PanAust (ASX:PNA) is pleased to announce that it has exercised its option under a previous share placement agreement to subscribe for a further 64,432,990 shares in Highlands Pacific (ASX:HIG) at $0.0776/share, following the placement on equivalent terms in November 2013.
This is a vote of confidence in Highlands, and in exploration projects in Papua New Guinea; notable especially because of the material premium PanAust is paying to Highland's market price of around $0.065.
PanAust is capitalised at $1.4 billion - and could this be the beginning of a trend towards larger companies increasing stakes in mineral rich PNG?
It will take PanAust’s shareholding in Highlands to 14%, with placement scheduled to take place on 1 September 2014.
The agreement with Highlands related to PanAust’s agreement with Glencore to acquire Glencore’s interest in the Frieda River Copper‐Gold Project, a joint venture with Highlands.
The Frieda River transaction was completed today.
PanAust and Highlands will now respectively hold 80% and 20% interest in the Frieda River Joint Venture.
Under the terms of the Agreement, should the Government of PNG elect to take up its right to 30% of the project, PanAust
will sell down the first 20% of its joint venture interest and thereafter the parties will 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 will be responsible for 100% of the costs incurred by the Frieda River Joint Venture to finalise the definitive feasibility study.
PanAust will also be responsible for 100% of the costs to maintain the Frieda River project site, assets and community relations programs up to the time of lodgement of the Mining Lease or Special Mining Lease application.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.