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Business |
New team to bring Highlands back on
track
Turn-around group to
design new mine plan: Chairman
By BIBIAN BARRENG
THE right mixture of professional skills in the mining industry is
needed to lift Highlands Pacific production performance back on
track at the Kainantu gold mine.
This was the key focus of the board which was raised during the
10th annual general meeting of stakeholders yesterday.
Just before the agenda could be taken up, frustrated
shareholders pointed out the “appalling performance” of the mine
due to falling production levels during the last 12 months.
Gold production dropped in the first quarter of this year to
5,378 ounces from 6,225oz last December quarter, while the
projected production level was around 110,000 of gold per annum.
Chairman Robert Bryan said the issue was being confronted and
addressed as the company restructured its senior management
team.
“The company had been criticised in some quarters for using gold
forward sales to secure debt to cover the Kainantu development,
but realistically it was the only way that Highlands could bring
Kainantu into production quickly.”
“We were, however, punished by the quite unexpected surge in
gold price combined with the operational problems at Kainantu …
when we work through the current issues at Kainantu, the country
should be in a position to reap the benefits that accrue from
being a producer rather than simply a minerals explorer,” Mr
Bryan said.
Mr Bryan noted the appointment of new managing director John
Gooding had already lifted spirits, given his very wide
underground mining experience that he now brings to Kainantu.
The chairman also announced that a new general manager , who
specialised in underground mining, would be appointed.
Mr Gooding will be joined by recently-appointed chief geologist,
a maintenance manager, along with a new mine and process plant
managers who also came on board.
“This new turn-around team will focus on developing a new mine
plan going forward, and I am confident that they will deliver
the goods.
“To cover additional costs incurred at Kainantu, Highlands
recently raised a further US$20 million (K56.7 million) as new
equity with associated options from Resource Capital Fund IV (RCF
IV),” Mr Bryan said.
He added that this was a boost and timely contribution to the
company’s working capital and a show of confidence from RCF IV.
When combined with the re-scheduled gold forward sales, it gives
the company the breathing space it needs to get the Kainantu
performance back on track.
There was also mention that the bankers have rescheduled the
gold forward sales tied to the Kainantu production.
“One aspect of the rescheduling of the gold forward sales which
have been overlooked, is that it tacitly recognises that the
gold resources base at Kainantu has been increased
substantially, thus justifying a long payback period for the
banks to recover their investment,” Mr Bryan noted.
The chairman reported that Kainantu gold resource is currently
estimated to contain two million ounces of gold, while
exploration will be stepped up both within the mine area at
Kainantu and on other gold-bearing structures within the gold
field to further extend mine life as well as increasing the
level of production.
 
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