GOLD and copper producer PanAust has agreed to acquire a majority stake in the Frieda River project from Glencore Xstrata in a US$75 million (K181.60 million) deal that will give the Australian miner exposure to a large undeveloped deposit.
Under the terms of the deal, PanAust will acquire all the shares held by Glencore’s PNG registered subsidiary, with US$25 million (K60.5 million) paid at the close of the transaction and a second installment of US$50 million (K121 million) paid on Dec 31, 2015.
PanAust has also entered into an agreement to take a 7.5% shareholding in Australian junior miner Highlands Pacific Ltd.
Highlands, which is a joint venture partner in the Frieda River project, will hold a 20% stake upon its completion, the agreement of which settles an existing dispute between Glencore and Highlands.
Glencore will retain a 2% net return royalty on PanAust’s interest in the project, if a development at Frieda River is successfully completed.
The agreement was subject to conditions, which relate to applicable regulatory approvals, including that of the Investment Promotion Authority (IPA).
The deal announced last Friday also outlined terms in the event the PNG Government exercises its right to acquire up to a 30% interest in the project. – My Wealth News