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Newcrest in PNG deal with Frontier

AAP

Newcrest Mining is to become a joint venture partner with Frontier Resources in its Mt Andewa project in Papua New Guinea after taking a small stake in the junior gold and copper explorer .

Newcrest, Australia’s biggest gold miner, would take a 2.3 per cent interest in Frontier with the purchase of $750,000 worth of shares at 10.67 cents each, per share, the two companies said in a statement on Tuesday.

Shares in Frontier had jumped one cent, or 9.52 per cent, to 11.5 cents by 1413 AEDT while Newcrest shares backtracked 45 cents, or 1.39 per cent, to $32.04.

The companies also said that Newcrest may earn a 60 per cent interest in the Mt Andewa project on the island of New Britain by spending $15.25 million on exploration over four years.

Newcrest may also earn the same interest in Frontier’s nearby Mt Schrader project by spending a further $4 million on exploration.

Newcrest has an option to acquire an additional 12 per cent in Mt Andewa.

Frontier chairman Peter McNeil said the agreement was an endorsement of the potential of the Mr Andewa project.

“Frontier will benefit from Newcrest’s expertise and capability in the ongoing efforts to unlock this potential,” Mr McNeil said.

Newcrest executive general manager of minerals Colin Moorhead said the deal was in line with the miner’s strategy of seeking early-stage entry into high-quality gold projects in the Asia Pacific region.

In 2008, Frontier’s then main asset, the Kodu copper and gold project in PNG, was expropriated by the PNG government because it was near Kokoda Track.

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