Australian mining firms take hard look at RP

Australian mining companies are taking Philippine mining potentials more seriously with several keen on accelerating their mineral exploration and production projects.

Tony Robbins, managing director of Indophil Resources, a junior mining company listed on the Australian Stock Exchange and who also heads the Philippine Exploration Association said that Australian mining companies are now more upbeat about the local mining industry, especially after the landmark decision by the Supreme Court to allow 100-percent foreign ownership of a mining project.

"We have actually been in the Philippines even before the Supreme Court’s favorable ruling. This despite the political, economic and security risks, but our enthusiasm was bolstered with what is now a more investor-friendly environment," said Robbins.

Aside from the SC ruling, the resurgence of interests by Australian mining companies could also be attributed to the uptick in metal prices worldwide.

"These are good times for all mining companies worldwide because of the emergence of China as a big market for ore and copper, metal prices are still steadily going up," said Robbins."

Robbins’ company which has been in the Philippines for more than five years, tied up with local mining firm Sagittarius Mines chaired by Paul Dominguez for the $650 million Tampakan Copper Project in Tampakan, South Cotabato. The other local investors include Alsons Development Corp. and Lyon Selection.

Indophil is also expanding its mining activities and is eyeing partners for three mineral exploration projects in Camarines Norte, Leyte and Central Mindanao.

"We are currently talking with several potential investors and we expect to come out with a positive announcement in the coming months," said Robbins.

Robbins said that for Luzon, the gold mine prospect in Labo, Camarines Norte looks promising, along with the targeted sites in Eastern Leyte and the Manat gold project in Davao del Norte.

For the Tampakan project, Indophil is currently conducting detailed exploration drilling and feasibility studies and is scheduled to start commercial operation by 2009. He added that the Tampakan mine is expected to yield 140,000 ounces of gold and another 140,000 metric (MT) tons of copper yearly.

The other prominent Australian mining firms in the Philippines include Oxiana Resources NL, Climax-Arimco Mining Ltd., Lafayette Philippines Inc., QNI/BHP Billiton and Red5 Ltd.

Climax-Arimco Mining is investing $85 million in its principal interest, the Dinkidi Copper Project in Northern Luzon. The project which straddles Nueva Vizcaya and Quirino provinces indicated the mine area could produce 150,000 ounces of gold per year, with a mine life of 14 years.

Aside from the Dinkidi project, the company will also be developing the Didipio copper project in Kasibu, Nueva Vizcaya.

Climax Arimco is currently looking for third party exploration funding through joint venture farm-outs for the Dinkidi gold/copper project and for the Paco cooper/gold project in the Surigao Peninsula in northeastern, Mindanao. It will also develop the Manhulayan prospect south of Butuan City in eastern Mindano which is said to have characteristics to that of the Ridgeway and Cadia gold, copper area of New South Wales.

On the other hand, Lafayette NL’s local unit Lafayette Phils. Inc., is sinking in $42 million for the Rapu-Rapu Polymettalic Project in the island of Rapu-Rapu, Albay.

Rod Watt, Philippine country manager of Lafayette, said earlier that the mill plant will begin commercial operations by June this year. The mine area of 4,663 hectares has estimated combined reserves of 5.9 million MT of copper, gold, silver and zinc.

Rapu Rapu will be one of the largest operating mines in the country producing about 10,000 metric tons (MT) of copper in concentrates, 14,000 MT of zinc, 50,000 ounces of gold and 600,000 ounces of silver annually.

Red 5 Ltd. holds an interest in the Siana Gold project in the Surigao gold district which is estimated to yield more than 800,000 ounces of gold. Its wholly owned subsidiary Bremer Resources NL, Red 5 signed an agreement with Manila-based JCG Resources Corp. that gives it an 80 percent equity in the project upon completion of a bankable feasibility study at any time prior to early June 2007.

Oxiana Phils. Inc. on the other hand, is putting together a portfolio of exploration properties in the Philippines. It has three exploration projects covering Southern Leyte, Panaon Island and Surigao.

Its other prospects include Malimono also in Panaon Island, and the Pao and Gambang applications that were positively evaluated by the Mines and Geosciences Bureau. The Pao and Gambang project areas are adjacent to major gold and copper-gold discoveries, namely Climax Mining’s Dinkidi copper-gold project and Lepanto Mining’s Victoria vein system.

For the Pajuda nickel project, BHP-Billiton and Queensland Nickel Inc. are investing $1 billion to develop the mining area covering 11,799 hectares in Mati, Davao Oriental. It is under exploration and is set to start commercial operations in 2009.

BHP Billiton is one of the world’s top producers of copper and a leading producer of lead and zinc. It provides base metal concentrates to custom smelters and copper cathodes to rod and brass mills and casting plants.

The joint venture partners are also developing another nickel project covering the Adlay-Cagdianao-Tandawa areas in Surigao del Norte.

Other lesser-known companies like Rusina Mining NL with existing exploration interests for platinum group metals, nickel, copper, rare metals and diamonds in Australia and Namibia, is also going headstrong with its interests in the Philippines.

Rusina Mining said in its 2004 annual report that it reached several milestones in relation to the Acoje platinum/ nickel sulphide project in Zambales Province.

Recently, Medusa Mining Ltd. disclosed it will invest $1 million for its joint venture with Vulcan Industrial & Mining Corp. (VIMC) for the Panaon Island Gold Project in Southern Leyte.

Robbins noted that Australian mining companies, especially the ones that came in long before the SC ruling was issued, will expectedly be the first to reap the fruits of their patience.

"We are seeing a real potential here that will go beyond the hype that ensued shortly after the Supreme Court ruling and, hopefully, with the sustained efforts of government to give both local and foreign investors a break, more companies will come in. The Philippines is the best place for mineral prospectivity in Asia next to Indonesia," said Robbins.