News: Highlands Pacific and PanAust to joint venture Frieda River Project

Highlands Pacific (ASX:HIG) will join forces with PanAust (ASX:PNA) at the Frieda River Copper‐Gold Project in Papua New Guinea after Glencore plc (LON:GLEN) officially advised that PanAust could acquire Glencore’s interest in the project.

PanAust and Highlands have agreed that the two parties will hold interests of 80% and 20% respectively in the Frieda River Joint Venture on completion of an agreement.

Should the PNG Government elect to take up its right under PNG Law to 30% of the project, PanAust will sell down the first 20% of its joint venture interest.

The parties would then sell down in equal amounts. Where the Government of PNG elects to take up its maximum 30% of the project, the respective joint venture interests would be PanAust 55%, the Government of PNG 30% and Highlands 15%.

PanAust is responsible for 100% of the costs incurred by the Frieda River Joint Venture to finalise the Definitive Feasibility Study for PanAust’s development concept and fund the cost of an independent expert to provide a peer review.

PanAust will have a right to subscribe to a placement of A$5 million at the issue price of $0.0776 cents a share.

Highlands will also have the option of requiring PanAust to subscribe to this placement for a 90 day period.

All told this seems a tidy outcome for Highfield.

Its major assets are interests in the producing US$2.1 billion Ramu nickel cobalt mine and the Frieda River copper gold project.  It also has exploration in progress on the Star Mountains licenses approximately 20 kilometres north of the Ok Tedi mine.

For the June quarter, Highfield maintained cash reserves of $6.1 million.