Vancouver — Although the Philippines was a major producer of gold, copper, nickel and chromite for hundreds of years, the mining industry in the country has been plagued by many problems that have staved off foreign investment in recent decades, including a recent Supreme Court ruling which some say has placed the status of foreign mining investments in doubt.
Despite the political instability and perceived risk from terrorism and ethnic conflicts, several junior and senior exploration companies are venturing into the jungles there in search of large-scale porphyry gold and copper deposits and meeting with success.
The Philippines is made up of a magmatic volcanic arc of some 7,000 islands, with two major islands comprising about 70% of the land mass. The capital city of Manila is situated on the northern island of Luzon, and Mindanao Island is in the south. The archipelago lies just north of the equator and 1,100 km from the mainland of southeastern Asia.
Alberta-based junior explorer,
During the past year, the company teamed up with Vancouver-based
Modern exploration in the Surigao area was spurred by the discovery of the large-scale Boyongan gold and copper porphyry deposit in 2000 by
Drilling at Boyongan has uncovered three porphyry systems. The drill spacing is about 100 metres with some 38,000 metres drilled in 72 holes. An inferred resource calculated by AMEC for the Boyongan deposit was tabled in June, pegging the resource at 219 million tonnes of combined sulphide and oxide material with an average grade of 0.51% copper and 0.74 gram gold per tonne (0.81% copper-equivalent). Oxide material accounts for 99 million tonnes grading 1.09% copper-equivalent, and sulphide material accounts for the remaining 120 million tonnes grading 0.58% copper-equivalent.
Traditionally a Peruvian exploration company, Panoro Minerals recently turned its eye towards gold and gold-copper exploration projects in the Philippines after its water permit application for El Rosal was denied by the Ministry of Agriculture in Peru.
Through a recent deal with Mindoro it can earn up to a 40% interest in the Surigao properties by spending a total of $2 million on exploration over four years.
Through another agreement with a private company based in the Philippines, Minimax Mineral Exploration, Mindoro and Panoro can increase their interests when the project reaches the feasibility stage. This is based on a purchase of the established mining reserves, which would give each a potential interest of 42.5%, with Minimax retaining 15%.
The Surigao properties comprise the Tapian, Tapian San Francisco and Agata mineral concessions which are situated along the Philippine gold belt — the same belt that hosts the Boyongan copper-gold deposit.
The properties had seen no modern day exploration until this summer, when the company started reconnaissance geological and geochemical sampling. Grid-surveying began on the Tapian San Francisco porphyry copper-gold prospect, the Agata gold prospects and the Tapian Main gold and copper targets. Ground geophysics including induced polarization and magnetic surveys are planned in an effort to pin-point drill targets.
Several targets are evident from old gold-copper workings that were exploited by primitive methods. Geochemical sampling has turned up coincident gold and copper anomalies. There is good potential for bulk tonnage gold deposits in calcareous sediments and Boyongan style gold-copper porphyries.
While the Mindoro-Panoro joint venture remains focused on the copper-gold potential of the district, Philippines-based Taganito Mining was recently granted the right to carry out reconnaissance evaluation of the potential for direct, shipping-grade nickel-cobalt ore on its Surigao properties. Taganito is partly owned by a Japanese nickel smelter that produces direct shipping-grade ore from several mines in the Philippines, including the Surigao province. The ore is shipped to Japan and Queensland, Australia, for processing.
Batangas
Mindoro is earning a 75% interest in the land position in the Batangas gold and copper belt which encompasses the Archangel and Lobo projects from privately-held Egerton Gold Philippines, formerly a unit of an Australian-based junior. The company is actively exploring the Archangel and Lobo projects for targets similar to the ones at Surigao.
The projects are at various stages of exploration, and are also prospective for epithermal gold and silver as well as porphyry gold and copper mineralization.
At the Archangel project, situated about 150 km south of Manila, epithermal gold and silver mineralization in quartz stockworks is found at higher elevations while porphyry copper and gold is found at the lower elevations.
Within the Kay Tanda area which is being eyed for its open-pit and heap-leach potential, an inferred resource of 370,000 oz. of gold and 1.3 million oz. of silver was estimated in January 2003, for the epithermal mineralization. Gold and silver resources were estimated for the near-surface oxide and underlying sulphide mineralization: the oxide comprises 6.3 million tonnes at a grade of 0.48 gram gold and 4.4 grams silver per tonne inferred, while the underlying sulphide comprises 10.7 million tonnes at 0.79 gram gold and 1.3 grams silver at a cutoff of 0.2 gram gold.
Trenching focusing on the Kay Tanda deposit recently extended the epithermal gold-silver mineralization to both the east and the west. Three trenches, 30 metres apart from each other, tested the Pulang Lupa area, situated 400 metres west of the Kay Tanda resource. The trenches returned 23 metres grading 1.86 grams gold and 11 grams silver; 8 metres of 4.28 grams gold and 4 grams silver; and 18 metres grading 2.67 grams gold and 49.2 grams silver.
A trench in the Lumbangan area, 300 metres east of the Kay Tanda resource, returned 51 metres grading 1.24 grams gold and 25.5 grams silver. Further east, a vertical channel sample down an old shaft returned 5 metres of 1.71 grams gold and 56 grams silver per tonne.
From geology and geochemistry it appears that the gold-silver mineralization at Kay Tanda extends over 1.6 km along its strike and is about 100 to 600 metres wide.
The Lobo project includes a past-producing underground mine situated about 150 km south of Manila. Reconnaissance work on the project in 2002 defined two major epithermal veins, Sampson and Camo, each of which is thought to be over 2 km long and up to 19 metres wide. The veins, exposed by old mine workings, contain widely distributed, high grade gold-silver-copper mineralization.
Two diamond drill holes, completed last December as part of the Phase 2 program, tested the Southwest Breccia zone. returning average grades of 12.46 grams gold over 6.15 metres (from 36.2 metres depth) and 5.74 grams gold over 6.10 metres (from 21 metres depth).
An independent gold resource estimate is under way at the Southwest Breccia gold occurrence on the Sampson epithermal breccia trend. The occurrence is situated 300 metres southwest of the old Lobo copper
-silver mine.
Although the current Philippine government under President Gloria Macapagal-Arroyo, which was recently re-elected into power, is supportive of the mining industry and business in general, there has been low foreign investment. This stems from the political instability and strict limitations on foreign ownership, high taxation and high operation and production costs.
A major set-back for the government’s plans to open up and revitalize the mining industry came in January this year when the Supreme Court nullified certain provisions of the 1995 Mining Act and restricted foreign participation in mining operations that had been established through the Financial and Technical Assistance Agreement.
The 1995 act was designed to decrease the risks of initial investment, increase mining exports and encourage joint venture agreements for mineral exploration and production. The agreement had allowed foreign corporations to control and manage up to 100% of a mining project through wholly-owned subsidiaries. The court voided all provisions relating to exploration and mineral processing permits that would allow participation of foreign companies in mineral development.
An appeal
The Philippine government is appealing the Supreme Court ruling which has implications for the oil and gas sector as well as the mining industry. An amendment to the 1987 Philippine Constitution could start to ease the strict limits on foreign ownership.
Earlier this summer, Mindoro said in a statement that it would not be affected by the ruling as its mining operation is based on a Mineral Production Sharing Agreement, a separate licence that allows it up to 40% foreign equity.
Tony Climie, Mindoro’s President and CEO, says the areas in which the company is active have not experienced any threat of terrorism from the minority Muslim population. “There is a significant amount of foreign investment going on and the government is certainly supportive.” The company is working closely with the government which has been encouraging the company’s exploration efforts to date. “Although we would prefer 100% foreign ownership, which would make things easier, we can still share in the commercial profits [of potential operations].”
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