PanAust Ltd., an Australian operator of copper and gold mines in Laos and Thailand, is seeking to acquire assets in Chile with partner Codelco to add to their Inca de Oro project.
PanAust wants to form ventures with the world’s largest copper producer for projects that have an annual output capacity of 50,000 metric tons to 150,000 tons, Managing Director Gary Stafford said in an interview yesterday. The partners are studying ways to boost the reserves of Inca de Oro, 34 percent owned by Codelco, and a decision is expected next year, he said.
PanAust is boosting investments as it expects copper to stay between $3.50 and $3.80 a pound this year on sustained demand and limited supply, he said. Codelco, which invested a record $4.2 billion in 2012, plans to spend more than $5 billion this year as it begins to dig underneath its century-old Chuquicamata mine to access new deposits.
“They’ve got such a massive capital investment program focused on their core assets” that PanAust has the opportunity to develop Codelco’s smaller deposits, Stafford said by phone from Brisbane, where PanAust is based. The company is seeking partnerships “with Codelco for projects that aren’t receiving focus from them at the moment,” he said.
PanAust shares gained 7.3 percent, the most in five months, to A$2.81 at the close of trading in Sydney, giving the miner a market value of A$1.7 billion ($1.75 billion). Ten analysts rate the stock a buy, eight a hold and two a sell, with a 12-month consensus price target of A$3.33, according to data compiled by Bloomberg.
Copper, which rose 6.3 percent in 2012, has fallen 1.4 percent this year and traded at $3.6015 a pound on Comex in New York as of 4:41 p.m. Melbourne time. Gold may trade in a range of $1,500 to $1,800 an ounce on continued central bank purchases, Stafford said. The metal rose 7.1 percent last year, the 12th consecutive year of annual gains.
PanAust aims to produce as much as 65,000 tons of copper and as much as 175,000 ounces of gold this year.