PANAUST has matched its M&A rhetoric by transacting a significant deal in Chile to add to development success at Phu Kham in Laos. At just about the same time another ASX-listed, Chinese-backed junior has also touched down in the slivered country of copper. Coincidences, cohorts, or conspiracies? We ask The Outsider.
HighGrade: Great to see a company like PanAust seeking significant growth, right?
The Outsider: Sure, though it must be said that it always looks so, so easy from the Harry Hindsight M&A Jacuzzi International room at the Media Ivy Tower.
HighGrade: Yep, we are typically geniuses after the fact, and that?s why we?re reporters. But still, it is a good deal, the PanAust one, isn?t it?
The Outsider: Some investors do get a bit twitchy with deposits grading 0.46% copper and 0.13gpt gold, but it has got to be acknowledged that PanAust appears to have done a terrific job at Phu Kham ? which prior to commissioning had reserves grading 0.56% copper and 0.25gpt gold. The strip ratio at Inca de Oro is obviously a key ? at Phu Kham it was stated as about 0.6:1? and no indications have yet been provided on that score. Much of the resource at Inca de Oro is in the ?indicated? category, and the property also looks like it has got good infrastructure options, though whether there might be any social issues given its location on the outskirts of an historic mining town remains to be seen.
HighGrade: What else is pertinent here?
The Outsider: Sources suggest investment banker Rob McDonald?s grubby little fingerprints are all over this one. McDonald is the ex-Rothschilds bloke who these days is the principle of The Minera Group, a specialist mining advisory outfit. Minera is to have a 10% interest in Minera PanAust (PanAust to hold the other 90%), with that company to own 66% of Inca de Oro ? the balance being held by Codelco.
HighGrade: That?s very interesting. So what?
The Outsider: They say McDonald is extremely well connected. They say China, as well as Chile. They say he was intimately involved in the $US550 billion (yes, dollars US five hundred and fifty billion!) deal between Minmetals and Codelco back in 2006. The point is, they say, an argument could be made that this all bodes very well indeed for PanAust shareholders if PanAust is, as it looks, a Rob McDonald-chosen vehicle. Not only does Inca de Oro look tasty in its own right, but PanAust may put itself in a prime position with Codelco for future opportunities. Those that don?t buy that particular line, might be reassured by McDonald?s involvement over and above the clipping of the tickets ? that is, via the direct Minera equity stake.
HighGrade: What about this other Chile deal of which you speak?
The Outsider: Well just to the south of Inca de Oro, ASX-listed China Yunnan Copper Australia (CYU) last month picked up the Humitos Copper Porphyry property from Rey Resources. Presumably Humitos is, as our Canadian cousins like to say, little more than moose pasture given the miniscule consideration being paid by CYU. Or perhaps there?s a lot more to this below the surface, so to speak. Whatever the case, the arrival of CYU and, more significantly, its comrades at the Guangdong Rising Assets Management-backed PanAust into this major part of the copper world ? not to mention China Sci-Tech Holding?s acquisition this week of budding Canadian copper miner (in Peru) Chariot Resources ? would seem just further pointers to the ?interesting times? theme of the future.
PNA Price at posting:
50.5¢ Sentiment: Buy Disclosure: Held
