miningweekly.com | April 10, 2018
PERTH (miningweekly.com) – ASX-listed Highlands Pacific is facing a $12.4-million bill relating to the Frieda River copper/gold project, in Papua New Guinea, after the first stage of arbitration found in favour of project partner PanAust.
Highlands, which has a 20% interest in the Frieda River joint venture (JV), has been arguing that a feasibility study submitted to the Papua New Guinea government as part of an application for a special mining lease in June 2016, was incomplete, and that the company’s free carry should continue.
However, an arbitrator has determined in the first stage of an arbitration process that Highland’s free carry for the Frieda River project feasibility study ended on the date of the lodgment of an application for a special mining lease.
The arbitration will now proceed to the second stage, with Highlands telling shareholders that it will be contending that other provisions of the JV agreement should be applied to make PanAust liable in the first instance for the full cost of the feasibility studies undertaken since June 2016, with the right for Highlands to pay its share at a later date, if the project proceeds.
If Highlands is unsuccessful in the second stage, and if the cash calls made by PanAust are held to be valid, the ASX-listed company will be expected to pay its share of project expenditure from June 2016 to May 2018, which amounts to some $12.4-million.
In this case, the company could either elect to pay the amount, or have its share in the JV dilute by around 2.2%.
Meanwhile, the permitting process for the Frieda River project is continuing, although the Papua New Guinea authorities are awaiting the completion of current feasibility study work, which is scheduled for the second half of 2018.
PERTH (miningweekly.com) – ASX-listed Highlands Pacific is facing a $12.4-million bill relating to the Frieda River copper/gold project, in Papua New Guinea, after the first stage of arbitration found in favour of project partner PanAust.
Highlands, which has a 20% interest in the Frieda River joint venture (JV), has been arguing that a feasibility study submitted to the Papua New Guinea government as part of an application for a special mining lease in June 2016, was incomplete, and that the company’s free carry should continue.
However, an arbitrator has determined in the first stage of an arbitration process that Highland’s free carry for the Frieda River project feasibility study ended on the date of the lodgment of an application for a special mining lease.
The arbitration will now proceed to the second stage, with Highlands telling shareholders that it will be contending that other provisions of the JV agreement should be applied to make PanAust liable in the first instance for the full cost of the feasibility studies undertaken since June 2016, with the right for Highlands to pay its share at a later date, if the project proceeds.
If Highlands is unsuccessful in the second stage, and if the cash calls made by PanAust are held to be valid, the ASX-listed company will be expected to pay its share of project expenditure from June 2016 to May 2018, which amounts to some $12.4-million.
In this case, the company could either elect to pay the amount, or have its share in the JV dilute by around 2.2%.
Meanwhile, the permitting process for the Frieda River project is continuing, although the Papua New Guinea authorities are awaiting the completion of current feasibility study work, which is scheduled for the second half of 2018.
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