PanAust : Frieda River transaction unconditional

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: info@panaust.com.au

11 August 2014

PanAust is pleased to announce that the condition precedent has been satisfied under a share sale and purchase agreement for PanAust to acquire Glencore's interest in the Frieda River Copper‐ Gold Project in Papua New Guinea (PNG). The transaction is scheduled to close on 25 August
2014.
Following completion of the transaction, PanAust will have an 80% interest in the Project and
Highlands Pacific Limited will hold 20%. The Government of PNG has a right to acquire up to a
30% interest in the Project which, if exercised to its full extent, would reduce PanAust's interest to
55%.
Under the PanAust Glencore Agreement, PanAust will pay the initial consideration of
US$25 million on transaction completion and reimburse Glencore for its expenditures on the Project since 1 November 2013, the date of the Agreement. A further payment of US$50 million1 is scheduled to be paid to Glencore on 31 December 2015. In addition, on successful completion of a mining operation at Frieda River, Glencore will receive a 2% net smelter return royalty (on PanAust's interest in the Project) to a total aggregate amount of US$50 million1.
The Frieda River Project is located on the border of the Sandaun (formerly West Sepik) and East Sepik provinces in PNG (Figure 1) and is one of the largest undeveloped copper and gold deposits in the world. The Project site is located in the foothills of the Schattenberg Range at elevations ranging from 300mRL to 800mRL and is approximately 18 kilometres from the Frieda River.
The Frieda River acquisition is consistent with PanAust's strategy to ensure that it has access to sufficient mineral resources to secure the Company's sustainable growth beyond the life of its Phu Kham Operation in Laos. The likely timing for implementation of PanAust's development concept for Frieda River coincides with rising production levels scheduled for Phu Kham.

1 subject to consumer price index ("CPI") escalation between the date of signing (1 Nov 2013) and on a quarterly basis each year prior to payment

For further information contact:

Investors:

Mr Gary Stafford Mr Allan Ryan
Managing Director Investor Relations Manager
PanAust Limited
Tel: +61 7 3117 2000
Email: info@panaust.com.au
Website: www.panaust.com.au

Media:

Matthew Gerber or Garry Nickson
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.

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