HIGHLANDS Pacific received cashflow from the Ramu joint venture for the first time during the June quarter, resulting in a boost to the company’s cash at bank.
In the company’s June 2015 quarterly report, Highlands reported cash at bank of US$10.5 million, up on the previous quarter due to the receipt of joint venture cash calls in advance of expenditure.
The Ramu operation reported net cashflow (unaudited) of US$18.8 million in the half year to June, after capital expenditure of US$2.5 million.
Highlands was entitled to an 8.56 per cent share of cashflow, equivalent to US$1.62 million, of which US$1.3 million was applied to repayment of the company’s share of project debt.
In the June quarter, Ramu produced 5,943 tonnes of nickel and 573 tonnes of cobalt, slightly below the record production achieved in the three months to the end of March.
A production rate of 76% of nameplate capacity was reported in the quarter, compared with 79% in the previous quarter.
Production of about 25,800 tonnes of nickel in the full year is being targeted, with production expected to rise to more than 31,000 tonnes in 2016.
Highlands is encouraged by progress in the September quarter, with production rates in excess of 80% being achieved consistently.
Highlands reported its feasibility study on the Frieda River copper gold project is on schedule, with completion expected by the end of 2015.
An updated mineral resource model is being prepared as part of the study, as well as models being developed to optimise metallurgical recovery and throughputs, the company said.
Highlands, which holds a 20% interest in the project, said it was continuing to refine engineering and design concepts to maximise project value.
Frieda River project concept is based on an average processing rate of 30 metric tonnes per annum over a 20 year mine life to produce an average annual copper and gold in concentrate of 125,000 tonnes and 200,000 ounces (oz) respectively.
Highland’s Star Mountains drilling campaign, conducted with joint venture partner Anglo American, produced encouraging results in line with expectations, according to Highlands.
At the end of the June quarter, Star Mountains has one hole drilled with a further two holes in progress.
Depending on results an additional three holes are planned to test expected high grade zones at depth in coming months, Highlands said.
Assay results for the three competed holes in expected in late-August.
Highlands will receive US$5 million from Anglo American in February 2016 as part payment for its interest in the Star Mountains project.
Highlands Pacific managing director John Gooding said the remainder of 2015 will be spent further advancing the Star Mountains exploration campaign, driving operational progress at Ramu and finalising the Freida River feasibility study.
“The June quarter saw some important landmarks for Highlands Pacific, including becoming entitled to cashflows from Ramu for the first time, commencement of our exploration program at Star Mountains and completion of the initial exploration work at Sewa Bay,” he said.
“At Freida River, solid progress is being made in the preparation of the feasibility study, and the acquisition of our joint venture partner, PanAust, by Chinese group GRAM, potentially enhances the project’s funding options and capability,” Mr Gooding said.