LAOS – Agreements for Phu Kham copper-gold supply

PanAust Limited has signed a long-term sales agreement with Tongling Nonferrous Metals, operator of China’s largest copper smelter, for supply of copper - gold concentrate from its Phu Kham Copper - Gold Operation in Laos.

The contract is for an initial four-year period to December 2012 and can be extended by agreement. Total concentrate tonnage for the first four years is 80,000 dry metric tonnes (dmt) and treatment and refining charges will be negotiated annually.

In addition to the new contract with Tongling, PanAust has also agreed terms with a metal trader for the spot market sale of a further 20,000 dmt of concentrate for delivery this year.

PanAust has now secured spot and long - term markets for 40% of Phu Kham’s copper - gold concentrate production to 2010.

PanAust managing director Gary Stafford says: “We are delighted to have entered into a sales agreement with Tongling. This is our first long - term contract with a smelter and we look forward to a long and mutually rewarding relationship.

“We will continue with our strategy of entering into a mix of long - term and spot sale agreements in order to both develop strategic relationships and capitalize on competitive treatment and refining charges in the currently tight market for copper concentrate.”

Commercial copper - gold concentrate production began at Phu Kham in June this year and the operation is ramping up to steady state production.

The Phu Kham process plant achieved name plate throughput capacity in late July and the sale of Phu Kham’s fourth 10,000 dmt shipment of copper - gold concentrate was completed in early October.

Production for 2009, the first full year of production is targeted to be 240,000dmt of concentrate containing 60,000 tonnes of copper, 60,000 ounces of gold and 600,000 ounces of silver.

An expansion in 2009 will increase annual production to an average of 300,000dmt of concentrate containing 75,000 tonnes of copper, 65,000 ounces of gold and 600,000 ounces of silver from 2010.

www.panaust.com.au

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