Growth by discovery, acquisition and development Corporate - PowerPoint PPT Presentation

Growth by discovery, acquisition and development Corporate presentation, February 2014

Production and growth  Phu Kham Copper-Gold and Ban Houayxai Gold-Silver Operations providing strong cash flow to support dividends and growth  Phu Kham brownfield opportunities to progressively lift annual copper and gold output:  Process plant capacity expanded in 2012; Increased Recovery Project 2013  Copper production to increase steadily to peak at approx. 90,000tpa in 2018/19  Pre-development opportunities:  KTL Copper-Gold Project, Laos  Inca de Oro Copper-Gold Project, Chile  Frieda River Copper-Gold Project, PNG i i: The agreed acquisition of a majority interest in the Frieda River Project remains subject to a condition precedent.

Phu Kham: a foundation for growth  Established operation with competitive cash costs  Process plant expanded in 2012: processing rates exceeding upgraded 16Mtpa plant design rate  Increased Recovery Project completed in Jun quarter 2013: step change in recoveries achieved  Copper production to increase steadily to peak at approx. 90,000tpa in 2018/19  2013 production of 64,885t copper at an average C1 cash cost i of US$1.36/lb; all- in sustaining costs ii US$2.37 i: C1 direct operating costs, based on payable copper in concentrate produced, after precious metal credits. ii: C1 cash costs plus royalties; corporate support and shared services costs; sustaining capital; lease principal and interest charges; and deferred mining and inventory adjustments capitalised. Data shown on a 100% equity basis.

Phu Kham: 16Mtpa Upgrade and Increased Recovery Project 2 nd filter Increased flotation capacity six additional cleaner cells 2 nd regrind mill 2 nd ball mill 3 rd transformer 16Mtpa Upgrade Project Increased Recovery Project

Phu Kham: Increased Recovery Project  Increased recovery achieved through less selective rougher flotation together with increased regrind, cleaner flotation and concentrate handling capacity  Project completed June quarter 2013, several months ahead of schedule and under budget  Record recovery performances during the December half 2013; copper 74.9% (up from 71.1% for June half 2013); and gold 50.3% (up from 40.9%)  Copper recoveries for 2014 are scheduled to range from 74% to 86% depending upon ore quality Data shown on a 100% equity basis.

Ban Houayxai Gold-Silver Operation

Ban Houayxai Gold-Silver Operation  Established operation, competitive costs  2013 production of 112,546oz gold at an average C1 cash cost of US$611/oz after silver credits; all-in sustaining costs of US$964/oz  Pervasive zone of high-grade gold mineralisation extends beneath the current pit design Data shown on a 100% equity basis

Phu Kham district  High priority target for exploration  Prospective for copper-gold and gold- Nam Ve; 7km silver mineralisation NW of LCT  Extends from Phu Kham at least 14km to Core shed LCT prospect Nam Ve deposit  Includes the LCT deposit  Nam Ve - scout drilling intersected high- grade gold and copper-gold mineralisation  Other near-mine targets at Phu Kham to Haul Road prospect be drill tested in 2014 Nam San N Phu Kham 1000m

KTL Copper-Gold Project, Laos  Study largely completed on the low capital cost development option to truck high-grade copper mineralisation to Phu Kham for processing  Close to existing road and power infrastructure; nearby town of Phonsavan could provide a workforce  Delivery of crushed ore to the Phu Kham process plant will bypass that operation’s crusher constraint  Ore Reserve estimate reported as a subset of the Phu Kham Ore Reserve Data shown on a 100% equity basis.

Inca de Oro Copper-Gold Project, Chile  Joint Venture with Codelco (PanAust 60.45%)  Sulphide feasibility study completed in mid- 2012; provided strong production in first five years  Study extended to evaluate the potential for existing oxide and additional sulphide resources, including Carmen (PanAust 100%), to make a material contribution to the Project  Considering options for project scale: from a down-scaled higher grade 9Mtpa processing rate to an expanded 18Mtpa processing rate  Initial evaluations favour the smaller, higher grade approach which should provide improved operating costs over the first ten years of project life

Carmen copper-gold deposit, Chile  Carmen deposit (PanAust 100%): positive results from resource drilling  Porphyry-style mineralisation discovered, overprinting earlier IOCG mineralisation  Near surface low strip ratio open-pit opportunity

Benefiting from existing infrastructure

Frieda River Copper-Gold Project

Frieda River Mineral Resources Koki copper-gold HIT deposit: M I & I deposit Resources of 2,090Mt @ 0.45% Cu, 0.22 g/t Au Nena deposit: M I & I Ekwai copper-gold Resources of 45Mt @ deposit 2.55% Cu, 0.60 g/t Au Mineralisation Mineralisation intersected by drilling open at depth Mineralisation open at depth

The PanAust Glencore Agreement  PanAust has entered into a share sale and purchase agreement with Glencore Xstrata plc to acquire its shares in Xstrata Frieda River Ltd (XFRL)  Initial cash consideration of US$75M in two tranches: US$25 million upon transaction close; and US$50 million on 31 December 2015  On successful completion of a project development a 2% NSR royalty becomes payable that will not exceed US$50 million  Completion of the acquisition is consistent with PanAust’s strategy to ensure access to sufficient mineral resources to secure the Company’s growth beyond the life of the Phu Kham Operation in Laos  The likely timing for implementation of PanAust’s development concept for Frieda River coincides with rising production levels scheduled for Phu Kham

PanAust scoping study results  Average annual production of 100,000t copper and 160,000oz gold in concentrate at a C1 cash cost of approximately US$1.25/lb after gold credits*  Open pit mine with low strip ratio of less than 0.6:1  Mill feed of 430M tonnes grading 0.54% copper and 0.3g/t gold for an 18-year mine life; represents 20% of the HIT Mineral Resource  Metallurgical recoveries of 80% to 85% for copper and 70% to 75% for gold  Development capital estimate**: US$1.5Bn to US$1.8Bn; competitive capital intensity of approx. US$13,000/t of annual copper equivalent production *Gold credit estimated at US$1,200/oz **2013 dollars

Strong commitment to sustainable development  PanAust’s commitment to sustainable development is a key consideration in the way the Company undertakes its business activities  Strong emphasis on delivering sustainable benefits to the communities within the vicinity of its operations Around 50% of food requirements for the Phu Kham camp are sourced locally  Further information on PanAust’s sustainability programs and credentials, including the latest Sustainability Report, can be viewed at the Company’s website PanAust’s community development programs have a strong focus on education

2014 financial performance and outlook  EBITDA expected to be between US$200M and US$225M assuming a copper price of between US$3.20/lb and US$3.40/lb, US$1,300/oz gold and US$22/oz silver  Group consolidated production of 65,000t to 70,000t copper, 160,000oz to 165,000oz gold and approx. 1.2Moz silver  Phu Kham copper production of between 65,000t and 70,000t at an average C1 cash cost of between US$1.50/lb and US$1.60/lb  Ban Houayxai gold production of approximately 100,000oz at an average C1 cash cost of between US$650/oz and US$700/oz Data shown on a 100% equity basis.

Summary  Competitive copper and gold producer with strong cash flow to support growth initiatives  Increased free cash flow following conclusion of major capital development program  Progressive increase in copper production at Phu Kham; peaking at approx. 90,000tpa in 2018/19  Organic growth provided by capital efficient brownfield opportunities and pre-development opportunities in Laos, Chile and PNG  Proven track record as a successful developer of operations

Supplementary slides

PanAust Limited securities  Listed on the Australian Securities Exchange (ASX:PNA)  Issued securities (20 Feb 2014) 621M shares 0.6M unlisted options & rights  Share price (20 Feb 2014) A$1.895  Market capitalisation A$1.2Bn  12-month average daily turnover ~A$10M  FY2012 dividends paid Total A$0.07/share Total A$0.06/share i FY2013 dividends  Substantial shareholders Guangdong Rising Assets Management (GRAM) ~22.5% Goldman Sachs Asset Management ~5.2%  Shareholding structure ~71% institutional investors (incl. GRAM)  Top 20 shareholders ~58% i: Final dividend of A$0.03/share to be paid in April 2014

Financial position as at 31 December 2013  Cash of US$130.3M  Debt of US$162M; undrawn facilities of US$113M  Facilities comprise: US$250M revolving debt facility with a syndicate of seven banks; a US$25M working capital facility  Four-year term (from Jan 2013); interest rate of US LIBOR plus a fixed margin of 3.5%/yr on revolving facility (plus political risk insurance)  Equipment lease facilities drawn to a total of US$67.7M  Gearing (debt/debt+equity) of 18%