Highlands Pacific Limited today (Thursday June 21) announced that it is in the advanced stages of negotiations on a capital raising with PNG Sustainable Development Program Ltd (PNGSDP), which is considering taking up a cornerstone investment in the company.
While it is anticipated that a final agreement between Highlands and PNGSDP will be completed within the next two days, an agreement has not been executed at this time and there can be no guarantee that an agreement will be executed within two days or at all.
Managing director of Highlands Pacific John Gooding said today: “While there are still some points to be finalised a relationship with PNGSDP, a company with net assets of over US$1.43 billion, has the potential to deliver significant benefits to Highlands, giving it the financial and technical backing of a very large investment company that has strong ties in Papua New Guinea and is the majority shareholder of Ok Tedi Mining Ltd (OTML), in Western province, PNG.
"These connections could be crucial for Highlands as it proceeds with any development at the Star Mountains exploration project and also for the future development of the Frieda River project.”
“In relation to our projects Ramu is progressing well with ore commissioning and ramp‐up continuing, drilling is continuing at the Star Mountains exploration and work on the feasibility study at Frieda River continues.
"Recently Xstrata Copper has advised that it has commenced a market evaluation of a number of the projects in its portfolio, including Frieda River.
"This is consistent with their announcement at the May annual general meeting where they stated ‘Xstrata management will optimise the value of the mining portfolio’ and is consistent with the approach of all major mining companies at present.
" Xstrata Copper have also confirmed they are committed to completing the Frieda River Feasibility Study by (or before) December this year.”
About PNG Sustainable Development Program Ltd
PNGSDP was established in 2002, when BHP Billiton divested its 52% shareholding in OTML. PNGSDP has the task to support and promote sustainable development through projects and initiatives to benefit the people of PNG, especially the people of Western province. PNGSDP is also a substantial financial institution with the function of investment of its Long Term Fund and Development Fund so that it can support a high level of development expenditure in Western Province and PNG in general.
PNGSDP is a company registered in Singapore and “limited by guarantee”, which means that it has no share capital, debentures, share options or unissued shares. The total net assets of PNGSDP in 2011 amounted to US$1.43 billion.
About Ok Tedi Mine
OTML operates the Ok Tedi mine which is located in the Star Mountains region of the Western province. The mine started operations in 1984, and has become the single largest business contributor to the economies of the Western province and PNG.
The Ok Tedi mine is a major producer of copper concentrate for the world smelting market in Germany, India, Japan, Korea and the Philippines. The mine exports copper as the main product but it also extracts gold and silver.