Highlands Pacific announced in January that joint-venture exploration and development agreements between Highlands and Anglo American covering Highlands’ Star Mountains copper-gold project in western Papua New Guinea were due to be finalized by February 5. Anglo had completed due diligence on the project and was in the advanced stage of planning a drilling campaign, with exploration expected to begin during the first quarter of 2015.
The Star Mountains exploration tenements cover 515 km2 within the New Guinean Orogenic Belt. Early-stage drilling by Highlands over the past three years has identified significant copper and gold mineralization.
Anglo will initially pay Highlands $10 million in two tranches of $5 million each. A first payment of $5 million was payable on execution of the definitive farm‐in and joint‐venture agreements; a second payment of $5 million is to be made 12 months later. Highlands is transferring a 51% interest in the joint venture to Anglo, which must be transferred back to Highlands if Anglo decides not to continue its earn‐in obligations.
Anglo will be entitled to retain a 15% participating interest in the project by spending $25 million on exploration over four years from the date of execution of the agreements and will be entitled to retain the remaining 36% interest upon declaration of an NI 43‐101/JORC-compliant inferred resource estimate of 3 million metric tons (mt) of contained copper-equivalent within five years of execution of the agreements. Highlands will continue to manage the project; however, Anglo will have the right to take over project management when it has completed $25 million in project expenditure.
Anglo can move to an 80% interest by completing and funding a bankable feasibility study within 15 years of the execution of the agreements.