Xstrata to spend K194m on Frieda

Business, Main Stories


XSTRATA will spend more than K194 million (A$77.5 million) on the Frieda River gold and copper project this year, according to its partner, Highlands Gold Ltd (HGL).
A statement released to the Australian Stock Exchange (ASX) by HGL said the expenditure programme at Frieda included completion of a pre-feasibility study which was expected in the third quarter of the year and the proposed start of feasibility study shortly after.
ASX-listed gold and base metals explorer Highlands Pacific reported that Xstrata, which owned a 76,3% stake in the project dependent on the completion of a bankable feasibility study, had spent A$38 million (K95.7 million) on the project in 2008.
“The significant resource upgrade announced recently combined with the major activities planned in 2010 is testament to the quality of this project.
“This level of expenditure by Xstrata will bring the total investment by the end of this year to more than A$150 million (K737 million),” HGL managing director John Gooding said.
He noted that on-site activity would include 50,000m of drilling split between resource, geotechnical and waste rock characterisation.
He added, however, that most of the drilling would focus on lifting the proportion of the mineral resource inventory from inferred category to the measured and indicated category.
The programme would also include project-permitting activities, including landownership investigations and a broad range of environmental and social studies to support an environmental-impact assessment.
Highlands Pacific noted that the Frieda copper project is one of the world’s largest undeveloped copper and gold resources.
An extended scoping study released early last year indicated a 40 million tonne on a year plant with a 27-year mine life, averaging 200,000t/y of copper and 240 000oz/y of gold.
The pre-feasibility study is currently considering larger throughput and production options.
Subject to the project continuing to meet its project hurdles, a 12-month feasibility study would start in the third quarter of this year, with possible construction in 2012 and production in 2017.
The project owners are Xstrata, with a 76.30% interest, Highlands Pacific, with a 16.95% interest, and miner OMRD Frieda, which owns the remaining 6.75%.