43
Phu Kham Operations, November 2013 David Reid, General Manager
Phu Kham Operations, November 2013
David Reid, General Manager
Safety performance – zero harm objective
1.82
00.20.40.60.811.21.41.61.82
0
1
2
3
4
No
v-1
2
De
c-1
2
Jan
-13
Feb
-13
Mar
-13
Ap
r-1
3
May
-13
Jun
-13
Jul-
13
Au
g-1
3
Sep
-13
Oct
-13
TR
IFR
Nu
mb
er
of
Inju
ries
Total Reportable Injuries & Frequency Rate Last 12 Months
TRI Occurances 12 Mth TRIFR YTD TRIFR TRI Target
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0
1
2
3
4
5
6
No
v-1
2
De
c-1
2
Jan
-13
Feb
-13
Mar
-13
Ap
r-1
3
May
-13
Jun
-13
Jul-
13
Au
g-1
3
Sep
-13
Oct
-13
LT
IFR
Nu
mb
er
of
Inju
riie
s
Month
Lost Time Injuries & Frequency Rate Last 12 Months
LTI Occurances 12 Mth LTIFR YTD LTIFR LTI Target
-0.10
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0
1
2
3
4
5
6
No
v-1
2
De
c-1
2
Jan
-13
Feb
-13
Mar
-13
Ap
r-1
3
May
-13
Jun
-13
Jul-
13
Au
g-1
3
Sep
-13
Oct
-13
RT
IFR
Nu
mb
er
of
Inju
ries
Month
Restricted Work Injuries & Frequency Rate Last 12 Months
RWI Occurances 12 Mth RWIFR YTD RWIFR RWI Target
Established operation with competitive
cash costs
2013 production expected to be 62,000t
to 65,000t copper at an average C1 cash
costi of approx. US$1.35/lb; total cash
costs (incl. royalty, sustaining capital and
lease and finance charges) US$2.14/lb
for 9 months to 30 Sep 2013
Production expected to rise to between
65,000t and 70,000t copper in 2014 and
over 70,000t in 2015
2016 onwards: production rates to
increase progressively to a peak of
approximately 90,000t in 2018 and 2019
Phu Kham Operation – Outlook Summary
i: C1 direct operating costs, based on payable copper in concentrate produced, after precious metal
credits. Assumes DecH2013 prices of US$1300/oz gold and US$20/oz silver.
Data shown on a 100% equity basis.
Commenced production 2008: 12Mtpa
nominal capacity exceeded
Process plant expanded in 2012 to
16Mtpa nominal: processing rates
exceeding design on transitional ores
Increased Recovery Project completed
2013 ahead of schedule and under
budget: recovery performance exceeding
design for ore types processed
Potential for further mine and mill
optimisation
2013 Ore Reserve estimate confirmed
10-year mine life
Phu Kham district exploration upside
Phu Kham Operation – Overview
Data shown on a 100% equity basis.
Phu Kham: progressive upgrades
2nd regrind mill six additional cleaner cells
2nd filter
3rd transformer
2nd ball mill
Increased flotation capacity
16Mtpa Upgrade Project
Increased Recovery Project
Mill processing rate to increase from
12Mtpa by 33% to a design capacity of
16Mtpa on primary ore
Commissioned in the SepQtr2012; quick
ramp-up; record throughput achieved in
December 2012 demonstrating high
throughput rates at 21Mtpa, running at
18Mtpa rates in 2013
Timed to offset a decline in head grades as
deeper primary ore is mined and processed
Grinding and flotation capacity increased by
50%; collectively deliver 2% absolute
improvement in copper recovery
Capital cost within the US$95M budget
Phu Kham: Upgrade Project
Data shown on a 100% equity basis.
Increased recovery achieved through less
selective rougher flotation together with
increased regrind, cleaner flotation and
concentrate handling capacity
Project completed April 2013, several
months ahead of schedule and under
budget
Utilises existing plant technology: low
technical risk, rapid payback
Metallurgical recovery performance to
date is exceeding design model
expectations for copper and gold based
on ore types processed
Phu Kham: Increased Recovery Project
Data shown on a 100% equity basis.
Expecting an average 6% absolute
increase in copper and gold recovery
Actual recovery rates achieved will
depend upon ore type (S:Cu ratio) and
production strategy including grind size
vs throughput rate trade-off; moderate
positive correlation with copper grade
S:Cu ratio expected to decline (11-13) as
the proportion of primary ore increases
Minor increase in unit processing costs
due to power and grinding media
required for the second regrind mill….
…increased metal production is expected
to reduce C1 cash cost by more than 5%;
capital cost under budget by $10m
Increased Recovery Project
0
10
20
30
40
50
60
70
80
90
0 10 20 30 40
Co
pp
er
reco
very
(%
)
Sulphur : copper ratio
0
10
20
30
40
50
60
70
80
90
0.3 0.4 0.5 0.6 0.7
Co
pp
er r
eco
ver
(%)
Copper grade (%)
Charts show actual daily performance data from July 2013 onwards.
Crusher bottleneck at 18 to 18.5Mtpa
on softer ore, examining options to
improve
SAG mill capacity ~20Mtpa
Original plant design required a
pebble crusher in order to maintain
nameplate throughput on primary ore
Evaluating options to improve in-pit
ore fragmentation (mine to mill
studies) and improving crusher
operating time to allow optimal SAG
mill operation
Opportunity to circumvent crusher by
providing crushed ore from satellite
pits – KTL & LCT potential – and low-
grade stockpiles
Throughput optimisation
Data shown on a 100% equity basis.
Geotechnical instability detected in the
interim pit west wall in December 2012
Revised mine schedule necessitated
lower grade transitional ore to be
prioritised thereby delaying access to
higher grade ore in the pit floor
Average copper head grade for
2013/2014 is expected to range from
0.45% to 0.50%
Interim wall slope angle being reduced;
no change to final pit wall design
The interim west wall failure was mined
out from January to October 2013, new
walls established
Open-pit
Revised life of mine plan developed;
copper production to progressively
increase to a peak of around 90,000t in
2018 and 2019
Ore processing rate of 18Mtpa expected to
be sustained
Phu Kham open pit mine life remains 10
years (from start of 2013) at a copper price
of US$3.00/lb
Potential for mineralisation from satellite
deposits close to Phu Kham and near
Phonsavan to augment mill feed and/or
extend mine life
Revise mine plan: October 2013
Data shown on a 100% equity basis.
Material movements of approx. 50Mtpa from
2014 to 2016 then reducing; additional mine
shovel and drill required in 2014; LOM strip
ratio of 1.2:1
Low-grade stockpile strategy developed
reducing effective strip ratio in high material
movement years
Truck fleet scheduled to increase from Q1
2016 by six trucks as haulage distances
increase with open-pit depth
Accounting standard amended for 2013:
deferred waste mining costs now limited to
waste mining relating to future mining areas
Approximately US$23.3M (or 8.1Mt) of waste
stripping for 2013 is expected to be capitalised
Material movements and strip ratios
Mining pit stages
Mining areas (red) in 2014 Data shown on a 100% equity basis.
Progressive TSF wall lifts have
historically been a significant
component of sustaining capital at
Phu Kham
Implementation of floating discharge
of tailings and continuous discharge
of decant water in 2012 has led to a
revised TSF construction schedule
Annual sustaining costs for 2013 –
2015 are expected to reduce
significantly but will vary depending
upon requirements for
accommodating waste as a
construction material
Tailings Storage Facility
Data shown on a 100% equity basis.
0.31
0.28
0.26 0.22
0.32
0.08
0.08
0.07 0.09 Labour
Fuel
Process power
Grinding media
Maintenance, mill liners andother spares
Explosives
Reagents
Tyres
Other
Total on-site operating costs: US$1.71/lb (before credits)
Site costs for the 9 months to 30 Sep 2013
Current production fleet comprises:
48 CAT777D 100t trucks
2 PC3000 & 2 RH90 face shovels
2 PC2000 excavators
Reconciliation: ore processed to Ore
Reserve; project to late 2012:
-6% contained copper
+4% contained gold
+24% contained silver
-5% ore tonnes
Low LOM strip ratio: 1.2:1 based at a
US$3.00/lb copper price
Mining costs: US$2.50/t – US$3.00/t,
average $2.60/t
Mine and ore body performance
Tonnes/month
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
Ap
r-0
8
No
v-0
8
Jun
-09
Jan
-10
Au
g-1
0
Mar
-11
Oct
-11
May
-12
Dec
-12
Jul-
13
Total material mined
Ore mined
Extreme
rainfall
events
Design process plant capacity of
16Mtpa has been exceeded on
softer transitional ores, site uses a
blending regime (S:Cu, hardness)
End Sep 2013 YTD average
processing rate of 2,244t/hr versus
design 2,000t/hr
Ball mill Bond work index range
10-17 kWh/t
Primary grind: P80 of ~90μm
Regrind: P80 of ~30μm
Processing cost: averaging
US$6.50/t
Process plant performance: ore milled
Tonnes/month Tonnes/hr
0
500
1,000
1,500
2,000
2,500
3,000
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
Ap
r-0
8
No
v-0
8
Jun
-09
Jan
-10
Au
g-1
0
Mar
-11
Oct
-11
May
-12
Dec
-12
Jul-
13
Ore milled
Mill throughput rate (t/hr)
Data shown on a 100% equity basis.
Process plant performance: Cu recovery
Cu Recovery Cu Grade Scheduled ore head grades have
declined as primary ores are mined
and processed
Recoveries reflect the mix of ore
types processed
Transitional ores; metallurgical
complexity limits recovery rates
Higher recoveries achieved on
primary ore types
Current LOM average ore split:
~15% transitional, ~85% primary
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
0.8%
0.9%
1.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Ap
r-0
8
Oct
-08
Ap
r-0
9
Oct
-09
Ap
r-1
0
Oct
-10
Ap
r-1
1
Oct
-11
Ap
r-1
2
Oct
-12
Ap
r-1
3
Oct
-13
Copper recovery
Copper head grade
Typical Phu Kham concentrate
specification:
22% - 25% copper
5g/t - 8g/t gold
30g/t - 100g/t silver
<0.5% arsenic
Variability in output during steady-
state production largely reflects
head grade
Process plant performance: output
Tonnes
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Ap
r-0
8
Oct
-08
Ap
r-0
9
Oct
-09
Ap
r-1
0
Oct
-10
Ap
r-1
1
Oct
-11
Ap
r-1
2
Oct
-12
Ap
r-1
3
Oct
-13
Conc produced
Concentrate marketing
Well positioned to supply custom smelters
in Southeast Asia
Copper-gold concentrate trucked to
Sriracha Harbour in Thailand or Vung Ang
in Vietnam for export; haulage cost
~US$95/t (Sriracha) ~US$87/t (Vung Ang)
Approximately 83% of planned sales to the
end of 2014 are under a mix of long term
and spot sales agreements with
internationally recognised traders and
smelters
Majority of current and next 3 years
production committed to contracts
Between 50% and 90% of the copper price
exposure hedged based on provisional
invoice pricing
Phu Kham to
Sriracha Harbour
~1,000km
Phu Kham to
Vung Ang
~630km
On track to meet 2013 production of 62,000-
65,000t copper in concentrate at an average
C1 cash cost will approximate to the upper end
of guidance (US$1.35/lb)
Revised life of mine plan developed; copper
production to progressively increase to a peak
of around 90,000t in 2018 and 2019
Major capital phase now concluded: benefits
flowing from the expansion and increased
recovery projects together with lower scheduled
sustaining capital is expected to enhance cash
flow
Exploration upside in the Phu Kham district
provides the potential for additional sources of
mill feed
Phu Kham Outlook
Data shown on a 100% equity basis.
Ban Houayxai Operations, November 2013
Dr Jon Gaunt, General Manager
Safety performance – zero harm objective
Ban Houayxai Lag Indicator 12 Month Trends
12 Months from October 2012 to September 2013:
• LTIFR = 0.76
• TRIFR = 4.20
• AIFR = 8.78
Open pit mining operation feeding a
conventional 4Mtpa CIL / gravity gold plant
First gold-silver doré poured 1 May 2012;
commercial production from 1 June 2012
2013 production expected to be 110,000oz
gold at an average C1 cash costi of
US$600-US$650/oz after silver credits; total
cash cost (incl. royalty, sustaining capital
and lease and finance charges) US$863/oz
for 9 months to 30 Sep 2013
Mine life of over 10 years based on 2013
Ore Reserves estimate
Ban Houayxai Gold-Silver Operation
i: C1 direct operating costs, based on payable copper in concentrate produced, after precious metal
credits. Assumes DecH2013 silver price of US$20/oz.
Data shown on a 100% equity basis.
Ban Houayxai Gold-Silver Operation
Admin. Office Process Plant
Open Pit
Waste dump
To accommodation
camp
Production fleet comprises:
7 CAT777D 100t trucks
2 PC1250 from late November
Changing the PC2000 for a PC1250
Good contained metal reconciliation
between ore processed and the Ore
Reserve block model project to date:
-3% contained gold
-3% contained silver
+7% ore tonnes
Mining cost ~US$3.25/t - US$3.75/t
Zone of high-grade gold-silver
mineralisation extends beneath the
current open-pit design; potential target
for underground mining
Mine and ore body performance
Tonnes/month
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
Total material mined
Ore mined
Open pit current mining
LOM strip ratio of ~1.7:1 based
on the 2013 Ore Reserve
Over the first six years of
mining the strip ratio is
expected to be approximately
1:1 rising to over 2:1 in the last
year of mine life commensurate
with a cut-back to access
deeper ore
Low-grade stockpiling strategy:
currently defined open pit
depleted after 7 years: low
grade stocks processed
thereafter
Minimal deferred mining costs
Open pit stages and strip ratios
166
58
92
34 116
34
94
17
147 Labour
Fuel
Process power
Grinding media
Maintenance, mill liners and otherspares
Explosives
Reagents
Tyres
Other
Total on-site operating costs US758/oz gold (before credits)
Site costs for the 9 months to 30 Sep 2013
Design capacity of 4Mtpa; can be
exceeded on softer ores
Record processing rate achieved
in September quarter 2013:
equivalent to annualised rate of
4.9Mt
Focus on milling has delivered
15% improvement in mill
throughput for oxide and
transition ores against design
Processing cost ~US$9.00/t –
US$9.50/t
Minimal sustaining capital until
2016/17 when next TSF lift is
scheduled
Process plant performance: ore milled
Tonnes/month Tonnes/hr
0
100
200
300
400
500
600
700
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
Ore milled
Mill throughput rate (t/hr)
Data shown on a 100% equity basis.
Process plant performance: recovery rates
Recovery rates vary according to
ore type and grade
Recoveries of +90% for gold and
+70% for silver on oxide; c.85% for
gold and c.60% for silver on
transitional ore; gold recovery
75%-80% for harder primary ore
Project identified to evaluate
improved recovery on primary ore
Silver grade increasing with the
proportion of transitional and
primary ore; oxide ore is partly
silver depleted
2013/14 production predominantly
transitional ore types (60%)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
0%
20%
40%
60%
80%
100%
Gold recovery
Gold head grade
0.0
2.0
4.0
6.0
8.0
10.0
0%
10%
20%
30%
40%
50%
60%
70%
Silver recovery
Silver head grade
Production profile reflects
increasing silver grades as the
proportion of transitional and
primary ores processed
increases
March 2013 production impacted
by SAG mill reline
Post-March soft oxide ore has
progressively been displaced by
harder transitional ore
Mine to mill program is delivering
mill throughput improvements to
offsets the change to harder ores
to maintain gold output
Process plant performance: output
Ounces/month
0
10,000
20,000
30,000
40,000
50,000
60,000
Gold in doré
Silver in doré
Data shown on a 100% equity basis.
SAG mill
reline
Additional information
PanAust’s assets in Laos are held
by the Lao-registered entity Phu Bia
Mining Ltd (PanAust 90%)
2,600km2 Contract Area held under
a Mineral Exploration and
Production Agreement (“MEPA”):
sets out approvals process for
project development, operating
framework and fiscal regime – mine
development fast track
30-year tenure refreshed with each
new mine development
PanAust’s operations in Laos
Corporate tax rate of 25%
Royalty payment is based on metal prices - net smelter return royalty i.e.
off-site costs (transport, shipping, TC/RC’s etc) are deductable :
Copper:
• Up to US$3,000/t – 3%
• From US$3,000/t to US$4,000/t – 4%
• From US$4,000/t to US$5,000/t – 5%
• Above US$5,000/t – 6%
Gold
• Up to US$450/oz – 3%
• From US$450/oz to US$500/oz – 4%
• From US$500/oz to US$600/oz – 5%
• Above US$600/oz – 6%
Silver
• Royalty rate % is set by the gold rate
Fiscal regime
Mining cost 80
Deduct deferred mining costs (14)
Inventory adjustments (6)
Processing 87
General and Administration 24
Total mine site operating costs 171
Transport, Handling and Marketing 31
Concentrate treatment and refining 20
Total off-site operating costs 51
Precious metal credit (79)
Total direct operating costs (C1 cash cost) 144
Royalty 22
Sustaining capital (includes TSF) 33
Lease principal and interest charges 16
Total cash costs 214
Average copper price received (after realised hedging) 339
Phu Kham production costs; YTD Sep2013
Note: costs are based on payable copper in concentrate produced
US¢/lb copper
Mining 275
Deduct deferred mining costs -
Inventory adjustments (60)
Processing 398
General and Administration 145
Total mine site operating costs 758
Total off-site operating costs (freight, refining) 11
Silver credit (124)
Total Direct Operating Costs (C1 cash cost) 644
Royalty 96
Sustaining capital (includes TSF) 76
Lease principal and interest charges 48
Total cash costs 863
Average realised gold price (after hedging) 1,406
Ban Houayxai production costs; YTD Sep2013
US¢/oz gold
Ban Houayxai Process flow sheet
PanAust’s commitment to sustainable development is a key consideration in
the way the Company undertakes its business activities and incorporates a
strong emphasis on delivering sustainable benefits to the communities within
the vicinity of its operations.
Further information on PanAust’s sustainability programs can be viewed at the
Company’s website www.panaust.com.au
Sustainability Report 2012: PanAust uses the reporting requirements of the
Global Reporting Initiative (GRI) G3, and reports to an A+ Application Level.
To achieve this rating the report has undergone external verification prior to
publication.
PanAust’s Sustainability Report and GRI index are available on PanAust’s
website at www.panaust.com.au/reports The 2012 Assurance Statement
provided by the external agency (ERM-Siam, Co Ltd) is incorporated into the
report.
Strong commitment to sustainable development
March 2013: PanAust received the 2013 Sustainability Leadership Award at the Asia Mining
Congress in Singapore in recognition of PanAust’s program to create and support business
opportunities within the villages closest to the Company’s mining operations in Laos
Previously at the Asia Mining Congress, PanAust received awards for “Best Community
Development Initiative” in the Southeast Asia category for:
2011 – The positive contribution that PanAust’s Technical Trades program had made to
local communities and the greater Lao economy
2010 – PanAust’s Livelihood Improvement Programme designed to assist sustainable
development of the local communities
December 2011: PanAust received the Government of Lao PDR Labour Order Class 1
Award for the “best development in a rural area” for the Company’s outstanding contribution
to rural socio-economic development and poverty eradication
December 2011: PanAust received the Ethical Investor magazine 11th Sustainability Award
within the social and community category in recognition of the Company’s Livelihood
Improvement Program that is designed to assist the sustainable development of the
communities around the Phu Kham Copper-Gold Operation in Laos
Award winning sustainability performance
PanAust provides a total of US$450,000
annually to the Community Development
Funds supporting the communities around
Phu Kham, Ban Houayxai and Phonsavan
Funding and support for: agriculture,
healthcare, infrastructure, and microfinance
and small business development
Phu Kham purchases almost 50% of its fresh
produce for the accommodation camp kitchen
from local communities
PanAust to partner with the Asian
Development Bank in a US$46.6M clean
water project to deliver clean water and better
sanitation facilities to residents of 11 towns in
Laos; PanAust will contribute a US$6M grant
over six years
Sustainable Development
Classroom sessions – market gardening and fish
farming
Around 50% of food requirements for the Phu Kham
camp is sourced locally
Approximately 3,370 employees; ~85% are
Lao nationals
Up-skilling of the Lao workforce; PanAust
has developed scholarship and
apprenticeship programs in conjunction with
colleges, universities and polytechnics in
Laos and Thailand
PanAust received the 2011 award for Best
Community Development Initiative at the Asia
Mining Congress in Singapore in recognition
of the positive contribution that PanAust’s
Technical Trades Training program is making
to local communities and the greater Lao
economy
Laos: employment and training
Full provision for estimated closure costs is
recognised in PanAust accounts and
amortised over the life of the operation
US$53M provision as at 31 December 2012
Estimate is updated annually
Land rehabilitation
This presentation has been prepared by the management of 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.
Important notice
