Philippine Mineral Exploration Perspective - Sajona-Domingo

Fernando G. SajonaGeneral Manager

BRASS Technologies Inc.Consulting Geologist

Edwin G. DomingoDirector for Foreign Assisted Projects

Department of Environment and Natural Resources

MINING PHILIPPINES 2011 Philippine Mineral Exploration Perspective

OUTLINE• Summary of Philippine geologic and tectonic setting

• Brief History of Philippine Mineral Explorationo Pre‐Colonialo Spanish Erao American Colonial Periodo WW IIo 1950’s ‐ 60’so 1970’s ‐mid 80’so Mid‐80’s –Present

• Current Exploration Trendso FSE Porphyry Cu Projecto Taysan Porphyry Cu Projecto Kingking Porphyry Cu Projecto Runruno Au Projecto Kay Tanda Au Project

• Where are we now?

• Moving Forward


LUZON

MINDANAO

PHILIPPINE SEA

SOUTH CHINA SEA

CELEBES SEA

SULU SEA

Man

ila

Tren

ch

PHILIPPINE ARCHIPELAGO

• Surrounded by opposing subduction zones• Characterized by several volcanic arc chains

• Volcanism and plutonism since Pre‐Tertiary (> 60 Ma)

• Igneous rock‐related ore deposits:₋ Porphyry Cu‐Au₋ Epithermal Au (high to low sulfidation)₋ Skarn deposit (Fe, Cu, Au)₋ Residual deposits (weathering/erosion): Placer Au, iron‐nickel laterite

• Philippine Fault and related structures control localization of many important deposits


Ultramafic rocks

Intrusive rocks

Volcanic rocks

Limestone

Simplified Geology Mineral DistrictsCentral CordilleraCu, Au, Fe

ZambalesCr, Ni, Pt, Cu,

AuParacaleAu, Fe, Cu, Ni

Masbate Au

NegrosCu, Au

ZamboangaCu, Au, Cr

Eastern MindanaoCu, Au, Ni, Cr

PalawanCr, Ni

Vizcaya-AuroraCu, Au


BRIEF EXPLORATION HISTORY

Pre-Colonial – Exploration limited to readily extractable and usable materials (mainly copper,iron gold, silver and clay for pottery).

"On the island [Butuan] where the king came to the ship, pieces of gold as large as walnuts or eggs areto be found, by sifting the earth. All the dishes of the king are of gold, and his whole house is very wellset up.“ – PIGAFETTA (16th Century Spanish Historian)


BRIEF EXPLORATION HISTORYSpanish era - The Spaniards failed to develop a Philippine mineral

industry because of the lack of technology and the refusal of natives to cooperate.

- Royal Decree of 1837 created the Inspeccion General de Minas.

- Lepanto Mine was opened in 1864 by Cantabro-Filipino; closed in 1874

Old Lepanto Payroll for Chinese miners

Lepanto Mine


BRIEF HISTORYAmerican Colonial Period

1900 - Mining Bureau was established

1902 - Second Mining Law enacted

1907 - Benguet Mine was established

1930’s - Gold boom1936 - 3rd Mining Law (Commonwealth Act.

No. 137)- Bureau of Mines was created- Lepanto Consolidated Mining

Company was established

- 52 gold mines distributed in Baguio, Paracale, Masbate, Surigao and other areas

- 37 tons gold per year production- Chromite produced from Zambales,

Dinagat and Siquijor

Pre-WWII Gold ProductionCompiled by: Ruelo, 2011


Baguio Gold DistrictBenguet ConsolidatedItogonBalatocAntamok GoldfieldsBaguio GoldBenguet ExplorationSuyocConsilidatedCal HorrDemonstrationBig WedgeCrownGold CreekLepanto ConsolidatedMacawiwiliPugoBatong BuhayCamp 4Shevlin

Paracale Gold DistrictCoco GroveUnited ParacaleSan MauricioRoyal ParacaleMineral ResourcesParacale-GumaosSta. RosaMambulao ConsolidatedSta. Ana – San JoaquinNorth CamarinesNorthern MiningMayonParacale Gold Mining

Masbate Gold DistrictIXL-ArgosMasbate ConsolidatedMasbate GoldfieldsTinago ConsolidatedCapsay

Surigao Gold DistrictEast MindanaoMindanao Mother LodeSurigao ConsolidatedKilometer 73TapianNorth MindnaoMapaso GoldfieldsTambis

Pre-WWII Mineral Districts


BRIEF HISTORYJapanese Occupation – WW II1940-45 – Japanese operated copper,

chromite, manganese, iron, coal and gold mines (e.g., Lepanto, Rapu-rapu, Sipalay, Toledo, Busuanga,Zambales, etc. )

WW II Japanese Mines


BRIEF HISTORY

Post War – 1950’s to 60’s- First Copper Boom; vigorous exploration

for copper

- Introduction of bulk mining (open pit) technology in the Philippines

1955 – Atlas Mine in Toledo (Carmen, Lutopan, Biga orebodies)

1957 – Sipalay Mine (Cansibit-Binulig, Baclao orebodies)

1958 – Philex Mine (Sto. Tomas II orebody)

1964 – Marcopper Mine (Tapian orebody)

Gold performed poorly due to low prices – 12 tons/yr production


Philex (Sto Tomas II) Mine

Marcopper (Tapian) Mine

Sipalay (Cansibit) MineAtlas (Carmen) mine


BRIEF HISTORY1970’s-early 80’s- Declaration of Martial Law in 1972

- P.D. 463 enacted in 1974

- P.D. 1899 (Small-Scale Mining Law) enacted in 1984

- Planning and construction of downstream mineral processing facilities (e.g., PASAR, Nonoc Ni plant) Discovery of 13 gold deposits

PASAR

NONOC Nickel Plant


BRIEF HISTORY1970’s-early 80’s- Declaration of Martial Law in 1972

- P.D. 463 enacted in 1974

- P.D. 1899 (Small-Scale Mining Law) enacted in 1984

- Planning and construction of downstream mineral processing facilities (e.g., PASAR, Nonoc Ni plant) Discovery of 13 gold deposits

- 45 mines operating from 1971-81; 21% of total exports in 1980.

- Discovery of about 40 porphyry copper deposits

- Advent of Plate Tectonics Theory

- Introduction of novel exploration techniques

- Formulation of new geologic and ore formation models

- Government cooperative exploration programs (e.g., UNDP, RP-Japan) and research

Courtesy of: H. Ruelo, 2011

Courtesy of: H. Ruelo, 2011


Sillitoe and Gappe Model 1984

THE PHILIPPINE PORPHYRY COPPER MODEL

Sillitoe and Gappe Jr., 1984


KILONGOLAOHALE

FAR SOUTHEASTGUINAOANG

SAINT ANTHONY

LOBO/BONENGSULUAKAN

STO. NINOKENNONSTO. TOMAS

PISUMPANDIZON TAYSAN

INO-CAPAYANGSAN ANTONIO

TAPIANBIGA

CARMENLUTOPAN BACLAO

CANSIBIT-BINULIGHINOBAANSAGUIBON

BASAYAYA-AYA

MANAGBATONG-BUHAY

BOTILAOSINIPSIPMARIAN

TAWI-TAWISAN FABIANLUMBAY

POLILLOLARAP

LABANGANSALATAN

BALAK-5

ASIGA

KALAMATANTAGPURAAMACAN

MAPULAKINGKING

INVENTORY OF PHILIPPINE PORPHYRY COPPER DEPOSITS(Sillitoe and Gapper, Jr., 1984)

(Modified from H. Ruelo, 2011)


ANTAMOK, ACUPAN, KELLYBenguet Corp.

STO. TOMAS IIPhilex Mines

DIZONDizon Mines/Benguet Corp.

AROROYAtlas Cons. Min. Corp.

CARMEN, BIGA, TOLEDOAtlas Cons. Min. Corp.

MANKAYANLepanto Cons. Min.Corp.

MASARAApex Mining Corp.

TAPIANMarcopper Min. Corp.

SIANASuricon Mining Corp..

HIJONorth Davao Min. Corp.

THANKSGIVINGBenguet Exploration Inc.

MARIANVulcan Ind. And Min. Corp.

ATOK-BIG WEDGEAtok Mining Corp.

AMACANNorth Davao Min. Corp.

SIPALAYMaricalum Mining Corp

PLACERManila Minnig Corp.

BASAYBasay Mining Corp

PARACALEParacale Minnig Corp.

18 Mines:

11 Epithermal deposits

7 Porphyry copper deps

1 Skarn deposit

OPERATING GOLD MINES

(1982)


BRIEF EXPLORATION HISTORYMid 80’s-Present- 1984 People’s Power

- “Dark Age” of mining in late 80’s to mid- 90’s; 14 large scale mining firms collapse.

- Rise of small-scale mining activities, e.g. Diwalwal, Palo-12, Boringot; accounting for >50% of gold production in 1999.

- Republic Act No. 7076 - People's Small-Scale Mining Act of 1991

- Republic Act No. 7942 – Philippine Mining Act of 1995

- Mining/exploration industry problems: low metal prices, disasters, opposition, permitting

- Lowest gold prices in 2000

- RA 7942 upheld by SC on 01 Dec 2004

Diwalwal

Diwalwal by night


BRIEF EXPLORATION HISTORYLate 80’s-Present- Exploration/ore formation models were

refined

- Government embarked on geological and mineral exploration programs with international technical and financial assistance (UNDP, ADB Japan, Korea, US, UK, Germany, France)

- Several gold discoveries

- 4 porphyry copper-gold discoveries:

• Dinkidi (1990)

• Tampakan (1994)

• Boyongan (2000)

• Bayugo (2004)

BOYONGAN-BAYUGO OREPBODIES

DINKIDI OREBODY TAMPAKAN OREBODY

1 km


Porphyry copper and associated deposits model(Modified from Sillitoe and Gappe, 1984; Hedenquist, 1987)

Source: Mindoro Resources Ltd.


KILONGOLAOHALE

FAR SOUTHEASTGUINAOANG

SAINT ANTHONY

LOBO/BONENGSULUAKAN

STO. NINOKENNONSTO. TOMAS

PISUMPANDIZON TAYSAN

INO-CAPAYANGSAN ANTONIO

TAPIANBIGA

CARMENLUTOPAN BACLAO

CANSIBIT-BINULIGHINOBAANSAGUIBON

BASAYAYA-AYA

MANAGBATONG-BUHAY

BOTILAOSINIPSIPMARIAN

TAWI-TAWISAN FABIANLUMBAY

POLILLOLARAP

LABANGANSALATAN

BALAK-5

ASIGA

KALAMATANTAGPURAAMACAN

MAPULAKINGKING

INVENTORY OF PHILIPPINE PORPHYRY COPPER DEPOSITS

(1984‐Present)

TAMPAKAN

DIDIPIPIO

BOYUNGAN / BAYUGO

GAMBANG

TAMAROK

LOBO/ARCHANGEL

DEPOSIT – Post-WWII (Sillitoe, 1984)

DEPOSIT – 70’s-mid 80’s (Ibid.)

DEPOSIT – Late 80’s-present

DEPOSIT – Prospects

From: Ruelo, 2011

KALINGA

MAPAWA (?)

KALAYAAN

LINGIG


GOLD DEPOSITSDiscoveries and Prospects

(1985-Present) TERESA (Lepanto)8.8 MMt 5.23 g/t Au

BULAWAN (Philex)23.9 MMt, 1.91 g/t Au

SIBUTAD (Philex)41 MMt, 1.46 g/t Au

T’BOLI Cadan Res1.3 MMt 11.6 g/t Au

BALABAG TVI3.33 MMt, 2.72 g/t Au

BATOTO-TARALECadan Resources

CO-O (Medusa)3.74 MMt 10.28 g/t Au

DIWALWAL (PMDC)10.2 MMt, 8.10 g/t Au

RUNRUNO (MetalsEx)25.4 MMt, 1.74 g/t Au

NALESBITAN (El Dore)7.7 MMt, 1.11 g/t Au

PAO-YABE(Royalco)

ARCHANGEL-LOBO-CALOMRL

DICKSON(CNC-Faratuk)

CENTRAL MASBATE(Geograce-Vale)

NORTH DAVAO PROSPECTS(North Davao)

AGATA-TAPIANMRL

Discovery (n=10)

Prospect (n=6+)

Not counting discoveries by informal miners


OPERATING GOLD MINES

(2011)

TERESA (Lepanto)8.8 MMt 5.23 g/t Au

MACO (Apex)3.087 MMt 5.9 g/t Au

CO-O (Medusa)3.74 MMt 10.28 g/t Au

MASBATE (Filminera-CGA)262.48 MMt 0.87 g/t Au


THE NICKEL RUSH- Caused by a sudden spike of prices

from 2006 to 2008

- Accompanied by rush in iron, manganese and chromite exploration (steel-allied metals)

- Triggered frenzied exploration in all ultramafic areas

- Short lived but created impetus for downstream processing possibilities (e.g., HPAL and APAL)

- Most nickel deposits already identified

- Current exploration activities focused on detailed delineation of resources and feasibility studies.


ZAMBALES Ni DistrictGLOBAL (23 MMT, 1.75%Ni)STA. CRUZ (Benguet Corp.)

- 19.52MMT, 1.36% NiACOJE (Euronickel)

- 30.2 MMT, 1.13% NiBOTOLAN (Geocgrace)FILIPINAS

PALAWAN Ni DistrictINFANTA (Macroasia)

34.76 MMT, 1.23% NiTORONTO (Oriental Peninsula)

44.90 MMT, 1.55% NiPULOT (Oriental Peninsula)

9.66 MMT, 1.51% NiBERONG (TMM)

140M @1.41% NiIPILAN (TMM)

30.59 MMT, 1.36%Ni (JORC)ULUGAN (TMM)RIO TUBA

40.45 MMT 1.30% Ni

SURIGAO Ni DistrictCASIGURAN (Century Peak)

10.79 MMt, 1.11% Ni)AGATA (MRL)

18.1 MMt, 1.13% NiCADGIANAO (NAC)

7.37DMt 1.64% NiNONOC (Philnico)

141 MMt, 1.10% NiHINATUAN (NAC)

3.0 DMt 1.50% NiTAGANITO (NAC)

75.6 Dmt 1.14% NiCARRASCAL (CNC)

21.0 MMt 1.10% NiTAGANITO (NAC)

75.6 Dmt 1.14% NiOTHERS: CTP, Tubay (SR Metals), Marcventures, Oriental Vision, etc.

ISABELA Geograce42.38 MMt, 1.16% Ni

PUJADA (Amcor)200 MMt 1.3% Ni

MANTICAO

BUKIDNON

GUIAN

SIBUYAN

MT. KADIG

TAWI-TAWI

MANICANI (NAC)34.31 DMt, 1.11% Ni


CURRENT TRENDS IN PHILIPPINE EXPLORATION

GOLD and COPPER – Still the maincommodity of interest due to high prices;further exploration, review/re-evaluation,FS of already identified deposits.

NICKEL – Detailed ore delineation, highFe laterite is marketable; downstreamprocessing is becoming an importantconsideration

IRON – Direct shipping ore is still the target; very little systematic exploration


FAR SOUTHEAST (FSE) Porphyry Cu-Au Project

• Option Agreement between Goldfields (Netherlands Group) and Lepanto Consolidated Mining Corp. (LCMC) on 20 Sept 2010.

• Goldfields has 18 months option for 60% stake of the FSE project at a cost of $340 million.

• 22,000 meters drilling in 17 holes completed as of August 2011, confirming the presence of “vertically and laterally extensive orebody.”

• Goldfields have 12 months to decide to proceed with the acquisition.

• Previous resource estimate by Lepanto: 657 million tons at 0.65% Cu and 0.94 g/t Au.

Year-to-date share price chartLepanto Cons Mining A

EXPLORATION UPDATES


TAYSAN Porphyry Cu-Au Project• Completed NI 43-101 report - Mineral Resource Estimate

and Preliminary Economic Assessment of the TaysanProject in April 2011; currently being updated.

• Current Resources:

• NPV – US$743M at 10% (discounted after tax) using $3.00/lb Cu.

• Copper Development Corp. invests C$5 million (private placement)

• Continues to extend mineralization with current drilling program.

EXPLORATION UPDATES


KINGKING Porphyry Cu-Au Project• Completed NI 43-101 report for Mineral Resource

Estimate of the Kingking Project in Oct 2010

• Current Resources:

• Total resource contains 5.4 Billion Lbs Copper and 10.3 Million Oz Gold

• Excellent epithermal gold upside

• Projections: 110,000-130,000 tpd plan1st 5 years average production:

529,000 oz Au193 million lbs Cu

EXPLORATON UPDATESEXPLORATION UPDATES


RUNRUNO Au Project• Bulk mineable gold deposit hosted in alkalic rock suite,

analogous to Cripple Creek deposit

• Current Resources (March 2011):

• Definitive FS completed in May 2010

• Aeromagnetics flown

• Step-out drilling to expand resource base

• Other Au-anomalous areas being followed through

EXPLORATION UPDATES


KAY TANDA Au Project• NI 43‐101 Report on Mineral Resource Estimate completed in April 2010

• Current Resources (April 2011):

• Some high grade intercepts not yet included

• Strong chargeability anomalies (porphyry copper possibility)

• Target: 15‐20 million tons, 1.1‐1.4 g/t Au, open pittablematerial

M R L G O L DPHILS., INC.

EXPLORATION UPDATES


WHERE ARE WE NOW?1) Most deposits being developed are previous discoveries and mines (very

few recent discoveries).

2) Of the four (4) porphyry copper deposits discovered in the last 20 years, three (3) are blind.

3) Exploration is focused on conventional metals – Cu, Au, Ni, Fe. So called “Critical” and “Hi‐tech” commodities (PGMs, Mo, Te, Co, Ti, V etc.) are largely ignored.

4)Very little (new) research / information generation.


STATEMENT:A critical strategy in promoting the exploration and development of the country’s mineral resources is the provision and/or availability and accessibility of geologic information.

QUERY:How many more deposits like Boyongan, Tampakan and FSE do we potentially have?

Looking back:Government geological and exploration projects 1960’s‐mid 90’s:

MGB IN-HOUSE PROJECTS FOREIGN ASSISTED PROJECTSSamar‐Leyte Copper‐Aluminum Project RP‐Japan Project

Pig Iron Project (Ilocos Norte et al.) UNDP Gold‐Copper Project

Bicol Gold‐Uranium Project RP‐Korea Project

Surigao Nickel‐Iron Project RP‐Japan‐US Gold‐Platinum Project

Southern Negros Geochemical Project UNRFNRE Nickel‐Chromite Project

Researches (ophiolite, porphyryr Cu, epithermal Au, PGMs, Mineralogy) RP‐France Philippine Fault Project

Regional mapping, mineral investigations, etc. RP‐BGS Non‐metallics Project


QUERY:What is the potential of high technology minerals in the Philippines?

In retrospect:Tellurium: Many epithermal gold deposits have Te by‐product

potential

Molybdenum: Porphyry Cu (e.g., Basay, Polillo) and some epithermal deposits (Runruno) have significant Mo content; Mo veins in east Mindanao.

PGMs ‐ Acoje produced Pt and Pd from pentlandite; occurrences reported in Samar and Bislig‐Lingig; “merenskyte” discovered by MGB in porphyry Cu‐Au deposits.

Cobalt – Many nickel laterite deposits contain significant amounts of Co.

Titanium, Vanadium – Magnetite sand deposits in the Philippines are known to contain ilmenite and rutile


QUERY:What data are available and accessible?

FACTS:• An integrated database is needed to address

data accessibility

• Each company tries to build a country‐wide database system

• Neighboring countries (Vietnam, Cambodia, Myanmar and Laos, Indonesia, Thailand and Malaysia) have embarked on the serious business of constructing their databases to support and sustain their mineral industries


MOVING FORWARD:1) Government and private sector partnership

(i.e., PPP) for cooperative exploration efforts.

2) Revive regional studies on a higher level (remote sensing, regional airborne geophysics) aimed at giving clues to sites of blind deposits.

3) Revive research projects aimed at defining the potential of strategic, critical and high technology minerals and their value adding capacity to conventional products.

4) Government and industry cooperation in establishing an integrated database system and make it available on a pay‐per‐use scheme.

Fernando G. SajonaGeneral Manager

BRASS Technologies Inc.Consulting Geologist

Edwin G. DomingoDirector for Foreign Assisted Projects

Department of Environment and Natural Resources

Education

Philippine Mineral Exploration Perspective - Sajona-Domingo