Highlands Pacific (ASX:HIG) and Anglo American (LON:AAL) have executed the joint venture and farm-in agreements for the Star Mountains copper gold project in Papua New Guinea.
Anglo American is a £16 billion (A$31.4 billion) market cap. with mining operations in southern Africa, north and south America and Australia.
Preparation for the upcoming exploration and drilling campaign will now ramp-up, with a four hole, 3,000 metre campaign to commence in April 2015.
A helicopter-magnetic survey is currently being completed and a LIDAR survey will commence in the coming weeks.
The joint venture and farm-in agreements consist of the following:
- US$10 million payment: Anglo American will pay Highlands US$10 million in two tranches of US$5 million each. The first payment of US$5 million is payable on execution of the agreements with the second payment of US$5 million to be made 12 months later;
- Phase 1 (51% interest): Anglo can earn a 51% interest in the joint venture by spending US$25 million on exploration over four years, and declaring a 43-101/JORC compliant inferred resource of 3 million tonnes of contained copper-equivalent within five years;
- Phase 2 (80% interest): Anglo American can move to an 80% interest in the Joint Venture by completing and funding a Bankable Feasibility Study (BFS) within 15 years of the execution of the Farm‐in and Joint Venture Agreements;
- Development Free‐Carry: Anglo American will provide Highlands with up to US$150 million in project development funding as a deferred free‐carry following completion of the BFS.
Highlands will continue to manage the project, however, Anglo American will have the right to take over management of the project when it has invested US$25 million in project expenditure.
Star Mountains Exploration Tenements
The Star Mountains exploration tenements cover 515 square kilometres and are located within the prospective New Guinean Orogenic Belt, which hosts the Grasberg, Ok Tedi, Porgera and Hidden Valley mines, as well as the Frieda River deposit.
Highlands has identified 17 copper gold targets to date at Star Mountains and drilled six of these targets, of which all but one encountered mineralisation.
- 596 metres at 0.61% copper and 0.85 grams per tonne gold from 24 metres down hole;
- 22 metres at 1.42% copper and 0.57g/t gold from 146 metres down hole; and
- 68 meters at 0.97% copper and 0.37g/t gold from 280 metres down hole.
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