A commissioned report by Independent Investment Research on the project's 18.18% stakeholder Highlands Pacific recently explored some of the FID issues.

"Before a FID is made there are a number of things that need to be completed, such as additional modelling, renewal of exploration licences and obtaining the required environmental and regulatory approvals," IIR said.

Another uncertainty for the Frieda River joint venture is whether the infrastructure spending-focused PNG government will exercise its option to acquire up to a 30% stake of the project.

While Xstrata last year signalled it could either fully or partially divest its 81.82% stake in the project, or even pursue no divestment at all, IIR encouragingly said Xstrata had proposed a $US20 million work program for 2013.

"Xstrata continues its review of its global portfolio and has signalled its intention to sell some or all of its interest in the project," IIR said.

"Highlands has a pre-emptive right to Xstrata's interest."

Depending on what choices are made for power generation, especially whether a capital-draining hydroelectric power station is on the cards, the feasibility study outcomes so far indicate production at Frieda River could be in the range of 204,000-291,000 tonnes per annum copper and 424,000-451,000 gold ounces per annum over the first five years.

IIR expects first production in 2018.

It rated Highlands as undervalued when also considering its Star Mountains project and Ramu mine stake in PNG.

IIR consequently gave Highlands shares a "risk-adjusted" valuation of A71c each - far off the 13.5c level they have traded at today.