PanAust to acquire a majority interest in the Frieda River Copper-Gold Project

PanAust has entered into a share sale and purchase agreement with Glencore Xstrata plc to acquire its shares in Xstrata Frieda River Ltd (XFRL)

Initial cash consideration of US$75M in two tranches: US$25 million upon transaction close; and US$50 million on 31 December 2015

On successful completion of a project development a 2% NSR royalty becomes payable that will not exceed US$50 million

Completion of the acquisition is consistent with PanAust’s strategy to ensure access to sufficient mineral resources to secure the Company’s growth beyond the life of the 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

The PanAust Glencore Agreement

Highlands supports PanAust’s acquisition of a majority interest in the Frieda River Project

PanAust will fund all Project and feasibility study costs to maintain up to an application for a Special Mining Lease

PanAust and Highlands have agreed that on completion of the acquisition, project ownership will be PanAust 80%, Highlands 20%; the PNG Government has an option to acquire, on a sunk cost basis, up to 30% of Frieda River

The first 20% of any PNG Government acquisition will be from the PanAust equity share; above 20% the split will be equal between PanAust and Highlands. Should the PNG Government acquire 30% then PanAust’s interest will be 55% and Highland’s interest will be 15%

PanAust will take a 7.5% shareholding in Highlands through a placement of 64,432,990 fully paid ordinary shares and an option to acquire a further 64,432,990 shares

The PanAust Highlands Agreement

Project location

Source: Glencore Xstrata

To date, four copper-gold deposits and several prospects have been identified along a approximately 10 km trend

Substantial Measured and Indicated Mineral Resources estimated; project focused on the large Horse-Ivaal-Tukai (HIT) copper-gold deposit

Project terrain similar to that at PanAust’s Phu Kham operation in Laos;

Located at modest elevation of 400m to 800m above msl

Feasibility study work by XFRL focused on a large scale development

PanAust funded feasibility study will evaluate a mid-sized development that utilises existing logistical routes and minimises infrastructure requirements, resulting in a competitive capital intensity and manageable risk profile

Feasibility study based on the HIT copper-gold deposit is expected to be complete by mid-2015

About Frieda River

Terrain is similar to Laos

N

Main camp

Drill camp

HIT Deposit

Substantial Mineral Resources*

Deposit CategoryTonnes

(Mt)

Copper grade

(%)

Gold grade(g/t)

Horse-Ivaal-Tukai(0.2% copper cut-off) Measured 780 0.51 0.28

Indicated 410 0.44 0.20

Measured and Indicated 1,190 0.49 0.25

Inferred 900 0.4 0.2

Nena (epithermal)(0.5% copper cut-off)

Measured - - -

Indicated 33 2.81 0.65

Measured and Indicated 33 2.81 0.65

Inferred 12 1.84 0.45

• See Competent Persons Statements at the end of this presentation

• Mineral Resource estimates for the Ekwai and Koki deposits are not presented and can be viewed in the Highlands Pacific Ltd 2012 annual report available on its website

Mineral Resource locations

HIT deposit: M I & I Resources of 2,090Mt @ 0.45% Cu, 0.22 g/t Au

Koki copper-gold deposit

Ekwai copper-gold deposit

Nena deposit: M I & I Resources of 45Mt @ 2.55% Cu, 0.60 g/t Au

Mineralisation open at depth

Mineralisation open at depth

Frieda River is a world class copper resource

0 20,000 40,000 60,000 80,000 100,000

Cerro ColoradoEl AbraKamoto

LubambeAntapaccayEncuentro

Tenke FungurumeSar Cheshmeh

KansanshiEsperanza Sur

SaloboCuajone

La CaridadKonkola

Radomiro TomicFrieda River (Global)

ToquepalaMorenci

Quebrada BlancaCerro VerdeAntaminaCananea

BuenavistaLos Bronces

Los PelambresOyu TolgoiGrasberg

ChuquicamataCollahuasiEscondidaEl Teniente

Andina (+117 Mt)Olympic Dam (+126 M t)

Developed copper assetsCu Eq in Mineral Resource (MI&I) (kt)

0 10,000 20,000 30,000 40,000

Inca de OroTia Maria

CoroccohuaycoAntucoya

ConstanciaMichiquillayCaseronesCanariaco

Santo DomingoGalenoHaquiraSentinelAktogayEl Morro

Schaft CreekMinistro Mina Hales

West WallRelincho

Cerro CasaleAynak

Agua RicaLas Bambas

Frieda River (HIT)Sierra GordaToromochoQuellavecoWafi GolpuEl Pachon

Frieda River (Global)Tampakan

UdokanKamoa

Cobre PanamaResolutionReko Diq

Pebble (+55M t Cu eq)

Pre‐development copper assetsCu Eq in Mineral Resource (MI&I) (kt)

Source: Mineral Resource estimates from MEG; Copper equivalents estimated by PanAust using the following commodity prices – copper US$3.30/lb, gold US$1,300/oz, silver US$22/oz

Average annual production of 100,000t copper and 160,000oz gold in concentrate at a C1 cash cost of approximately US$1.25/lb after gold credits*

Open pit mine with low strip ratio of less than 0.6:1

Mill feed of 430M tonnes grading 0.54% copper and 0.3g/t gold for an 18-year mine life; represents 20% of the HIT Mineral Resource

Metallurgical recoveries of 80% to 85% for copper and 70% to 75% for gold

Development capital estimate**: US$1.5Bn to US$1.8Bn; competitive capital intensity of approx. US$13,000/t of annual copper equivalent production

PanAust scoping study results

*Gold credit estimated at US$1,200/oz **2013 dollars

Quality data-set from extensive feasibility study work will be utilised in the PanAust funded feasibility study

C. 40MW comminution circuit with conventional flotation plant allowing throughput rates of between 20Mtpa and 26Mtpa depending on feed hardness

Development concepts use Phu Kham experience: 39MW comminutioncircuit); conventional flotation; compact footprint; integrated TSF-waste management

Development concept

Conceptual pit comparison

LegendPit 11- R.F. 50% M+IPit 36- R.F.100% M+IPit 36- R.F.100% M+I+I

PanAust scoping study pit shell

XFRL feasibility study pit shell

Activity Xstrata Feasibility Study PanAust Scoping Study  ChangePower generation

200 MW hydro dam on Frieda River

Base case: 75 MW Heavy Fuel Oil generating sets at Iniok River 

Port

Lower initial cap‐ex, higher op‐ex trade off

Power transmission

17 km of 220 kV 130 km of 220 kV Extra 113 km

Mine waste Primary crush/convey/barge to combined TSF

Phu Kham model for waste management

Eliminates crush / convey with shorter trucking

Key facilities Separate mine & concentrator site Combined sites Reduced footprint 

Concentrator 2 modules to grinding then 4 R/S modules, tailings thickening

Phu Kham model (18 Mtpa), no pebble crushing, pyrite flotation module, no tailings thickening

Single line plant, eliminate tailings thickening

Plant Tailings Sub‐aqueous disposal (combined with mine waste)

Split sub‐aerial(75%) / sub‐aqueous (25%) disposal

Split disposal facilities

Concentrate transport

130 km Pipeline to Kubkain River Port, then 550 km barge to Marine 

port

130 km truck in containers to Kubkain River Port, then 550 km barge  (bulk) to Marine port

Eliminates pipeline and relocates concentrate dewater back to site

Comparative project concepts

PanAust is a successful developer of mine operations in remote regions and places a high priority on its sustainability performance

Ability to leverage off the Company’s experience of working in Laos

Due diligence indicates that landowners in the Project region are generally supportive of the Frieda River Project; approximately 3,000 people in 12 villages within 50km of the Project

Consistent with its internationally recognised sustainability performance, PanAust aims to maintain a high standard of community and government engagement

Sustainability

The acquisition of a majority interest in the Frieda River Copper-Gold Project provides entry into a world class copper-gold deposit that provides the basis for long-term sustainable growth of the business

Ability to leverage off Laos experience and expertise

The acquisition is supported by Frieda River joint venture partner Highlands Pacific Limited

Post the transaction, the project ownership will be PanAust 80%, Highlands 20%; the PNG Government has an option to acquire up to a 30% interest in the Project

Large resource together with exploration potential could support staged development growth

Summary

This presentation has been prepared by PanAust Limited (the 'Company') for the benefit of brokers, analysts and investors and not as specific advice to any particular party or person.

The information is based on publicly available information, internally developed data and other sources. No independent verification of those sources has been undertaken and where any opinion is expressed in this document it is based on the assumptions and limitations mentioned herein and is an expression of present opinion only. No warranties or representations can be made as to the origin, validity, accuracy, completeness, currency or reliability of the information. The Company disclaims and excludes all liability (to the extent permitted by law), for losses, claims, damages, demands, costs and expenses of whatever nature arising in any way out of or in connection with the information, its accuracy, completeness or by reason of reliance by any person on any of it.

Where the Company expresses or implies an expectation or belief as to the success of future exploration and the economic viability of future projects, such expectation or belief is based on management’s current predictions, assumptions and projections. However, such forecasts are subject to risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed, projected or implied by such forecasts. Such risks include, but are not limited to, exploration success, gold and copper price volatility, changes to the current mineral resource estimates, changes to assumptions for capital and operating costs as well as political and operational risks and governmental regulation outcomes. For more detail of risks and other factors, refer to the Company's other Australian Securities Exchange announcements and filings. The Company does not have any obligation to advise any person if it becomes aware of any inaccuracy in, or omission from, any forecast or to update such forecast.

Forward-Looking StatementsThis presentation includes certain “Forward-Looking Statements”. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding forecast cash operating costs and financial performance, potentialmineralisation, resources, 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. Canadian investors are advised that this presentation has not been prepared in accordance with Canadian securities law relating to forward looking statements and that the forward looking statements included herein may not be accompanied by the disclosure and explanations that would be required of a Canadian issuer under Ontario Securities Laws.

Important notices

Competent Person Statements

The data in this report that relate to exploration results and the Horse-Ivaal-Tukai Mineral Resources are based on information reviewed by Mr Daniel Brost who is a Member and Chartered Professional (Geology) of the Australasian Institute of Mining and Metallurgy (MAusIMM CP).

Mr Brost is a full time employee of PanAust Limited. Mr Brost has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Mr Brost consents to the inclusion in the report of the Horse-Ivaal-Tukai Mineral Resources in the form and context in which they appear.

The data in this report that relate to the Nena Mineral Resources are based on information reviewed by Mr Paul Gow who is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM).

Mr Gow is a full time employee of Glencore Xstrata plc. Mr Gow has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.

Mr Gow consents to the inclusion in the report of the Nena Mineral Resources in the form and context in which they appear.

Important notices (cont.)