PAN AFRICAN RESOURCES PLC: ZAR703 Million Rights Offer becomes unconditional

PAN AFRICAN RESOURCES PLC: ZAR703 Million Rights Offer becomes unconditional
Pan African Resources PLC                            
(Incorporated and registered in England and Wales under Companies Act 1985    


              with registered number 3937466 on 25 February 2000)              
                                 AIM Code: PAF                                 
                                 JSE Code: PAN                                 
                              ISIN: GB0004300496                               
            ISIN for Nil Paid Rights: GB00B85FJG40 (JSE Code: PANN)            
                   ISIN for Fully Paid Rights: GB00B8RCBP62                    
                         ("Pan African" or "Company")                          
         PAN AFRICAN ZAR703 MILLION RIGHTS OFFER BECOMES UNCONDITIONAL         

INCORPORATING:

  * RESULTS OF GENERAL MEETING
      * UPDATE REGARDING THE ACQUISITION OF EVANDER
      * RIGHTS OFFER FINALISATION ANNOUNCEMENT
      * RESULTS OF ANNUAL GENERAL MEETING
     1. RESULTS OF GENERAL MEETING


Pan African is pleased to inform shareholders ("Shareholders") that at the
general meeting of Shareholders held on Friday, 30 November 2012 ("General
Meeting"), all the resolutions necessary for the implementation of: 
* the acquisition of all the shares in and claims against Evander Gold Mines 


    Limited ("Evander") from Harmony Gold Mining Company Limited ("Harmony") by
    a wholly owned subsidiary of Pan African ("Transaction"); and
      * the related capital raising by way of a ZAR703 million (GBP51.8 million)
    rights offer of 370 071 902 new Pan African ordinary shares of 1p each
    ("Shares") at ZAR1.90 or 14 pence per share ("Rights Offer"),


were approved at the General Meeting. Furthermore, all the regulatory approvals
required in relation to the Rights Offer have been obtained. Accordingly, the
Rights Offer is now unconditional and shall proceed in accordance with the
timetable set out in the announcement published by the Company through the
Securities Exchange News Service and a Regulatory Information Service on
23 November 2012 ("Announcement"). 
Jan Nelson, CEO of Pan African said: 
"The overwhelming support received at today's general meeting is testament to
our shareholders support for the Group's rationale and strategic objective for
the acquisition of Evander. I would like to thank all of them for their
continued support and engagement. 
The successful completion of the rights offer will allow Pan African to
sufficiently capitalise itself so as to implement the acquisition without
compromising the Group's current operations or strategic momentum." 
 2. BACKGROUND TO EVANDER, THE TRANSACTION AND THE RIGHTS OFFER 
Evander, currently, mines and produces gold and related products and its
operations comprise, inter alia: 
* an operating shaft in the form of Evander 8 shaft which has an expected 


    life of mine of more than ten years and is expected to produce
    approximately 100,000 ounces of gold per annum;
      * various development projects comprising Evander South, Rolspruit and
    Poplar;
      * surface resources comprising existing tailings dumps; and
      * metallurgical processing facilities known as the Kinross plant which uses a
    hybrid carbon-in-pulp/carbon-in-leach (CIP/CIL) process.


Evander meets Pan African's investment criteria of a high grade, high margin,
quality asset, the acquisition of which is not only expected to be earnings
accretive, but will provide Pan African with a material increase in its
production profile through the doubling of its current gold production. The
introduction of an additional operating asset into the Pan African group shall
further the Company's strategy of reducing operational risk through the
broadening of its operations. 
On 30 May 2012, the Company entered into an agreement ("Agreement") to acquire
100% of the shares in and claims against Evander from Harmony for ZAR1.5
billion, subject to certain adjustments ("Purchase Consideration"). Pan African
proposed to fund the acquisition from a combination of: 
* cash generated at the operations of Pan African and Evander; 


      * third party debt finance; and
      * the issue of new equity to Shareholders pursuant to a rights offer.


On 17 August 2012, Pan African published a further announcement providing
details of, inter alia, the conclusion of a bookbuild exercise in terms of
which the Company secured approximately R702 million in capital commitments
("Capital Commitments") from, amongst others, leading institutional investors
to support a capital raising for purposes of funding the payment of a portion
of the Purchase Consideration. 
Following the procurement of the Capital Commitments, the Pan African Board of
Directors ("Board") resolved that the Company would proceed with the Rights
Offer in terms of which 25.5 new Shares would be issued to Shareholders for
every 100 Shares held as at the record date of the Rights Offer at an issue
price of R1.90 or 14 pence per new Share. The total quantum of the Rights Offer
amounts to approximately ZAR703 million and is subscribed to the extent of
approximately ZAR702 million through the Capital Commitments. 
 3. TRANSACTION UPDATE 


    3.1 Conditions Precedent

Following the General Meeting, all the approvals required for the
implementation of the Rights Offer have been obtained, which will enable Pan
African to secure a portion of the requisite funding for the Transaction
through the proceeds of the Rights Offer. The Transaction is now subject to
only two remaining conditions precedent, being:

  * Evander entering into a new electricity supply agreement with Eskom on
    terms and conditions acceptable to Pan African ("Eskom Agreement
    Condition"); and
      * the Minister of Mineral Resources granting the requisite consent for the
    Transaction in accordance with section 11 of the Mineral and Petroleum
    Resources Development Act, No. 28 of 2002, by no later than 30 June 2013
    ("Ministerial Consent Condition").


The date of fulfilment for the Eskom Agreement Condition has been extended,
pursuant to an addendum ("Addendum") to the Agreement pertaining to the
Transaction, to 31 January 2013 but may be waived at Pan African's election.
The Ministerial Consent Condition is incapable of waiver. 
3.2 Amendment to the Transaction Terms 
In addition to the extension of the date of fulfilment for the Eskom Agreement
Condition, certain of the payment terms set out in the Agreement have been
amended. 
Pan African was required to pay Harmony an amount of ZAR950 million (or such
greater amount as Pan African may elect to pay) ("Deposit") by no earlier than
1 December 2012 subject to all the conditions precedent to the Transaction,
other than the Ministerial Consent Condition, being fulfilled or waived and
certain security arrangements being in place. In accordance with the Addendum,
Pan African shall now pay Harmony no less than ZAR400 million no earlier than
14 December 2012, subject to certain security arrangements being in place. The
remaining portion of the Deposit shall be payable by Pan African to Harmony by
no earlier than 1 February 2013, subject to certain additional security
arrangements being in place. Pan African retains the right to, in its sole
discretion, pay Harmony amounts in addition to ZAR400 million, provided such
further amounts are a multiple of ZAR10 million. 
The Purchase Consideration shall be reduced by an amount equal to interest
calculated at 5% per annum on any portion of the Deposit paid to Harmony from
the date of each payment until the closing date for the Transaction, being the
later of 18 January 2013 or the 10th business day after the last of the
conditions precedent to the Transaction has been fulfilled ("Closing Date").
Furthermore, the Closing Date may not occur earlier than 18 January 2013 and
the remaining portion of the Purchase Consideration is required to be paid
within 10 business days of the Closing Date. 
Following the execution of the Addendum, as security for the Deposit, Pan
African may now, in addition to cessions of Evander's gold sales and mortgage
bonds over Evander's properties, register a special notarial bond over
Evander's property, plant and vehicles. 
3.3 Funding Update 
Favourable market conditions and strong operational performance have resulted
in both Pan African and Evander generating substantial cash reserves since the
commencement of the Transaction. As a result and because all the profits of
Evander have accrued for Pan African's benefit since 1 April 2012, the Company
has secured a favourable funding position. 
Cash balances currently held at Evander and Pan African amount to approximately
R268 million and R319 million, respectively (Pan African emphasises that these
cash balances are presented as at the date of the General Meeting and have not
been adjusted to account for the potential effect that future working capital
fluctuations and/or taxation payments may have on them). Following receipt of
the Rights Offer proceeds on or about 16 January 2013 and together with the
current cash reserves, it is expected that sufficient cash resources will be
available to settle the Deposit. Furthermore, Pan African's existing ZAR300
million revolving credit facility is expected to be replaced by a new ZAR600
million revolving credit facility, in respect of which the Company has executed
a term sheet, on the Closing Date after which, the balance of the Purchase
Consideration is required to be paid to Harmony. 
 4. TIMETABLE AND PUBLISHING OF RIGHTS OFFER DOCUMENT 
Due to the Rights Offer becoming unconditional in accordance with the timetable
presented in the Announcement, no changes to the timetable are required. 
The letters of allocation and nil paid rights to be listed on the Main Board of
the JSE and quoted on the AIM market of the LSE ("AIM"), respectively, in terms
of the Rights Offer have been allocated the JSE Code "PANN" and ISIN
GB00B85FJG40. The fully paid rights to be quoted on AIM in terms of the Rights
Offer have been allocated the ISIN GB00B8RCBP62. 
Full details of the Rights Offer shall be provided in a document to
Shareholders, which will comprise a prospectus in accordance with the Financial
Services and Markets Act. 2000 in the United Kingdom and a pre-listing
statement in terms of the JSE Listings Requirements ("Document") is expected to
be published shortly. Copies of the Document shall be posted to Shareholders on
or about 3 December 2012. 
 5. RESULTS OF ANNUAL GENERAL MEETING ("AGM") 
The Board further announces that all resolutions proposed to the shareholders
at the AGM of the Company held on Friday, 30 November 2012 were passed. 
3 December 2012 
Sole Bookrunner, Corporate Adviser and JSE Transaction Sponsor to the Rights
Offer 
One Capital 
Independent Sponsor to the Rights Offer 
Nedbank Capital 
SA Legal Counsel to the Transaction 
Werksmans Inc. 
SA Attorneys to the Rights Offer 
Cliffe Dekker Hofmeyr Inc. 
UK Legal Counsel to the Rights Offer 
Fasken Martineau LLP 
Enquiries                            UK                                         
                                                                           
South Africa                                                                    
                                                                           
Pan African Resources                Canaccord Genuity Limited - Nomad and      
                                 Joint Broker                              
Jan Nelson, Chief Executive Officer                                             
                                 Rob Collins / Peter Stewart / Sebastian   
+27 (0) 11 243 2900                  Jones / Joe Weaving                        


                                                                               
                                     +44 (0) 20 7523 8350                      


                                                                           
One Capital                          finnCap Limited - Joint Broker             
                                                                           
Sholto Simpson / Megan Young         Elizabeth Johnson / Joanna Weaving         
                                                                           
+27 (0) 11 550 5000                  +44 (0) 20 7220 0500                       
                                                                           
Vestor Investor Relations            St James's Corporate Services Limited      
                                                                           
Louise Brugman                       Phil Dexter                                
                                                                           
+27 (0) 11 787 3015                  +44 (0) 20 7499 3916                       
                                                                           
+27 83 504 1186                                                                 


                                                                               
                                     Gable Communications                      
                                                                               
                                     Justine James                             
                                                                               
                                     +44 (0) 20 7193 7463 / +44 (0) 7525 324431

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

Canaccord Genuity Limited, which is regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Pan African Resources
PLC, as nominated adviser and broker to Pan African Resources PLC, and for no
one else in connection with the matters referred to in this announcement.
Canaccord Genuity Limited will not be responsible to anyone other than Pan
African Resources PLC for providing the protections afforded to customers of
Canaccord Genuity Limited or for providing advice in relation to the matters
referred to herein.



END

-0- Dec/03/2012 07:59 GMT


 
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