PanAust rebuffs Frieda frustration speculation

RUMOURS of an attempt by the Papua New Guinean government to overturn the sale of the Frieda River copper-gold mine to PanAust have been downplayed by the miner.
PanAust rebuffs Frieda frustration speculation PanAust rebuffs Frieda frustration speculation PanAust rebuffs Frieda frustration speculation PanAust rebuffs Frieda frustration speculation PanAust rebuffs Frieda frustration speculation

The company, which has just completed the acquisition with joint venture partner Highlands Pacific, said it had received "consistent support" from the PNG government during meetings before and after the deal.

Media reports had suggested that the PNG government attempted to overturn the $125 million sale of Glencore Xstrata's Frieda River mine at the last minute.

Under the completed sale agreement, PanAust will acquire an 80% interest with Highlands holding the remaining 20%, with a new JV arrangement in place.

The PNG government has a right to acquire up to a 30% interest which, if exercised to its full extent, will reduce PanAust's stake to 55% and Highland's to 15%.

An initial acquisition payment of $US25 million ($A27 million) has been paid to Glencore in addition to about $4 million for costs including camp maintenance, feasibility study work and community assistance.

A spokesman for PanAust said: "In the lead up to the announcement of PanAust's agreement to acquire an 80% interest in the Frieda River project from a subsidiary of Glencore Xstrata, PanAust met with a number of members of the Papua New Guinea government, including Prime Minister Peter O'Neill and received widespread support for the proposed transaction.

"Since then, we have been in ongoing contact with the PNG government and that support has been continually reiterated," he added.

"At no point during these meetings has the PNG government indicated any opposition to PanAust progressing with the Frieda River transaction.

"Since the Frieda River transaction completed on Monday, PanAust has held a number of courtesy meetings with members of the PNG government, again including the prime minister.

"We have received consistent support for the transaction. We now look forward to working with the PNG government, our JV partner Highlands Pacific and a range of other stakeholders on plans for developing the Frieda River project."

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