Starmin, Adonos to invest in Philippine porphyry project

A large copper-gold porphyry deposit on the Philippine island of Negros has attracted a couple of Toronto-based juniors intent on bringing it into production.

Starmin Mining (TSE) and Adonos Resources (VSE) have negotiated to acquire a 100% interest in the property by making cash payments totalling about US$178,000 during the next year. The deal requires payment of about US$71,000 on signing.

An agreement between Starmin (formerly Silverside Resources) and Adonos allows the latter to acquire a 50% interest in the project, which will be subject to a 3% net smelter royalty once Starmin and Adonos assume full ownership.

Starmin President Babu Gajaria, in a recent letter to shareholders in which he referred to the international mining experience of members of his company’s board of directors, wrote that “Starmin has decided to concentrate its efforts in acquiring world-class copper and gold deposits in the Pacific Rim countries of Asia and South America.”

The Philippine claims belong to three privately owned Philippines-registered mining companies and were, prior to the Starmin agreement, under option to a Philippine government-owned company.

“If our potential projections are correct, this deposit may contain 12 million oz. gold and 2,700 million lb. copper, which would put us in the big league,” Gajaria told shareholders. “However, we wish to caution you that a number of checks in the form of trenching and drilling need to be done to confirm the grade and tons.”

Gajaria, a geologist, describes the deposit as being hosted within a diorite porphyry intrusion of oligocene-miocene age. A preliminary reserve estimate of 94 million tons grading 0.45% copper and 0.04 oz. gold per ton has been reported. The deposit has been tested by 82 drill holes and a 1,300-ft.-long adit.

Compared with the larger Mt. Milligan porphyry deposit in British Columbia, Gajaria said, the Philippine deposit contains much better copper and gold credits.

A cash-flow model, based on current preliminary tonnage and grade figures, indicates that a 20,000-ton-per-day operation could produce annually 61 million lb. copper, 159,000 oz. gold and 285,000 oz. silver during a 13-year mine life.

Capital cost would be US$180 million, with a 4-year payback period and an estimated operating cost of US$4.96 per ton. (The model assumes prices of US$1 per lb. copper, US$375 per oz. gold and US$5 per oz. silver, and recovery rates of 85% copper, 50% gold and 30% silver.).