Mining giant PanAust lowers earnings target
Mining giant PanAust lowers earnings target
Australian mining company PanAust, which owns two gold and copper mines in Laos, has lowered its earning target for this year due to lower commodity export prices.
PanAust is the parent company of Phu Bia, which operates the Phu Kham and Ban Houayxai mines in central Vientiane province. PanAust said the company expected its copper and gold production to be high in a statement earlier this week.
But lower commodities prices will affect earnings for the 2013 full year, the company was quoted as saying in Australian online news site news.com.au on Wednesday.
“The positive effect on earnings of the excellent operating performances will be offset by softer realised commodity prices in the final quarter resulting in 2013 full year earnings being at the lower end of the guidance range,” PanAust said in a statement.
The company's earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to be between US$260 million and US$300 million (AU$285.64 million to AU$329.58 million) for the full year of 2013, according to the statements reported by news.com.au. The company's shares dropped in value by 2.7 percent, or 4.5 AU cents.
The company said it was still on track to reach its copper production target of 62,000 to 65,000 tonnes and its gold target of 160,000 to 175,000 ounces.
But the company said costs for the year were expected to be above the upper end of the guidance range at Phu Kham and towards the upper end at Ban Houayxai, largely due to lower prices for by-products produced at both mines.
In 2014, the company expects copper production at Phu Kham to reach 65,000 to 70,000 tonnes and precious metals to hit 160,000 to 165,000 ounces.
Earnings in the 2014 full year are expected to fall to between US$200 million and US$225 million, assuming an average copper price of between US$3.20 and US$3.40 a pound and a gold price of $US1,300 an ounce.
PanAust said free cash flow was expected to more than double to approximately US$100 million (AU$109.86 million) and would fund exploration in Laos as well as acquisition and planned study costs for the Frieda River Project in Papua New Guinea.
Share prices for PanAust slumped after the company announced it was lowering its earnings estimate.
The lower earnings will also impact the tax revenue collected by the Lao government.
vientiane times
