Ramu Nickel and Cobalt Project (Highlands’ ownership – 8.56% growing to 20.55%). The project is located 75km west of the provincial capital of Madang and has reserves for a 20-year mine life producing 31,150 tonnes of nickel and 3,300 tonnes of cobalt metal annually contained in a high grade intermediate product. The resource base has the potential to increase the life of the mine by a further 15 to 20 years. The project is managed by Metallurgical Corporation of China Limited (“MCC”) and includes joint venture partners Jinchuan Group Limited, Jinlin Jien Nickel Industry Co. Limited and Jiuquan Iron and Steel (Group) Co. Limited.  From commissioning, Highlands has access to its pro-rata share of the project’s post-debt servicing net cash flow.  This 8.56% interest is increased to 11.3% at no cost after the repayment of the project debt (estimated to be 8 years). At this same time Highlands also has the right to increase its interest to 20.55% at fair market value.

 Frieda River Copper and Gold Project (Highlands’ ownership – 18.18% in the greater Frieda area and 100% in the Nena deposit which is subject to an Option Agreement with Xstrata).  The Frieda district contains one of the world’s largest undeveloped copper gold resources with a current estimated 11 million tonnes of copper and 18 million ounces of gold.  Xstrata Frieda River Limited (“Xstrata”), a subsidiary of Xstrata Plc, has an 81.82% interest in the greater Frieda area however to maintain this interest Xstrata must, in the main, complete a Bankable Feasibility Study by January 2012 and in doing so fund Highlands’ share of project expenditure until completion of such.  Xstrata completed a Scoping Study in January 2008, an Extended Scoping Study in December 2008 and a Pre-feasibility Study in November 2010.  The project is now in the Feasibility Study stage which is expected to be completed by January 2012.  This will, subject to the results of the study, allow permitting to commence in 2012, construction in 2013 and production in 2017.  The Pre-feasibility Study indicated a project with 60Mtpa throughput for the first eight years with output averaging 246,000tpa of copper and 379,000ozpa of gold.  The multi-decade life mine will have an average throughput of 50Mtpa.

 Star Mountains Prospects (Highlands’ ownership EL1392 100%; EL1312 100% subject to a claw back by Xstrata of 72%).  The Star Mountains licenses are located approximately 20km north of the Ok Tedi Mine.  These prospects lie within the highly prospective New Guinean Orogenic Belt, home to deposits like Grasberg, Ok Tedi, Frieda, Porgera and Hidden Valley.  A US$3 million exploration program was undertaken during 2010 on EL1312 with some encouraging diamond drilling results.  2011 will see this program accelerated and the expenditure more than doubled.