Name of the Project
Frieda River copper/gold project.

Location
The gold project is located 175 km north-west of the Porgera gold mine and 75 km north-east of the Ok Tedi mine, in Papua New Guinea.

Client
Frieda River is held by the Frieda River Joint Venture (JV), an unincorporated JV between Frieda River Limited; PanAust, a former listed Australian miner and now a unit of China’s Guangdong Rising Assets Management (GRAM); and Highlands Frieda, a subsidiary company of Highlands Pacific. Frieda River manages the project and holds an 80% interest, while Highlands holds the remaining 20% interest.

Project Description
Frieda River is one of the largest undeveloped copper/gold deposits in the world.
An addendum to the May 2016 Frieda River feasibility study (FS) was completed on the project in March 2017.

The addendum incorporates new data and information that was generated by PanAust/GRAM, subsequent to the completion of the initial study, and addresses some of the issues raised in an independent peer review conducted by engineering consultant Behre Dolbear Australia (BDA) in January 2017.

The addendum includes data from additional resource and geotechnical drilling at the project, which has led to increases in mineral resources and reserves, an amended openpit design and a consequent updated mine plan and production schedule.

Mineral resources and reserves at the project, which comprise the Horse-Ivaal-Trukai, Ekwai and Koki mineral resources, have decreased from 2.74-billion tonnes to 2.64-billion tonnes. Reserves have increased from 608-million tonnes to 686-million tonnes.

Jobs to Be Created
Not stated.

Net Present Value/Internal Rate of Return
Compared with the May 2016 FS, the FS addendum has increased the project’s post-tax net present value (NPV), at a real discount rate of 7.8%, from $820-million to $1.13-billion. 
The NPV has been calculated to a start date of June 30, 2018 and not the current date.
The internal rate of return has increased from 10.8% to 11.4%. The postproduction payback period has remained the same, at six years.

Value
Compared with the May 2016 FS, preproduction capital costs have decreased from $3.61-billion to $3.6-billion.

Duration
Construction is expected to take four years.

Latest Developments
Despite views from mining consultant BDA that the updated Frieda River FS could be presented to lenders to secure possible financing, Highlands Pacific believes that the study still does not meet the standards required by the JV agreement and is, therefore, incomplete in a number of key areas.
BDA submitted a peer review on the initial FS provided by PanAust in January 2017, identifying a number of shortcomings and omissions.
PanAust subsequently carried out additional work, which resulted in the release of an addendum in March.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
PanAust, tel +61 7 3117 2000,  fax +61 7 3846 4899 or  email info@panaust.com.au.
Highlands Pacific, tel +675 323 5966,  fax +675 323 5990 or email info@highlandspacific.com.