Shares in PanAust Ltd jumped more than 10% yesterday after the company revealed a surprise production upgrade.
The shares rose 8c to 82.5c after the upgrade was announced, that’s just 3.5c off its 52 week high hit a couple of months ago.
PanAust lifted its 2010 production guidance to approximately 67,000 tonnes of copper at an average cash cost of less than US$0.90/lb of copper after precious metals credits estimated at 60 ounces of gold and 500,000 ounces of silver in concentrate.
"The upgrade follows strong quarter to date production and cost performances at the Company’s flagship Phu Kham copper/gold operation in Laos, coupled with higher average commodity prices for copper, gold and silver.
"Cash costs during October and November averaged US$0.56/lb.
"Costs benefited from seasonal variations following of the dry season and higher than budgeted for precious metal production and prices."
The company said that its current guidance for earnings before interest, tax, depreciation and amortisation of $260 million for the 2010 year ”is based on actual operating performance to the end of November and the assumption that production will exceed sales in the final quarter of the year".
PanAust managing director Gary Stafford said in the release that the Phu Kham mining operation "is proving to be a consistent performer at a time when prices for copper and precious metals are rising, providing both higher than budgeted revenue and increased by-product credits against operating costs”.
The company said guidance for 2011 will be provided in late January when the December quarter’s production report is released.
Overnight, world copper prices hit new highs, which is more good news for PanAust.
In London the LME price rose to a record $US9,267.50 a tonne and in New York Comex March futures ended at $US4.209 a pound.
That was after it reached $US4.229, the highest for a most-active contract since May 2008, when the price hit $US4.2605.
But offsetting that was another move over parity with the US dollar by the Aussie.
It was trading at $US1.008 after the Fed’s announcement at 6.15 am.
It then fell back to trade just under parity.
