Highlands Pacific is exploring the Frieda porphyry copper/gold deposit in Papua New Guinea in a joint venture with Xstrata Frieda River and OMRD Frieda.

The project covers exploration licences 58 and 1212, and the Nena deposit, which is subject to Xstrata Copper making an option payment of $10.8 million to Highlands. Xstrata Copper is the project operator.

The joint venture has an approved budget of US$11 million for 2007 and the work program is focusing on the completion of a scoping study to test various options for development of the copper/gold deposits.

The study will examine infrastructure requirements, the geological resource model, mining options, environmental impacts, community relations and metallurgical processing options.

The program at Frieda will include 8000 metres of diamond drilling designed to test extensions to the current porphyry resource as well as collect metallurgical samples for comminution and flotation test work.