In a disclosure to the Philippine Stock Exchange, VIMC senior vice president Jurisita M. Quintos said its partner, Medusa, is in advanced negotiations with an investment group that has committed to put an initial $1million into the project. She said a joint venture agreement is expected to be signed in the near future.
Under a memorandum of understanding between the two parties, the Medusa Group will operate the Panaon project and will provide a three-percent net refinery return royalty to VIMC on all gold and silver production.
On the other hand, VIMC is entitled to buy back 20 percent of the Panaon project when it has been operating for more than three months at a rate of 100 metric tons per day.
VIMC will be paying a 100-percent premium on the pro-rate expenditure to that date for its 20 percent in the project.
The Panaon project was granted an exploration permit last month. The area covers 1,646 hectares and extends to the Northern Surigao mineral district in Mindanao.
Gold was discovered at the Panaon Island as early as the Spanish times and subsequently mined by the Americans and by several Filipino Groups since Word War II.
Most mining activities appear to have used crude mining and processing techniques and attempts to modernize in the 1980s failed due to lack of management control and expertise.