Aussie firm to invest $117M on copper- gold project

Climax-Arimco Mining, an Australian company listed in the Australian Stock Exchange, is investing $117 million or P6.5 billion in the next five years for its Didipio copper-gold project in Kasibu, Nueva Vizcaya.

This after the approval of its feasibility study by the Department of Environment and Natural Resources (DENR). The Didipio copper-gold project is one of the government’s 23 flagship mining projects and is only one of two foreign-funded projects under a financial and technical assistance agreement (FTAA).

An FTAA is a 25 -year mining contract that allows foreigners to hold 100-percent ownership of a mining project.

"This investment would be on top of the P2 billion that the company has spent for various exploration projects in the Philippines since 1989. We have been here a long time and we are here to stay," said Jose P. Leviste Jr., chairman of Australasian Philippines Mining Inc. (APMI), the local unit of Climax-Arimco.

Leviste said APMI will spend $81 million for open cut establishment, processing plant and installation of infrastructure, and within the next five years, raise an additional $35 to $39 million for its underground mining operations.

Chito Gozar, senior geologist and general manager for liason for northern Luzon of APMI, said the construction of the mining plant which will begin in 2006. The plant, upon completion in 2007, will produce 5,000 metric tons of ore per day and is capable of processing 94,000 ounces of gold and 10,000 metric tons of copper concentrate.

DENR Secretary Michael T. Defensor said the approval of the feasibility study is the final approval needed by the project to prove its technical and financial viability.

"We are very optimistic about this project which is estimated to post total revenue of $783 million. Government could get as much as $131 million in taxes and fees for this project alone. Environmental and social development expenditures, on the other hand, will also amount to $8.6 million and $2.8 million, respectively," said Defensor.

The Didipio mine has total ore resource of 120 million metric tons and mineral reserve of 23.8 million metric tons consisting of 0.61 percent copper and 1.6 gram per ton of gold. The estimate is based on a conservative audit system of the Joint Ore Reserve Committee Code of Australia. With a mine life of 15 years, it is estimated to have an additional diluted resource of 3.2 million metric tons at 0.61 percent copper and 2.5 grams per metric tons of gold.

APMI is raising funds and is tapping a syndicate of banks led by ANZ Investment Bank of Australia and with off-takers which will advance payment for the mineral supply. Other funding will come from listing of shares of parent firm CAMC.

The project is seen to employ 1,500 during construction and 500 during operation and commercial production.

Aside from its Didipio project, the company will also be developing copper and gold deposits of its Paco Project in Surigao Peninsula in northeastern , Mindanao. The property is adjacent to the exploration permits containing the Anglo American / Philex Gold Boyongan gold-copper discovery.

The company will also develop the Manhulayan prospect which is located in rugged terrain approximately 70 kilometers south of Butuan City in eastern Mindano. Manhulayan has similar characteristics to that of the Ridgeway and Cadia gold, copper area of New South Wales.

The Philippine government is banking on the resurgence of the local mining sector to raise additional revenues. The Supreme Court decision last year that allowed full foreign ownership of mining interests in the Philippines led to new interest in the mining industry and is expected to bring in $6 billion in new investments. So far, about $700 million have been committed by various foreign mining firms led by listed Australian and Canadian mining companies.