Freida

I had not fully appreciated that Highlands borrowings for Freida would be under the umbrella of PanAust's.We will of course have to provide our own equity but there are ways.
Attached is part of a article on PNA in Fridays PNG Industry News.“PanAust currently has a modest net debt position, but should revert to net cash over the next 12 months due to a stronger performance from Phu Kham,” Evans & Partners said. Not only that, PanAust’s joint venture partner, fellow ASX-listed company Highlands Pacific, is carried within the PanAust project finance facility and can potentially obtain further funding via an offtake agreement, then is likely to look to alternative funding for the balance required. Patersons also said in a research note that Highlands Pacific uses the PNG mining experience of its board and management to structure deals that minimise its funding requirements for a minority share in the project. “Ramu and Frieda River are both examples, and we expect [Highlands Pacific] will replicate this type of deal in regards to the development of Star Mountains,” Patersons said. Trivett noted that even the parameters of a downsized project at Frieda River were “massive”: a 24 million tonne per annum operation over 18 years that would still only have exploited about 20% of the total resource. “PanAust’s pit optimisation should increase the reserve grade of what it’ll be mining. So they are cutting out some lower grade to bring their cut-off grade a bit higher, which will help the economics quite a bit as well,” he said. To develop Frieda River, Glencore considered building its own crushing and process plant, a 160MW hydro-electric dam and power station, maritime ports, 120km of new access roads, large mining infrastructure and an airport – all within PNG’s rugged highlands. Frieda River is near the border of the Sandaun and East Sepik provinces in north-western PNG, 170km north-west of Barrick Gold’s Porgera gold mine. “The similarities between Phu Kham and Frieda River are quite uncanny, [including] the type of topography that they will be working in – Frieda River is actually lower and closer to sea level than Phu Kham was, but the most important aspect is the waste treatment process,” Trivett said. He said that while what PanAust was doing at Frieda River was not a template of how to get things done in PNG, it gave an indication of how to do business there, in the light of the way in which the capital markets are dictating at present.