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Post from Debenham - a solid operator. PNA also in Laos (as is OXR)

 

Last week I visited PNA's operations in Laos and was very impressed with the developments of the company. The exploration camp is ideally suited approximate to the main deposits being Phu Kham Gold/Copper Cap and Ban Houxay and Long Chien Track. The contract area is about 100 miles from the capital city and was accessed mostly via a decent sealed road. On leaving the sealed road the all weather dirt/gravl road was travelled at reasonable speed. Local infrastructure of the nearby town has a population of about 2000 and has power,water, a decent hospital and usual civic amenities for the country.

Unbelievably beautiful country, without doubt one of the most naturally beautiful places I have ever seen.

Recently the company appointed Simon Milroy who was a key manager at Kingsgate's Chatree mine - he will effectively be the country manager and will take the reins of internal work for the gold feasibility study going forward. This is a key appointment and adds real strength to the management team.

Overall I think this company has the legs and strength to get up and build a decent gold mine and probably a more than decent copper mine. My personal view is that PNA will be a very significant mining house in the future.It has enormous potential.

On Saturday night there was a bbq in Vientiane attended by local embassy staff, Aussie expats plus the guys from Oxiana. All positive comments. This company will be ok. I am sticking round for the next few years on this one. Buying more shares, not worried about the price at all.

Cheers

Debenham

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Getting Inquiries For Copper Concentrate Output

 

To fund further drilling and a feasibility study on the copper-gold project,

Pan Australian is concentrating on first starting its gold production to

generate cashflow, he said.

The company estimates Phu Bia will produce 50,000 to 70,000 ounces of gold

dore a year when it starts producing in 2005.

Dore is the raw material produced from a gold mine, which contains a mixture

of gold and other metals, mostly silver.

The capital cost for the initial gold project is estimated at $20 million- $30

million, which will be financed through around 30% debt, with the rest from

equity markets, said Stafford.

Pan Australian plans to raise the resources - a rough guide of the amount of

gold that can be mined profitably - at Phu Bia to 500,000 ounces from the

current 350,000 ounces, said Stafford.

To further develop the Phu Kham project by going deeper where both gold and

copper deposits are located, it would cost the company another $120 million-$150

million, he said.

He is confident that the project, which has an inferred resource of 900,000

tons of copper and 1.2 million ounces of gold in concentrate, will be able to

find ready buyers after production starts late 2006.

"There's a huge copper concentrate demand in China and Thailand is building a

smelter; we will be the closest (source of concentrate) to them," he said.

Like their overseas counterparts, Chinese copper smelters are facing problems

securing enough concentrate, or raw material, due to lower mine production.

The first Thai copper smelter, Thai Copper Industries Co., will also start

production in April 2004.

"The Japanese, Chinese and Thais all want to talk to me" about securing

concentrate supply, said Stafford.

 

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-- DJ INTERVIEW:Copper-Gold Proj Next Driver For Pan Australian --

 

 

Singapore, Nov. 17 (OsterDowJones) - With its share price already up 50% in

November amid a rally in gold prices and encouraging drilling results, Pan

Australian Resources NL (PNA.AU) is banking on its copper-gold project in Laos

to trigger the next jump in market capitalization.

"There's absolutely no value from the project (in our share price) - the

increase in the value of our shares has come purely from the announcements of

our gold drilling results," Managing Director Gary Stafford told OsterDowJones

Monday.

Pan Australian owns the Phu Bia gold project in Laos, which comprises three

deposits - Ban Houayxai, Phu Kham and Long Chieng Track.

Located beneath Phu Kham is the more lucrative copper-gold deposit.

Newmont Mining (NEM), the world's largest gold miner, owns around 5% of Pan

Australian in addition to a separate 20% stake in the Phu Bia project.

Stafford believes that once results from the pre-feasibility study on the

copper-gold project are announced in a few months' time, investors will start

factoring that into Pan Australian's share price.

Currently, the surging gold price has taken some thunder away from the

copper-gold project, he said.

"I keep getting asked all these questions on gold....and we're trying to say,

look, we have copper as well."

But make no mistake, Stafford is pleased with the surging gold price, which

rose to a new seven-and-a-half year high of $399.50 a troy ounce Monday in Asia.

At the close of trading on the Australian Stock Exchange Monday, Pan

Australian's market capitalization was at A$47.3 million, up from around A$10

million a year ago. Its shares surged 21.74% from Friday to close at A$0.14.

Compared with its Australian counterparts with copper projects around the size

of its estimated resources, Stafford hinted Pan Australian could see its

Keen To Get Singaporean Investors

 

And Stafford is keen to get Singaporean investors to trade in the company via

the World Link system that ASX launched with the Singapore Exchange.

Through World Link, investors in one country can trade shares listed on the

other country's bourse. There are 100 Singapore stocks and 100 Australian stocks

available for trading.

Pan Australian isn't one of them yet, but Stafford said the company is seeking

ways to get included in the list.

Two of the criteria for qualification are market capitalization and liquidity,

said Stafford.

"Liquidity wise, we're well up there but if marcap is an issue, that means

Singapore investors will miss the upside," he said.

He isn't daunted by reports that Australian mining companies currently

available for trading via World Link aren't actively sought after by Singaporean

investors.

"I suspect it's perhaps lack of knowledge or marketing," he said.

He sees Singapore as a logical place for Pan Australian to seek more

investors, given its Asia-based operations.

Stafford expects that once the company has the results of a share purchase

plan announced last month and concluded Friday, its market capitalization should

rise slightly to A$50 million.

Pan Australian is likely to announce the results Tuesday, he said.

The share purchase is to help fund the feasibility study for its gold project,

estimated to cost around A$4 million and to be completed by April- June 2004, he

said.

Getting Inquiries For Copper Concentrate Output

 

To fund further drilling and a feasibility study on the copper-gold project,

Pan Australian is concentrating on first starting its gold production to

generate cashflow, he said.

The company estimates Phu Bia will produce 50,000 to 70,000 ounces of gold

dore a year when it starts producing in 2005.

Dore is the raw material produced from a gold mine, which contains a mixture

of gold and other metals, mostly silver.

The capital cost for the initial gold project is estimated at $20 million- $30

million, which will be financed through around 30% debt, with the rest from

equity markets, said Stafford.

Pan Australian plans to raise the resources - a rough guide of the amount of

gold that can be mined profitably - at Phu Bia to 500,000 ounces from the

current 350,000 ounces, said Stafford.

To further develop the Phu Kham project by going deeper where both gold and

copper deposits are located, it would cost the company another $120 million-$150

million, he said.

He is confident that the project, which has an inferred resource of 900,000

tons of copper and 1.2 million ounces of gold in concentrate, will be able to

find ready buyers after production starts late 2006.

"There's a huge copper concentrate demand in China and Thailand is building a

smelter; we will be the closest (source of concentrate) to them," he said.

Like their overseas counterparts, Chinese copper smelters are facing problems

securing enough concentrate, or raw material, due to lower mine production.

The first Thai copper smelter, Thai Copper Industries Co., will also start

production in April 2004.

"The Japanese, Chinese and Thais all want to talk to me" about securing

concentrate supply, said Stafford.

 

JOSHI - Oze.

 

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  • 2 weeks later...

http://www.asxboard.com/html/emoticons/biggrin.gif Very good rise in the price over the last weeks or so. I think once the feasability study is done the upside will be very good for this stock. I would like to think i can get a $1 out of this one over the next two to three years.

Allen

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  • 2 weeks later...

g'day gottsy,

$1 means a market cap of $373m now & by the time feasibility done, they'll probably have double that, so you're looking for a cap of over $700m ??? By end of feasibility.

I like PNA, but even in my wildest dreams I can't see $700m cap. If they continue to prove up & find lots more, then it has a good shot at a multiple bagger by the time they are pouring gold or within 2-3 quarters of that time, but no way by feasibility.

With a market cap of $80m now, I would think 2-4X current cap more reasonable. But you never know, a bonanza strike would help.

 

cheers,

 

ned

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