HIGHLANDS PACIFIC LIMITED 
By 25 June 2012
Agreement Finalised Cornerstone Investment with PNG Sustainable Development Program LimitedFurther to the announcement on 20 June 2012 Highlands Pacific Limited (ASX: HIG) today announces that it has entered into a Share Placement Agreement ("Agreement") with PNG Sustainable Development Program Limited ("PNGSDP"), with PNGSDP investing US$15 million into Highlands.
Under the Agreement, PNGSDP will subscribe for 102,930,373
fully paid ordinary shares to raise US$15 million (A$14.9
million equivalent), which results in an issue price of
approximately A14.5c per share. Upon completion of the
placement HIG will have approximately US$23 million in cash
reserves and will be well placed to continue its exploration
program at Star Mountains for the next 18-24 months.
As part of the Agreement, Highlands will appoint a PNGSDP
nominee to the Highlands' Board of Directors. The placement
will be undertaken by Highlands under its 15% limit and at
the completion of the placement
PNGSDP will hold a 13.04% interest in the company. The
placement will be conditional on Highlands obtaining a waiver
from ASX Listing Rule 6.18 to grant PNGSDP a right to
participate on a pro-rata basis in any future capital
raisings. It is anticipated that this waiver will be granted
shortly and following the receipt of this Highlands will
receive the placement funding from SDP. The rights attaching
to this fall away should PNGSDP's shareholding in Highlands
drop below 10%.
Managing Director of Highlands Pacific Mr John Gooding said today: "As stated the other day the relationship with PNGSDP has the potential to deliver significant benefits to Highlands, giving it the financial and technical backing of a very large investment company that has strong ties in Papua New Guinea and is the majority shareholder of Ok Tedi Mining Limited ("OTML")."
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About PNG Sustainable Development Program Limited
PNGSDP was established in 2002, when BHP Billiton divested
its 52 per cent shareholding in OTML. PNGSDP has the task to
support and promote sustainable development through projects
and initiatives to benefit the people of PNG, especially the
people of Western Province. PNGSDP is also a substantial
financial institution with the function of investment of its
Long Term Fund and Development Fund so that it can support a
high level of development expenditure in Western Province and
PNG in general.
PNGSDP is a company registered in Singapore and "limited by
guarantee", which means that it has no share capital,
debentures, share options or unissued shares. The total net
assets of PNGSDP in 2011 amounted to US$1.43 billion.
About Ok Tedi Mine
OTML operates the Ok Tedi mine which is located in the Star
Mountains region of the Western Province. The mine started
operations in 1984, and has become the single largest
business contributor to the economies of the Western Province
and PNG.
The Ok Tedi mine is a major producer of copper concentrate
for the world smelting market in Germany, India, Japan, Korea
and the Philippines. The mine exports copper as the main
product but it also extracts gold and silver.
For further information, please contact:
John Gooding or Craig Lennon
Highlands Pacific - 07 3239 7800
Media Enquiries to:
Simon Jemison
Collins St Media - 03 9224 5319
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ASX Code: HIG PoMSox Code: HIG
Shares on Issue: 686 million Options on Issue: 23 million Performance Rights: 3.5 million
Market Capitalisation ~ A$106m
Cash on Hand (31/03/12) A$12m
Directors
Ken MacDonald, Chairman
John Gooding, Managing Director
Mike Carroll
Dan Wood
Drew Simonsen
Fiu Williame-lgara
Management
Craig Lennon, CFO & Co.Sec Larry Queen, Chief Geologist Peter Jolly, GM Projects
Ron Gawi, GM Port Moresby
For further information, please contact:
John Gooding or Craig Lennon
Highlands Pacific - 07 3239 7800
Media Enquiries to:
Simon Jemison
Collins St Media - 03 9224 5319
Website:
About Highlands Pacific Limited
Highlands Pacific is a PNG incorporated and registered mining
and
exploration company listed on the ASX and PoMSox exchanges.
Its major development assets include the US$1.5bn Ramu nickel
cobalt project, the Frieda River copper gold project and
exploration on the highly prospective Star Mountains (Nong
River, Mt Scorpion and Tifalmin) licenses approximately 20km
north of the Ok Tedi mine. Highlands also holds exploration
ground in the Wau/Bulolo close to the new Hidden Valley and
Wafi gold projects.
The Frieda copper gold project is one of the Asia-Pacific's
largest undeveloped copper/ gold resources. The Project is
175kms north- west of the giant Porgera gold mine and 75km
north-east of the Ok Tedi mine. The project owners are
Xstrata (81.82% and manager) and Highlands (18.18%). The
pre-feasibility study released in November
2010 indicated a 60Mtpa throughput for the first eight years
with output averaging 246,000tpa of copper and 379,000 ozpa
of gold. The multi-decade life mine will have an average
throughput of
50Mtpa.
Star Mountains leases, which include Nong River EL1312, Mt
Scorpion
EL1781 and Tifalmin EL 1392, are located approximately 20km
north of the Ok Tedi mine, in Western Province, PNG. These
prospects lie within the highly prospective New Guinean
Orogenic Belt, home to deposits like Grasberg, Ok Tedi,
Frieda, Porgera and Hidden Valley. A drilling program is
underway with some significant copper gold intersections
reported.
The Ramu nickel mine is located 75km west of the provincial
capital of
Madang, PNG and will produce an annual output of 31,150
tonnes of nickel and 3,300 tonnes of cobalt contained in high
grade concentrate over a 20 year mine life. The mine is
currently being commissioned and the mineral resources at
Ramu have the potential to increase the mine life by a
further 15-20 years. Highlands 8.56% interest in Ramu will
increase to 11.3% at no cost after repayment of the project
debt (estimated to be 8 years). From commissioning, Highlands
has access to its pro-rata 8.56% share of Ramu's post-debt
servicing net cash flow. Highlands also has an option to
acquire an additional 9.25% at fair market value which could
increase its interest to 20.55%.
* Subject to the right of the Independent State of Papua New Guinea to acquire up to a 30% equity interest in any mining development in the country.
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