Phu Kham Copper-Gold Operation

The Phu Kham Copper-Gold Operation is located within PanAust's Phu Bia Mining Contract Area in Laos approximately 140 kilometres from the capital city, Vientiane. Phu Kham is PanAust's flagship operation and the significant cash flow generated by the Phu Kham Operation has supported PanAust’s growth while contributing to a strong balance sheet.

The Operation comprises an open-pit mine feeding ore to a process plant with recovery of copper and precious metals into a saleable concentrate using conventional flotation technology. The concentrate contains between 23 and 25 per cent copper, 9 grams per tonne (g/t) gold and up to 60g/t silver. Eighty per cent of concentrate is trucked in covered containers to the ports of Vung Ang or Hon La in Vietnam (approximately 650 kilometres from Phu Kham) and the remaining 20 per cent to Sriracha Harbour in the south of Thailand (approximately 1,000 kilometres from Phu Kham) for export to customer smelters mainly in Asia.

In 2016, Phu Kham recorded its best ever annual production of copper in concentrate of 89,187 tonnes (t) (2015: 78,449t); open-pit material mined of 57 million tonnes (Mt) (2015: 12.5Mt) and copper recovery rate of 79.9 per cent (2015: 77.4 per cent).

December quarter 2016 production

The Phu Kham Copper-Gold Operation produced 22,571t of copper in concentrate at a C1* cost of US$1.23/lb after precious metal credits from 20,353 ounces (oz) gold and 141,733oz silver. An all-in sustaining cost (AISC**) of US$1.81/lb copper was achieved.

Overall copper recovery averaged more than 81 per cent for the quarter. Quarterly pay-metals in concentrate sales totalled 23,718t of copper, 21,049oz of gold and 150,698oz of silver.

Outlook

Annual copper in concentrate production is expected to continue to rise steadily over the next several years as the average copper head grade increases and improving ore quality lead to further gains in metallurgical recovery rates. The annual production of copper in concentrate is expected to peak in 2018 and 2019 between approximately 85,000t to 90,000t before subsequently declining with ore grade. Gold in concentrate is expected to generally range between 70,000oz and 80,000oz per annum from 2016 onwards. No further development capital is currently expected for this targeted growth.

The Phu Kham Ore Reserve supports a mine life of approximately six years from the end of 2015.

For the most up-to-date information about the Phu Kham Operation, see the quarterly reports and other statements on the Company Announcements page.

 

*Brook Hunt convention for the reporting of direct costs comprising: mine site, product transportation and freight, treatment and refining charges and marketing costs; based on payable metal content after by-product credits

**AISC reported are the C1 cost plus royalties, allocated corporate support charges, shared services costs, sustaining capital; lease principal and interest charges; and deferred mining and inventory adjustments capitalised