first ore crushed at the phu bia gold mine, laos ASX...

first ore crushed at the phu bia gold mine, laos ASX ANNOUNCEMENT
16 May 2005
First ore crushed at the Phu Bia Gold Mine, Laos
Pan Australian is pleased to report that last Friday, 13 May 2005, it passed a major
milestone in the development of the Phu Bia Gold Mine in Laos when crushed and
agglomerated high-grade ore was stacked on the leach pad. This follows the successful
commissioning of the crusher, agglomerator and stacker modules of the heap leach plant.
Production mining started on 3 May at an initial rate of approximately 1,000 tonnes per
day. Prior to commissioning of the crusher, 10,000 tonnes of material grading nearly
1.7g/t was on the run-of-mine ore stockpile. This compares with an average ore reserve
grade of 1.1g/t.
The next milestone for the mine will be to commence irrigation of the first heap leach
cell. It is envisaged that this will commence in early June. Soon thereafter, it is
anticipated that gold bearing liquor will be collected in the pregnant pond. Once a
sufficient quantity has been collected, the pregnant liquor will be pumped to the process
plant where gold will be recovered and poured.
The project economics have improved significantly compared with those estimated in the
Feasibility Study. An increase in the ore reserve to just over 8.5 million tonnes at 1.1 g/t
containing about 300,000 ounces of gold1 has enabled Pan Australian to accelerate the
mining schedule whilst maintaining a mine life of at least 4.5 years.
The project remains within the budget of US$15.3 million and is on schedule for ramp-up
to the initial ore mining rate of 1.5 million tonnes per annum during the September 2005
quarter. The revised mining schedule will see the ore mining rate increase to 2.0 million
tonnes per annum by December 2005. This higher rate will enable the mine to produce
up to 70,000 ounces in the first twelve months after the initial ramp-up.
If these production targets are achieved, then the NPV of the project will be US$18.5
million at a gold price of US$425/oz and a 10% discount rate. The free cash flow over
the life of the mine is predicted to be US$47 million.
1 Refer to the JORC compliant report on ore reserves to ASX dated 25 November 2004
2
Background
Pan Australian views the Phu Bia Gold Mine as the first phase of a two phase
development of its assets in the southern part of the Phu Bia Contract Area in Laos. The
ore reserve for the Phu Bia Gold Mine comprises reserves from three deposits: the Phu
Kham gold cap (77% of the ore reserve tonnes), Long Chieng Track and Ban Houayxai
(Figure 1). The process plant is located between the Phu Kham gold cap and Long
Chieng Track deposits.
The second phase is earmarked to be the Phu Kham Copper-Gold Project, which is
partially overlain by the Phu Kham gold cap deposit and is the subject of a feasibility
study with key findings scheduled to be announced in August 2005. A Preliminary Study
has indicated the potential for the Phu Kham Copper-Gold Project to support a 9 million
tonnes per annum flotation operation to produce 57,000 tonnes of copper and 52,000
ounces of gold in a concentrate2.
For further information contact:
Mr. Gary Stafford Mr. Joe Walsh
Managing Director General Manager – Corporate Development
Pan Australian Resources Limited
Tel: +61 7 3878 9299
Website: www.panaustralian.com.au
Email: [email protected]
Forward-Looking Statements
This announcement includes certain “Forward-Looking Statements”. All statements, other than statements of
historical fact, included herein, including without limitation, statements regarding potential mineralisation and
reserves, exploration results and future plans and objectives of Pan Australian Resources Limited are forwardlooking
statements that involve various risks and uncertainties. There can be no assurance that such statements will
prove to be accurate and actual results and future events could differ materially from those anticipated in such
statements.
Financial data for the Phu Bia Gold Project presented above has been prepared by the Company on the basis of
indicative findings from the Company’s Feasibility Study completed and announced to the ASX in July 2004, adjusted
having regard to the revised assumptions for gold price, ore reserves and mining schedule set out below, which the
Company considers reasonable, having regard to all the information currently available to the Company and general
economic conditions:
�� Commodity and currency rates applicable to revenues from FY 2004-’05: Gold Price: US$425/oz, Exchange
Rate: US$0.75/A$ except where stated below.
The Company has taken into account external reports by analysts in this regard.
Ore Reserves estimated using gold prices of US$375/oz and US$400/oz as outlined in the JORC compliant
report to ASX dated 25 November 2004.
�� Production in each of the first two years of operation is based on an accelerated mining rate of 2.0 million
tonnes per year versus that assumed in the Feasibility Study of 1.5 million tonnes per year in the first two
years of operation and 2.0 million tonnes per year over the remaining life of the mine.
2 Refer to June 2004 Quarterly Report to ASX
FIGURE 1