Highlands Pacific sells its stake in Kainantu goldmine 09:23, Thursday, 25 October 2007
Sydney - Thursday - October 25: (RWE Australian Business News) - Highlands Pacific Ltd (ASX:HGL) has signed a binding sales and purchase agreement with Barrick Gold Corporation for the sale of its interest in the Kainantu goldmine and surrounding exploration tenements in the Kainantu region of Papua New Guinea. The sale price is $US141.5m with the agreement subject to PNG regulatory and shareholder approvals. Shareholder approval will be sought before the end of the calendar year. Highlands managing director Mr John Gooding said the group's future would be secured by paying out the monetised gold hedge program of about $US93m and the loan facility, which totals a further $US19.8m. On completion of the sale, Highlands would have cash reserves of $US29m to pursue other growth strategies and allow it to retain full exposure to its Ramu nickel and Frieda copper/gold assets. "Barrick is the world's largest goldminer, and is presently operating the Porgera goldmine in PNG, in which it has a 95pc interest. "Barrick has all the required attributes and capacity to successfully manage the Kainantu operation," Mr Gooding said. "The Barrick offer of $141.5m effectively recapitalises Highlands whilst removing the significant financial risk faced by the company and shareholders from a deteriorating hedge book. "The sale of Kainantu was the very best outcome for all stakeholders in Highlands, and will enable the company to unlock the value of its interest in two other world-class assets at Ramu and Frieda," he said.
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