PERTH (miningweekly.com) – Mining major Anglo American and ASX-listed junior Highlands Pacific have signed joint venture (JV) and farm-in agreements over the Star Mountain copper/gold project, in Papua New Guinea.

The exploration and development JV proposal was initially announced in December last year.

Under the terms of the agreement, Anglo American would pay Highlands $10-million in two tranches of $5-million each, with the first payment due on the execution of the agreements, and the second about 12 months later.

Anglo could earn a 51% interest in the JV by spending $25-million on exploration at Star Mountain over the next four years, and by declaring a Joint Ore Reserves Committee-compliant resource of three-million tonnes of contained copper equivalent within five years.

The major could up its interest to 80% by completing and funding a bankable feasibility study within 15-years of executing the farm-in and JV agreement. Furthermore, Anglo would provide Highlands with up to $150-million in project development funding as a deferred free-carry following the completion of the bankable feasibility study.

Highlands would continue to act as manager of the project, until Anglo had invested some $25-million in project expenditure.

Highlands MD John Gooding said that the execution of the agreement represented a major step forward for Highlands.

“Anglo American is a highly reputable international company that brings great exploration and development experience to the Star Mountain project. Together, we can move forward with a defined exploration programme that will test the size and grade of these exciting targets,” Gooding added.

The exploration tenement covers 515 km² and is located within the New Guinean Orogenic belt, which also hosts the Grasberg, Ok Tedi, and Hidden Valley mines, as well as the Frieda deposit.

Gooding said that the project had significant potential, and had only been drilled twice in the last 50 years.