Price (18 Aug 08) 0.73 (A$)Target price (12M) 1.50 (A$)Market...

Price (18 Aug 08) 0.73 (A$)
Target price (12M) 1.50 (A$)
Market cap: 1,042 (A$mn)
Year avg. monthly trading value 143 (A$mn)
Last month�fs trading value 92 (A$mn)
Projected return:
Capital gain (%) 106.9%
Gross yield (%) 0.0%
Total return (%) 106.9%
Excess return** (%) 76.6%
52-week price range (A$) 0.56-1.24
* Stock ratings are relative to the relevant country index

Credit Suisse (19/08/2008): Commissioning smoothly, costs look reasonable

�¡ Event: PNA has released an Open Briefing transcript indicating that commissioning of Phu Kham is proceeding well.

�¡ View: Mill throughout is close to design rates of ~1mt per month. This is in line with our expectation of 3mt milled in the SepQ. Recoveries at 60% are on plan and in line to track up to 67% by year end. This is in line with our expectation of 62.5% Cu recoveries in the SepQ. Cost guidance was very encouraging, with total cash operating costs of US$12.5mn for August, below our expectation of US$40.2mn for the SepQ. Cash cost guidance is for cash costs around US$1/lb, in the middle of the second quartile globally according to the company. This is in line with our expectation of US$0.97/lb cash costs (pre-royalties) in 2009 and US$0.99/lb in 2010 at current gold
prices.

�¡ Outlook: Credit Suisse forecasts are currently well above spot gold and copper prices, which implies there is downside earnings risk for PNA.

�¡ Valuation: PNA is on 4.8x and 3.9x 2009 and 2010 earnings at spot commodity and currency. PNA is attractive at current prices – the company is in production and generating strong cashflows, amid continuing
tight copper markets