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Growth by discovery, acquisition
and development
Corporate presentation, February 2014
Phu Kham Copper-Gold and Ban Houayxai
Gold-Silver Operations providing strong cash
flow to support dividends and growth
Phu Kham brownfield opportunities to
progressively lift annual copper and gold
output:
Process plant capacity expanded in 2012;
Increased Recovery Project 2013
Copper production to increase steadily to
peak at approx. 90,000tpa in 2018/19
Pre-development opportunities:
KTL Copper-Gold Project, Laos
Inca de Oro Copper-Gold Project, Chile
Frieda River Copper-Gold Project, PNGi
Production and growth
i: The agreed acquisition of a majority interest in the Frieda River Project remains subject to a condition precedent.
Established operation with competitive
cash costs
Process plant expanded in 2012:
processing rates exceeding upgraded
16Mtpa plant design rate
Increased Recovery Project completed in
Jun quarter 2013: step change in
recoveries achieved
Copper production to increase steadily to
peak at approx. 90,000tpa in 2018/19
2013 production of 64,885t copper at an
average C1 cash costi of US$1.36/lb; all-
in sustaining costsii US$2.37
Phu Kham: a foundation for growth
i: C1 direct operating costs, based on payable copper in concentrate produced, after precious metal
credits.
ii: C1 cash costs plus royalties; corporate support and shared services costs; sustaining capital; lease
principal and interest charges; and deferred mining and inventory adjustments capitalised.
Data shown on a 100% equity basis.
Phu Kham: 16Mtpa Upgrade and Increased
Recovery Project
2nd regrind mill six additional cleaner cells
2nd filter
3rd transformer
2nd ball mill
Increased flotation capacity
16Mtpa Upgrade Project
Increased Recovery Project
Increased recovery achieved through less
selective rougher flotation together with
increased regrind, cleaner flotation and
concentrate handling capacity
Project completed June quarter 2013,
several months ahead of schedule and
under budget
Record recovery performances during the
December half 2013; copper 74.9% (up
from 71.1% for June half 2013); and gold
50.3% (up from 40.9%)
Copper recoveries for 2014 are scheduled
to range from 74% to 86% depending
upon ore quality
Phu Kham: Increased Recovery Project
Data shown on a 100% equity basis.
Ban Houayxai Gold-Silver Operation
Established operation, competitive costs
2013 production of 112,546oz gold at an
average C1 cash cost of US$611/oz after
silver credits; all-in sustaining costs of
US$964/oz
Pervasive zone of high-grade gold
mineralisation extends beneath the current
pit design
Ban Houayxai Gold-Silver Operation
Data shown on a 100% equity basis
Phu Kham district
1000m
N Phu Kham
Nam San
Haul Road prospect
LCT deposit
Nam Ve; 7km NW of LCT
High priority target for exploration
Prospective for copper-gold and gold-
silver mineralisation
Extends from Phu Kham at least 14km to
Nam Ve
Includes the LCT deposit
Nam Ve - scout drilling intersected high-
grade gold and copper-gold mineralisation
Other near-mine targets at Phu Kham to
be drill tested in 2014
Core shed prospect
Study largely completed on the low
capital cost development option to
truck high-grade copper mineralisation
to Phu Kham for processing
Close to existing road and power
infrastructure; nearby town of
Phonsavan could provide a workforce
Delivery of crushed ore to the Phu
Kham process plant will bypass that
operation’s crusher constraint
Ore Reserve estimate reported as a
subset of the Phu Kham Ore Reserve
KTL Copper-Gold Project, Laos
Data shown on a 100% equity basis.
Joint Venture with Codelco (PanAust 60.45%)
Sulphide feasibility study completed in mid-
2012; provided strong production in first five
years
Study extended to evaluate the potential for
existing oxide and additional sulphide
resources, including Carmen (PanAust 100%),
to make a material contribution to the Project
Considering options for project scale: from a
down-scaled higher grade 9Mtpa processing
rate to an expanded 18Mtpa processing rate
Initial evaluations favour the smaller, higher
grade approach which should provide
improved operating costs over the first ten
years of project life
Inca de Oro Copper-Gold Project, Chile
Carmen deposit (PanAust 100%):
positive results from resource drilling
Porphyry-style mineralisation
discovered, overprinting earlier IOCG
mineralisation
Near surface low strip ratio open-pit
opportunity
Carmen copper-gold deposit, Chile
Benefiting from existing infrastructure
Frieda River Copper-Gold Project
Frieda River Mineral Resources
HIT deposit: M I & I
Resources of 2,090Mt @
0.45% Cu, 0.22 g/t Au
Koki copper-gold
deposit
Ekwai copper-gold
deposit
Nena deposit: M I & I
Resources of 45Mt @
2.55% Cu, 0.60 g/t Au
Mineralisation
open at depth
Mineralisation
open at depth
Mineralisation
intersected by drilling
PanAust has entered into a share sale and purchase agreement with
Glencore Xstrata plc to acquire its shares in Xstrata Frieda River Ltd (XFRL)
Initial cash consideration of US$75M in two tranches: US$25 million upon
transaction close; and US$50 million on 31 December 2015
On successful completion of a project development a 2% NSR royalty
becomes payable that will not exceed US$50 million
Completion of the acquisition is consistent with PanAust’s strategy to ensure
access to sufficient mineral resources to secure the Company’s growth
beyond the life of the Phu Kham Operation in Laos
The likely timing for implementation of PanAust’s development concept for
Frieda River coincides with rising production levels scheduled for Phu Kham
The PanAust Glencore Agreement
Average annual production of 100,000t copper and 160,000oz gold in
concentrate at a C1 cash cost of approximately US$1.25/lb after gold credits*
Open pit mine with low strip ratio of less than 0.6:1
Mill feed of 430M tonnes grading 0.54% copper and 0.3g/t gold for an 18-year
mine life; represents 20% of the HIT Mineral Resource
Metallurgical recoveries of 80% to 85% for copper and 70% to 75% for gold
Development capital estimate**: US$1.5Bn to US$1.8Bn; competitive capital
intensity of approx. US$13,000/t of annual copper equivalent production
PanAust scoping study results
*Gold credit estimated at US$1,200/oz **2013 dollars
PanAust’s commitment to sustainable
development is a key consideration in the
way the Company undertakes its business
activities
Strong emphasis on delivering sustainable
benefits to the communities within the
vicinity of its operations
Further information on PanAust’s
sustainability programs and credentials,
including the latest Sustainability Report,
can be viewed at the Company’s website
Strong commitment to sustainable development
Around 50% of food requirements for the Phu Kham
camp are sourced locally
PanAust’s community development programs have a
strong focus on education
EBITDA expected to be between US$200M
and US$225M assuming a copper price of
between US$3.20/lb and US$3.40/lb,
US$1,300/oz gold and US$22/oz silver
Group consolidated production of 65,000t
to 70,000t copper, 160,000oz to 165,000oz
gold and approx. 1.2Moz silver
Phu Kham copper production of between
65,000t and 70,000t at an average C1 cash
cost of between US$1.50/lb and
US$1.60/lb
Ban Houayxai gold production of
approximately 100,000oz at an average C1
cash cost of between US$650/oz and
US$700/oz
2014 financial performance and outlook
Data shown on a 100% equity basis.
Competitive copper and gold producer
with strong cash flow to support growth
initiatives
Increased free cash flow following
conclusion of major capital development
program
Progressive increase in copper
production at Phu Kham; peaking at
approx. 90,000tpa in 2018/19
Organic growth provided by capital
efficient brownfield opportunities and
pre-development opportunities in Laos,
Chile and PNG
Proven track record as a successful
developer of operations
Summary
Supplementary slides
Listed on the Australian Securities Exchange (ASX:PNA)
Issued securities (20 Feb 2014) 621M shares
0.6M unlisted options & rights
Share price (20 Feb 2014) A$1.895
Market capitalisation A$1.2Bn
12-month average daily turnover ~A$10M
FY2012 dividends paid Total A$0.07/share
FY2013 dividends Total A$0.06/sharei
Substantial shareholders Guangdong Rising Assets
Management (GRAM) ~22.5%
Goldman Sachs Asset Management ~5.2%
Shareholding structure ~71% institutional investors (incl. GRAM)
Top 20 shareholders ~58%
PanAust Limited securities
i: Final dividend of A$0.03/share to be paid in April 2014
Cash of US$130.3M
Debt of US$162M; undrawn facilities of US$113M
Facilities comprise: US$250M revolving debt facility with a syndicate of
seven banks; a US$25M working capital facility
Four-year term (from Jan 2013); interest rate of US LIBOR plus a fixed
margin of 3.5%/yr on revolving facility (plus political risk insurance)
Equipment lease facilities drawn to a total of US$67.7M
Gearing (debt/debt+equity) of 18%
Financial position as at 31 December 2013
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’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
Good operating environment, stable
government
Ready access to key infrastructure: power,
water, road
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
25% company tax rate and net smelter return
royalty of 3% to 6%
GoL owns 10% of Phu Bia Mining Ltd,
PanAust’s Lao-registered entity
Laos: a great place to operate
Phu Kham copper-gold concentrate is
trucked to ports in Vietnam and
Thailand for export to custom smelters
Concentrate sold under a blend of
frame and spot price contracts to both
custom smelters and metals traders
The Company manages short-term
and provisional price risk (over the
quotational period) on copper sales
through swaps and fixed price
agreements with customers
Concentrate sales
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
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