Australian miner PanAust is to go ahead with the development of its Ban Houayxai gold/silver project in Laos.

The decision comes following a feasibility study based on an open pit mining operation feeding ore to a conventional 4mtpa carbon-in-leach process plant to produce over 100,000oz of gold and 700,000oz of silver per annum.

The company said the project is expected to cost $134m.

Commissioning of the mine is expected to start by December 2011, with steady state gold production from March 2012.

The Ban Houayxai gold-silver deposit is located west of the company’s flagship Phu Kham copper-gold project in Laos.

The mineral resource has been estimated at 42.7 million tons grading 1.1 g/t gold and 8 g/t silver for 1.6 million ounces of contained gold and 11 million ounces of silver.

The total ore reserve is expected to be 28 million tons of ore grading 0.8 g/t gold and 6.8 g/t silver.