PanAust is focused on a sustainable business model associated with the production and sale of copper and gold, delivery of production goals and economically astute growth. While copper forms the core product focus, gold and silver provide a measure of commodity diversity.
The strategic direction of the Company is to maximise returns from its producing assets while advancing projects that offer potential to sustain and grow the business in the long term. Any project that progresses to the development stage is required to demonstrate compelling investment returns.
PanAust Business overview 2016
PanAust achieved outstanding operational results during 2016 with several annual production and cost performance records achieved at the Phu Kham and Ban Houayxai operations. Consolidated annual metal production included a record 89,187t of copper in concentrate, 217,482oz of gold, and 1,636,591oz of silver in concentrate and doré. Importantly, the production and cost records were achieved through the improved performance and productivity of employees and increased reliability of existing equipment rather than through additional capital investment.
Excellent safety outcomes for 2016 underpinned PanAust’s record production throughout the year. At the end of 2016 the PanAust Group had achieved 18 months without a lost time injury (LTI) and PanAust’s flagship Phu Kham Operation had achieved an exceptional 21 months without an LTI.
The outstanding safety performance reflects the Company’s commitment to Zero Harm and the success of targeted safety programs which focus on hot spots and lead indicators. When viewed together with the exceptional production and cost outcomes, it is clear that PanAust’s pro-active safety culture is a key driver of operational success and was an integral factor to the Company’s economic strength by year-end 2016.
PanAust’s operational excellence can, in part, be attributed to its superior maintenance programs. The Phu Kham and Ban Houayxai mobile maintenance workshops and associated supply facilities maintained their Caterpillar 5 Star Contamination Control Facility ratings in 2016. Phu Kham and Ban Houayxai are two of only three workshops worldwide that have this rating.
Much of 2016 was characterised by ongoing weakness in the copper price which dipped below US$2.00/lb early in the year and remained depressed until November when a rally in the copper price above US$2.50/Ib occurred and was sustained into early 2017. Gold prices exhibited considerable volatility during 2016 ranging from a low of US$1,088/oz to a high of US$1,361/oz.
Despite the depressed copper price, PanAust’s superior production performances, coupled with improved cost performance outcomes, meant that the Company achieved a significantly higher net profit and cash flow compared to both the 2016 budget and the 2015 result.
The Way Ahead for PanAust in 2017 will be to focus on and further refine elements of our business that are within our control – safety, production, cost performance and strategic growth opportunities.