Friday, 30 October 2009

Philippine Gov’t grants contract to British miner

Neil Jerome C. Morales
BusinessWorld
http://beta.bworldonline.com/main/content.php?id=587

THE GOVERNMENT has allowed a British miner to fully own and operate a gold and molybdenum mine in Northern Luzon, the fourth such arrangement under a landmark law that allowed foreigners to exploit the country’s mineral resources.

The Office of the President granted the local unit of London-based Metals Exploration Plc, FCF Minerals Corp., a Financial or Technical Assistance Agreement (FTAA) for a $208-million, 3,091-hectare gold-molybdenum project in the municipality of Runruno in Nueva Vizcaya.

The FTAA approval was signed by Executive Secretary Eduardo R. Ermita and FCF Minerals Corp. President Gary Raymond Powell on Sept. 19, a document from the Mines and Geosciences Bureau showed.

An official of the mining company confirmed this.

“It looks like we are still on target for the project. Some more drilling has to be done on the ground as part of our feasibility study,” FCF Vice-President Ernesto H. Mendoza said yesterday in a phone interview.

Mr. Mendoza said the $15-million feasibility study will be completed early next year.

Metals Ex seeks to extract 183,000 ounces of gold and 1.7 million pounds of the industrial metal molybdenum starting late in 2011 or early in 2012, according to its pre-feasibility study. It will also employ about 1,400 miners.

Given the weak US dollar, gold prices have reached $1,030-$1,035 per ounce from average prices of $907 and $922 per ounce in the first and second quarters, respectively, data from the New York Mercantile Exchange showed.

In October last year, the mine in Runruno, 200 kilometers north of Manila, was estimated to have 31.17 million metric tons (MT) of ore at two grams of gold per MT, as well as 0.05% molybdenum, or a total of two million ounces of gold and 34.4 million pounds of molybdenum.
Commenting on the development, Mines bureau Director Horacio C. Ramos said yesterday: “The Environmental Protection and Enhancement Program (EPEP) and the approval of the mining feasibility will take about three to six months from Sept. 19. And then they will begin the development phase.”

The EPEP is the mining company’s comprehensive environment management plan.

In March, the Environment department endorsed to the Office of the President the conversion of Metals Ex’s exploration permit into a FTAA. In August, Metals Ex posted a P175-million bond with the government for the approval of the FTAA.

The Runruno mine is listed as one of the priority projects of the government, which expects to rake in a total of $11 billion in investments for the entire sector by 2013.

Mining investments have totaled $2.1 billion since 2004, when the Supreme Court allowed complete foreign ownership of mining ventures, data from the Mines bureau showed.

The government approved the first FTAA application in 1994, for the $320-million Didipio gold and copper project of Australian OceanaGold Corp. The 19,363-hectare project in Nueva Vizcaya was shelved in December last year after OceanaGold failed to produce $200 million to complete the mine development.

The second FTAA involves Sagittarius Mines, Inc., a joint venture of Swiss Xstrata Plc, Australian Indophil Resources and Filipino conglomerate Alsons Corp. The group is undertaking the $5.2-billion Tampakan gold and copper mine covering 27,945 hectares in Sultan Kudarat and Davao del Sur.

In October last year, Agusan Petroleum and Mineral Corp. obtained a contract for a 78,732-hectare gold, copper, silver, zinc and nickel project in Occidental Mindoro, Palawan and Oriental Mindoro.

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