The copper unit of Xstrata PLC (XTA.LN) Friday upgraded a mineral resource estimate for the Horse-Ivaal-Trukai, or HIT, deposit at its Frieda River copper-gold project in Papua New Guinea.

The latest resource estimate includes much increased inventory and improved confidence levels, including a 26% increase in resource tonnage. Measured resources have been reported for the first time and measured and tons now total 40% of the increased resource inventory, it reported.

The new HIT resource estimate indicates a measured, indicated and inferred resource of 1.06 billion tons of ore grading 0.53% copper, 0.29 grams a metric ton of gold and 0.8 grams/ton of silver, using a cut-off grade of 0.3% copper, for more than 5.6 million tons of copper and 9.9 million ounces of gold.

"Our current focus is to conduct various technical studies to support a pre-feasibility study which is scheduled for completion in the third quarter of 2010," Xstrata Copper Executive General Manager Project Evaluation Peter Forrestal said in a statement.

Xstrata holds a 76.3% stake in Frieda River, while Highland Pacific Ltd. (HIG.AU) holds 16.95% with the remaining 6.75% held by OMRD, the project's host communities and district, provincial and national governments.

The Frieda River project, located 170 kilometers northwest of the giant Porgera gold mine, is shaping up as one of the largest open-pit greenfield copper projects in the world, Highlands Pacific Managing Director John Gooding said in a separate statement.

The prefeasibility study is considering mining and processing 50 million tons of ore a year, with construction to start in 2012 and first production in 2017, he said.

-By Ray Brindal, Dow Jones Newswires; 612-6208-0902; ray.brindal@dowjones.com
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