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PNA $1.84

re-valuation due soon.....

  1. jojosydney

    8,112 Posts.
    Soon everyone will know about our "hidden" goldmine and the share price will start reflecting this mine's real potential. The good news is spreading around as we speak.......
    I hope its not too late to pick some more up at yesterdays bargain price...

    This last one I found on the Mine web.

    >PanAust gets glowing review

    By: Peter Gonnella

    Posted: 2004/03/25 Thu 16:46 ZE8 | © Mineweb 1997-2004

    PERTH (minewebaustralia.com) – Gold and copper hopeful Pan Australian Resources [ASX:PNA] is an Aussie sleeper highly fancied to graduate to mid-cap ranks.
    In giving a speculative buy recommendation, a leading analyst slapped a whopping 150 percent-plus valuation premium on the junior’s latest share price as its South East Asian growth profile is steadily enhanced.

    Brisbane-based PanAust this month released encouraging preliminary data from an initial study into the Phu Kham copper-gold project in Laos that could pave the way for a significant rerating.

    However, Intersuisse is so stoked with the early progress that it predicts PanAust will reach impressive production levels of about 70,000 tonnes per annum of copper and 140,000 ounces per annum of gold in the relatively short period of about four years’ time – via the phased development of its Phu Bia (gold) and Phu Kham projects in Laos and Puthep (copper) project in Thailand.

    Consequently Intersuisse analyst Peter Arden has placed a A$0.45 per share base case valuation on PanAust, versus the stock’s close today (Thursday) of A$0.175. He applied a gold price of US$400 per ounce, a copper price of US$2,500 per tonne, an Aussie dollar/US dollar exchange rate of US$0.80 and a discount rate of 10 percent to arrive at the NPV.

    “Our analysis indicates that (Phu Kham) has the major part of the value of PanAust, and that the economic viability of that project is borne out by comparisons with similar large tonnage/low grade Australian copper-gold projects such as Cadia and Telfer that involve copper concentrate production,” noted Arden, who felt that PanAust’s most significant upside potential lay in Phu Kham.

    From an inferred mineral resource for Phu Kham of 108 million tonnes grading 0.8 percent copper and 0.3g/t gold (using a 0.5 percent copper cut-off) for an insitu 900,000 tonnes of copper and one million ounces of gold, PanAust’s scoping study suggests the potential operation – targeted to produce between about 57,600tpa of copper and 52,000ozpa of gold in a copper-gold concentrate (based on an ore throughput rate of 9 million tonnes per annum and 0.8 percent copper head grade) and 100,000tpa of copper and 72,000ozpa gold (assuming 12.5Mtpa and 1.0 percent copper head grade) – was economically and technically robust. The corresponding capital cost range was between US$138.6 million (9Mtpa) and US$163.8 million (12.5Mtpa) and average cash operating costs (after gold credits) were estimated at roughly US$1,035-$1,190/t, with a projected mine life in excess of 10 years.

    PanAust – who recently reported the size and grade of the Phu Kham resource could be materially higher than anticipated following pre-feasibility exploration work – plans to finish this September the definition drilling program aimed at facilitating an update of the resource and calculation of first reserves, which are slated to be announced by the end of October.

    Acknowledging the sovereign risk factor, Arden sees parallels between PanAust and success story Aussie-based Laotian gold-copper company Oxiana [ASX:OXR] and, as was the case with Oxiana, he expects PanAust to also gain increased sharemarket recognition as it moves along the development path. “Oxiana had a market capitalisation of about A$110 million two years ago (and one year before commencing full scale gold production at Sepon),” the Melbourne-based analyst pointed out. “(Its) market capitalisation had risen to about A$430 million one year ago as gold production at Sepon ramped up to full rate (and) … about A$950 million as it completes its first full year of full scale operation of the Sepon gold project and about one year before cathode copper production begins.” PanAust’s market cap is currently just over A$70 million. It hopes to wrap up the Phu Kham bankable feasibility study (BFS) by mid-2005, and, dependent on positive BFS outcomes and should project financing be secured, then push the go button on a two-year construction and commissioning phase.

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