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Central to the company's operating philos- ophy is a desire to make a positive impact on its host communities. "The government is very sensitive to any issue that might be unpopular with the local community or would be disruptive to the local community," he said. "We were able to build Phu Kham without having to relocate any villages, we were able to employ a lot of people locally and we've got world-leading approaches to sustainability in terms of our work with the local community." PanAust's business development pro- gram in Laos benefits local communities and, in particular, female entrepreneurship amongst three ethnic groups and literacy through company-sponsored training and access to microfinance credit. During 2012, PanAust's microfinance scheme—the Village Savings and Credit Fund—provided more than $210,000 in loans, and collected savings deposits of close to $138,000 for its 743 members. Additionally, PanAust's small community business initiatives generated revenue in excess of $768,000 for local families com- prising local production of vegetables, drinking water, cloth bags, fruit and fish. It saw the company snare several internation- al awards, most recently the 2013 Sustainability Leadership Award at the Asia Mining Congress in Singapore. "It's amazing when you go up there now seeing the market gardens," Stafford said. "When we first went there, the vil- lagers had no cash in the economy and they were principally making a living based on rice. Occasionally, the rice yields were too low and the U.N. World Food Program went to top it up. They had chickens, a few pigs and caught a few fish, but that was about it. Through the microfinance scheme, we support the villagers in pro- ducing food for the camp. "Out of the initiative we're finding that the overall health of the population has improved many times over because their own diet has improved. It's actually one of those great success stories where mining has been a magnificent boost to the health and well-being of the local community." PanAust's success in Laos can also be attributed to its strong relationship with government. The company takes a respon- sible approach to initiatives implemented as it represents a large part of the business community. "As a leading business in a country such as Laos, it is important we support good policy initiatives, otherwise, it can be very difficult for the government to imple- ment successfully," Stafford said. "I think if you take a responsible approach to leg- islative change and changes to tax sys- tems, this cements your reputation as being business people with high integrity." "We're in a really good country; it's a country that rewards development. The government holds us up as an example of how mining should be conducted in their country because they know that we're very professional in our approach." Well Placed for the Future Earlier this year, Stafford announced plans to step down as managing director after being the driving force behind the success that has seen PanAust evolve from a junior explorer into a producer with a market cap- italization of $1.1 billion. The company has achieved a steady rate of production at Phu Kham and has determined the mine's future. Drawing on its experience in Laos, PanAust has two prospective projects in the pipeline—the Inca de Oro project in Chile and the Frieda River project in Papua New Guinea—and it plans to build mines at one or both of those projects in due course. Looking back, Stafford is proud of PanAust's achievements in Laos and believes he is leaving the company in great shape. "We've got two great operating assets in Phu Kham and Ban Houayxai with a highly motivated workforce at both sites, plus a capacity to build projects, which is unique amongst companies of our size. "We've also got people with the skills to continue to research and ride the waves of approvals with the operations we have, and we are keenly looking at improvement ini- tiatives. We've got a safety record that is second-to-none and our outstanding sus- tainability track record is proven through various international awards. "Looking ahead, we've got two great opportunities in PNG and Chile. The planned acquisition of a majority interest in the Frieda River project in PNG remains subject to conditions precedent, including Chinese approvals for the merger between Glencore and Xstrata, but I think that will all fall into place. "In Chile, we have a 60.45% interest in the Inca de Oro copper-gold project in a joint venture with Codelco. A feasibility study for that project is scheduled to be completed midyear. "I think that's a great legacy for the company—we've got the resource-base to survive and grow in the future. Now, the company needs someone to come in and implement strategies—there's no need to turn the company around. I feel happy that the company is in good hands with the cur- rent management team, we've just got to find the right person to take over from me. "I'd like to think that PanAust is a good example of how to do business in a devel- oping country. It's not just about the pro- duction it's also about the health of the peo- ple close to where you are, bringing those people along with you and being regarded as a worthwhile and ethical investor." JUNE 2014 • E&MJ; 69 www.e-mj.com PA N A U S T The open pit at the Phu Kham copper-gold project. EMJ_pg64-71_EMJ_pg64-71 6/3/14 4:20 PM Page 69