PanAust steps up in Laos
South East Asian correspondent, 30th Apr 2012
VIENTIANE, Laos, Apr 30 -- Australian mining company PanAust has opened its second gold mine in northwest Laos.
The $US200M Ban Houayxai opencut gold/silver mine is 25km west of the company’s producing gold/copper mine in Phu Kham in the Bokeo province, and is expected to mine about 4Mtpa for 100,000oz gold and 700,000oz silver over a nine-year mine life. The current estimate for 2012 production is about 85,000oz gold at a cash cost of $550-600/oz after a credit from about 200,000oz of silver.
Ore processing at the 90%-owned project began recently following commissioning of the crushing and milling circuits, leaching and recovery of gold onto carbon. The downstream sections of the process plant, including the tailings handling systems, are being progressively commissioned with the first bar of gold/silver doré expected before the end of this month. The operation is scheduled to ramp up to steady state production during the June quarter.
At the 90%-owned Phu Kham copper/gold operation, March quarter production (100% equity basis) was 15,772t copper in concentrate at an average cash cost of $US0.92/lb copper after gold/silver credits, which exceeded budget expectations and was a monthly milling record. Gold in concentrate production was 14,660oz and silver in concentrate 138,818oz.
Commissioning of the $95M Phu Kham Upgrade Project is scheduled to begin in June, with ramp-up continuing into the September quarter. A scoping study is also currently examining options for an underground mine.
The company’s 2012 production and cost guidance for Phu Kham stands at between 63,000-65,000t of copper in concentrate at an average cash cost of $1.05-1.15/lb copper after precious metal credits from 50,000-55,000oz gold and 550,000-600,000oz silver.
However, copper production is expected to progressively increase over the next three years following completion of the upgrade project this year and the increased recovery project in the second half of 2013. Production is expected to rise to 65,000-70,000t copper in 2013 and to 70,000-75,000t in 2014. Gold and silver production is also expected to rise.
The Phu Kham upgrade project is designed to increase ore processing rates from a nominal 12Mtpa to 16Mtpa and improve metal recoveries.
The $65M Phu Kham Increased Recovery Project, once implemented in the December half of 2013, is expected to increase mine recovery rates for both copper and gold by more than 6% to at least 83% and 53% respectively. Cash operating cost per pound of copper would correspondingly reduce by more than 5%.
Assuming a $3.80/lb copper price and $1,700/oz gold price, the payback period is expected to be less than 18 months.
PanAust will also begin a feasibility study on its Phonsavan copper-gold project in Laos (90%) in the June quarter, following an updated mineral resource for the KTL deposit and inaugural resource models/estimates for the nearby Tharkhek prospect. The development concept is for two openpit mines (KTL and Tharkhek) feeding a central processing plant.
In Chile, PanAust is managing the feasibility study for its 59.4%-owned Inca de Oro copper-gold project, which is scheduled for completion during the June quarter for JV consideration in the September quarter.
The prefeasibility study has indicated potential for a conventional openpit mining and flotation operation to support annual production of about 50,000t copper and 40,000oz gold in concentrate over a +10 year mine life.
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