PanAust shareholders would have been shocked to see their company linked to the purchase of a controlling stake in the Frieda River copper and gold project in Papua New Guinea last week. With the most recent estimate suggesting a building cost of $US5.6 billion ($6.2 billion), Frieda River hardly seems of a size that the mid-tier copper miner’s balance sheet could support – even if it has the assistance of a partner.

But those close to the negotiations claim there are lower-cost development options, which is what PanAust would probably pursue if it were the successful bidder for Glencore Xstrata’s 72 per cent stake.