AUSSIE COMPANY FINDS NEW GOLD, COPPER IN PNG

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By Brian Gomez

PORT MORESBY, Papua New Guinea (The National, Jan. 29) – Highlands Pacific, the only Australian junior mining company to have persevered with exploration when most other companies packed their bags, may well be on to another giant copper-gold discovery in Papua New Guinea.

Already the owner of an undeveloped nickel-cobalt deposit at Ramu and a billion ton copper-gold resource at Frieda River, the company has now found a "pretty exciting" copper-gold anomaly.

Highland Pacific’s managing director Ian Holzberger told The National yesterday the new find was first pinpointed as a geophysical anomaly about half way between the giant Ok Tedi copper-gold mine and its highly advanced Frieda River project.

He said follow up geological mapping and collection of ground samples from outcrops and stream sediments had confirmed the attractiveness of the area - results will be announced shortly in the quarterly report due out later this month.

Highlands Pacific first disclosed its success in the Nong River and Tifalmin areas in its September quarterly report issued on October 28 last year.

It said: "This area is prospective for porphyry copper-gold and related high grade skarn deposits and covers an area of 920 square kilometers some 40 kilometers north of the Ok Tedi mine. Earlier in the year an airborne magnetic and radiometric survey was carried out over the entire area. Some fifty priority targets have been defined and an initial program of ground follow up was recently completed. This work will continue this year."

"This is exciting stuff but very early days," Mr. Holzberger said, adding that the target was similar to the big Ok Tedi copper-gold skarn deposit and the company’s own Frieda River project.

Canadian mining giant, Noranda Inc, which has since been taken over by Falconbridge and which, in turn, is now merging with Inco, has farmed into the area to earn a 72 percent stake.

Details of how much Noranda has agreed to spend were not disclosed.

Meantime, ore processing has commenced at the company’s Kainantu underground gold mining project in Eastern Highlands with the first shipment of gold concentrate to a smelter in Japan anticipated in mid-February.

Kainantu is the first of several small to medium sized gold mines that will be developed in Papua New Guinea in the next few years after exploration and development had virtually stalled until government incentives were introduced in 2003.

Industry sources are anticipating that Highland Pacific’s partner, China Metallurgical Construction Corp, is also expected to begin construction at its big Ramu nickel-cobalt mine by the middle of this year.

Mr. Holzberger confirmed that Falconbridge had committed to further exploration at Frieda River after completing metallurgical tests at its laboratory in Canada.

Industry observers are anticipating an early decision on a feasibility study on the high-grade Nena deposit, which contains 78 million tons with a highly attractive content of 2 percent copper and a gold oxide resource of 18 million tons at 1.4 grams per ton gold and 0.1 percent copper.

January 30, 2006

The National: www.thenational.com.pg/

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