PERTH (miningweekly.com) – ASX-listed Highlands Pacific and its joint venture (JV) partner at the Frieda River copper/gold project, in Papua New Guinea, have started arbitration proceedings to resolve a funding dispute.
The parties were in dispute regarding their respective obligations under the JV agreement, including whether Highlands is obligated to start funding of project expenditures.
Highlands has previously sought to resolve the dispute through mediation; however, the parties have now agreed to seek a final and binding arbitration before a sole arbitrator, with a final hearing yet to be fixed.
Highlands previously raised doubts about the standard of the Frieda River feasibility study, saying that it did not meet the standards required by the JV agreement, and was therefore incomplete.
JV partner PanAust carried out additional work on the feasibility study, which resulted in an addendum being released.
The addendum increased the project’s internal rate of return from 10.8% to 11.4% and its post-tax net present value from $820-million to $1.13-billion. Copper-in-concentrate production also increased from 190 000 t/y to 200 000 t/y, while gold-in-concentrate production increased from 260 000 oz/y to 280 000 oz/y.