The two have been working towards formal documentation for a farm-in and JV over the Star Mountains copper-gold project in Papua New Guinea since a letter of intent was signed in December.

Under the deal, Anglo will pay Highlands an initial $10 million cash payment in two equal tranches – one now that the agreement is signed and the second in 12 months.

Anglo must spend $25 million on exploration over four years and delineate an inferred resource of 3 million tonnes of contained copper equivalent within five years to earn a 51% interest.

Highlands will manage the project until that point.

By funding and completing a bankable feasibility study, Anglo can move to an 80% stake within 15 years of the initial agreement.

Anglo will provide Highlands with up to $150 million in project development funding as a deferred free-carry following completion of the BFS.

Highlands managing director John Gooding said Anglo was a highly reputable company that brought great exploration and development experience to Star Mountains.

“Together we can move forward with a defined exploration program that will test the size and grade of these exciting targets,” he said.

Exploration and early-stage drilling by Highlands over the past three years has identified substantial copper and gold mineralisation in tenements that cover 515sq.km.

Gooding said Star Mountains had great potential having only been drilled twice in the past 50 years.

“First by Kennecott in the late 1960s when they discovered the Mt Fubilan deposit that Ok Tedi Mining Limited has been operating for decades, and then by Highlands for three years from 2010 where 28 diamond drill holes were drilled over six prospects which produced some major intersections of copper-gold porphyry mineralisation,” he said.

Preparation for the first JV drilling campaign is ramping up, with a four-hole, 3000m program to begin in April.

A helicopter magnetic survey is underway and a LIDAR survey will begin in the coming weeks.

Shares in Highlands were unchanged at A5.6c.