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Annual Report 2007
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Pan Australian Resources Limited ABN 17 011 065 160

Annual Report - 31 December 2007
Contents
Directors' report
Corporate governance statement
Financial report
Directors' declaration
Shareholder information
Page
1
23
27
83
87
Pan Australian Resources Limited

Directors' report
31 December 2007
Directors' report
Your directors present their report on the consolidated entity consisting of Pan Australian Resources Limited (referred to
hereafter as the Company or PanAust) and the entities it controlled at the end of, or during, the year ended 31 December
2007 (Reporting Period).
Directors
The following persons were directors of PanAust during the whole of the financial year and up to the date of this report:
R. Bryan
G. Stafford
N.P. Withnall
A.E. Daley
G.A. Handley
(Chairman, Non-Executive Director)

(Managing Director)
(Non-Executive Director)
Information on directors
Robert Bryan BSc (Hons, Geology) FAusIMM. (Chairman, Non-Executive Director). Age 73.
Mr Bryan is a geologist who has wide experience in the mining industry. In 1984 Mr Bryan founded Pan Australian Mining
Limited and, while Managing Director from 1984 to 1989, oversaw the development of the major gold mine at Mt Leyshon.
After selling his controlling interest in Pan Australian Mining in 1989, Mr Bryan founded his own private company Leyshon
Pty Ltd. In 1994 Mr Bryan was appointed founding Chairman of the Company, which became PanAust in 1996.
Mr Bryan is an Honorary Life Member of the Queensland Resources Council, and a Director of the Sustainable Minerals
Institute within the University of Queensland. During the past three years, Mr Bryan has also served as a director of the
following listed companies:
Highlands Pacific Limited (chairman) appointed 1 July 1998*
Queensland Gas Company Limited (chairman) appointed 22 September 1999*
* denotes current directorship
Appointed Director and Chairman of the Company on 12 December 1994. Mr Bryan is also the Chairman of the
Remuneration Committee.
Interests in shares and options
Mr Bryan has a direct interest in 118,201 ordinary shares in PanAust.
Mr Bryan has an indirect interest in 24,059,514 ordinary shares in PanAust held by Leyshon Equities Pty Ltd, a company
in which Mr Bryan has a substantial shareholding. Mr Bryan also has an indirect interest in 4,178,767 ordinary shares in
PanAust held by Transmere Pty Ltd, a company in which Mr Bryan has a substantial shareholding.
Gary Stafford BSc (Hons, Mining Engineering) MAusIMM. (Managing Director). Age 47.
Mr Stafford is a mining engineer with 26 years experience in the mining industry, initially in engineering and management
positions at coal and gold mines with CRA, BHP and Barrack Mine Management before moving into company
management with Saracen Minerals Limited (a subsidiary of Crusader Limited) and then PanAust. Mr Stafford is also a
Director of Puthep Company Limited (Thailand).
Appointed Managing Director on 7 March 1996. Mr Stafford is also a member of the Finance Committee.
Mr Stafford has a direct interest in 11,080,334 ordinary shares in PanAust.
7,500,000 options over ordinary shares in PanAust.
4,400,000 options over ordinary shares in PanAust to be issued in 2008 subject to shareholder approval.
Mr Stafford has an indirect interest in 3,495,314 ordinary shares in PanAust held by The Spellbrook Superannuation Fund.
-1-

Directors' report
31 December 2007
(continued)
Information on directors (continued)
Nerolie Phyllis Withnall BA, LLB. (Non-Executive Director). Age 64.
Mrs Withnall is a former commercial lawyer with specialist skills in the areas of corporate advice, capital raisings,
securities and corporate trusts. Mrs Withnall is a former partner of the national law firm Minter Ellison and is a member of a
number of government and community organisations, including the Takeovers Panel and the Corporations and Markets
Advisory Committee. Mrs Withnall is Chairman of the Brisbane Institute and is a member of the Council of the Australian
National Maritime Museum.
During the past three years Mrs Withnall has also served as a director of the following listed companies:
Campbell Brothers Limited appointed 1994*
Alchemia Limited appointed October 2003*
QM Technologies Limited Chairman appointed September 2003*
Hedley Gaming and Leisure Property Partners Limited - appointed 2007*
Appointed Director on 21 May 1996. Mrs Withnall is also a member of the Remuneration Committee and is Chairman of
the Audit Committee.
Mrs Withnall has a direct interest in 448,507 ordinary shares in PanAust.
Andrew Edward Daley BSc (Hons, Mining Engineering) FAusIMM. (Non-Executive Director). Age 59.
Mr Daley is a Chartered Engineer, a Member of IOM3 and a director of Investor Resources Finance Pty Ltd, a company
based in Melbourne that provides financial and corporate advisory services to the resource industry. Mr Daley commenced
his career on the Zambian Copper Belt with Anglo American and subsequently worked with Rio Tinto and Conoco
Minerals, before relocating to Australia with Fluor Australia in early 1981. Since late 1983, Mr Daley has primarily worked
in the resource finance sector, initially with National Australia Bank, then Chase Manhattan and more recently, as a
Director of Barclays Capital mining team in London and Sydney.
During the past three years, Mr Daley has also served as a director of the following listed companies:
Kentor Gold Limited appointed 12 November 2004*
Gladstone Pacific Nickel Limited appointed 11 February 2005 and resigned on 7 December 2007
Dragon Mining Ltd appointed director 23 March 2005 and Chairman 20 March 2006*
Minerva Resources plc - appointed as director and Chairman 7 July 2007*
Uranex NL - appointed 30 November 2007*
Appointed Director on 3 August 2004. Mr Daley is also Chairman of the Finance Committee and is a member of the Audit
Committee.
Mr Daley has an indirect interest in 311,861 ordinary shares in PanAust held by The Motherlode Superannuation Fund.
Geoffrey Arthur Handley BSc (Hons, Geology and Chemistry) MAusIMM. (Non-Executive Director). Age 58.
Mr Handley is a geologist with over 30 years experience in the mining industry. Mr Handley worked as a geologist for BHP
Exploration Ltd., as a chemist and geologist for Placer Exploration Ltd. and as an analyst for the AMP Society. In 1981, he
joined Placer Pacific Ltd. as a Senior Geologist and was responsible for the exploration and feasibility work at the Porgera,
Granny Smith, Osborne and Big Bell mines. Most recently, Mr Handley was Executive Vice President, Strategic
Development with Placer Dome where he was responsible for global exploration, acquisitions, research and development
and strategic planning.
During the past three years, Mr Handley has also served as a director of the following companies listed on the Toronto and
AMEX Stock Exchanges:
Eldorado Gold Corp. appointed 29 August 2006 *
Endeavour Silver Corp. appointed 14 June 2006*
Mr Handley is also a director of the following Australian company, which listed on the Australian Securities Exchange on
5 April 2007:
-2-

Directors' report
31 December 2007
(continued)
Information on directors (continued)
Boart Longyear Limited appointed 21 February 2007*
Appointed Director on 29 September 2006. Mr Handley is also a member of the Audit Committee.
Mr Handleys spouse, a related party of the Company for the purposes of the Corporations Act 2001, holds 155,000
ordinary shares in PanAust.
Company secretary
David Hairsine MFTA (Senior), for the period 1 January 2007 to 23 February 2007.
Mr Hairsine was appointed the Company Secretary on 25 November 2004. After an extensive career with MIM Holdings
Limited in a number of senior commercial, project development and treasury roles, he joined the Company in September
2004 and continues in the role of Chief Financial Officer.
Resigned as Company Secretary on 23 February 2007.
Paul Martin Scarr B Comm, LLB (Hons) for the period after 23 February 2007.
Paul Scarr is a lawyer with 16 years experience. He has particular expertise in advising clients in the mining industry in
Australia, Papua New Guinea and South East Asia. Prior to joining PanAust, he worked in private practice with both Allens
Arthur Robinson and Mallesons Stephen Jacques. During that period, he advised publicly listed companies in relation to
their obligations under the Corporations Act and the ASX Listing Rules. Mr Scarr is responsible for the company secretarial
function, corporate governance issues and the legal function of the Company.
Appointed Company Secretary on 23 February 2007.
Meetings of directors
The numbers of meetings of the Companys board of directors and of each board committee held during the year ended
31 December 2007, and the numbers of meetings attended by each director were:
Meetings of committees
Full meetings
of directors
A
B
R. Bryan
G. Stafford
N.P. Withnall
A.E. Daley
G.A. Handley
4
4
3
4
4
4
4
4
4
4
Ad hoc
A
B
Finance
A
B
1
**
1
1
1
**
**
2
3
3
**
**
3
3
3
**
5
**
5
**
1
**
1
1
1
Audit
**
5
**
5
**
Remuneration
A
B
1
**
1
**
**
1
**
1
**
**
A = Number of meetings attended

B = Number of meetings held during the time the director held office or was a member of the committee during the year
** = Not a member of the relevant committee
Earnings per share
31 December
2007
Cents
Basic loss per share
Diluted loss per share
(0.92)
(0.92)
-3-
31 December
2006
Cents
(0.39)
(0.39)

Directors' report
31 December 2007
(continued)
Dividends
Since the end of the previous financial year, no amounts were paid or declared by way of dividend by the Company. The
Directors do not recommend a final dividend in respect of the year ended 31 December 2007.
Review of operations
Group Corporate Structure
PanAust is a company limited by shares that is incorporated and domiciled in Australia. The Companys operating assets
and associated commitments are in Laos and Thailand. PanAust has prepared a consolidated financial report
incorporating the entities it controlled during the financial year, which are outlined in the following illustration of the Groups
corporate structure:
Corporate Structure in Laos

PanAust owns a 90% interest (2006: 100%) in the Lao-registered company, Phu Bia Mining Limited (Phu Bia Mining),
through the Companys wholly owned subsidiary Pan Mekong Exploration Pty Limited. Phu Bia Mining has a Mineral
Exploration and Production Agreement (MEPA) with the Government of Laos. This agreement regulates exploration and
mining within a contract area of 2,636 square kilometres (the Phu Bia Contract Area) in Laos.
The Government of Laos has exercised its option to acquire a 10% interest in Phu Bia Mining, so that PanAusts interest
has reduced to 90%. The Government interest can be funded through future dividends payable to the Government as
declared by Phu Bia Mining.
-4-

Directors' report
31 December 2007
(continued)
Review of operations (continued)
Corporate Structure in Thailand
PanAust holds a shareholding right of 33.17% (2006: 20.66%) (the legal formalities to complete the increase in the
shareholding are currently being completed) in the Thai-registered company Puthep Company Limited (Puthep) through
the Companys wholly owned subsidiary PNA (Puthep) Pty Limited. Padaeng Industry Public Company Limited (Padaeng)
owns the other 66.83% (2006: 79.34%) interest in Puthep. Puthep has a concession agreement with the Government of
Thailand. The concession covers the two deposits (the PUT1 and PUT2 deposits) that comprise the Puthep Copper
Project.
PanAust can earn a 51% interest in Puthep by completing a feasibility study on the Puthep Copper Project in accordance
with the Participation Agreement between the parties dated 21 August 2000 (as amended). The Government of Thailand
has an option to acquire a 10% interest. If the Government of Thailand exercises its option to acquire a 10% interest, each
of Padaeng and the Company must transfer half of the shares required to be transferred to the Government of Thailand
provided that Padaeng's interest is not to fall below 26%. Under the Participation Agreement, the Company has further
options to acquire a 60% or 70% interest in Puthep (if the Government of Thailand exercised its option the interest would
be diluted to 55% or 64% respectively).
Under the Thailand - Australia Free Trade Agreement, the Company can acquire a 60% interest without any further
approvals from the Government of Thailand. The Company can acquire an interest above 60% with government approval.
Nature of operations and principal activities
The principal activities during the reporting period of entities within the consolidated entity were mine development, gold
mining operations, precious and base metal project evaluation and mineral exploration.
Employees
The consolidated entity had 1,261 permanent employees, including staff on fixed term contracts, as at 31 December 2007
(2006: 404 employees).
Operating Review for the Year
Laos
The major focus for the year was development of the Phu Kham Copper-Gold Operation. At the end of the year,
construction was approaching completion and commissioning had commenced. Construction of the project was running
significantly ahead of the previously scheduled mid-2008 start up of concentrate production and within the US$241 million
capital budget. Production of copper-gold-silver concentrate is scheduled to commence in March 2008 with first
concentrate sales expected during the June quarter 2008. Initially, the mine is designed to process 12 million dry metric
tonnes ore per annum to produce more than 200,000 tonnes of concentrate containing, on average, 50,000 tonnes of
copper, 50,000 ounces of gold and 400,000 ounces of silver. In September 2007, PanAust announced that it would
expand mine throughput by 33% to 16 million tonnes per annum for annual production of 65,000 tonnes of copper, 60,000
ounces of gold and 550,000 ounces of silver. The expansion is scheduled to be completed by the end of 2009.
Record annual gold production of 31,380 oz (21,557 oz for 2006) was achieved at the Phu Kham Heap Leach Gold
Operation (formerly known as Phu Bia Gold Mine). During the year, a seasonal operating strategy was successfully
implemented whereby irrigation of the heap leach pads takes place only during the dry season months (October to April).
For the balance of the year, irrigation is suspended and the pads are covered with plastic. Mining and stockpiling of gold
ore continues through the wet season.
During the year, exploration progressed at several projects. Advanced exploration was undertaken and a pre-feasibility
study commenced at the Ban Houayxai Gold-Silver Project approximately 25km west of the Phu Kham Copper-Gold
Operation, and advanced exploration at the Phonsavan Copper Project in the northern part of the Contract Area. Early
exploration was underway at several prospects including the Pha Nai Copper Prospect, Phu He Gold Prospect and the
Triple N Gold Prospect. The Phu Bia Contract Area covers 2,636 square kilometres of highly prospective ground and
remains very much under-explored. A major aerial geophysical survey is scheduled to be completed during the first half of
2008 and will provide base-line data to assist in the targeting of ongoing exploration activities.
Thailand
PanAust is undertaking a feasibility study on the Puthep Copper Project. The feasibility study will be conducted in two
phases. The first phase commenced in the March 2007 quarter and will test the overall economics and potential of the
PUT 1 deposit and allow planning for a second, more detailed phase. Drilling being undertaken as part of the feasibility
study is focused on the establishment of a primary copper-gold resource. The second phase of the feasibility study, which
is subject to a positive outcome to the first phase, is currently scheduled to be completed by the end of 2008.
-5-

Directors' report
31 December 2007
(continued)
Review of operations (continued)
Australia
During the financial year, the Company held a 16% interest in the tenements comprising the Darlot South Gold Exploration
Project located in Western Australia. Sundowner Minerals N.L., part of the Barrick Gold Group, is the operator and has
earned its majority interest under a farm-in arrangement. The Company incurred no expenditure in relation to this project
during the financial year.
Funding for growth
Syndication of funding for the development of the Phu Kham Copper-Gold Operation was completed in June 2007.
PanAust entered into loan agreements for debt facilities with a syndicate of ten banks and underwritten by ANZ Investment
Bank. The facilities included a US$160 million construction facility over a seven-year term for the completion of the
construction of the Phu Kham Copper-Gold Operation; a US$35 million lease facility for the mining fleet (split into two
tranches); and working capital, letter of credit and cost overrun facilities totalling US$47 million. The debt facilities are fully
covered by political risk insurance (PRI) provided by a range of commercial PRI providers. First drawdown of the US$160
million construction facility occurred in July 2007.
In December 2007, PanAust agreed terms for a US$80 million subordinated debt facility with Goldman Sachs JBWere.
The funds will be used to finance initial expenditure on the US$40 million capital works for the expansion of the Phu Kham
Copper-Gold Operation and the substantially increased exploration and evaluation budget of US$30 million (includes
Thailand) for 2008. The facility will also provide the Company with funding flexibility through the first year of copper-gold
production at Phu Kham.
Operating Results for the Year
The consolidated operating loss for the financial year of the consolidated entity after providing for income tax amounted to
(US$13,054,830) compared to a consolidated operating loss of (US$4,522,338) for the year ended 31 December 2006.
A summary of consolidated revenues and results by significant industry segments is set out below:
Segment revenues
31 December 31 December
2007
2006
US$'000
US$'000
Geographic Segments
Australia
Southeast Asia
2,440
22,536
24,976
11,012
12,670
23,682
Segment results
2007
2006
US$'000
US$'000
(3,636)
(9,419)
(13,055)
7,018
(11,476)
(4,458)
Non-segment unallocated revenues and results

Profit before income tax expense
(13,055)
(64)
(4,522)
Consolidated entity loss from ordinary activities before

income tax expense
(13,055)
(4,522)
The results were affected by the following significant gains and expenses:
Gains:
Foreign exchange gains
Expenses
Hedging expenses
Write off of uneconomically recoverable gold in heaps
-6-
31 December
2007
US$'000
31 December
2006
US$'000
1,057
7,379
(2,687)
-
(5,212)

Directors' report
31 December 2007
(continued)
Significant changes in the state of affairs
Significant changes in the state of affairs of the Company during the financial year were as follows:
31 December
2007
US$'000
(a)
An increase in contributed equity of $8,129,098 (from $207,855,937 to $215,985,035) as a

result of:
Issue of 11,661,649 fully paid ordinary shares @ A$0.64 each on exercise of unlisted options
6,565
Issue of 10,000,000 fully paid ordinary shares @ A$0.12 each on exercise of options granted
under the Company's Executive Option Plan
977
Issue of 3,900,000 fully paid ordinary shares @ A$0.18 each on exercise of options granted
under the Company's Executive Option Plan
587
8,129
(b)
(c)
An increase in debt as a result of project financing for Phu Kham Copper-Gold Operation
development
Expenses:
Hedging expenses
173,998
(2,687)
Matters subsequent to the end of the financial year

Since the end of the financial year, the syndicate of lenders involved in the project debt facilities for the development of the
Phu Kham Copper-Gold Operation approved the US$80 million subordinated debt facility between PanAust and Goldman
Sachs JBWere (GSJBW). The agreement was executed on 5 March 2008, with the first drawdown of funds from this
facility occurring on 10 March 2008.
In conjunction with entry into the debt facility on 5 March 2008, 5 million options were issued to GSJBW with an exercise
price of A$1.145 per option, a term of 12 months and an expiry date of 5 March 2009. The options are unlisted. The holder
of the options is only entitled to participate in future share issues if the options are first exercised.
Options and share rights have been issued to senior executives, and share rights have been issued to other employees
subsequent to the end of the financial year.
Likely developments and expected results of operations
Additional comments on expected results of certain operations of the Group are included in this annual report under the
review of operations and activities on pages 4 - 6.
Future developments and business strategies of the Company are as follows:
Commencement of copper-gold concentrate production at the Phu Kham Copper-Gold Operation in Laos;
Commencement of the expansion of production capacity at the Phu Kham Copper-Gold Operation in Laos;
New reserve estimate for Phu Kham following extensive infill and step-out drilling program;
Ongoing exploration evaluation activities in Laos and Thailand;
Completion of a pre-feasibility study on the Ban Houayxai Project in Laos; and
Ongoing identification, evaluation and possible acquisition of new projects and evaluation and development of corporate
initiatives.
-7-

Directors' report
31 December 2007
(continued)
Environmental regulation
Under the Corporations Act 2001, the Company is required to report on its performance in relation to Australian
environmental laws.
The Company owns a minority interest in the Darlot South Gold Exploration Project in Western Australia. The Project is
subject to the environmental laws of Western Australia and the Commonwealth of Australia. Sundowner Minerals N.L., part
of the Barrick Gold Group, is the operator of the Project. Under the farm-in arrangements, the operator is required to
comply with all relevant environmental laws and regulations. The Company is not aware of any breach of any
environmental laws by the operator and has fully complied with its obligations as a minority holder of tenements.
The Companys policies with respect to compliance with environmental laws in all countries in which it operates will be
more fully discussed in the Sustainability Report to be released in the second quarter 2008 (first released in the second
quarter 2007).
Insurance of officers
During the financial year, PanAust paid a premium of US$52,346 (2006: US$39,742) to insure the officers of the Company
and its controlled entities.
The liabilities insured include legal costs that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of entities in the Group, and any other payments arising from
liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from
conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information
to gain advantage for themselves or someone else or to cause detriment to the Company. It is not possible to apportion
the premium between amounts relating to the insurance against legal costs and those relating to other liabilities.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of
the Corporations Act 2001.
Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor's expertise and experience with the Company are important.
Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers) for audit and non-audit services provided
during the year are set out below.
The Board of Directors has considered the position and, in accordance with advice received from the Audit Committee, is
satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor,
as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the
following reasons:
all non-audit services have been reviewed by the Audit Committee to ensure they did not impact the impartiality
and objectivity of the auditor; and

none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
-8-

Directors' report
31 December 2007
(continued)
Non-audit services (continued)
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
Consolidated
2007
2006
$
$
1. Audit services
PricewaterhouseCoopers Australian firm:
Audit and review of financial reports and other audit work under the Corporations Act
2001
Related practices of PricewaterhouseCoopers Australian firm:
PricewaterhouseCoopers Laos firm
Total remuneration for audit services
2. Other assurance services
Due diligence services
Controls assurance services
AIFRS accounting services
Other services
Total remuneration for other assurance services
Taxation services
Tax compliance services
Related practices of PricewaterhouseCoopers Australian firm:
PricewaterhouseCoopers Laos firm
Tax advice
Total remuneration for taxation services
-9-
174,598
86,187
90,541
265,139
49,000
135,187
5,327
14,833
20,160
81,506
18,606
100,112
7,704
16,400
16,400
33,598
41,302

Directors' report
31 December 2007
(continued)
Remuneration report
The remuneration report is set out under the following main headings:
A
B
C
D
E
Principles used to determine the nature and amount of remuneration

Details of remuneration
Service agreements
Share-based compensation
Additional information
The information provided under headings A-D includes remuneration disclosures that are required under Accounting
Standard AASB 124 Related Party Disclosures. These disclosures have been transferred from the financial report and
have been audited. The disclosures in Section E are additional disclosures required by the Corporations Act 2001 and the
Corporations Regulations 2001 not otherwise dealt with in sections A-D and which have not been audited.
A Principles used to determine the nature and amount of remuneration (audited)
This report outlines the remuneration agreements in place for directors and executives of PanAust.
Remuneration philosophy
The performance of the Company depends upon the quality of its directors and executives. To prosper, the Company must
attract, motivate and retain highly skilled directors and executives.
To this end, the Company embodies the following principles in its remuneration framework:
Provide competitive rewards to attract high calibre executives;
Link executive rewards to shareholder value;
Significant portion of executive remuneration is at risk", dependent upon meeting pre-determined performance
benchmarks; and
Establish appropriate, demanding performance hurdles in relation to variable executive remuneration.
Remuneration Committee
The Remuneration Committee of the Board of Directors of the Company comprises Mr R. Bryan (Chairman) and Mrs N.
Withnall, both independent directors. It is responsible for determining and reviewing compensation arrangements for the
Chairman, the Directors, the Managing Director and the senior management team.
The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of directors and
executives on a periodic basis by reference to relevant employment market conditions. The overall objective is to ensure
maximum stakeholder benefit from the retention of a high quality Board and executive team.
Remuneration structure
In accordance with "best practice" corporate governance, the structure of non-executive director and senior manager
remuneration is separate and distinct.
Non-executive director remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain
directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be
determined from time to time by a general meeting. An amount not exceeding the amount determined is then divided
between the directors as agreed by the directors. The latest determination was at the Annual General Meeting held on 25
May 2007 when shareholders approved an aggregate remuneration cap of A$500,000 per year.
The amount of aggregate remuneration sought to be approved by shareholders, and the manner in which it is apportioned
amongst directors, is reviewed annually. The Board considers the fees paid to non-executive directors of comparable
companies when undertaking the annual review process. Each director receives a fee for being a director of the Company.
Membership of a board committee entitles directors to an additional fee. The fee for membership by a non-executive
director of a board committee was A$7,500 and the fee for chairing a committee was A$15,000.
In April 2007, the Company discontinued a scheme under which non-executive directors of the Company were able to
acquire shares in the Company in lieu of fees under the Director Share Incentive Plan. No shares had been issued under
the scheme since December 2003.
The remuneration of non-executive directors for the year ending 31 December 2007 is detailed in the table on page 14.
-10-

Directors' report
31 December 2007
(continued)
Remuneration report (continued)
A Principles used to determine the nature and amount of remuneration (audited) (continued)
Executive director and senior executive remuneration
Objective
The Company aims to reward executives with a level and mix of remuneration commensurate with their position and
responsibilities within the Company.
Structure
In determining the level and make-up of executive remuneration, the Remuneration Committee researches market levels
of remuneration for comparable executive roles from which the Committee makes its recommendations to the Board.
Remuneration consists of the following key elements:
Fixed Remuneration;
Short Term Incentive (STI); and
Long Term Incentive (LTI).
The proportion of Fixed Remuneration, STI and LTI is established for each senior executive by the Remuneration
Committee. Remuneration for the most highly remunerated senior executives is detailed in the table on page 14.
Fixed Remuneration
Objective
The level of Fixed Remuneration is set so as to provide a base level of remuneration which is both appropriate to the
position and competitive in the market.
Fixed Remuneration is reviewed annually by the Remuneration Committee. The process consists of a review of relevant
comparative remuneration in the market and internal and, where appropriate, external advice on policies and practices.
Structure
Senior executives (or key management personnel) are given the opportunity to receive their Fixed Remuneration as either
base salary or base salary and superannuation.
Short Term Incentives
Objective
The objective of awarding STI is to link the achievement of the Companys strategic targets with the remuneration received
by the executives charged with meeting those targets. The total potential remuneration available is set at a level so as to
provide sufficient incentive to the senior executive to achieve the strategic targets, and such that the cost to the Company
is reasonable in the circumstances.
Structure
Actual payments or bonuses granted to each senior executive depend on the extent to which specific strategic targets set
at the beginning of the financial year are met. The strategic targets consist of a number of critical tasks covering both
financial and non-financial measures of performance. Typically included are measures such as reaching project
development milestones, safety, performance against budget or agreed operational targets.
For 2007, payment of the STI was linked to:
The Company's performance compared with the S&P/ASX 300 Metals and Mining Index on a Total Shareholder Return
(TSR) basis for the period commencing 1 April 2007 and ending 31 December 2007 (the TSR Performance Hurdle); and
As at 31 December 2007, the Phu Kham Copper-Gold Operation being ahead of schedule for first concentrate production
in the June 2008 quarter and being within construction budget (the Construction Performance Hurdle).
The TSR Performance Hurdle was chosen on the basis of its link to the creation of shareholder value. The proportion of
this STI component to be paid correlated to TSR performance. The Company had to perform at the 51st percentile of the
S&P/ASX 300 Metals and Mining Index prior to any amount being paid (50% payable at the 51st percentile increasing on a
straight line basis with 100% payable if the Company performed at the 75th percentile or above). Given the Company's
performance over the relevant period, 100% of this component of the STI was payable. This assessment was based on
publicly available information in relation to the TSR performance of the Company and the S&P/ASX 300 Metals and Mining
Index.
The Construction Performance Hurdle was chosen on the basis of its key strategic and financial importance to the
Company. This hurdle was achieved . Accordingly, 100% of this component of the STI was payable. This was confirmed
by reference to reports prepared by the Company and its contractors.
-11-

Directors' report
31 December 2007
(continued)
On an annual basis, after consideration of the individual performance against critical tasks, an overall assessment of each
senior executives performance, as a participant in the management team for the Company, is approved by the
Remuneration Committee.
Company performance
The table below shows the outperformance of the Company as measured by the increase in its share price and growth in
market capitalisation over the last five years:
Year
A$ Cents per share
A$ Market Capitalisation
US$ Profit/(Loss)
30-Jun-03
4.3
12,475,520
(1,437,914)
30-Jun-04
17
70,723,474
(1,206,962)
30-Jun-05
24.5
155,619,734
(2,502,114)
31-Dec-05
21
158,438,625
(4,990,915)
31-Dec-06
31.5
443,459,891
(4,522,338)
31-Dec-07
99.0
1,419,037,120
(13,054,830)
Long Term Incentives

Objective
The objective of the Executives Option Plan (EOP) and Share Rights Plan (SRP) is to reward executives in a manner
which aligns this element of remuneration with the creation of shareholder wealth. The issue of share rights and
executives' options also forms part of the Company's retention strategy.
Options are granted under the EOP that was approved by the shareholders at the 1996 Annual General Meeting (as
amended by subsequent Board resolutions). EOP issues are only made to the Managing Director and his senior
executives as they are able to influence and have the prime responsibility for the generation of shareholder wealth, and
thus have a direct impact on the Companys performance against the relevant long term performance hurdle.
Share rights are granted under the Company's Share Rights Plan (SRP).
Commencing in 2007, the Managing Director and senior executives were offered a choice of options issued under the
EOP, share rights issued under the SRP or a combination of both.
Vesting of options and share rights issued in 2007 is subject to PanAusts total return to shareholders (TSR), including
share price growth, dividends and capital returns, compared to the TSR of the S&P/ASX 300 Metals and Mining Index over
a three-year period. Vesting will occur after a non-vesting period of three years and subject to the Companys ranking
within the Index, as follows:
TSR rank
Less than or at 50th percentile
Between 51st and 75th percentile
At or above 75th percentile
Proportion of options and share rights that vest

0%
th
50% increasing linearly to 100% at 75 percentile
100%
Once vested, the options remain exercisable for a period of up to two years and the share rights remain exercisable for a
period of up to ten years from the grant date. Options are granted under the EOP with cash consideration due on exercise
of the options at the relevant exercise price. Share rights are granted under the plan with no cash consideration due on
exercise of the share rights.
It should be noted that share rights under the SRP are also issued to other employees and contractors, but without
performance conditions. The vesting of such share rights is only subject to the employees or contractors being employed
or providing services as at the relevant vesting date. This reflects the retention objective of such issues.
Structure
The Remuneration Committee recommends to the Board the number and terms of options and share rights offered to
executives. Options and/or share rights recommended by the Board for the Managing Director are submitted for approval
by shareholders at the annual general meeting.
The tables on pages 17 - 19 provide details of options and share rights granted, the value of options and share rights,
vesting periods and lapsed options under the EOP and SRP.
-12-

Directors' report
31 December 2007
(continued)
Under the terms of the present EOP and SRP:
The Board may invite a person who is an executive in permanent full time or permanent part time employment with the
Company or on a fixed term contract with the Company to participate in the EOP. A participant may nominate an
associate (such as a personal superannuation fund) to hold the options. An executive director of the Company is eligible
to participate in the EOP.
The Board may invite a person who is an employee of the Company or a contractor or an employee of a contractor to
participate in the SRP. A participant may nominate an associate (such as a personal superannuation fund) to hold the
share rights. An executive director of the Company is eligible to participate in the SRP.
Participation in both the EOP and SRP is voluntary. The Board has the discretion to determine (a) the number of options
and share rights to be issued under the EOP and SRP; (b) the exercise price (if any); and (c) other terms of issue of the
options and share rights. The Board has the discretion to impose performance hurdles which must be satisfied before the
options and share rights can be exercised.
Where the employment of a participant in the EOP is terminated for any reason other than retirement, retrenchment or
death, any unexercised options which have outstanding performance or other conditions will immediately lapse. Any
unexercised options which have satisfied all conditions are not affected.
Where the employment of a participant in the SRP is terminated for any reason other than retirement, retrenchment or
death, any unvested share rights will immediately lapse. Any vested share rights are not affected.
Where the employment of a participant in the EOP is terminated by reason of retirement, retrenchment or death, any
unexercised options which have outstanding conditions will immediately lapse unless the Board exercises its discretion to
the contrary. Any unexercised options which do not have any outstanding conditions are not affected.
Where the employment of a participant in the SRP is terminated by reason of retirement, retrenchment or death, any
unvested share rights will immediately lapse unless the Board exercises its discretion to the contrary. Any vested share
rights are not affected.
In the case of options or share rights, a participant will not be taken to have retired until they reach the age of 60 or such
other age as the Board may approve in a particular case.
Upon exercise of an option and payment of the exercise price, each option will convert into one ordinary fully paid share
in the Company. Options must be exercised within the exercise period determined by the Board. The exercise period for
an option must not exceed 5 years.
Upon exercise of a share right, each share right will convert into one ordinary fully paid share in the Company. There is
no exercise price payable. Share rights must be exercised within the exercise period determined by the Board. The
exercise period for a share right must not exceed 10 years.
Holders of options and share rights are not thereby entitled to participate in new pro rata or bonus issues of securities
made by the Company. Upon a new pro rata or bonus issue of securities, adjustments are made to the number of shares
over which the options and share rights exist and/or the exercise price (if any). The relevant formula to reflect changes to
the capital structure that occur by way of pro rata and bonus issues is set out in the EOP and SRP. The formula is
consistent with the ASX Listing Rules. In any reconstruction, options and share rights will be similarly reconstructed in
accordance with the ASX Listing Rules.
Options and share rights may not be transferred. In addition, the Board may impose disposal restrictions upon shares
acquired through the exercise of share rights. The disposal restrictions on such shares may restrict disposal of the shares
until the earlier of the nominated period (up to 10 years) after the acceptance of an offer by the participant to take share
rights, the cessation of the participants employment with the Group, the occurrence of a change in control in the
Company, or the receipt of the consent of the Board. There are no disposal restrictions on options issued under the EOP.
Upon a change in the control of the Company (for example, a takeover) or a demerger, all unvested options and share
rights will immediately vest and become exercisable. Immediately prior to the change in control or demerger, the Board
must make appropriate arrangements to ensure that the holders of options and share rights are able to exercise the option
or share right on or prior to the relevant event.
Participation in both the EOP and SRP does not confer any right upon the participant to future issues of options or share
rights.
-13-

Directors' report
31 December 2007
(continued)
B Details of remuneration (audited)
Amounts of remuneration
Details of the remuneration of the directors and the key management personnel (as defined in AASB 124 Related Party
Disclosures) of PanAust are set out in the following tables.
The key management personnel of PanAust includes the directors as per pages 1 to 3 above and the senior executives
listed in the following table, and in Part C of this Remuneration Report, who have authority and responsibility for planning,
directing and controlling the activities of the entity, and are also the highest paid executives of the Company and the
Group:
Year ended 31 December 2007
Name
Non-executive directors
R. Bryan Chairman
N.P. Withnall
A.E. Daley
G.A. Handley
Sub-total non-executive directors
Managing director
G. Stafford
Other senior executives
F. Hess
J. Walsh
D. Hairsine
A. Bell
R. Usher
R. Allen (from 23 April 2007)
D. Brost (from 3 August 2007)
P. Scarr (from 5 February 2007)
R. Child (resigned effective 30 June 2007)
Total key management personnel compensation
Short-term employee
benefits
Retirement
benefits
Sharebased
payments
Cash
salary and Short Term
fees
Incentive
$
$
Superannuation
$
Long Term
Incentive
$
Total
$
143,353
74,329
83,565
12,831
314,078
6,687
53,991
60,678
143,353
81,016
83,565
66,822
374,756
449,397
87,673
38,760
63,215
639,045
266,175
217,502
205,956
191,254
220,848
154,342
76,428
140,017
188,077
2,424,074
46,767
35,069
35,069
46,917
22,795
35,069
35,069
35,069
379,497
18,033
29,764
14,870
8,311
33,798
204,214
28,620
23,480
23,029
52,582
60,111
23,029
8,662
23,480
306,208
341,562
294,084
293,818
305,623
303,754
212,440
128,470
232,364
188,077
3,313,993
The value for Long Term Incentives presented in the table above is calculated in accordance with AASB 2 Share-based
Payment and represents options and share rights that have been expensed during the current year. Refer to the tables on
pages 17 and 19 for full details of the fair $A value at the grant date of all options and share rights issued by the Company
to the Managing Director and other senior executives in previous, this or future reporting periods and the number of
options and share rights issued to these executives during the reporting period.
Short-term employee
benefits
Retirement
benefits
Cash
salary and Short Term
Superfees
Incentive annuation
$
$
$
Name
Non-executive directors
R. Bryan Chairman
N.P. Withnall
A.E. Daley
G.A. Handley
Sub-total non-executive directors
Managing director
Gary Stafford
F. Hess
J. Walsh
D. Hairsine
A. Bell (from 27 March 2006)
R. Usher (from 5 September 2006)
-14-
Sharebased
payments
Long Term
Incentive
$
Total
$
80,603
40,302
40,718
161,623
7,254
3,627
3,665
12,834
27,380
87,857
43,929
44,383
12,834
189,003
359,737
38,688
30,488
125,450
554,363
216,696
176,166
168,829
123,753
57,307
297,632
1,561,743
11,824
15,048
15,048
11,824
15,424
107,856
15,846
23,192
11,138
108,044
50,642
19,715
195,807
228,520
207,060
207,069
197,357
77,022
313,056
1,973,450

Directors' report
31 December 2007
(continued)
B Details of remuneration (audited) (continued)
Amounts of remuneration (continued)
Long-term benefits provided for during the year
Long service leave /
Long service leave /
termination benefits 2007 termination benefits 2006
$
$
Name
Managing director
G. Stafford
F. Hess
J. Walsh
D. Hairsine
A. Bell
D. Brost
P. Scarr
177,321
375,707
11,180
10,864
10,385
4,292
467
1,017
8,398
223,924
3,677
7,136
6,618
791
4,875
398,804
Long service leave and termination benefits represent amounts provided for long service leave and termination
entitlements during the year ended 31 December 2007. Termination benefits are those as referred to under Part C Service
Agreements (audited) of this Remuneration Report. Termination benefits payable when the Managing Director leaves the
employment of the Company (other than for gross misconduct) are included in the table.
Only the value showing for R. Child was paid out during the year (this related to outstanding long service leave).
Termination benefits accrued from 1996 to 2006 for the Managing Director were first recognised as salaries and
employment benefits in the income statements in the year ended 31 December 2006. The figures for the year ended 31
December 2007 reflect the amount accrued during the current year only.
Termination benefits for other senior executives are payable only upon termination of employment by the Company (other
than for gross misconduct). The termination benefit is not payable if the senior executive resigns. On that basis, the
amounts accrued as at 31 December 2006 have been reversed in 2007 and the amounts are not included in the above
table.
C
Service agreements (audited)
The Managing Director and the other senior executives are employed under service agreements. Each of these
agreements provides for the provision of performance-related cash bonuses and participation, when eligible, in the EOP
and SRP. Other major provisions of the agreements relating to remuneration are set out below. The current service
agreements may be terminated by either party with three months' notice, subject to termination payments as detailed
below.
G. Stafford, Managing Director
Commencement date 7 March 1996;
Base salary, inclusive of superannuation, for the year ended 31 December 2007 of A$570,000, to be reviewed
annually by the Remuneration Committee; and

Payment of a termination benefit, other than for gross misconduct, equal to one months salary for each year of
service to a maximum of 12 months.

F. Hess, Managing Director - Phu Bia Mining Limited
Commencement date 17 October 2005;
Base salary, inclusive of superannuation, for the year ending Monday, 31 December 2007 of A$320,000, to be
reviewed annually by the Remuneration Committee; and

Payment of a termination benefit, upon termination by the Company other than for gross misconduct, equal to one
months salary for each year of service to a maximum of 6 months.

J. Walsh, General Manager Corporate Development
Commencement date 1 July 2004;

-15-

Directors' report
31 December 2007
(continued)
C Service agreements (audited) (continued)
D. Hairsine, Chief Financial Officer
Commencement date 27 September 2004;


A. Bell, General Manager Human Resources
Commencement date 27 March 2006;


R. Usher, General Manager Phu Kham Operations
Commencement date 5 September 2006; and


R. Allen, General Manager Country Affairs
Commencement date 23 April 2007;


D. Brost, General Manager Geology
Commencement date 3 August 2007;


P. Scarr, Company Secretary & General Counsel
Commencement date 5 February 2007;

-16-

Directors' report
31 December 2007
(continued)
D Share-based compensation (audited)
Options
The terms and conditions of each grant of options affecting remuneration in the previous, this or future reporting periods
are as follows:
Grant date
Date vested and exercisable
30-Jun-04
13-Oct-05
13-Oct-05
13-Jun-07
13-Oct-08
50% after 13 April 2006 50%
after 13 October 2006
1-Dec-05
15-Mar-06
27-Mar-06
50% after 15 September 2006

50% after 15 March 2007
24-May-06
4-Sep-06
23-Mar-07
29-May-07
5-Oct-07
22-Feb-08
Note (i)
Expiry date

1 April 2010
1 April 2010
8 October 2010
31 December 2010
31 December 2010
Exercise price
Fair value per
Unissued shares
A$ cents
option at grant date
under option
A$ cents
12.00
4.00
18.00
5.70
-
13-Oct-08
18.00
5.70
5,500,000
13-Oct-08
18.00
5.70
15-Mar-09
18.00
6.28
27-Mar-09
18.00
4.85
600,000
13-Apr-09
32.00
8.25
2,000,000
13-Sep-09
32.00
8.60
1,000,000
29-Feb-12
29-Feb-12
7-Oct-12
31-Dec-12
31-Dec-12
40.00
40.00
83.00
90.00
90.00
8.10
8.10
16.50
25.90
-
4,550,000
3,500,000
750,000
2,310,000
4,400,000
Note (i) - 4,400,000 options under the EOP to be issued to the Managing Director in 2008 subject to shareholder approval.
Options granted under the EOP carry no dividend or voting rights.
Details of options over ordinary shares in the Company provided as remuneration to the Managing Director and each of
the senior executives of the Company are set out below. When exercisable, each option is convertible into one ordinary
share of PanAust. Further information on the options is set out in note 40 to the financial statements.
Name
Managing Director
G. Stafford
F. Hess
J. Walsh
A. Bell
R. Usher
R. Allen
D. Brost
P. Scarr
Number of options granted during the year

2008
2007
2006
Number of options vested

during the year
2007
2006
4,400,000
3,500,000
2,000,000
2,000,000
660,000
330,000
660,000
660,000
800,000
1,300,000
650,000
500,000
750,000
1,300,000
2,000,000
1,000,000
-
1,000,000
1,000,000
-
2,000,000
1,000,000
-
In the table above, the grant of options in 2008 represents options granted since the end of the financial year up to the
date of this report. The options to be issued to the Managing Director in 2008 are subject to shareholder approval.
In 2007, the Company commenced issuing options with a three year non-vesting period and subject to TSR performance
conditions (see page 12) as part of key senior executive remuneration.
-17-

Directors' report
31 December 2007
(continued)
D Share-based compensation (audited) (continued)
From 1 July 2004 until 31 December 2006, options granted as part of senior executives' remuneration were valued using
the Single Barrier option pricing model, which takes account of factors including option exercise price, share price hurdles,
current level and volatility of the underlying share price, risk-free interest rate, expected dividends on the underlying share,
current market price of the underlying share and expected life of the option.
Fair value of options
The fair value attributed to options in the table on page 17 was calculated using a model with the following inputs:
Dividend yield
Expected volatility
Risk-free interest rate
Staff turnover
Dec
2007
Dec
2006
Dec
2005
June
2005
June
2004
Nil
40%
6.50%
16.70%
Nil
30-50%
5.75%
-
Nil
40-55%
4.99%
-
Nil
40-55%
4.99%
-
Nil
74%
5.34%
-
Shares issued on exercise of options

Details of ordinary shares in the Company issued as a result of the exercise of options to the Managing Director of
PanAust and other senior executives of the Group are set out below.
Name
Managing Director
G. Stafford
G. Stafford
G. Stafford (indirect)
J. Walsh
J. Walsh
D. Hairsine
D. Hairsine
A. Bell
R. Child (ex-employee)
R. Child (ex-employee)
J. Adams (ex-employee)
S. Milroy (ex-employee)
T. Olsen (ex-employee)
Date of exercise of
options
Number of ordinary shares

Exercise price issued on exercise of options
A$ cents
during the year
2007
2006
29 May 2007
20 October 2006
31 March 2006
12.00
4.70
4.00
4,000,000
-
1,000,000
3,000,000
1 May 2007
26 June 2006
21 September 2007
30 June 2006
2 April 2007
13 March 2007
8 October 2007
1 May 2007
29 May 2007
14 June 2007
27 January 2006
2 February 2006
12.00
12.00
12.00
12.00
18.00
12.00
18.00
18.00
12.00
18.00
9.74
17.00
1,000,000
1,000,000
1,400,000
2,000,000
750,000
1,000,000
2,000,000
750,000
-
1,000,000
1,000,000
1,000,000
2,000,000
-18-

Directors' report
31 December 2007
(continued)
D Share-based compensation (audited) (continued)
Share Rights Plan
The terms and conditions of each grant of share rights to senior executives in the previous, this or future reporting periods
are as follows:
Grant Date
Expiry Date
Number
Granted
A$ Exercise
Price Cents
Performance
Hurdle
A$ Fair Value per share

right at grant date
2-Apr-07
25-Feb-08
31-Mar-17
31-Dec-17
2,025,000
1,885,000
Nil
Nil
TSR
TSR
15.9 cents
44.1 cents
Details of share rights issued under the SRP provided as remuneration to senior executives of the Company are set out
below. When exercised, each share right is convertible into one ordinary share of PanAust.
Name
Senior executives
J. Walsh
D. Hairsine
A. Bell
F. Hess
R. Usher
R. Allen
Number of share rights granted during the

year
2008
2007
2006
420,000
420,000
550,000
330,000
165,000
650,000
325,000
400,000
650,000
Number of share rights

vested during the year
2007
2006
-
16,130
14,663
-
Shares vested in 2006 represented shares issued under the Employee Share Plan, which has since been replaced by the
SRP. The grant of share rights in 2008 in the table above, represents options granted since the end of the financial year
up to the date of this report.
No share rights were issued to the Managing Director.
Fair value of share rights
The fair value attributed to share rights in the table above was calculated using a model with the following inputs:
Dec
2007
Dividend yield
Expected volatility
Risk-free interest rate
Staff turnover
E
Nil
40%
6.50%
16.70%
Additional information - unaudited
This section of the remuneration report details matters required to be reported by the Corporations Act which have not
been dealt with elsewhere in this report.
Details of remuneration of the Managing Director and other senior executives
For each cash bonus and grant of options and share rights included in the tables on pages 17 - 19, the percentage of the
available bonus or grant that was paid, or that vested, in the financial year, and the percentage that was forfeited because
the person did not meet the service and performance criteria is set out below. No part of the bonuses is payable in future
years. The options and share rights vest after three years, provided the vesting conditions are met. No options or share
rights will vest if the conditions are not satisfied, hence the minimum value of the option or share right yet to vest is nil.
The maximum value of the options or share rights yet to vest is calculated by taking the fair value of the options and share
rights as at the grant date (refer to tables on page 17 and 19) and deducting that component of the fair value of options
and share rights which has already been expensed.
-19-

Directors' report
31 December 2007
(continued)
E
Additional information - unaudited (continued)
Cash bonus
Name
G. Stafford (EOP)
F. Hess (EOP)
F. Hess (SRP)
J. Walsh (EOP)
D. Hairsine (SRP)
A. Bell (EOP)
A. Bell (SRP)
R.Usher (EOP)
R. Allen (SRP)
D. Brost (EOP)
P. Scarr (EOP)
Paid
%
100
100
Forfeited
%
-
100
100
100
100
100
100
100
Year
granted
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
Options and Share Rights

Financial
years in Minimum
which total value
grant may of grant
Vested Forfeited
vest
yet to vest
%
%
$
2010
Nil
2010
Nil
2010
Nil
2010
Nil
2010
Nil
2010
Nil
2010
Nil
2010
Nil
2010
Nil
2010
Nil
2010
Nil
Maximum
total value
of grant
yet to vest
$
184,517
42,175
41,405
68,535
67,283
34,267
33,641
26,360
67,283
90,015
68,535
Share-based compensation: Options and Share Rights

Further details relating to options and share rights are set out below.
Name
G. Stafford
F. Hess
J. Walsh
D. Hairsine
A. Bell
R. Usher
R. Allen
D. Brost
P. Scarr
A
B
C
D
E
Remuneration
consisting of
options and Value at grant
Value at
Value at lapse
Total of
share rights
date
exercise date
date
columns B-D
$
$
$
$
9.9%
63,215
63,215
8.4%
28,620
28,620
8.0%
23,480
23,480
7.8%
23,029
23,029
17.2%
52,582
52,582
19.8%
60,111
60,111
10.8%
23,029
23,029
6.7%
8,662
8,662
10.1%
23,480
23,480
A = The percentage of the value of remuneration consisting of options and share rights, based on the value of options and
share rights expensed during the current year.
B = The value at grant date calculated in accordance with AASB 2 Share-based Payment of options and share rights
granted during the year as part of remuneration that has been expensed during the current year.
C = The value at exercise date of options that were granted as part of remuneration and were exercised during the year,
being the intrinsic value of the options at that date.
D = The value at lapse date of options that were granted as part of remuneration and that lapsed during the year.
Risk management products
The Company's securities trading policy applies to debt securities and financial products issued or created over its share
rights or options by third parties and associated products which executives or directors may procure to limit the risk of a
holding in the Company.
-20-

Directors' report
31 December 2007
(continued)
In recognising the need for the highest standard of corporate behaviour and accountability, the Directors of PanAust
support, and have adhered to, principles of corporate governance appropriate for a company such as PanAust. The
Companys corporate governance statement is contained after the auditor's independence declaration in this financial
report.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
on page {T#}
Rounding of amounts
The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments
Commission, relating to the ''rounding off'' of amounts in the directors' report. Amounts in the directors' report have been
rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.
Auditor
PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors.
R. Bryan
Chairman
G. Stafford
Managing Director
Brisbane
20 March 2008
-21-

Directors' report
31 December 2007
(continued)
-22-

31 December 2007

Introduction
PanAust is committed to best practice corporate governance practices. This commitment is founded on a culture of
integrity rather than a tick a box mentality.
In August 2007, the ASX Corporate Governance Council issued a revised edition of the Corporate Governance Principles
and Recommendations (the Recommendations). Whilst the changes in reporting requirements are not formally required
to be complied with until 1 January 2008, PanAust has elected to transition to the revised principles and recommendations
at the earliest stage practical.
In accordance with Listing Rule 4.10, this statement discloses the extent to which the Company has followed the
Recommendations. The relevant Recommendations are considered under each of the corporate governance principles
identified by the ASX Corporate Governance Council. Where a Recommendation has not been followed, the Company is
obligated to disclose the reasons why the Recommendation has not been followed. This is referred to as if not, why not
reporting. Unless otherwise stated, the Company has adhered to the Recommendation for the full period of this report.
It should be noted that Corporate Governance Principles and Recommendations are largely recommendations (the main
exception to this being the requirement for PanAust to have an Audit Committee). It is recognised that not all of the
Recommendations will be suitable for all companies at all times in their corporate development. In this regard, the Board
recognises that the Companys corporate governance practices must continue to evolve and develop as the Company
grows.
Principle 1 Lay solid foundations for management and oversight
The Company has established the functions reserved to the Board and those delegated to senior executives. During
2007, the Board re-visited the responsibilities of the Board and management and their enunciation in a new Board Charter
in accordance with the Recommendations. At the time of this report, the new Board Charter is in the process of being
finalised. The responsibilities of the Board include:
to appoint and remove the Managing Director on the basis of performance and approve key appointments reporting to
the Managing Director;
assess the performance of the Board, each Committee and each non-executive director so as to ensure their
effectiveness;
review and approve managements proposed strategy and performance objectives;
oversee the Company, including its control and accountability systems;
make recommendations to the shareholders as to the appointment and removal of non-executive directors based on
performance;
review key executive performance and remuneration policy;
review and monitor development of succession plans for key senior management, including the Managing Director and
the Chief Financial Officer;
review, ratify and monitor systems of risk management and internal control, codes of conduct, and legal compliance;
approve and monitor the progress of major capital expenditure, capital management, and acquisitions and divestitures;
approve annual budget (including key assumptions) and monitor financial performance against budget;
consider and approve proposals in relation to capital and debt structure allotment of new capital, share buybacks,
significant capital and debt raisings (including project and other finance arrangements), dividend policy and the payment of
dividends; and
approve and monitor financial and other reporting.
Once the new Board Charter is finalised it will be posted on the Companys website.
-23-

31 December 2007
(continued)
The Recommendations provide that the Company should disclose the process of evaluating the performance of senior
executives.
Senior executives prepare annual achievement plans which reflect their role description in the context of the strategic plan
of the Company. Performance against these annual achievement plans is assessed on an annual basis. This annual
review also includes an assessment of the senior executives key behavioural indicators (whilst the executive may have
achieved certain performance goals, this assessment considers whether the executive's behaviour has been consistent
with the values of the Company). The process is documented and managed by the Managing Director.
The results of the senior executive review feed into the remuneration review which is overseen by the Remuneration
Committee. Further information is contained in the Remuneration Report on pages 10-20.
The Chairman and the Remuneration Committee consider the performance of the Managing Director. Again, the results of
the review are reflected in the results of the remuneration review. This process has been completed for the 2007 reporting
year.
Principle 2 Structure the Board to add value
The skills and experience of each of the Directors is detailed in the Directors Report.
A majority of the Directors of the Company are independent. In addition, the Chairman is an independent director. The
roles of the Chairman and Managing Director are not exercised by the same person.
The Board has adopted specific principles with respect to assessing the independence of directors. In order to be
independent, the Director must be independent of management and free from any business or other relationship that could
materially interfere with or could reasonably be perceived to interfere with the exercise of their unfettered or
independent judgment.
In the context of the independence of directors, immateriality is considered from the perspective of both the Company and
the Director. The determination of independence requires a consideration of both quantitative and qualitative elements.
An item is presumed to be immaterial from a quantitative perspective if it is equal to less than 5% of the relevant base
amount. It is presumed to be material (unless there is qualitative evidence to the contrary) if it is equal to or greater than
10% of the appropriate base amount. Qualitative factors include whether a relationship is strategically important, the
competitive landscape and the nature of the relationship (including the contractual or other arrangements governing the
relationship).
On the basis of these measures, the following Directors of PanAust (being all of the Non-Executive Directors) are
considered to be independent:
Name
R. Bryan
N.P. Withnall
A.E. Daley
G.A. Handley
Position
Chairman, Non-Executive Director
Non-Executive Director
The Recommendations provide that the Board should establish a Nominations Committee to consider and make
recommendations to the Board with respect to a range of matters relating to the selection and performance of directors.
Given the size of the Board of PanAust and the Company, a separate committee has not been established to perform this
function. The matters which would normally be considered by a Nominations Committee have been reserved to the Board,
although from time to time ad hoc committees of the Board are established to assist in these tasks.
With respect to assessing the performance of Directors, the policy of the Board has been that the Chairman annually
reviews the performance of all Directors. Directors whose performance has been unsatisfactory are asked to retire. This
policy reflected the size of the Board and the Company. During the year, the Board determined to review its practices with
respect to the process of evaluating the performance of the Board, its committees and individual directors. The starting
point for this review will be the circulation of a questionnaire to all Directors to obtain their views on the collective
performance of the Board and each Committee.
There is a procedure in place for Directors to seek independent professional advice as considered necessary, at the
Companys expense. Prior written approval of the Chairman is required, but will not be unreasonably withheld.
-24-

31 December 2007
(continued)
Principle 3 Promote ethical and responsible decision making
PanAust has adopted a Vision and Values statement which provides that PanAusts business affairs are to be conducted
legally and ethically with strict observance of the highest standards of integrity and propriety. The statement is available
on the Companys website. Within this framework, the Board and management have a responsibility to carry out their
functions in order to maximise the financial performance of the PanAust Group. In addition, the Company is a signatory to
the Enduring Values framework developed by the International Council on Mining and Metals in 2003.
The Recommendations provide that the Company should have a Code of Conduct. Whilst the Companys Vision and
Values statement and its adherence to Enduring Values provides a clear framework for ethical and responsible decision
making, the Board has determined to develop a Code of Conduct in accordance with the Recommendations.
In accordance with the Recommendations, the Company has a policy relating to the trading of securities by Directors,
senior executives, employees and contractors. The policy was updated and re-launched in 2007 to reflect the increase in
the size of the Company and the number of employees.
Principle 4 Safeguard integrity in financial reporting
In accordance with the Recommendations and Listing Rule 12.7, the Company has an Audit Committee.
The Audit Committee:
consists only of Non-Executive Directors (Nerolie Withnall, Andrew Daley and Geoff Handley);
all of the non-executive directors are independent;
is chaired by Nerolie Withnall (being an independent chairman who is not Chairman of the Board); and
has three members.
The Audit Committee has a formal charter. The number of meetings of the Audit Committee are provided on page 3.
Information in relation to the Audit Committee and its functions is provided on the Companys website.
Principle 5 Make timely and balanced disclosure
PanAust complies with its continuous disclosure obligations in accordance with the requirements of the ASX Listing Rules
and the Corporations Act. The Managing Director has primary responsibility for ensuring the market is properly informed.
In settling the wording of announcements, drafts are circulated as appropriate to managers and the Chairman (a nonexecutive director) who can provide relevant input and raise any issues with respect to the particular wording of
announcements. This provides intensive quality control of both the content and expression of announcements.
In accordance with the JORC Code, PanAust has in place procedures to ensure it obtains relevant form and context
consent from relevant experts in relation to the disclosure of exploration results, resource and reserve information.
The Company has developed a culture of complying with its continuous disclosure obligations under the leadership of the
Managing Director. Previously, the size of the Company and the complexity of its operations did not warrant a detailed
disclosure policy. However, the Board has determined that it is now appropriate for the Company to adopt a detailed
policy concerning disclosure in accordance with the Recommendations. Once this policy is developed it will be located on
the Companys website.
Principle 6 Respect the rights of shareholders
The Board of Directors aims to ensure that shareholders are informed of all information necessary to assess the
performance of the Company and the Board. This reflects the core value of the Company to strive for excellence in
communications with all stakeholders.
Information on all major developments affecting the Company is communicated to the shareholders through the annual
report, halfyearly report, quarterly reports and the Annual General Meeting. The Companys website is a key
communication tool. It provides information to shareholders back to 2005. Transcripts of material such as the Chairmans
address and media briefings are available on the website. Shareholders may provide feedback to the Company and ask
questions through the website. During 2007, the website was revamped to make it an even more user friendly informative
business tool.
Whilst it is a legal requirement to provide shareholders with an opportunity to ask questions at the Annual General
Meeting, the Company and the Board has worked hard to develop a culture where shareholders are encouraged to ask
questions and to provide feedback to PanAust.
-25-

31 December 2007
(continued)
The Recommendations provide that companies should have a communications policy. Whilst PanAust considers that
the initiatives referred to above meet the spirit of the Recommendation and that the formation of a definitive policy has not
previously been warranted by the size of the Company, the Board considers the time is right to develop a formal
communications policy. Once this is developed, a summary will be provided on the Companys website.
Principle 7 Recognise and manage risk
PanAust has a number of policies and procedures for the recognition and management of risk. These policies and
procedures reflect the nature of the Companys operations. In particular, the Company has in place the following
procedures:
a severity-consequence matrix used to assess the impact of environmental incidents;
a crisis management plan with respect to security incidents;
interest rate, currency and commodity hedging programs;
financial risk control (the charter of the Audit Committee provides that it has responsibility for overseeing this risk); and
occupational health and safety procedures and programs.
The Recommendations provide that companies should establish policies for the oversight and management of material
business risks. In addition, the Recommendations provide that the Board should require management to design and
implement the risk management and internal control systems to manage the Companys material business risks.
Up to this point in time of the evolution of the Company and given the size of the Company and the nature of its
operations, the Board considered the policies and procedures the Company had in place to be entirely appropriate. To
reflect the growth of the Company and its transition to a mining company with significant assets and operations, the Board
has now determined to develop a fully integrated risk oversight and internal control system in accordance with an
appropriate Australian or international standard. Once this system is developed it will be appropriately disclosed on the
Companys website.
The Board has received assurance from its Managing Director and Chief Financial Officer that the declaration as to the
financial records and statements made under section 295A of the Corporations Act 2001 has been founded on a system of
risk management and internal control and that the system is operating effectively in all material respects in relation to
financial reporting risks.
Principle 8 Remunerate fairly and responsibly
In accordance with the Recommendations, PanAust has a Remuneration Committee.
The Remuneration Committee consists only of non-executive directors, all of whom are independent (Robert Bryan as
Chairman and Nerolie Withnall). The Remuneration Report contained on pages 10 to 20 provides details with respect to
the Companys remuneration policies and practices.
There is a clear distinction made between remuneration paid to Non-Executive Directors (who are not entitled to short term
or long term incentives) and the Managing Director and other senior executives.
At the last annual general meeting of the Company, the Companys Remuneration Report for 2006 was overwhelmingly
supported by the Companys shareholders (98.86% of all proxies voted in favour of adopting the report).
-26-
Pan Australian Resources Limited ABN 17 011 065 160

Annual Report - 31 December 2007
Contents
Page
Financial report
Income statements
Balance sheets
Statements of changes in equity
Cash flow statements
Notes to the financial statements
28
29
30
31
32
83
This financial report covers both PanAust as an individual entity and the consolidated entity consisting of PanAust and its
subsidiaries. The financial report is presented in the United States currency.
Pan Australian Resources Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
Level 2
99 Melbourne Street
South Brisbane Queensland AUSTRALIA 4101.
Registered postal address is:
PO Box 3468
South Brisbane Queensland AUSTRALIA 4101.
-27-

Income statements
For the year ended 31 December 2007
Notes
Year Ended 31 December 2007
Revenue from continuing operations
Consolidated
2007
2006
US$'000
US$'000
Parent
2007
2006
US$'000
US$'000
23,900
16,303
1,467
3,624
Other income
Changes in inventories of finished goods and
work in progress
Depreciation and amortisation expense
Employee benefits expense
Hedging expenses
Mining Costs
Write off uneconomically recoverable gold in
heaps
Finance costs
Provision for diminution on intercompany loans
Other expenses
Royalties
Profit/(Loss) before income tax
1,075
7,379
985
7,570
4,328
(7,346)
(10,681)
(2,687)
(15,764)
4,735
(4,507)
(4,479)
(14,389)
(264)
(3,885)
(1,731)
(13,055)
(5,212)
(456)
(3,582)
(314)
(4,522)
(161)
(9,725)
(462)
(7,896)
(455)
(3,533)
(529)
6,677
Income tax expense

Profit/(Loss) for the year
(13,055)
(4,522)
(7,896)
6,677
(13,055)
(0.92)
(0.92)
(4,522)
(0.39)
(0.39)
(7,896)
6,677
Net Profit/(Loss) is attributable to:

members of Pan Australian Resources
Limited
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
8
8
8
8
39
39
The above income statements should be read in conjunction with the accompanying notes.
-28-

Balance sheets
As at 31 December 2007
Notes
ASSETS
Current assets
Cash and cash equivalents
Receivables and other assets
Inventories
Derivative financial instruments
Total current assets
Consolidated
2007
2006
US$'000
US$'000
Parent
2007
2006
US$'000
US$'000
10
11
12
13
24,414
5,341
13,288
535
43,578
68,472
2,285
4,579
75,336
10,708
800
11,508
64,489
1,696
66,185
14
29,236
15
16
17
18
1,021
3,667
47,389
1,021
11,800
21,775
176,825
-
11,800
109,571
-
19
20
13
274,585
5,380
3,871
365,149
80,975
5,380
120,951
176,825
121,371
408,727
196,287
188,333
187,556
21
22
23
13
23,711
9,014
1,825
1,002
35,552
13,412
1,020
14,432
63
63
24
25
26
13
5,607
164,984
12,479
9,910
192,980
1,568
1,568
205
205
205
205
Total liabilities
228,532
16,000
205
268
Net assets
180,195
180,287
188,128
187,288
27
28(a)
28(b)
215,985
(9,438)
(41,387)
165,160
207,856
743
(28,332)
180,267
215,985
1,350
(29,207)
188,128
207,856
743
(21,311)
187,288
29
15,035
20
180,195
180,287
188,128
187,288
Non-current assets
Receivables and other assets
Investments accounted for using the equity
method
Held-to-maturity investments
Other financial assets
Property, plant and equipment
Exploration and evaluation, development and
mine properties
Intangible assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Payables
Borrowings
Provisions
Total non-current liabilities
EQUITY
Contributed equity
Reserves
Accumulated Losses
Minority interest
Total equity
The above balance sheets should be read in conjunction with the accompanying notes.
-29-

Statements of changes in equity
Notes
Total equity at the beginning of the financial
year
Changes in the fair value of cash flow hedges
Net income recognised directly in equity
28
Profit/(loss) for the year

Total recognised income and expense for
the year
Contributions of equity, net of transaction costs
Option reserve on recognition of bonus
element of unlisted executive options
Total changes in minority interest
Total equity at the end of the financial year
Consolidated
2007
2006
US$'000
US$'000
Parent
2007
2006
US$'000
US$'000
180,287
(10,788)
(10,788)
46,915
-
187,288
-
42,717
-
(13,055)
(4,522)
(7,896)
6,677
(23,843)
(4,522)
(7,896)
6,677
27
8,129
137,672
8,129
137,672
28
29
607
15,015
23,751
222
137,894
607
8,736
222
137,894
180,195
180,287
188,128
187,288
The above statements of changes in equity should be read in conjunction with the accompanying notes.
-30-

Cash flow statements
Notes
Cash flows from operating activities
Receipts from customers (inclusive of goods
and services tax)
Payments to suppliers and employees
(inclusive of goods and services tax)
Interest received
Interest paid
Net cash (outflow) inflow from operating
activities
37
Cash flows from investing activities

Payments for property, plant and equipment
Payments for investment in associate
Payments for held-to-maturity investments
Payment of development costs
Loans to subsidiaries
Proceeds from held-to-maturity assets
Net cash (outflow) inflow from investing
activities
Cash flows from financing activities
Proceeds from issues of shares and other
equity securities
Proceeds from borrowings
Share issue and buy-back transaction costs
Repayment of borrowings
Borrowing and loan establishment costs and
interest
Net cash inflow (outflow) from financing
activities
Consolidated
2007
2006
US$'000
US$'000
22,163
12,671
(42,552)
(20,389)
2,040
(67)
(30,419)
(17,748)
3,292
(351)
(685)
(685)
1,773
(65)
(1,398)
(1,398)
3,283
(350)
(18,416)
(14,807)
1,023
1,535
(22,097)
(3,667)
(180,316)
11,800
(12,199)
(11,800)
(36,113)
-
(75,718)
11,800
(11,800)
(67,126)
-
(194,280)
(60,112)
(63,918)
(78,926)
8,129
196,697
(21,559)
143,574
5,500
(6,043)
(9,500)
8,129
21,559
(21,559)
143,574
5,500
(6,043)
(9,500)
(15,577)
Net increase (decrease) in cash and cash

equivalents
Cash and cash equivalents at the beginning of
the financial year
Effects of exchange rate changes on cash and
cash equivalents
Cash and cash equivalents at end of year
10
Financing arrangements
Non-cash financing and investing activities
25
38
Parent
2007
2006
US$'000
US$'000
167,690
133,531
8,129
133,531
(45,006)
58,612
(54,766)
56,140
68,472
2,481
64,489
779
948
24,414
7,379
68,472
985
10,708
7,570
64,489
The above cash flow statements should be read in conjunction with the accompanying notes.
-31-

31 December 2007
Contents of the notes to the financial statements
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
Summary of significant accounting policies

Financial risk management
Critical accounting estimates and judgements
Segment information
Revenue
Other income
Revision of estimates
Expenses
Income tax expense
Current assets - Cash and cash equivalents
Current assets - Receivables and other assets
Current assets - Inventories
Non-current assets - Receivables and other assets
Non-current assets - Investments accounted for using the equity method
Non-current assets - Held-to-maturity investments
Non-current assets - Other financial assets
Non-current assets - Property, plant and equipment
Non-current assets - Exploration and evaluation, development and mine properties
Non-current assets - Goodwill
Current liabilities - Payables
Current liabilities - Borrowings
Current liabilities - Provisions
Non-current liabilities - Payables
Non-current liabilities - Borrowings
Non-current liabilities - Provisions
Contributed equity
Reserves and accumulated losses
Minority interest
Key management personnel disclosures
Remuneration of auditors
Contingent Liabilities
Commitments
Related party transactions
Subsidiaries
Events occurring after the balance sheet date
Reconciliation of profit after income tax to net cash inflow from operating activities
Non-cash investing and financing activities
Earnings per share
Share-based payments
Schedule of tenements and joint venture arrangements
-32-
Page
33
44
49
50
51
51
52
52
53
55
55
55
56
57
58
59
60
60
61
62
63
63
63
63
64
66
66
68
69
69
73
74
74
76
76
77
77
78
78
79
82

31 December 2007
(continued)
1 Summary of significant accounting policies

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have
been consistently applied to all the years presented, unless otherwise stated. The financial report includes separate
financial statements for Pan Australian Resources Limited ("Company", "PanAust" or "parent entity") as an individual entity
and the consolidated entity of the Company and its subsidiaries (the "Group").
The financial report was authorised for issue by the directors on 20 March 2008. The Company has the power to amend
and reissue the financial report.
(a) Basis of preparation
This general purpose financial report has been prepared in accordance with Australian Accounting Standards, other
authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the
Corporations Act 2001.
Compliance with IFRS
Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRSs).
Compliance with AIFRS ensures that the consolidated financial statements and notes of PanAust comply with International
Financial Reporting Standards (IFRS). Financial Instruments: Disclosure and Presentation.
Basis of measurement
These financial statements have been prepared under the historical cost convention, except for derivative financial
instruments measured at fair value.
Critical accounting estimates
The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Groups accounting policies. The
areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to
the financial statements, are disclosed in note 3.
Comparative information has been reclassified where appropriate to enhance comparability.
(b) Principles of consolidation
(i)
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company as at 31
December 2007 and the results of all subsidiaries for the reporting period then ended.
Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the
financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The
existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing
whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group (refer to note 1(h)).
Changes in ownership of a subsidiary without gain or loss of control of the subsidiary are accounted for using the modified
parent entity model. Under this method, the purchase of the minority interest is treated as additional consideration for an
additional part of the subsidiary. The consideration paid is first deducted against the minority interest, with any excess over
the carrying value of minority interest recorded as goodwill. If there is a discount on acquisition, the difference is treated as
a gain in the income statement.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Group.
Minority interests in the results and equity of subsidiaries are shown separately in the consolidated income statement and
balance sheet respectively.
-33-

31 December 2007
(continued)
1 Summary of significant accounting policies (continued)

Investments in subsidiaries are accounted for at cost in the individual financial statements of the Company. Such
investments include both investments in shares issued by the subsidiaries and other parent entity interests that in
substance form part of the parent entity's investment in the subsidiaries. These include investments in the form of interestfree loans which have no fixed repayment terms and which have been provided to subsidiaries as an additional source of
long term capital. Other amounts advanced on commercial terms and conditions are included in receivables.
(ii) Associates
Associates are all entities over which the Group has significant influence but not control, generally accompanying a
shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for in the parent
entity financial statements using the cost method and in the consolidated financial statements using the equity method of
accounting, after initially being recognised at cost.
The Groups share of its associates post-acquisition profits or losses is recognised in the income statement, and its share
of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are
adjusted against the carrying amount of the investment. Dividends receivable from associates are recognised in the
parent entitys income statement, while in the consolidated financial statements they reduce the carrying amount of the
investment.
When the Groups share of losses in an associate equals or exceeds its interest in the associate, including any other
unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made
payments on behalf of the associate.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Groups interest
in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the
policies adopted by the Group.
(iii) Joint ventures
The interest in a joint venture partnership is accounted for in the consolidated financial statements using the equity method
and is carried at cost by the parent entity. Under the equity method, the share of the profits or losses of the partnership is
recognised in the income statement, and the share of movements in reserves is recognised in reserves in the balance
sheet.
Profits or losses on transactions establishing the joint venture partnership and transactions with the joint venture are
eliminated to the extent of the Groups ownership interest until such time as they are realised by the joint venture
partnership on consumption or sale, unless they relate to an unrealised loss that provides evidence of the impairment of
an asset transferred.
(c) Segment reporting
A business segment is identified for a group of assets and operations engaged in providing products or services that are
subject to risks and returns that are different to those of other business segments. A geographical segment is identified
when products or services are provided within a particular economic environment subject to risks and returns that are
different from those of segments operating in other economic environments.
(d) Foreign currency translation
(i)
Functional and presentation currency
Items included in the financial statements of each of the Groups entities are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The consolidated financial statements are
presented in United States dollars, which is the Companys functional and presentation currency. This ensures that parent
entity reporting is consistent with the requirements for the main operating subsidiary in Laos where our key assets are
located.
(ii) Transactions and balances
Foreign currency transactions are translated into United States dollars using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
in the income statement, except when they are deferred in equity as qualifying cash flow hedges and qualifying net
investment hedges or are attributable to part of the net investment in a foreign operation.
-34-

31 December 2007
(continued)

Translation differences on non-monetary items, such as equities held at fair value through profit or loss, are reported as
part of the fair value gain or loss. Translation differences on non-monetary items, such as equities classified as availablefor-sale financial assets, are included in the fair value reserve in equity.
(e) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net
of returns, trade allowances and duties and taxes paid. Revenue is recognised for the major business activities as follows:
(i)
Gold Sales
Revenue from gold sales is recognised where there has been a passing of control from the Company to the customer.
(ii) Interest income
Interest income is recognised on a time proportion basis using the effective interest method. Interest is recognised as the
interest accrues (using the effective interest method, where applicable) to the net carrying amount of the financial asset.
(f)
Income tax
The income tax expense or revenue for the period is the tax payable on the current periods taxable income based on the
national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted for each
jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences
to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial
recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary
differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not
affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities
are offset where the relevant entity has a legally enforceable right to offset and intends either to settle on a net basis, or to
realise the asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in
equity.
The Company and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.
(g) Leases
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of
ownership are classified as finance leases (note 18). Finance leases are capitalised at the leases inception at the fair
value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental
obligations, net of finance charges, are included in other short-term and long-term payables. Each lease payment is
allocated between the liability and finance cost. The interest element of the finance cost is charged to the income
statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the
liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the shorter
of the assets useful life and the lease term.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are
classified as operating leases (note 33). Payments made under operating leases (net of any incentives received from the
lessor) are charged to the income statement on a straight-line basis over the period of the lease.
-35-

31 December 2007
(continued)

(h) Acquisition of assets
The purchase method of accounting is used to account for all acquisitions of assets (including business combinations)
regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets
given, shares issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the
acquisition. Where equity instruments are issued in an acquisition, the fair value of the instruments is their published
market price as at the date of exchange unless, in rare circumstances, it can be demonstrated that the published price at
the date of exchange is an unreliable indicator of fair value and that other evidence and valuation methods provide a more
reliable measure of fair value. Transaction costs arising on the issue of equity instruments are recognised directly in
equity.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost
of acquisition over the fair value of the Groups share of the identifiable net assets acquired is recorded as goodwill (refer
to note 1(z)). If the cost of acquisition is less than the Group's share of the fair value of the identifiable net assets of the
subsidiary acquired, the difference is recognised directly in the income statement, but only after a reassessment of the
identification and measurement of the net assets acquired.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their
present value as at the date of exchange. The discount rate used is the relevant entitys incremental borrowing rate, being
the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and
conditions.
(i)
Impairment of assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that
are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the assets carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an assets fair value less costs to sell
and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash generating units).
(j)
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term, highly
liquid with original maturities of three months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in
current liabilities on the balance sheet.
(k) Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for
doubtful debts. Trade receivables are due for settlement within 30 days from the date of recognition. Collectibility of trade
receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for
doubtful receivables is established when there is objective evidence that the Group will not be able to collect all amounts
due according to the original terms of the receivables. The amount of the provision is the difference between the assets
carrying amount and the present value of future cash flows. The amount of the provision is recognised in the income
statement.
(l)
Inventories
Raw materials and stores, work in progress and finished goods are stated at the lower of cost and net realisable value.
Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure,
the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on
basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business less
the estimated costs of completion and the estimated costs necessary to make the sale.
-36-

31 December 2007
(continued)

(m) Investments and other financial assets
The Group classifies its investments and other financial assets in the following categories: financial assets at fair value
through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets. The
classification depends on the purpose for which the investments were acquired. Management determines the
classification of its investments at initial recognition and re-evaluates this designation at each reporting date.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of
selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after
the balance sheet date which are classified as non-current assets. Loans and receivables are included in receivables in
the balance sheet (notes 11 and 14).
(n) Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at each reporting date. The accounting for subsequent changes in fair value depends on
whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group
designates certain derivatives as either:
hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge), or
hedges of the cash flows of recognised assets and liabilities and highly probable forecast transactions (cash flow
hedges), or
Derivatives that do not qualify for hedge accounting.
The Group documents at the inception of the hedging transaction the relationship between hedging instruments and
hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The
Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that
are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or
cash flows of hedged items.
The fair values of various derivative financial instruments used for hedging purposes are disclosed in note 13. Movements
in the hedging reserve in shareholders' equity are shown in note 28. The full fair value of a hedging derivative is classified
as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified
as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives
are classified as a current asset or liability.
(i)
Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income
statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged
risk. The gain or loss relating to the effective portion of interest rate swaps hedging fixed rate borrowings is recognised in
the income statement within finance costs, together with changes in the fair value of the hedged fixed rate borrowings
attributable to interest rate risk. The gain or loss relating to the ineffective portion is recognised in the income statement
within other income or other expenses.
If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedge item for
which the effective interest method is used is amortised to profit or loss over the period to maturity using a recalculated
effective interest rate.
(ii) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is
recognised in equity in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately
in the income statement within other income or other expense.
Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item affects profit or
loss (for instance when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of
interest rate swaps hedging variable rate borrowings is recognised in the income statement within finance costs. The
gain or loss relating to the effective portion of forward foreign exchange contracts hedging export sales is recognised in the
income statement within sales. However, when the forecast transaction that is hedged results in the recognition of a nonfinancial asset (for example, inventory or fixed assets) the gains and losses previously deferred in equity are transferred
from equity and included in the initial measurement of the cost of the asset. The deferred amounts are ultimately
recognised in profit or loss as cost of goods sold in the case of inventory, or as depreciation in the case of fixed assets.
-37-

31 December 2007
(continued)

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge
accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the
forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement.
(iii) Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument
that does not qualify for hedge accounting are recognised immediately in the income statement and are included in other
income or other expenses.
(o) Property, plant and equipment
Land and buildings are shown at fair value, less subsequent depreciation for buildings. Any accumulated depreciation at
the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the
revalued amount of the asset. All other property, plant and equipment is stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include
transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant
and equipment.
Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably. All other repairs and maintenance are charged to the income statement during the reporting
period in which they are incurred.
Increases in the carrying amounts arising on revaluation of land and buildings are credited to other reserves in
shareholders' equity. To the extent that the increase reverses a decrease previously recognised in profit or loss, the
increase is first recognised in profit or loss. Decreases that reverse previous increases of the same asset are first charged
against revaluation reserves directly in equity to the extent of the remaining reserve attributable to the asset; all other
decreases are charged to the income statement.
Land is not depreciated. Economic life assets' depreciation is calculated using the straight line method to allocate their
cost or revalued amounts, net of their residual values, over their estimated useful lives, as follows:
- Buildings
- Machinery
- Vehicles
- Furniture, fittings and office equipment
- Other plant and equipment
3-10 years
3-10 years
3-5 years
3-5 years
3-8 years
Life of mine assets are depreciated on the units of production method. This is in accordance with AASB 116 Property,
Plant & Equipment that requires a depreciation method that closely reflects the assets expected use or output.
Depreciation is based on assessments proven and probable reserves available to be mined by the current production
equipment.
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An assets carrying amount is written down immediately to its recoverable amount if the assets carrying amount is greater
than its estimated recoverable amount (note 1(i)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the
income statement. When revalued assets are sold, it is Group policy to transfer the amounts included in other reserves in
respect of those assets to retained earnings.
(p) Exploration and evaluation expenditure
(i) Costs carried forward
Costs arising from exploration, evaluation, development and restoration activities are carried forward provided such costs
are expected to be recouped through successful development, or by sale, or where exploration and evaluation activities
have not, at reporting date, reached a stage to allow a reasonable assessment regarding the existence of economically
recoverable reserves. The ultimate recoupment of costs carried forward for exploration and evaluation phases is
dependent on the successful development and commercial exploitation or sale of the respective areas of interest. All costs
carried forward are in respect of areas of interest in the exploration and evaluation phases and accordingly, production has
not commenced.
-38-

31 December 2007
(continued)

Grants and subsidies are offset against costs as incurred.
Costs carried forward in respect of an area of interest that is abandoned are written off in the year in which the decision to
abandon is made.
(ii) Amortisation
Amortisation of development costs carried forward is not charged until production commences. When production
commences, costs on productive areas are amortised over the life of the area of interest to which such costs relate on the
production output basis.
(iii) Restoration costs
Restoration costs that are expected to be incurred are provided for as part of the cost of exploration, evaluation,
development, construction or production phases that give rise to the need for restoration. Accordingly, these costs are
recognised gradually over the life of the facility as these phases occur. The costs include obligations relating to
reclamation, waste site closure, plant closure, platform removal and other costs associated with the restoration of the site.
These estimates of the restoration obligations are based on anticipated technology and legal requirements and future
costs, which have been discounted to their present value. Any changes in the estimates are adjusted on a retrospective
basis. In determining the restoration obligations, the entity has assumed no significant changes will occur in the relevant
national or regional (Australian or overseas) legislation in relation to restoration of such sites in the future.
Under Amendment No.3 to the MEPA entered into on 9 April 2007, Phu Bia Mining agreed to the establishment of an
Environmental Protection Fund to be funded by Phu Bia Mining at the rate of US$1/ounce of gold sold and US$1/tonne of
copper sold. The establishment of this fund does not limit the obligations of Phu Bia Mining under its Environmental Social
Management and Monitoring Plan (ESMMP) as approved by the Government of Laos. Phu Bia Mining must provide any
additional funds required to complete the approved rehabilitation plan under the ESMMP.
(q) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which
are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
(r)
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is
recognised in the income statement over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability
for at least 12 months after the balance sheet date.
(s) Borrowing costs
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is
required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.
The capitalisation rate used to determine the amount of borrowing costs to be capitalised is the weighted average interest
rate applicable to the entity's outstanding borrowings during the year.
(t)
Provisions
Provisions for legal claims, service warranties and make good obligations are recognised when the Group has a present
legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to
settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with
respect to any one item included in the same class of obligations may be small.
-39-

31 December 2007
(continued)

Mine closure and restoration costs are provided for at the present value of future expected expenditure required to settle
the Groups obligations on commencement of commercial production, discounted using a rate specified to the liability.
When the provision is recognised a corresponding asset is also recognised as part of the development costs of the mine
to the extent that it is considered that the provision gives access to future economic benefits. The capitalised cost of this
asset is amortised over the life of the mine. On an ongoing basis, the closure liability is remeasured at each reporting
period in line with the changes in time value of money (recognised as a finance expense in the income statement and an
increase in provision), and additional disturbances or changes in rehabilitation and closure costs will be recognised as
additions or changes to the corresponding asset and liability. The provisions referred to above do not include any amounts
related to remediation costs associated with unforseen circumstances.
(u) Employee benefits
(i)
Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to
be settled within 12 months of the reporting date are recognised in other payables in respect of employees' services up to
the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for nonaccumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value
of expected future payments to be made in respect of services provided by employees up to the reporting date using the
projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the reporting date on
national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future
cash outflows.
(iii) Share-based payments
Share-based compensation benefits are provided to senior executives via the Company's Executive Option Plan (EOP)
and Share Rights Plan (SRP). SRP issues are also made to a wider cross section of employees, including Brisbane staff
and expatriate employees (and some contractors) based in Laos and Thailand. Information relating to these plans is set
out in Note 40.
Options granted before 7 November 2002 and/or vested before 1 January 2005
No expense is recognised in respect of these options. The shares are recognised when the options are exercised and the
proceeds received allocated to share capital.
Options granted after 7 November 2002 and vested after 1 January 2005
The fair value of options under the EOP is recognised as an employee benefit expense with a corresponding increase in
equity. The fair value is measured at grant date and recognised over the period during which the employees become
unconditionally entitled to the options.
The fair value at grant date is independently determined using a pricing model that takes into account the exercise price,
the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option,
the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk
free interest rate for the term of the option.
For the financial year ending 31 December 2007 the terms of issue of options to senior executives under the EOP and of
share rights under the SRP will provide for performance conditions relating to the performance of the Company as
measured by total shareholder return (TSR) against the S&P/ASX 300 Metals and Mining Index, as opposed to a single
price barrier which applied to issues made under the EOP during the financial year ended 31 December 2006.
Upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to
share capital.
The market value of shares issued to employees for no cash consideration under the SRP is recognised as an employee
benefits expense with a corresponding increase in equity when the employees become entitled to the shares.
(iv) Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee
accepts voluntary redundancy in exchange for these benefits. Benefits falling due more than 12 months after balance
sheet date are discounted to present value.
-40-

31 December 2007
(continued)

(v) Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a
business are not included in the cost of the acquisition as part of the purchase consideration.
(w) Dividends
Provision is not made for the amount of any dividend declared on or before the end of the reporting period but not
distributed at balance date.
(x) Earnings per share
(i)
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
(y)
Financial guarantee contracts
Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is
initially measured at fair value and subsequently at the higher amount determined in accordance with AASB137
Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less cumulative amortisation,
where appropriate.
The fair value of financial guarantees is determined as the present value of the theoretical cash flows arising if each
subsidiary were to source each guarantee on market terms as an arms length transaction.
When guarantees in relation to loans of subsidiaries or associates are provided for no consideration, the fair values are
accounted for as contributions and recognised as part of the cost of the investment.
(z)
Intangible assets
Goodwill represents the excess of the cost of the acquisition of the 20% minority interest held by Newmont SEA in Phu Bia
Mining Limited over the book value of the minority interest at the date of acquisition 14 November 2005. Goodwill on the
acquisition is included in intangible assets. Goodwill acquired in business combinations is not amortised. Instead, goodwill
is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be
impaired, and is carried at cost less accumulated impairment losses.
(aa) Rounding of amounts
The Company is of a kind referred to in Class order 98/0100, issued by the Australian Securities and Investments
Commission, relating to the ''rounding off'' of amounts in the financial report. Amounts in the financial report have been
rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.
(ab) New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for Monday, 31
December 2007 reporting periods. The Groups assessment of the impact of these new standards and interpretations is
set out below.
-41-

31 December 2007
(continued)

(i)
Revised IFRS 3 Business Combinations and IAS 27 Consolidated and Separate Financial Statements
The IASB has issued revised accounting standards for business combinations and consolidated financial statements in
January 2008. Corresponding Australian Accounting Standards are expected to be issued shortly. The revised standards
are operative for annual reporting periods beginning on or after 1 July 2009 but may be applied earlier. The Group has not
yet decided when it will apply the revised standards. However, the new rules generally apply only prospectively to
transactions that occur after the application date of the standard. Their impact will therefore depend on whether the Group
will enter into any business combinations or other transactions that affect the level of ownership held in the controlled
entities in the year of initial application.
(ii) AASB 2008-1 Amendments to Australian Accounting Standard - Share-based Payments: Vesting Conditions and
Cancellations
AASB 2008-1 was issued in February 2008 and will become applicable for annual reporting periods beginning on or after 1
January 2009. The revised standard clarifies that vesting conditions are service conditions and performance conditions
only and that other features of a share-based payment are not vesting conditions. It also specifies that all cancellations,
whether by the entity or by other parties, should receive the same accounting treatment. The Group will apply the revised
standard from 1 January 2009, but it is not expected to affect the accounting for the Group's share based payments.
(iii) Amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements
In February 2008 the IASB made amendments to IAS32 and IAS1 in relation to puttable financial instruments and
instruments that require the entity to pay the holder a pro-rata share of the entity's net assets on liquidation. The revised
standards have to be applied from 1 January 2009. Amendments to the corresponding Australian Accounting Standards
are expected to be issued shortly. Under the revised rules, the relevant instruments will be classified as equity if certain
conditions are satisfied. As the Group has not issued any such instruments, the amendments will not have any effect on
the Group's or the parent entity's financial statements.
(iv) Revised AASB 101 Presentation of Financial Statements and AASB 2007-8 Amendments to Australian Accounting
Standards arising from AASB 101 and AASB 2007-1 Further Amendments to Australian Accounting Standards arising from
AASB 101
The revised AASB 101 that was issued in September and December 2007 is applicable for annual reporting periods
beginning on or after 1 January 2009. It requires the presentation of a statement of comprehensive income and makes
changes to the statement of changes in equity but will not affect any of the amounts recognised in the financial statements.
If an entity has made a prior period adjustment or a reclassification of items in the financial statements, it will need to
disclose a third balance sheet (statement of financial position), this one being as at the beginning of the comparative
period. The Group has not yet determined the potential effect of the standard on the Group's disclosures.
(v) AASB-I 11 AASB 2 - Group and Treasury Share Transactions and AASB 2007-1 Amendments to Australian
Accounting Standards arising from AASB Interpretation 11
AASB-I 11 and AASB 2007-1 are effective for annual reporting periods commencing on or after 1 March 2007. AASB-I 11
addresses whether certain types of share-based payment transactions should be accounted for as equity-settled or as
cash settled transactions and specifies the accounting in a subsidiarys financial statements for share-based payment
arrangements involving equity instruments of the parent. The Group will apply AASB-I 11 from 1 January 2008. The Group
has not yet determined the potential effect of the standard on the Group's financial statements.
(vi) AASB-I 12 Service Concession Arrangements, AASB 2007-1 Amendments to Australian Accounting Standards
arising from AASB Interpretation 12, revised UIG 4 Determining whether an Arrangement contains a Lease and revised
UIG 129 Service Concession Arrangements: Disclosures
AASB-I 12, AASB 2007-2, UIG 4 and the revised UIG 129 are all effective for annual reporting periods commencing on or
after 1 January 2008. AASB-I 12 provides guidance on the accounting by operators for public-to-private service
concession arrangements under which private sector entities participate in the development, financing, operation and
maintenance of infrastructure for the provision of public services, such as transport, water and energy facilities. UIG 4 has
been amended to exclude public-to-private service concession arrangements from its scope and UIG 129 was revised to
require some additional disclosures. The Group will apply AASB-I 12 and the related amended standards and
interpretations from 1 January 2008, but it is not expected to have any impact on the Group's financial statements.
-42-

31 December 2007
(continued)

(vii) AASB 8 Operating Segments and AASB 2007-3 Amendments to Australian Accounting Standards arising from AASB
8
AASB 8 and AASB 2007-3 are effective for annual reporting periods commencing on or after 1 January 2009. AASB 8 will
result in a significant change in the approach to segment reporting, as it requires adoption of a 'management approach' to
reporting on the financial performance. The information being reported will be based on what the key decision-makers use
internally for evaluating segment performance and deciding how to allocate resources to operating segments. The Group
has not yet decided when to adopt AASB 8. Application of AASB 8 may result in different segments, segment results and
different type of information being reported in the segment note of the financial report. However, it will not affect any of the
amounts recognised in the financial statements.
(viii) Revised AASB 123 Borrowing Costs and AASB 2007-6 Amendments to Australian Accounting Standards arising
from AASB 123 (AASB 1, AASB 101, AASB 107, AASB 111, AASB 116 & AASB 138 and Interpretations 1 & 12)
The revised AASB 123 is applicable to annual reporting periods commencing on or after 1 January 2009. It has removed
the option to expense all borrowing costs and - when adopted - will require the capitalisation of all borrowing costs directly
attributable to the acquisition, construction or production of a qualifying asset. The Group's current accounting policy
already reflects the revised AASB 123 and capitalises all borrowing costs directly attributable to the acquisition,
construction or production of a qualifying asset.
(ix) AASB 2007-4 Amendments to Australian Accounting Standards arising from ED 151 and Other Amendments and
AASB 2007-7 Amendments to Australian Accounting Standards (AASB 1, AASB 2, AASB 4, AASB 5, AASB 107 & AASB
128)
AASB 2007-4 and AASB 2007-7 are applicable to annual reporting periods beginning on or after 1 July 2007. The
amendments introduce a number of options that existed under IFRS but had not been included in the original Australian
equivalents to IFRS and remove many of the additional Australian disclosure requirements, for example the detailed
disclosures in relation to the financial position and funding of defined benefit superannuation plans.
The financial statements may be affected by:
the ability to use the proportionate consolidation method for interests in joint venture entities
the ability to use the indirect method for presenting cash flow statements
the ability to recognise government grants of non-monetary assets at nominal amounts and present assets and
expenses net of related government grants, and
a possible exemption from the requirement to prepare consolidated financial reports for intermediate parent
entities, provided they are wholly-owned or all shareholders agree and they are not the ultimate Australian
parent entity in the group
discount rates for employee benefits obligations to be based on corporate bonds if there is a deep market in
Australia (previous guidance mandated the use of government bond rates).
The Group will adopt the amendments arising from AASB 2007-4 and AASB 2007-7 for the financial year ending 31
December 2008. However, it does not intend to apply any of the new options now available.
Other new standards published but not mandatory for annual reporting periods ended 31 December 2007 are not expected
to have an impact on the financial statements of the Group.
-43-

31 December 2007
(continued)
2 Financial risk management

PanAust's mine development and mining activities, and the debt required to fund these activities, exposes it to a variety of
financial risks: market risk (including currency risk, interest rate risk, and price risk), credit risk and liquidity risk. The
Company has a risk management policy which focuses on these risks under the supervision of the Finance Committee.
Mandatory Hedging Program
The banks providing project finance for the Phu Kham Copper-Gold Operation required a hedging program to be
implemented by the Company as a condition of the project debt financing (Mandatory Hedging Program). This program
incorporated currency, interest rate and gold hedging with a view to minimise potential adverse effects on the ability of the
Group to service its debt obligations on the following bases:
Foreign exchange risk relating primarily to the currency of purchases of the Group for the construction of the Phu Kham
Copper-Gold Operation;
Interest rate risk associated with borrowing and investment activities but particularly with regard to the project finance
debt facilities for the Phu Kham Copper-Gold Operation; and
Commodity price risk, relating to the future sales of gold from the Phu Kham Heap Leach Gold Operation and from the
Phu Kham Copper-Gold Operation.
At the Balance Date, PanAust has hedged the following:
Forecast Australian Dollar purchases as part of the construction of the Phu Kham Copper-Gold Operation;
Forecast interest payable under the construction facility; and
A percentage of the forecast gold production with certain members of the project finance syndicate led by the ANZ Bank.
Company Hedging Policy
Under the hedging policy approved by the PanAust Board (Company Hedging Policy) a number of basic hedging
guidelines are recognised and taken into consideration when developing a suitable hedging strategy for the Company.
The hedging guidelines are as follows:
Commodity price hedging will be kept to a minimum where production costs are low by industry standards;
Hedging positions will only be entered into if the Company is totally comfortable with the ability to be able to deliver under
the contracts and the resulting cash position;
The overall aim of any hedging entered into will be to ensure that PanAust remains in a position to meet its financial
obligations in an orderly and timely manner and to achieve an acceptable return on its investments; and
Management of cash flow risk will be undertaken through the forecasting of cash inflows and outflows using internally
produced cash flow forecasts. Whilst there is a debt facility in place, forecasts will be in a form pursuant to the debt facility
waterfall requirements (the order in which operating cash flow is applied) outlined in those facility agreements.
In applying these hedging guidelines, the Company must also consider the mandatory hedging requirements which may
be imposed by financiers as a precondition to the provision of finance.
The primary objective of the Company Hedging Policy is to provide a framework to investigate, recommend and (upon
approval) execute appropriate strategies.
-44-

31 December 2007
(continued)
2 Financial risk management (continued)

(a) Market risk
(i)
Foreign exchange risk
PanAust operates internationally and is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to the Australian dollar.
Foreign exchange risk arises from both future commercial transactions and recognised assets and liabilities that are
denominated in a currency that is not the Companys functional currency. The risk is measured using sensitivity analysis
and cash flow forecasting.
Sensitivity of post-tax profit/(loss) and equity to movements in US$ exchange rates by -/+10%, with all other variables held
constant, are shown in the table below. The sensitivity is demonstrated for both the 2007 and 2006 years. The exposure is
mainly as a result of foreign exchange gains/losses on translation of Australian dollar denominated cash and cash
equivalents and payables, as well as forward foreign exchange contracts designated as cash flow hedges.
Profit/(loss) after tax

US$ 10%
US$ 10%
weaker
stronger
US$'000
US$'000
Consolidated
2007
Derivatives - cash flow hedges
Parent
2007
Consolidated
2006
Parent
2006
Equity
US$ 10%
weaker
US$'000
US$ 10%
stronger
US$'000
872
(127)
745
(713)
104
(609)
872
275
(127)
1,020
(713)
(275)
104
(884)
700
700
(573)
(573)
700
700
(573)
(573)
4,154
(41)
4,113
(3,399)
34
(3,365)
4,154
(41)
4,113
(3,399)
34
(3,365)
4,106
4,106
(3,359)
(3,359)
4,106
4,106
(3,359)
(3,359)
-45-

31 December 2007
(continued)

(ii) Cash flow and fair value interest rate risk
PanAust's main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the
Company to cash flow interest rate risk. As part of the Mandatory Hedging Program under the project financing for the
development of the Phu Kham Copper-Gold Operations, PanAust must maintain approximately 90% of its borrowings at
fixed rate using floating-to-fixed interest rate swaps to achieve this when necessary.
Sensitivity of post-tax profit/(loss) and equity to changes in interest rates by -/+1% from the 31 December 2007 rates of
3.68% for cash and 7.75% for borrowings with all other variables held constant, are shown in the table below. The
sensitivity is demonstrated for both the 2007 and 2006 years. The exposure is mainly as a result of borrowings at floating
rates and interest income from cash and cash equivalents. Equity would have been impacted mainly as a result of an
increase/decrease in the fair value of the cash flow hedges of borrowings.

1% decrease
1% increase
US$'000
US$'000
Consolidated
2007
Receivable from Government of Laos
Option premium payable
Borrowings
Parent
2007
Consolidated
2006
Parent
2006
Equity
1% decrease
1% increase
US$'000
US$'000
(244)
(147)
465
74
244
141
(465)
(80)
(244)
354
1,216
(147)
465
1,644
244
(342)
(1,200)
141
(465)
(1,622)
(63)
(63)
63
63
(63)
(63)
63
63
(685)
(118)
(803)
685
118
803
(685)
(118)
(803)
685
118
803
(370)
(370)
370
370
(370)
(370)
370
370
-46-

31 December 2007
(continued)

(iii) Commodity price risk
PanAust is exposed to commodity price risk. This arises from the sale of copper (from 2008), gold and silver that is priced
on, or benchmarked to, open market exchanges. The Company has entered into forward contracts and put options to
hedge the gold price as part of its Mandatory Hedging Program (required under the project financing for the Phu Kham
Copper-Gold Operation).
At 31 December 2007, had the gold price changed by -/+20% from the year end price of US$842.10/oz, post-tax profit and
equity for the year would have been impacted as per the table below. This impact is as a result of the gold forward
contracts and put options in place. The parent entity has no exposure to movements in gold prices. At 31 December 2006,
the Company had no gold hedges in place. Accordingly, no comparison has been made to the 2006 year.

20% decrease
20% increase
US$'000
US$'000
Consolidated
2007
Financial assets
Financial liabilities
Equity
20% decrease
20% increase
US$'000
US$'000
5,087
(2,164)
5,087
(2,164)
5,087
(2,164)
11,652
16,739
(11,658)
(13,822)
(b) Credit risk

Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents, derivative financial
instruments and deposits with banks and financial institutions, as well as credit exposures to customers, including
outstanding receivables and committed transactions. For banks and financial institutions, only high-credit-quality
counterparties are accepted, and the Company utilises ISDA agreements with derivative counterparties in order to limit
exposure to credit risk through the netting of amounts receivable from and payable to individual counterparties. If
wholesale customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk
control assesses the credit quality of the customer, taking into account its financial position, past experience and other
factors.
There are no significant credit risk issues for PanAust at the balance date with one single customer for gold sales on short
credit terms and no balance in trade debtors at 31 December 2007.
PanAust also has a policy in place to ensure that surplus cash is invested with financial institutions of appropriate credit
worthiness.
-47-

31 December 2007
(continued)

(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding
through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the
dynamic nature of the underlying businesses, the Group's treasury function aims at flexibility in funding by maintaining
committed credit lines available at a prudent level.
The table below analyses the Companys financial liabilities and net settled derivative financial instruments into relevant
maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts
disclosed in the table are the contractual undiscounted cash flows.
At 31 December 2007
Less than 1
year
US$'000
Bank overdrafts and loans

Option premium payable
Finance lease liabilities
Interest rate swaps *
Between 1 and Between 2 and

2 years
5 years
US$'000
US$'000
8,000
22,390
1,321
1,014
759
28,800
1,183
4,055
73
Over 5 years
US$'000
66,240
3,600
12,165
-
44,160
824
9,565
-
* The net amounts expected to be receivable in relation to the interest rate swaps have been estimated using interest
rates applicable at the reporting date.
At 31 December 2006 the only financial liabilities or derivative financial instruments of the Company were trade and other
payables totalling US$13.4 million maturing in less than 1 year.
The table below analyses the Companys derivative financial instruments that will be settled on a gross basis into relevant
maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts
disclosed in the table are the contractual undiscounted cash flows. They are expected to occur and affect profit or loss at
various dates between six months to one year from the reporting date.
At 31 December 2007
Less than 1
year
US$'000
Forward foreign exchange contracts - cash flow hedges

- inflow
- outflow
Between 1 and Between 2 and

2 years
5 years
US$'000
US$'000
2,764
(2,554)
Forward gold sales contracts - cash flow hedges

- inflow
- outflow
12,033
(13,259)
Over 5 years
US$'000
35,064
(36,921)
8,472
(8,371)
(d) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is
determined using valuation techniques. The Company uses a variety of methods and makes assumptions that are based
on market conditions existing at each balance date. Quoted market prices or dealer quotes for similar instruments are
used for long-term debt instruments held. Other techniques, such as estimated discounted cash flows, are used to
determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the
present value of the estimated future cash flows. The fair value of forward exchange contracts is determined using forward
exchange market rates at the balance sheet date.
-48-

31 December 2007
(continued)
3 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under
the circumstances.
(a) Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(b) Critical judgements in applying the entitys accounting policies
(i) Mine restoration provisions estimates
The calculation of rehabilitation and closure provisions (and corresponding capitalised closure cost assets where
necessary) rely on estimates of costs required to rehabilitate and restore disturbed land to its original condition. These
estimates are regularly reviewed and adjusted in order to ensure that the most up to date data is used to calculate these
balances. Restoration provisions are disclosed in Note 26. The restoration provision increased in 2007 by US$10,404,869
to US$11,922,929 (2006 by US$579,660 to US$1,518,060) primarily due to reassessment of the final costs of closure for
the Phu Kham Heap Leach Operation as well as a more detailed calculation of the costs of closure of the Phu Kham
Copper-Gold Operation currently in development.
Significant judgement is required in determining the provision for mine rehabilitation as there are many transactions and
other factors that will affect the ultimate costs required to rehabilitate the mine site. Factors that will affect this liability
include future development, changes in technology, price increases and changes in interest rates.
(ii) Determination of Ore Reserves and Mineral Resources
The Group estimates its ore reserves and mineral resources based on information compiled by Competent Persons as
defined in accordance with the Australasian Code for Reporting of Mineral Resources and Ore Reserves of December
2004 (the JORC code). Reserves determined in this way are used in the calculation of depreciation, amortisation and
impairment charges, the assessment of mine lives and for forecasting the timing of the payment of close down and
restoration costs.
When a change in estimated recoverable gold ounces contained in proved and probable ore reserves is made,
amortisation and depreciation is accounted for prospectively.
(iii) Units of Production Method of Depreciation and Amortisation
The Group applies the units of production method for depreciation and amortisation of its mine assets based on ore tonnes
mined. These calculations require the use of estimates and assumptions. Significant judgement is required in assessing
the available reserves and the production capacity of the plants to be depreciated under this method. Factors that are
considered in determining reserves, resources and production capacity are the Groups history of converting resources to
reserves and the relevant timeframes, the complexity of metallurgy, markets and future developments. When these factors
change or become known in the future, such differences will impact pre-tax profit and carrying value of assets.
(iv) Income Taxes
The Group is subject to income taxes of Australia and jurisdictions where it has foreign operations. Significant judgement
is required in determining the worldwide provision for income taxes. There are many transactions and calculations for
which the ultimate tax determination is uncertain during the ordinary course of business.
(v) Fair values of derivative financial instruments
The Group assesses the fair value of its gold put options, currency options and interest rate swaps half-yearly in
accordance with the accounting policy stated in Note 1(n). Fair values have been determined based on well established
option pricing models and market conditions existing at the balance date. These calculations require the use of estimates
and assumptions. Changes in assumptions concerning interest rates, gold prices and volatilities could have a significant
impact on the fair valuation attributed to the Group's gold put options and interest rate swaps. When these assumptions
change in the future, such differences will impact asset carrying values and the hedging reserve and / or income
statement in the period in which they change or become known.
(vi) Impairment
Assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts
exceed their recoverable amounts. The assessment of the carrying amount often requires estimates and assumptions
such as discount rates, exchange rates, commodity prices, future capital requirements and future operating performance.
-49-

31 December 2007
(continued)
4 Segment information
(a) Description of segments
Business segments
The consolidated entity operated solely in the mining and mineral exploration industry.
Geographical segments
Australia
The home country of the parent entity which is the corporate headquarters for the Group.
Southeast Asia
Comprises mining and mineral exploration operations carried on in Laos and Thailand.
(b) Primary reporting format - geographical segments
2007
Southeast
Asia
US$'000
Australia
US$'000
Sales to external customers

Interest revenues
Total sales revenue
Foreign exchange gains/sundry revenue
Consolidated revenue
Segment result
Hedging expenses
Profit before income tax
Profit for the year
Segment assets
Segment liabilities
Other segment information
Investments in associates and joint venture partnership (note (iii))
1,492
1,492
1,368
22,174
253
22,427
109
(3,636)
(6,732)
1,021
1,021
21,390
7,247
(1,533)
21,618
7,346
(1,071)
193,611
Southeast
Asia
US$'000
Australia
US$'000
3,633
7,785
11,418
12,671
12,671
7,018
(11,476)
(180,028)
(180,028)
(10,368)
(2,687)
(13,055)
(13,055)
Increase in deferred exploration, evaluation and development costs
Segment result
Loss from foreign currency translation
Net loss
22,174
1,745
23,919
1,057
24,976
370,511
406,361
228
99
462
Total sales revenue

Interest revenue
Foreign exchange gains/sundry revenue
Total segment revenue
(420)
218,244
2,199
Acquisitions of property, plant and equipment, intangibles and other

non-current segment assets
Other non-cash expenses
2006
Eliminations Consolidated
US$'000
US$'000
408,727
228,532
193,611
Eliminations Consolidated
US$'000
US$'000
(406)
(406)
-
(4,458)
(64)
(4,522)
201,186
5,256
-
110,329
125,972
1,021
Acquisitions of property, plant and equipment, intangibles and other

non-current segment assets
Other non-cash expenses
301
49
200
11,898
4,458
57
12,199
4,507
257
Increase in deferred exploration, evaluation and development costs
52,836
52,836
Segment assets
Segment liabilities
Investments in associates and joint venture partnership (note (iii))
-50-
(115,228)
(115,228)
-
12,671
3,633
7,379
23,683
196,287
16,000
1,021

31 December 2007
(continued)
4 Segment information (continued)
(i)
Accounting policies
Segment information is prepared in conformity with the accounting policies of the entity as disclosed in note 1 and
Accounting Standard AASB 114 Segment Reporting.
Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the relevant
portion that can be allocated to the segment on a reasonable basis. Segment assets include all assets used by a segment
and consist primarily of operating cash, receivables, inventories, property, plant and equipment and goodwill and other
intangible assets, net of related provisions. While most of these assets can be directly attributable to individual segments,
the carrying amounts of certain assets used jointly by segments are allocated based on reasonable estimates of usage.
Segment liabilities consist primarily of trade and other creditors, employee benefits and provision for service warranties.
Segment assets and liabilities do not include income taxes.
(ii) Inter-segment transfers
Segment revenues, expenses and results include transfers between segments. Such transfers are priced on an ''armslength'' basis and are eliminated on consolidation.
(iii) Equity-accounted investments
The Group owns 20.66% of Puthep Company Limited, a base metals exploration company located in Thailand which is
accounted for using the equity method and is allocated to the Southeast Asia segment. The Company has earned the right
to acquire 33.17% of Puthep Company Limited, with the issue of shares currently in progress.
5 Revenue
Consolidated
2007
2006
US$'000
US$'000
Parent
2007
2006
US$'000
US$'000
From continuing operations

Sales revenue
Sale of goods
Other revenue
Interest
Sundry income
22,113
12,671
1,745
42
1,787
3,632
3,632
1,467
1,467
3,624
3,624
23,900
16,303
1,467
3,624
6 Other income
Consolidated
2007
2006
US$'000
US$'000
Net gain on disposal of property, plant and equipment
Foreign exchange gains (net)
19
1,056
1,075
-51-
7,379
7,379
Parent
2007
2006
US$'000
US$'000
985
985
7,570
7,570

31 December 2007
(continued)
7 Revision of estimates
(a) Revision of useful lives of plant and equipment
During the year the estimated total useful lives of certain items of plant and equipment used in the Phu Kham Heap Leach
Gold Operation were revised as these assets are not expected to have any economic use past the current expected
closure of the Phu Kham Heap Leach Gold Operation at the end of 2009. The net effect of the changes in the current
financial year was an increase in depreciation expense of the Group of US$2.4 million.
Assuming the assets are held until the end of their estimated useful lives, depreciation of the Group in future years in
relation to these assets will be increased by approximately US$1.5million in each of 2008 and 2009.
8 Expenses
Consolidated
2007
2006
US$'000
US$'000
Parent
2007
2006
US$'000
US$'000
(a) Profit before income tax includes the following

specific expenses:
Depreciation
Buildings
Field plant and equipment
Mine properties
Office equipment
Mining plant and equipment
Motor vehicles
Total depreciation
120
52
6,005
108
949
70
7,304
47
3,933
157
352
19
4,507
42
42
351
105
456
65
96
161
350
105
455
420
406
Rental expense relating to operating leases

Minimum lease payments
Total rental expense relating to operating leases
338
338
223
223
Defined contribution superannuation expense
262
151
Amortisation
Development costs
Total amortisation
Finance costs
Interest and finance charges paid/payable
Provisions: unwinding of discount
Other borrowing costs
Amount capitalised
Amount recognised as prepayment
Finance costs expensed
17,925
101
96
(5,325)
(12,533)
264
Intercompany management fees (included in Other

expenses at Note 7(b))
-52-

31 December 2007
(continued)
Expenses (continued)
Consolidated
2007
2006
US$'000
US$'000
Parent
2007
2006
US$'000
US$'000
(b) Other expenses

Professional and consultancy fees
Travel expenses
Community relations
Investor relations
Insurance
Other
930
951
629
440
270
665
3,885
745
305
317
309
307
1,599
3,582
462
462
529
529
2,687
2,687
5,212
5,212
(c) Material impacts on expenses

Hedging expenses
Write off of uneconomically recoverable gold in
heaps
Hedging activities during 2007 have resulted in a negative impact to the profit and loss statement as a result of
ineffectiveness in some of the hedge relationships, as well as the movement in value of deferred premium on gold put
options due to increase in gold price.
During 2006, wet season rain damage inflicted upon agglomerates on the surface of active cells prevented uniform leach
solution penetration of the underlying heap. In order to commence the stacking of fresh agglomerated ore, the rain
damaged cells had to be sealed to ensure maximum recovery of gold from the fresh agglomerates. As a result 16,040
ounces of gold in circuit is uneconomically recoverable and was written off at cost as at 31 December 2006.
9 Income tax expense

Consolidated
2007
2006
US$'000
US$'000
Parent
2007
2006
US$'000
US$'000
(a) Income tax expense

Current tax
Tax not brought to account
(5,310)
5,310
-
-53-
1,019
(1,019)
-
821
(821)
-
1,726
(1,726)
-

31 December 2007
(continued)
9 Income tax expense (continued)

Consolidated
2007
2006
US$'000
US$'000
Parent
2007
2006
US$'000
US$'000
(b) Numerical reconciliation of income tax expense

to prima facie tax payable
Profit from continuing operations before income tax
expense
Tax at the Australian tax rate of 30% (2006 - 30%)
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Expenditure not allowed for income tax purposes
Other assessable income
Diminution of intercompany loans
Other deductible expenses
Non-assessable income
International tax rate differential
(13,055)
(3,917)
(4,522)
(1,357)
(7,896)
(2,369)
6,677
2,003
1,105
928
(4,062)
(310)
946
(5,310)
3,734
(371)
(987)
1,019
29
923
2,917
(373)
(306)
821
1,060
(370)
(967)
1,726
5,310
-
(1,019)
-
(821)
-
(1,726)
-
Deferred tax asset not brought to account

Income tax expense
Consolidated
2007
2006
US$'000
US$'000
Parent
2007
2006
US$'000
US$'000
(c) Tax losses
Unused tax losses for which no deferred tax asset has

been recognised
Potential tax benefit @ 30%
International tax rate differential
73,913
22,174
(3,349)
18,825
53,718
16,115
(2,403)
13,712
6,929
2,079
2,079
5,656
1,697
1,697
Unused tax losses for all Australian entities are included under the parent entity in the table above. The difference between
unused tax losses for the consolidated and parent entities represents tax losses of the Laos entity Phu Bia Mining Limited.
The Company has not recognised any deferred tax assets or liabilities as at 31 December 2007. If the Company had
recognised deferred tax balances at period end the estimated tax position would be US$19 million deferred tax asset,
US$13 million deferred tax liability and US$6 million tax credit to profit & loss.
(d) Tax consolidation legislation
Effective 1 January 2004, for the purposes of Australian income taxation, PanAust and its 100% Australian owned
subsidiaries have formed a tax consolidated Group. Members of the Group have entered into a tax sharing arrangement in
order to allocate income tax expense to the wholly-owned subsidiaries on a pro-rata basis. In addition the agreement
provides for the allocation of income tax liabilities between the entities should the head entity default on its tax payment
obligations. At the balance date, the possibility of default is remote. The head entity of the Group is Pan Australian
Resources Limited.
-54-

31 December 2007
(continued)
10 Current assets - Cash and cash equivalents

Consolidated
2007
2006
US$'000
US$'000
24,414
Cash at bank and in hand
Parent
2007
2006
US$'000
US$'000
68,472
10,708
64,489
(a) Reconciliation to cash at the end of the year

Consolidated
2007
2006
US$'000
US$'000
Cash balance comprises:
Cash at bank
Short term money market deposits
Petty cash
19,111
5,254
49
24,414
Parent
2007
2006
US$'000
US$'000
28,347
40,087
38
68,472
10,708
10,708
24,402
40,087
64,489
(b) Cash at bank and on hand

These are interest bearing floating interest rates between 3.7% to 7.4% (2006: 5.3% to 5.8%).
11 Current assets - Receivables and other assets

Consolidated
2007
2006
US$'000
US$'000
Net receivables
Other receivables
Prepayments
Prepayments
Prepayments - Lease facility fees
Prepayments - Loan facility fees
Parent
2007
2006
US$'000
US$'000
202
340
35
341
3,234
308
1,597
5,139
1,945
1,945
765
765
1,355
1,355
5,341
2,285
800
1,696
12 Current assets - Inventories

Consolidated
2007
2006
US$'000
US$'000
Parent
2007
2006
US$'000
US$'000
Raw materials and stores - at cost

Provision for obsolete stores
5,193
(74)
5,119
1,408
1,408
Gold in heaps - at cost

Gold bullion - at cost
8,169
-
2,316
855
13,288
4,579
-55-

31 December 2007
(continued)
13 Derivative financial instruments

Consolidated
2007
2006
US$'000
US$'000
Parent
2007
2006
US$'000
US$'000
Current assets
((a)(ii))
Gold put options ((a)(iii))
Total current derivative financial instrument assets
223
312
535
Non-current assets
Gold put options ((a)(iii))
Total non-current derivative financial instrument assets
3,871
3,871
Total derivative financial instrument assets
4,406
Current liabilities
((a)(ii))
Interest rate swaps - cash flow hedge ((a)(i))
Total current derivative financial instrument liabilities
7
995
1,002
96
9,814
9,910
Total derivative financial instrument liabilities
10,912
Net derivative financial instrument assets/(liabilities)
(6,506)
Non-current liabilities
Interest rate swaps - cash flow hedge ((a)(i))
Gold forward contracts ((a)(iii))
Total non-current derivative financial instrument
liabilities
(a) Instruments used by the Group as required by the Mandatory Hedging Program
The Group is party to derivative financial instruments in the normal course of business in order to hedge exposure to
fluctuations in foreign exchange, interest rates and gold price in accordance with the mandatory hedging program for the
project financing for the Phu Kham Copper-Gold Operation (refer to note 2).
(i) Forward exchange contracts - cash flow hedges
The Laos based operations use materials and services purchased from Australia. In order to protect against exchange
rate movements, the Group has entered into forward exchange contracts to purchase Australian dollars.
These contracts are hedging highly probable forecasted purchases for the ensuing financial year. The contracts are timed
to mature when payments for major shipments of component parts are scheduled to be made or Australian dollar costs for
services are payable.
The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised directly
in equity. When the cash flows occur, the Company adjusts the initial measurement of the component recognised in the
balance sheet by the related amount deferred in equity.
During the year ended 31 December 2007 a gain of US$586,007 (2006 - nil) was removed from equity and the benefit
reduced the acquisition cost of components.
-56-

31 December 2007
(continued)
13 Derivative financial instruments (continued)

(ii) Interest rate swap contracts - cash flow hedges
Bank loans of the Group currently bear an average variable interest rate of 7.73%. It is policy to protect part of the loans
from exposure to increasing interest rates. Accordingly, the Group has entered into interest rate swap contracts under
which it is obliged to receive interest at variable rates and to pay interest at fixed rates.
Swaps currently in place cover approximately 90% (2006 - nil%) of the construction facility principal outstanding and are
timed to expire as each loan repayment falls due. The fixed interest rates range between 5.12% and 5.1375% (2006 nil%) and the variable rates are 2.5% above the LIBO rate which at last reset prior to balance date was 5.2447%.
The contracts require settlement of net interest receivable or payable each 30 days until 10 April 2008, then each 90 days
from 30 June 2008 to 30 June 2009. The settlement dates coincide with the dates on which interest is payable on the
underlying debt. The contracts are settled on a net basis.
The gain or loss from remeasuring the hedging instruments at fair value is deferred in equity in the hedging reserve, to the
extent that the hedge is effective, and reclassified into profit and loss when the hedged interest expense is recognised.
The ineffective portion is recognised in the income statement immediately. In the year ended 31 December 2007 a gain of
US$99,087 was transferred to profit and loss (2006 - nil) and recognised as a hedge gain relating to the ineffective portion
of the interest rate swaps due to differences in values and timing of maturities between the interest rate swaps and the
hedged debt. In the year ended 31 December 2007 a loss of US$6,193 was capitalised as finance costs for the Phu Kham
Copper-Gold Operation development (2006 - nil) on the settlement of interest rate swaps.
(iii) Gold forward contracts and put options
The Company has entered into forward contracts for the sale of gold produced by the Phu Kham Operations from 20092013. These contracts comprise committed gold forward hedging of 70,000 ounces at an average price of approximately
US$800 per ounce. This committed hedging represents 4% of forecast total revenue from the Phu Kham Operations
through to 2013.
The Company has also entered into put options over 124,000 ounces of gold at a strike rate of US$700 per ounce.
(b) Interest rate and foreign exchange risk
For an analysis of the sensitivity of derivatives to interest rate and foreign exchange risk refer to note 2.
14 Non-current assets - Receivables and other assets

Consolidated
2007
2006
US$'000
US$'000
Prepayments
Prepaid Tax
Prepayments - Lease facility fees
Prepayments - Loan facility fees
Government of Laos receivable
Parent
2007
2006
US$'000
US$'000
3,592
1,847
8,781
14,220
15,016
29,236
Tax prepaid by Phu Bia Mining Limited is able to be offset against future income tax payments.
Amount receivable from Government of Laos to acquire 10% interest in Phu Bia Mining Limited represents fair value of
estimated future cash flows required to obtain the interest based on 10% of current equity invested by PanAust as at 31
December 2007.
-57-

31 December 2007
(continued)
14 Non-current assets - Receivables and other assets (continued)

(a) Interest rate risk
The Groups exposure to interest rate risk and the effective weighted average interest rate by maturity periods is set out in
the following tables.
2007
Floating
NonTotal
interest interest
rate
bearing
US$'000 US$'000 US$'000
Financial Assets
Non-trade debtors
Cash
24,414
24,414
202
202
4.8 %
Weighted average interest rate
2006
202
24,414
24,616
-%
Floating
NonTotal
interest interest
rate
bearing
US$'000 US$'000 US$'000
Financial Assets
Non-trade debtors
Cash
68,471
11,800
80,271
341
341
5.7 %
341
68,471
11,800
80,612
-%
15 Non-current assets - Investments accounted for using the equity method

Consolidated
2007
2006
US$'000
US$'000
1,021
Shares in associates
1,021
Parent
2007
2006
US$'000
US$'000
-
(a) Interest in associate

The interest in associates are accounted for in the consolidated financial statements using the equity method of
accounting and is carried at cost by the parent entity (refer to note 17).
-58-

31 December 2007
(continued)
15 Non-current assets - Investments accounted for using the equity method (continued)
Ownership interest held by
consolidated entity
31 December
31 December
2006
2007
%
%
20.66
20.66
Name
Puthep Company Limited - ordinary shares
(i) Principal activity
Puthep Company Limited is a copper exploration company incorporated in Thailand.
Puthep Companys sole asset is the Puthep Copper Project in northern Thailand.
Consolidated
31 December
31 December
2006
2007
US$
US$
(ii) Carrying amount of investment in associate
Balance at the beginning of the financial year
Carrying amount of investment at year end
1,020,825
1,020,825
1,020,825
1,020,825
The Company has the right to earn a 51% interest in Puthep Company Limited, a Thai incorporated subsidiary of Padaeng
Industry Public Company Limited (Padaeng) and the licence holder of the Puthep Copper Project in Thailand through a
Participation Agreement entered into in 2000. The consolidated entity is required to complete a bankable feasibility study.
The consolidated entity has completed the expenditure requirements of the First and Second Earning Period of the
Participation Agreement (US$2 million) and has earned a 33.17% interest in Puthep Company Limited. The share issue of
a 20.66% interest in Puthep Company Limited was finalised on 29 June 2005, with the share issue for the further 12.51%
for the Second Earning Period (to take the Company's interest to 33.17%) currently in progress and expected to be
finalised in the first half of 2008.
The Government of Thailand has an option to acquire a 10% interest. If the Government of Thailand exercises its option to
acquire a 10% interest, each of Padaeng and the Company must transfer half of the shares required to be transferred to
the Government of Thailand provided that Padaeng's interest is not to fall below 26%. Under the Participation Agreement,
the Company has further options to acquire a 60% or 70% interest in Puthep (if the Government of Thailand exercised its
option the interest would be diluted to 55% or 64% respectively).
Under the Thailand - Australia Free Trade Agreement, the Company can acquire a 60% interest without any further
approvals from the Government of Thailand. The Company can acquire an interest above 60% with government approval.
16 Non-current assets - Held-to-maturity investments

Consolidated
2007
2006
US$'000
US$'000
-
Short term money market deposits
11,800
11,800
Parent
2007
2006
US$'000
US$'000
-
11,800
11,800
The short term money market deposits are carried at cost. They are held to their maturity and carry a fixed interest rate of
5% for 2006.
-59-

31 December 2007
(continued)
17 Non-current assets - Other financial assets

Consolidated
2007
2006
US$'000
US$'000
Shares in subsidiaries (note 35)
Other investments
Loan to equity accounted investment **
Loans to subsidiaries *
Provision for diminution on intercompany loans
Other unlisted securities

Equity securities
Provision for diminution on
unlisted shares
Parent
2007
2006
US$'000
US$'000
3,667
3,667
(7)
-
(7)
-
176,825
109,571
3,667
207
213,897
(37,279)
176,618
207
136,918
(27,554)
109,364
* Represents parent entity interest in subsidiaries as described in Note 1(b)(i).

** Represents advances for exploration expenditure to Puthep Company Limited.
18 Non-current assets - Property, plant and equipment
Consolidated
Mine
Properties Field Plant Phu Kham
Mining
Office
and
Heap Leach Plant and
Equipment Equipment Operation Equipment
US$'000
US$'000
US$'000
US$'000
Motor
Vehicles
US$'000
Total
US$'000

Opening net book amount
Additions
Amortisation charge
Depreciation charge
Transfers in/(out)
Closing net book amount
272
389
(157)
504
92
384
(47)
429
1,223
(191)
1,032
10,230
11,427
(1,526)
(352)
19,779
49
(19)
31
11,867
12,200
(1,717)
(575)
21,775
At 31 December 2006
Cost or fair value
Accumulated amortisation
Accumulated depreciation
Net book amount
773
(269)
504
508
(79)
429
1,277
(245)
1,032
22,183
(1,993)
(411)
19,779
105
(74)
31
24,846
(2,238)
(833)
21,775
-60-

31 December 2007
(continued)
18 Non-current assets - Property, plant and equipment (continued)
Consolidated
Mine
Properties Field Plant Phu Kham
Mining
Office
and
Heap Leach Plant and
Equipment Equipment Operation Equipment
US$'000
US$'000
US$'000
US$'000

Additions
Disposals
Amortisation charge
Depreciation charge
Depreciation transferred (in)/out
Transfers in/(out)
504
283
(15)
(107)
174
(398)
441
At 31 December 2007
Cost or fair value
Net book amount
643
(202)
441
429
29
(52)
131
(537)
-
Motor
Vehicles
US$'000
Total
US$'000
1,032
(6,416)
(4,417)
23,778
13,977
19,779
19,232
(803)
(77)
(7,266)
30,865
31
2,074
(19)
(70)
10
80
2,106
21,775
21,618
(34)
(7,448)
(4,179)
15,657
47,389
25,055
(11,078)
13,977
34,149
(3,284)
30,865
2,241
(135)
2,106
62,088
(14,699)
47,389
The parent entity does not hold any property, plant or equipment.
(a) Leased assets
Mining plant and equipment includes the following amounts where the Group is a lessee under a finance lease:
Consolidated
2007
2006
US$'000
US$'000
Cost
Net book amount
25,980
(1,810)
24,170
Parent
2007
2006
US$'000
US$'000
19 Non-current assets - Exploration and evaluation, development and mine properties
Consolidated

Carrying amount at start of year
Additions
Amortisation charge
Carrying amount at end of year
Preproduction Phu Kham

Exploration & Copper-Gold
Phu Kham
Evaluation
Development Preproduction
US$'000
US$'000
US$'000
17,156
6,315
23,471
46,041
46,041
-61-
13,200
480
(2,217)
11,463
Restoration
Asset
US$'000
Total
US$'000
30,356
52,836
(2,217)
80,975

31 December 2007
(continued)
19 Non-current assets - Exploration and evaluation, development and mine properties

(continued)
Consolidated
Preproduction Phu Kham

Exploration & Copper-Gold
Phu Kham
Evaluation
Development Preproduction
US$'000
US$'000
US$'000

Additions
Amortisation charge
Amortisation transferred out/(in)
Transfers in/(out)
23,471
12,206
9
35,686
46,041
159,061
252
205,354
11,463
22,224
(42)
2,835
(14,298)
22,182
Restoration
Asset
US$'000
11,860
144
(641)
11,363
Total
US$'000
80,975
205,351
102
2,194
(14,037)
274,585
The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the successful
development and commercial exploitation or sale of the respective mining areas.
20 Non-current assets - Goodwill

Consolidated
Goodwill
US$'000

Additions
Amortisation charge
5,380
5,380
At 31 December 2006
Cost
Accumulated amortisation and impairment
Net book amount
5,380
5,380

Amortisation charge
5,380
5,380
At 31 December 2007
Cost
Accumulated amortisation and impairment
Net book amount
5,380
5,380
The ultimate recoupment of goodwill carried forward is dependent on the successful development and commercial
exploitation or sale of the respective mining areas.
-62-

31 December 2007
(continued)
21 Current liabilities - Payables
Notes
Consolidated
2007
2006
US$'000
US$'000
Trade payables
Accrued expenses
Gold put option premium payable
Other payables
10,271
10,979
1,321
1,140
23,711
6,172
6,838
402
13,412
Parent
2007
2006
US$'000
US$'000
-
63
63
22 Current liabilities - Borrowings

Consolidated
2007
2006
US$'000
US$'000
Secured
Project finance
Lease liabilities (note 33)
Total secured current borrowings
8,000
1,014
9,014
Parent
2007
2006
US$'000
US$'000
Refer to Note 25 Non-current liabilities - Borrowings for further details.
23 Current liabilities - Provisions

Consolidated
2007
2006
US$'000
US$'000
Employee benefits
Other provisions
1,805
20
1,825
1,020
1,020
Parent
2007
2006
US$'000
US$'000
-
Other provision relates to provision for environmental protection , first recognised in 2007.
24 Non-current liabilities - Payables

Consolidated
2007
2006
US$'000
US$'000
Loan from controlled entity
Gold put option premium payable
5,607
5,607
-63-
Parent
2007
2006
US$'000
US$'000
205
205
205
205

31 December 2007
(continued)
25 Non-current liabilities - Borrowings

Consolidated
2007
2006
US$'000
US$'000
Secured
Lease liabilities
Project finance
Total secured non-current borrowings
25,784
139,200
164,984
Parent
2007
2006
US$'000
US$'000
(a) Bank loans and bank overdraft

On 26 June 2007, the Company entered into loan agreements for debt facilities with a syndicate of banks led by the ANZ
Investment Bank. The facilities include a US$160 million construction facility over a seven-year term for the completion of
the development and construction of the Phu Kham Copper-Gold Operation in Laos. The facility also includes US$47
million working capital and pre-operating cost facilities and a US$35 million equipment lease facility (split into two
tranches) secured over the mobile mining equipment. As at 31 December 2007, the Company has drawn down US$26.8
million of the lease equipment facility and US$147.2 million of the construction facility.
The construction facility, the working capital facility and the pre-operating cost facility have variable interest rates and are
repayable in instalments over the next 7 years. The interest rate at reporting date on funds drawn from these facilities is
7.745%. The equipment lease facility has a variable interest rate and is repayable in instalments over the next 7 years.
The interest rate at reporting date on funds drawn from the two lease facility tranches is 7.58% and 8.03%.
In December 2007, PanAust agreed terms for a US$80 million subordinated debt facility with Goldman Sachs JBWere.
The funds will be used to finance initial expenditure on the US$40 million capital works for the expansion of the Phu Kham
Copper-Gold Operation and the substantially increased exploration and evaluation budget of US$30 million (includes
Thailand) for 2008. The facility will also provide the Company with funding flexibility through the first year of production at
the Phu Kham Copper-Gold Operation.
Phu Kham Copper-Gold Operation have approved the US$80 million subordinated debt facility between PanAust and
Goldman Sachs JBWere (GSJBW). The agreement was executed on 5 March 2008, with the first drawdown of funds from
this facility received on 10 March 2008. The current interest rate on this facility is LIBOR plus 4.5%. The term of this facility
is twelve months. The facility is fully subordinated to the Phu Kham Copper-Gold Operation debt finance with second
ranking security provided by the Company in favour of GSJBW.
As part of the consideration for the agreement of GSJBW to make available the facility, 5,000,000 unlisted options have
been issued at an exercise price of A$1.145 (being a 10% premium to the volume weighted average price in the five
trading days ending 5 March 2008), expiring 5 March 2009. Under the terms of the arrangements entered into with
GSJBW a further two tranches, each of 5,000,000 options, may be issued under certain circumstances described in Note
36.
-64-

31 December 2007
(continued)
25 Non-current liabilities - Borrowings (continued)

(b) Financing arrangements
Consolidated
2007
2006
US$'000
US$'000
Bank loan facilities
Construction facility
Pre-operating cost facility
Working capital facility
Letter of credit facility
Lease facility
Total facilities
Used at balance date
Unused at balance date
160,000
25,000
20,000
2,000
34,637
241,637
173,998
67,639
Parent
2007
2006
US$'000
US$'000
The current interest rates are LIBOR plus 2.5% on the $160 million construction facility, LIBOR plus 3.25% on the $25
million pre-operating cost facility, and LIBOR plus 2% on the $20 million working capital facility.
As at the date of this Report, capital expenditure on the Phu Kham Copper-Gold Operation was fully funded. Pre operating costs are being met by facilities provided by the project finance banks. Expenditure on the ramped up
exploration program, initial commitments for the Phu Kham expansion and feasibility study activities will be funded by the
US$80 million subordinated debt facility provided by Goldman Sachs JBWere.
(c) Interest rate risk exposures
The following table sets out the Groups exposure to interest rate risk, including the contractual repricing dates and the
effective weighted average interest rate by maturity periods.
Fixed interest rate
Floating 1 year or Over 1 to
Total
interest
less
2 years
rate
US$'000 US$'000 US$'000 US$'000
2007
Bank overdrafts and loans (notes 22 and 25)

Lease liabilities (notes 22, 25 and 33)
Interest rate swaps * (note 13)
147,200
26,798
173,998
7.63 %
2006
101,106
101,106
5.13 %
34,869
34,869
147,200
26,798
135,975
309,973
5.13 %
Floating 1 year or Over 1 to

Total
interest
less
2 years
rate
US$'000 US$'000 US$'000 US$'000
Bank overdrafts and loans (note 22)

Lease liabilities (notes 22, 25 and 33)
Interest rate swaps * (note 13)
4,000
7.70 %
* Notional principal amounts
-65-
4,000
-

31 December 2007
(continued)
26 Non-current liabilities - Provisions

Consolidated
2007
2006
US$'000
US$'000
Employee benefits
Restoration
556
11,923
12,479
50
1,518
1,568
Parent
2007
2006
US$'000
US$'000
-
A provision for restoration is recognised in relation to the mining activities for costs such as reclamation, waste site
closure, plant closure and other costs associated with the restoration of a mining site. Estimates of the restoration
obligations are based on anticipated technology, legal requirements and future costs which have been discounted to their
present value. In determining the restoration provision, the Company has assumed no significant changes will occur in the
relevant country legislation in relation to restoration of such mines in the future.
(a) Movements in provisions
Movements in each class of provision during the financial year, other than employee benefits, are set out below:
Restoration
US$'000
Consolidated - 2007
Non-current
- additional provisions recognised
- unwinding of discount
1,518
10,304
101
11,923
27 Contributed equity
Consolidated and Parent entity
31 December
31 December
2007
2006
Shares
Shares
Consolidated and Parent entity

2007
2006
US$'000
US$'000
(a) Share capital

Ordinary shares
Fully paid
1,433,370,828
-66-
1,407,809,179
215,985
207,856

31 December 2007
(continued)
27 Contributed equity (continued)

(b) Movements in ordinary share capital:
Date
1 January 2006
31 December 2006
1 January 2007
31 December 2007
Number of
shares
Details
US$'000
Opening balance
Executive options exercised
Unlisted options exercised
Employee share plan
Entitlements offer
Private placement
Less Transaction costs
Balance
754,469,646
9,000,000
9,999,820
598,172
622,079,892
11,661,649
1,407,809,179
70,184
621
1,731
141
136,222
5,000
(6,043)
207,856
Opening balance
Executive options exercised
Unlisted options exercised
1,407,809,179
13,900,000
11,661,649
207,856
1,564
6,565
215,985
Balance
1,433,370,828
215,985
(c) Ordinary shares

Ordinary shares have the right to receive dividends as declared and, in the event of a winding up of the Company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on
shares held.
Ordinary shares entitle their holder to one vote per share, either in person or by proxy, at a meeting of the Company.
(d) Share Rights Plan
Information relating to the PanAust Share Rights Plan, including details of shares issued under the plan is set out in
note 40.
(e) Share Options
Executives' Options Plan
Information relating to the PanAust Executives Option Plan, including details of options issued, exercised and lapsed
during the financial year and options outstanding at the end of the financial year, is set out in note 40.
Unlisted options
On 19 May 2006 11,661,649 unlisted options, with an exercise price of 64 cents and a term of two-years, were issued to
Sempra Metals & Concentrates Corporation. These options were exercised in full in December 2007.
(f)
Capital risk management
The Company's objectives when managing capital are to safeguard their ability to continue as a going concern, so that
they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
Consistently with others in the industry, PanAust monitor capital on the basis of the gearing ratio. This ratio is calculated
as net debt divided by total capital. Net debt is calculated as total borrowings (including 'borrowings' and trade and other
payables' as shown in the balance sheet) less cash and cash equivalents. Total capital is calculated as equity as shown
in the balance sheet (including minority interest) plus net debt.
During 2007, the Company's strategy was to establish a consolidated gearing ratio within 40% to 70%, increasing the level
of debt to finance the development of the Phu Kham Copper-Gold Operation. The gearing ratios at 31 December 2007
and 31 December 2006 were as follows:
-67-

31 December 2007
(continued)
27 Contributed equity (continued)

Consolidated
2007
2006
US$'000
US$'000
Total borrowings
Less: cash and cash equivalents (10)
Net debt
Total equity
Total capital
Parent
2007
2006
US$'000
US$'000
196,161
(24,414)
171,747
180,196
351,943
13,412
(68,472)
(55,060)
180,287
125,227
(10,708)
(10,708)
188,128
177,420
63
(64,489)
(64,426)
187,288
122,862
49 %
(44)%
(6)%
(52)%
Gearing ratio
The increase in the gearing ratio during 2007 resulted primarily from the project financing facilities being finalised and
drawn on during the year.
28 Reserves and accumulated losses

Consolidated
2007
2006
US$'000
US$'000
Parent
2007
2006
US$'000
US$'000
(a) Reserves
Hedging reserve - cash flow hedges
Share-based payments reserve
Other reserves
(10,788)
1,213
137
(9,438)
606
137
743
1,213
137
1,350
606
137
743
(10,109)
(99)
(580)
(10,788)
606
607
1,213
384
222
606
606
607
1,213
384
222
606
137
137
137
137
137
137
137
137
Movements:
Hedging reserve - cash flow hedges
Balance at beginning of year
Adoption of hedge accounting (note 13)
Transfer to net profit - gross
Transfer to capitalised development
Balance at end of year
Share-based payments reserve
Valuation options and share rights
Option reserve
Valuation options
-68-

31 December 2007
(continued)
28 Reserves and accumulated losses (continued)

(b) Accumulated losses
Balance at the beginning of the financial year
Net gain/(loss) attributable to members of PanAust
(28,332)
(13,055)
(41,387)
(23,810)
(4,522)
(28,332)
(21,311)
(7,896)
(29,207)
(27,988)
6,677
(21,311)
(c) Nature and purpose of reserves

(i) Share-based payments reserve
The share based payments reserve is used to recognise the fair value of executive options and employee share rights
issued.
(ii) Option reserve
The option reserve is used to recognise the fair value of options issued.
(iii) Hedge Reserve
The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised
directly in equity, as described in note 1(n). Amounts are recognised in profit and loss when the associated hedged
transaction affects profit and loss.
29 Minority interest
Consolidated
2007
2006
US$'000
US$'000
Interest in:
Share capital
15,035
15,035
20
20
Parent
2007
2006
US$'000
US$'000
The Government of Laos has exercised its option to acquire a 10% interest in Phu Bia Mining Limited, which will be paid
from future dividend flows. The 10% interest has been valued as the discounted future cash flows relating to an amount
equivalent to 10% of PanAust's cash investment in Phu Bia Mining as at 31 December 2007.
30 Key management personnel disclosures

(a) Directors
The following persons were directors of PanAust during the financial year:
R. Bryan
G. Stafford
N.P. Withnall
A.E. Daley
G.A. Handley
Chairman (non-executive)
Managing Director (executive)
Director (non-executive)
-69-

31 December 2007
(continued)
30 Key management personnel disclosures (continued)

(b) Other key management personnel
The following persons (senior executives) also had authority and responsibility for planning, directing and controlling the
activities of the Group, directly or indirectly, during the financial year:
F. Hess
J. Walsh
D. Hairsine
A. Bell
R. Usher
R. Allen (from 23 April 2007)
D. Brost (from 3 August 2007)
P. Scarr (from 5 February 2007)
R. Child (resigned effective
30 June 2007)
Managing Director Phu Bia Mining Limited

General Manager Corporate Development
Chief Financial Officer
General Manager Human Resources
General Manager Phu Kham Operations
General Manager Country Affairs
General Manager Geology
Company Secretary & General Counsel
General Manager Geology and Country Affairs
(c) Compensation
Consolidated
2007
2006
$'000
$'000
Short-term employee benefits

Post-employment benefits
Long-term benefits
Share-based payments
2,803
204
142
306
3,455
1,669
108
399
196
2,372
Parent
2007
2006
$'000
$'000
The Company has taken advantage of the relief provided by Corporations Regulation 2M.6.04 and has transferred the
detailed remuneration disclosures to the directors report. The relevant information can be found in sections A-C of the
remuneration report on pages 10 to 16.
(d) Equity instrument disclosures
(i)
Options and share rights provided as remuneration and shares issued on the exercise of such options
Details of options and share rights provided as remuneration and shares issued on the exercise of such options, together
with terms and conditions of the options and share rights, can be found in section D of the remuneration report on pages
17 to 19.
-70-

31 December 2007
(continued)

(ii) Option and share right holdings
The numbers of options over ordinary shares in the Company under the EOP and share rights under the SRP held during
the year by the Managing Director and other senior executives of the Company, including their personally related parties,
are set out below.
2007
Name
Managing Director
G. Stafford (EOP)
F. Hess (EOP)
J. Walsh (EOP)
D. Hairsine (EOP)
A. Bell (EOP)
R. Usher (EOP)
R.Allen (EOP)
D. Brost (EOP)
P. Scarr (EOP)
R.Child (EOP) (resigned effective
30 June 2007)
F. Hess (SRP)
D. Hairsine (SRP)
A. Bell (SRP)
R. Allen (SRP)
Balance at Granted as
start of the compenyear
sation
Exercised
Balance at
end of the Vested and
year
exercisable Unvested
Other
changes
8,000,000
3,500,000 (4,000,000)
7,500,000
4,000,000
3,500,000
2,000,000
1,750,000
1,750,000
2,000,000
1,000,000
2,750,000
800,000
1,300,000
650,000
500,000
750,000
1,300,000
-
(1,000,000)
(1,000,000)
(1,400,000)
(2,750,000)
2,800,000
2,050,000
750,000
1,250,000
1,500,000
750,000
1,300,000
-
2,000,000
750,000
750,000
600,000
1,000,000
-
800,000
1,300,000
650,000
500,000
750,000
1,300,000
-
400,000
650,000
325,000
650,000
400,000
650,000
325,000
650,000
400,000
650,000
325,000
650,000
No options or share rights are vested and unexercisable at the end of the year.
2006
Name
Managing Director
G. Stafford
G. Stafford (indirect)(ii)
F. Hess
J. Walsh
D. Hairsine
A. Bell
R. Usher
R. Child (resigned effective
30 June 2007)
Balance at Granted as
start of the compenyear
sation
Exercised
Balance at
end of the Vested and
year
exercisable Unvested
Other
changes
7,000,000
3,000,000
2,000,000 (1,000,000)
- (3,000,000)
8,000,000
-
8,000,000
-
2,000,000
2,750,000
2,750,000
2,750,000
- (1,000,000)
- (1,000,000)
2,000,000
1,000,000
-
2,000,000
1,750,000
1,750,000
2,000,000
1,000,000
2,750,000
2,000,000
1,750,000
1,750,000
1,000,000
2,750,000
1,000,000
1,000,000
-
-71-

31 December 2007
(continued)

(iii) Share holdings
The numbers of shares in the Company held during the financial year by each director of PanAust and other senior
executives of the Company, including their personally related parties, are set out below.
2007
Name
Directors of Pan Australian Resources Limited
Ordinary shares
R. Bryan
R. Bryan (indirect) (i)
G. Stafford
G. Stafford (indirect) (ii)
N.P. Withnall
A.E. Daley (indirect) (iii)
G.A. Handley (indirect) (iv)
Senior executives of the Company
Ordinary shares
F. Hess
J. Walsh
D. Hairsine
A. Bell
R. Usher
P. Scarr
2006
Name
Directors of Pan Australian Resources Limited
Ordinary shares
R. Bryan
R. Bryan (indirect) (i)
G. Stafford
G. Stafford (indirect) (ii)
N.P. Withnall
A.E. Daley (indirect) (iii)
G.A. Handley (indirect) (iv)
Senior executives of the Company
Ordinary shares
F. Hess
J. Walsh
D. Hairsine
A. Bell
R. Usher
Received during
Balance at the the year on the
Balance at
start of the
exercise of
Other changes the end of
year
options
during the year
the year
118,201
28,238,281
7,080,334
3,495,314
662,507
311,861
-
4,000,000
-
(214,000)
155,000
118,201
28,238,281
11,080,334
3,495,314
448,507
311,861
155,000
28,570
1,057,800
1,064,070
111,530
14,663
40,000
6,822,950
1,000,000
1,000,000
1,400,000
2,750,000
(86,320)
(53,000)
(5,000,000)
28,570
2,057,800
1,977,750
1,458,530
14,663
40,000
4,572,950
Received during
Balance at the the year on the
Balance at
start of the
exercise of
Other changes the end of
year
options
during the year
the year
65,667
26,381,051
5,080,334
495,314
368,059
173,256
-
1,000,000
3,000,000
-
52,534
1,857,230
1,000,000
294,448
138,605
-
118,201
28,238,281
7,080,334
3,495,314
662,507
311,861
-
28,570
57,800
64,070
6,822,950
1,000,000
1,000,000
-
111,530
14,663
-
28,570
1,057,800
1,064,070
111,530
14,663
6,822,950
(i) Mr Bryan has an indirect interest in 24,059,514 ordinary shares in PanAust held by Leyshon Equities Pty Ltd, a
company in which Mr Bryan has a substantial shareholding. Mr Bryan also has an indirect interest in 4,178,767 ordinary
shares in PanAust held by Transmere Pty Ltd, a company in which Mr Bryan has a substantial shareholding.
(ii) Mr Stafford has an indirect interest in 3,495,314 ordinary shares options in PanAust held by The Spellbrook
Superannuation Fund.
(iii) Mr Daley has an indirect interest in 311,861 ordinary shares in PanAust held by The Motherlode Superannuation Fund.
(iv) Mr Handley has an indirect interest in 155,000 ordinary shares in PanAust held by his spouse.
-72-

31 December 2007
(continued)

(e) Other transactions with key management personnel
1. Assaying fees of US$641,151 (2006: US$370,425) paid to Australian Laboratory Services Pty Ltd on normal commercial
terms, a wholly owned subsidiary of Campbell Brothers Limited of which Mrs N. Withnall is a director.
2. Pan Australian Services Pty Ltd has sub-leased its offices at 99 Melbourne Street South Brisbane from Lumley Australia
Pty Ltd. The lessor is Australian Property Growth Fund Trust that is an associate of the Leyshon Group of which Mr R.
Bryan is a director and shareholder.
31 Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
Consolidated
2007
2006
$
$
Parent
2007
2006
$
$
(a) Audit services

PricewaterhouseCoopers Australian firm
Audit and review of financial reports and other audit
work under the Corporations Act 2001
Related practices of PricewaterhouseCoopers
Australian firm - PricewaterhouseCoopers Laos firm
Total remuneration for audit services
174,598
86,187
90,541
265,139
49,000
135,187
5,327
14,833
20,160
81,506
18,606
100,112
7,704
16,400
16,400
33,598
41,302
(b) Other assurance services

Audit-related services
Due diligence services
Controls assurance services
AIFRS accounting services
Other services
Total remuneration for audit-related services
Taxation services
Related practices of PricewaterhouseCoopers
Australian firm - PricewaterhouseCoopers Laos firm
Tax advice
Total remuneration for taxation services
-73-

31 December 2007
(continued)
32 Contingent Liabilities
The parent entity had contingent liabilities at 31 December 2007 in respect of:
Guarantees given in respect of loans of subsidiaries amounting to US$174 million (2005 - NIL), secured by registered
mortgages over the freehold properties of the subsidiaries.
(a)
(b)
leases of Phu Bia Mining Limited amounting to US$26.8 million; and

loans of Phu Bia Mining Limited amounting to US$147.2 million.
These guarantees may give rise to liabilities in the parent entity if the subsidiaries do not meet their obligations under the
terms of the overdrafts, loans, leases or other liabilities subject to the guarantees.
No material losses are anticipated in respect of any of the above contingent liabilities.
33 Commitments
(a) Capital commitments
Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:
Consolidated
2007
2006
US$'000
US$'000
Property, plant and equipment
Within one year
12,638
12,638
15,112
15,112
Consolidated
2007
2006
US$'000
US$'000
Deferred exploration, evaluation and development
Within one year
6,830
6,830
80,660
80,660
Parent
2007
2006
US$'000
US$'000
Parent
2007
2006
US$'000
US$'000
(i) The capital expenditure commitment for the Company under its contract agreement with the Government of Laos is
approximately US$60,000 for rental.
(ii) The Phu Kham Copper-Gold Operation represents the major phase of the development of the Companys Lao assets
following the commissioning of the Phu Kham Heap Leach Gold Operation (formerly referred to as the Phu Bia Gold Mine)
in 2005. At full production the 12 million tonne per annum Phu Kham Copper-Gold Operation is scheduled to produce
more than 200,000 dry metric tonnes of concentrate per year containing on average 50,000 tonnes copper, 50,000 ounces
gold and 400,000 ounces silver. Good progress with capital works, and equipment procurement and fabrication has meant
that the Project is running ahead of the scheduled target date for first concentrate production in mid-2008. At the end of
December 2007, project committed expenditure totalled approximately US$211 million. This expenditure represents 88%
of the overall budget. On current projections, the Project is expected to be completed within the US$241 million capital
budget.
In 2007, the Board approved plans to expand the project to 16 million tonnes per annum, at a capital cost of US$40 million
(including a contingency of US$7 million). At full production the expanded Phu Kham Copper-Gold Operation is scheduled
to produce on average 65,000 tonnes copper, 60,000 ounces gold and 550,000 ounces silver. An order has already been
placed for the additional ball mill required for the expansion, which is expected to be completed by end of the December
2009 quarter.
(iii) Exploration at the Puthep, Phu Kham, Ban Houayxai, Pha Nai and Phonsavan projects will continue during 2008, and
such expenditure is included in a US$30 million exploration and evaluation budget approved by the Board in November
2007.
-74-

31 December 2007
(continued)
33 Commitments (continued)
(b) Lease commitments : Group as lessee
Consolidated
2007
2006
US$'000
US$'000
Commitments in relation to leases contracted for at the
reporting date but not recognised as liabilities, payable:
Within one year
Later than one year but not later than five years
Representing:
Non-cancellable operating leases
Parent
2007
2006
US$'000
US$'000
1,051
2,230
3,281
225
754
979
3,281
3,281
979
979
(i) Operating leases

The Group leases various offices and computer equipment under non-cancellable operating leases expiring within two to
five years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are
renegotiated.
(ii) Finance leases
The Group leases various plant and equipment with a carrying amount of $25.9 million (2006 - NIL) under finance leases
expiring within seven years.
Consolidated
2007
2006
US$'000
US$'000
Parent
2007
2006
US$'000
US$'000
Commitments in relation to finance leases are payable

as follows:
Within one year
Later than one year but not later than five years
Later than five years
Minimum lease payments
2,981
21,577
4,661
29,219
Future finance charges

Total lease liabilities
(2,421)
26,798
1,014
25,784
26,798
Representing lease liabilities:

Current (note 22)
Non-current (note 25)
The weighted average interest rate implicit in the leases is 7.6725%
-75-

31 December 2007
(continued)
34 Related party transactions

(a) Parent entities
The ultimate parent entity within the Group is Pan Australian Resources Limited.
(b) Directors and specified executives
Disclosures relating to directors and specified executives are set out in Note 30.
(c) Subsidiaries
Interests in subsidiaries are set out in note 35.
(d) Transactions with related parties
The following transactions occurred with related parties:
Advances made to wholly-owned subsidiaries
Expense incurred on provision for diminution on
advances
Advances made to Puthep Company Limited
Administrative, management and accounting services
from a wholly-owned subsidiary, Pan Australian
Services Pty Ltd
Tax consolidation legislation
Tax losses assumed from wholly-owned tax
consolidated entities
Contributions to superannuation funds on behalf of
employees
76,979,349
67,175,359
3,666,857
(9,724,705)
-
(3,626,137)
-
(420,000)
(406,251)
(6,930)
(5,656)
(262,129)
(150,959)
176,619,063
205,458
176,824,521
109,364,420
205,458
109,569,878
(e) Outstanding balances arising from transactions with related parties

Loans to subsidiaries
Loan from a controlled entity (*)
Advances to Puthep Company Limited
End of year
3,666,857
3,666,857
(*) Represents an interest free loan from a controlled entity, Masons Hill Gold Limited. The loan has no fixed repayment
term.
35 Subsidiaries
Name of entity
Masons Hill Gold Limited

Pan Australian Exploration Pty Ltd
Terra Firma Resources NL
Pan Australian Services Pty Ltd
Pan Mekong Exploration Pty Ltd
PNA (Puthep) Pty Ltd
Phu Bia Mining Limited (Subsidiary of Pan Mekong
Exploration Pty Ltd)
Place of
incorporation
Class of shares
WA
QLD
QLD
QLD
QLD
QLD
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
90
100
100
100
100
100
90
100
100
100
100
100
Laos
Ordinary
90
100
-76-
Equity holding **
2007
2006
%
%

31 December 2007
(continued)
36 Events occurring after the balance sheet date

Phu Kham Copper-Gold Operation have approved the US$80 million subordinated debt facility between PanAust and
Goldman Sachs JBWere (GSJBW). The agreement was executed on 5 March 2008, with the first drawdown of funds from
this facility received on 10 March 2008.
As part of the consideration for the agreement of GSJBW to make available the facility, 5,000,000 unlisted options have
been granted at an exercise price of $1.145, expiring 5 March 2009.
As part of the consideration for the agreement of GSJBW to make available the US$80 million subordinated debt facility, a
second tranche of 5,000,000 options, may be issued on the earlier of:
(a) The date on which borrowings under the facility first exceeds US$25 million;
(b) 30 June 2008;
(c) Cancellation of the facilities in accordance with the terms of the agreement; or
(d) The total amount owing is paid in full.
The Company will issue a further tranche of 5,000,000 options to GSJBW on the date when borrowings under the facilities
first exceeds US$50 million (if this does occur).
Options and share rights have been granted to senior executives, and share rights to other employees, subsequent to the
end of the financial year.
37 Reconciliation of profit after income tax to net cash inflow from operating activities
Consolidated
2007
2006
US$'000
US$'000
Profit for the year
Depreciation and amortisation
Write back rehabilitation
Capitalised exploration expenditure
Fair value (gains)/losses on other financial assets at fair
value through profit or loss
Net exchange differences
Intercompany management fees
Movement in provision for diminution on intercompany
loans
Value employee shares issued
Value executive options issued
Decrease (Increase) in inventories
Decrease (Increase) in prepayments
Decrease (Increase) in receivables
(Decrease) increase in employee benefits
(Decrease) increase in trade creditors
Net cash (outflow) inflow from operating activities
Parent
2007
2006
US$'000
US$'000
(13,055)
7,346
(10,224)
(4,522)
4,507
(172)
(6,567)
(7,896)
-
2,687
(947)
-
(7,379)
-
(985)
420
(7,570)
406
199
176
(8,783)
(2,546)
(459)
1,114
6,076
(18,416)
69
188
(505)
(1,493)
(341)
1,117
291
(14,807)
9,725
(484)
306
(63)
1,023
3,533
(1,206)
(341)
36
1,535
-77-
6,677
-

31 December 2007
(continued)
38 Non-cash investing and financing activities

Consolidated
2007
2006
US$'000
US$'000
Acquisition of plant and equipment by means of finance
leases
Parent
2007
2006
US$'000
US$'000
25,980
25,980
39 Earnings per share

(a) Reconciliations of earnings used in calculating earnings per share
Consolidated
2007
2006
US$'000
US$'000
The following reflects the income and share data used in the calculations of basic and
diluted earnings per share:
Loss used in calculating basic and diluted loss per share
(13,055)
(4,522)
(b) Weighted average number of shares used as the denominator

Consolidated
2007
2006
Number
Number
Weighted average number of ordinary shares used as the denominator in calculating

basic loss per share
Effect of dilutive securities:
Share options
Adjusted weighted average number of ordinary shares used in calculating diluted loss
per share
1,416,854,854
1,147,669,718
35,056,671
43,713,376
1,451,911,525
1,191,383,094
(c) Conversions, calls, subscription or issues after 31 December 2007

There have been no other conversions to, calls of, or subscriptions for ordinary shares or issues of ordinary shares since
the reporting date and before the completion of this financial report.
-78-

31 December 2007
(continued)
40 Share-based payments
(a) Executives' Option Plan
The establishment of the Companys Executives Option Plan (EOP) was approved by shareholders at the 1996 annual
general meeting. Further details of the plan can be found in sections A-D of the remuneration report.
Set out below are summaries of options granted under the plan:
Grant Date
Expiry
date
Exercise Balance at
price A$ start of the
Cents
year
Number
Consolidated and parent - 2007

1-Jul-04
1-Jul-07
12.00
13-Oct-05
13-Oct-08
18.00
15-Mar-06
15-Mar-09 18.00
27-Mar-06
27-Mar-09 18.00
24-May-06
13-Apr-09
32.00
4-Sep-06
13-Sep-09 32.00
23-Mar-07
29-Feb-12 40.00
29-May-07
29-Feb-12 40.00
5-Oct-07
7-Oct-12
83.00
Total
10,000,000
7,000,000
1,000,000
2,000,000
2,000,000
1,000,000
23,000,000
Weighted average exercise price (cents)

Consolidated and parent - 2006
27-Mar-03
31-Mar-06
4.00
30-Nov-03
30-Nov-06
9.74
1-Jul-04
1-Jul-07
12.00
13-Oct-05
13-Oct-08
18.00
15-Mar-06
15-Mar-09 18.00
27-Mar-06
27-Mar-09 18.00
24-May-06
13-Apr-09
32.00
4-Sep-06
13-Sep-06 32.00
Total
17.22
3,000,000
2,000,000
14,000,000
7,000,000
26,000,000
Weighted average exercise price (cents)
12.52
Granted
during the
year
Number
Exercised
during the
year
Number
Forfeited
during the
year
Number
Balance at
end of the
year
Number
4,550,000
3,500,000
750,000
8,800,000
(10,000,000)
(1,500,000)
(1,000,000)
(1,400,000)
(13,900,000)
5,500,000
600,000
2,000,000
1,000,000
4,550,000
3,500,000
750,000
17,900,000
43.66
13.68
32.96
10,000,000
7,000,000
1,000,000
2,000,000
2,000,000
1,000,000
23,000,000
1,000,000
2,000,000
2,000,000
1,000,000
6,000,000
(3,000,000)
(2,000,000)
(4,000,000)
(9,000,000)
25.00
8.83
Vested and
exercisable at
end of the year
Number
5,500,000
600,000
2,000,000
1,000,000
9,100,000
10,000,000
7,000,000
500,000
1,000,000
2,000,000
500,000
21,000,000
17.22
No options expired during the periods covered by the above tables.

The weighted average share price at the date of exercise of options exercised during the year ended 31 December 2007
was A$0.1368 (2006 - A$0.0883).
The weighted average remaining contractual life of share options outstanding at the end of the period was 2.62 years
(2006 - 1.40 years).
-79-

31 December 2007
(continued)
40 Share-based payments (continued)

Fair value of options granted
The assessed fair value at grant date is independently determined using a pricing model that takes into account the
exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature
of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield
and the risk free interest rate for the term of the option.
The non-variable model inputs for options granted during the year ended 31 December 2007 included:
(a)
options are granted for no consideration, have a three year life and each tranche vests and is exercisable upon
obtaining any performance hurdles
(b)
expected price volatility of the Companys shares: 40% (2006 - 30-50%)
(c)
expected dividend yield: nil% (2006 - nil%).
Set out below are the variable model inputs for options granted during the year ended 31 December 2007:
Grant date
15-Mar-06
27-Mar-06
24-May-06
04-Sep-06
23-Mar-07
29-May-07
05-Oct-07
Expiry date
15-Mar-09
27-Mar-09
13-Apr-09
13-Sep-09
29-Feb-12
29-Feb-12
07-Oct-12
Exercise
price
A$ cents
23.00
23.00
32.00
32.00
40.00
40.00
83.00
Risk free
interest rate
Number
1,000,000
2,000,000
2,000,000
1,000,000
4,550,000
3,500,000
750,000
5.31%
5.25%
5.25%
5.75%
6.00%
6.00%
6.50%
Staff
Turnover
Rate
16.70%
16.70%
16.70%
Price /
Performance
Hurdle A$
Share price
at grant date
A$ cents
31.5
31.5
45.0
45.0
TSR
TSR
TSR
21.0
19.0
29.0
29.0
40.0
58.0
81.0
Options are granted for no consideration and vest based on PanAust's TSR ranking within the S&P/ASX 300 Metals and
Mining Index. Vested options are exercisable for a period of 5 years from the grant date.
(b) Share Rights Plan
Under the Share Rights Plan (SRP) established in 2007, eligible employees may be offered rights to acquire fully-paid
ordinary shares in the Company annually for no cash consideration. Further details of the plan can be found in sections AD of the remuneration report.
The number of shares rights issued to participants in the SRP is the offer amount divided by the weighted average price at
which the Companys shares are traded on the Australian Securities Exchange during the five trading days immediately
before the date of the offer.
Set out below are summaries of share rights issued under the SRP:
Grant date Expiry date
2-Apr-07
1-May-07
14-May-07
29-May-07
1-Jun-07
1-Oct-07
13-Dec-07
31-Mar-17
31-Mar-17
14-May-17
14-May-17
14-May-17
1-Oct-17
1-Oct-17
Exercise Balance at
price
start of the
A$ cents
year
Number
Nil
Nil
Nil
Nil
Nil
Nil
Nil
-
Granted
during the
year
Number
2,025,000
1,300,000
1,695,627
232,380
295,584
568,375
4,500
6,121,466
-80-
Exercised
during the
year
Number
-
Forfeited
during the
year
Number
(341,189)
(122,990)
-
Balance at
end of the
year
Number
2,025,000
1,300,000
1,354,438
109,390
295,584
568,375
4,500
(464,179)
5,657,287

31 December 2007
(continued)
40 Share-based payments (continued)

Set out below are the variable model inputs for share rights issued during the year ended 31 December 2007:
Grant date
2-Apr-07
1-May-07
14-May-07
29-May-07
1-Jun-07
1-Oct-07
13-Dec-07
Expiry date
Exercise
price
A$ cents
31-Mar-17
31-Mar-17
14-May-17
14-May-17
14-May-17
1-Oct-17
1-Oct-17
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Risk free
interest rate
Number
2,025,000
1,300,000
1,695,627
232,380
295,584
568,375
4,500
6.00%
6.00%
-
Staff
Turnover
Rate
Performance
Hurdle
A$
16.70%
16.70%
16.70%
16.70%
16.70%
16.70%
16.70%
TSR
TSR
Nil
Nil
Nil
Nil
Nil
Share price
at grant date
A$ cents
43.0
54.0
52.0
58.0
65.0
83.0
101.0
Share rights subject to TSR performance hurdle are offered to the Managing Director, senior executives and senior
managers for no cash consideration and vest based on PanAust's TSR ranking within the S&P/ASX 300 Metals and Mining
Index. Share rights with no performance hurdles are offered to other employees for no cash consideration and vest after
one, two and three years of employment. Vested share rights are exercisable for a period of 10 years from the grant date.
For 2006 the Employee Share Plan existed whereby participants were issued with shares worth up to A$5,000 based on
the weighted average market price (2006 - A$0.31). The total number of shares issued for the year ended 31 December
2006 under the Plan was 598,172.
(c) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit
expense were as follows:
Consolidated
2007
2006
US$'000
US$'000
Options issued under the EOP

Share rights issued under the SRP
(d)
154
226
380
222
141
363
Parent
2007
2006
US$'000
US$'000
154
226
380
Unlisted Options
On 19 May 2006 11,661,649 unlisted options, with an exercise price of A$0.64 and a term of two-years, were issued to
Sempra Metals & Concentrates Corporation and were exercised during the financial year.
-81-
222
141
363

31 December 2007
(continued)
41 Schedule of tenements and joint venture arrangements

Project and
Activities
Western Australia
Darlot South - gold
exploration
Thailand
Puthep - copper
evaluation and
development
Laos
Phu Bia Contract
Area copper and
gold evaluation
and development
Tenement Description
%
Beneficial
Interest
M 37/246, 265, 320,

343, 345, 393 and
P 37/4669 and MLA 37/776
16%
Joint Venture
Operator
Joint Venture
Partners
Sundowner
Minerals N.L. (1)
Sundowner
Minerals N.L. (1)
RAL Baker
The consolidated entity is party to an agreement to earn a 51% (with further options
to acquire a total of 60% or 70%, refer to Note 15) interest in Puthep Company
Limited a subsidiary of Padaeng Industry Public Company Limited.
The consolidated entity has 90% interest in Phu Bia Mining Limited that holds the
Phu Bia Contract Area under a Mineral Exploration & Production Agreement with
the Government of Laos.
(1) Wholly-owned subsidiary of Barrick Gold of Australia

Exploration, evaluation and development costs capitalised (Note 19) includes nil amount (2006:$Nil)
pertaining to interests in Darlot South joint venture.
-82-

31 December 2007
In the directors opinion:
(a)
the financial statements and notes set out on pages 27 to 82 are in accordance with the Corporations Act 2001,
including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
(ii)
giving a true and fair view of the Companys and consolidated entity's financial position as at 31
December 2007 and of their performance for the financial year ended on that date; and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable; and
(c)
the audited remuneration disclosures set out on pages 10 to 19 of the directors report comply with Accounting
Standards AASB 124 Related Party Disclosures and the Corporations Regulations 2001; and
The directors have been given the declarations by the chief executive officer and chief financial officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
R. Bryan
Chairman
G. Stafford
Managing Director
Brisbane
20 March 2008
-83-

Audit report
31 December 2007
Liability limited by a scheme approved under Professional Standards Legislation

-84-

Audit report
31 December 2007
(continued)
Independent auditor's report to the members of

(continued)
Liability limited by a scheme approved under Professional Standards Legislation

-85-
-86-

31 December 2007
Additional information required by the Australian Securities Exchange and not shown elsewhere in this
report is as follows, and is current as at 14 March 2008.
A.
Distribution of shares
Analysis of numbers of shareholders by size of holding:

Total Holders
1
1,001
5,001
10,001
100,001
- 1000
- 5,000
- 10,000
- 100,000
and over
977
3,593
2,899
7,029
1,175
15,673
% Issued
Capital
Units
687,371
11,640,735
24,495,438
258,782,844
1,137,799,310
1,433,405,698
0.05
0.81
1.71
18.05
79.38
100
There were 322 holders of less than a marketable parcel of 541 ordinary shares totalling 84,677 shares.
B.
Shareholders
Twenty largest quoted shareholders

Name
Ordinary shares
Percentage of
Number held issued shares
216,101,252
15.08
154,114,160
10.75
135,326,445
9.44
56,529,343
3.94
28,591,642
1.99
25,000,000
1.74
24,059,514
1.68
17,804,231
1.24
14,075,387
0.98
11,954,489
0.83
11,080,334
0.77
10,000,000
0.70
8,594,546
0.60
8,380,000
0.58
7,321,279
0.51
6,685,929
0.47
6,286,217
0.44
5,899,058
0.41
5,758,830
0.40
5,307,689
0.37
758,870,345
52.92
National Nominees Limited

JP Morgan Nominees Australia Limited
HSBC Custody Nominees (Australia) Limited
ANZ Nominees Limited <Cash Income A/C>
Citicorp Nominees Pty Limited
Mr Robert Anthony Healy
Leyshon Equities Pty Ltd
Australian Reward Investment Alliance
Cogent Nominees Pty Ltd
AMP Life Limited
Gary Stafford
Invia Custodian Pty Limited <Black A/C>
Citicorp Nominees Pty Limited CFSIL
Credit Suisse Securities (Europe) LTD Collateral A/C
Cogent Nominees Pty Ltd <SMP Accounts>
UBS Nominees Pty Ltd
Queensland Investment Corporation
Citicorp Nominees Pty Limited CFS Future Leaders Fund
Equity Trustees Limited
IAG Nominees Pty Limited
A number of these shareholders are nominee companies which hold the legal interest in shares where others hold the
relevant interest. For the purposes of the Corporations Act, there are no substantial holders of equity in the Company.
C.
Voting rights
All ordinary shares issued by PanAust carry one vote per share without restriction.
-87-

31 December 2007
(continued)
D.
Holders of other equity securities
There are the following holders of unlisted equity securities issued by the Company:
Equity Securities
Options under the EOP
Other unlisted options
Share rights under the SRP subject to performance
conditions
Share rights under the SRP not subject to performance
conditions
None of these equity securities have voting rights
E.
On-market buy back
There is no current on-market buy back.
-88-
Total Holders
9
1
Number of securities
20,210,000
5,000,000
10
5,460,000
161
3,672,823

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delivering growth

Annual Report 2007

Pan Australian Resources Limited ABN 17 011 065 160

Pan Australian Resources Limited

(Chairman, Non-Executive Director)

Pan Australian Resources Limited

Pan Australian Resources Limited

A = Number of meetings attended

Pan Australian Resources Limited

Corporate Structure in Laos

Pan Australian Resources Limited

Pan Australian Resources Limited

Non-segment unallocated revenues and results

Consolidated entity loss from ordinary activities before

Pan Australian Resources Limited

An increase in contributed equity of $8,129,098 (from $207,855,937 to $215,985,035) as a

Matters subsequent to the end of the financial year

Pan Australian Resources Limited

and objectivity of the auditor; and

Code of Ethics for Professional Accountants.

Pan Australian Resources Limited

Pan Australian Resources Limited

Principles used to determine the nature and amount of remuneration

Pan Australian Resources Limited

Pan Australian Resources Limited

Long Term Incentives

Proportion of options and share rights that vest

Pan Australian Resources Limited

Pan Australian Resources Limited

Year ended 31 December 2007

Year ended 31 December 2006

Pan Australian Resources Limited

Service agreements (audited)

annually by the Remuneration Committee; and

service to a maximum of 12 months.

reviewed annually by the Remuneration Committee; and

months salary for each year of service to a maximum of 6 months.

annually by the Remuneration Committee; and

months salary for each year of service to a maximum of 6 months.

Pan Australian Resources Limited

annually by the Remuneration Committee; and

months salary for each year of service to a maximum of 6 months.

annually by the Remuneration Committee; and

months salary for each year of service to a maximum of 6 months.

annually by the Remuneration Committee; and

months salary for each year of service to a maximum of 6 months.

annually by the Remuneration Committee; and

months salary for each year of service to a maximum of 6 months.

annually by the Remuneration Committee; and

months salary for each year of service to a maximum of 6 months.

annually by the Remuneration Committee; and

months salary for each year of service to a maximum of 6 months.

Pan Australian Resources Limited

Date vested and exercisable

50% after 15 September 2006

50% after 13 March 2007

Number of options granted during the year

Number of options vested

Pan Australian Resources Limited

Shares issued on exercise of options

Number of ordinary shares

Pan Australian Resources Limited

A$ Fair Value per share