Miner eyes high prices HIGHLANDS Pacific Limited will need to produce gold ounces outside of its hedge book to benefit from the ever rising world gold prices. Under the company’s hedge book, gold prices were listed for sale at an average of $US405.34 (K1295.01) — well below the $US650 (K2076.67) world price. Managing director Ian Holzberger told shareholders on Friday that while the company’s gold was pre-sold, they needed to produce gold above the hedged ounces so that they could see some benefit from the recent world gold prices. As part of the financing agreement, a 275,000-ounce hedging program was undertaken using a fixed lease rate flat forward structure. Highlands Pacific said during the March quarter, the company reduced the hedged ounces by 2000. The hedged ounces total 55 per cent of the scheduled production and 23 per cent of the current gold resource. Mr Holzberger also said Highlands would look at making some money in the next 12 months after it reported a net loss of $US5.399 million (K17.2 million) in 2005. He said the company’s objective would be to continue to grow into a major mining house this year and these would be underpinned through continued exploration at Kainantu and the greater Kainantu region, the early development of the Ramu nickel and cobalt project and the development of the Frieda River copper and gold project. Mr Holzberger said at Kainantu, there were a number of occurrences within economic trucking distance from the existing plant. “These targets offer potential to increase the production at Kainantu with a target of 250,000 ounces of gold per year,” he said. “Further more, the Kainantu region has the potential to be a major gold field and capable of hosting several more Kainantu –style mines. Over the next few years we will test this potential. “We are satisfied that all our immediate targets and longer term plans are consistent with our corporate objective of creating shareholder wealth through the development of high quality mineral deposits.”
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