HPL targets gold near Ok Tedi site

Business, Main Stories

HIGHLANDS Pacific announced on Monday that it was exploring a copper-gold resource close to the Ok Tedi mine, which was due to close next year, The Australian newspaper reported yesterday.
The report, by the paper’s Asia-Pacific editor Rowan Callick, said that since BHP Billiton quit Ok Tedi in February 2002 in the wake of environmental controversies, the mine had enjoyed record earnings.
The 52% that BHP used to own was passed on to PNG Sustainable Development Program Ltd, a non-profit body chaired by leading economist Ross Garnaut.
The PNG Government owns 30% and Canadian miner Inmet, 18%.
Ok Tedi has been contributing a quarter of PNG’s export earnings, providing about A$100 million (K245 million) a year to the national budget.
It is located in the remote Star Mountains in Western province, where it remains the dominant employer – with 2,000 staff and a further 2,000 contractors.
Its closure has caused considerable concern about the future of the workforce, and of the thriving Tabubil mining township.
Brisbane-based Highlands Gold, which focuses on PNG, also owns 8.56% of the A$1.5 billion (K3.7 billion) Ramu Nickel mine being built in Madang province by China Metallurgical Construction Corp (MCC) and 16.9% of the A$4.3 billion (K10.5 billion) Frieda copper-gold project being developed by Xstrata.
Highlands said it was about to accelerate its development of the Nong River exploration area 20km northeast of Ok Tedi.
It is engaged in a joint venture there with Xstrata, which has the right to take a 72% stake if it pays Highlands three times its expenditure on exploration.
It will spend about A$3.25 million (K7.97 million) on an airborne electromagnetic survey – which will also cover Highlands’ sole owned, adjacent Tifalmin exploration area – and on diamond drilling of targets in the area.
The former US mining giant Kennecott – which was later taken over by Rio Tinto – carried out drilling in the area in 1972, which identified a resource with grades and thicknesses that, Highlands said on Monday, “in today’s terms can be potentially economical”.
Highlands managing director John Gooding said: “What we already know about Nong River is the shallow copper-gold hits achieved by Kennecott’s drilling.
“Modern geophysical surveys in association with previous work on the ground will be the key to pinpointing areas for drilling and revealing its full potential.
“Its proximity to Ok Tedi is of particular advantage and opportunity in terms of infrastructure, people and services.” – www.theaustralian.news.com.au