AUSSIE MINING COMPANY TARGETS SANDAUN, PNG STARTUP

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By Anton Huofolo

PORT MORESBY, Papua New Guinea (The National, Feb. 18, 2008) – The billion-tonne Frieda copper and gold deposit in Papua New Guinea’s Sandaun province, discovered more than four decades ago, finally has a project timeline aiming for initial production in 2016, Highlands Pacific announced last Wednesday.

Project venture-partner Highlands Pacific, in a company update to the Australian Securities Exchange, described the planned timeline as "very positive news for the Frieda River project", which will be the first major mining project in Sandaun province.

According to Highlands, extended scoping studies will be carried out in 2008 and pre-feasibility studies conducted in 2009 for the Frieda project.

[PIR editor’s note: Highlands Pacific is an Ausralian mining company. Sandaun province is in the northwest corner of mainland Papua New Guinea, bordering the Indonesian province of West Papua. ]

This will be followed by a bankable feasibility study from 2010 to the first half of 2011.

The rest of the timeline, Highlands Pacific says, includes detailed engineering in 2012, followed by construction anticipated to cost more than US$1 billion (K2.8 billion) from 2012-2015. Production should start in 2016.

"The expended US$10 million (K26 million) during 2007 and the budget for 2008 is US$25 million (K65 million), with an accelerated spend in 2009 and 2010.

"Xstrata Copper is funding Highlands’ share of the expenditure through to bankable feasibility study completion," Highlands Pacific said.

"The Frieda River copper/gold project covers exploration licences 58 and 1212, and the Nena Deposit, which is subject to Xstrata Copper making a further option payment of US$10.8 million (K28.6 million) to Highlands," Highlands added.

"To retain its shares of Highlands’ equity in the project, Xstrata Copper must complete a bankable feasibility study by January 2012 – clearly on plan given the timeline developed for the plan."

The joint-venture project consists of Xstrata Copper of Switzerland holding 73.7% equity in the project while Highlands and OMRD Frieda Co Ltd hold 16.4% and 9.9% respectively.

Mine span is expected to be over 26 years while the mine will be producing 190,000 tonnes of copper and 295,000 ounces of gold per year.

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