Highlands Pacific shifts strategy to focus on controlling projects in Papua New Guinea


Highlands Pacific is expanding its focus from large projects and exploration, to controlling interests in smaller projects that offer near term returns. Highlands Pacific Managing Director, Craig Lennon, tells Business Advantage PNG it is a response to market changes.

Kurumbukari mine, at the Ramu Nickel project. Source: Highlands Pacific

Craig Lennon came on board as Managing Director in late 2016, and Ron Douglas was appointed Chairman earlier this year. Lennon says the board is keen to focus on a renewed strategy for the junior mining company.

‘In the past, we have ended up with minority interests in large projects and, therefore, have had limited control over our destiny.’

Lennon says that because markets have changed and economies are challenged, investors are pursuing returns in a shorter timeframe. They are no longer prepared to wait for longer-term projects to deliver.

‘Times have changed, and so investment time frames are now shorter.’

‘In a time gone by, the investment market recognised the potential value of a minority interest in a large project.’

‘Times have changed, and so investment time frames are now shorter,’ he adds.

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Maximising value

Highlands Pacific’s Craig Lennon. Source: Craig Lennon

To have more control over its future, Highlands Pacific’s strategy is now to focus on playing a substantial role in smaller projects, while maximising the value of its existing suite of projects.

Lennon says consistent government legislation has helped the company provide its investors with confidence.

‘You want to be able to assure people that we are investing in Papua New Guinea, this is what Papua New Guinea is about—and to have confidence that the government’s policy settings are going to remain consistent.’


Papua New Guinea’s resources sector has matured greatly and external opinions are changing, says Lennon.

However, he believes some investors are still wary of doing business in the region, which is a challenge for the company.

‘Part of our job is telling people outside of the country just how good Papua New Guinea is as a place to invest.’

‘In line with the company’s new focus, Highlands Pacific’s 20 per cent interest in the Frieda River project has been up for sale.’

‘It’s not easy to reassure the investment community, because there are entrenched views that have been built up over many decades, and those views are difficult to shift, even though they are wrong.’

‘Instead of defending the jurisdiction that we operate in, it would be great if we would just talk about our assets when we meet with potential partners,’ Lennon adds.

Frieda River

In line with the company’s new focus, Highlands Pacific’s 20 per cent interest in the Frieda River project has been up for sale since the beginning of the year and has received some interest.

‘Sewa Bay has the potential of being a great project.’

While Highlands Pacific holds only 8.56 per cent interest in the Ramu mine, Lennon says with the project closing in on delivering cash flow, it’s likely to remain a core asset.

The wharf at Basamuk, Ramu Nickel project. Source: Highlands Pacific

‘Ramu is delivering what we want, which is near term cash flow.’

Unlike the Ramu mine, the Star Mountains project is considered a long way off production.

While partner Anglo American is currently funding the project, Lennon questions whether Star Mountains is a good fit for a junior explorer.

Sewa Bay

Lennon is confident in the company’s exploration program at Sewa Bay. He says at this stage the project is a good fit.

‘There is potential for direct shipping of ore at Sewa Bay, providing the grades are more than 1.5 per cent nickel, which would result in a near term cash producing project.

‘Sewa Bay has the potential of being a great project, and its relatively short development timeframe fits nicely into the company’s strategy.

‘The issue for Highlands Pacific in the past is that our discoveries have always been very large projects that require a substantial amount of funding.’

‘The focus now is to see if we can find smaller projects—ones that require much less capital expenditure, and are therefore projects that we can be fully involved in.’

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