Philex Mining may join bidding for Mt Diwalwal gold project

Philex Mining Corp. has expressed interest in bidding for the Mt. Diwalwal gold project in southern Compostela Valley, the company told the Philippine Stock Exchange.

Philex is among the 27 firms that have indicated willingness to participate in a February 2007 auction to run the Mt. Diwalwal gold mine, which has an estimated gold resource of about 2.9 million metric tons at six grams per metric ton and 5.8 million metric tons at 9.6 grams per metric ton in two mineral reserves.

About 40 to 50 percent of the Mt. Diwalwal project would be sold to investors at a price yet to be determined. The project requires an investment of at least $70 million.

The state-run Natural Resources Mining Development Corp. (NRMDC) said prospective investors must have the necessary capacity, equipment and technology to develop the project with a minimum output of 2,000 tons per day.

Among the companies that earlier signified their intention to bid in the project were US-based Newmont Mining Corp. and Harmony Gold Mining Co. Ltd. – the world’s second and fifth biggest gold producers, respectively; Sylvania Resources Ltd. and QNI, both from Australia; and Japan’s Sumitomo Metal Mining Co. Ltd.

The government is expected to narrow down the list of bidders in January before final bids are submitted on Feb. 16. The announcement of the winning bidder will be made in March.

Production at Mt. Diwalwal after a two-year development was earlier estimated at 1,000 metric tons per day, which could expand to 2,000 metric tons a day over its 15-year mine life.

The NRMDC earlier said it also wants to list the Mt. Diwalwal project at the stock exchange to raise more funding and allow more Filipino investors into the project.

Philex plans to increase its production next year to 120,000 ounces of gold and 40 million pounds of copper. It also plans to develop its 129-hectare real estate property in Baguio into a special economic zone.