External Commitments

1. Legislative Requirements and Commitments

All of the Company’s activities in the Lao PDR are conducted in accordance with our Mineral Exploration and Production Agreement (MEPA) which is subject to the laws of Laos. The MEPA outlines the Company’s obligations across a range of issues including, but not restricted to:

  • Taxes and other financial obligations of the Company
  • Employment and training of Lao nationals
  • Regional co-operation in regard to the provision of additional infrastructure
  • Environmental management and protection
  • Local business development
  • Settlement of disputes

The Company's policies and procedures are consistent with the obligations of the MEPA, as well with those of the external bodies of which we are members.

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2. Minerals Council of Australia and Enduring Value

PanAust is an Associate Member of the Minerals Council of Australia. A condition of membership is being a signatory to the "Enduring Value" framework. These development principles were outlined by the International Council on Mining and Metals (ICMM) in May 2003. The Enduring Value principles aim to manage social, health, safety, environmental and economic issues in order to deliver sustainable shareholder value, and to improve performance of the industry and the public reporting framework with regard to managing these issues.

Commitment to Enduring Value brings with it a number of obligations. In summary, these are:

  • to progressively implement the International Council on Mining and Metals (ICMM) Principles and Elements
  • to commit to public reporting of site level performance, on a minimum annual basis, with reporting metrics self-selected from the Global Reporting Initiative (GRI); and
  • to assess the systems used to manage key operational risks (using either internal or external assessment as appropriate).

For further detail on the Minerals Council of Australia, please refer to:
www.minerals.org.au/.

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3. International Cyanide Management Code

The Company is a signatory to the International Cyanide Management Code. The Principles and Standards of Practice of the International Cyanide Management Code are listed below:

  • Production: Encourage responsible cyanide manufacturing by purchasing from manufacturers who operate in a safe and environmentally protective manner.
  • Transportation: Protect communities and the environment during cyanide transport.
  • Handling and Storage: Protect workers and the environment during cyanide handling and storage.
  • Operations: Manage cyanide process solutions and waste streams to protect human health and the environment.
  • Decommissioning: Protect communities and the environment from cyanide through development and implementation of decommissioning plans for cyanide facilities.
  • Worker Safety: Protect workers' health and safety from exposure to cyanide.
  • Emergency Response: Protect communities and the environment through the development of emergency response strategies and capabilities.
  • Training: Train workers and emergency response personnel to manage cyanide in a safe and environmentally protective manner.
  • Dialogue: Engage in public consultation and disclosure.

For further detail on the International Cyanide Management Code, please refer to: www.cyanidecode.org.

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4. Equator Principles

The Equator Principles are a voluntary set of guidelines which provide the finance industry with benchmarks for determining, assessing and managing social and environmental risk in project financing. Equator Principles Financial Institutions (EPFIs) commit to provide loans only for those projects whose sponsors can demonstrate their ability and willingness to comply with processes that ensure projects are developed in a socially responsible manner and according to sound environmental management practices.

Two of our major lenders, ANZ and Stand Chartered, are EPFIs, having formally adopted the Equator Principles in December 2006 and June 2006 respectively.

The Environmental Impact Assessment process in Laos is outlined in the Decree for the Regulation on Environmental Assessment (2002). For both the Phu Bia Gold Mine and the Phu Kham Copper-Gold Project, an Environmental and Social impact Assessment (ESIA) was completed by an external consultant on behalf of the Company which addressed the criteria outlined by the Equator Principles. The ESIAs for both projects have been endorsed by the Company and the Water Resources and Environment Agency (WREA) of the Prime Minister's Office.

The Company undertakes independent annual audits to assess conformance against the Equator Principles and International Finance Corporation Performance Standards.

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For further detail on the Equator Principles, please refer to:
http://www.equator-principles.com/documents/Equator_Principles.pdf


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