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Sydney, June 4, 2007 (ABN Newswire) - Pan Australian Resources Ltd Managing Director Gary Stafford told shareholders at the 2007 annual general meeting that the company is running ahead of schedule and ahead of budget as it develops its Phu Kham Copper Gold mine in northern Laos.
Stafford said Pan Australian had designed and procured major items for the Phu Kham process plant, as well as successfully implementing a decision to lease and operate mining fleet equipment.
Shareholders heard that the company achieved a turn around in the performance of the Phu Bia gold cap and the identification of several new exploration targets with significant upside in the region to host more ore bodies.
Stafford said he constantly get asks about cost pressures at Phu Kham given mine cost inflation throughout the industry.
“To put operating costs in perspective – when we calculated the cash costs we used a gold credit of $450 / oz, and if we were to use today’s gold price of $650 / oz today’s operating costs would fall to less than 50 cents per pound.
“So yes we are seeing some pressures in terms of high diesel price and higher wages bills but when you put that next to the high gold price that we are enjoying then it offsets any increases that we have seen in those areas.”
Stafford said company is on schedule for pre-commissioning start in December 2007, with first production by mid 2008.
“When we talk about economics, in our feasibility study we assumed US$1.35 / pound for copper and US$450 / oz for gold for an annual cash flow of US$50 million from 2009. If you take just over US$1.20 off today’s copper price and use US$550 / oz for gold then our cashflow more than doubles to more than US$108 million.
“This gives us capital payback in less than three years and you have to look at our current market capitalisation then you can understand our confidence about the growth of the company.
Stafford shows Pan Australian is a consistent performer in the top quartile of Mining Index on the ASX.
Video includes fly through of the development of the company’s Phu Kham copper gold project and related infrastructure and detailed overview of plant operations.
