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Star MountainsAnglo American joint venture formed
About the Star Mountains Exploration Tenements:
The Star Mountains exploration tenements cover 515 sq kms and are located within the prospective New Guinean Orogenic Belt, which hosts the Grasberg, Ok Tedi, Porgera and Hidden Valley mines, as well as the Frieda deposit. The tenements, which include Nong River EL1312, Mt Scorpion EL1781, Munbil EL2001 and Tifalmin EL1392, are approximately 20km north east of the Ok Tedi mine and 25kms from the support town of Tabubil, in the West Sepik Province of PNG.
The Star Mountains region has only been drilled twice in the last 50 years. The first drilling was conducted by Kennecott in the late 1960’s when the Mt Fubilan deposit was discovered, and subsequently mined by Ok Tedi Mining Limited. Highlands undertook a drilling campaign for three years from 2010 where 28 diamond drill holes were drilled over six prospects which produced some major intersections of copper gold porphyry mineralisation.
Ownership In December 2014, Highlands and Anglo American Plc (Anglo American) announced that they were forming a joint venture to undertake exploration and potential development of the Star Mountains project.
The joint venture and farm-in agreements consist of the following:
US$10 million payment – Anglo American has paid Highlands an initial US$5 million, with a second US$5 million due in February 2016.
Phase 1 (51% interest) – Anglo American can earn a 51% interest in the joint venture by spending US$25 million on exploration over four years, and declaring a 43-101/JORC compliant inferred resource of 3Mt of contained copper-equivalent within five years.
Phase 2 (80% interest) – Anglo American can move to an 80% interest in the Joint Venture by completing and funding a Bankable Feasibility Study (BFS) within 15 years of the execution of the Farm‐in and Joint Venture Agreements.
Development Free‐Carry – Anglo American will provide Highlands with up to US$150 million in project development funding as a deferred free‐carry following completion of the BFS.
Highlands will continue to manage the project, however, Anglo American will have the right to take over management of the project when it has invested US$25 million in project expenditure.