PERTH (miningweekly.com) - Precious metals miner PanAust on Tuesday reported a 22% reserve increase at its Ban Houayxai operation, in Laos, which has extended the mine line and near-term gold and silver production rates.

Silver ounces at Ban Houayxai increased by 25% while gold resources increased by 26%, with total reserves standing at 41-million tons, grading 0.81 g/t gold and 7.9 g/t silver.

PanAust said in its 2013 ore reserve estimates that this estimate also contained 1.4-million tons of low-grade stockpiled ore, which would be stockpiled for processing either during periods of excess process plant capacity, or at the end of the mine life.

The miner has now started detailed short- to medium-term scheduling based on the new ore reserve estimate, with the objective of optimising cash flow, and thereby gold production, through 2013 and 2014, to offset the potential cash flow impact of the less than 70 000 t of yearly copper production expected at the Phu Kham operation, during the same period.

Meanwhile, at the Phu Kham operations, PanAust reported that the total ore reserve had remained largely unchanged, after depletion of mining in 2012.

The 2013 ore reserve supported a mine life of over ten years, assuming an ore processing rate of 17-million tons a year, following the completion of the upgrade project during 2012.

Following the commissioning of the increased recovery project, scheduled for the June quarter of this year, copper and gold recovery rates were each expected to increase by some 6%, lifting the life-of-mine average recovery for copper from 77% to 83% and for gold from 47% to 53%.

Assuming that the ore processing rate remained constant at 17-million tons a year, the increased recovery project would imply a yearly metal production of 70 000 t of copper and more than 65 000 oz of gold at Phu Kham.

This increase in production would reduce cash costs by between 5% and 7%, PanAust reported.

During 2013 and 2014, PanAust would implement changes to the Phu Kham mine plan to address short-term stability issues associated with one of the interim pit slopes, which would necessitate the processing of some mineralisation below the ore reserve economic cutoff grade, resulting in copper concentrate production ranging between 65 000 t and 70 000 t for between 12 to 18 months from mid-2013.