from morgan stanley city of today, pls DYOR...thx....
PanAust Limited (PNA.AX) Green light for Ban Houayxai Development approved by the board X PNA has announced that the Ban Houayxai project has received management approval, with commissioning targeted for the December quarter 2011. The project is expected to produce ~100kozpa of gold and 700kozpa of silver, with steady state production anticipated from the March quarter 2012. No real changes X Key metrics have been delivered within range of our expectations (summarized below). Management expects that at current copper and gold prices, project funding can be delivered from PNAs expected cash flows. The only real change is the inclusion of a SAG mill upfront. This lifted the milling rate, but also the cash cost due to more consumables/power. However increased milling rates and mine life offset the higher cost from an NPV basis. Our NPV on Ban Houayaxi is $70m. Keep the Buy X While the approval of this project comes as no real surprise, it represents an incremental positive and should support increasing confidence in future growth options. We continue to see PNA trading at attractive value at current levels, and maintain our Buy recommendation and A$0.70 target.
PNA Price at posting:
53.0¢ Sentiment: Buy Disclosure: Held