share placement, page-16

Below from SMH

As it is explained the cash shortfall is due to needing to repay the customer post poc collapse, NOT due to ongoing failure to generate cashflow.

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PanAust on revenue-raising spree after winning debt extensionJamie Freed
January 20, 2009
FRESH from gaining an extension on a portion of its debt, the Laos copper miner PanAust is seeking to raise up to $US40 million ($58.7 million) for working capital and exploration funds.

After a trading halt yesterday, PanAust raised $US15 million from institutions and sophisticated investors at 15c a share in an oversubscribed placement.

It plans to conduct a share purchase plan to raise $US20 million to $US25 million at the same issue price.

The issue was made at a 19 per cent discount to PanAust's last closing price of 18.5c.

PanAust's managing director, Gary Stafford, said most of the new funding would be put toward working capital to supplement a $US8 million facility it entered with lenders this month that is already fully drawn.

Like most copper miners, PanAust's production is priced on a provisional basis. That means it is responsible for repaying its customers if the copper price plunges during a specific period.

The extreme fall in the copper price during the second half of last year means PanAust owes a metals trader $US35 million. It had only $US6.3 million of cash remaining at December 31, even though its low-cost Phu Kham copper-gold mine is cashflow-positive at the present price. The Queensland miners CopperCo and Matrix Metals were forced into administration in the December quarter when they were unable to repay the Swiss commodities trader Glencore.

Mr Stafford said PanAust's unnamed customer had allowed the company to repay the $US35 million debt within 12 months rather than immediately.

PanAust this month gained an extension of up to one year on an $US80 million debt facility with Goldman Sachs JBWere, albeit on onerous terms including an interest rate as high as 15 per cent and the issue of up to 150 million options. "The incentive to refinance this debt is obviously high," said a Credit Suisse analyst, Julian McCormack.

PanAust has appointed Rothschild as an adviser and has received unsolicited interest from third parties. It expects to complete the refinancing in the first half of the year.

Phu Kham produced 13,100 tonnes of copper in the December quarter at an average cash cost of $US1.07 a pound of copper.