Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr
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68 E&MJ; • JUNE 2014 www.e-mj.com PA N A U S T 65,000 mt) and gold-in-concentrate pro- duction of 71,223 oz was higher than scheduled. Weaker precious metal prices than those assumed for guidance during the quarter resulted in full year C1 cash costs of $1.36/lb, which was just above the guidance range. All-in sustaining costs for Phu Kham during 2013 were $2.37/lb. "Now looking forward, the grade-profile from the end of this year onward starts in- creasing, the strip-ratio starts falling again, and by the end of this decade, we should be producing well more than 90,000 mt of cop- per without any further capital investment. "As far as I know, we are the only mining company that has a plan to increase copper production by about 40% without the need for any further capital expenditure," he said. The Ban Houayxai gold-silver project, which commenced production in 2012, pro- duced 112,546 oz of gold and 637,603 oz of silver in 2013. The average C1 cash cost of production was $611/oz after silver cred- its. The all-in sustaining cost was $964/oz. PanAust is one of the first base-metal companies to report costs on an all-in sus- taining basis, which provides a clearer pic- ture of cash costs. Further Exploration Laos is a high-priority target for PanAust's exploration and resource development. The most advanced project is the KTL copper- gold project in the northern part of the company's contract area. "In the past 12 months, PanAust has defined a high-grade ore body (KTL) near a town called Phonsavan, 100 km north of Phu Kham," Stafford said. "The govern- ment has been building a road between Phonsavan and Phu Kham and we're plan- ning to make sure that road is built to an adequate standard and sealed. We'll con- tribute to the cost so we can truck the high- grade ore from Phonsavan to Phu Kham. That should lift copper production to 100,000 mt by the end of the decade." An options analysis for the project has shown that the low-capital option of mining and crushing discrete high-grade copper-gold zones then trucking 1.5 mil- lion mt/y of ore over a four- to seven-year period to Phu Kham for processing is the most economically favorable. Under the trucking option, high-grade KTL copper mineralization will either augment the feed to the Phu Kham SAG mill, which has a nominal capacity of 20 million mt/y, or processing the lower grade Phu Kham ore will be deferred. The highly prospective Phu Kham dis- trict hosts several exploration targets, including the LCT deposit and Nam Ve prospect. "Running about 10 km north of Phu Kham is a prospective corridor and we've been working on the LCT deposit as there's some good continuity and mineralization there," Stafford said. "It's quite complex, there are some gold-only zones, some base metal and some polymetallic zones. We're also looking at the Nam Ve prospect where we initially got some very good gold grades, however, it is early days there." Working with the Community Laos, a single-party socialist republic, has seen an expansion in the mining and hydro-power sectors in recent years, both of which have driven economic growth. Phu Bia Mining has a Mineral Exploration and Production Agreement (MEPA) with the Lao government that regulates explo- ration and mining within the Phu Bia con- tract area, which covers an area in excess of 2,600 km 2 . With its stable government, ready access to power, water and roads, and the MEPA, Laos provides an excellent operat- ing environment for PanAust. Stafford said the company has built strong ties with the government and has worked with the local community around Phu Kham and its other projects to improve living conditions. View of the open pit at the Ban Houayxai gold-silver project. An aerial view of the Ban Houayxai process plant with Nam Ngum Reservoir in the background. EMJ_pg64-71_EMJ_pg64-71 6/3/14 4:20 PM Page 68