reuters uk: prodn ahead of schedule

Thought this would be of interest to all those PNA holders.

INTERVIEW-Pan Australian ahead of schedule on Laos copper
Thu Oct 4, 2007 3:31pm BST

By Anna Stablum

LONDON, Oct 4 (Reuters) - Pan Australian Resources (PNA.AX: Quote, Profile, Research) says production at its copper-gold mine in Laos will start ahead of schedule, managing director Gary Stafford said on Thursday.

Construction was underway at the Phu Kham project and production could start in February or March instead of mid-2008, Stafford told Reuters in an interview in London.

"When we start the new copper-gold mine early next year we will start producing 50,000 tonnes of copper, 50,000 ounces of gold and 400,000 ounces of silver," Stafford said.

He said the project was within its $241 million capital budget and the operating cost for copper was estimated at 74 cents a pound.

The largest miner in the world, BHP Billiton (BLT.L: Quote, Profile, Research) (BHP.AX: Quote, Profile, Research), had been appointed manager of all concentrate sales and the project was well positioned to supply Southeast Asian smelters, which would turn the concentrates into copper metal.

"We have a fairly unique agreement with BHP Billiton ... they go out and sell the concentrate to smelters or traders," Stafford said.

The firm had not entered into any long-term deals with smelters as the concentrate market was widely expected to see a shortfall this year.

"We think that the market for concentrates has moved strongly in favour of the miner," Stafford said.

The firm's feasibility study assumed a smelting fee, or treatment and refinement charge (TC/RC), of $75 a tonne and 7.5 cents a pound, he said.

"We actually went out to tender for 40,000 tonnes for delivery next year and ... the losing bid was less than a third," Stafford said.

In comparison, the mid-year 2007 benchmark deal between miners and smelters globally was set at $45/t and 4.6 cents/lb.

Stafford said ore throughput could be expanded to 16 million tonnes per year, up from 12 million, but definite production figures would be known by March 2008 after establishing the size of the ore reserves.

The firm aims to produce 65,000 tonnes of copper per year, 60,000 ounces of gold and over 500,000 ounces of silver from mid-2010.