Growth by discovery, acquisition and development


8 Νοε 2013 (πριν από 4 χρόνια και 8 μήνες)

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Growth by discovery, acquisition
and development
Gary Stafford, Managing Director
Sydney Mining Club – 7 November 2013

 PanAust formed in 1995 as a minerals
 Late 1990’s cyclical commodity downturn
led to a strategy shift to acquire a pre-
development stage mining asset
 2001 agreement to acquire Lao
registered Phu Bia Mining Limited
 Heap Leach Gold Operation commenced
in 2005 but the real opportunity lay in the
larger Phu Kham Copper-Gold Operation
which was brought into production in
 Phu Kham production to steadily
increase to a peak of around 90,000tpa
From junior explorer to mid-tier miner
 2005: First gold pour at the Phu Kham Heap
Leach Gold Operation
 2006: Completion of equity and debt package
for funding of development of Phu Kham
 2008: First sales of copper-gold concentrate
from Phu Kham
 Late 2008: Phu Kham was cash flow positive
despite the slump in copper prices due to the
 2009: Recapitalised after the GFC

2010: Decision to build Ban Houayxai for
average annual production of 100,000oz gold
and 700,000oz silver

PanAust timeline
 2010: Phu Kham production rose to 67,800t
copper and 58,000oz gold
 Acquired a majority interest in the Inca de Oro
Project in Chile
 2012: First gold-silver bar poured at Ban
 Completed the US$95m Phu Kham expansion
 2013: Completed the US$30m Phu Kham
Increased Recovery Project
 Announced the acquisition of Frieda River
PanAust timeline continued
 Good operating environment, stable
 GoL owns 10% of Phu Bia Mining Ltd,
PanAust’s Lao-registered entity
 To date, PanAust has invested
approximately US$1.2 billion in Laos
 In 2012, PanAust’s economic contributions
accounted for:
 More than 7% of the nation’s GDP; and
 Over 30% of total Lao exports
Contribution to the Lao economy
 Phu Kham and Ban Houayxai providing
strong cash flow to support dividends and
 Phu Kham process plant upgrade;
Increased Recovery Project 2013
 Production to progressively lift to annual
output to peak levels of 90,000 tonnes per
annum in 2018 and 2019
 Production outlook for 2013 to 2015
 62,000t to 65,000t copper for 2013; rising
to between 65,000t and 70,000t in 2014
and more than 70,000t in 2015
Production and growth
 Mineral Exploration and Production
Agreement covers an area of over
 Phu Kham region: trend of copper-
gold and gold-silver mineralisation
extending from Phu Kham for a
distance of over 13km
 Potential to augment Phu Kham mill
feed and extend mine life
 Phonsavan Copper-Gold Project:
stand alone project or low capital
trucking option for processing at Phu
Pre-development opportunities in Laos

 Pre-feasibility study nearing completion
Development options:
 Stand-alone open-pit and flotation
processing operation
 Alternative low capital cost
development scenario to transport high-
grade open-pit mineralisation for
processing at Phu Kham
Phonsavan Copper-Gold Project, Laos
Data shown on a 100% equity basis.
 Joint Venture with Codelco
(PanAust 60.45%)
 Feasibility Study underway:
scheduled for completion in mid-
 Potential to establish a second
business stream in Chile
 Carmen copper-gold deposit
(PanAust 100%): potential
satellite open-pit to augment Inca
de Oro feed

Inca de Oro Copper-Gold Project, Chile

 PanAust has entered into a share sale and purchase agreement with
Glencore Xstrata plc to acquire its shares in Xstrata Frieda River Ltd
 Initial Frieda River Project ownership will be PanAust 80%, Highlands
20%; the PNG Government has an option to acquire up to 30% of Frieda
 Initial cash consideration of US$75M in two tranches: US$25 million upon
transaction close; and US$50 million on 31 December 2015
 On successful completion of a project development a 2% NSR royalty
becomes payable that will not exceed US$50 million in aggregate
 The acquisition fits well with PanAust’s corporate strategy; entry into a
world class copper-gold deposit that provides the basis for long-term
sustainable growth of the business

Frieda River Project, PNG
Project location
Source: Glencore Xstrata
 To date, four copper-gold deposits and several prospects have been
identified along a approximately 10 km trend
 Project focused on the large Horse-Ivaal-Tukai (HIT) copper-gold deposit
 Project terrain similar to that at PanAust’s Phu Kham operation in Laos
 Previous feasibility study work by XFRL focused on a large scale
 PanAust will evaluate a mid-sized development option that utilises existing
logistical routes and minimises infrastructure requirements; expected to
result in a competitive capital intensity and manageable risk profile

Feasibility study based on the HIT copper-gold deposit is expected to be
complete by mid-2015

About Frieda River
Terrain is similar to Laos
Main camp
Drill camp
HIT Deposit
 Scoping study completed on a smaller circa 24 million tonne per annum
conventional open pit and flotation operation
 Assumed mill feed of 430 million tonnes grading 0.54% copper and 0.3g/t
gold; average annual production (100% basis) of over 100,000 tonnes of
copper and 160,000 ounces of gold in concentrate at competitive cash
cost of approx. $US1.25/lb (after gold credits) over an 18 year mine life.
 Low strip ratio - less than 0.6:1 including pre-strip
 Sepik River will the main artery for the supply of materials and export of
copper-gold concentrate
 Development capital estimated in range of US$1.5 billion to US$1.8 billion
(100% basis, 2013 dollars) which would equate to a competitive capital
intensity of less than US$13,00/t of annual copper equivalent production.
Frieda River Development Concept
Industry positioning
Independent and listed copper companies (below Freeport) ranked by 2013 forecast
attributable copper equivalent production

Source: Company guidance, PanAust estimates. Copper equivalent calculation based on 25/10/2013 close prices: US$3.23/lb Cu, US$1,350/oz Au, US$23/oz Ag, US$9/lb Mo, US$0.86/lb Zn, US$6.52/lb Ni, and US$0.97/lb Pb.
OZ Minerals
Copper Equivalent Production (kt)
Five-year plan
Status Quo
(incl Pinto Valley
 PanAust’s commitment to sustainable
development is a key consideration in the
way the Company undertakes its business
 Performance has been recognised
 Strong emphasis on delivering sustainable
benefits to the communities within the
vicinity of its operations
 Further information on PanAust’s
sustainability programs and credentials,
including the latest Sustainability Report,
can be viewed at the Company’s website
Strong commitment to sustainable development
Around 50% of food requirements for the Phu Kham
camp are sourced locally
PanAust’s community development programs have a
strong focus on education
 CDF comprises 67 small-scale projects in 30
rural communities directly and indirectly
affected by PanAust’s activities
 Local ownership of development priorities
 Funding and support for education, healthcare,
agriculture, infrastructure and small business
 Aim to build long-term capacity in communities
through economic development, rather than
economic dependency
 Asian Development Bank partnership will see
11 towns throughout Laos be supplied with
potable water and sanitation
Community Development Fund
Community members doing a ‘show of hands’ during a
workshop to choose community development projects
Villagers rank development priorities during a community
development workshop

 Commitment to our employees’ health and
safety “Zero Harm” safety objectives
 Promote an internal culture of
environmental and social awareness
 Treating employees with consistency and
 Environmental performance that reflects
the expectations of the communities and
international standards
 Integrity in all of our dealings with
employees, communities, government,
suppliers and shareholders
 Excellence in communication necessitates
Values – Respect & Integrity
 Competitive copper and gold producer
with strong cash flow to support growth
 Organic growth provided by capital
efficient brownfield opportunities and
pre-development opportunities in Laos,
Chile and PNG
 Proven track record of discovery and
resource growth
 Proven track record as a successful
developer of operations
PanAust: the story so far…..
This presentation has been prepared by PanAust Limited (the 'Company') for the benefit of brokers, analysts and investors and not as specific
advice to any particular party or person.
The information is based on publicly available information, internally developed data and other sources. No independent verification of those
sources has been undertaken and where any opinion is expressed in this document it is based on the assumptions and limitations mentioned herein
and is an expression of present opinion only. No warranties or representations can be made as to the origin, validity, accuracy, completeness,
currency or reliability of the information. The Company disclaims and excludes all liability (to the extent permitted by law), for losses, claims,
damages, demands, costs and expenses of whatever nature arising in any way out of or in connection with the information, its accuracy,
completeness or by reason of reliance by any person on any of it.
Where the Company expresses or implies an expectation or belief as to the success of future exploration and the economic viability of future
projects, such expectation or belief is based on management’s current predictions, assumptions and projections. However, such forecasts are
subject to risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed, projected or
implied by such forecasts. Such risks include, but are not limited to, exploration success, gold and copper price volatility, changes to the current
mineral resource estimates, changes to assumptions for capital and operating costs as well as political and operational risks and governmental
regulation outcomes. For more detail of risks and other factors, refer to the Company's other Australian Securities Exchange announcements and
filings. The Company does not have any obligation to advise any person if it becomes aware of any inaccuracy in, or omission from, any forecast or
to update such forecast.

Forward-Looking Statements
This presentation includes certain “Forward-Looking Statements”. All statements, other than statements of historical fact, included herein, including
without limitation, statements regarding forecast cash operating costs and financial performance, potential mineralisation, resources, exploration
results and future expansion plans and development objectives of PanAust Limited are forward-looking statements that involve various risks and
uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially
from those anticipated in such statements. Canadian investors are advised that this presentation has not been prepared in accordance with
Canadian securities law relating to forward looking statements and that the forward looking statements included herein may not be accompanied by
the disclosure and explanations that would be required of a Canadian issuer under Ontario Securities Laws.
Important notice