Philippines

A supplement to Mining Journal

September 2009Mining Journal special publication – Philippines2

CONTENTS

Message from the MDC 2In troduction 2-3

Why invest in the Philippines?Mineral potentialClimateGovernment

Co untry overview 4-9Mineral industryGovernment policies affecing industryGold, copper and nickel

Recent developments 10-12MDC history 12MDC directory 14Cover image: Prospective ground for epithermal gold on Mindanao Island. Inset: Three photos of Philex Mining: the mine community; co-workers at the underground mine works; and the ball mill – mill department Photos: Philex

ACCOMPLISHMENTS are visions transformed into action. The accomplishment report of the Minerals Development Council (MDC)

proves that the government and the private sector remain committed to the vision of revitalising the minerals industry as one of the means to conquer poverty.

We have come a long way since President Gloria Macapagal Arroyo announced a policy shift from “tolerance to active promotions” of the industry in Year 2004. With the MDC as overall co-ordinator of the ‘revitalization programme’, we have promoted priority mining and exploration projects here and abroad, harmonised the implementation of some laws and policies affecting the sector, and engaged all stakeholders in continuous and meaningful dialogues.

We have chosen to act on the issues and concerns outlined in the Minerals Action Plan that will promote an investment climate that is more conducive for business, while balancing out the interests of host communities, local governments and other stakeholders, and without sacrificing the quality of our environment.

In the coming years, the MDC will remain focused on several action points including the development of an industrialisation programme through the development of services and supplier industries and of downstream processing for metal and manufac-tured products. We will continue to support the passage of the bill on the direct remittance of local

government shares in mining taxes, fees and royalties. We also hope to expand the allocation for community development and provide funds for the conduct of information, education and communication campaigns for responsible mining. Moreover, the MDC will continue to work for the implementation of

the Extractive Industries Transparency Initiative to ensure greater transparency in revenue collection and management. We will likewise continue to rationalise the implementation of small-scale mining laws, rules and regulations and strengthen the implementation of the streamlined permitting procedures.

We expect the mining sector to continue facing more challenges in the wake of the global financial crisis. However, we are confident the MDC will be able to assist the industry seek innovative ways to overcome this hurdle. The MDC will not waiver in its mission of developing our mineral resources for the benefit of the country and the Filipino people. The tasks seem daunting but we have already begun some good actions, and we will not rest till we bring it to full completion.

Hon. Jose L. Atienza, Jr Chairman, Minerals Development Council, Office of the President, and Secretary, Department of Environment and Natural Resources

A message from the MDC/DENR

Published in September 2009 by:Aspermont UK Albert House, 1 Singer StreetLondon EC2A 4BQ United KingdomTel: +44 (0)20 7216 6060 Fax: +44 (0)20 7216 6050E-mail: editorial@mining-journal.com Website: www.mining-journal.com

Supplement editor: Chris HindeDesign and production: Tim Peters,

Printed by Stephens & George, Merthyr Tydfil, UK

© Aspermont UK 2009

Published in September 2009 by:

INTRODUCTION

THE country enjoys democracy, with a free market economy, and remains among Asia-Pacific region’s top investment destinations owing to its liberalised investment policies and

conducive investment environment.Investor interest in the domestic mining industry

did not wane last year despite the global financial crisis. The strong demand for minerals and metals by China, India, Korea, Japan and other developing countries in the region has sustained exploration and mining activities in the Philippines. While there has been a reduction in the exports of nickel ore shipments, demand for the country’s other resources in gold, copper, iron ore, chromite and coal remained good.

With prices of these commodities considered above break-even levels, a number of mining

operations started in late 2008 and early 2009, defying scepticism that has hounded commodity markets.

The Philippines earned its high rating by posting economic growth averaging 4.4% annually from 2001 to 2006, the country’s best six-year average in the past 18 years. GDP growth in 2007 was a remarkable 7.1%, while there was a growth of 3.8% in 2008 despite the international difficulties. Interest rates have remained stable, and inflation has further eased in view of fiscal and monetary reforms.

The Philippine government has deregulated the telecommunications, shipping, oil and energy, banking and insurance industries, and has a continuing economic and financial reform programme. Straddling the well-defined belt of volcanoes around the Pacific (the so-called Ring of Fire), the Philippines has the greatest number of proven deposits of metallic and non-metallic minerals among Southeast Asian countries.

WHY INVEST IN THE PHILIPPINES?Existing mining laws are attractive to investors. They allow co-production, joint venture, mineral production sharing, and financial or technical assistance agreements for large-scale mining projects. The current policy of revitalising mining has spurred renewed interest in the industry. The presence of major mining companies such as Anglo American, AngloGold Ashanti, BHP Billiton, CVRD, Phelps Dodge, Sumitomo Mining and Xstrata, attest to the allure of Philippine mining.

The country’s private and government sectors are taking stock of the current metals market and the surging minerals demand of industrialising countries,

Asian gatewayThe Philippines is a natural gateway to the other Asia-Pacific economies, and has flourishing trade links with the region

full completion.

Hon. Jose L. Atienza, Jr

Country information

Location: The Philippines lie in the western Pacific Ocean, just north of the equator, southeast of the Asian mainland, with Taiwan north and Indonesia to the south.

Capital: Manila.

Geography: The Philippines is the world’s second-largest archipelago after Indonesia. It consists of 7,107 islands, with a total land area of 299,764km2 . The interior is mountainous, skirted by lowlands and alluvial plains. The highest point is Mt Apo on Mindanao Island at 2,954m above sea level. According to the Philippine Institute of Volcanology and Seismology, there are more than 400 volcanoes throughout the archipelago, of which 22 are active, 27 are potentially active, and more than 350 are inactive. There are three major island groups: Luzon, Visayas and Mindanao.

Mining Journal special publication – PhilippinesSeptember 2009

INTRODUCTION

3

notably from China and India, and the recovery of the Japanese economy. With the rest of the world’s significant economies likewise on an upswing, the prospects are bright for Philippine minerals.

In a special report London-based Mining Journalwrote recently that “over the past decade, and despite stiff competition from other countries for the exploration dollar, the Philippines has progressed significantly, and exploration activity has resulted in the discovery of a new generation of potentially world-class deposits, such as Tampakan (copper), Far Southeast (copper-gold), Boyongan (copper) and many others. They can be differentiated from previous discoveries that were of low grade and shallow-seated”.

MINERAL POTENTIALThe Philippines covers some 30Mha but only less than 2% are presently covered by mining permits, and some 30% of the remaining area is regarded by the Mines and Geosciences Bureau to be geologically prospective for metallic minerals. As a result, there is an estimated 9Mha that has potential for metallic minerals.

A large pool of Filipino professional geologists and mining engineers have extensive experience in mineral exploration and mining operations. A continuing scholarship and training programme is being implemented to address an increasing demand for skilled workers. Moreover, English is spoken and understood throughout the archipelago.

The Philippines offers foreign investors a high standard of living at low cost. First-rate housing, hotels, schools and recreation facilities are found in Metro Manila and in major cities all over the country. Repatriation of the earnings and capital of foreign investors is guaranteed. Investors from various lands will find the Filipino people a happy mix of Asian and Western cultures. Among Asian countries, the Philippines is perceived to be the most westernised.

But the tapestry of Philippine culture also threads other than Spanish and American-Malay, Chinese, Arabian, Indian and Japanese. These are the major cultures that streamed into Philippine history, along with influences from the English, the French, the Germans and the Dutch. Still, 110 ethno-linguistic groups scattered throughout the archipelago retain their distinctive identities and dialects.

CLIMATEThe Philippines has a tropical-marine climate, characterised by relatively high temperature, high humidity and abundant rainfall, similar in many respects to the climate of Central America. The mean annual temperature is 26.6°C, except in Baguio City. The coolest month is January with a mean tempera-ture of 25.5°C; the warmest is May, with a mean temperature of 28.3°C. Baguio City, at an elevation of 1,500m, has a mean annual temperature of 18.3°C, earning its popularity as the country’s summer capital.

The country’s average monthly relative humidity varies between 71% in March and 85% in September. Mean annual rainfall ranges from 965 to 4,064mm annually. Baguio City, eastern Samar and eastern Surigao receive the greatest amount of rainfall, while the southern portion of Cotabato receives the least. At General Santos City in South Cotabato, the average annual rainfall is only 978mm.

Based on temperature and rainfall, the country’s

climate can be divided into two major seasons: first, the rainy season from June to November, during the southwest monsoon; and, second, the dry season from December to May. The dry season may be further divided into the cool dry season (December to February) coinciding with the northeast monsoon, and the hot dry season (March to May).

Straddling the typhoon belt, the Philippines experiences 15-20 typhoons yearly, usually from July to October. The typhoons move generally northwest-erly from the Marianas and Caroline Islands in the Pacific, sparing Mindanao Island.

GOVERNMENTThe Philippines is an independent democratic and republican state. Its government consists of three co-equal branches: the executive, the legislature and the judiciary. Executive power is vested in the President; legislative power in the bicameral Congress; and judicial power in the Supreme Court and other courts established by law.

The President is elected by direct vote of the people for a single term of six years. In the Congress, the Members of the House of Representatives hold three-year terms, while those of the Senate serve for

six years. Local government officials have three-year terms.

The most recent elections for the Congress and local government officials were held in May 2007. The magistrates of the Supreme Court and of the lower courts are appointed by the President from the nominees of the Judicial and Bar Council, without need for congressional confirmation.

Provinces are headed by governors, and cities and municipalities by mayors.

The barangay is the basic political unit and is administered by a set of elective officials headed by the chairman, locally known as the punong barangay.

Percentage of highly prospective areas in the Philippines

Mining industry, benefi ts to the economy

Gross domestic product and export growth(share of mining in gdp and total exports)

Year GDP GVA/Mining % Total Exports Minerals Share % (PP million) (US$ m) Share (US$m) (US$m)1990 721 29.6 11,091 1.5 8,126 723 8.81995 803 31.2 10,681 1.3 17,447 893 5.12000 973 22.0 10,533 1.1 38,078 650 1.22005 1,211 22.0 20,032 1.7 40,263 1,084 2.72006 1,277 24.9 18,812 1.5 47,410 2,756 5.82007 1,369 29.7 23,678 1.7 50,276 3,299 6.62008 1,432 33.2 23,817 1.7 48,202* 2,482* 5.2*Source:NSCB and Bangko Sentral ng Pilipinas (BSP); * Preliminary

Excise tax and royalties derived from miningYear Excise Tax Royalties Total (US$m) (PP m) (US$m) (PP m) (US$m) (PP m)1990 30.0 730.0 0.67 16.2 30.7 746.31995 6.8 174.5 0.64 16.5 7.4 191.02000 5.6 243.3 781.5 34.5 6.3 277.92005 4.6 251.3 2.6 145.1 7.2 396.52006 9.5 489.6 2.2 112.7 11.7 602.32007 23.8 1.1 12.6 579.9 36.4 1,679.92008 14.8 660.3 9.3 414.8 24.2 1,075.1Source:BIR and MGB/DENR

Geologically prospective areasfor metallic minerals

30%

2%57%

11%

Land area covered by approvedmining tenements

Other land areas in the Philippines

Protected areas

September 2009Mining Journal special publication – Philippines

COUNTRY OVERVIEW

4

DESPITE the reeling effects of the global financial crisis, the Philippine economy posted a 3.8% growth in GDP for 2008, albeit lower than the previous year’s 7.1% record.

Latest data for the Philippine economy shows that the country is holding its head above water, with real GDP growth remaining positive (0.4% in the quarter to end-March). Despite its small growth, the Philippines is one of only four countries in Asia able to post positive GDP growth in the first quarter of this year. The others are Indonesia, Vietnam and China.

With exports accounting for only one-third of GDP, Standard Chartered Bank recently predicted

that, taken overall, the Philippines would be better insulated from the collapse of external demand compared with other Asian economies.

The Philippine government remains optimistic that the economy will be better placed to weather recession in 2009, with GDP growth at 0.8-1.8%. Exports are expected to fall but the remittances of overseas workers will be about the same, or better, than for last year at US$17.0 billion.

MINERAL INDUSTRYThe country has seen an upsurge in foreign mining investment since 2005, when the Supreme Court

Economy stays buoyant despite downturn

BoI approvalThe Board of Investments (BoI) has approved the government’s 2009 Investment Priorities Plan (IPP). This incorporates mining initiatives, and adds to the plans to provide incentives to firms that would generate or save jobs in spite of the global economic slowdown.

More efficient excise tax remittancesAn important, and much-awaited, government approval is the direct payment of the share of excise taxes to the local government units. After many years of lobbying by the Chamber of Mines (CoM), the different government agencies (represented in the Mineral Development Council; MDC), primarily the Departments of Environment and Natural Resources (DENR), Budget and Management (DBM) and Interior and Local Government (DILG), were able to finalise the rules (which will be implemented in 2010). The excise tax of metal revenues for 2009 will be paid to the different local government units (LGU) in March 2010. This new schedule of three months contrasts with the present two to three years.

Accelerating permit approvalsTo facilitate investments in the mining industry, the old issue of the lengthy approval of permits had to be resolved. In July 2009, the DENR put in place a process of streamlining the permitting process to make it faster and more transparent.

According to DENR Secretary Joselito Atienza, the permits for mining will be carried out in a period of seven weeks from the current minimum of 17 weeks. The environment compliance certificate (ECC) will be decided within three weeks from filing, compared with the current one year. While these efforts are being promoted during the latter part of the Secretary’s tenure, it is still a welcome move for the industry.

In 2005, the government officially changed its stance of mere tolerance to active promotion of the mining industry. The frequent changes of Secretaries, however, have hampered the implementation of effective long-term policies of the DENR.

Cancellation of dormant mining claimsThe Department of Environment and Natural Resources has given instructions to the Mines and Geosciences Bureau (MGB) to review mining applications/permits that have not been active for five to ten years.

This situation, according to the DENR, has a negative effect on investors, hence the necessity of the review. Dormant mining claims and tenements will be cancelled and restored to government ownership. To implement this policy, a three-stage notification process will be adopted.

Cancellation of mining applicationsThe CoM has expressed its “grave concern” over a DENR memoranda (dated March and May 2009) to

the regional directors of the MGB directing it to deny all mining applications that have been rejected by indigenous peoples (IP). In a letter to the Secretary, the Chamber expressed concern about procedural ambiguities created by the memoranda that may undermine its efforts at promoting

investments and competitiveness in the industry.The CoM requested that there should be clear

guidelines on the procedures in obtaining Certifica-tion Precondition (CP) or Free and Prior Informed Consent (FPIC). It should also address the issue of when the non-grant of a CP or FPIC becomes final (ie no longer negotiable with IP). It should also include the possibility of compromise or of an appeal by the EP or mineral agreement applicant. The Secretary agreed to the drafting of procedures to address such concerns.

Government policies affecting the mining industry

upheld the constitutionality of the Financial or Technical Assistance Agreement (FTAA) and the Mining Act of 1995. The law allows 100% foreign ownership in Philippine mining companies.

Over 30 foreign companies have investments in the Philippine mining sector. These include the world’s largest mining company, BHP Billiton, Brazil’s Vale and Anglo American. Some 24 flagship projects are projected to be operational before 2016, and the Mines and Geosciences Bureau reported at least 50 exploration projects that have ‘good’ potential for development.

Mining in 2008 contributed 1.5% of GDP. The national target is to attain the 6.6% of GDP by 2011 (which would fix the Philippines firmly as a ‘mining country’. While it is still attainable, the target is likely to be delayed by at least three years due to the reduction in mining investments, and to delays in implementation of the larger projects.

The government has scaled down its mining investment target for this year to about US$800 million, down from the original US$1 billion but still above last year’s US$650 million inflow.

INFLUX OF FILIPINO INVESTORSDuring the past two years, numerous large Filipino corporations (or Filipino-based subsidiaries) have been drawn to the domestic mining sector. These organisations include First Pacific Co, San Miguel, Macroasia and APC. They were attracted to mining due to the government’s support in developing the mining sector and the great potential of the various local metal deposits.

First Pacific invested in Philex Mining Corp and acquired an initial 22% equity. It is currently carrying out a due-diligence study on Lepanto’s Far Southeast copper-gold project. San Miguel is in talks with various mining groups and is open to an array of opportuni-ties. Macroasia is developing its nickel deposit in Palawan for direct shipping ore and is considering the construction of a processing plant. APC has coal projects in Isabela and Masbate, and nickel and gold prospects in Mindanao.

These companies can readily finance the development of medium-sized projects. They are likewise familiar in dealing with groups opposing mining such as the Catholic Church, environmentalists and New People’s Army (NPA). Being local companies they are more knowledgeable about local cultural sensitivities, and are more acceptable to the local communities.

By Artemio F. Disini, Chairman

Drill technicians load core into trays for geological assessment at the Tampakan copper-gold mine project in the southern

Philippines, in mid-2008Photo: Indophil Resources via Bloomberg News

September 2009Mining Journal special publication – Philippines

COUNTRY OVERVIEW

6

GOLD SECTORThe production of gold fell by 8% from 38.8t in 2007 to 35.6t in 2008. The decline was due to a decrease in the gold produced by large-scale mining companies, whose output represented about a fifth of the country’s total production.

Bangko Sentral Ng Pilipinas (Philippine Central Bank) reported that it had purchased 28.2t (about 80% of the country’s total production) from small-scale miners.

The country’s gold production is projected to increase to 70t/y when the large copper-gold projects become operational in about four years.

Two Australian companies, CGA Mining and Medusa Mining Ltd, are new performers in the gold sector.

CGA Mining (formerly called Central Asia Gold Ltd) started commissioning its gold project during the first quarter of 2009. The project is the former Masbate gold mine that was operated for 14 years by Atlas Consolidated Mining Co until it shut in 1994.

The project has indicated resources containing 3.3Moz and inferred resources of 1.77Moz, including a probable mining reserve of 1.98Moz of gold (at a cut-off of 0.7g/t). The projected annual production of 200,000oz is scheduled to be reached next year.

Medusa Mining advised that it has completed a JORC-compliant ore reserve estimation for the Co-O mine in eastern Mindanao. It has an indicated and inferred resource totalling 1.38Moz. The

probable reserve was estimated from an indicated resource of 1.25Mt at 15.0g/t gold, containing 603,000oz. This was the result of over 40,000m of drilling and over 6,000m of underground development completed in 2008. The Co-O gold veins are narrow but have the highest grade among the country’s operating gold mines.

For its Runruno gold project, London-based Metal Exploration reported that it has defined a JORC-compliant inferred and indicated mineral resource of 2.0Moz gold and 34.4Mlb molybdenum, contained within 31.17Mt of ore at average grades of 2.00g/t gold and 0.05% molybdenum.

Runruno lies 320km north of Manila in the mineral rich province of Nueva Viscaya. The results of its recently-completed scoping/pre-feasibility study indicate its economic viability. It will have an annual production of 183,000oz gold and 1.7Mlb molybde-num. The capital cost is about US$208 million and the operation will have an average cash operating cost of US$285/oz after credits for molybdenum.

The bankable feasibility study (BFS) on the Runruno project was launched last February,and is expected to take a year to complete. The BFS is expected to cost US$15 million. DENR has endorsed the company’s FTAA application in respect of Runruno.

COPPERThe country produced about as much copper last year as it did in 2007, at 22,565t. The Rapu Rapu polymetallic and Atlas Toledo copper mines became operational during the year. TVI completed its commissioning and began production during the first quarter of 2009.

Due to the problems brought about by the economic crisis, the planned development of a mine by Oceana Gold has been deferred, and the project has been placed under care and maintenance.

Switzerland-based Xstrata has announced the preliminary results of a two-year extended pre-feasibility study for its Tampakan copper and gold mine in Mindanao. The study was completed in April 2009 for Sagittarius Mines Inc (SMI), and confirmed a 2,200Mt mineral resource base initially

Diwalwal Project(10.2 MMt, 8.10 g/t Au)

Masara Mine(0.5 MMt, 9 g/t Au)

NDMC Prospects

Boringot Prospect

Siana Mine(7.7 MMt, 3.3 g/t Au)

Acupan Mine(10.61 MMt, 2.46 g/t

Au)

Victoria Mine(10 MMt, 6.94 g/t Au)

Panaonprospect

SibutadMine

Gold mineralisation is mostly found in the central Cordilleras,

and most of the areas in Mindanao

Bringing innovative, low-costnickel heap leaching technologyto the Philippines

The Acoje joint venture between Rusina and EuropeanNickel in Zambales is trialing innovative heap leachingtechnology for nickel laterites.

Developed by European Nickel as a low-cost andenvironmentally-friendly alternative to high-pressure acidleaching, the heap leach trial site will commence irrigationof the leach pads in third quarter 2009. The plant willproduce a mixed hydroxide nickel product.

A bankable feasibility study, examining a full-scalecommercial plant producing around 25,000 tpa nickel, isexpected to be completed in 2010. The project capital costis currently estimated to be in the range of US$500 million,with an operating cost forecast of around US$3.10/lbof nickel.

www.enickel.co.uk www.rusina.com.au

Mining Journal special publication – PhilippinesSeptember 2009 7

COUNTRY OVERVIEW

containing about 1,400Mt of mill feed. It has a proposed stage-one open-pit mining and milling rate of 44Mt/y, leading to a stage-two rate of 66Mt/y after three years.

Tampakan will have a life-of-mine average production of 325,000t/y of copper for 20 years, with output expected to peak at more than 400,000t/y of copper and 310,000oz/y of gold.

The mill recovery rates will be 83-90% for copper and 60-80% for gold, with a copper concentrate grade of 37-40% copper. The mine also has an operating cost base of less than US$0.60/lb of copper after gold credits. It has an initial stage-one capital expenditure of about US$5.2 billion. The schedule for start-up of commissioning and production is early 2016.

Following the completion of the extended pre-feasibility study, a US$74 million feasibility study was approved by the shareholders, which will entail a detailed engineering study. This study will determine whether the project will advance to development stage. SMI engaged the services of Bechtel, a global leader in engineering and construction, as the lead engineer for the Tampakan feasibility study.

The study will be submitted to the government by the second quarter of 2010. The decision to develop a major mine at Tampakan will depend on the outcomes of the feasibility study, which will examine the project’s economic, social and environmental viability.

Philex Mining Co has bought the 50% stake of Anglo American in the Boyongan copper-gold project in Surigao del Norte for US$55 million. Philex

disagreed earlier with the results of Anglo American’s pre-feasibility study on the project.

This study concluded that “a mining operation based on the currently-defined resources, proposed mining and processing methods, assumed long-term copper and gold prices and estimated capital and operating costs, could not provide an acceptable rate on return on the project investment”. The projected capital cost was US$750 million.

Philex disputed the assumptions, and conclusions, made by Anglo American, and negotiated to acquire

the project. Philex is now carrying out more extensive exploration work in the sulphide zones of the Bayugo deposit, located north of the Boyongan orebody. The sulphide zones are easier to mine by block caving and a mooted single-stage flotation gives better metal recoveries. Philex plans to undertake a bankable feasibility study by 2010. The Boyongan project is expected to be operational before 2014, when the reserves of Philex’s Padcal mine would have been mined out.

Hong Kong conglomerate First Pacific Co (FPCL)

BARLO VMSDeposit

SAN MARIANOVMS Prospect

SULAT VMSProspect

Ultramafic rocks and ophiolitic

belts

Bully BuenoProspect

Batong Buhay Mine(69 MMt, 0.59% Cu, 0.31 g/t

Au)

Lepanto Enargite Mine____________

Far Southeast deposit(650 MMt, 0.65% Cu, 1.3 g/tAu)

Sto. Tomas II Mine(449 MMt, 0.375% Cu, 0.7 g/t

Au)Dizon Mine

(187 MMt, 0.36% Cu, 0.93 g/tAu)

Amacan Mine(116 MMt, 0.37% Cu,0.36 g/t Au)

Kingking deposit(400 MMt, 0.35% Cu,0.6 g/t Au)

Boyungan deposit(300 MMt, 0.6% Cu, 1.0 g/tAu)

Tampakan deposit(>1000 MMt, 0.7% Cu, 0.3 g/t Au)

Copper mineralisation is likewise indicated mostly

in the Cordilleras, and most of the areas in

Mindanao

Consistently delivering valueSince establishment in 1992, Lycopodium has focussed on the delivery of high-quality, cost- effective engineeff ring and project management services across a broad range of mineral commodities regardless of project scale or location. To seTT rvice the Philippines area, we offeff r:

Manila-based engineering and drafting • teamsExtensive feasibility study and project • development experienceRecent project development with Masbate • and Rapu RapuCurrent study involvement with Runruno•

Contact: Brad Hannam or Steve ZaninovichT: +61 8 6210 5222E: minerals@lycopodium.com.auW: www.lycopodium.com.au

September 2009Mining Journal special publication – Philippines

COUNTRY OVERVIEW

8

Mining Journal special publication – PhilippinesSeptember 2009 9

COUNTRY OVERVIEW

acquired a 20.06% stake in Philex Mining for US$135 million in November 2008. It has since increased its stake to 22.0%.

The Far Southeast project of Lepanto Consolidated Mining Co is a large, deep-seated copper-gold porphyry deposit, located below the enargite mine. In November 2007, Lepanto Consolidated signed a joint-venture agreement with China’s Zijin Mining Group for development of the project. The latest information, however, stated that Zijin Mining has pulled out from the project.

In May 2009, FPCL signed a Memorandum of Agreement with Lepanto to undertake due diligence on the Far Southeast project, with an exclusivity clause of three months. The due-diligence study is continuing, with the objective of FPCL acquiring a majority interest in the project.

Concurrent to this study by FPCL is its due diligence on Manila Mining Corp with a similar aim to acquire majority interest of its mining projects. Manila’s Kalayaan project lies at the northern extension of the Bayugo orebody, which is being explored in the Philex claims. Drilling undertaken by Anglo American at Kalayaan in 2008 confirmed these extensions.

NICKELHigh international inventories of nickel, along with sharply reduced demand, resulted in a sharp fall in the nickel price last year. Direct shipping ore (DSO) exports from the Philippines to China fell 23% to 5.67Mt in 2008. However, the market opened up gradually in early 2009 when China started purchasing low-grade nickel ore (1% Ni) with high iron content (over 45% Fe). However, the price of this DSO was only about US$10/t, and only a few local mining companies (in Mindanao, which has a short hauling distance to the loading ports) are able to operate at this price level.

Coral Bay Nickel successfully completed its expansion in the first quarter of 2009 with the doubling of its present capacity of 10,000t/y in the high-pressure acid leach (HPAL) plant to 20,000t. The capital cost of the expansion was about US$295 million and the work was achieved within budget. The nickel and cobalt metal recoveries have likewise been achieved at over 90%.

Nickel Asia will be announcing before the end of 2009 its decision to proceed with the con struction of a 30,000t/y HPAL plant in

Surigao del Norte. The project cost has been reduced to US$1.1 billion from the original US$2.0 billion. Sumitomo, Mitsui and Sojitz are the Japanese partners of the Zamora Group that will construct the new HPAL plant.

European Nickel plc has reported that test work at its Acoje joint venture with Rusina Mining NL in Zambales continues to have high recoveries and leaches rapidly in the column tests compared with many other deposits. The nickel recoveries are in the 75-80% range. The company announced that construction of the heap-leach trial site is progressing well, while construction of the heap-leach pad and ancillary facilities has been completed. The heap will be stacked to a height of about 3m and irrigation was due to start in October 2009. The project capital cost is about US$450 million, with an operating cost of about US$4/lb. A bankable feasibility study will be completed by mid-2010.

Intex’s plans aim at completing a definitive feasibility study and environmental permitting by year-end, and to start on engineering details in 2010, and a stage-one HPAL processing plant in 2013. The mine is in Mindoro.

Pre-feasibility study estimates by Aker Solutions in June 2008 suggest operating costs of US$2.7/lb Ni for stage one and about US$2.0/lb Ni when stage two is included. The capital costs are US$2.2 billion and US$0.9 billion for stages one and two, respectively. The annual capacity was estimated to increase by 25% to 50,000t nickel metal, without a significant rise in capital expenditure. BHP Billiton and its Filipino partner Asiaticus Management Corp (Amcor) have decided to

with draw legal cases against each other over the Pujada nickel project in Mindanao, according to the DENR. The latter’s Secretary said BHP Billiton is not withdrawing its investments in the country as it agreed with Amcor to start from a clean slate.

Eramen Nickel has recently completed its mineral resource calculation and has an indicated resource of

108Mt with a grade of 1.21% Ni. The project, in Zambales, lies adjacent to the Acoje mine. Eramen is currently studying the several options to operate the project with a processing plant.

AIM-listed Toledo recently reported results for the year to March 2009. It reported record production at its Berong nickel mine through October 2008. Shipments for the same period, to customers in Australia and China, were also higher than the comparable 2007 period. Subject to securing sufficient profitable sales contracts, the Berong mine can restart production at short notice. Longer term, Toledo aims to be major value-added nickel producer and is progressing its talks with European Nickel and Jiangxi Rare Earth and Rare Metals Tungsten Group about a possible heap-leach and processing operation at Berong.

GLOBAL PROSPECT(23 MMt, 1.75% Ni)

GUIANDEPOSIT

COTO PROSPECT(24 MMt, 1.68% Ni)

DINAGATDEPOSIT

HINATUAN &TAGANITO MINES

PALAWAN HPPPROJECT (11.5 MMt, 2.3% Ni)

TMM Ni Project

PUJADADEPOSIT(>500 MMt, 1% Ni)

ISABELAPROSPECT

ROMBLONPROSPECT

TAWI-TAWIPROSPECT

MT. KADIGDEPOSIT

Nickel and nickel laterites

are scattered in Luzon, Visayas and

Mindanao

Annual mineral production

2006 2007 2008Gold (kg) 36,100 38,800 35,600 Silver (kg) 23,500 27,800 12,700 Copper 17,200 22,900 21,200 Nickel ore (Mt) 3.58 6.20 7.38 Nickel mixed sulphides (Mt) 8,200 10,100 10,600Chromite ore (metallurgical grade) 25,000 16,600 13,500 Chromite ore (Chemical) 16,800 11,700 1,700 Chromite ore (refractory grade) 4,700 3,400 – Coal (Mt) 2.597 3.830 3.950 Oil (bbl) 181,000 184,000 964,800 Condensate (’000 bbl) 5,123 5,753 5,606 Gas (billion ft3) 108,600 130,200 137,000

September 2009Mining Journal special publication – Philippines

RECENT DEVELOPMENTS

10

THE opportunities for development in the Philippines are vast, and the prospective entry of San Miguel Corp, as well as that of First Pacific, indicates that the relatively untapped sector

holds a lot of promise. With a reported 7,100Mt of metallic minerals and 51,000Mt of non-metallic minerals waiting to be unearthed, downstream processing and manufacturing remains an area of immense potential.

There has been record growth since 2005, with good performance in investments, production, tax revenues and exports. There has been an increase in mining company listings in the local bourse from less than four in 2004 to the current 15. The Philippine mining industry’s growth in 2008 was subdued, largely owing to the decline in metal prices (especially nickel).

The operations of Atlas Consolidated Mining and Development Corp (which has increased its production capacity recently), as well as the Masbate operation, somewhat cushioned the decline in nickel production.

The value of total Philippine production was estimated at PP92.3 billion, reflecting the decrease in metal prices and a contraction of about 8.9% over the recorded total of PP101.0 billion in 2007. Total mineral exports in 2008, on the other hand, were estimated at US$2.5 billion, accounting for 5.2% of the country’s total exports of US$48.2 billion.

Excise tax revenue from the mining sector reached PP1.1 billion in 2007, an increase of 125% from the 2006 figure of PP489.6 million. The figures for 2008 was only PP660 owing to the low commodity prices.

Investment inflow from US$840 million in 2006 went up to US$1.4 billion in 2007 but settled back to under US$1 billion last year. However, MGB/DENR predicts that mining will be a US$13 billion industry by 2013.

Some projects that were initially targeted to start in 2008 were reassessed, rescheduled and are now being repackaged to pare down capital expenditure. These include Sumitomo’s Taganito nickel plant, Global Steel’s expansion and Rusina’s US$498 million HPAL project in Zambales.

Demand for mineral commodities is still strong and since the US is now significantly less important in world commodity demand than it was five years ago, the repercussions of its downturn will not be felt heavily in the mining sector, which has already diversified its markets.

FAVOURABLE SHIFTThere has been a structural shift in recent years that has favoured a rapid growth in those developing countries that have a large population (such as China and India, whose growth in 2008 can still be considered high). This trend is expected to continue as their population strives for material possessions. Growth in these economies and the rest of Asia will be resource-intensive due to industrialisation and urbanisation.

Moreover, there have been positive indications recently that financial institutions and banks are more liquid, and the industry only needs to be innovative in accessing them through private equity, sovereign funds, retail investors, listing by way of introduction, dual listing and payment in kind.

With the current operating investment environ-ment, the Philippine government is expected to play a role in mitigating sovereign and political risk through cover and participation through sovereign guarantee to move the mining industry forward. This can be implemented through PhilExim, which provides guarantees on local and foreign loans to exporters to finance developmental projects and industries encouraged by government policy.

Non-financial issues also need to be considered to

reduce risk and gain investor trust and confidence. These include the implementation of the Philippine Mineral Reporting Code (patterned after Australia’s JORC), more liberalised market-listing rules, and implementation and monitoring of corporate social responsibility (CSR). Local government units will now be given their share of the excise tax directly after the end of the first quarter of every year. Other corporate governance mechanisms are expected to gain leverage on mining projects.

As partners in mineral resource development, the government accepts that it needs to play a role in risk participation, and to provide sovereign credit guarantees. These measures will enhance the investment environment and ensure the industry’s growth. The government should also engage sectors that still have reservations about the revitalisation of the mining industry.

OUTLOOKBeing immersed in volatile market conditions typical of internationally traded commodities, the Philippine mining industry is expected to be over the hump within the year as financial stimulus and economic rescue packages take effect. Philippine economic fundamentals remain strong and this would definitely

Untapped sector holds much promise

Akle Cement Project

28 Mining Development Projects

Tampakan Copper Project Far Southeast Copper Project Boyongan Copper Project Carmen Copper Project Batong Buhay Copper Project San Antonio Copper Project

Amacan Copper Project Rapu-Rapu Polymetallic Didipio Cu-Au Project Kingking Cu-Au Project Padcal Expansion Project

Itogon Gold Project Masbate Gold Project Teresa Gold Project

Diwalwal Gold Project Siana Gold Project Canatuan Au-Cu Project Masara Gold Project -Apex

Mindoro Nickel Project CTP Nickel Project Palawan HPAL Project Nonoc Nickel Project Surigao-Sumitomo HPAL Iligan Ferro-Nickel

ACT Nickel Project Pujada Nickel Project Berong Nickel Project Acoje PGE Nickel Proj. Manticao Ferro Nickel

“The Philippine mining industry is expected to The Philippine mining

industry is expected to The Philippine mining

be over the hump within industry is expected to

be over the hump within industry is expected to

the year as financial be over the hump within

the year as financial be over the hump within

stimulus and economic the year as financial

stimulus and economic the year as financial

rescue packages take effect. Philippine

rescue packages take effect. Philippine

rescue packages take

economic fundamentals effect. Philippine

economic fundamentals effect. Philippine

remain strong”

A drill rig in the North Block of Rusina’s Ajoce chromite project. Rusina is paring down its HPAL project in Zambales

  

Partners 

 

  Avelino J. Cruz, Jr.  F. Arthur L. Villaraza 

  Simeon V. Marcelo  Raoul R. Angangco 

  Sylvette Y. Tankiang  Elma Christine R. Leogardo 

  Bienvenido I. Somera, Jr.  Alejandro Alfonso E. Navarro   

  Joe Nathan P. Tenefrancia  Augusto A. San Pedro, Jr.   

  Manuel L. Manaligod, Jr.  Susan D. Villanueva   

  Patricia A. O. Bunye  Rodel A. Cruz  

  Aida Araceli G. Roxas‐Rivera  Thea T. Daep   

  John Jerico L. Balisnomo  Miguel U. Silos   

  Elmar B. Galacio  Rosa Michele C. Bagtas   

  Divina Gracia E. Pedron  Franchette M. Acosta  

Senior Associates 

   

  Ma. Joycelyn L. Guirnalda  Victor E. M. Pangilinan 

  Pancho G. Umali  Aldrich Fitz U. Dy 

 

Associates 

 

  Rene Raphael A. Guina  Katrina V. Doble   

  Kristoffer James E. Purisima  Rogelio D. Torres, Jr.   

  Leslie Monica G. Raymundo  Charisse Jen S. Choa   

  Mark Hadrian P. Gamo  Joseph Anthony P. Lopez   

  Jean Jacquelyn A. De Castro  Tara Ann I. Vea   

  Rowanie A. Nakan  Khristine C. Dy   

  Jaclyn B. Gonzales  Ruth Nichole R. Ureta  

  Raymond G. Pasiliao  Wenceslao B. Fernandez   

  Leonardo A. Singson  Heather Ezra C. Annang 

  Ma. Sophia E. Cruz‐Abrenica  Charmian Wyanet S. Zaragoza  

  Candy T. Avance  Jonathan T. Pampolina   

  Charles Edward M. Cheng  Reezann Keith E. Ramos   

  Fritzzie Lyn F. Español  Ramon Manolo A. Alcasabas   

  Juanito L. Sañosa, Jr.  Davidson Rich L. Sih   

  Ma. Francesca Q. Baltazar  Jacques S. Lynn    

  Julius Gregory B. Delgado   Oliver P. Baclay, Jr.    

  Kristin Charisse C. Siao   Regidor A. Ponferrada    

  Stella Angela G. Pastores   Maria Karen S. Olidan    

  Maria Cecilia G. Natividad   Abigail V. Go    

  Michael Angelo O. Lopez   Esther Rose N. Rances    

  Christianne Grace F. Salonga   Robert Leo C. Ty    

  Mark Francis P. Abaya  

 

 

118 Perea Street, Legaspi Village, 1229 Makati City, Philippines I P.O. BOX 3559 Makati Central 

Tel.: (632) 818‐9838; 818‐9880; 818‐9550 I Fax: (632) 816‐7057; 817‐1324; 894‐4729 

info@cvclaw.com I www.cvclaw.com 

September 2009Mining Journal special publication – Philippines

RECENT DEVELOPMENTS

12

THE Minerals Development Council (MDC) was created by President Gloria Macapagal-Arroyo on October 11, 2005 when Executive Order No. 469 was issued to advance the

government policy of responsible and sustainable development of the country’s mineral resources.

As envisaged, it is empowered to enlist the assistance of any agency or instrumentality of the government, including government-owned or -controlled corporations, to harmonise requirements and procedures that would facilitate the inflows of investments into the mining industry.

Since its inception, the MDC has evolved from being an inter agency council that seeks to resolve the problems of the industry through policy reforms and investment promotions, into a more active and consultative body that addresses the policy and operational problems of the industry at the national and, recently, at the regional levels through the creation of the Regional Minerals Development Councils (RMDCs).

The appointment of Secretary Jose L. Atienza, Jr. to the DENR came at a crucial time in the development of the Philippine mining industry. Before the creation of the MDC, the major bottleneck that hampered the resurgence of the industry was the conflicting and tedious requirements among the concerned government agencies in the grant of mining tenements. In recent years, however, the challenge for the mining industry is securing the social licence to operate from local government units (LGUs), host communities, civil society groups and the religious sector. Mr Atienza’s experience as a former local chief executive, political and human-rights activist, and

pro-life advocate benefited the Council by attracting new dialogue partners in the government’s advocacy for responsible mining.

The MDC’s active engagement with local government partners culminated in the inclusion of the LGU Leagues (eg League of Provinces, League of Municipalities, League of Cities and the Liga ng mga Barangay) as regular Council Members.

Also, through its various activities, the MDC stood firm in balancing the interests of various stakeholder groups with the rule of law and the pursuit of national development goals. The Council addressed legitimate issues against some mining projects while carefully laying down the law when conflicts arise due to the different interpretation or implementation of the same law(s). The Council also tried to listen to dissenting voices opposed to mining by stressing that the government’s programme is not for “mining at all cost” but only for responsible mining and that the economic, environmental, and social safeguards are in place to prevent or minimise the impacts of the exploration, development, and utilisation of the country’s mineral wealth.

The MDC was equally challenged in Year 2008 by the escalation of armed attacks against some exploration and mining projects. The Council took an active stand by emphasising that the State owns mineral resources and that the mining companies are merely government contractors. It is also obligated to protect and defend the national interest.

The MDC accomplishments were a collaboration of efforts of all the members of the council that includes individual members: the Department of Environment and Natural Resources, particularly the Mines and Geosciences Bureau (MGB), the

Presidential Adviser for Multilateral Development represented by Her Excellency, Ambassador Delia D Albert, Department of the Interior and Local Government (DILG), Department of Finance (DOF), National Economic and Development Authority (NEDA), Department of Trade and Industry (DTI), Department of Agrarian Reform (DAR), Department of Agriculture (DA), Department of National Defense (DND), Department of Labor and Employment (DOLE), Presidential Management Staff (PMS), National Commission on Indigenous Peoples (NCIP), National Anti-Poverty Commission (NAPC), Philippine Information Agency (PIA), Chamber of Mines of the Philippines (COMP), League of Municipalities of the Philippines (LMP), League of Provinces of the Philippines (LPP), League of Cities of the Philippines (LCP), and the Liga ng mga Barangay sa Pilipinas (LnB).

The accomplishments which were translated in concrete terms are testament to the collective vision and action of the Council Members who believe that responsible mining can effectively contribute to the sustainable development of the country.

help keep the economy and the industry afloat.Judging from the interest shown by mining

companies in accessing funds to finance pipeline and mature projects and those in the final feasibility stages, chances are strong that the various projects in the pipeline will push through after project reassessments. A surge in investments and production may be expected towards the end of 2010.

With projects being rescheduled and the likely continuation of supply side difficulties, most commodity prices are expected to remain well above their long run levels over the short and medium term.

Rescheduled projects are therefore expected to be implemented within 2010 to take advantage of price improvements. The availability of funding is crucial in ensuring the continuation of bullish sentiments and perspective in the industry.

On the part of government, it has made commitment to do its best in resolving administrative issues, and is determined to provide the necessary support to revitalise the industry, particularly in Mindanao, where mineral resources abound.

The government is also bent on transparency, and is working to enlist in the Extractive Industry Transparency Initiative (EITI), and also in streamlin-ing operations to prevent corruption. Much remains to be seen but a lot of indicators point to a more stabilised metals market within the next few years.

Ampucao Proj.(Benguet) Paco Proj.(Surigao Norte) Tabuk Proj. (Kalinga) Gambang Proj.(Benguet)

Sogod Proj. (S. Leyte) Tagpura Proj. (Compostela) Hixbar Proj. (Rapu-Rapu Is) Manat Proj. (Compostela)

Colet Proj.(Negros Occ.) Claveria Proj.(Cagayan) Papaya Proj.(N. Vizcaya) Conner Proj. (Apayao)

Kingking Proj. (Davao Or.) Panag Proj. (Compostela) Del Gallego Proj. (Quezon) Negros Proj. (Negros Or.) Alicia Proj. (Zamboanga Sur) Kalaya-an Proj. (Surigao N.) Pana-on Proj. (Leyte) Tongonan Proj. (Leyte) Surigao Proj. (Surigao N.) Pao Proj. (Nueva Vizcaya) Road 5 M Proj. (Davao Or.) Camp 3 Proj. (Benguet)

Pantuyan Proj. (Leyte) Batoto Proj.(Compostela) Mabuhay Proj. (Surigao Norte) Kematu Proj. (South Cotabato) Archangel Proj. (Batangas) Hinonangan Proj. (S. Leyte) Labo Proj. (Camarines Norte) Nalesbitan Proj.(Camarines Norte) Cordon Proj. (Isabela) Pantingan Proj. (Bataan) Agata Proj. (Agusan del Norte) TMC Proj. (Antique-Iloilo)

Acoje Proj. (Zambales) Sta. Cruz Proj. (Zambales) Berong Proj. (Palawan)

Samar Bauxite Project, (Samar)

Pamplona, Negros Oriental

MDC enters its fifth year Minerals Development Council

Office of the Executive Director: 2/F DENR Building, Visayas Ave., Diliman,Quezon City, Philippines 1101Tel: (+632) 9262628 Fax: (+632) 9264708

MDC Secretariat:2/F Petrolab Building, Mines and Geosciences

Bureau, North Avenue, Diliman Quezon CityTelefax: (632) 9209123E-mail: mdc_pilipinas@yahoo.com.ph

Mining Journal special publication – PhilippinesSeptember 2009

September 2009Mining Journal special publication – Philippines

CONTACTS

14

MDC directoryDepartment of Environment and Natural Resources (DENR)DENR Building, Visayas Avenue, Diliman, Quezon City NCR 1100Tel: +63 (2) 928 0691 or 925 2329Fax: +63 (2) 929 6628, 920 4301www.denr.gov.ph

Presidential Adviser for Multi lateral Development (PAMD)Embassy of the Republic of the PhilippinesUhlandstr. 97, D-10715 Berlin, GermanyTel: (030) 864 9500 Fax: (030) 873-2251

Department of the Interior and Local Government (DILG)A. Francisco Gold Condominium II,EDSA cor. Mapagmahal StreetBrgy. Piñahan, Diliman, Quezon CityTel: +63 (2) 925-2333 Fax +63 (2) 925-3843 www.dilg.gov.ph

Department of Finance (DOF)DOF Building, BSP Complex,Roxas Boulevard,cor. P. Ocampo Street,Pasay City NCR 1004Tel: + 63 (2) 523 5727, 525 1321, 524 1633Fax: +63 (2) 523 5143www.dof.gov.ph

National Economic and Development Authority (NEDA)NEDA Building, 12 Saint Jose Maria Escriva Drive,Ortigas Center, Pasig City NCR 1605Telefax: + 63 (2) 631 3734, 631 3739www.neda.gov.ph

Department of Trade and Industry (DTI)Industry & Investments Building385 Senator Gil J. Puyat Ave.,Makati City NCR 1200Tel: +63 (2) 890-9332, 897-6682Fax: + 63 (2) 895-3512www.dti.gov.ph

Department of Agrarian Reform (DAR)DAR Building, Elliptical RoadDiliman, Quezon City NCR 1100Tel Nos.+63 (2) 929-4101, 928-7031 loc. 406Fax: + 63 (2) 922-8975www.dar.gov.ph

Department of Agriculture (DA)DA Building, Elliptical Road,Diliman, Quezon City NCR 1104Tel: +63 (2) 920-2223Fax + 63 (2) 929-8183www.da.gov.ph

Department of National Defense (DND)DND Building, Camp AguinaldoEDSA, Quezon City NCR 1110Tel. Nos. + 63 (2) 911-6268, 911-6460, 911-4438Fax + 63 (2) 911-4360www.dnd.gov.ph

Presidential Management Staff (PMS)PMS Building, Arlegui St., San Miguel,Malacañang Compound, ManilaTel Nos. + 63 (2) 734-2206, 734-3971-75Fax: + 63 (2) 734-2201www.pms.gov.ph

National Commission on Indigenous Peoples (NCIP)2/F N. dela Merced Bldg. (DELTA)cor. West Ave., Quezon CityTel: +63 (2) 373 9787Fax +63 (2) 373 9765www.ncip.gov.ph

National Anti-Poverty Commission (NAPC)3/F, Agricultural Training Institute BuildingElliptical Road, Diliman, Quezon CityTel: + 63 (2) 426 5028Fax + 63 (2) 426 5249www.napc.gov.ph

Philippine Information Agency (PIA)Philippine Information Agency BuildingVisayas Avenue, Diliman, Quezon CityTel: +63 (2) 921 7941, 920 4386, 920 1224Fax: +63 (2) 928 6917www.pia.gov.ph

Department of Labor and EmploymentDOLE Building, Intramuros Manila NCR 1002Tel: +63 (2) 527-3000 loc.712Fax: +63 (2) 527-3462www.dole.gov.ph

Chamber of Mines of the Philippines (CoMP)Rm. 809, Ortigas Bldg., Ortigas Ave., Pasig CityTel: +63 (2) 635 4123 24 Fax: +63 (2) 635 4160www.chamberofmines.com.ph

League of Municipalities of the Philippines (LMP)2nd Floor LMP Bldg., 265 Ermin Garcia St,Cubao, Quezon CityTel: +63 (2) 913 5737, 913 5738Fax: +63 (2) 440 7280 / 4407306www.lmp.org.ph

League of Provinces of the Philippines (LPP)1510 West Tower, PSE Bldg.Exchange Road, Ortigas Centre, Pasig CityTel: +63 (2) 687 5399, 631 0170, 631 0197Fax + 63 (2) 687-4048www.lpp.gov.ph

League of Cities of the Philippines (LCP)LCP Bldg. 1278 Estrada Corner Lemery Streets, Malate, Manila 1004Tel: +63 (2) 521 6384, 521 6461Fax: +63 (2) 521 7298 / 521 8239www.lcp.org.ph

Liga ng mga Barangay (LnB)2nd Floor, Old Sanguniang Bldg.Caloocan City Hall ComplexA. Mabini St. Caloocan CityTel: +63 (2) 2881653Fax +63 (2) 324-5299www.barangay.gov.ph

Minerals Development Council (MDC) Secretariat2nd Flr. Petrolab BuildingMines and Geosciences BureauNorth Avenue, Diliman, Quezon CityTelefax: +63 (2) 920 9123E-mail: mdc_pilipinas@yahoo.com.ph

DENR- Mines and Geosciences Bureau (MGB)2nd Flr. Fernandez Bldg., MGB CompoundNorth Avenue, Diliman, Quezon CityTel: +63 (2) 928 8642, 920 9120Fax: +63 (2) 920 1635www.mgb.gov.ph

DTI-Board of Investments (BOI)Industry & Investment Building385 Senator Gil Puyat AvenueMakati CityTel: +63 (2) 890 9332, 895 3701, 897 6682 loc. 308 Fax: +63 (2) 895-3980www.boi.gov.ph

For more informationLondon office: +44 (0)20 7514 1480

Manila office: +63 2 817 7104info@toledomining.com www.toledomining.com

Toledo Mining Corporation(AIM:TMC) is an emergingnickel producer focused onthe economic processing ofnickel laterites in thePhilippines.

The company has strategicinterests in four large, good-grade nickel depositson Palawan Island, with acombined pre-JORCresource base of more than300 million tonnes, or 3.1 million tonnes ofcontained nickel.

Toledo is also advancing itsactivities downstream inpartnership with EuropeanNickel and Jiangxi RareEarth and Rare MetalsTungsten Group (JXTC).

International standard for construction and mining

Leighton Contractors (Philippines), Inc. 7/F L.V. Locsin Building, 6752 Ayala Avenue corner Makati Avenue, Makati City Philippines t: +632 841 0998 f: +632 811 0158 e: info@leighton.com.ph

www.leightonasia.com

Leighton Asia offers its clients the highest standard of mining solutions. Operations were established in the Asian region in 1972 and in the Philippines in 1996. We are focused on continued success and growth in the region with local knowledge and international experience.

Leighton Asia is part of the Leighton Group, the world’s leading contract miner, with over 60 years of global mining experience. We engage a team of committed engineering and management professionals coupled with a plant fleet we own, operate and maintain to offer our clients ‘real’ mining and construction solutions.