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64 E&MJ; • JUNE 2014 www.e-mj.com PA N A U S T Laos Gives PanAust Perfect Kick-start Capitalizing on recovery improvement program, PanAust evolves from a junior explorer into a producer with a market cap of $1.1 billion By Kathryn Edwards, The ASIA Miner The journey of PanAust from junior explor- er to successful ASX 200 mining company can be largely attributed to its successful operations in Laos. The Phu Kham copper- gold and Ban Houayxai gold-silver projects have seen PanAust's Lao-registered com- pany, Phu Bia Mining, become an impor- tant part of the Lao economy, both in terms of contributions to GDP and exports. PanAust also ensures the economic and social benefits of its operations are shared with key stakeholders in Laos, including the government and host communities, through employment, training and develop- ment, and a broad range of community development programs. In addition to its operations, PanAust holds a portfolio of development and explo- ration projects in Laos and Chile. The com- pany has also entered into a share sale and purchase agreement with a subsidiary of Glencore Xstrata for PanAust to acquire Glencore's interest in the Frieda River cop- per-gold project in Papua New Guinea. The Phu Kham operation comprises a large open-pit mine feeding ore to a process plant with recovery of copper and precious metals into a saleable concentrate using conventional flotation technology. The final product is a copper-gold concen- trate grading about 22% to 25% copper, 7 grams/metric ton (g/mt) gold and up to 60 g/mt silver. Concentrate is trucked in cov- ered containers to Sriracha Harbour south of Bangkok in Thailand or to the South China Sea port of Vung Ang in Vietnam. The significant cash flow generated by Phu Kham since commencing production in 2008 has supported PanAust's growth and success, and contributed to the com- pany's strong balance sheet. Managing Director Gary Stafford has been at the helm of PanAust for almost two decades and has overseen its successful rise. Originally in the Southeast Asia region scoping out a copper project in northern Thailand, Stafford explained that PanAust looked elsewhere to see whether there were any complementary projects it could work on as it was experiencing difficulties get- ting the Thai project off the ground. "We did some research on opportuni- ties in Laos, Vietnam and Malaysia, and we became aware of an opportunity in Laos where land access seemed more straight forward; there was already an agreement with the government that had been origi- nally negotiated by a joint-venture between Normandy Mining and Anglo American," he said. "They had held the contract area in Laos for around eight years, and for the three years prior to us looking at Laos, they hadn't done any work on it. They were look- ing to sell it, get some money back on the The Phu Kham copper-gold project, which was PanAust's first operation in Laos. The company's administration buildings can be seen in the foreground, with process plant and coarse-ore stockpile in mid-ground, and the open pit in the background. (Photos courtesy of PanAust) EMJ_pg64-71_EMJ_pg64-71 6/3/14 4:20 PM Page 64