Highlands Pacific has reported a 37% increase in gold production to 8015 ounces from its Kainantu Gold Mine in Papua New Guinea during the September quarter.

A total of 7745 ounces of gold were shipped in concentrates to Japan for smelting and refining.

Mining performance improved across the quarter at the Kainantu Gold Mine and mine performance is expected to continue to improve over the next quarter as new plan is implemented.

Re-estimation of the Irumafimpa (in the Kainantu mine area) mineral resource based on the revised geological understanding increased the contained gold by 27%.

The Irumafimpa mineral resource is estimated at 2.2 million tonnes @ 16.7 grams per tonne gold containing 1.2 million ounces of gold.

The Kora mineral resource, which has not been re-estimated as yet, adds an additional 0.9 million tonnes at 29.0 grams per tonne gold containing 0.8 million ounces of gold to the Kainantu mineral resource base.

Irumafimpa ore reserve is now estimated at 1.3 million tonnes at 16.0 grams per tonne gold containing 655,700 ounces an increase of 75% over previous estimate.

Up to a further 330,000 ounces (contained in the inferred resource category) may be reasonably expected to be converted to reserves by mine development.

A revised mining plan has been adopted based on a mixture of bulk, shrink and other forms of hand held mining techniques.

The bulk stopes will provide around 50% of production for the first five years. Further potential for bulk stoping is recognised.

The revised plan envisages the production of 110,000 ounces of gold per year over an extended mine life in excess of six years and approaching nine years.

Kainantu's production upside remains through exploration success in the mine area and by developing the nearby Kora mineral resource.

Restructuring of the Kainantu project debt and forward sales program is proceeding with ABN AMRO appointed as the lead arranger.