Highlands Pacific Limited (ASX: HIG) is a mining company which explores various mineral resources in Papua New Guinea and is the foremost explorer in that region. The company has a pedigree of over 20 years now in the mineral mining space.
The Company has via a release declared the HITEK Ore reserve estimate regarding the Frieda River project at September 2018 as per the 2012 edition of the Australasian Code on mining, i.e., the JORC Code. These Ore reserves are substantiated by the Sepik Development project Feasibility Study completed in 2018. This ore estimate is an improvement over the earlier 2017 reserve estimates.
The probable reserves came in at 761 Mt as compared to the 276 Mt which came in as the 2017 estimate. Here, the only the blocks which are being classified as the positive economic value resource are selected as ore. The cut-off value which is considered for the classification as the ore was applied on a Net Smelter Return (NSR) basis & has thus taken into account the costs of realization, metallurgical recovery, ore processing and general and administrative costs. The economic evaluation of the mineral resource within the open-pit has yielded a positive net present value (NPV) at US$3.30 per pound (lb) copper and US$1,390 per ounce (oz) gold. The stated ore reserve was based on the feasibility study with key characteristics and premise that the ore reserves are extracted from the HITEK open pit design, the production schedule shall be designed in such a manner that it garners highest value mill feed. It is also noteworthy that the Frieda River Copper-Gold Project (FRCGP) has the ownership of the Frieda River Hydroelectric Project, with the supply of power equal to the cost of generation. Post the cessation of mining, the revenue from the sales of power to third parties shall commence from the year 35.
This material increase in the ore is corroborated by the various key enhancement to the project. This is evidenced by the relocation of the integrated storage facility from the Nena river to the Frieda river which has substantially increased the storage capacity from the 0.9 Bm3 to 3.3 Bm3 and has enabled up to 490 MW of hydroelectric power generation capacity with the potential to export power. Also, this is on account of the proposed expansion of the HITEK process plant in year 8 of the operations from the earlier 40Mtpa to a revised 49-65 Mtpa.
Meanwhile, the share price of the company has fallen 48.28 percent in the past six months as on 7 December 2018. HIG’s shares traded at $0.076, up by 1.333% & with a market capitalization of circa $81.96 Million as on 10 December 2018 (AEST 04:00 PM).
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