Growth by discovery, acquisition and development Feb 2012 PanAust: - - PowerPoint PPT Presentation

Growth by discovery, acquisition and development

Feb 2012

Phu Kham Operation providing strong cash flow Ban Houayxai Gold-Silver Project: first gold production scheduled for March 2012 Phu Kham Upgrade and Increased Recovery Projects to lift annual copper in concentrate output Nam San copper-gold deposit, Laos Inca de Oro, Chile: an alliance with Codelco and a beach-head into South America Phonsavan Copper-Gold Project, Laos

PanAust: production and a pipeline for growth

Inca de Oro Copper-Gold Project, Chile Phu Kham Copper-Gold Operation, Laos

• 2011 production: 59,897t of copper in

concentrate at an average C1 cash cost of US$1.01/lb after precious metal creditsi

• PanAust 2011 EBITDAii of US$284M;

net cash flow from operating activities

• f US$239M
• Cash-flow has funded 2011 capital

expenditure on development projects

• Phu Kham district: Nam San

discovery adjacent to Phu Kham and a potential new discovery at LCT, 6km to the northwest

Phu Kham: a foundation for growth

i: C1 direct operating costs, based on payable copper in concentrate produced, after precious metal credits from: 53,590oz gold, 538,123oz silver. ii: Earnings before interest, tax, depreciation and amortisation on a group consolidated basis. Additional financial results are included in the supplementary slides of this presentation Data shown on a 100% equity basis.

• Mill processing rate to increase by 33% to

a nominal 16Mtpa on primary ore; potential to process 17Mtpa of softer lower grade ore

• Timed to coincide with scheduled decline

in head grades in 2012 as deeper primary

• re is mined and processed
• Commissioning scheduled for the June

quarter 2012 with ramp-up extending into the September quarter 2012

• Capital cost estimate of US$95M

(includes contingency of US$14M)

Phu Kham Upgrade

Data shown on a 100% equity basis.

• Increased plant capacity:

Grinding power up from 26MW to 39MW allowing finer grind; and Flotation up 50%

• Will collectively deliver 2% absolute

improvement in copper recovery

• Design copper in concentrate production

capacity to increase to between 65,000tpa and 70,000tpa

Phu Kham Upgrade

Data shown on a 100% equity basis. Flotation cell foundation work Ball mill foundation work

• Annual copper and gold in concentrate to

increase by approximately 5,000t and 7,500oz respectively; potential to lift Phu Kham copper production to between 70,000t and 75,000t in 2014

• Increased recovery achieved through less

selective rougher flotation together with increased regrind, cleaner flotation and concentrate handling capacity

• Plant scale tests confirmed the concept
• Preliminary capital cost estimate US$65M
• Low technical risk, rapid payback
• Fast track approach; targeting

commissioning in Sept quarter 2013

Phu Kham: Increased recovery project

Higher-grade Nam San discovery 200m north of the Phu Kham copper-gold deposit

• Lateral continuity of mineralisation over

500m; remains open to the east, northwest and at depth

• Drilling to be accelerated with the
• bjective of defining an inferred mineral

resource in the second half of 2012

• Conceptual studies have commenced to

investigate possible portal locations for underground access, mining methods and mining rates

• Potential to displace or augment lower

grade open pit sourced mill feed

Nam San copper-gold deposit

Nam San mineralisation now confirmed over a strike length of over 500m; remains open to the east, northwest and at depth Phu Kham ultimate pit outline

Scout drilling has previously returned broad intersections of Cu-Au mineralisation up to 1km from the planned Phu Kham open-pit

Nam San copper-gold deposit

Final Phu Kham pit shell

Nam San copper-gold mineralisation

• Open pit mining operation feeding

a conventional 4Mtpa CIL gold plant; potential to treat >4Mtpa on softer oxide ore

• Nominal annual production

capacity of 100,000oz of gold and 700,000oz of silver; lower initial silver production on partly silver- depleted oxide ore

• Nine-year mine life from 2012
• Low strip ratio of 1.1:1; good

metallurgical recoveries: +90% for gold and +70% for silver on oxide/ transitional ore

Ban Houayxai Gold-Silver Project

Data shown on a 100% equity basis.

• Commissioning in progress; first gold

production scheduled for March 2012

• Total estimated capital cost of

construction, including contingency of US$12M and US$5M of deferred capitali is expected to be US$200M

• ICMIii announced in January 2012 that

Ban Houayxai had been pre-operationally certified in compliance with International Cyanide Management Code

Ban Houayxai: status

Data shown on a 100% equity basis. i: Required to fund the second lift of the tailings storage facility 2012 (after operations commence). ii: International Cyanide Management Institute

Ban Houayxai, Feb 2012

• Phu Kham: between 63,000t and 65,000t
• f copper in concentrate at a C1 cash cost
• f between US$1.05/lb and US$1.15/lb

after precious metal credits from 50,000oz to 55,000oz of gold and 550,000oz to 600,000oz of silver

• Ban Houayxai: approximately 85,000oz of

gold at a cash cost of between US$550/oz and US$600/oz after a credit from approximately 200,000oz of silver

• EBITDAi expected to be between

US$340M and US$400M assuming copper prices between US$3.50/lb and US$4.00/lb

PanAust FY2012 guidance

i: Earnings before interest, tax, depreciation and amortisation on a group consolidated basis. Financial guidance assumes the mid-point of production guidance and gold and silver prices of US$1,800/oz and US$30/oz respectively. Data shown on a 100% equity basis.

• PanAust has a 59.4% beneficial interest in

Codelco subsidiary, Inca de Oro S.A., through a 90% interest in PanAust Minera; Codelco retains a 34% interest

• Provides geographic diversity and a beach-

head into South America

• Consistent with PanAust’s corporate growth

strategy

• PanAust is managing the Inca de Oro

feasibility study: scheduled for completion in mid-2012 for consideration by the joint venture and PanAust Boards in the September quarter 2012

Inca de Oro S.A.: alliance with Codelco

• Inca de Oro: potential for the

development of an operation producing, on average, 50,000t copper and 40,000oz gold per annum

• ver a +10year mine life
• First three years of production to

benefit from higher-grade supergene

• re
• Project benefits from existing

infrastructure

• Potential for development of Inca de

Oro and Artemisa oxides

• Carmen copper-gold deposit acquired

by PanAust in 2010

PanAust South America projects, Chile

Data shown on a 100% equity basis.

• Comprises two deposits, KTL and

Tharkhek, located 5km apart

• Scoping study underway:

contemplates two open pit mines feeding a central processing plant

• Pre-feasibility resource drill program

in progress Phonsavan:

• Population 57,000
• Excellent access to power and road

infrastructure

• ~250km to coast - Vietnam

Phonsavan Copper-Gold Project, Laos

Phonsavan Copper- Gold Project

20 40 60 80 100 120 140 2011 2012 2013 2014 2015 Copper Eq.v (t 000's)

Phu Kham copper-gold Phu Kham Upgrade Phu Kham IRP Ban Houayxai Inca de Oro

Pipeline for growth: Projects (PanAust sharei)

i: PanAust Limited share of production: 90% share of Phu Kham and Ban Houayxai , 59.4% share of Inca de Oro. ii: Incorporates implementation of the Phu Kham Upgrade from July 2012 with a mid-point of the expanded annual copper production capacity range of 65kt-70kt. iii: Incorporates implementation of the Phu Kham Increased Recovery Project December quarter 2013 and assumes an annual production increase (100% equity basis) of 5,000t copper and 7,500oz gold. iv: Subject to feasibility study and project approvals; assumes December half 2014 start-up and an average annual production rate of 50kt copper and 40koz gold. v: Copper equivalent assumptions: copper US$3.75/lb, gold US$1,800/oz, silver US$30/oz.

iv ii iii

20 40 60 80 100 120 140 2011 2012 2013 2014 2015 Copper Eq.ii (t 000's)

Copper Gold and silver

Pipeline for growth: Commoditiesi

i: PanAust Limited share of production: 90% share of Phu Kham and Ban Houayxai , 59.4% share of Inca de Oro. ii: Copper equivalent assumptions: copper US$3.75/lb, gold US$1,800/oz, silver US$30/oz.

Supplementary slides

• Listed on the Australian Securities Exchange (ASX:PNA);

constituent of the S&P/ASX100 index

• Issued securities

597M shares 6.1M unlisted options & rights

• Share price 21 Feb 2012

A$3.68

• Market capitalisation

A$2.2Bn

• 12-month average daily turnover

~A$13M

• Substantial shareholders

Guangdong Rising Assets Management (GRAM) ~20%

• Shareholding structure

~71% institutional investors (incl. GRAM)

• Top 20 shareholders

~52%

PanAust Limited securities

• Sales revenue

US$575.7M

• Sales revenue, derivative gains/losses and other income

US$598.0M

• Earnings before interest, tax, depreciation and amortisation (EBITDAi)

US$284.2M

• Earnings before interest and tax (EBITii)

US$224.7M

• Statutory consolidated net profit after tax (NPAT)

US$146.6M

• NPAT attributable to PanAust Limited

US$132.1M

• Underlying net profit from ordinary activities after tax,

attributable to PanAust Limited US$137.6M

• Basic earnings per share (US cents)

22.5

• Net cash-flow from operating activities of US$239.1M
• Cash-flow and balance sheet strength to support PanAust’s ongoing growth strategy: cash

balance at 31 December 2011 of US$156M; gearingiii at 31 December 2011 was 11%

PanAust FY2011 result

i: EBIT excludes from profit before income tax the effects of profit or loss items such as depreciation, amortisation, and impairment, interest revenue and expense and equity-settled share-based payments ii: EBIT excludes from profit before income tax the effects of profit or loss items such as interest revenue and expense. iii: Gearing = debt / (debt + equity).

Further details of PanAust’s financial results are contained in the PanAust “Appendix 4E and Statutory Financial Report 31 December 2011” which was released to the Australian Securities Exchange (ASX) on 23 February 2012 and is available on the Company’s website at www.panaust.com.au

US$M 2011 2010 Earnings before interest, tax, depreciation and amortisation (EBITDA) 284.2 300.1 Depreciation, amortisation and impairment (59.5) (54.3) Earnings before interest and tax (EBIT) 224.7 245.8 Interest income 1.4 1.1 Interest expense and finance charges (13.8) (14.0) Share based payment expense from acquisition (5.5)

• Put option premium expense

(3.0) (16.9) Profit/(loss) before income tax 203.8 216.0 Income tax expense (57.3) (55.9) Statutory consolidated net profit after tax (NPAT) 146.6 160.1 NPAT attributable to PanAust 132.1 143.4 Underlying NPAT1 from ordinary activities attributable to PanAust 137.6 143.4

EBITDA and EBIT reconciliation to NPAT

1: Underlying NPAT from ordinary activities, attributed to PanAust Limited excludes the effect of a non-recurring, non-cash share based payment expense from acquisition of US$5.5M relating to the acquisition of a majority interest in Inca de Oro S.A., which owns the Inca de Oro Copper-Gold Project in Chile. Rounding of data in this table may cause minor computational discrepancies

• PanAust’s commitment to sustainable development is a key consideration in

the way the Company undertakes its business activities and incorporates a strong emphasis on delivering sustainable benefits to the communities within the vicinity of its operations

• Further information on PanAust’s sustainability programs can be viewed at the

Company’s website www.panaust.com.au

• Sustainability Report 2010: PanAust uses the reporting requirements of the

Global Reporting Initiative (GRI), Application Level B+. To achieve this rating the report has undergone external verification prior to publication.

• PanAust’s Sustainability Report and the GRI B+ Assurance Statement

provided by the independent third party are available on PanAust’s website at www.panaust.com.au/reports

Strong commitment to sustainable development

• December 2011: PanAust’s Lao-registered company, Phu Bia Mining received the

Government of Lao PDR Labour Order Class 1 Award for the “best development in a rural area” for the Company’s outstanding contribution to rural socio-economic development and poverty eradication

• December 2011: PanAust received the Ethical Investor magazine 11th

Sustainability Award within the social and community category in recognition of the Company’s Livelihood Improvement Program that is designed to assist the sustainable development of the communities around the Phu Kham Copper-Gold Operation in Laos

• In 2010 and 2011, PanAust received the award for “Best Community Development

Initiative” in the Southeast Asia category at the Asia Mining Congress in Singapore: For 2011 in recognition of the positive contribution that PanAust’s Technical Trades program had made to local communities in the greater Lao economy For 2010 in recognition of PanAust’s Livelihood Improvement Program designed to assist sustainable development of the local communities

Award winning sustainability performance

Approximately 3,370 employees; ~85% are Lao nationals Up-skilling of the Lao workforce; PanAust has developed scholarship and apprenticeship programs in conjunction with colleges, universities and polytechnics in Laos and Thailand PanAust received the 2011 award for “Best Community Development Initiative” at the Asia Mining Congress in Singapore in recognition of the positive contribution that PanAust’s Technical Trades Training program is making to local communities and the greater Lao economy

Laos: employment and training

PanAust provides US$300,000 annually to the Community Development Fund Funding and support for: health, livelihood, education, infrastructure and commercial development initiatives Phu Kham purchases almost 50% of its fresh produce for the accommodation camp kitchen from local communities PanAust received the 2010 award for “Best Community Development Initiative” at the Asia Mining Congress in Singapore in recognition

• f PanAust’s Livelihood Improvement Program

designed to assist sustainable development of the local communities

Community Development Fund, Laos

Classroom sessions – market gardening and fish farming Around 50% of food requirements for the Phu Kham camp is sourced locally

• Drilling at the KTL deposit has

confirmed the continuity of copper-gold mineralisation

• ver a strike length of 2km
• Initial resource estimate 80Mt

at 0.43% copper and 0.19g/t gold; targeting +100Mt

KTL Copper-Gold Deposit

Data shown on a 100% equity basis.

K S D 1 5 100 50 200 150 1 5 K D D 5 8 K T R 8 150 100 300 2 5 200 2 5 200 150 5 5 100 K D D 4 300 250 200 1 5 1 50 K S D 2 6 100 50

K D D 6

2,149,500mN 2,149,600mN 2,149,700mN 2,150,200mN 2,149,800mN 2,149,900mN 2,150,000mN 2,150,100mN 2,149,400mN 1,100mRL 1,200mRL 1,300mRL 1,400mRL 1,500mRL

200 100

metres

Results for KTR080 pending at time of report

KTL Mineralisation

Copper - Gold Mineralisation Zone

0.5 - 1 1 - 10 0.2 - 0.3 0.1 - 0.2 0 - 0.1

Legend for Cu%

0.3 - 0.5

KTL south-north cross section showing copper-gold mineralisation

• Drilling has intersected

copper-bearing porphyry/skarn mineralisation

• Initial Mineral Resource

estimate due mid-2012

• High-grade gold skarn

mineralisation discovered in close proximity to the Tharkhek copper-gold mineralisation

Tharkhek: copper-gold and high-grade gold

High-grade gold skarn discovery

North copper in soil anomaly South copper in soil anomaly Northeast copper in soil anomaly

metres 250 500

Planned drill holes Tharkhek geochemical targets Tharkhek geophysics target Previous drilling Anomalous copper High chargeability Drill Hole Tharkhek copper intercepts TKD002 167m @ 0.3% Cu from surface TKD006 53.6m @ 0.3% Cu from 110.8m TKD007 228m @ 0.3% Cu from 270m

• incl. 48m @ 0.9% Cu from 270m

TKD010 46.6m @ 0.2% Cu from 133.4 m TKD011 53.9m @ 0.2% Cu from 100.4 m TKD020 20.0m @ 1.3% Cu from 284m TKD024 20.0m @ 1.4% Cu from 42m TKD026 32.0m @ 0.4% Cu from 62m TKD046 6.0m @ 1.25% Cu from 96.0m

• High-grade gold skarn mineralisation

has been intersected over an area of approximately 100x100m

• Mineralisation has an estimated true

thickness of 15m to 20m with gold grades from 3g/t to 13g/t

• Occurs in close proximity to the

Tharkhek copper-gold mineralisation

• Follow-up drilling in progress

Tharkhek high-grade gold discovery

Isometric projection of high-grade gold skarn mineralisation

• Good operating environment, stable

government

• Ready access to key infrastructure: power,

water, road

• Mineral Exploration and Production

Agreement (“MEPA”) – sets out approvals process for project development, operating framework and fiscal regime – mine development fast track

• 25% company tax rate and net smelter

return royalty of 3% to 6%

• GoL has exercised its option to acquire 10%
• f Phu Bia Mining Ltd

Laos: a great place to operate

PanAust and Laos: a symbiotic relationship

PanAust sees Laos as a source of competitive advantage and a favourable place to do business – Stable, predictable political environment and stable labour force – Cost effective labour, delivering direct and indirect savings (e.g. through smaller vehicles and better access to parts) – Visa rules that make it easy to recruit skilled expatriate labour as required – A ready and cost effective supply of water and hydroelectric power – A location that is close to smelters and end users of copper The MEPA delivers PanAust a significant degree of certainty – Certainty around Government payments and royalty rates – Change in law protection – Long term contract with a favourable extension regime High degree of alignment of interest with Government of Laos, particularly through the 10% shareholding The mining sector is a very significant contributor to the Lao economy and future growth – PanAust and Minmetal Resources (part of China Minmetals) both operate significant copper / gold mines in country and are both major employers and significant taxpayers – Substantial ongoing capital and investment commitments to further develop the mining industry – PanAust contributes to labour upskilling programs, community programs, as well as funding road upgrades – Laos has a pragmatic Government that recognises the importance of international capital and expertise

PanAust’s business and operating risks in Laos are lower than any perceived Laos sovereign risk

1 2 3 4

Lao People’s Democratic Republic

Country overview

Location Key facts

Capital Vientiane Population (2011) 6.5m GDP (US$bn 2011, PPP) 17.4 (+8.3% 2010) GDP/capita (US$ 2010, PPP) 2,700 Inflation (2010) 5.7% Languages Lao (official), French, English & various ethnic Head of Government Prime Minister Thongsing Thammavong Economic composition 30% agriculture; 32% industry; 38% services Currency Kip (LAK)

• Laos, officially the Lao People’s Democratic Republic, is a

landlocked country governed as a single-party socialist republic

• Through late 1980s to early 1990s, Laos formalised the

establishment of a market-oriented economy, in an attempt to promote gradual economic liberalisation

• In line with this strategy, the government decreased its

control through privatisation of state-owned enterprises and legislative reform. The strategy has had success with Laos achieving real GDP growth of +7% over the past 5 years

• Laos has also gained Normal Trade Relations status with

the US in 2004 and is taking the steps required to join the World Trade Organisation with policy reforms to improve the business environment

• The country opened its first stock exchange in 2011 and the

World Bank has declared that Laos’ goal of graduating from the UN Development Program’s list of least-developed countries by 2020 is achievable

• The outlook for the mining sector is positive, predominantly

due to the expansion of gold and copper mining by Australian and Chinese firms who regard Laos to be a potential significant market for both exploration and project development

• Laos continues to encourage foreign investment,

acknowledging that this is crucial for the economy’s development and funding Laos economic environment

Source Bloomberg

Mining’s contribution to Laos

Phu Kham is a significant contributor to the Laos economy. In 2010 Phu Kham contributed:

– 34% of Lao’s exports – 13% of GDP

Phu Kham & Sepon are responsible for providing 90% of Laos’ mining production An independent study, conducted by the International Council on Metals and Mining, reported that together Phu

Kham and Sepon have met “quality FDI” criteria which includes: – $630 million in revenues since 2003; $215 million per year by 2015; – 25-30,000 jobs - direct, indirect and ‘induced’; – Increased average local incomes 5-7 times

PBM’s payments to the Laos government – US$’000s Total contributions to Government of Laos

• f around $84 million

in 2011; up from $65m in 2010 Contributed >$200,000 in cash donations to road and bridge repairs

Note * estimate

Total FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 FY2005 FY2004 FY2003 Royalties Gold (Dore) 4,313

• 523

758 2,281 603 148

• Copper (Concentrate)

54,991 26,345 23,112 5,534

• Gold (Concentrate)

11,325 4,987 4,266 2,072

• 70,630

31,332 27,902 8,363 2,281 603 148

• Income tax

16,067 5,245 3,271 232 3,000 1,409 514 307 81 8 Rental fee (concession fee) 408 59 59 59 59 59 42 31 20 21 Import service fee (1%) 2,777 1,545 1,031 202

• Profit tax payable

78,315 46,000* 32,315

• Total PNA contribution

168,197 84,181 64,577 8,856 5,339 2,071 704 337 101 29

Applicable laws and mining licence process

Mining in Laos is governed by the following key agencies:

– Department of Geology, Ministry of Natural Resources and Environment – Department of Mines, Ministry of Energy and Mines – Ministry of Planning and Investment

Mineral Exploration and Production Agreements (“MEPA”) were used during the early 1990s govern the mining

activities in Laos – Regulates exploration, development and mining within a designated Contract Area in Laos – MEPA delivers certainty and predictability, as well as competitive advantage, vis-à-vis new entrants to the market

The Government is still developing its mining legislative and regulatory framework, with increasing capacity to service

environmental and other permitting and approval processes

Since 2002, the Government of Laos has approved all 6 new mine development applications applied for under

MEPAs – 3 for PBM and 3 for Sepon

Partnership with Laos government

The Government of Laos holds a direct interest in Phu

Bia Mining (“PBM”) following the exercise of its right to acquire a 10% stake – The terms of the acquisition are still under discussion, however the stake expected to be valued at c. US$29m

The MEPA with the Government of Laos, provides the

legal, commercial, fiscal and approval framework for PanAust’s operations in the Phu Bia Contract Area (“Contract Area”) – The MEPA’s efficiency has been demonstrated throughout the exploration, feasibility study and

• perating phases of the Phu Kham and Ban

Houayxai projects – Provides regulatory certainty and stability for PBM

The Government at all levels continues to express

support for PBM

Phu Bia Mining Contract Area – 2,631 km2

MEPA

Key terms

Term Details PBM rights

Search and explore for minerals in the Contract Area Develop and mine any deposits found Process, refine, transport and sell the minerals produced Specific rights to construct facilities, use timber, quarry products and utilise water from the

Contract Area as required Period

Rights extend for thirty years from 2012, following commissioning of Ban Houayxai Renewable for further thirty-year periods upon the approval of each new mine development

Fiscal arrangements

Royalties between 3% to 6% of net smelter return Company tax rate of 25% (no income tax holiday) Personal income taxes (from 10%) Concession and land rental fees Import fee of 1% Offset against profits for consumption taxes

Protections

Dispute resolution mechanism – UNCITRAL rules apply to conciliation or arbitration

proceedings to be conducted in Vientiane

MEPA includes protections for PBM against adverse changes in law, including an indemnity

from the Government

MEPA

Evolution of the MEPA has been consensual and in the best interests of the development of the mining industry, while protecting PBM’s interests

1994 ……… ….…… 1996 ……… ….….. 2002 ……… ……. ……… …….. 2007 Execution of the MEPA Executed between Government of Laos and Normandy Mining (subsequently acquired by Newmont) Amendment 1 Contract area modified, with a 1,010 km2 extension to the south west included Amendment 2 PanAust acquired 80% interest in PBM with an

• ption to purchase the remaining 20%

The MEPA amended to reflect this change in

• wnership

Amendment 3 Covered a number of commercial and technical

• issues. Reflected the approvals for Phu Kham
• project. Tenure extension. Fiscal regime

changes

Article 27.8 Notwithstanding any other provision in this Agreement (with the exception of Article 25), the Government shall use its best endeavours to ensure that any Lao Change in Law coming into effect after the Share Transfer Date will not have the effect of: i) Imposing on PBM (or its assignee) standard or practices which are more stringent or onerous than those in force as

• f the Share Transfer Date;

ii) Eliminating, impairing or reducing any rights granted under this Agreement; or iii) Adversely affecting PBM (or its assignee), including in each such case by increasing the costs or reducing the revenues, profits or cashflow of the Company. Notwithstanding the previous sentence, if any Lao Change in Law interferes with or abrogates in any way from the rights, privileges

• r protections afforded to PBM (or its assignee) by this

Agreement, the Government shall indemnify PBM (or its assignee) against any adverse financial impact to PBM (or its assignee) as well as for all additional costs, losses and claims which PBM (or its assignee) suffer as a result thereof, whether direct or indirect, as and when such cost, loss or claim is suffered. Notwithstanding the provision of this article 27.8, the Government acknowledges that PBM or (its assignee) shall be entitled to benefit from any Lao Change in Law which as effect of: i) Imposing applicable standards or practices which are less

• nerous; or

ii) Increasing the rights or reducing the obligations in respect of such person, as the case may be

MEPA protection against adverse changes in law History of the MEPA

Phu Kham Reserves and Resources*

Category Tonnes (Mt) Copper grade (%) Gold grade (g/t) Silver grade (g/t) Cont. copper (000t) Cont. gold (000oz) Cont. silver (000oz) Proved 160 0.56 0.25 2.1 900 1,300 11,000 Probable 50 0.45 0.21 2.3 230 340 4,000

TOTAL 210 0.53 0.24 2.1 1,120 1,630 14,000

Category Tonnes (Mt) Copper grade (%) Gold grade (g/t) Silver grade (g/t) In situ copper (000t) In situ gold (000oz) In situ silver (000oz) Measured 160 0.59 0.26 2.2 940 1,340 11,260 Indicated 65 0.49 0.21 2.4 320 440 4,960 Inferred 16 0.43 0.20 2.1 70 100 1,060

TOTAL 240 0.55 0.24 2.2 1,320 1,880 17,280

Ore Reserves (using price assumptions of US$2.50/lb copper, US$1,100/oz gold and US$18/oz silver) Mineral Resources (0.25% copper cut-off)

* As at 1 January 2011. Reported on a 100% equity basis – PanAust has a 90% beneficial interest.

Ban Houayxai Ore Reserves*

* As at 1 January 2011. Reported on a 100% equity basis – PanAust has a 90% beneficial interest.

Category Tonnes (Mt) Gold grade (g/t) Silver grade (g/t) Cont. Gold (000oz) Cont. Silver (000oz) Proved 9 0.77 5.6 220 1,600 Probable 27 0.77 8.0 660 6,900

TOTAL 36 0.77 7.4 880 8,500

Ore Reserves (using price assumptions of US$1,100/oz gold and US$18/oz silver)

Ban Houayxai Mineral Resources*

Category Tonnes (Mt) Gold grade (g/t) Silver grade (g/t) In situ Gold (000oz) In situ Silver (000oz) Oxide @ 0.2g/t gold cut-off grade Measured 5 0.77 2.4 120 370 Indicated 12 0.57 3.1 220 1,180 Inferred 1 0.45 1.9 20 70 SUB TOTAL 18 0.61 2.8 350 1,620 Transitional @ 0.3g/t gold cut-off grade Measured 4 0.82 8.7 100 1,100 Indicated 14 0.75 8.3 330 3,590 Inferred 0.4 0.74 3.0 10 40 SUB TOTAL 18 0.76 8.2 440 4,730 Primary @ 0.4g/t gold cut-off grade Measured 0.1 1.04 5.3 4 20 Indicated 20 0.99 9.2 620 5,770 Inferred 21 0.89 7.6 590 4,980 SUB TOTAL 40 0.94 8.4 1,210 10,770 Combined Oxide/Transitional/ Primary Resources Measured 9 0.79 5.2 230 1,490 Indicated 45 0.81 7.3 1,160 10,550 Inferred 22 0.87 7.2 610 5,090 TOTAL 76 0.82 7.0 2,000 17,130

Estimated using a geologically constrained model and indicator kriging at the stated cut-off grades. Rounding may cause minor computational discrepancies. * As at 1 January 2011. Reported on a 100% equity basis – PanAust has a 90% beneficial interest.

KTL Mineral Resources*

Category Tonnes (Mt) Copper grade (%) Gold grade (g/t) Indicated 18 0.38 0.14 Inferred 63 0.45 0.21

TOTAL 80 0.43 0.19

Estimated using a geologically constrained model and ordinary kriging. Rounding may cause minor computational discrepancies.

* As at 1 January 2011. Reported on a 100% equity basis – PanAust has a 90% beneficial interest.

Mineral Resources (0.25% copper cut-off)

Inca de Oro Mineral Resources*

Category Tonnes (Mt) Copper grade (%) Gold grade (g/t) Mo grade (%) Oxide Indicated 65 0.49 0.14 0.004 Inferred 13.3 0.35 0.08 0.003 Mixed Indicated

• Inferred

8.2 0.89 0.14 0.004 Combined Oxide-Mixed SUB TOTAL 86.5 0.63 0.13 0.004 Supergene Indicated

• Inferred

10.4 1.31 0.13 0.005 Primary Indicated 373.8 0.34 0.11 0.010 Inferred 299.0 0.27 0.07 0.010 Combined Supergene-Primary SUB TOTAL 683.2 0.32 0.09 0.010

Total Resources 769.7 0.36 0.10 0.010

Mineral Resources (0.2% copper cut-off)

* Reported on a 100% equity basis. PanAust has a 59.4% beneficial interest in Inca de Oro.

Carmen Mineral Resources*

Category Tonnes (Mt) Copper grade (%) Gold grade (g/t) Transitional Measured 2.3 0.34 0.38 Indicated 0.6 0.35 0.27 Inferred 0.9 0.41 0.25 Primary Measured 1.7 0.32 0.40 Indicated 5.5 0.34 0.44 Inferred 28.4 0.34 0.31 Combined Transitional and Primary Measured 4.0 0.33 0.39 Indicated 6.1 0.34 0.42 Inferred 29.4 0.34 0.31

TOTAL 39.5 0.34 0.33

Mineral Resources (0.25% copper cut-off)

* PanAust has a 100% beneficial interest in Carmen.

This presentation has been prepared by the management of PanAust Limited (the 'Company') for the benefit of brokers, analysts and investors and not as specific advice to any particular party or person. The information is based on publicly available information, internally developed data and other sources. No independent verification of those sources has been undertaken and where any opinion is expressed in this document it is based on the assumptions and limitations mentioned herein and is an expression of present opinion only. No warranties or representations can be made as to the origin, validity, accuracy, completeness, currency or reliability of the information. The Company disclaims and excludes all liability (to the extent permitted by law), for losses, claims, damages, demands, costs and expenses of whatever nature arising in any way out of or in connection with the information, its accuracy, completeness or by reason of reliance by any person on any of it. Where the Company expresses or implies an expectation or belief as to the success of future exploration and the economic viability of future projects, such expectation or belief is based on management’s current predictions, assumptions and projections. However, such forecasts are subject to risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed, projected or implied by such forecasts. Such risks include, but are not limited to, exploration success, gold and copper price volatility, changes to the current mineral resource estimates, changes to assumptions for capital and operating costs as well as political and operational risks and governmental regulation outcomes. For more detail of risks and other factors, refer to the Company's other Australian Securities Exchange announcements and filings. The Company does not have any obligation to advise any person if it becomes aware of any inaccuracy in, or omission from, any forecast or to update such forecast. Calculation of copper equivalent tonnes Copper equivalent production referred to in this report was calculated by combining copper, gold and silver production using the following equation: Copper equivalent tonnes = copper tonnes + value of gold produced (US$) + value of silver produced (US$) copper price (US$/tonne) Competent Person Statements The data in this presentation that relate to Exploration Results, and Mineral Resources are based on information reviewed by Mr Dan Brost who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Brost is a full time employee of PanAust Limited. Mr Brost has sufficient experience relevant to the styles of mineralisation and type of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) . Mr Brost consents to the inclusion in this presentation of the Mineral Resources in the form and context in which they appear. The data in this presentation that relate to Ore Reserves for Phu Kham are based on information reviewed by Dr Jon Gaunt who is a Member of the Australasian Institute of Mining and Metallurgy. Dr Gaunt is a full time employee of PanAust Limited. Dr Gaunt has sufficient experience relevant to the styles of mineralisation and type of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code). Dr Gaunt consents to the inclusion in this presentation of the Ore Reserves in the form and context in which they appear. The data in this presentation that relate to Ore Reserves for Ban Houayxai are based on information reviewed by Mr David Reid who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Reid is a full time employee of PanAust Limited. Mr Reid has sufficient experience relevant to the styles of mineralisation and type of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code). Mr Reid consents to the inclusion in this presentation of the Ore Reserves in the form and context in which they appear.

Important notice