Conditional amendment to Manica disposal agreement

Pan African Resources PLC (Incorporated and registered in England and Wales under Companies Act 1985 with registered number 3937466 on 25 February 2000) AIM Code: PAF JSE Code: PAN ISIN: GB0004300496 ("Pan African" or "the Company") CONDITIONAL AMENDMENT TO THE TERMS OF THE MANICA GOLD EXPLORATION PROJECT ("MANICA") DISPOSAL AGREEMENT INTRODUCTION Pan African shareholders ("Shareholders") are referred to the announcementspublished by the Company on 29 August 2012 and 14 December 2012("Announcements") regarding the disposal by Pan African of Manica to awholly-owned subsidiary of Auroch Minerals NL ("Auroch") ("Transaction"). PanAfrican and Auroch have agreed to amend the terms of the Transaction asexplained below. Pursuant to the original Transaction agreement and amendments thereto("Original Agreement"), Pan African received 25 million shares in Auroch("Consideration Shares") and an AUD 2,000,000 cash payment is payable to PanAfrican within 18 months of completion of the Transaction ("TransactionPurchase Consideration"). Pan African is also entitled to a deferredconsideration consisting of further shares and cash payments ("FutureConsideration"). The Future Consideration is subject to Auroch achievingcertain future milestones, which at this stage is uncertain. A detaileddescription of the terms of the Original Agreement is provided in theAnnouncements. The Company's carrying value for the Auroch investment iscurrently GBP1,182,606. Pan African considers Manica as a non-core asset which will requireconsiderable future development capital. Currently Pan African's shares inAustralian Securities Exchange ("ASX") quoted Auroch are subject to an embargoarrangement with the ASX, whereby these shares may not be sold or otherwisetransferred until January 2015. AMENDMENT Pan African is intent to remain focused on operating assets and now wishes toexpedite the realisation of value pursuant to the Transaction. For this reason,Pan African entered into an agreement with Auroch on 25 November 2013("Amendment") in terms of which: 1. Auroch shall pay Pan African an amount of AUD 2,000,000 in cash, as full and final settlement of the Transaction Purchase Consideration and Future Consideration ("Cash Consideration") as follows: Auroch shall pay Pan African AUD 150,000 of the Cash Consideration by no laterthan 30 November 2013; and Auroch shall settle the remaining portion of the Cash Consideration by1 March 2014 ("Payment Date"), but may extend the Payment Date by a further 2months by paying Pan African an amount of AUD 50,000 per month of extensionprior to the Payment Date, as extended, and such payments shall serve as partpayment of the Cash Consideration; and 2. if Auroch settles the Cash Consideration in accordance with the Amendment, Pan African shall allow Auroch to reacquire or cancel the Consideration Shares at no additional cost or consideration. In the event that Auroch fails to settle the Cash Consideration pursuant to theAmendment, the Amendment will expire and the provisions of the OriginalAgreement will be restored. The Amendment is not subject to any otherconditions. PRO FORMAFINANCIAL EFFECTS As a result of the pro forma financial effects of the Transaction havingpreviously being published in the Announcements, the pro forma financialeffects of the Amendment ("Financial Effects") have been set out in the tablebelow. The Financial Effects have been prepared for illustrative purposes onlyin order to provide information about how the Amendment might have affectedShareholders, had the Amendment been implemented on the dates indicated in thenotes below. Due to their nature, the Financial Effects may not fairly present the financialposition, changes in equity, results of operations or cash flows of Pan Africanafter the Amendment. The preparation of the Financial Effects is theresponsibility of Pan African's directors. The Financial Effects have been prepared using accounting policies that complywith International Financial Reporting Standards ("IFRS") and that areconsistent with those applied in the published audited results of Pan Africanfor the year ended 30 June 2013. The figures included in the "Before the Amendment" column of the FinancialEffects have been extracted from Pan African's annual financial statements forthe financial year ended 30 June 2013 ("2013 Financial Statements"), whichaccounted for the Transaction in accordance with the terms and conditions ofthe Original Agreement. The Financial Effects are therefore presented afteraccounting for the Transaction in the 2013 Financial Statements. Before the After the Percentage Amendment Amendment Change (%) Earnings per share (pence) 2.63 2.65 0.76 Diluted earnings per share (pence) 2.62 2.64 0.76 Headline earnings per share (pence) 2.17 2.17 - Diluted headline earnings per share (pence) 2.16 2.16 - Net asset value per share (pence) 9.45 9.45 - Tangible net asset value per share (pence) 3.77 3.77 - Weighted average number of shares in issue 1 619 756 902 1 619 756 902 - Diluted weighted average number of shares in issue 1 625 933 891 1 625 933 891 - Number of shares in issue 1 822 834 263 1 822 834 263 - Notes: The figures included in the "Before the Amendment" column have been extractedfrom the 2013 Financial Statements. The Financial Effects have been prepared on the assumption that the Amendmentwas concluded on and all payments in terms thereof received on 1 July 2012 forpurposes of the Statement of Comprehensive Income and by 30 June 2013 forpurposes of the Statement of Financial Position. The Financial Effects are prepared on the assumption that Pan African receivedthe Cash Consideration amounting to AUD 2,000,000 (GBP 1,162,791) as full andfinal settlement of the Transaction Purchase Consideration and FutureConsideration. The Financial Effects have been prepared on the assumption that Pan Africandisposed of the Consideration Shares to Auroch for no consideration. The 2013 Financial Statements accounted for the impairment to nil value of allamounts due to, but not received by, Pan African pursuant to the Transaction.Accordingly, as a result of the Amendment, those impairment charges pertainingto the Cash Consideration of GBP 1,162,791 were reversed for purposes ofpreparing the Financial Effects. None of the adjustments will have a continuing effect on Pan African. For purposes of the Financial Effects, Australian Dollars have been convertedto South African Rand at a rate of AUD 1.00 : ZAR 8.73 and South African Randhave been converted to British Pounds using the relevant exchange ratesapplicable in the 2013 Financial Statements. Johannesburg 26 November 2013 JSE Sponsor One Capital PAN AFRICAN ENQUIRIESSouth Africa UK Pan African Resources Canaccord Genuity LimitedRon Holding Nomad and Joint BrokerChief Executive Officer Peter Stewart / Joe Weaving/Neil Elliot+27 (0) 11 243 2900 +44 (0) 20 7523 8350 Vestor Investor Relations finnCap LimitedLouise Brugman Joint Broker+27 (0) 11 787 3015 Elizabeth Johnson / Joanna Weaving+27 83 504 1186 +44 (0) 20 7220 0500 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 324431 For further information on Pan African, please visit the website atwww.panafricanresources.com