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" or the "Company")                        

    ACQUISITION OF A FURTHER INTEREST IN SHANDUKA GOLD AND VENDOR PLACING

    1, INTRODUCTION

    Pan African shareholders ("Shareholders") are referred to the announcement
    published by the Company on 23 February 2016 ("SBSA Announcement"), wherein
    Shareholders were advised that the Company had entered into an agreement to
    acquire the Standard Bank of South Africa Limited's ("SBSA") 16.9% interest in
    Shanduka Gold Proprietary Limited ("Shanduka Gold") ("SBSA Transaction").

    Shanduka Gold's only assets are its 23.8% interest in Pan African's issued
    ordinary share capital and its interest in a notional loan (as more fully
    described in section 2 below). Shanduka Gold is currently (i.e. before
    implementation of the SBSA Transaction) owned by the following entities:

      * The Mabindu Business Development Trust ("Mabindu") (49.5%);
      * Jadeite Limited ("Jadeite") (33.6%); and
      * SBSA (16.9%).

    Further to the SBSA Announcement, Shareholders are advised that, pursuant to
    Shanduka Gold's memorandum of incorporation ("MOI"), Jadeite has exercised a
    tag-along right in terms of which Pan African was required to make an offer to
    acquire Jadeite's Shanduka Gold shares. Accordingly, Pan African will present
    an offer ("Offer") to Jadeite to acquire its 33.6% interest in Shanduka Gold
    subject to certain terms and conditions ("Jadeite Transaction") on materially
    the same terms as the SBSA Transaction. The Offer remains subject to acceptance
    by Jadeite.

    If Jadeite accepts the Offer, the SBSA Transaction and the Jadeite Transaction
    (the "Transactions") are expected to be concluded simultaneously on or about 7
    June 2016. The aggregate purchase consideration payable by Pan African pursuant
    to the Transactions is approximately R545.6 million (£23.9 million) ("
    Purchase Consideration") which shall be settled in cash from the Company's
    existing reserves and facilities, and from the proceeds of a vendor
    consideration placing ("Vendor Placing") of new Pan African ordinary shares ("
    PAR Shares"), as explained below.

    A maximum of 111 711 791 PAR Shares ("Placement Shares") are to be issued in
    consideration of a portion of the Purchase Consideration and will be issued by
    Pan African to certain Shareholders and new institutional investors ("Investors
    ") pursuant to a vendor consideration placing ("Vendor Placing"). The
    Transactions are not conditional upon the implementation of the Vendor Placing.
    Completion of the Vendor Placing is subject to, inter alia, the Jadeite
    Transaction becoming unconditional in all respects and approval for the listing
    and admission of the Placement Shares to trading on AIM and the exchange
    operated by the JSE Limited ("Main Board").

    In anticipation of completion of the Vendor Placing, Pan African has concluded
    a bookbuild in terms of which it has secured undertakings from the Investors to
    acquire the Placement Shares. Should the Vendor Placing proceed, the Placement
    Shares shall be acquired by the Investors for R3.25 (approximately 14.25 pence)
    per share (the "Placing Price"), being a premium of 5.1% to the 30 day volume
    weighted average traded price of a PAR Share as at 25 May 2016, to raise a
    maximum of R363.1 million (£15.9 million) and the remaining portion of the
    Purchase Consideration will be settled in cash by Pan African using its
    existing cash reserves and funding facilities.

    The Vendor Placing comprises two separate but simultaneous and co-ordinated
    vendor placings in the United Kingdom and South Africa. The Company has entered
    into a placing agreement (the "Placing Agreement") with Numis and Peel Hunt
    (together the "UK Bookrunners"), pursuant to which the UK Bookrunners have
    agreed, in accordance with its terms, to use their reasonable endeavours to
    procure on behalf of the Company subscribers for the Placement Shares at the
    Placing Price in the United Kingdom.

    The Placing Agreement contains customary warranties given by the Company to the
    UK Bookrunners as to matters relating to the Company and its business and a
    customary indemnity given by the Company to the UK Bookrunners in respect of
    liabilities arising out of or in connection with the Vendor Placing. The UK
    Bookrunners are entitled to terminate the Placing Agreement in certain
    circumstances prior to admission of the Placement Shares, including
    circumstances where any of the warranties are found not to be true or accurate
    or were misleading and upon the occurrence of certain other events. The Placing
    Shares will represent, in aggregate, approximately 5.7% of the enlarged issued
    share capital of the Company following the Vendor Placing. The Placement Shares
    will be issued to Investors credited as fully paid and will, upon issue, rank
    pari passu in all respects with the Pan African ordinary shares then in issue,
    including all rights to receive all dividends and other distributions declared,
    made or paid following admission and listing of such Pan African ordinary
    shares. The Placement Shares are not being made available to the public or
    being offered or sold in any jurisdiction where it would be unlawful to do so.
    The Vendor Placing is not underwritten by the UK Bookrunners or any other
    person.

    Application will be made to the London Stock Exchange for admission of the
    Placement Shares to trading on AIM. The Company will also apply to the JSE
    Limited for the listing and trading of the Placement Shares on the Main Board.
    It is expected that admission and listing of the Placement Shares on AIM and
    the Main Board will become effective on or about 3 June 2016.

    2. RATIONALE FOR THE TRANSACTIONS

    The Transactions allow Pan African to:

      * address operational and value dilution risks presented by the possible
        dilution of its black economic empowerment ("BEE") ownership;
      * gain further flexibility and commensurate certainty as to its ability to
        comply with the prevailing BEE legislation from time to time;
      * partner with Mabindu in furthering Pan African's BEE ownership in a
        meaningful and mutually beneficial manner on an ongoing basis;
      * through the Vendor Placing, retain the Company's funding headroom necessary
        for swift access to potential future organic and acquisitive growth
        opportunities; and
      * realise further value for Shareholders through a reinvestment in the
        Company via Shanduka Gold on an earnings and dividends accretive basis, as
        more fully explained below.

    Mabindu is a black owned and controlled trust and constitutes a Historically
    Disadvantaged South African ("HDSA") for the purposes of South Africa's BEE
    legislation. Shanduka Gold (and, indirectly, Mabindu) is Pan African's primary
    BEE shareholder. Pursuant to legislation governing BEE and the granting and
    retention of South African mining licences and rights, Pan African is required
    to have a minimum level of HDSA ownership and Shanduka Gold contributes
    significantly towards the Company's continued compliance with these
    requirements. The Transactions allow Pan African to ensure that its current
    HDSA ownership structures are unaffected by retaining Shanduka Gold and,
    indirectly, Mabindu as Shareholders.

    A draft Mining Charter has been published by the Minister of Mineral Resources
    for comment. Companies have until 31 May 2016 to submit their comments. It is
    anticipated that there may be a number of significant amendments to this draft
    version of the Charter following the submissions made by the mining industry
    and, therefore, it is unclear at this stage in what form the final version of
    the Charter will be published.  The Transactions will provide Pan African with
    flexibility in terms of ensuring compliance with future BEE regulations.

    Approximately 0.6% of the Shanduka Gold shares to be acquired from Jadeite will
    be retained by Jadeite for sale, at a future date, to an independent third
    party nominated by Pan African. Pursuant to the Transactions, Pan African will
    therefore acquire a 49.9% direct interest in Shanduka Gold. Shanduka Gold shall
    accordingly not be a subsidiary of Pan African and further details of the
    intended application of the 0.6% interest in Shanduka Gold will be determined
    after completion of the Transactions. Jadeite shall retain ownership of these
    shares and all the benefits and rights associated therewith until they are
    transferred to the selected recipient.

    Mabindu's 49.5% interest in Shanduka Gold was acquired at a discounted value
    but created a notional loan, to be settled by Mabindu, with a notional value of
    R536 039 493 ("Notional Loan") as at 11 December 2015. The Notional Loan
    accrues notional interest at the South African prime rate plus 5% and is
    required to be notionally settled on 11 December 2018. Whilst the Notional Loan
    is outstanding, 95% of the dividends payable to Mabindu are waived by Mabindu
    and the Notional Loan is notionally reduced by the aggregate value of all
    dividends paid and payable to Mabindu. On 11 December 2018, the Notional Loan
    will be notionally settled by the repurchase by Shanduka Gold of all or a
    portion of Mabindu's Shanduka Gold shares at the same price per share as
    originally paid by Mabindu. The number of Shanduka Gold shares to be
    repurchased shall be calculated by dividing the Notional Loan value by the fair
    value of a Shanduka Gold share calculated at that time.

    Pursuant to, inter alia, the Notional Loan, implementation of the Transactions
    will result in Pan African consolidating all the PAR Shares (436 358 059
    shares) held by Shanduka Gold for accounting purposes. Accordingly, the net
    effect will be a reduction of 324 646 268 PAR Shares (as increased by the issue
    of the Placement Shares) in issue for purposes of the Company's earnings per
    share calculations. Furthermore, Pan African will receive the benefit of
    indirectly participating in dividends it declares to Shareholders on a
    continuing basis.

    3. SUSPENSIVE CONDITIONS

    Subject to the acceptance of the offer by Jadeite, the Jadeite Transaction is
    expected to be conditional upon the fulfilment or waiver of, inter alia, the
    following suspensive conditions:

      * the SBSA Transaction becoming unconditional; and
      * Mabindu waiving its pre-emptive rights pursuant to the MOI.

     1. CATEGORISATION

    Pursuant to the JSE Limited Listings Requirements, the Purchase Consideration
    payable pursuant to the Transactions represents 9.2%, being more than 5% but
    less than 30%, of the Company's current market capitalisation. Accordingly, the
    Transactions, on an aggregated basis, are classified as a category 2
    transaction.

    The net asset value of Shanduka Gold is materially equal to approximately 23.8%
    of Pan African's market capitalisation, from time to time, and, its earnings
    primarily comprise dividends received from Pan African according to the number
    of PAR Shares held by it from time to time.

    Rosebank, Johannesburg

    26 May 2016

    For further information on Pan African, please visit the Company's website at 
    http://www.panafricanresources.com/     

    Sole Corporate Advisor in respect of the Transactions, South African Bookrunner
    and JSE Sponsor to Pan African

    One Capital

    South African Legal Advisors to Pan African

    Webber Wentzel

    UK Bookrunners

    Numis Securities Limited                                                Peel
    Hunt LLP

    UK Legal Advisors to Pan African

    Fladgate LLP

    Legal Advisors to UK Bookrunners

    Memery Crystal

    Contact Details

    Corporate Office

    The Firs Office Building

    1st Floor, Office 101

    Cnr. Cradock and Biermann Avenues

    Rosebank, Johannesburg

    South Africa

    Office:   + 27 (0) 11 243 2900

    Facsimile: + 27 (0) 11 880 1240

    Registered Office

    Suite 31

    Second Floor

    107 Cheapside

    London

    EC2V 6DN

    United Kingdom

    Office:   + 44 (0) 207 796 8644

    Facsimile: + 44 (0) 207 796 8645

    Cobus Loots                                         Deon Louw

    Pan African Resources PLC                               Pan African Resources
    PLC

    Chief Executive Officer                                      Financial Director

    Office: + 27 (0)11 243 2900                                Office: + 27 (0)11
    243 2900

    Phil Dexter                                           John Prior / James Black
    / George Fry

    St James's Corporate Services Limited Numis Securities Limited

    Company Secretary                              Nominated Adviser and Joint
    Broker

    Office: + 44 (0)207 796 8644                 Office: + 44 (0)207 260 1000

    Sholto Simpson                                                Matthew Armitt /
    Ross Allister

    One Capital                                                     Peel Hunt LLP

    JSE Sponsor and Transaction Advisor Joint Broker

    Office: + 27 (0)11 550 5009                              Office: + 44 (0)207
    418 8900

    Gareth Driver / Huneiza Goolam                       Julian Gwillim

    Webber Wentzel                                              Aprio Strategic
    Communications

    South African Legal Advisor                            Public & Investor
    Relations SA

    Office: + 27 (0)11 530 5000                              Office: + 27 (0)11 880
    0037

    Daniel Thöle

    Bell Pottinger

    Public & Investor Relations UK

    Office: + 44 (0)203 772 2500

    Numis and Peel Hunt, who are authorised and regulated in the United Kingdom by
    the Financial Conduct Authority, are acting for the Company and for no-one else
    in relation to the Vendor Placing, and will not be responsible to any person
    other than the Company for providing the protections afforded to their clients
    nor for providing advice in connection with the matters contained in this
    announcement. No representation or warranty, express or implied, is or will be
    made, and to the fullest extent permitted by law no responsibility or liability
    is or will be accepted by any of Numis or Peel Hunt, or by any of their
    affiliates or agents, as to or in relation to, the accuracy or completeness of
    this announcement, or any other written or oral information made available to
    or publicly available to, any interested party or its advisers, and any
    liability therefor, or in connection therewith, is expressly disclaimed.

    DISCLAIMER - INTENDED ADDRESSEES

    NOT FOR PUBLICATION, RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN, OR
    INTO THE UNITED STATES, AUSTRALIA, NEW ZEALAND, HONG KONG, CANADA, JAPAN, OR
    SWITZERLAND OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL OR TO U.S.
    PERSONS (WITHIN THE MEANING OF REGULATION S UNDER THE UNITED STATES SECURITIES
    ACT OF 1933, AS AMENDED).

    This announcement is for information purposes only and does not constitute an
    invitation or offer to subscribe for, underwrite or otherwise acquire or
    dispose of any securities in any jurisdiction. This announcement is only
    intended to be accessed and reviewed by persons to whom it can lawfully be
    addressed and is not intended to be transmitted or distributed, directly or
    indirectly, into the United States, Australia, New Zealand, Hong Kong, Japan,
    Canada or Switzerland or any jurisdiction where to do so would constitute a
    violation of the relevant laws of such jurisdiction. The transmission and
    distribution of this announcement may be restricted by law in various
    jurisdictions, and persons who access this announcement should inform
    themselves about, and observe, any such restrictions.

    The securities described in this announcement have not been, and will not be,
    registered under the U.S. Securities Act 1933, as amended (the "Securities
    Act"), or under any relevant securities laws of any state of the United States
    of America and, subject to certain exceptions, the securities may not be
    offered or sold within the United States or to, or for the account or benefit
    of, U.S. persons or to persons within the United States of America, as such
    terms are defined in Regulation S under the Securities Act. There will be no
    public offering of the securities in the United States.