pna_qtr_apr2010

PanAustLimitedABN17011065160 Level2,99MelbourneStreetPOBox3468SouthBrisbaneQld4101 Phone+61(0)731172000Facsimile+61(0)738464899 [email protected]

22April2010

QuarterlyReportforthethreemonthsending31March2010

PhuKhamCopperGoldOperations,Laos

Marchquarterproductionwas64,931dmtofconcentratecontaining16,005tofcopperatanaverageC11cashcostofUS$0.80/lbofcopperafterpreciousmetalcreditsfrom16,098ozofgoldand118,119ozofsilver

Recordmonthlycopperproductionof5,904tachievedinJanuary

GrowthProjects

BanHouayxaiGoldSilverProject,Laos

PanAustsBoardofDirectorsapprovedthedevelopmentoftheBanHouayxaiGoldSilverProjectsubjecttoGovernmentofLaosapprovals;thesuccessfulFeasibilityStudywasbasedonanoperationproducingover100,000ozofgoldand700,000ozofsilverperannumoveraminimumeightyearminelife

IncadeOroCopperGoldProject,Chile

PanAusthasmadeabindingoffertoCodelcotoacquireamajorityinterestintheIncadeOroCopperGoldProjectinChile.TheBoardofdirectorsofCodelcohaspassedaresolutionrecommendingtheacceptanceofPanAustsoffer,subjecttoapprovalbyPresidentialDecree.

Exploration

DrillingcontinuedathighprioritytargetsinLaos:PhonsavanCopperProjectandBanPhonxaicoppergoldprospect

Corporate

At31March2010,PanAusthadcashofUS$91.5million,projectdebtofUS$53.7millionandamobileequipmentleasefacilityofUS$36.9million

PanAustreceivedthe2010awardforBestCommunityDevelopmentInitiativeattheAsiaMiningCongressinSingapore

1BrookHuntconventionforreportingdirectcashcostscomprising:minesite,concentratetransportationandfreight,treatmentandrefiningchargesandmarketingcosts.Basedonpayablecopperinconcentrateproduced.

PhuKhamOperations,Laos

Introduction

StrongproductionandcostperformancescontinuedintheMarchquarter2010.Forthesecondsuccessivequarter,thePhuKhamOperationproducedover16,000tofcopperatanaverageC1cashcostofUS$0.80/lbcopper(afterpreciousmetalcredits)despiteascheduledfivedayshutdowninMarchandlowergoldproduction(comparedtotheDecemberquarter).Notably,theMarchquarterincludedrecordmonthlycopperproductionof5,904tinJanuary.

Table1:Productionandcostsummary

PhuKhamOperationsProductionsummary

Units3months

to31Mar2010

Copperinconcentrate t 16,005

Goldinconcentrate oz 13,704

Silverinconcentrate oz 118,119

Goldindor(HeapLeach) oz 2,394

C1cashcostafterpreciousmetalcredits2 US$/lbCu 0.80FurtherdetailsoftheproductionandcostperformancesarecontainedinTable2andTable3ofthisreport

ProductionPerformance

Designmillthroughputofthreemilliontonnesoforewasachievedduringthequarter.DuringMarch,therewasaplannedfivedaymaintenanceshutdowntoundertakeacompleterelineoftheballmillandapartialrelineoftheSAGmill.ThenextmajormaintenanceshutdownisscheduledfortheSeptemberquarter.

Theaveragecoppergradeforthequarterwas0.79%andtheaveragecopperrecoverywas68%,reflectingthemixoforetypesprocessed.Theelevatedcopperheadgradesprocessedoverthepastsixmonthswerelargelyafunctionofasignificantcomponentofmillfeedbeingsourcedfromahighgradestageoftheopenpit,whichwasdepletedinearlyApril.Theaveragecoppergradescheduledfor2010is0.7%.

Miningpostedaquarterlyrecordofnearly6.7milliontonnesofmaterialmoved.Furtherminingcapacityisscheduledtobeaddedmidyearwiththecommissioningofafifthshovel.

PhuKhamremainsontracktoachievetargetconcentrateproductionforthe2010yearintherangeof240,000dmtand260,000dmtcontainingbetween60,000tand63,000tcopper,andmorethan40,000ozgoldand300,000ozsilveratanaverageC1cashcostofbetweenUS$0.95/lbandUS$1.05/lbcopperafterpreciousmetalcredits3.

AttheHeapLeachGoldOperation,irrigationoftheleachpadsendedinMarch2010andgoldrecoveryfromsolutionceasedon1April2010.BetweenNovember2005andApril2010,theOperationproducednearlythreetonnesofgoldandplayedanimportantroleintheinitialdevelopmentofPanAustsoperatingpresenceinLaos.Afterclosureactivitiesarecompleted,theworkforcewillberedeployedtodutiesatPhuKhamandtheBanHouayxaiGoldSilverProject.

2Basedoninvoicedpricingforgoldandsilver3AssumesgoldandsilverpricesofUS$1,000/ozandUS$16/ozrespectivelyandUS$0.78/litredieselfuelcost

PaymetalinconcentratesalesduringtheMarchquartertotalled13,919tofcopperand15,564ozofgold.Theaveragecopperandgoldpricesrealised(afterhedging)wereUS$3.23/lbandUS$957/ozrespectively.

Resourceextension

NorthpitareaResourcedrillingwithinthenorthpitareaofPhuKhamcontinuedduringthequarter.The3,600mprogramwilltestthenorthernandnortheasternlimitofthePhuKhamcoppergolddepositwheremineralisationremainsopenbothlaterallyandatdepth.Initialdrillresultsatthenortheastofthedeposithaveextendedtheinterpretedlimitofmineralisation.

Arevisedmineralresourceestimatewhichincorporatesresultsfromthesouthernpitarearesourceextensiondrillingcompletedin2009isnowbeingfinalisedandwillformthebasisforarevisedorereserveestimate.

Growth

PanAusthasacorporatestrategyfocusedongrowthbydiscovery,acquisitionanddevelopment.

Keycomponentsofthisstrategyare:acommitmenttoprogressingcapitalefficientorganicgrowthopportunities;theacquisitionofproducingorpredevelopmentcopperassetsthatcouldsupportannualproductionof50,000tofcopperorcopperequivalent;and,pursuitofanactiveexplorationandresourcedevelopmentprograminLaos.

BanHouayxaiGoldSilverProject,Laos

InMarch,PanAustannouncedthattheBoardofDirectorshadapprovedthedevelopmentoftheBanHouayxaiGoldSilverProject.Thedecisionfollowedthesuccessfulconclusionoftheprojectfeasibilitystudywhichwasbasedonanopenpitminingoperationfeedingoretoaconventional4MtpaCarbonInLeach(CIL)processplanttoproduceover100,000ozofgoldand700,000ozofsilverperannum.

Keyprojectparametersfromthefeasibilitystudy:

Averageannualproduction Over100,000ozgoldand700,000ozsilver

Recoveryrates Gold:recoveryrangeis80%to94%withanaverageof87%overthelifeofthemine

Silver:averagerecovery70%withonlyminorvariationacrossmineralisationtypes

MineLife Minimumeightyears.Mineralisationisopenatdepthandtothewest

Waste:Orestripratio Lessthan1.5:1,noprestriprequired

Processplant Carboninleach,4Mtpathroughputcapacity

PredevelopmentCapital US$16M,approvedNovember2009

DevelopmentCapital US$134M,includes10%contingency

CashOperatingCost4 BetweenUS$400/ozandUS$450/ozgold

4Beforeroyalty,assumessilverbyproductcreditatUS$13/oz

TheBanHouayxaigoldsilverdepositislocatedapproximately25kmwestofthePhuKhamCopperGoldOperationandtheminingequipmentwillbesimilartotheexistingfleetatPhuKhamensuringstandardisationofmaintenancecomponentsandproceduresbetweenthetwosites.

Majorearthworks,inpreparationforcampconstructionandinitialcivilworks,areunderwayatBanHouayxaifollowingGovernmentofLaosapprovalfortheseworkstobecompletedbeforeonsetofthe2010wetseason.Attheendofthequarter,constructionofthenewnorthernaccessroadandsiteworksfortheprocessplantandcampsitewereallmorethan60%complete.CommencementofmajorconstructionworkandoperationsissubjecttoGovernmentofLaosacceptanceoftheEnvironmentalandSocialImpactAssessment(ESIA).ThedraftESIAisscheduledtobelodgedinApril.

TheBanHouayxaidepositremainsopenatdepthandtothewest.Furtherresourcedevelopmentdrillingisaimedatdelineatingadditionalnearsurfaceoxidemineralisation,andupgradingtheresourcecategorisationofdeeperprimarymineralisationwiththetargetofextendingtheminelifebeyondtenyears.SignificantintersectionsfromthecurrentdrillprogramareincludedinTable4andincluded:

DrillholeHDD143intersected52mat2.0g/tgoldand3.9g/tsilverfromsurface,and4mat6.1g/tgoldand9.5g/tsilverfrom189m

DrillholeHDD147intersected5mat19.5g/tgoldand16.4g/tsilverfrom165m DrillholeHDD156intersected51mat1.7g/tgoldand53.5g/tsilverfrom98m DrillholeHDD158intersected31mat2.7g/tgoldand72.1g/tsilverfrom141m

PhuKhamOperations,Laos

During2010,PanAustwillcommenceareviewofthePhuKhamCopperGoldOperationtodeterminetheoptimumapproachtoexpandingproduction.Thereviewwillbebasedonoperatingexperiencetodateandwillconsiderpreviousstudiestoexpandprocessingratesfrom12Mtpato16Mtpaandoptionstorecoveradditionalcopperandgoldfromfurtherprocessingoftheexistingtailingsstream.Thereviewwillhavetheobjectiveofmaintainingannualcopperproductionasoreheadgradesdecline(identifiedascommencingin2012underthecurrentmineplan).

IncadeOroCopperGoldProject,Chile

PanAusthasmadeabindingoffertoCorporacinNacionaldelCobredeChile(Codelco)forPanAusttoacquireamajorityinterestintheChileanregisteredcompanyIncadeOroS.A.,which,followingarestructureofCodelcosubsidiarieswillowntheIncadeOroCopperGoldProject.TheProjectincludesanestimatedtotalcombinedIndicatedandInferredsulphideMineralResourceof259milliontonnesgrading0.46%copperand0.13g/tgold(Table5).TheacquisitionwillfitwellwithPanAustscorporatestrategyforgrowthandrepresentsanexcellentopportunitytoestablishabusinessinoneoftheworldsmostattractivecopperminingregions.

TheBoardofdirectorsofCodelcohaspassedaresolutionrecommendingtheacceptanceofPanAustsoffer.UnderChileanlaw,theofferissubjecttoapprovalbyPresidentialDecreeanditisanticipatedthatthePresidentoftheRepublicofChilewillconsidertheproposalduringthenextfewmonths.

TheIncadeOroprefeasibilitystudy,scheduledforcompletioninmid2010,hasconfirmedthepotentialforaconventionalopenpitminingandflotationoperationtosupportannualproductionofapproximately50,000tofcopperand40,000ozofgoldinconcentrateatacompetitivecashcostandoveraplustenyearminelife.Inaddition,theprefeasibilitystudyisevaluatingthepotentialofoxidemineralisationthatoverlaysthesulphideresourcetosupportaheapleachSXEWoperation,andwillalsoevaluatethepotentialtoproduceamolybdenumconcentrate.

Oncetheprefeasibilitystudyresultshavebeenreviewed,thefocusforIncadeOroS.A.willbethecompletionofafeasibilitystudyontheProjectoverthefollowing12to18months.

TheIncadeOrodepositisatypicaloxidetransitionalprimaryzonedAndeanstyleporphyrycoppergolddepositandislocatednearthetownofIncadeOro(goldoftheIncas,populationofapproximately500),intheprovinceofChaaral,RegionIIIofAtacama,Chile(Figure1).

PanAustsinterestinIncadeOroS.A.willbeheldthrougha90%interestinPanAustMinera,theremaining10%beingheldbyanindependentAustralianprivatecompany,TheMineraGroup.PanAustMinerawillholda66%interestinIncadeOroS.A.(givingPanAusta59.4%beneficialinterest)andCodelcowillretaina34%interest.

PanAustMinerawillinitiallyinvestUS$45millionofequityintoIncadeOroS.A.toacquire66%ofthecompanyofwhich:US$23millionwillbepaidtoacquirestudydataandthemajorityinterest;US$10millionwillbeallocatedtofundafeasibilitystudyontheIncadeOroProject;andUS$12millionwillberetainedascashtosupportgrowthinitiativesandinitialdevelopmentcostsfortheProject.IncadeOroS.A.willevaluateothercopperminingassetsinChileforacquisition,includingcopperassetscurrentlyownedbyCodelco.

Figure1:LocationofIncadeOro

PuthepCopperProject,Thailand5

Thefeasibilitystudycontinuedduringthequarter.Preliminaryleachtestworkhasconfirmedcoppervatleachingasthepreferredprocessingoptionfornearsurfacechalcocitemineralisation.PanAustistargetingaprojectwithanannualproductionrateof25,000tto30,000tofcathodecopperoveraneightyearminelife.Itisanticipatedthatfurthercopperleachtestworkwillbeundertakenin2010.

Exploration

RegionalexplorationactivitiesduringthequartercomprisedreconnaissanceworkandsoilsamplingatvariousprospectswithintheCompanys2,636km2ContractAreainLaos.TheContractAreaisunderexploredandishighlyprospectiveforcopperandgold,offeringexcellentpotentialforthediscoveryofsignificantnewresourcesasthebasisfororganicgrowth.

Drillingprogramscontinuedduringthequarterathighprioritytargets:thePhonsavanCopperProjectinthenorthernpartoftheContractArea,andtheBanPhonxaiprospectlocatedapproximately25kmnorthwestofPhuKham.

ThePhonsavanCopperProjectcomprisesthreediscretedepositsKTL,TharkhekandBohrThonglocatedwithin10kmofeachotherandclosetoexistingroadandpowerinfrastructure.Atwoyearresourcedevelopmentprogram,whichwillbecompletedinseveralphases,isunderwaywithaninitialfocusontheKTLandTharkhekdeposits.AtTharkhek,a4,850mdrillprogramcommencedduringthequarteraimedatextendingthelimitofknownmineralisationandthetestingofsoilgeochemistryandgeophysicaltargetsinareaswithwherehasbeennopreviousdrilling.DrillingattheKTLdepositcontinuedthroughthequarteraspartofa6,750mdrillprogram.AttheendofMarch,bothdrillprogramswerenearingcompletionandplanningforfollowupdrillprogramswasunderway.SignificantintersectionsduringthequarterarepresentedinTable6andincluded:

KTL

DrillholeKDD040intersected42mat0.69%copper,0.19g/tgold,3.5g/tsilverand0.006%molybdenumfromadepthof160m

DrillholeKDD044intersected50mat0.95%copper,0.38g/tgoldand2.8g/tsilverfromadepthof146m

Tharkhek

DrillholeTKD020intersected20mat1.30%copper,0.03g/tgoldand11.3g/tsilverfromadepthof284m

TheBanPhonxaiCopperGoldProspectisdefinedbythelargest(6kmx3km)soilanomalydiscoveredtodateintheContractArea.Theanomalyrepresentsanexcellenttargetforporphyrystylemineralisation.Scoutdrillingcontinuedduringthequarterwitha3,400mprogramfocusedinthenorthernareaofthecopperinsoilanomalyandtoprovidebaselinegeologicalinterpretationdata.

5PanAustwillearna51%interestinPuthepuponcompletingafeasibilitystudyonthePUT1depositandhasfurtheroptionstoacquireatotal60%to70%interest

Sustainability

Safety

TherewerenoLostTimeInjuries(LTI)recordedduringthequarter.TheLTIfrequencyrate(LTIspermillionmanhours)ona12monthrollingaveragebasisat31March2010was0.3.

Environment

Therewerenoreportableenvironmentalincidentsduringthequarter.

Training

AnimportantmilestonewasachievedduringthequarterwiththefirstgroupofPhuKhamtradetraineessuccessfullypassingtheLaoMinistryofEducationpracticalandtheoryexaminations,arecognisedqualificationinLaos,12monthsafterenteringtheworkforce.

Economicandsocialcontribution

PanAustiscommittedtothehigheststandardsofcorporatecitizenshipthroughcontributingtothefuturesocioeconomicsuccessofLaos,andinparticular,ongoingdevelopmentinthecommunitieswithinwhichtheCompanyoperates.

AttheAnnualSustainabilityAwardsofthe2010AsiaMiningCongressinSingapore,PanAustreceivedtheawardforBestCommunityDevelopmentInitiative.TheawardwasinrecognitionofPanAustsLivelihoodImprovementProgramwhichisdesignedtoassistthesustainabledevelopmentofthecommunitiesaroundthePhuKhamOperationinLaosthroughtrainingoflocalvillagersandmicrofinancingvillagebasedagriculturalbusinessesthatnowsupply40%ofthefoodrequirementsofthePhuKhamcampandprovidecashincomeanddietdiversificationforlocalvillages.

ThedirecteconomicvaluegeneratedthroughPanAustsoperationsincludesemployeewagesandbenefits,paymentstolocalsuppliers,taxes,royaltiesandcommunityinvestmentsthroughaCommunityDevelopmentFund.

LocalCommunityProjects,Laos

InthevicinityofPhuKham,PanAustcontinuestoadvanceanumberofcommunitydevelopmentprojectsmainlyintheneighbouringvillagesofNamMoandNamGnone.Education,health,infrastructureandbusinessdevelopmentarethemainfocus,withprojectsprogressedinfullconsultationwithlocalcommunityandgovernment.

Activitiesforthequarterincluded:

ConstructionofacommunitycentreattheNamGnonevillagewascompleted PreparationswerefinalisedfortheconstructionofacommunitycentreattheNamMo

village

Sealingoftheaccessroadthroughallvillagesalongtheconcentratehaulageroutecommenced

Corporate

At31March2010,theCompanyhadcashofUS$91.5million,projectdebtofUS$53.7millionandamobileequipmentleasefacilityofUS$36.9million.

Copperpriceexposure

PanAustscurrenthedgingpolicyseekstomaximisetheCompanysexposuretotheprevailingcopperpricebutprotecttheCompanyagainstneartermsharpfallsinthecopperpriceandrevenuelossoverthequotationperiodonprovisionallypricedshipments.

TheCompanymanagesthecopperprovisionalpriceriskonsalescontracts(overthequotationalperiod)withbankhedgingfacilitiesandneartermproduction(upto12months)withamixtureoffixedpriceagreementsestablishedlastyearwithcoppertradingcompaniesandputoptions.

Atthedateofthisreport,PanAusthas8,000tofcopperunderfixedpriceagreements,ofwhich,6,000tatanaveragepriceofUS$6,156/t(US$2.79/lb)isdueforsettlementinthecurrentquarter,withtheremaining2,000tatUS$7,438(US$3.37)duetobeexecutedinJuly.

PanAustalsohasputoptions(asprotectionagainstpotentialdownsidecopperpriceriskonfutureproduction)over2,500tofcopperexecutableeachmonthtoMarch2011atanaveragestrikeofUS$5,543/t(US$2.51/lb).

Goldpricehedging

PanAusthasalimitedamountofgoldhedginginplace.GoldpricehedgingwasarequirementunderthetermsofthePhuKhamprojectdebtfacility.Thefollowinggoldhedgingpositionsremainedat31March2010:

Goldforwardsalestotalling48,319ozbetween2010and2013atescalatingpricesbetweenUS$771/ozandUS$858/oz

Goldputoptionspurchasedonadeferredpremiumbasiscovering65,675ozofgoldatastrikepriceofUS$700/ozandexecutablebetween2010and2013.

Committedgoldhedgesrepresentlessthan25%oftheanticipatedPhuKhamgoldproductionoverthatperiod.

IssuedCapital

TheissuedcapitaloftheCompanyat31March2010comprised:

2,933,053,479 Ordinaryfullypaidshares 36,580,000 Unlistedoptions 19,414,305 Unlistedsharerights

Proposed2010reportingcalendar:

22Jul2010 Junequarter2010report 27Aug2010 Junehalf2010financialresults 27Oct2010 Septemberquarter2010report

Datesareprovisionalandremainsubjecttoconfirmation.

Appendix5Breporting

InApril2010,ASXconfirmedthatthePanAustindustryclassificationforreportingpurposeshadbeenamendedtoMining/OilProductionCompanywitheffectfrom1April2010.TheclassificationbetterreflectsPanAustsstatusasasignificantcopperandgoldproducer.

Accordingly,PanAustwillnolongerberequiredtoprovideanAppendix5B(Miningexplorationentityquarterlyreport)asrequiredunderASXlistingrule5.3.TheaccompanyingAppendix5Bforthequarterended31March2010willbethefinaloneprovidedtothemarket.

PanAustwillcontinuetoreportitsactivitiesquarterlyandfinancialresultsonahalfyearandfullyearbasis.

Directors

GarryHounsell NonexecutiveChairman

GaryStafford ManagingDirector

GeoffBillard NonexecutiveDirector

AndrewDaley NonexecutiveDirector

GeoffHandley NonexecutiveDirector

NerolieWithnall NonexecutiveDirector

ZezhongLi NonexecutiveDirector

Registeredandprincipaloffice

POBox3468,SouthBrisbaneQld4101

Telephone: (07)31172000

Facsimile: (07)38464899

SecuritiesExchangeListing

AustralianSecuritiesExchangeCode:PNA

PanAustisaconstituentoftheS&P/ASX200Index.

Forfurtherinformationcontact:

AllanRyan InvestorRelationsManager

NatalieWhale CommunicationsManager

PanAustLimited

POBox3468

SouthBrisbaneQld4101

Telephone: (07)31172000

Facsimile: (07)38464899

Email: [email protected]

Website: www.panaust.com.au

Shareholderenquiriesto:

ComputershareRegistryServices

POBox523,BrisbaneQld4001

Telephone: 1300552270

Facsimile: (07)32299860

Website: www.computershare.com.au

CompetentPersonStatement

ThedatainthisreportthatrelatestoexplorationresultsfortheBanHouayxaiandPhonsavanProjectsinLaos,andtheMineralResourcesfortheIncadeOroCopperGoldProjectinChilearebasedoninformationreviewedbyMrDanielBrostwhoisaMemberoftheAustralasianInstituteofMiningandMetallurgy.

MrBrostisafulltimeemployeeofPanAustLimited.MrBrosthassufficientexperiencerelevanttothestyleofmineralisationandtypeofdepositunderconsiderationandtotheactivitywhichheisundertakingtoqualifyasaCompetentPersonasdefinedinthe2004EditionoftheAustralasianCodeforReportingofExplorationResults,MineralResourcesandOreReserves.MrBrostconsentstotheinclusioninthereportoftheexplorationresultsandMineralResourcesintheformandcontextinwhichtheyappear.

ForwardLookingStatements

ThisannouncementincludescertainForwardLookingStatements.Allstatements,otherthanstatementsofhistoricalfact,includedherein,includingwithoutlimitation,statementsregardingproductionandcostperformances,potentialmineralisation,mineralresources,explorationresultsandfutureexpansionplansanddevelopmentobjectivesofPanAustLimitedareforwardlookingstatementsthatinvolvevariousrisksanduncertainties.Therecanbenoassurancethatsuchstatementswillprovetobeaccurateandactualresultsandfutureeventscoulddiffermateriallyfromthoseanticipatedinsuchstatements.

Attachment

Table2:Productionstatistics

PhuKhamOperations Units3months

to31Mar2010

Totalmaterialmined t 6,664,205

Coppergoldoremined t 2,506,714

Oremilled t 2,985,348

Copperheadgrade % 0.79

Goldheadgrade g/t 0.34

Silverheadgrade g/t 4.00

Concentrateproduced dmt 64,931

Copperinconcentrate t 16,005

Goldinconcentrate oz 13,704

Silverinconcentrate oz 118,119

Goldindor(HeapLeach) oz 2,394

Copperrecovery % 68.0

Table3:Productioncosts(US$/lbcopper)

PhuKhamCopperGoldOperation3months

to31Mar2010

Miningcost 0.36

Processingcost 0.48

General&Administration 0.20

Totalonsiteoperatingcosts 1.04

Transporthandlingandmarketing 0.25

Concentratetreatmentandrefining 0.10

Totaloffsiteoperatingcosts 0.35

Deductpreciousmetalcredits 0.59

Totaldirectoperatingcosts(C1cashcost) 0.80

Royalty 0.18

Depreciationandamortisation 0.38

Totalcosts 1.36

Averagecopperpricerealisedforsalesduringtheperiod(afterhedging)

3.23

Notes:CostsarebasedonpayablecopperinconcentrateproducedMayincludeminorcomputationaldiscrepanciesduetorounding

Table4:BanHouayxaiGoldSilverProject;drillintersectionsfromresourceextensionandinfillprogram

HoleNo.

Depthofhole

Orientation

From

(m)

Interval

(m)

GoldGrade

(g/t)

SilverGrade

(g/t) Comments

HDD142204.7m

60to180

0.0

20.0

80.0

149.0

161.0

193.0

3.0

51.0

8.0

4.0

5.0

3.0

0.4

0.6

0.3

0.3

0.7

0.3

0.3

3.2

11.4

4.3

3.1

1.0

HDD143206.6m

60to180

0.0

68.0

116.0

125.0

189.0

52.0

17.0

4.0

3.0

4.0

2.0

0.8

0.4

0.4

6.1

3.9

9.4

6.3

3.5

9.5

HDD147197.3m

60to180

165.0

175.0

5.0

22.3

19.5

0.6

16.4

6.7

Holeendedinmineralisation

HDD148219.3m

60to180

0.0

14.0

50.0

72.0

85.0

112.0

144.0

8.0

31.0

5.0

8.0

3.0

16.0

4.0

0.6

0.4

0.3

0.7

0.4

0.4

0.4

1.3

2.8

9.1

8.1

5.1

2.2

1.7

HDD150224.5m

60to180

38.0

89.0

7.0

12.0

0.6

1.2

0.3

26.6

HDD156354.4m

60to180

15.0

33.0

42.0

56.0

98.0

167.0

254.0

13.0

3.0

8.0

16.0

51.0

9.0

10.0

0.3

0.4

0.5

0.9

1.7

0.5

0.3

1.1

1.1

2.1

8.8

53.5

5.4

21.0

HDD158302.2m

60to180

11.0

56.0

93.0

141.0

238.0

21.0

16.0

5.0

31.0

7.0

0.4

0.4

0.8

2.7

0.8

0.8

2.4

13.9

72.1

2.0

Intersectiongradesaredownholelengthweightedcalculationsusinga0.3g/tgoldcutoffandamaximumsubgradeintervalof4m.

Table5:IncadeOrosulphideMineralResources(0.3%coppercutoff)

Category MtCopper(%)

Gold(g/t)

Molybdenum(%)

Supergene Inferred 10.2 1.33 0.13 0.005

Primary Indicated 180.5 0.45 0.15 0.012

Inferred 68.3 0.35 0.09 0.010

Subtotal 248.8 0.42 0.13 0.011

Combined TOTAL 259.0 0.46 0.13 0.011

Table6:PhonsavanCopperProject;significantdrillintersections

HoleNo.

Depthofhole

Orientation

From

(m)

Interval

(m)

CopperGrade

(%)

GoldGrade

(g/t)

SilverGrade

(g/t)

MolybdenumGrade

(%)

KTLdeposit:

KDD003235.9m

60to360

75.6

104.0

124.0

16.4

12.0

6.0

0.54

0.34

0.30

0.33

0.06

0.10

8.3

1.7

1.7

KDD004236.0m

60to360

44.0 12.0 0.36 0.14 2.9

KDD030203.2m

70to360

144.0 14.0 0.40 0.13 2.6

KDD040261.7m

55to360

80.0

96.0

146.0

8.0

6.0

50.0

0.30

0.43

0.95

0.27

0.39

0.38

1.9

3.4

2.8

KDD042397.2m

65to360

52.0

160.0

40.0

42.0

0.38

0.69

0.19

0.19

2.9

3.5

0.009

0.006

KDD044215.7m

60to360

46.0

86.0

16.0

10.0

0.44

0.41

0.2

0.4

2.1

2.8

0.010

0.012

Tharkhekdeposit:

TKD020436.4m

60to180

284.0 20.0 1.30 0.03 11.3

Intersectiongradesaredownholelengthweightedcalculationsusinga0.3%coppercutoffandamaximumsubgradeintervalof4m.

Appendix 5B Mining exploration entity quarterly report

Appendix 5B Page 1

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98.

Name of entity

PANAUST LIMITED

ACN or ARBN Quarter ended (current quarter)

011 065 160 MARCH 2010

Consolidated statement of cash flows

Cash flows related to operating activities

Current quarter US$000

Year to date (3 months) US$000

1.1 Receipts from product sales1 and related debtors

122,630 122,630

1.2 Payments for (a) exploration and evaluation (b) development/tailings storage (c) production2 (d) administration3

(4,387) (17,738) (57,391) (11,709)

(4,387) (17,738) (57,391) (11,709)

1.3 Dividends received - - 1.4 Interest and other items of a similar nature received 63 63 1.5 Interest and other costs of finance paid4 (7,617) (7,617) 1.6 Income taxes paid - - 1.7 Other deposits - -

Net Operating Cash Flows

23,851

23,851

Cash flows related to investing activities

1.8 Payment for purchases of: (a)prospects (b)equity investments (c) other fixed assets

- (186)

(4,104)

- (186)

(4,104) 1.9 Proceeds from sale of: (a)prospects

(b)equity investments (c)other fixed assets

- - -

- - -

1.10 Loans to other entities - - 1.11 Loans repaid by other entities - - 1.12 Other (provide details if material) (5,000) (5,000)-

Net investing cash flows

(9,290)

(9,290)

1 Paymetal basis 2 Includes treatment and refining charges 3 Includes royalties 4 Includes put option premium payments


Appendix 5B Page 2

1.13 Total operating and investing cash flows (carried forward)

14,560

14,560

Cash flows related to financing activities

1.14 Proceeds from issues of shares, options, etc. - - 1.15 Proceeds from sale of forfeited shares - - 1.16 Proceeds from borrowings - - 1.17 Repayment of borrowings (11,235) (11,235) 1.18 Dividends paid - - 1.19 Other - - Net financing cash flows (11,235) (11,235)

Net increase (decrease) in cash held

3,325

3,325

1.20 Cash at beginning of quarter/year to date 88,203 88,203 1.21 Exchange rate adjustments to item 1.20 - -

1.22 Cash at end of quarter 91,528 91,528

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

Current quarter US$'000

1.23 Aggregate amount of payments to the parties included in item 1.2 772

1.24 Aggregate amount of loans to the parties included in item 1.10 -

1.25

Explanation necessary for an understanding of the transactions

Amounts represented in 1.12 relates to the initial deposit of US$5m in relation to the binding offer to Corporacin Nacional del Cobre de Chile (Codelco) for PanAust to acquire a majority interest in the Chilean registered company Inca de Oro S.A.

Non-cash financing and investing activities

2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

Amounts recorded under section 1.17 for the quarter ended represent the Project Facility repayments (US$9.3 million) and the quarterly finance lease repayment (US$1.930 million).

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting

entity has an interest


Appendix 5B Page 3

Financing facilities available Add notes as necessary for an understanding of the position.

Amount available US$000

Amount used US$000

3.1 (a) Loan facilities (b) Equipment Lease Facilities

$53,695 $36,918

$53,695 $36,918

3.2 Credit standby arrangements

- -

Estimated cash outflows for next quarter

US$000 4.1 Exploration and evaluation

4,000

4.2 Development

27,000

Total 31,000

Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.

Current quarter US$000

Previous quarter US$000

5.1 Cash on hand and at bank 61,491 48,203

5.2 Deposits at call 30,037 40,000

5.3 Bank overdraft - -

5.4 Other (provide details) - -

Total: cash at end of quarter (item 1.22) 91,528 88,203

Changes in interests in mining tenements

Tenement reference

Nature of interest (note (2))

Interest at beginning of quarter

Interest at end of quarter

6.1 Interests in mining tenements relinquished, reduced or lapsed

NIL

6.2 Interests in mining tenements acquired or increased


Appendix 5B Page 4

Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates.

Total number Number quoted Issue price per security (see note

3) (cents)

Amount paid up per security (see note 3)

(cents) 7.1 Preference

+securities (description)

7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions

7.3 +Ordinary securities

2,933,053,479

2,933,053,479

NA

NA

7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs

533,240

533,240

Nil

Nil

7.5 +Convertible debt securities (description)

7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted

7.7 Options/Share Rights (description and conversion factor)

55,994,305

0

Exercise price See Attached

Expiry date See Attached

7.8 Issued during quarter

1,814,895

0

See Attached

See Attached

7.9 Exercised during quarter

533,240

0

As per 7.4

As per 7.4

7.10 Expired during

quarter

1,447,337 0

7.11 Debentures (totals only)

7.12 Unsecured notes (totals only)


Appendix 5B Page 5

Compliance statement 1 This statement has been prepared under accounting policies which comply with

accounting standards as defined in the Corporations Law or other standards acceptable to ASX (see note 4).

2 This statement does give a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: 22 April 2010

(Company Secretary) Print name: .....Paul Scarr.................................................... Notes 1 The quarterly report provides a basis for informing the market how the entitys activities

have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2 The Nature of interest (items 6.1 and 6.2) includes options in respect of interests in

mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

3 Issued and quoted securities The issue price and amount paid up is not required in

items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries

and AASB 1026: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International

Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

== == == == ==


Appendix 5B Page 6

PANAUST LIMITED QUARTERLY REPORT

FOR THE QUARTER ENDING 31 MARCH 2010

ISSUED OPTIONS

AT 31 MARCH 2010

NUMBER ISSUED

EXERCISE PRICE CENTS

EXPIRY DATE

With Outstanding Performance Conditions

750,000 81.00 07/10/2012 1,980,000 88.00 31/12/2012 4,400,000 88.00 31/12/2012 4,200,000 30.50 31/12/2013

17,200,000 42.12 31/12/2013

With No Outstanding Performance Conditions 8,050,000 38.00 29/02/2012

36,580,000

ISSUED EMPLOYEE SHARE RIGHTS

AT 31 MARCH 2010

NUMBER ISSUED

EXERCISE PRICE CENTS

EXPIRY DATE

With Performance Conditions

1,625,000 NIL 31/03/2017 1,845,000 NIL 31/12/2017

29,000 NIL 30/06/2018 202,703 NIL 30/09/2018

10,180,000 NIL 31/12/2018 218,447 NIL 01/09/2019

With No Performance Conditions

5,314,155 NIL Various 2012 -2019

19,414,305

pna_qtr_apr2010

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