PANAUST LIMITED ABN 17 011 065 160

Level 1, 15 James Street, Fortitude Valley, Brisbane | QLD | 4006 | Australia

PO Box 2297, Fortitude Valley Business Centre | QLD | 4006

T: +61 7 3117 2000 | F: +61 7 3846 4899 | E: [email protected]

ASX ANNOUNCEMENT

7 April 2015

Strong March quarter production and cost performances

PanAust is pleased to announce strong March quarter 2015 production and cost performances at its Phu Kham and Ban Houayxai Operation in Laos.
The Phu Kham Copper-Gold Operation produced a record 21,146t of copper at a C1i cost of US$1.05/lb after precious metal credits that include record gold production of 29,745oz (Table 1); the all-in sustaining costii (AISC) was US$1.50/lb. The Ban Houayxai Gold-Silver Operation produced 24,530oz of gold at a C1 cost of US$674/oz after quarterly silver credits of 261,268oz
(Table 2); the AISC was US$862/oz. These results compare favourably with 2015 full year guidance issued in January 2015. Further details will be included in the March quarter 2015 production report which is scheduled for release on 22 April 2015.
PanAust Managing Director, Dr Fred Hess, said "Both operations performed strongly with increased production and reduced costs in the March 2015 quarter. The organisational changes announced in January 2015 in conjunction with the wave of cost reduction initiatives flowing from the business efficiency review have had a significant and immediate beneficial impact."
While the initial assessment of savings identified US$50 million in budgeted operating and capital cost improvements per annum across the Group, unit cost outcomes in the March quarter 2015 suggest that further benefits have been achieved, most notably in mining, shared services and sustaining capital.
C1 costs at Phu Kham benefited from the record quarterly gold production. Further cost benefits were achieved as a result of the strong US dollar driving lower prices for key consumables including diesel fuel and the weaker Australian dollar, lowering both the expatriate payroll charge and allocated head office costs.
"It's most encouraging to see such clear evidence that unit costs are improving as a result of the planned initiatives under the business efficiency review and also from the stronger US dollar we have recently experienced. These excellent results reflect the Company's strategy to maximise returns from its producing assets while advancing the Frieda River Project through its feasibility study and the regulatory approvals phase." Dr Hess said.

Table 1:

Table 2:

Longer term production set to rise at Phu Kham

Looking forward, PanAust expects a near 25 per cent increase in annual copper production (from a
2014 base) with no further development capital expenditure.
Annual copper production is expected to continue to rise steadily over the next several years as the average copper head grade increases and improving ore quality lead to further gains in metallurgical recovery rates. The annual production of copper in concentrate is expected to peak in 2018 and 2019 at approximately 90,000t. Gold in concentrate is expected to generally range between 70,000oz and 75,000oz per annum from 2016 onwards. No further development capital is required to underpin this increasing production.
For further information contact: Investors:
Joe Walsh Mr Allan Ryan
General Manager Corporate Development Investor Relations Manager
PanAust Limited
Tel: +61 7 3117 2000
Email: [email protected]
Website: www.panaust.com.au

1 Based on invoiced pricing for gold and silver.

2 Based on invoiced pricing for silver.

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Media:

Garry Nickson or Matthew Gerber
MAGNUS
Tel: +61 2 8999 1010

Forward-Looking Statements

This announcement includes certain "Forward-Looking Statements". All statements, other than statements of historical fact, included herein, including without limitation, statements regarding financial, production and cost performances, potential mineralisation, exploration results and future expansion plans and development objectives of PanAust Limited are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.

Receipt of Notice of Intention to make a Takeover Offer

On 30 March 2015, PanAust announced that it had received a letter from Guangdong Rising Assets Management ("GRAM") announcing its intention to make an unconditional, off-market takeover offer to acquire all of the shares (not currently held by GRAM) of PanAust at a cash price of $1.71 per share ("Takeover Offer").
GRAM released its Bidders Statement on the Australian Securities Exchange (ASX) on Monday
30 March 2015 advising that it expected to dispatch the document to PanAust shareholders on or about 13 April 2015.

PanAust notes the Takeover Offer is not yet open for acceptances. The PanAust Board will consider the Takeover Offer and will provide advice to shareholders in due course. In the meantime, the Board recommends shareholders take no actionin relation to the Takeover Offer.

i Brook Hunt convention for the reporting of direct costs comprising: mine site, product transportation and freight, treatment and refining charges and marketing costs. Based on payable metal content after by-product credits.

ii All-in sustaining costs reported are: the C1 cost plus royalties; corporate support and shared services costs; sustaining capital;

lease principal and interest charges; and deferred mining and inventory adjustments capitalised.

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