PANAUST PLANS FOR GROWTH
Written on the 4 June 2013
PANAUST (ASX: PNA) will look for further international development opportunities after boosting revenue by 43 per cent last calendar year says chairman Garry Hounsell.
PNA commissioned its second mine in Laos last year, expanded its Phu Kham Copper-Gold Operation and had exploration success within the Phu Kham district, while also extending ore reserves at Ban Houayxai.
Revenue increased by 24 per cent to US$712 million, boosted by the commencements of gold-silver dore sales from Ban Houayxai. Profit after income tax attributable to PanAust increased by 8 per cent to US$142.3 million.
The company declared a maiden dividend of three cents per share in August and in February a final dividend of a further four cents per share.
“We are delighted the company is in a position to reward the support of our shareholders in this way and we aim to continue to provide a dividend to shareholders,” Hounsell told the company’s annual general meeting today.
“Strong cash flow from Phu Kham and Ban Houayxai has enabled the company to support dividend payments and fund a significant capital program while maintaining a strong balance sheet.”
The company has cash reserves of $64 million, debt of $137 million and undrawn facilities of $138 million as of April 30.
“With a significant reduction in capital commitments, and assuming current copper and gold prices are at least sustained, the company is expected to have strong free cash for the balance of 2013.”
The company’s share price has been hit this year, falling more than $1 since January to $2.260 per unit this morning (up 2.73 per cent), but Hounsell is confident in PNA’s ability to withstand falling commodity prices.
The company estimates consolidated full-year 2013 production will be in the ranges of 62,000t to 65,000t of copper in concentrate and precious metal production in concentrate and dore of 160,000oz to 175,000oz of gold and 1.1million to 1.2 million oz of silver.
The Ban Houayxai Operation commenced commercial production in June, while the expansion of the Phu Kham process plant was finished in September. The plant had strong production performances during the December quarter.
“A total of US $330 million has been invested at Ban Houayxai and Phu Kham over the past three years and we are now seeing the benefits from operational diversity and increased capacity,” says Hounsell.
“Looking to the future, we are advancing studies for potential new development opportunities at Phonsavan in Laos and at Inca de Oro and Carmen in Chile.
“We are aiming to complete these studies in late 2013 and mid 2014 respectively. Assuming positive study results, these projects will be competing for capital – a nice problem to have.”
PNA will continue to explore and develop resources in the Phu Kham region.
The company won a sustainability award at the Asia Mining Congress at Singapore, the third time it has won an award at the event. It has also improved safety over the previous year.