URL might be an option.LAOS-focused PanAust is on the hunt for...

URL might be an option.

LAOS-focused PanAust is on the hunt for potential acquisition opportunities and hasn’t ruled out raising further capital after its recent $A143 million capital raising and proposed $216 million injection from a Chinese investor.

Addressing delegates on the third day of Diggers & Dealers, PanAust managing director Gary Stafford said there were a number of potential acquisitions that it may look at.

“We think that there are some opportunities out there,” he said.

“A lot of junior companies are going to struggle to get finance. We see a number of junior companies who are sitting on projects where they can’t get their finance, can’t get their debt and I think looking at things now is the smart thing to do.”

He also said PanAust may consider raising further funds to finance an acquisition.

“If we see something out there which makes sense to buy or develop, then we won’t be frightened to raise equity to fund it,” Stafford said.

PanAust recently paid down its $US80 million subordinated debt facility following a successful $A143 million capital raising.

In the meantime, major Chinese investment group Guangdong Rising Assets Management Company plans to invest $216 million to acquire a 19.9% stake in PanAust, subject to Chinese regulatory approvals.

Stafford said by bringing in a major Chinese investment group like Guangdong, PanAust would not only have access to their support, but may also invest alongside the company in projects of interest.

“They also may be able to access cheap debt for us in China,” he said. “The debt market has substantially changed over the last couple of years. Project financing going forward is going to be increasingly difficult to get.”

PanAust recently announced its Phu Kham copper-gold mine produced a record 5000 tonnes of copper for July after a number of recovery improvement initiatives were introduced.

The average copper recovery rate was around 62% compared with 56% in the June quarter.

In the June quarter, Phu Kham produced 47,282t of concentrate containing 10,760t of copper, 10,523 ounces of gold and 86,136oz of silver.

Production for 2009 is expected to be around 60,000t of copper, 50,000-60,000oz of gold and 300,000-400,000oz of silver at a cash cost of US85c per pound after precious metal credits.

Shares in PanAust have dipped 1c to 40.5c in afternoon trade.

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