Merrill Crowe's Siana gold project to start development next year

MANILA, Philippines - The Siana gold project of Merrill Crowe and Red 5 Ltd. of Australia is expected to finally start development next year following the approval by the Mines and Geosciences Bureau (MGB) of Merrill Crowe’s feasibility study for the project.

Red 5 just this month finally secured the $40 million fun-ding for the Siana gold project in Surigao del Norte.

In a Dec. 4, 2009 disclosure to the Australian Stock Exchange where it is listed, Red 5 said it has exclusively mandated Deutsche Bank AG, Sydney branch and Ashmore Investment Management Limited, a subsidiary of Ashmore Group plc, to handle the $40-million senior secured financing for the project.

Ashmore is a leading emerging markets fund manager based in the UK, with $31 billion under management worldwide.

Ashmore has a long standing association with the Philippines, having invested in hard assets across a wide range of industries including mining, oil refining, telecommunications, transport and high end commercial and residential developments.

Red 5 holds a 90 percent be-neficial interest in the Siana gold project through Greenstone Resources Corp., which manages the local operations through a joint venture with JCG Resour-ces Corp.

Merrill Crowe Corp., a Philippine mining investment company, holds a 10 percent inte-rest in the Siana Gold project.

Merrill Crowe’s controlling shareholder is Jerry Angping, president of Angping Securities. He is also the vice chairman of First Metro Investment Corp., the investment banking subsidiary of Metro-Bank.

The Siana gold project is covered by a Mineral Production Sharing Agreement (MPSA) for 2,023.74 hectares in Siana, Mainit, Surigao del Norte.

The MGB said the Siana gold project is expected to bring in $45 million in investments and could generate gross sales of $15 million annually.

Red 5 earlier said the pre-mining gold endowment at Siana was estimated to reach two million ounces.

It said past production from underground and open pit operations in the Siana mine reached 4.9 million tons at an average grade of 6.3 g/t gold.

A narrow vein underground development was carried out from 1938 to 1960 and produced 1.6 million tons at an average grade of 11.8 g/t gold.

Open pit mining from 1980 to 1990 produced 3.3 million tons at an average grade of 3.6g/t gold.