Highlands Pacific Ltd and JV partner Anglo American have kicked off another drilling programme at their exciting Star Mountains copper/gold tenements in Sanduan Province.
Highlands, a long-time PNG miner and explorer says the Anglo American funded exploration drilling campaign in the Star Mountains tenements is a major focus for the company this year.
The US$3 million programme, which will increase the total Star Mountains exploration budget for 2016 to US$9 million, kicked off in September and is scheduled for completion by the end of the calendar year.
The 2016 programme will involve 3500m of drilling at two yet to be drilled targets – Unfin and Fune.
Highlands said the priority targets have been identified following an extensive fieldwork programme carried out in the first half of 2016 involving up to seven field crews undertaking geological mapping, rock chip, soil and stream sediment sampling combined with results from an airborne ZTEM survey covering more than 3300 line km.
Highlands managing director John Gooding said the Star Mountains tenements were very exciting and provided the potential to host a major copper porphyry system.
“The contribution of Anglo American demonstrates their commitment to the Star Mountains project, and we remain quietly confident that ongoing exploration this year will identify further mineralisation. The extensive field work in the first six months of the year has provided a lot of information and many interesting targets to be followed up,” he said.
The 2016 programme will build on the successful drilling completed in 2015, which confirmed the presence of mineralisation at the two main prospects tested so far – Olgal and Kum Kom.
A total of nine holes were drilled during the 2015 campaign, for 5387 metres.
The Star Mountains joint venture between Highlands and Anglo American was finalised early in 2015 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 three 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 expenditure.