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PanAust wraps up $125m Frieda River deal, ups stake in JV partner

PanAust wraps up $125m Frieda River deal, ups stake in JV partner

Photo by Bloomberg

25th August 2014

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Metals miner PanAust on Monday announced that it would increase its shareholding in fellow-listed joint venture (JV) partner Highlands Pacific from 7.5% to 14%, after completing a buy-in into the Frieda River JV.

PanAust on Monday completed the acquisition of an 80% shareholding in the Frieda River copper/gold project, in Papua New Guinea, from mining major Glencore in a deal valued at $125-million.

MD Gary Stafford said that the conclusion of the acquisition added significant value to the company’s existing portfolio of producing and predevelopment assets.

“The Frieda River copper/gold deposit is one of the largest known undeveloped copper deposits in the world and offers excellent potential for the establishment of a long-life operation,” Stafford said.

The most recent feasibility study had considered a project with the potential to deliver an openpit mining operation averaging around 190 000 t/y of copper and 280 000 oz/y of gold, over a 20-year life-of-mine. However, as part of its due diligence, PanAust conducted a scoping study based on a smaller-scale 24-million-tonne-a-year conventional openpit and flotation operation, providing an average 100 000 t/y of copper and 160 000 oz/y of gold over an 18-year mine life.

A new feasibility study on the project was slated for completion by the end of 2015, at an estimated cost of $25-million.

Meanwhile, PanAust said it had subscribed for a further 64.4-million shares in project partner Highlands Pacific, which owns the remaining 20% interest in the Frieda River project.

The share placement was scheduled to take place on September 1.

Edited by Mariaan Webb
Creamer Media Contract Publishing Editor

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