities |
(3.3) |
(0.4) |
(58.0) |
(6.9) |
Net cash flows
financing activities |
3.3 |
0.4 |
58.0 |
6.9 |
Increase/ (decrease)
in cash and cash equivalents |
- |
- |
- |
- |
*This correction applies to the year
ended 30 June 2018 annual financial
statements and, was not a re-presentation, as stated, but an
error.
The correction of the classification of the payment of cash
settled share options in the consolidated statement of cash flows
for the year ended 30 June 2017 and
six months ended 31 December 2017 had
no effect on the:
- consolidated statement of profit or loss and other
comprehensive income;
- consolidated statement of financial position and cash holdings;
or
- the group’s basic and diluted earnings per share.
Classification of the cash outflow
from the purchase of the shares in PAR Gold
For the year ended 30 June 2016
the group concluded a transaction for the acquisition of PAR Gold’s
shares by Pan African Resources. The transaction was entered into
to secure the group’s BEE status and was deemed to be strategic in
nature. The transaction entailed the acquisition of 49.9% of PAR
Gold’s shareholding which was settled with an issue of Pan African
Resources’ shares. The transaction was classified as a treasury
share buyback transaction from a group perspective as PAR Gold held
23.8% of Pan African Resources’ shares. The cash outflow of
GBP25.3 million (R546.9 million)
related to this transaction was previously classified as an
investing activity in the consolidated statement of cash flows.
However, since the transaction amounted to a treasury share
transaction from a group perspective the cash outflow should have
been classified as a financing activity in the consolidated
statement of cash flows in accordance with the criteria of IAS
7.
As a consequence, net cash flows from investing activities were
overstated and net cash flows from financing activities were
understated in the consolidated statement of cash flows for the
year ended 30 June 2016. The error
was identified through the JSE’s proactive monitoring process. The
error would be corrected by restating each of the affected
financial statement line items in the consolidated statement of
cash flows for the prior period as follows:
Impact on the
statement of cash flows: |
|
Audited |
Unaudited |
|
|
year
ended |
year
ended |
|
|
30
June 2016 |
30
June 2016 |
|
|
GBP
million |
R
million |
Net cash
flow from investing activities |
25.3 |
546.9 |
Net cash flow from
financing activities |
|
(25.3) |
(546.9) |
Increase/
(decrease) in cash and cash equivalents |
- |
- |
The correction of the classification of the cash outflows
resulting from the transaction to purchase the shares in PAR Gold
in the consolidated statement of cash flows for the year ended
30 June 2016 had no effect on
the:
- consolidated statement of profit or loss and other
comprehensive income;
- consolidated statement of financial position and cash holdings;
or
- the group’s basic and diluted earnings per share.
16.
ALTERNATIVE PERFORMANCE MEASURES SUMMARY FOR THE PERIOD ENDED 31
DECEMBER 2018 |
|
|
|
|
|
Unaudited
six months ended
31 December 2018 |
Unaudited
six months ended
31 December 2017 |
RECONCILIATION OF WORLD GOLD COUNCIL COSTS |
Unaudited
six months ended
31 December 2017 |
Unaudited
six months ended
31 December 2018 |
USD
million |
USD
million |
R
million |
R
million |
70.8 |
93.7 |
Cash
costs |
1,255.1 |
1,005.3 |
70.1 |
91.7 |
Gold
cost of production |
1,228.0 |
994.9 |
0.7 |
2.0 |
Realisation costs |
27.1 |
10.4 |
77.7 |
108.2 |
All-in sustaining costs |
1,448.0 |
1,103.8 |
70.8 |
93.7 |
Cash
costs |
1,255.1 |
1,005.3 |
0.5 |
0.5 |
Royalties |
6.1 |
6.7 |
0.8 |
0.7 |
Community costs related to gold operations |
9.0 |
11.7 |
(0.3) |
- |
By-product credits |
(0.3) |
(3.9) |
1.3 |
1.7 |
Corporate general and administrative costs |
23.0 |
18.0 |
2.4 |
4.9 |
Development capital (sustaining) |
65.6 |
34.7 |
2.2 |
6.7 |
Maintenance capital expenditure (sustaining) |
89.5 |
31.3 |
114.3 |
110.0 |
All-in costs |
1,471.8 |
1,623.6 |
77.7 |
108.2 |
All-in
sustaining costs |
1,448.0 |
1,103.8 |
36.6 |
1.8 |
Capital
expenditure (non-sustaining) |
23.5 |
519.8 |
- |
- |
Voluntary severance pay (non-sustaining) |
0.3 |
- |
|
|
|
|
|
Unaudited
six months ended
31 December 2018 |
Unaudited
six months ended
31 December 2017 |
RECONCILIATION OF ADJUSTED EBITDA |
Unaudited
six months ended
31 December 2017 |
Unaudited
six months ended
31 December 2018 |
GBP
million |
GBP
million |
|
R
million |
R
million |
18.7 |
10.2 |
Adjusted EBITDA |
178.1 |
342.5 |
7.5 |
3.3 |
Profit
after taxation |
58.2 |
137.8 |
1.8 |
0.7 |
Taxation |
12.1 |
33.0 |
4.4 |
0.8 |
Finance
costs |
14.3 |
80.9 |
(0.3) |
(0.4) |
Finance
income |
(7.4) |
(6.3) |
5.3 |
2.6 |
Mining
depreciation |
45.1 |
97.1 |
- |
3.2 |
Loss
after taxation on discontinued operations |
55.8 |
- |
Unaudited
six months ended
31 December 2018 |
Unaudited
six months ended
31 December 2017 |
Units |
CASH
COST PER OZ/KG |
Units |
Unaudited
six months ended
31 December 2017 |
Unaudited
six months ended
31 December 2018 |
888 |
1,099 |
USD/oz |
Cash
cost |
R/kg |
473,187 |
405,216 |
70.8 |
93.7 |
USD
million |
Cash
costs |
R million |
1,255.1 |
1,005.3 |
79,765 |
85,282 |
Oz |
Gold
sold |
kg |
2,653 |
2,481 |
|
|
|
|
|
|
|
Unaudited
six months ended
31 December 2018 |
Unaudited
six months ended
31 December 2017 |
Units |
IN-ALL SUSTAINING COST PER OZ/KG |
Units |
Unaudited
six months ended
31 December 2017 |
Unaudited
six months ended
31 December 2018 |
975 |
1,268 |
USD/oz |
All-in sustaining cost |
R/kg |
545,908 |
444,946 |
77.7 |
108.2 |
USD
million |
All-in
sustaining costs |
R million |
1,448.0 |
1,103.8 |
79,765 |
85,282 |
oz |
Gold
sold |
kg |
2,653 |
2,481 |
|
|
|
|
|
|
|
Unaudited
six months ended
31 December 2018 |
Unaudited
six months ended
31 December 2017 |
Units |
IN-ALL COST PER OZ/KG |
Units |
Unaudited
six months ended
31 December 2017 |
Unaudited
six months ended
31 December 2018 |
1,435 |
1,289 |
USD/oz |
All-in cost |
R/kg |
554,890 |
654,470 |
114.3 |
110.0 |
USD
million |
All-in
costs |
R million |
1,471.8 |
1,623.6 |
79,765 |
85,282 |
Oz |
Gold
sold |
kg |
2,653 |
2,481 |
Unaudited
six months ended
31 December 2018 |
Unaudited
six months ended
31 December 2017 |
HEADLINE EARNINGS AND HEADLINE EARNINGS PER SHARE FROM
COMBINED OPERATIONS |
Unaudited
six months ended
31 December 2017 |
Unaudited
six months ended
31 December 2018 |
GBP million |
GBP million |
R million |
R million |
7.5 |
3.3 |
Basic
earnings |
58.2 |
137.8 |
- |
0.3 |
Fair
value movement on asset held for sale |
4.8 |
- |
7.5 |
3.6 |
Headline earnings |
63.0 |
137.8 |
pence |
pence |
|
cents |
cents |
0.39 |
0.20 |
Headline earnings per share |
3.51 |
7.15 |
0.39 |
0.20 |
Diluted
headline earnings per share |
3.50 |
7.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
six months ended
31 December 2018 |
Unaudited
six months ended
31 December 2017 |
HEADLINE EARNINGS AND HEADLINE EARNINGS PER SHARE FROM
CONTINUING OPERATIONS |
Unaudited
six months ended
31 December 2017 |
Unaudited
six months ended
31 December 2018 |
GBP
million |
GBP
million |
R
million |
R
million |
7.5 |
6.5 |
Basic
earnings |
114.0 |
137.8 |
7.5 |
6.5 |
Headline earnings |
114.0 |
137.8 |
pence |
pence |
|
cents |
cents |
0.39 |
0.36 |
Headline earnings per share |
6.34 |
7.15 |
0.39 |
0.36 |
Diluted
headline earnings per share |
6.33 |
7.15 |
|
|
|
|
|
Unaudited
six months ended
31 December 2018 |
Unaudited
six months ended
31 December 2017 |
SUMMARY OF NET DEBT |
Unaudited
six months ended
31 December 2017 |
Unaudited
six months ended
31 December 2018 |
GBP
million |
GBP
million |
R
million |
R
million |
102.7 |
39.2 |
Net
debt |
653.0 |
1,880.3 |
44.5 |
40.6 |
Revolving credit facility |
676.6 |
815.4 |
54.6 |
5.7 |
Elikhulu term loan facility |
95.1 |
1,000.0 |
6.3 |
- |
Gold
prepayments |
- |
115.0 |
(2.7) |
(7.1) |
Cash
and cash equivalents |
(118.7) |
(50.1) |
|
|
|
|
|
Unaudited
six months ended
31 December 2018 |
Unaudited
six months ended
31 December 2017 |
NET CASH GENERATED BY OPERATIONS AFTER TAXATION, ROYALTY
AND FINANCE COSTS AND BEFORE DIVIDENDS |
Unaudited
six months ended
31 December 2017 |
Unaudited
six months ended
31 December 2018 |
GBP
million |
GBP
million |
R
million |
R
million |
17.0 |
8.5 |
Net
cash generated by operations after taxation, royalty and finance
cost and before dividends |
171.1 |
316.6 |
23.4 |
9.5 |
Cash
generated by operations |
187.5 |
434.0 |
(1.1) |
0.4 |
Taxation refund/(paid) |
7.6 |
(20.5) |
(0.3) |
(0.4) |
Royalties paid |
(6.5) |
(5.4) |
- |
(0.4) |
Settlement of cash settled share option costs |
(6.9) |
(0.5) |
(0.5) |
- |
Rehabilitation expenses |
- |
(8.6) |
0.8 |
- |
Net
receipts from financial instruments |
- |
14.6 |
(5.3) |
(0.6) |
Net
finance costs |
(10.6) |
(97.0) |
|
|
|
|
|
Unaudited
six months ended
31 December 2018 |
Unaudited
six months ended
31 December 2017 |
|
NET
ASSET VALUE PER SHARE |
|
Unaudited
six months ended
31 December 2017 |
Unaudited
six months ended
31 December 2018 |
6.5 |
11.7 |
pence |
Group net asset value per share |
cents |
194.3 |
114.4 |
2,234.7 |
2,234.7 |
shares
million |
Total
shares issued at year-end |
shares
million |
2,234.7 |
2,234.7 |
(306.4) |
(436.4) |
shares
million |
Treasury shares |
shares
million |
(436.4) |
(306.4) |
1,928.3 |
1,798.3 |
shares
million |
|
shares
million |
1,798.3 |
1,928.3 |
124.9 |
212.3 |
GBP
million |
Net
asset value |
R
million |
3,493.8 |
2,207.0 |
Contact information |
Corporate Office
The Firs Office Building
2nd Floor, Office 204
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)20 7796 8644 |
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)20 7796 8644 |
John Prior/Paul
Gillam
Numis Securities Limited
Nominated Adviser and Joint Broker
Office: +44 (0)20 7260 1000 |
Marian Gaylard
Questco Corporate Advisory Proprietary Limited
JSE Sponsor
Office: + 27 (0)11 011 9200 |
Ross Allister/David
McKeown
Peel Hunt LLP
Joint Broker
Office: +44 (0)20 7418 8900 |
Julian Gwillim
Aprio Strategic Communications
Public & Investor Relations SA
Office: +27 (0)11 880 0037 |
Jeffrey Couch/Thomas
Rider
BMO Capital Markets Limited
Joint Broker
Office: +44 (0)20 7236 1010 |
Bobby Morse/Chris
Judd
Buchanan
Public and Investor Relations UK
Office: +44 (0)20 7466 5000
paf@buchanan.uk.com |
Website:
www.panafricanresources.com |
Meeting and conference call details are as follows
DATE: 20 February 2019
TIME: 11:00 (SAST time), 09:00 (UK time)
VENUE: Batha Room, 54 on Bath, 54
Bath Avenue, Rosebank, Johannesburg
For those attending in person
Parking is available at Rosebank Mall. Refreshments will be
served after the presentation.
For those dialling in
A live teleconference facility is available for dial-in
participants on the following numbers. Please ask to be joined to
the Pan African Resources PLC call and provide your name and
company upon entering the call.
UK listeners: 0 333 300 1418
SA listeners: 010 201 6800
South Africa toll free: 0800
200 648