Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and...
Transcript of Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and...
![Page 1: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/1.jpg)
Pan African Resources Plc. – Arrowhead BID 1 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Due Diligence and Valuation Report
Arrowhead Code: 19-02-07
Coverage initiated: 10 May 2010
This document: 11 April 2013
Fair share value bracket: GBP0.31 to GBP0.43i
Share price on date: GBP0.16ii
Company: Pan African Resources Plc.
Ticker: AIM: PAF, JSE: PAN
Headquarters: Johannesburg, South Africa
Non-executive Chairman: Keith Cousens Spencer
Website: www.panafricanresources.com
Analyst Team
Vishal Pasari Mohanarangam Purushothaman
[email protected] [email protected]
Market Data
52-Week Range: GBP 0.12 – GBP 0.21iii
Average Daily Volume: 2,743,732iv
Market Cap. on date: GBP 286.86MMv
Financial Forecast Data (in GBP)
‗13E ‗14E ‗15E 16E ‗17E 18E ‗19E
High profit/ (loss) MM
89 120 120 125 128 129 130
High EPS (pence)
4.9 6.6 6.6 6.8 7.0 7.1 7.1
Low profit/ (loss) MM
63 82 81 86 88 89 90
Low EPS (pence)
3.5 4.5 4.5 4.7 4.9 4.9 4.9
Fiscal Year (FY) 1st July – 30th June
Summary
Pan African Resources Plc (Pan African) is a
precious metals firm with its assets based in
South Africa. The company‘s asset portfolio
includes production and near-production projects,
including Barberton Gold Mines, the Phoenix
Platinum Project, and Evander Gold Mines.
The company plans to grow both organically and
inorganically. It has recently completed the
acquisition of Evander Gold Mines for a total
consideration of GBP 116.2MM. In 1H 2013, the
company generated a revenue of GBP 49.4MM
and an attributable profit of GBP 12.4MM.
The company‘s flagship Barberton Mines Project
consists of three operating mines – Fairview, New
Consort, and Sheba – with an estimated mine life
of 17 years. The project contains SAMREC-
compliant mineral resource of 2.95Moz gold and
mineral reserves of 1.16Moz gold. In 1H 2013,
gold sales from Barberton Gold Mines decreased
4.26% to 44.926koz. The decline was primarily
due to shutdown of the Biox plant and mechanical
failure at the Sheba Mine. The company has also
started construction on the Barberton Tailing
Retreatment Project (BTRP). The project,
scheduled to be commissioned in July 2013, has
an estimated mine life of six years, and is likely to
increase the production at Barberton Mines by
20koz per year. The project has an estimated
capital expenditure of ZAR 305.8MM, of which
ZAR 138.5MM was spent as of 2012.
The Phoenix Platinum Project has SAMREC-
compliant resource of 493koz Platinum Group
Metals (PGM) 4Es (4.853MMT ore at 3.16g/t PGM
4Es). Platinum-group elements (PGE) sales from
the mine in 1H 2013 were 3,136oz. The PGE
production was lower than management‘s
expectations, primarily due to a lower head grade
and reduced recoveries, resulting from an
increase in oxidized material content. Over its 17-
year mine life, the project is likely to produce
211koz PGM 6E‘s.
The Evander Gold Mines, acquired by the
company in February 2013, has a resource of
28.74Moz gold and a reserve of 7.66Moz gold. Its
key operational mine Evander 8 shaft is expected
to produce 85-100koz gold annually over its mine
life of more than 10 years. The company plans to
focus on Evander 7 and Evander 9 shafts to
increase the production profile. It also plans to
explore strategic partnership opportunities for the
completion of the bank feasibility study (BFS) at
Evander South and Poplar.
Given the due diligence and valuation estimations
based on intrinsic revenue capacity of existing
assets, Arrowhead believes that Pan African‘s fair
share value lies in the GBP 0.31 to GBP 0.43vi
bracket. This value is based on continuing
production from Barberton Mines, the Phoenix
Platinum Project, Evander Gold Mines, and the
BTRP, which are likely to contribute significantly
to the top line in the coming years.
![Page 2: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/2.jpg)
Pan African Resources Plc. – Arrowhead BID 2 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Table of Contents
Company Presentation ...................................................................................................... 3
News ................................................................................................................................. 5
Listing Information ........................................................................................................... 6
Contacts ............................................................................................................................ 6
Major Shareholders ........................................................................................................... 6
Management and Governance ........................................................................................... 7
Assets and Projects ........................................................................................................... 8
Technologies and Markets ............................................................................................... 15
Project Risk Profile Analysis ............................................................................................ 17
Risk Parameters – Definition ........................................................................................... 18
Peer Valuation and Risk Profile ....................................................................................... 18
Value ............................................................................................................................... 20
Analyst Certifications & Important Disclosures ............................................................... 24
Valuation ......................................................................................................................... 25
Notes and References ..................................................................................................... 26
![Page 3: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/3.jpg)
Pan African Resources Plc. – Arrowhead BID 3 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Company Presentation
Pan African Resources Plc. (Pan African) was incorporated in February 2000 in England and Wales, with
all of production, development, and appraisal assets in South Africa. After transforming itself into a full-
fledged gold production company and continuing to focus on low costs and high margins, the company
entered production of Platinum Group Metals (PGM) in FY 2012. Pan African has categorized its assets
based on the stage of development, with each of its projects managed through its subsidiaries.
Pan African‘s revenue in 1H 2013 decreased 3% to GBP 49.4MM (1H 2012: GBP 51.1MM), primarily due
to a 7% decline in gold sales to 47.5MM. During the period, the company‘s attributable profit decreased
14% to GBP 12.4MM (1H 2012: GBP 14.4MM), due to a decrease in revenue, an increase in cash costs,
and a one-off transaction cost related to the acquisition of Evander Gold Mines. The capital expenditure
during the period was GBP 9.0MM. As of December 31, 2012, the company had a cash balance of GBP
48.3MM.
In January 2013, the company raised ZAR703MM through a rights offer. As part of the offer, 370MM
ordinary shares were issued at a subscription price of ZAR1.90 (GBP 0.14) per rights offer share. The
proceeds of the rights offer will be used to partly fund the Evander Mines acquisition.
The company has explored both organic and inorganic growth opportunities by constructing the
Barberton Gold Tailings Retreatment Project and acquiring the Evander Gold Mines, respectively. On
February 15, 2013, the company announced it had fulfilled the last condition precedent to the
transaction, following which it completed the acquisition of Evander Mines on February 28, 2013. The
company expects the acquisition to double its gold production to 200koz and to rise further to 220koz by
July 2013 after the completion of the Barberton Tailings Retreatment Project. It also plans to focus on
Evander 7 and Evander 9 shafts to increase the production profile and explore strategic partnership
opportunities for the completion of BFS at Evander South and Poplar.
For more detail on Assets, see the Assets and Projects section of this report.
Company’s Portfolio and Premiums
Pan African has progressed from being a precious metals explorer to a producer, and is enhancing its
production and operational capacity through acquisitions (Evander) as well as growing organically
(BTRP). Arrowhead believes that the current pace of both managing mining operations and developing
growing projects should position the company from a junior exploration company to a mid-tier company
in the medium-to-long term.
Developed precious metals projects: Pan African has established itself as a precious metals miner
producing about 200koz of gold and 12koz of PGM annually. Gold production is primarily carried from
Barberton Mines. Production at the Phoenix Platinum Project began in November 2011, and subsequently
a ramp up was completed in July 2012. The company is also working towards enhancing its production
profile at Barberton Mines through the BTRP, which is likely to push the annual production by 20koz to
25Koz from FY 2013 onwards.
Low-cost producer: Pan African is one of the lowest cash-cost producers in the South African mining
industry — its Barberton mine‘s cash cost was US$856/oz in 1H 2013. The company expects to be one of
the lowest cash cost producers of PGMs in South Africa.
Benefits of extraction from tailings: This process is a proven technical concept with low mining risks.
From a commercial perspective, the economics are compelling, as it requires only a small plant footprint
(50m X 50m). Additionally, it constitutes a low-cost, a low-risk, and a high-margin process. Pan African
has adopted the same methodology of extraction for BTRP where it would reclaim surface tailings that
require no underground mining, hence, placing it on the lower end of the cost curve.
Synergies from the acquisition of Evander: The acquisition of a 100% stake in Evander is a move
towards the company‘s strategic objective of acquiring a high-grade, high-margin asset on the low end
of the cost curve. This deal will help Pan African to double its annual gold production to 200koz. The
acquisition is likely to reduce the overall operational risk of the company. Pan African considers Evander
to match the margin yielding capability of Barberton, with the Evander 8 shaft ore-body possessing gold
![Page 4: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/4.jpg)
Pan African Resources Plc. – Arrowhead BID 4 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
grades in excess of 14g/T in the Measured and Indicated (M&I) resource category. The company targets
production of 100koz gold from Evander mines.
Experienced management team: Pan African management team‘s strong mining background has been
the main force behind the company‘s progress. The Evander Mines acquisition is also expected to bring
along an experienced management team and workforce, besides good infrastructure.
For more details, please refer to the Management and Governance section
Company’s Portfolio and Risks
Concentration risk: Despite achieving significant progress in its current mining and development
projects, Pan African remains exposed to concentration risk arising from sole dependence on gold and
PGM. Additionally, its operations are focused in South Africa, which exposes it to the risks emanating
from regional concentration and no global exposure.
Financial risk: As on March 13, 2013, Pan African had a operational cash balance of ZAR 157.4MM. The
company recently acquisition of Evander Mines which was funded through proceeds from rights offer of
ZAR 703MM, and utilizing ZAR 350MM from a revolving credit facility of ZAR 600MM. We believe that a
further equity financing will likely dilute shareholdings, and an additional debt financing may involve
restrictions on financing and operating activities.
For a detailed risk assessment, please refer to the Risk profile analysis section.
Company’s Corporate Strategy
Pan African continues to focus on achieving significant growth potential, low-cost base, high margin
productivity, and improving efficiency.
Change in investment criteria: Disappointing results from early stage exploration projects have pushed
Pan African to invest in projects that are at or near pre-feasibility. The current investment criteria
include low cost, high profit margin, significant resource growth, and at or near production. The recent
acquisition of a 100% interest in Evander Gold Mines also demonstrates this strategy.
Growth Strategy: Pan African‘s focus is on identifying and evaluating gold and platinum projects in Africa
that are at the near-term production or advanced stages such as mine development, construction or
production. Acquisition of Evander will enhance the production profile contributing to its current gold
production at Barberton mines with the extension of the reserve life of the portfolio.
Project strategic overview: Pan African aims to continue producing gold at Barberton at the lowest
possible cash cost and bring the Phoenix Platinum production to 12koz annually. It also plans to start
constructing a 1.2Mtpa BTRP.
![Page 5: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/5.jpg)
Pan African Resources Plc. – Arrowhead BID 5 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
News
– Completion of Evander Mines acquisition: On March 14, 2013, the company announced it has
completed acquisition of Evander Gold Mines on February 28, 2013 and has settled the transaction
purchase consideration in full. Payment of the purchase consideration was funded through a
combination of cash resources and bank funding. As on March 13, 2013, Pan African group had
operational cash resources available of ZAR157.4MM.
– Resignation of Chief Executive Officer: On February 27, 2013, the company announced
resignation of Mr Jan Nelson as the Company‘s Chief Executive Officer and as a member of the board
of directors. The resignation will be effective from March 1, 2013. The Board has appointed Mr. Ron
Holding and Mr. Cobus Loots as joint interim CEO‘s of the company.
– Acquisition of Evander Gold Mines Limited becomes unconditional: On February 15, 2013, the
company announced that the last remaining condition precedent to the transaction had been
fulfilled, and the transaction is now unconditional. The company will assume effective control over
Evander on February 28, 2013.
– Publication of interim results: On February 13, 2013, the company published interim results for
the half-year period ending December 31, 2012. Revenue during the period marginally declined 3%
yoy to GBP 49.5MM, while net profit after taxes declined 14% yoy to GBP12.3MM.
– Completion of rights offer: On January 14, 2013, the company announced the completion of its
ZAR 703MM rights offer implemented by issuing 370MM new ordinary shares at a subscription price
of ZAR1.90 (GBP 0.14) per rights share. The rights offer closed on January 11, 2013. The company
received subscription applications for a total of about 646MM rights shares, equating to 175% of the
available rights shares. Pan African will use the rights offer proceeds to acquire Evander Gold Mines
Limited.
– Publication of annual report: On November 6, 2012, the company published the annual report for
fiscal year ending June 30, 2012. The company‘s mining profit increased 67% yoy to GBP 51.5MM,
while profit after tax increased 70% yoy to GBP 29.2MM.
– Disposal of Manica Gold Project: On August 29, 2012, the company announced that it entered
into an agreement on August 28, 2012 to dispose of 100% of its Manica Gold Project to Auroch
Minerals Mozambique (Pty) Ltd, a wholly owned subsidiary of Terranova Minerals NL, for a total
potential purchase consideration of AUD 6MM (GBP 4MM/ZAR 52.4MM) payable in cash and
96,666,668 shares in Terranova, subject to certain terms and conditions. Pan African shall receive
the first portion of purchase consideration comprising AUD 2MM (GBP 1.3MM/ZAR 17.5MM) and
25MM shares in Terranova subject to conditions precedent to the transaction. The remaining portion
of the purchase consideration shall only become payable in tranches upon achievement of milestones
by Manica during the four-year period after the completion of the transaction.
– Evander Gold Mines acquisition update: On August 17, 2012, the company announced the
procurement of approximately 57% irrevocable shareholder support in respect of the proposed
acquisition of 100% of Evander Gold Mines Limited From Harmony Gold Mining Company Limited.
According to CEO Jan Nelson, ―Subject to shareholder approval, Pan African will issue approximately
25% of new share capital in new equity to fund a cash generative business that will double annual
gold production to some 200koz per annum and add significant reserves and resources.‖
– Pan African to acquire 100% of Evander: On May 30, 2012, the company announced that it
entered into an agreement with Harmony Gold Mining Company Limited to acquire the entire issued
share capital of and claims against Evander from Harmony for a total purchase consideration of
R1.5B. Pan African shall pay to Harmony an amount of no less than R1B upon the fulfillment or
waiver of all the conditions, other than consent, and pay the remainder of R500MM in cash upon the
fulfillment of the consent condition. The funding is expected to be done through a mix of debt (to an
extent of R600MM), cash reserves, and issue of equity.
– Pan African strengthens board by appointing Hester Hickey: On April 12, 2012, the company
announced the appointment of Hester Hickey as a non-executive director with immediate effect.
![Page 6: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/6.jpg)
Pan African Resources Plc. – Arrowhead BID 6 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Listing Information
Pan African Resources Plc. is a listed equity on JSE Limited (Ticker: PAN, Date of Re-Listing – 1
December 2009) and AIM (Ticker PAF, Date of Re-Admission – 31 July 2007).
Contacts
Company Secretary and Investor
Relations (UK) Administrative office in South Africa
Address
St James's Corporate Services Limited 6 St James's Place, London SW1A 1NP
United Kingdom
Office 101, First Floor, The Firs Cnr Cradock and Biermann Avenues Rosebank, Johannesburg
South Africa
Telephone + 44 (20) 7499 3916 + 27 11 243 2900
Facsimile + 44 (20) 7491 1989 + 27 11 880 1240
E-mail [email protected] [email protected]
Major Shareholdersvii
Equity Holder No. of Shares Held (MM) Percentage Holding
Shanduka Gold (Pty) Limited 436.36 23.96%
Coronation Fund Managers 125.27 6.88%
Allan Gray Investment Council 116.64 6.41%
Investec Asset Management (South Africa) 109.31 6.00%
Afena Capital 99.88 5.49%
Investec Asset Management (UK) 79.42 4.36%
Prudential Portfolio Managers 58.05 3.19%
Public Investment Corporation 55.26 3.03%
Citibank NA 28.96 1.59%
Sunvest Corporation Limited 25.70 1.41%
![Page 7: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/7.jpg)
Pan African Resources Plc. – Arrowhead BID 7 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Management and Governance
Pan African‘s management and governance team is composed of a balance of experienced mining
engineers and geologists with established careers in gold exploration, mining and geological valuation.
In February 2013, Mr. Jan Nelson resigned as the company‘s Chief Executive Officer and as a member of
the board of directors. The Board has appointed Mr. Ron Holding and Mr. Cobus Loots as joint interim
CEO‘s of the company.
Personnel Designation Work Experience
Keith Cousens Spencer
Non-Executive Chairman
Keith Cousens Spencer is a qualified mining engineer with 35 years of mining experience. In 1984, Keith was appointed as General Manager of Greenside Colliery and moved to Kloof Gold Mine as General Manager in 1986. He also served as MD of Driefontein Consolidated, chairman and MD
of Deelkraal Gold Mine, and a board member of all gold mines belonging to Gold Fields of South Africa.
Cobus Loots
Non-Executive Director, and
Joint Interim CEO
Mr. Loots was appointed Joint Interim CEO on March 1, 2013. Prior to joining Pan African Resources, he worked in Sentula Mining and Macquarie
Africa (Investment Banking). In 2008, he became a principal at Shanduka Coal. Loots is a chartered accountant.
Ron Holding
Chief Operating
Officer and Joint Interim CEO
Mr. Holding was appointed Joint Interim CEO on March 1, 2013. He has
been an employee of Phoenix Platinum Mining (Proprietary) Limited and Pan African since 2001.
Busi Sitole Finance Director
Busi Sitole is a chartered accountant. In December 2007, she joined Shanduka Group, where she was responsible for sourcing and execution, including raising capital and monitoring the company‘s investments. Prior
to joining Shanduka Group, she was a financial manager at RMB Treasury Agency Businesses, new treasury products marketer at Absa Capital, and finance manager at Standard Bank Structured Finance. At Standard Bank,
she completed her 3-year articleship as a trainee accountant.
Phuti Mahanyele
Non-Executive Deputy Chairman
Phuti is the CEO of Shanduka Group Ltd. She joined Shanduka in 2004 as
the managing director of Shanduka Energy Ltd, the Group‘s subsidiary, which focuses on electricity, oil, and gas in Africa. Prior to joining Shanduka, she was the head of the Project Finance South Africa unit at the Development Bank of Southern Africa.
Rob Still Non-Executive
Director
Rob Still has vast experience in mining, with specialization in mining finance. Prior to joining Pan African Resources, he was a partner at Ernst & Whinney. He co-founded Rhombus Exploration Limited and held executive and non-executive directorships in listed companies across South Africa,
Australia, Canada, and the UK. He has also participated in evaluation and development of mining projects — Rhovan, Ticor Titanium, Pangea Gold
Fields Limited, Southern Mining Corporation Limited, Great Basin Gold Limited, and Zimbabwe Platinum Mines Limited.
Hester Hickey
Non-Executive Director
Hester Hickey is a chartered accountant by profession and is currently a director of Omnia Limited, Afdawn Limited, and AGRE Insurance Company Limited. She has been a director of Glenrand MIB Limited and Metorex Limited since the past 5 years. Hester, also a member of audit committee,
has a lot of experience in corporate governance and audit. She has worked as a trustee and audit committee chairman for a variety of major resources companies in South Africa.
![Page 8: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/8.jpg)
Pan African Resources Plc. – Arrowhead BID 8 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Assets and Projects
Overview
Pan African has progressed from being a precious metals explorer to producer and is enhancing its
production and operational capacity organically and through acquisitions. The company‘s asset portfolio,
located entirely in South Africa, consists of three key projects — the Barberton Mines Project, the
Phoenix Platinum Project, and the Evander Mines Project.
Company’s Asset Portfolio
The company‘s primary asset is the Barberton Gold Mines that produces approximately 100koz gold a
year. The company‘s other projects include the Phoenix Platinum Project (commissioned in April 2012)
and the Evander Gold Mines (acquisition completed in February 2013).
Project location Project overview
Source: Company filings Source: Company filings
Barberton Mines Project
Company’s interest in the Project: 100%
Asset Summary: The Barberton Mining
Operations consists of three production-stage
mines — Fairview, New Consort, and Sheba —
having a mine life of 17 years. Gold production
from these mines in FY 2012 and 1H 2013 was
94.5koz and 44.93koz, respectively. Post the
commissioning of the BTRP project, annual gold
production is likely to increase by ~20koz.
Target commodity: Gold
Location: 25km southeast of Nelspruit, in the
Mpumalanga province in South Africa.
Barberton Mines – tenement description
South Africa
Primary / Flagship Projects
•Barberton Mines Project - 100% interest; Gold
South Africa
Secondary Projects
•Phoenix Platinum Project - 100% interest; Platinum Group Elements (primarily Platinum, Palladium, and Rhodium)
•Evander Gold Mines project - 100% interest; Gold
![Page 9: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/9.jpg)
Pan African Resources Plc. – Arrowhead BID 9 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Regional geology: The Barberton Greenstone
Belt is a large, triangular-shaped remnant of
metavolcanic and metasedimentary rocks
surrounded and intruded by granitoid bodies. The
structure consists primarily of northeast trending
shear zones separating upright to recumbent
syncinal folds. Most of the known occurrences of
gold within the Barberton Greenstone Belt are
localized in the James and Sheba Hills to the
north and north east of the Barberton and the
Moodies Hills to the immediate south west.
Barberton Mines – Regional Geology
1H 2013 Performance: In 1H 2013, gold sales
from the Barberton Gold Mining Operations
decreased 4.26% to 44.926koz (1H 2012:
46.927koz). The decline was primarily due to a
shutdown in the Biox plant, and mechanical
failure at the Sheba Mine. Total ore milled and
the overall recovery during the period were
relatively constant at 156KT and 90%,
respectively (1H 2012: 155KT and 89%,
respectively).
Production Statistics for the past five years
Though the total cash costs in 1H 2013 increased
9% to US$856/oz (1H 2012: US$786/oz), the
cash costs were significantly lower than the
average gold price of US$1,685/oz. Salaries
contributed 47% to cash cost, followed by mining
(13%) and processing (10%) expenditures.
Cash cost v/s Gold price trend
Total capital expenditure increased significantly in
1H 2013 to GBP 121.6MM (1H 2012:
GBP55.1MM), of which GBP 83.1MM was spent on
the BTRP. The remaining was spent on
maintenance and development capital.
Potential mineralization: Barberton Mining
Operations Resources is estimated to contain
2.9Moz gold (17.14MMT ore at an average grade
of 5.35g/t). Approximately 58% of the total
resources are located in Fairview Mine, followed
by Sheba (31%) and New Consort (11%) mines.
Resource Summary – June 2012
Tonnage
(KT) Grade (g/t)
Gold (MT)
Gold (koz)
Measured 3,200 8.18 26.2 840
Indicated 10,030 3.87 38.8 1,250
Inferred 3,910 6.82 26.7 860
Total 17,140 5.35 91.7 2,950
Source: Annual Report 2012
Total reserves in Barberton Mines are estimated
to be 1.16Moz Gold (11.34MMT ore at an average
grade of 3.17g/t). Approximately 63% of the
resources are located in Fairview Mine, followed
by Sheba (31%) and New Consort (6%) mines.
Reserve Summary – June 2012
Tonnage
(KT) Grade (g/t)
Gold (MT)
Gold (koz)
Proved 1,570 7.49 11.7 380
Probable 9,770 2.49 24.3 780
Total 11,340 3.17 36.0 1,160
Source: Annual Report 2012
![Page 10: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/10.jpg)
Pan African Resources Plc. – Arrowhead BID 10 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Recent Developments: In 1H 2013, 8,443.5m
of exploration drilling and 5,946.3m of
development drilling were completed.
Fairview Mine
Company’s interest: 100%
Target commodity: Gold
Regional geology: The Fairview property is
located along the central and southern portions of
Eureka Syncline and Ulundi Synclinorium. These
synforms are separated by the Sheba Fault and
bounded to the north by the Lily Fault and to the
south by the Barbrook Fault. These structures
were subsequently arcuated about a north-west
axis that resulted in the formation of most of the
mineralized shears.
Fairview Mine – cross section
Potential mineralization: Total resources in
Fairview Mine are estimated to be 4.8MMT ore at
an average grade of 13.60 g/t, (including
Measured and Indicated Resources of 3.32MMT
ore at 11.83g/t). Total reserves in the mine are
estimated to be 2.50MMT ore at an average grade
of 11.17g/t.
Recent developments: In FY 2012, the 54-level
Rossiter Orebody project was completed and the
indicated resource block was converted to a
measured resource (50g/t over 3.8m). In 1H
2013, about 1,688.8m of exploration drilling and
1,871.4m of development was completed in the
mine.
Sheba Mine
Company’s interest: 100%
Target commodity: Gold
Regional geology: The Swartkoppie Formation
at the Onverwacht Group is represented by well-
developed schist and green schists associated
with banded black and white chert, which is host
to gold mineralization. The Fig Tree Group
consists of pelitic sediments banded with
interlayered siliceous chemical sediments. The
Moodies Group consists primarily of clastic
sediments comprising conglomerates, quartzites,
and calcareous sandstones
Sheba Mine – cross section
Potential mineralization: Total resources in
Sheba Mine are estimated to be 2.57MMT ore at
5.70 g/t (including Measured and Indicated
Resources of 1.60MMT ore at 6.47g/t). Total
reserves in the mine are estimated to be
1.23MMT ore at an average grade of 5.05g/t.
Recent developments: In the Zwartkoppie (ZK)
area, a mineable block has been delineated. The
company plans to commence stoping and conduct
exploration drilling to delineate various cross
fractures. In the Edwin Bray, Thomas and Joe‘s
Luck area, incline development towards the high-
grade surface borehole intersections was carried
out in FY 2012 and additional infill exploration
drilling is likely to continue in FY 2013. In 1H
2013, ~2,871m of exploration drilling and
2,297.2m of development drilling were completed
in the mine.
New Consort Mine
Company’s interest: 100%
Target commodity: Gold
Regional geology: The ore bodies are subjected
to higher-grade metamorphism, and contact between the talc-biotite-amphibole schist and
intercalated leptite group and the metapelites is
![Page 11: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/11.jpg)
Pan African Resources Plc. – Arrowhead BID 11 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
marked by a sheared and highly siliceous
mylonite known as the new consort bar. The
rocks of the bar are strongly laminated and highly
siliceous with alternating layers in shades of
green and brown due to the varying content of
the mica.
New Consort Mine – cross section
Potential mineralization: Total resources in
New Consort Mine is estimated to be 0.91MMT
ore at an average grade of 9.60g/t (including
Measured and Indicated Resources of 0.61MMT
ore at 9.91g/t). Total reserves in the mine are
estimated to be 0.24MMT ore at an average grade
of 8.04g/t.
Recent developments: In FY 2012,
development to the east through the pegmatite
was successful, and development on the shale is
expected to continue in FY 2013. Further,
exploration drilling from strategic points is
expected to determine the extent of
mineralization. A station was successfully
established on the 52nd level and the shaft
decline is expected to be developed to the 53rd
level in FY 2013. In 1H 2013, ~3,884.2m of
exploration drilling and 1,777.7m of development
drilling were completed in the mine.
Barberton Tailing Retreatment Project
Company’s interest: 100%
Asset summary: The construction for the BTRP
project commenced on April 2012 and is expected
to be commissioned by July 2013. The project has
an estimated mine life of six years, and is
expected to increase the production in Barberton
Mines by 20koz per year.
Target commodity: Gold
Regional geology: Geostatistical modeling
indicates 74,600oz (758KT @ 3.06g/t in situ) for
the BIOX® section and 72,900oz (2.369Mt @
0.96g/t in situ) for the concentrator/flotation
section. This represents a total resource of
147,500oz (3.130Mt @ 1.47g/t in situ).
Recent developments: On 4th April 2012, the
company commenced bulk earthworks entailing
bulk excavations. The project is expected to be
commissioned in July 2013, with an estimated
capital expenditure of ZAR 305.8MM, of which
ZAR138.5MM had been spent as of December
2012.
Capital Expenditure
FY 2012 ZAR 55.417MM
1H 2013 ZAR 83.141MM
Historical Capital Expenditure (Dec 2012)
ZAR 138.558MM
Forecasted Capital expenditure ZAR 167.220MM
Total Capital Expenditure ZAR 305.778MM
Potential mineralization: The BTRP comprises
a total resource of ~654koz gold (13.7MMT ore at
an average grade of 1.38g/t) and a reserve of
~248koz gold (13.7MMT ore at an average grade
of 0.56g/t). The company expects annual gold
production of 20koz gold.
Project schedule: The company expects
construction to be completed by April 2013, and
expects cold commissioning by May 2013. The
following table details the project schedule before
hot commissioning in July 2013:
Event Status Target date
Plant Construction
Civil Construction In Progress Mar-2013
Mechanical / Structural / E&I Construction
In Progress Mar-2013
Commissioning To commence June-2013
Major Infrastructure
Water Reticulation Completed in Oct-2012
Electrical Reticulation In Progress Mar-2013
Environmental Impact Assessment
EIA In Progress Completed in Nov-2012
Water Use License Completed in Jul-2012
Tailings Storage Facility
Design Completed in Jul-2012
Construction To Commence Apr-2013
![Page 12: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/12.jpg)
Pan African Resources Plc. – Arrowhead BID 12 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Phoenix Platinum Project
Company’s interest: 100%
Asset summary: The project recovers PGMs
from tailings dumps, dams, and current arisings
through mineral rights agreements pertaining to
Buffelsfontein Dams and current arisings — the
Elandskraal dumps and pits and the Kroondal
dump — located in the north-west province of
South Africa. The tailings, dumps, and current
arisings are covered through various agreements
and are the feed source for 240 ktpa CTRP plant.
Phoenix Platinum –Corporate Structure
Target commodities: Platinum (56.5%),
Palladium (27%), Rhodium (16%), and Gold
(0.5%)
Location: Northwest province in South Africa,
between the towns of Rustenburg and Britsin.
Phoenix Platinum– tenement description
Regional geology: The Bushveld Complex is the
largest layered igneous complex in the world. It is
host to the world‘s largest deposits of PGM 4Es,
chromium, and vanadium. The Proterozoic complex is divided into the lower Rustenburg
Layered Suite of ultramafic/mafic rocks, the
Lebowa Granite Suite, and the felsic extrusive
rocks of the Rashoop Granophyre Suite.
Throughout the complex, the reefs extend
laterally over hundreds of square kilometers,
resulting in extensive mineral resources, where
continuity has been established over many years
of exploration and mining.
Phoenix Platinum – regional geology
Historical developments: The company has
entered into a formal Chrome Tailings
Retreatment Plant (CTRP) agreement with
International Ferro Metals SA (Pty) Ltd (IFM) to
construct and commission the CTRP on IFM‘s
Lesedi Mine property. The CTRP was designed to
treat sulphide material from the Lesedi Mine.
Potential mineralization: The project has
SAMREC-compliant resource of 493koz PGM 4Es
(4.853MMT ore at 3.16g/t PGM 4Es). Over its 17-
year mine life, the project is likely to produce
211koz PGM 6Es (at a recovery rate of 45%) with
a planned annual retreatment capacity of 240KT.
Recent developments: In 2012, IFM has
reduced the sulphide mining and has started
mining lower-cost, open-cast oxidized material.
This has led to a decrease in PGM concentrate
production in 2012, owing to the mixing of
oxidized tailings into the Phoenix feedstock. To
address the issue, the company plans to complete
the construction of an additional tailings storage
facility to bypass oxide tailings by July 2013. It also plans to increase feedstock (to increase PGE
6E production), reduce operating costs, and
![Page 13: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/13.jpg)
Pan African Resources Plc. – Arrowhead BID 13 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
explore ways to increase recoveries from oxide
material.
1H 2013 Performance: Sales in 1H 2013 were
3,136oz PGE. The PGE production was lower than
management expectations, primarily due to a
lower head grade of 3.75g/t (Budgeted: 4.50g/t),
and lower recoveries of 19% (Budgeted: 33%).
The decrease is primarily due to an increased
share of oxidized material. The total cash cost of
production and basket price during the period
were US$861/oz and US$1,013/oz, respectively.
Buffelsfontein (IFM’s Lesedi Mine)
In 2008, the company acquired the PGM 4Es
mineral rights in the IFM tailings dams and
Current Arisings situated on the farm
Buffelsfontein. There are four tailings dams on
IFM‘s Lesedi Mine, which are currently used on a
rotational deposition plan.
Potential mineralization: The resources and
reserve summary of the Buffelsfontein Tailings
Dams, as on June 30, 2012, is as follows:
Resource Summary (Tailings Dams) – June 2012
Tonnage
(KT)
PGM Grade
4E (g/t)
PGM Metal (kg)
PGM Metal (koz)
Measured 218 3.66 797 26
Indicated 208 3.39 704 23
Inferred
Total 426 3.52 1,501 49
Source: Annual Report 2012
Reserve Summary (Tailings Dams) – June 2012
Tonnage
(KT)
PGM Grade
4E (g/t)
PGM Metal (kg)
PGM Metal (koz)
Proved 218 1.65 359 12
Probable 208 1.52 317 10
Total 426 1.59 676 22
Source: Annual Report 2012
The resources and reserve summary of the
Buffelsfontein Current Arisings, as on June 30,
2012, is as follows:
Resource Summary (Current Arisings) – June 2012
Tonnage
(KT)
PGM Grade
4E (g/t)
PGM Metal (kg)
PGM Metal (koz)
Measured 1,597 3.66 5,845 188
Indicated 443 3.66 1,621 52
Inferred 641 3.66 2,348 75
Total 2,681 3.66 9,814 315
Source: Annual Report 2012
Reserve Summary (Current Arisings) – June 2012
Tonnage
(KT)
PGM Grade
4E (g/t)
PGM Metal
(kg)
PGM Metal
(koz)
Proved 1,597 1.65 2,630 85
Probable 443 1.65 730 23
Total 2,040 1.65 3,360 108
Source: Annual Report 2012
Elandskraal
The chrome tailings are scattered around the
Elandskraal farm in a number of pits, old tailings
dams and tailings dumps. Phoenix Platinum
entered into an agreement with Minco Reduction
Works to remove and treat 946.33KT of chrome
tailings from the Minco‘s mining area on
Elandskraal for PGM recovery.
Potential mineralization: The resources and
reserve summary of the mine, as on June 30,
2012 is as follows:
Resource Summary – June 2012
Tonnage
(KT)
PGM Grade
4E (g/t)
PGM Metal (kg)
PGM Metal (koz)
Measured 1,149 2.45 2,813 90
Indicated 145 2.04 296 9
Inferred 42 2.00 84 3
Total 1,336 2,39 3,193 102
Source: Annual Report 2012
Reserve Summary – June 2012
Tonnage
(KT)
PGM Grade
4E (g/t)
PGM Metal (kg)
PGM Metal (koz)
Proved 1,149 1.10 1,266 41
Probable 145 0.92 133 4
Total 1,294 1.08 1,399 45
Source: Annual Report 2012
Kroondal Dump
The company acquired common law rights to the
PGM 4Es contained in the Kroondal dump from GB
Mining. The rights to chrome content are owned
by Xstrata Chrome.
Potential Mineralization: The resources and reserve summary of the mine, as on June 30,
2012, is as follows:
![Page 14: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/14.jpg)
Pan African Resources Plc. – Arrowhead BID 14 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Resource Summary – June 2012
Tonnage
(KT)
PGM Grade
4E (g/t)
PGM Metal (kg)
PGM Metal (koz)
Measured 260 2.00 520 17
Indicated 30 2.00 60 2
Inferred 120 2.00 240 8
Total 410 2.00 820 27
Source: Annual Report 2012
Reserve Summary – June 2012
Tonnage
(KT)
PGM Grade
4E (g/t)
PGM Metal (kg)
PGM Metal (koz)
Proved 260 0.90 234 8
Probable 30 0.90 27 1
Total 290 0.90 261 9
Source: Annual Report 2012
Evander Gold Mines project
Company’s interest in Project: 100%
Asset summary: Evander Gold Mines was
acquired by Pan African Resources in February
2013. Evander operations comprise the operating
Evander 8 shaft and several significant
development projects. The operational mine,
Evander 8 shaft, has an expected mine life of
more than 10 years.
Target commodity: Gold
Location: Mpumalanga in South Africa
Evander Gold Mines – Tenement description
Acquisition: On May 30, 2012, the group
entered into an agreement with Harmony Gold
Mining Company Limited to acquire Evander Gold Mines for a total purchase consideration of
GBP116.2MM. On February 15, 2013, the
company announced that the transaction with
Harmony has become unconditional following the
consent of the Minister of Mineral Resources in
accordance with section 11 of the MPRDA, the last
remaining condition precedent to the transaction.
It completed the acquisition of Evander Gold
Mines on February 28, 2013.
Potential mineralization: Evander's total
underground resource represents 28.74Moz
(110MMT ore at 8.16g/t) and a reserve of
7.66Moz (28MMT ore at 8.45g/t). The Evander 8
shaft, the operational mine, has an expected
mine life of more than ten years and is expected
to produce between 85-100Koz annually.
Evander Gold Mines – Resources
Evander Gold Mines – Reserves
Recent developments: After the acquisition, the
company plans to focus on the Evander 7 Shaft to
increase the production profile, explore the
Evander 9 Shaft to access the recommencement
of mining activities, and explore ways to increase
the current mine life. The group also plans a
strategic partnership for the completion of a BFS
at Evander South and Poplar.
![Page 15: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/15.jpg)
Pan African Resources Plc. – Arrowhead BID 15 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Technologies and Markets
Platinum Group Metals (PGM)
Chemistry and properties
The Platinum Group Metals comprise six metallic
elements clustered together in the periodic table,
including ruthenium, rhodium, palladium,
osmium, iridium, and platinum.
Production and supply: Platinum supplies are
mainly concentrated in South Africa, with the
largest reserves located in the Bushveld Complex
in South Africa. Platinum is susceptible to
fluctuations in supplies and price variations due to
labor unrest/strikes and shortages of electrical
power in South Africa, which interrupt mining
output. Uncertainties also persist on the flow of
supplies from Russia.
The supply of platinum has revived after falling
10% in 2008, reporting a 6% yoy growth in 2011.
During 2012, platinum supply decreased 10% yoy
to 5.840koz due to lower production from South
Africa and fell substantially due to mining
disruptions in South Africa and the closure of
operations, coupled with lower recycling.
Platinum Supply (Moz)
Source: Johnson Matthey
Demand: The demand for Platinum declined 3%
and 15% yoy in 2008 and 2009, respectively,
recovering to grow 16% and 2% in 2010 and
2011, respectively. During 2012, platinum
demand was relatively constant at 8.070Moz
compared with the 2011 levels of 8.095Moz. The
worldwide demand for PGMs is expected to grow
moderately due to the strong demand for
responses to pollutants, particularly automotive
pollutants.
Historically, the demand for Platinum has
outpaced supply over most of the last decade.
However, the platinum market was expected to
be in deficit of 400koz in 2012, compared with a
surplus of 195koz in 2011.
Platinum Demand (Moz)
Source: Johnson Matthey
Applications: PGMs are used in a wide variety of
industries, including as autocatalysts, jewelry and
fuel cells.
Demand by application
Source: Johnson Matthey
Market trends: Prices and drivers
According to market trends, platinum prices are
sensitive to shifts in both the Japanese and U.S.
markets, and increasingly in the Chinese
economy. Seasonally, platinum prices tend to
increase during the first quarter of the year as
industrial production tends to be strong during February and March. Prices also tend to dip during
the August-September period as the biggest rush
![Page 16: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/16.jpg)
Pan African Resources Plc. – Arrowhead BID 16 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
of auto production, the leading industrial
consumer of platinum, is completed for the new
model year.
Platinum prices declined to US$1,391/oz in July
2012, after reaching US$1,728/oz in February
2012. However, prices have been rising in 2H
2012 due to supply concerns and labor
disruptions in South Africa.
Platinum Prices (US$/oz)
Source: Johnson Matthey
Gold
Chemistry and properties
Gold is the most widely accepted and applied
precious metal, with the chemical symbol ‗Au‘ and
the atomic number ‗79‘. It is dense, soft, shiny
and the most malleable and ductile pure metal.
Applications
Gold, due to its properties, has been a highly
sought-after precious metal for coinage, jewelry
and other arts since the beginning of recorded
history. It has been mainly used for jewelry
(48%), investments (40%) and technological
purposes (12%).
Demand and supply
The global demand for gold in 2012 decreased
marginally to 4.41KT, (2011: 4.07KT) due to
declines across jewelry, investments and the
technology sector. However, the annual gold
demand was higher than the past five-year
average. India and China together constitute
around 51% of the demand. The demand for gold
is expected to increase mainly for investment
purposes, triggered by gold‘s inflation-hedging
properties and an increase in global inflation due to central banks‘ focus on growth, globally.
Gold production involves relatively long lead
times, with new mines taking up to 10 years to
come on stream. As a result, its output is
relatively inelastic to changes in the price outlook.
Gold supply in 2012 decreased 1.4% yoy to
4.45KT, primarily due to lower supply from
recycling.
Market Drivers
The demand for gold is mainly driven by the need
for value preservation, which largely depends on
the economic situation (money supply, inflation,
interest rates, debt, equity markets, etc.). The
demand generally rises during weak economic
conditions as gold is considered a safe haven for
investments.
Another important driver is the fabrication
demand from downstream sectors, predominantly
jewelry. Also, a structural shift in central banks‘
policy towards gold in recent times is driving
demand. Further, China, one of the largest buyers
of U.S. Treasuries, reduced its holdings in US
treasuries and is increasing gold reserves by
around 30% a year.
Gold price trends
The gold price has been rising since 2001, when
the price was around US$250/oz. It reached
record levels in early 2011, due to an increase in
money supply in the US.
In 1H 2012, the gold price fell primarily due to
lower imports from India and tight credit
conditions arising from the Eurozone debt crisis.
However, the price rose in 2H 2012, backed by an
increase in demand from India and monetary
easing by the US Fed.
Gold Price trend in last five years
Source: Bloomberg
![Page 17: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/17.jpg)
Pan African Resources Plc. – Arrowhead BID 17 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Project Risk Profile Analysis
In comparison to its peers, Pan African Plc has a
low risk profile, as the advanced and operational
stages of its projects mitigate any potential
financing risk in the near-to medium term.
Peer risk analysis
We have evaluated the risk profile of Pan African
Resources compared with other peer companies.
We identified the risk as Low/Medium/High and
assigned a score of 1/2/3 respectively based on
the risk profile of the major projects pursued by
the companies. The important risk categories
considered for the study include:
– Project Maturity Risk: LOW - Near feasibility;
HIGH - Proof of concept/production stage
– Financing Risk: LOW - Near negotiations /
lower exploration capex; HIGH - Funding need
for exploration/ no well-known funding
sources
– Operational / execution Risk: LOW - Advanced
stages of production and stable grade
extraction; HIGH - Early development stages
and volatile grade extraction or more
– Key Man Risk: LOW - All key operations /
decisions do not depend on a few people;
HIGH - few decision makers whose presence
is critical for decision making
The individual risk parameters and the underlying
rationale for the scores are discussed in the
subsequent sections.
Peer risk profile
Ticker
Total
Risk
Score
Project
Stage
Risk
Financing
Risk
Operational
Risk
Key Man
Risk
PAF 1.2 1.0 1.0 1.5 1.3
AVM 1.7 1.5 2.0 2.0 1.5
AMA 2.1 2.5 2.0 2.0 1.5
GRL 2.7 3.0 2.5 3.0 2.0
GFI 1.2 1.0 1.3 1.5 1.0
South African Projects
Project stage risk – LOW
– Pan African Resource‘s asset portfolio consists
primarily of operational stage projects –
Barberton Mines Operations and the Phoenix Platinum Project. The recent acquisition of
Evander Gold Mines is also expected to boost
the company‘s production profile. The
company‘s Barberton Tailing Retreatment
Project is currently under development, and is
scheduled to be commissioned in July 2013.
– We believe that the advanced stages of its
current projects significantly reduce
uncertainty regarding the sustainability of the
project. Hence, we believe the project has a
low project stage risk.
Financing/capex Risk – LOW
– Pan African completed the Evander acquisition
in February 2013, which was funded through
proceeds from ZAR703MM rights offer and
ZAR350MM from the revolving credit facility
(RCF). As on March 13, 2013, the company
has operational cash of ZAR157.4MM, along
with an unutilized RCF of ZAR250MM.
– We believe that through its operational
projects, Pan African Resources will be able to
generate sufficient cash flow to service its
debt and meet its capex requirements. We
estimate the company to have a medium
financing risk profile in the near to medium
term, though we believe that any future debt
financing may involve restrictions on financing
and operating activities.
Operational risk – LOW
– The company‘s assets in its Barberton Mine
Project – Fairview Mine, New Consort Mine
and Sheba Mine – are operating mines with a
mine life of approximately 17 years. In the
BTRP project, construction commenced on
April 2012 and the project is expected to be
commissioned by July 2013. Also, the
production in the Phoenix Platinum Project
commenced during FY 2012, and a ramp-up
phase was completed in July 2012.
– As the company‘s current projects are in the
near production/production stage, we believe
the company has a low operational risk.
Key man risk – LOW
– Pan African‘s management team has a strong
mining background. The Evander Mines
acquisition is also expected to bring along an
experienced management team and
workforce. Hence, we believe the company to have a low key man risk.
![Page 18: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/18.jpg)
Pan African Resources Plc. – Arrowhead BID 18 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Risk Parameters – Definition
Project stage risk
The different stages in a project are:
Early stage exploration: In this stage, the
exploration location is decided using
combination of various techniques such as,
samplings, drilling, geophysics, and other
extensive geological and exploration services.
Pre-feasibility study: A preferred base case
option will be identified from the possible
options available to the company. The
preferred base case option will provide some
level of confidence in the production capacity,
ore grades, metal recovery, capital and
operating costs, project schedule, and project
risks / opportunities. A financial analysis will
also be carried out in order to assess the
economic viability of the project.
Feasilbility study: This includes a collection
of more detailed information, additional
designs, and project-specific cost information
to refine the project cost and schedule. This
will also address information gaps, issues of
concern, risks, and opportunities identified in
the advanced exploration stage.
Detailed engineering: Detailed designs
based on the project scope, concept designs
and purchase of key plant equipment will be
completed.
Site construction: Site construction starts as
per the field engineering designs and is
expected to confirm adherence to appropriate
quality control practices.
Commissioning and start of operations:
After completion of construction, operability
testing and acceptance, the owner will be
asked to confirm whether the project
construction and performance is as designed
and meets the required plant performance
and safety requirements. The final operating
control programs will be completed, installed,
and tested for functional efficiencies.
We consider a project to carry lower risk profile if
feasibility study is complete and detailed
engineering has been conducted as the
uncertainty regarding the sustainability of the
project reduces significantly.
Project financing risk
initial stages of exploration, development and
production require high levels of capital
investment. Investments will be riskier when
done in exploration stage as the economic
viability of deposit is not determined. The risk
level of the capital reduces as it advances through
the various exploration stages.
Initial stages of exploration and development of
the project attracts high-risk-capital investors. As
the project stages proceed, they have varied
options like equity (IPO), debt financing, etc.
We consider a project to carry lower risk profile if
the exploration capital expenditure is low and the
company has secured financing to fund its capital
expenditure.
Operational risk
Mining machinery, transport and new
technologies are used for operations in areas
which have complicated geological and climatic
conditions. There are increased risks of flooding,
pit slope and rim slide, accidents caused by the
use of mining transport equipment due to adverse
weather conditions and problems in power supply
facilities and recovery plants. These risks could
result in delayed ore production and recovery,
increased costs, health, safety and environmental
issues and affect the company‘s production
activities. Additionally, the quality of ore reserves,
and the method used for extraction also
contribute to the operational risk.
We consider a project to carry lower risk profile if
the company is in the advanced stages of its
operations and extracts fairly stable grades.
Key man risk
The company is run by its management who
brings prior experience and knowledge to the
table. Also, it is important that a company does
not rely heavily on very few individuals who have
vast experience in the field.
We consider a project to be of lower risk profile if
the management team is highly qualified, has
good number of years of experience in oil and gas
field and has lesser dependability on few people.
Peer valuation and risk profile
We have also evaluated the companies based on
the value per resource and the risk profile. Enterprise Value per Resource has been
evaluated. GBP/oz unit has been used as a proxy
for the valuation measure.
![Page 19: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/19.jpg)
Pan African Resources Plc. – Arrowhead BID 19 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
The risk profile has been assessed as a weighted
blended score based on the project maturity risk
(30% weightage), financing risk (30%),
operational risk (20%) and key man risk (20%).
The individual risk score have been provided in
the risk profile table in the peer risk profile table
in the previous section.
Valuation vs risk profile
Company
Ticker
Total Risk
Score
Enterprise
Value/
Resource
(GBP/oz)
Enterprise
Value (GBP MM)
Total
Resource (Moz)
PAF 1.2 68.1 279.8 4.1
AVM 1.7 2.9 23.5 8.1
AMA 2.1 12.4 57.3 4.6
GRL 2.7 15.1 6.1 0.4
GFI 1.2 74.6 5,362.9 71.9
The analysis clearly indicates our assertion that
Pan African Resources Plc commands a premium
compared to its peers, considering the low risk
profile and advanced stage of its projects.
Valuation vs risk profile chart
![Page 20: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/20.jpg)
Pan African Resources Plc. – Arrowhead BID 20 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Value
The fair market value for Pan African Resources Plc‘s shares stands between GBP 555.89MM and GBP
780.64MM.
The fair market value for one of Pan African Resources Plc‘s publicly traded shares stands between GBP
0.31 and GBP 0.43.
Pan African Resources Plc balance sheet forecast
CONSOLIDATED BALANCE
SHEET
all figures in '000 GBP ‘000, unless
stated differently
Low bracket estimates
year ending June 30 2013E 2014E 2015E 2016E 2017E 2018E 2019E
Total Current Assets 82,720 153,138 213,835 286,765 376,364 466,467 557,079
Total Non-Current Assets 230,320 232,798 235,153 229,409 223,950 218,763 213,832
TOTAL ASSETS 313,039 385,936 448,988 516,174 600,315 685,230 770,911
Total Current Liabilities 35,420 49,375 49,513 49,651 49,790 49,930 50,069
Total Non-current Liabilities 60,501 41,554 27,343 13,132 13,132 13,132 13,132
TOTAL LIABILITIES 95,921 90,929 76,856 62,784 62,923 63,062 63,202
Total Shareholders Equity 217,118 295,007 372,132 453,389 537,392 622,167 707,709
TOTAL LIABILITIES and EQUITY 313,039 385,936 448,988 516,173 600,315 685,230 770,911
Important information on Arrowhead methodology
The principles of the valuation methodology employed by Arrowhead BID are variable to a certain extent
depending on the subsectors in which the research is conducted, but all Arrowhead valuation research
possesses an underlying set of common principles and a generally common quantitative process.
With Arrowhead commercial and technical due diligence, Arrowhead extensively researches the
fundamentals, assets and liabilities of a company, and builds solid estimates for revenue and
expenditure over a coherently determined forecast period.
Elements of comparison such as multiple analyses may be to some limited extent integrated in the
valuation on a project-by-project or asset-by-asset basis. In the case of this Pan African report, there
are no multiple analyses integrated in the valuation.
Arrowhead BID fair market value bracket
The Arrowhead Fair Market Value is given as a bracket. This is based on quantitative key variable
analysis, such as key price analysis for revenue and cost drivers or analysis and discounts on revenue
estimates for projects, especially relevant to those projects estimated to provide revenue near the end
of the chosen forecast period. Low and high estimates for key variables are produced as a tool for
valuation.
In principle, an investor who is comfortable with the high-brackets of our key variable analysis will align
with the high-bracket in the Arrowhead Fair Value Bracket, and likewise in terms of low estimates. The
investor will also take into account the company intangibles – as presented in the first pages of this
document in the analysis on strengths and weaknesses and on other essential company information.
These intangibles serve as supplementary decision factors for adding or subtracting a premium in the
investor‘s own analysis.
The bracket should be understood as a tool provided by Arrowhead BID for the reader of this report and
the reader should not solely rely on this information to make his decision on any particular security. The
reader must also understand that on one hand, global capital markets contain inefficiencies, especially in
terms of information, and that on the other hand corporations and their commercial and technical
positions evolve rapidly: this present edition of the Arrowhead valuation is for a short to medium-term
![Page 21: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/21.jpg)
Pan African Resources Plc. – Arrowhead BID 21 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
alignment analysis (one to twelve months). The reader should refer to important disclosures on page 25
of this report.
Information on the Pan African Resources Plc valuation
Pan African Resources Plc valuation methodology: The Arrowhead fair valuation for Pan African
Resources Plc is based on the discounted cash flow (DCF) method. Valuation is based on its Barberton,
Phoenix Platinum, and Evander, and the BTRP Projects.
Time horizon: The Arrowhead fair valuation for Pan African Resources Plc is based on a DCF method.
The time period chosen for the valuation is ~112 months (2013-2022). While revenue is expected to
ramp up significantly during the 2014-2018, the later years are heavily discounted and have a marginal
effect on valuation, which are included primarily to present a full project cycle situation.
Underlying business plan: Pan African Resources is a company focused on precious metals with
operational assets in South Africa. The company aims to invest in projects that are at or near pre-
feasibility, and have a significant resource growth potential. The company aims to grow organically as
well as through acquisitions, as demonstrated by planned acquisition of 100% interest in the Evander
Gold Mines.
Terminal value: Terminal Value is estimated to depend on a terminal growth rate of 2%, representing
steady production at Barberton and increase in production at Phoenix Platinum.
Prudential nature of valuation: It should be noted that this Arrowhead Fair Value Bracket estimate is
a relatively prudential estimate, as it also discounts the eventuality of any of Pan African‘s projects and
assets other than Barberton, Phoenix Platinum, BTRP, coming to market and producing revenue before
2022. Arrowhead has also considered revenue contribution from Evander starting FY2014.
![Page 22: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/22.jpg)
Pan African Resources Plc. – Arrowhead BID 22 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Key variables in Pan African Resources Plc revenue estimations
Forecast price of platinum for 2013-2022
Arrowhead believes that demand for platinum will recover as the automobile industry rebounds in the
Western markets and in Asia and as demand for jewelry in China, Japan and the United States
increases. Prolonged labor and power problems in South Africa are also expected to result in platinum
prices witnessing upward tensions. On average, platinum prices should remain in the current range or
increase slightly in the decade ahead.
Based on this forecast and on hypothesis for an average of price stability, Arrowhead forecasts that a
comfortably low estimate for 2013 prices of platinum should be US$1,500/oz, whereas a prudent high
estimate should be US$1,700/oz. The price should grow through 2013-2022 at a +0.30% CAGR.
Price (US$/oz)
Low 1,500
High 1,700
Forecast price of palladium for 2013-2022
Arrowhead believes that demand for palladium should rise faster than demand for platinum as more
palladium is used to compensate for higher platinum prices, and producers tend to focus on the platinum
elements of combined deposits or on comparatively platinum-rich deposits over comparatively
palladium-rich deposits. Also, as palladium prices rise, so does its desirability and intrinsic susceptibility
to be used in jewelry, which should help sustain price growth.
Based on this forecast and on hypothesis for an average of price stability, Arrowhead forecasts that a
comfortably low estimate for 2013 prices of palladium should be US$650/oz, whereas a prudent high
estimate should be US$700/oz. The price should grow through 2013-2022 at a +0.30% CAGR.
Price (US$/oz)
Low 650
High 700
Forecast price of gold for 2013-2022
Arrowhead believes that the forecasted ―slow recovery‖ of the general economy and the equity and debt
markets in 2012 will leave some room for gold as a value refuge for investors. Conservatively, in the
medium-term, gold is expected to settle in the high ends of the last decade‘s bracket.
Based on this forecast and on hypothesis for an average of price stability, Arrowhead forecasts that a
comfortably low estimate for 2013 prices of gold should be US$1,500/oz, whereas a prudent high
estimate should be US$1,600/oz. The price should grow through 2013-2022 with a +0.30% CAGR.
Price (US$/oz)
Low 1,500
High 1,600
Forecast price of rhodium for 2013-2022
Predominant use of rhodium in catalytic converters for automobiles, no substitute in case of diesel
engines and with no pure rhodium mines in existence, Rhodium prices are very volatile. Additionally, the
recent power shortage in South Africa has forced mining companies to decrease production, which can
cause sharp deficits in the supply/demand dynamics in the rhodium market.
Based on this forecast and on hypothesis for an average of price stability, Arrowhead forecasts that a
comfortably low estimate for 2013 prices of rhodium should be US$1,400/oz, whereas a prudent high
estimate should be US$1,900/oz. The price should grow through 2013-2022 at a +0.30% CAGR.
![Page 23: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/23.jpg)
Pan African Resources Plc. – Arrowhead BID 23 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Price (US$/oz)
Low 1,400
High 1,900
Hypothesis for production rates for 2013-2022
Barberton Mines: Gold Production
Pan African has provided estimates of potential production rates and timing milestones. The
management disclosed a planned production of 125,000 oz of gold for 2011, 2012 and 2013, which is
expected to remain steady thereafter. The company has announced an increase in its 2P reserves to
1Moz in 2011 from 661Koz in 2010; life of mine increasing to 17 years from the previously 10 years.
Arrowhead has remained conservative and has capped the company‘s production to 115,000 oz in the
long term.
Oz 2013-2014 2015-2022
Low estimate 95,000 100,000
High estimate 100,000 115,000
Phoenix Mines: Platinum, Palladium, Rhodium & Gold Production (PGM 4E’s)
Phoenix mines produced its first PGM in November 2011. We expect the production to be in the range of
8,000oz -10,000oz of PGM 4E‘s, which is more or less expected to remain stable thereafter. The content
is estimated to be as follows: Platinum - 56.5%, Palladium – 27%, Rhodium – 16%, and Gold – 0.5%.
Arrowhead has remained conservative and estimated relatively lower production in the initial years.
Oz 2013-2022
Low estimate 8,000
High estimate 9,000
Evander Gold Mines Limited: Gold
Production at the Evander Gold Mine (Shaft 8) is estimated to be in the range 85-100Koz annually.
Oz 2013-2022
Low estimate 85,000
High estimate 100,000
The Barberton Tailing Project (BTRP): Gold
Production at the Barberton Trailing is estimated to be in the range 18,000oz to 20,000oz per year over
an estimated mine life of six years.
Variable 6 – ZAR/US$ exchange rates
Since Pan African‘s forecast revenues are extremely sensitive to the forecasted international prices of
gold and PGM 4E‘s, which are priced in US$, and since Pan African is listed in the UK and has operations
in South Africa, the currency factor is of high importance.
2013-2022
Low 9.2
High 9.7
![Page 24: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/24.jpg)
Pan African Resources Plc. – Arrowhead BID 24 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Analyst Certifications & Important Disclosures
Analyst Certifications
I, Mohanarangam Purushothaman, certify that all
of the views expressed in this research report
accurately reflect my personal views about the
subject security and the subject company.
I, Vishal Pasari, certify that all of the views
expressed in this research report accurately
reflect my personal views about the subject
security and the subject company.
Important Disclosures
Arrowhead Business and Investment Decisions,
LLC received fees in 2011-13 from Pan African
Resources Plc for researching and drafting this
report and for a series of other services to Pan
African Resources Plc, including distribution of
this report and networking services. Neither
Arrowhead nor its principals or employees own
any long or short positions in Pan African
Resources Plc.-related securities.
Aside from certain reports published on a periodic
basis, the large majority of reports are published
by Arrowhead BID at irregular intervals as
appropriate in the analyst‘s judgment.
Any opinions expressed in this report are
statements of our judgment to this date and are
subject to change without notice.
This report was prepared for general circulation
and does not provide investment
recommendations specific to individual investors.
As such, any of the financial or other money-
management instruments linked to the company
and company valuation described in this report,
hereafter referred to as ―the securities‖, may not
be suitable for all investors.
Investors must make their own investment
decisions based upon their specific investment
objectives and financial situation utilizing their
own financial advisors as they deem necessary.
Investors are advised to gather and consult
multiple information sources before making
investment decisions. Recipients of this report are
strongly advised to read the information on
Arrowhead Methodology section of this report to
understand if and how the Arrowhead Due
Diligence and Arrowhead Fair Value Bracket
integrate alongside the rest of their stream of
information and within their decision taking
process.
Past performance of securities described directly
or indirectly in this report should not be taken as
an indication or guarantee of future results. The
price, value of, and income from any of the
financial securities described in this report may
rise as well as fall, and may be affected by simple
and complex changes in economic, financial and
political factors.
Should a security described in this report be
denominated in a currency other than the
investor‘s home currency, a change in exchange
rates may adversely affect the price of, value of,
or income derived from the security.
This report is published solely for information
purposes, and is not to be considered as an offer
to buy any security, in any state.
Other than disclosures relating to Arrowhead
Business and Investment Decisions, LLC, the
information herein is based on sources we believe
to be reliable but is not guaranteed by us and
does not purport to be a complete statement or
summary of the available data.
Arrowhead Business and Investment Decisions,
LLC is not responsible for any loss, financial or
other, directly or indirectly linked to any price
movement or absence of price movement of the
securities described in this report.
![Page 25: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/25.jpg)
Pan African Resources Plc. – Arrowhead BID 25 AIM: PAF; JSE: PAN.
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Valuation
WACCviii Risk-free rate 2.20%
Variable 1 Variable 2 Variable 3
Beta 0.87
Risk premium 8.7% Max
value Please refer to the Key Variable Section Additional Risk Premium 10.0%
Cost of Equity 18.5% Min
value Terminal Growth Rate 2%
FCFE (High) Time Period->
0.33
1.33
2.33
3.33
4.33
5.33
6.33
7.33
8.33
2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E
Net cash from operating
activities 114,889 136,730 124,701 129,269 131,903 132,581 133,265 123,843 126,779
Capital Expenditure (32,729) (13,191) (13,191) (5,000) (5,000) (5,000) (5,000) (4,500) (3,500)
Net Debt Addition 46,500 - - - - - - - -
Free Cash Flow to Equity 128,659 123,538 111,510 124,269 126,903 127,581 128,265 119,343 123,279
Discount Factor 0.95 0.80 0.67 0.57 0.48 0.40 0.34 0.29 0.24
Present Value of FCF 121,585 98,527 75,056 70,591 60,838 51,619 43,797 34,392 29,982
FCFE (Low) Time Period->
0.33
1.33
2.33
3.33
4.33
5.33
6.33
7.33
8.33
2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E
Net cash from operating
activities 85,120 97,125 88,250 92,084 94,544 95,046 95,555 88,154 90,502
Capital Expenditure (32,978) (13,398) (13,398) (5,000) (5,000) (5,000) (5,000) (4,500) (3,500)
Net Debt Addition 46,500 - - - - - - - -
Free Cash Flow to Equity 98,642 83,726 74,852 87,084 89,544 90,046 90,555 83,654 87,002
Discount Factor 0.95 0.80 0.67 0.57 0.48 0.40 0.34 0.29 0.24
Present Value of FCF 93,218 66,775 50,382 49,468 42,928 36,432 30,921 24,107 21,159
In the model, the valuation is continued to the year 2022, from which point the terminal value is established. For all data see reference table
below:
GBP Value Contribution by Key Variables
ARROWHEAD FAIR VALUE BRACKET
High Low
Terminal Value (TV) 766,415 540,989
Present Value of TV 157,308 111,039
Present Value of FCF + TV 769,127 544,380
+ Cash 11,509 11,509
Equity Value Bracket 780,636 555,890
Shares Outstanding (in '000) 1,821,334 1,821,334
Fair Value Bracket GBP 0.43 GBP 0.31
Current Market Price GBP 0.16 GBP 0.16
Current Market Capital 286.86 286.86
Target Market Capital 780.64 555.89
![Page 26: Due Diligence and Valuation Report - abid AFRICAN RESOURCES - ABID rep… · Due Diligence and Valuation Report See important disclosures on page 24 of this report. ... opportunities](https://reader031.fdocuments.net/reader031/viewer/2022022514/5af4c0617f8b9ae9488c8645/html5/thumbnails/26.jpg)
Pan African Resources Plc. – Arrowhead BID 26 AIM: PAF; JSE: PAN
Due Diligence and Valuation Report See important disclosures on page 24 of this report.
Notes and References
i Arrowhead Business and Investment Decisions Fair Value Bracket - AFVBTM. See information on valuation on pages 20-25 of this report and important disclosures on page 24 of this report.
ii Source: Bloomberg extracted 11-Apr-2013
iii Bloomberg as on 11-Apr-2013
iv 3 months average daily volume from Bloomberg as on 11-Apr-2013
v Bloomberg as on 11-Apr-2013
vi Arrowhead Business and Investment Decisions Fair Value Bracket - AFVBTM. See information on valuation on pages 20-25 of this report and important disclosures on page 24 of this report.
vii As on 25-Jan-2013
viii Bloomberg as on 19-Feb-2013