Home' Australian Resources and Investment : March 2014 Contents VOLUME 8 NUMBER 1 • Australian Resources and Investment • 79
Resource Capital Fund in Denver and we became their rst
investment in Australia. It was managed by an Australian,
James McClements, and their investment made a material
difference to the business. It took a load (in terms of funding
responsibility) off the shoulders of Bob Bryan, who was then
our Chairman and major shareholder, and it enabled us to
start breathing, to raise new capital and to start moving on to
So, I think the key thing is that if you're a junior explorer,
you might love your own story, but you've got to make sure
that the investors love your story as well.
In 2001, we struck an agreement to acquire a Lao-
registered company called Phu Bia Mining from a joint venture
between Normandy Mining and Anglo-American. We paid the
princely sum of $5.5 million: $0.5 million for 80 per cent,
and a put and call to pay another $5 million to acquire the
balancing 20 per cent once we made a decision to mine.
By that time, the investment market had moved to the
mindset of 'we're prepared to invest in a project as long as
there's some near-term cash ow'. That's why we developed
the Heap Leach Gold Operation. It was effectively pre-
stripping for the Phu Kham copper-gold operation, which
was brought into production in 2008, and it gave us some
We're now looking to grow production at Phu Kham;
we have an expanded plant there, which can produce over
100,000 tonnes of copper if we can provide the grade. We
can certainly produce at a rate of over 18 million tonnes per
annum in terms of ore processing rates, and we see that
peaking at 20 million tonnes with some adjustments to either
the primary crusher or by introducing crushed ore beyond the
Most importantly, one of the main things I want to leave
you with today is the indelible belief that we care about our
values as a company -- our people and our impacts -- and
that we are a mining company that strives to achieve the
highest standards in everything that we do, in terms of our
performance and our ethics.
Once we started the Phu Kham Heap Leach Gold Mine, we got
a good wriggle on, and we moved straight into the funding for
development of Phu Kham. The rst sales of Phu Kham copper-
gold concentrate coincided with the downturn in the global
economy in 2008. Although we were cash- ow positive, it was
a very dif cult period for us during the global nancial crisis
(GFC). We had a supportive copper trading company that we
owed money to and which was prepared to do a deal, and we
had supportive and patient suppliers. And although we had a
bank syndicate of 10 banks, a smaller group of banks including
ANZ and Sumitomo, who are still supporters today, clubbed
together and helped us through those dif cult times.
Soon after, in 2009, we recapitalised and carried on with
our feasibility study on the Ban Houayxai Gold-Silver project.
So, we didn't stop resource drilling during that period. We
really did tighten the belt, but we wanted to keep going in
relation to Ban Houayxai, as well.
In 2010, production rose to over 67,000 tonnes of copper
and 58,000 ounces of gold, and we acquired a majority
interest in the Inca de Oro Project in Chile. In 2012, we
poured our rst gold-silver bar at Ban Houayxai; and we
completed a $95-million expansion of Phu Kham, well within
budget and ahead of schedule.
In 2013, we completed the construction and ramp-up of
the Phu Kham Increased Recovery Project, which will see
recoveries increase by between ve and seven or eight per
cent, depending on the ore type. Then, on 1 November 2013,
we announced the acquisition of the Frieda River project in
Papua New Guinea.
Contribution to the Lao economy
Our contribution to the Lao economy is huge. We have a very
good operating environment; it's a very stable government.
The government owns 10 per cent of Phu Bia Mining, and we
have now invested over 1.2 billion dollars in Laos.
In 2012, we accounted for about seven per cent of gross
domestic product (GDP) and 30 per cent of exports. So, we are
almost Codelco-esque in terms of size in the economy of Laos.
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