26 Oct 2007

Highlands Pacific sells its troubled Kainantu gold mine in PNG's Eastern Highlands

10:57 am on 26 October 2007

Highlands Pacific is selling its troubled Kainantu gold mine in Papua New Guinea's Eastern Highlands to Porgera mine owner and operator, Barrick Gold, for $141-point-5 million U.S. dollars.

Industry sources told The National newspaper the deal followed Monday's suspension of Highlands Pacific on the Australian Stock Exchange.

The Kainantu operations generated unprecedented losses for Highlands Pacific which, together with outstanding gold hedging contracts, threatened the financial viability of the company.

Highlands is expected to use revenue from sale of the mine to close its hedging book and pay off all debts, ending up with around US$30 million in cash for future initiatives.

Newly-appointed executives and mine staff at Kainantu will be retained by Barrick, the world's largest gold mining company.