Filminera Resources Corp. (FRC), a Canadian-Filipino partnership, is eyeing construction in August-September this year of the million Masbate gold project to cash in on investments from now lucrative gold price in a prospect drilled since the 1990s.
"The feasibility study (FS) will be finished in two weeks (after which) we’ll work on bank financing," said FRC regional manager for Asia Johan Raadsma in an interview.
The FS will be presented before the FRC board next month for approval prior to seeking bank financing for the mine’s development and production by the third quarter of 2007, another company official said.
There have been companies that signified interest in financing the project, but officials refused to disclose this until agreements are finalized.
The Masbate prospect earlier went through an FS conducted by Base Metals in 1997-1998 until Canada-based Thistle Mining Corp. (TMC) which owns 40 percent of FRC through subsidiary Philippine Gold UK (PGU) took over.
Another local firm, Open Pit Holdings, owns 60 percent of FRC.
When it begins producing in September 2007, Masbate gold will have a throughput of 12,000 metric tons per day at 1.4 grams per ton of ore or four million tons annually with a possible mine life of 14 years.
Potential investment is at $ 85 to $ 90 million and potential gross sales is at $ 74 million per year. The project will make use of carbon in leach (CIL) process which will use cyanide for gold recovery.
Current employment is at 85 persons which will increase to 1,000 during construction and will then drop to 620 during operations.
With this development along with the surging price of gold that’s seen to hit $ 1,000 per ounce from the now 25-year high $ 600, TMC and PGU are now eyeing a relisting in the Toronto Stock Exchange after suspending trading for some time.
AS it is has to work on bank financing, FRC has so far not yet committed its production to forward sales "but we’re talking to gold buyers where production will be consigned," an FRC official said.
The Masbate project is located near the northern tip of Masbate island, 360 kilometers south-east of Manila. Its mineral production sharing agreement (MPSA) covers 8,336 hectares, and its reserve is placed at 71.3 million tons containing 1.35 grams per ton or 3.09 million ounces of gold.
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