HIGHLANDS Pacific Ltd reports that it and joint venture partner Anglo American plc have received encouraging results from the first two holes drilled in the current Star Mountains exploration campaign.
PNG veteran Highlands said the results confirmed mineralisation at the targets tested and provide an improved understanding of the geology of the two new prospects – Unfin and Fune.
At Unfin, the first hole reached a depth of 1061 metres and encountered extended zones of low grade copper and gold mineralisation as well as some higher grade intercepts including:
8.7 m @ 0.02 g/t Au and 0.64% Cu from 777.9m and;
4.1m @ 0.05 g/t Au and 0.67% Cu from 905.4m.
Highlands said the hole confirms the existence of porphyry copper mineralisation, with skarn zones encountered suggesting the first hole is toward the edge of the mineralised system. One further hole is being drilled at Unfin in the current campaign to identify higher grade zones. The next stage of the drilling program at Unfin will be determined after results are received from the second hole.
At Fune drilling reached a depth of depth of 750 metres and also encountered extended low grade zones with intercepts including:
6.2m @ 0.03 g/t Au and 0.26% Cu from 244m
8m @ 0.03 g/t Au and 0.32% Cu from 372m
Highlands said the results confirm the presence of a mineralised system at Fune, which requires further drilling. One more hole is currently under way at Fune.
Highlands CEO Craig Lennon said the results provided further evidence of the potential at Star Mountains.
“We are encouraged by these results and remain cautiously optimistic that further drilling at these targets will identify significant high grade zones,” he said. “We are steadily improving our understanding of the geology of these prospects and look forward to exciting results during the remainder of the campaign.”
The Star Mountain exploration campaign is being funded by Anglo American, in accordance with a farm-in agreement announced in 2015.
The Star Mountains joint venture was finalised on the following terms:
- US$10 million initial payment – Anglo American paid Highlands US$10 million in two tranches of US$5 million each.
- Phase 1 (51% interest) – Anglo American will initially acquire a 51% interest in the Joint Venture with 15% vesting upon a farm-in spend of US$25m over four years and 36% vesting upon the declaration of a 43-101/JORC compliant Inferred Resource of 3 million tonnes of contained copper equivalent within 5 years of execution.
- Phase 2 (80% interest) – Anglo American can move to an 80% interest in the Joint Venture by completing a Bankable Feasibility Study 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 the completion of the BFS. Anglo American will recover this US$150 million from a portion of Highland’s share of project cashflows once in production.
- Management – Highlands will manage the project however Anglo American will have the right to take over management when they have spent US$25 million in project
The 100% Highlands owned Star Mountains exploration tenements, which include Nong River EL1312, Mt Scorpion EL1781, Munbil EL2001, Tifalmin EL1392 and Mt Abemh EL2467, cover 675 sq kms and are located approximately 20km north east of the Ok Tedi mine and 25km from the support town of Tabubil, in the West Sepik Province of PNG.