Pan Australian Resources Ltd. (PNA.AU) said Friday it has received government clearance to resume gold processing at its Phu Bia mine in Laos ending a two-month stoppage.
The plant was shut down in late June when cyanide spilled into local waterways killing fish just weeks after construction was completed.
The incident occurred after the heaviest rainfall on record at the site, hampering the new plant’s heap leach gold recovery process.
The resumption follows a commitment by Pan Australian to undertake further environmental survey work and an agreement for community development assistance.
Under a US$300,000 program running to mid-2006, the company has completed an aquatic survey of the downstream river and will fund a community health management plan, local businesses development, a new water supply to a nearby village and construction of a new primary school and marketplace at another village.
In September, Managing Director Gary Stafford told Dow Jones Newswires the stoppage means Phu Bia will have lost two of its first three months of operations, slowing ramp-up to April next year from the previous December target and reducing fiscal 2006 output to 50,000 ounces from 68,000 ounces, he said.
However, he said rising gold prices are expected to take much of the sting out of the two-month setback and that he is hopeful of making up some of the lost ground in terms of cash flow estimates.
“We’re all ready to go with 60,000 tons sitting on stockpile waiting to be irrigated (and) the gold price is a lot higher now than June-July so any time losses will be offset to a significant extent by price increases,” he said.