Highlands started 2013 badly

 THE Highlands Pacific Ltd (Highlands) began last year’s operations badly, according to its 2013 financial year statement.
The miner took off with an unsatisfactory result from the Frieda River feasibility study completed at the end of 2012.
In fact, the study recommended that further work on execution models was required to be completed during 2013.
Meanwhile, Highlands’ joint venture partner Glencore Xstrata said it did not want to develop any Greenfields projects in the future.
Highlands said Glencore’s response was disappointing considering that the project had already spent almost US$300 million (K726 million)  just to look for a world-class copper-gold resource.
For Highlands, 2013 was bad enough as gold prices fell by 23% to June to wrap up the worst quarter since 1920, according to some analysts.
Copper prices fell 10% after a decade during which prices rose fivefold.
By the middle of last year, about US$150 billion (K363 billio) in resource projects were scrapped and the major global miners were all pledging major spending cuts.
Highlands chairman Ken MacDonald and managing director John Gooding said in a joint report: “While we maintain our absolute faith in the Frieda River project with its world-class copper gold resource and its potential to produce very robust cash flows for all stakeholders over many decades, our 2013 end-of-year balance sheet valuation had to be modified to reflect the conditional and nominal sale price agreed between PanAust and Glencore, which resulted in an impairment of US$12.6 million  (K30.5 million)  to US$26.5 million (K64 million) .
Highlands had a 20% interest in Frieda River copper project, subject to the completion of the PanAust Glencore agreement, which was announced last November, as per a financial report.
PanAust, subject to the completion of the PanAust Glencore agreement, would be responsible for 100% of the costs incurred by the Frieda River Joint Venture to finalise the definitive feasibility study for PanAust’s development concept.
It would also appoint and fund the cost of an independent expert to provide a peer review.
PanAust would also be responsible for 100% of the costs to maintain the Frieda River project site, assets and community relations programmes up to the point in time of lodgement of the mining lease or special mining lease application.
According to Highlands Pacific 2013 financial statements, Frieda was among the world’s largest undeveloped copper gold projects and PNG’s largest copper gold deposit.
The resource has 2.5 times more copper than Panguna Bougainville and three times as much contained copper as all the copper extracted from Ok Tedi in the past 25 years.
Frieda copper gold project is 175km north west of the giant Porgera gold mine and 75km north east of the Ok Tedi copper gold mine.