HPL, Xstrata allot US$80m for Frieda

HIGHLANDS Pacific Ltd and Xstrata are expecting to spend at least US$80 million (K219 million) on the Frieda copper and gold projects in West Sepik province.
Managing director and chief executive officer John Gooding yesterday told shareholders at its 13th annual general meeting in Port Moresby that the Frieda copper project “is a world class project and among the top 12 world’s copper producing countries which accounts for 30% of world’s copper production”.
Gooding said the project which covers the Nena, Horse/Ivaal/Trukai and Koki deposits had an overall resource estimated at 7.5 million tonnes of copper and 14.3 million ounces of gold and collectively forms one of the world’s largest undeveloped copper and gold deposits found in PNG.
It is located near the border of the Sandaun and East Sepik provinces.
The project owners are Xstrata (81.82%) and Highlands (18.18%).
Highlands has a free-carried interest through to completion of a bankable feasibility study (required by January 2012).
Gooding said Xstrata’s spending for Frieda last year was US$38 million (K107 million) and for this year, it would be US$77.5 million (K218 million).
He said an extended scoping study released early last year indicated a 40mtpa plant with a 27-year mine life averaging 160,000tpa of copper metal and 240,000ozpa of gold (with higher output in the first 10 years).
“The pre-feasibility study due in the third quarter of this year is currently considering larger throughput and production options,”  he said.
Subject to the project’s continuing ability to meet its targets, a 12-month feasibility study would commence in the third quarter of this year with possible construction in 2012 and production in 2017.