The banking syndicate of Highlands Pacific has demonstrated continued support for the Kainantu gold project in Papua New Guinea by agreeing to defer several financial obligations.

Highlands managing director John Gooding says the agreement is a show of support for the new management team appointed at Kainantu and will allow them to concentrate solely on addressing and improving on the production issues at the mine.

He says: The syndicate, consisting of ABN Amro, Societe Generale and RMB Resources Limited, has a long association with Highlands and this initiative further strengthens the relationship while underpinning the Kainantu operation.

The agreement covers deferral of the August 2007 and November 2007 principal repayments, being US$2.5 million each, and the rolling of the September 2007 and December 2007 forward sales contracts, totalling 29,539 ounces, to February 2008.

The combination has the effect of providing Highlands with working capital of about US$12 million that was previously consumed by financing commitments and allows the company to accrue all gold production over the next two quarters at the prevailing spot gold price.