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 | W: www.panaust.com.au

18 October 2019

PanAust quarterly activities report for the three months to 30 September 2019

Highlights

• Safety performance recorded

- Total recordable injury frequency rate (TRIFR) – 0.37

- Lost time injury frequency rate (LTIFR) – 0.15

- The Ban Houayxai Gold-Silver Operation continues to be recordable incident free, holding a TRIFR of 0.00 for more than 12 months

• Production and cost performance highlights

- The Phu Kham Copper-Gold Operation produced 16,150 tonnes (t) of copper in concentrate at a C1i cost of US$1.17/lb after precious metal credits from 15,526 ounces (oz) of gold and 83,381oz silver. An all-in sustaining costii (AISC) of US$1.70/lb copper was realised.

- The Ban Houayxai Gold-Silver Operation recorded production of 21,984oz of gold and 152,584oz of silver at a C1 cost of US$884/oz after silver credits. An AISC of US$1,105/oz gold was achieved.

- A Geotechnical Stewardship Program was established during the quarter to support the safe, stable and productive operation of the Phu Kham and Ban Houayxai open-pits and waste dumps.

- In September, the Ban Houayxai Operation’s process plant was awarded Chevron Corporation’s 2019 ‘Best in Class’ for lubrication practices following an on-site audit. With a score of 95 per cent, the distinction recognises the Operation’s practices were reducing maintenance costs, minimising component failure, maximising lubricant potential and increasing equipment reliability.

• Growth

- Near mine mineral resource development phase one drilling commenced at Ban Houayxai in August and continued at Phu Kham during the quarter.

- Initial meetings regarding the independent peer review of the Sepik Development Project’s Environmental Impact Statement (EIS) and dam integrity were held with Government of Papua New Guinea (PNG) regulatory agencies and consultants during the quarter.

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- General Manager Geology, Matthew Farmer was appointed in July. Reporting directly to the Executive Chairman, Mr Farmer is based in the Vientiane office and will oversee the mineral resources development program to support the life of mine extension work.

• Sustainability and external affairs

- The Company sponsored a delegation from the Government of Laos to meet with mine closure regulator experts and participate in a study tour in Perth, Western Australia.

- During the quarter, PanAust Executive Chairman visited key ministers of the Government of Laos including, Deputy Prime Minister, Minister of Energy and Mines, and the Minister of Planning and Investment.

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Executive Chairman’s overview

PanAust recorded favourable production and cost performances against budget during the September quarter.

During the quarter, the PanAust Executive Management team agreed on strategic objectives that will ensure the Company’s continued growth and prosperity.

PanAust Executive Chairman, Dr Qun Yang explains.

“Our new strategic direction is anchored around three key pillars. First, we will work to sustain the business in the short term through the extension of mine life at our Phu Kham Copper-Gold and Ban Houayxai Gold-Silver Operations. Next, we will continue to actively seek out opportunities to acquire high quality operating and near-term development assets in Southeast Asia (preferably Laos) and progress exploration activities in Laos and Myanmar. Finally, we will look to grow the business in the long term through the advancement of the Sepik Development Project,” said Dr Yang.

In August, Dr Yang met with key Government of Laos officials to reiterate the Company’s commitment to the country, and to continuing to operate in Laos.

“During my meetings with Government representatives, I was proud to reaffirm our shareholder, GRAM is committed to operating PanAust’s existing assets in Laos for a long as possible. Both we and our shareholder are also committed to working with the Government of Laos to acquire, develop and operate new assets in country.

“Importantly, I confirmed that we remain equally dedicated to leaving a lasting positive legacy in Laos, built on the economic and social development sustainable mining brings,” added Dr Yang.

In August, PanAust was acknowledged for its work to improve operational efficiencies at the 2019 Australia and New Zealand SAP Best Run Business Awards where it was named a finalist of three in the data and analytics category. The Company’s internally development ‘Digital Operational Reporting Dashboard’ was recognised as a solution that had benchmark potential for the mining industry.

Dr Yang spoke of SAP’s acknowledgement.

“This recognition highlights how PanAust is committed to identifying opportunities that will enhance operational efficiencies to sustainably increase production and cost outcomes. The initiative – designed and developed in house by a dedicated cross-functional team – has transformed the way site teams manage and report operational data. It is truly an initiative we are proud to stand behind,” concluded Dr Yang.

PanAust’s focus for the December quarter will be to deliver outstanding full-year production and cost outcomes, and on defining clear pathways to achieving its strategic objectives.

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Operations overview Phu Kham Copper-Gold Operation, Laos (PanAust 90 per cent)

Production of copper in concentrate at the Phu Kham Copper-Gold Operation totalled 16,150t during the September quarter. A C1 cost of US$1.17/lb copper was realised.

Table 1

Further details of the production and cost performances are contained in Tables 3 and 4 of this report

Phu Kham production performance

More than 11.8 million tonnes (Mt) of ex-pit material was mined during the quarter which included 4.1Mt of copper-gold ore.

Copper, gold and silver head grades averaged 0.44 per cent, 0.22 grams/t (g/t) and 1.49g/t respectively. An overall copper recovery rate of 79 per cent was achieved.

Quarterly concentrate sales totalled 15,126t of copper, 14,743oz of gold and 71,979oz of silver.

Ban Houayxai Gold-Silver Operation, Laos (PanAust 90 per cent)

The Ban Houayxai Gold-Silver Operation poured 21,984oz of gold and 152,584oz of silver in doré during the September quarter. A C1 cost of US$884/oz gold was realised.

Table 2 Ban Houayxai Gold-Silver Operation Production summary (100% equity basis)

Units Three months to

30 Sep 2019 Nine months to

30 Sep 2019

Gold poured oz 21,984 81,496

Silver poured oz 152,584 591,104

C1 cost after precious metal credits US$/oz 884 675

AISC US$/oz 1,105 845 Further details of the production and cost performances are contained in Tables 3 and 5 of this report

Ban Houayxai production performance

The Operation mined 4.2Mt of ex-pit material during the quarter. Mined material included 1.3Mt of gold-silver ore. Over 1.2Mt of ore was processed.

Phu Kham Copper-Gold Operation Production summary (100% equity basis)

Units Three months to

30 Sep 2019 Nine months to

30 Sep 2019

Copper in concentrate t 16,150 53,832

Gold in concentrate oz 15,526 51,385

Silver in concentrate oz 83,381 294,334

C1 cost after precious metal credits US$/lb Cu 1.17 1.16

AISC US$/lb Cu 1.70 1.66

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Gold and silver head grades averaged 0.74g/t and 7.03g/t respectively. A gold recovery percentage of over 76 was achieved.

Gold and silver in doré sold during the quarter totalled 20,659oz and 133,867oz respectively.

Pre-development and exploration projects

Frieda River Project (PanAust 100 per cent)

PanAust has established the Sepik Development Project website (www.friedariver.com) as a platform to share Project information with all stakeholders. The website hosts fly through videos, factsheets and other Project-specific information.

The Sepik Development Project EIS was made publicly available on the Project website ahead of the Conservation and Environment Protection Authority (CEPA) statutory awareness campaign, scheduled to commence in October. The Company remains committed to working with the Government of PNG to fulfil its statutory requirements and obtain the necessary permits to progress the Project.

CEPA confirmed independent consultants Hydrobiology will complete the independent peer review of the EIS. Snowy Mountains Engineering Corporation (SMEC) will undertake a dam integrity assessment. A kick-off meeting was held in the Brisbane office, and a site visit undertaken with CEPA, the Mineral Resources Authority (MRA), Company representatives and the independent consultants during the quarter.

The Company continued to support its host communities in PNG with ongoing medical and education support.

Exploration Licences, Myanmar (PanAust 90 per cent)

In Myanmar, PanAust holds a 90 per cent interest in Wuntho Resources Company Limited (WRCL) with joint venture partner Myanmar Energy Resources Group International Company Limited (MERG), a Myanmar-based company which holds the remaining 10 per cent of WRCL.

WRCL holds tenements covering roughly 775 square-kilometres in the Sagaing region of Myanmar and has applied for additional Exploration Licences in the same Region.

In July, the Group Risk Manager and Risk Superintendent completed a deep dive safety audit of road transport safety in Myanmar. The audit focused on the safety, security, efficiency and effectiveness of road transport arrangements in country.

KTL Copper-Gold Project, Laos (PanAust 90 per cent)

Prefeasibility study work progressed during the September quarter with the completion of the Project implementation schedule, preliminary economic evaluations, and scoping and gap analysis for the environmental and social impact assessment. Further work is continuing to assess some of the opportunities identified in the study.

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Inca de Oro Copper-Gold Project, Chile (PanAust 66 per cent)

PanAust completed a feasibility study on the Inca de Oro Copper-Gold Project in 2014. No material site activities are currently being undertaken or are planned.

Sustainability

PanAust is committed to ensuring its presence positively impacts the host communities and countries in which it operates. The Company’s way of doing business, the PanAust Way, is a modern approach to mining that measures success not merely by production volumes but equally by the sustainability of its interaction with its people, hosts communities, governments and the environment.

Supporting local communities in Laos

In July, the Company facilitated the delivery of medical supplies to community healthcare centres in the Nam Ngone, Nam Mo and Nasaysavang villages in Xaysomboun province, Laos.

Sourced from private donations in Queensland, Australia, the supplies will assist with the delivery of primary healthcare to those living in communities close to the Company’s Lao Operations.

The donation highlights PanAust’s philosophy to collaborate with local authorities to improve the socio-economic livelihoods of those living close to where the Company operates. Improved access to healthcare continues to be one of the Company’s key focus areas.

Above: The donation of medical supplies to the Nasaysavang Community Medical Centre, 12 July 2019 (left to right) Nurse, Ms Nicktana Senthavong; Head of the Medical Centre, Mr Vixiane Inthavong; Head of the Nasaysavang Village, Mr Khamphanh Phommathath; PBM Community Officer, Mr Som Oh Duangthongchit and PBM Paramedic, Mr Southa Luangsamath

Company-sponsored mine closure study tour

In September, Company representatives and a delegation from the Government of Laos met with the Western Australian Department of Mining Industry Regulation and Safety (DMIRS). DMIRS provided insight

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on mine closure, approval frameworks and management, planning and permitting, mine closure challenges and acceptable closure solutions.

The delegation and Company representatives later toured the Mine Lake District in the town of Collie – a typical mining town that showcases examples of historic and new mine rehabilitation techniques.

While the Company is committed to extending the life of mine at its Operations in Laos, closure remains an important strategic issue for PanAust. The meeting with DMIRS and subsequent study tour afforded the Company the opportunity to demonstrate its vision for closure and further enhance the Government’s understanding of mine operations, mine planning and integrated closure activities.

Above: Company representatives and a delegation from the Government of Laos with DMIRS representative, Dan Endacott, September 2019

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PanAust Group production and sales statistics for the September quarter 2019

Table 3

Phu Kham Copper-Gold Operation Units Three months to 30 Sep 2019

Nine months to 30 Sep 2019

Total material mined t 11,888,891 34,931,152 Copper-gold ore mined t 4,070,679 13,381,343 Process plant available time % 94.6 95.4 Process plant operating time % 94.3 95.0 Ore milled t 4,635,875 14,681,636 Copper head grade % 0.44 0.46 Gold head grade g/t 0.22 0.22 Silver head grade g/t 1.49 1.59 Concentrate produced dmt 69,055 228,881 Copper in concentrate t 16,150 53,832 Gold in concentrate oz 15,526 51,385 Silver in concentrate oz 83,381 294,334 Copper recovery % 79.39 80.27 Concentrate sales dmt 67,184 230,114 Copper in concentrate sold t 15,126 51,784 Gold in concentrate sold oz 14,743 49,943 Silver in concentrate sold oz 71,979 268,473

Ban Houayxai Gold-Silver Operation Units Three months to 30 Sep 2019

Nine months to 30 Sep 2019

Total material mined t 4,191,874 11,021,820 Gold-silver ore mined t 1,293,961 3,653,171 Process plant available time % 96.3 96.8 Process plant operating time % 92.8 94.8 Ore milled t 1,235,050 3,752,299 Gold head grade g/t 0.74 0.84 Silver head grade g/t 7.03 8.95 Gold in doré oz 21,984 81,496 Silver in doré oz 152,584 591,104 Gold recovery % 76.32 79.75 Gold in doré sold oz 20,659 79,172 Silver in doré sold oz 133,867 566,430

Cumulative data may incorporate post reporting period adjustments to prior periods

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Table 4 Phu Kham Copper-gold Operation production costs US$/lb copper

Three months to 30 Sep 2019

Nine months to 30 Sep 2019

Mining cost 0.87 0.76 Deferred mining and inventory adjustments capitalised -0.20 -0.17 Processing cost 0.65 0.64 General and administration (site support) 0.19 0.18 Total on-site operating costs 1.51 1.41 Transport handling and marketing 0.20 0.20 Concentrate treatment and refining 0.21 0.22 Total off-site operating costs 1.92 1.83 Deduct precious metal credits -0.74 -0.67 Total direct operating costs (C1 cost) 1.17 1.16 Royalty 0.17 0.18 Sustaining capital (includes TSF) 0.06 0.07 Rehabilitation and closure 0.00 0.00 Corporate support and shared services costs 0.09 0.08 Lease principal and interest charges 0.00 0.01 Deferred mining and inventory adjustment capitalised 0.20 0.17 All-in sustaining costs 1.70 1.66

Notes: costs are based on payable copper in concentrate produced; may include minor computational discrepancies due to rounding

Table 5

Ban Houayxai Gold-Silver Operation production costs US$/oz gold

Three months to 30 Sep 2019

Nine months to 30 Sep 2019

Mining cost 414 324 Deferred mining and inventory adjustments capitalised -4 5 Processing cost 446 355 General and administration (site support) 129 95 Total on-site operating costs 985 779 Total off-site operating costs (freight, refining) 8 8 Deduct silver credit -109 -112 Total direct operating costs (C1 cost) 884 675 Royalty 96 88 Sustaining capital (includes TSF) 83 53 Rehabilitation and closure 2 1 Corporate support and shared services costs 36 31 Lease principal and interest charges 1 1 Deferred mining and inventory adjustment capitalised 4 -5 All-in sustaining costs 1,105 845

Notes: costs are based on payable copper in concentrate produced; may include minor computational discrepancies due to rounding

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i Brook Hunt convention for the reporting of direct costs comprising: mine site, product transportation and freight, treatment and refining charges and marketing costs; based on payable metal content after by-product credits ii AISC reported are the C1 cost plus royalties, allocated corporate support charges, shared services costs, sustaining capital; lease principal and interest charges; and deferred mining and inventory adjustments capitalised

For further information contact: Ms Kate Horan T +61 7 3117 2089 E kate.horan@panaust.com.au