Refinancing Boosts PanAust Shares

PanAust (PNA), an ASX listed cooper and gold mining company, has refinanced its debt worth $US 80 million with Goldman Sachs JBWere which is due next month. Even though the refinancing extension was expensive, the move increased the share price by 9 cents to 17.5 cents per share. PNA has issued the lender options worth of $75 million and would be forced to issue another $75 million if it fails to repay the debt within 31st of July.

In a statement Gary Stafford, Managing director of PanAust said that this will give some space to look at other refinancing offers from investors. "This rollover has bought us more time to consider proposals and will put us in a position to refinance before July". Many organisations including metals trade and resources funds are coming forward to provide replacement debt for the company. PNA’s Phu Kham project which is the second largest copper mine in Laos is predicted to make 65000 tonnes and 80000 ounces of gold this year.

Gavin Wendt, an analyst with Fat Prophets said, “What is worse, to be on the verge of administration or to take the financing opportunities available? I'm sure if [OZ] had their time again, they would have done things differently. I would certainly hope so”. Stafford said “talks had started last year but investor interest evaporated between September and November as stock markets and copper prices slumped”, “At the end of this period though, investors suddenly returned and we had quite a number of parties we entered into discussions with”.

In the recent past OZ Minerals (OZL), a rival company of PNA faced with a similar problem but it was not able to refinance its $1 billion debt, though the situation was not as serious as PanAust. Stating this Stafford said the company had been recently "tarred with the same brush". Many analysts have appreciated the company for the way they have handled the situation.