PERTH (miningweekly.com) – The share price of junior Highlands Pacific rose slightly Monday on news of the potential expansion of the Ramu nickel and cobalt operation, in Papua New Guinea, in which the company holds 8.56%.
Highlands on Monday confirmed that its project partner Metallurgical Corporation of China (MCC) could spend up to $1.5-billion on expanding the project, with details of the proposed expansion still under wraps.
The project has been achieving record production rates and strong profitability in recent quarters, and MCC recently also increased the ore reserves and mineral resource estimates at the project, with plans for further drilling programmes.
Highlands, in the meantime, said that it was focused on completing its proposed streaming transaction with Canadian company Cobalt 27, giving that company the right to buy 55% of Highlands’ cobalt output and 27.5% of payable nickel metal from the Ramu operation in return for a C$146-million upfront cash deposit to Highlands.
Highlands will use proceeds from the transaction to increase its effective ownership interest in Ramu to 11.3% through repaying its share of outstanding Ramu construction and development loans.
Highlands share prices traded at a high of A$0.12 a share on Monday, up from A$0.115 a share.
The Ramu mine has total estimated reserves of one-billion pounds of nickel and 100-million pounds of cobalt. Highlands management currently estimates a mine life of more than 30 years. Ramu produces about 3% of global mined cobalt a year as a co-product metal.
Ramu exceeded its yearly production projections in 2017, reporting net cash flow of $170-million, on production of 34 666 t of contained nickel and 3 308 t of contained cobalt, both in excess of nameplate capacity.