Pan African Regulatory News (PAF)

28 March 2014 Pan African Resources PLC (Incorporated and registered in England and Wales under Companies Act 1985 with registered number 3937466 on 25 February 2000) Share code on AIM: PAF Share code on JSE: PAN ISIN: GB0004300496 ("Pan African") EVANDER TAILINGS RETREATMENT PROJECT APPROVED Shareholders of Pan African are referred to the announcement dated 14 March2013 in which it was announced that the acquisition of Evander Gold MinesLimited ("Evander") had been completed. Pan African is pleased to announce thatits board of directors ("The Board") has approved the commencement ofconstruction of the Evander Tailings Retreatment Project ("ETRP"), which willrecover gold from the retreatment of gold tailings situated at Evander in SouthAfrica's Mpumalanga province. 1. Salient information pertaining to the ETRP * The ETRP comprises a total mineral resource of 597koz (57.8Mt @ 0.32g/t contained in Dams 1, 2 and 3 of the Kinross tailings storage facility ("TSF")) and a mineral reserve of 369koz (32.3Mt @ 0.32g/t contained in Dams 1 and 2 of the Kinross TSF). * A total estimated capital expenditure budget ("Capex") of ZAR200 million (approximately GBP11.2 million) has been approved for the ETRP in order to retreat 2.16Mt per annum of gold tailings over a 14 year life. * Once completed, it is anticipated that the ETRP will contribute approximately 10,000 oz per annum to Evander's gold production, at expected cash cost of ZAR280,000 per kilogram (approximately US$800 per ounce). * The estimated net present value of the ETRP is ZAR170 million with a forecast project payback period of less than five years. * The Capex of ZAR200 million will be fully funded via a gold loan of approximately 15,700oz from ABSA Bank Limited ("Gold Loan") and the ETRP construction cost is therefore not expected to impact materially on other Pan African cashflows. The Gold Loan will be repaid in quarterly instalments over a 4 year period, commencing in August 2014. * Commissioning of the ETRP is expected to commence during mid-January 2015, with full production anticipated by June 2015. * A remaining tailings mineral resource of 1.5Moz (167.6Mt @ 0.28 g/t) exists on the Winkelhaak, Leslie, Bracken and Kinross Dam 3 TSF's situated on the Evander mining right area. This presents the potential for a larger tailings retreatment plant that may be constructed in the future. The ETRP project will increase Evander's gold production with up to 10 000 ozper annum at a low cash cost, thereby increasing the profitability of Evanderand, consequently, that of Pan African. The project will bring to account aportion of the significant tailings resource at Evander and will utilise thecurrent spare capacity of the Kinross metallurgical plant (2.16 million tonsper annum). The success of the ETRP could provide a springboard for an evenlarger tailings project in the coming years. 2. Project concept and locality The ETRP is a tailings retreatment project which will exploit historicallygenerated gold tailings deposited on the Kinross TSF. The TSF is situatedadjacent to the Kinross metallurgical processing plant and falls within thetenure of the Evander mining right. In order to achieve a comparablelife-of-mine to that of Evander No 8 Shaft the ETRP will only need to exploittwo of the three available Dams at the Kinross TSF. A total of 88 boreholes were drilled on a 200m x 200m grid to determine thepotential mineral resource. Samples were also subjected to detailedmetallurgical test-work which indicates a gold recovery of 40%. Total ETRP mineral resource and reserve statement as at 2 January 2014 is asfollows: * The total mineral resource for the project has been estimated to be 57.8Mt at an average grade of 0.32g/t Au generating 597koz Au over the life of the project. * The definitive feasibility study ("DFS") estimated a probable mineral reserve of 32.3Mt at a grade of 0.32g/t Au generating 369koz Au over the life of the project. Mr B Naicker, the competent person for Evander and Pan African Group MineralResource Manager, signed off the mineral resources and mineral reserves forEvander. Based at Pan African's head office in Rosebank, Naicker is a member ofthe South African Council for Scientific Professions (400234/10) and has aMaster's degree in Mineral Resource Management from Witwatersrand Universityand a Bachelor of Science (Honours) in Economic Geology. He has 13 years ofexperience in economic geology and mineral resource management in gold andrelated deposits. Mr. Naicker has approved the information contained in this announcementrelating to mineral resources and mineral reserves for the ETRP. The mineralresources and mineral reserves comply with the SAMVAL Code insofar as itrelates to a valuation of mineral assets. 3. Project development summary The original Kinross metallurgical plant was designed to treat 240,000 tons runof mine ("ROM") per month and was subsequently rationalised to its currentcapacity to process 60,000 tons per month from surface and underground sources.The ETRP project will refurbish the carbon-in-leach plant to treatapproximately 180,000 tons of tailings per month, through using electro-winningand smelting to produce a saleable product. A cost benefit of the ETRP is thatno additional milling of feed material will be required. Basil Read-Matomo, who successfully constructed Pan African's Phoenix ChromeTailings Retreatment Plant as well as its Barberton Tailings Retreatment Plant,completed the ETRP feasibility report and plant Capex forecast. FraserAlexander completed the TSF feasibility report and associated capital forecast.The total Capex for the ETRP is estimated to be ZAR200 million (approximatelyGBP11.2 million) of which approximately ZAR110 million will be spent on plantdesign, refurbishment and construction with the remainder on re-mining, TSF andother infrastructure. Basil Read-Matomo has been contracted to design, procure and construct the ETRPand Fraser Alexander will construct the TSF and operate the re-miningoperation. Long lead items such as leach tanks and carbon regeneration kilnsare currently being procured. Civil work of the ETRP is planned to commence inApril 2014 with re-mining and plant commissioning commencing in January 2015.Build up to full production is anticipated by June 2015. The expected electricpower requirement of the ETRP (2800 KWhr) will be sourced as part of thecurrent Kinross plant power reticulation. The project should provide full time employment for an additional 20 workersafter completion. For further information on Pan African Resources plc, please visit the websiteat www.panafricanresources.com 28 March 2014 JSE Sponsor One Capital Enquiries South Africa UKPan African Resources Canaccord Genuity LimitedMr Ron Holding Nomad and Joint BrokerChief Executive Officer Neil Elliot / Peter Stewart / Joe Weaving+27 (0) 11 243 2900 +44 (0) 20 7523 8350 Vestor Investor Relations finnCap Limited - Joint BrokerLouise Brugman Elizabeth Johnson / Joanna Weaving+27 (0) 11 787 3015 / +27 83 504 +44 (0) 20 7220 05001186 One Capital St James's Corporate Services LimitedLiezl Gildenhuys Phil Dexter+27 (0) 11 550 5000 +44 (0) 20 7796 8647 Gable Communications Justine James +44 (0) 20 7193 7463 / +44 (0) 7525 32443