Philex may buy into OceanaGold’s Didipio mine

Philex Mining Corp., the Philippines’ biggest mining company, might buy into the Didipio gold project of Australian miner OceanaGold Phils. Inc., company president and chief operations officer Ernesto Villaluna said Wednesday. "We are conducting due diligence now. We have to study the reserve, how to increase it, as well as [the project's] fatal flaws," Villaluna told reporters in a briefing at the 10th Philippine Mining Conference and Exhibition in Manila Hotel. Philex also announced recently that it would be tapping the $5.2 billion Tampakan gold project of Sagittarius Mines by buying the remaining 34.5 percent share of Indophil in the venture. Indophil originally had a 37.5 percent share, with the 3 percent recently acquired by Philex. "We [already] have 3 percent of Indophil. It is a world-class project. It will give us exposure to [use of] big equipment and how it is to be a part of really big projects," said Villaluna. The Tampakan project is expected to employ 9,000 workers in its construction phase and over 2,000 when its operations start in 2016. The project has an estimated deposit of 13.5 million MT copper and 15.8 million ounces of gold, using a 0.3 percent copper cut-off grade at 0.6 percent copper and 0.2 grams gold per metric ton. The mineral resource also contains estimated average grades of molybdenum at 70 parts per million. The $320 million Didipio project in Nueva Vizcaya remains one of the government’s priority projects, expected to attract $13 billion worth of mining investments by 2013. Philex already spent as much as $120 million for exploration and development of the mine site The company is still raising $200 million to fund further construction work. The Philex board is also studying whether it will top the A$1.28 per share offer of Zijin of China for the Indophil shares, Villaluna said. The agreement regarding the possible take-over of Zijin reportedly fell through when an environmental law banning open-pit mining in South Cotabato. Though not yet enforced, the Chinese supposedly viewed this development as a hindrance to future mining operations in the Philippines. While the mineral reserve at Didipio is relatively small compared to Tampakan, the company remains interested in the project, Villaluna said. —LRS/VS, GMANews.TV