Philex Mining Corporation is ramping up exploration activities in its Bayugo prospect in Tubod, Surigao del Norte after initial mineral resource estimate showed 85.7 million dry metric tons (dmt) of indicated resource and 32.7 million dmt of inferred resource.

In a disclosure to the Philippine Stock Exchange, Philex president Jose Ernesto C. Villaluna Jr. said the Bayugo mineral deposit is a porphyry-hosted copper gold occurrence in an island-arc setting, located within areas covered by MPSA 149 and EP13 and about one kilometer northwest of the Boyongan copper gold deposit.

Boyongan and Bayugo are within the Silangan property in which Philex has a 50 percent interest (purchased earlier from Anglo American) and the other 50 percent is held by 81 percent-owned Canadian unit Philex Gold Inc.

Philex said external consultants of Philex Gold and in-house geologists of Philex Mining have estimated a cut-off grade of 0.4 percent copper based on drilling and assay results from 43 exploration holes available on September 30, 2009.

The Bayugo deposit is now comparable to the Boyongan deposit, which was previously announced at 104 million dmt of Measured and 19.8 million dmt of Inferred resource.

Meanwhile, Philex and Philex Gold have deployed eleven drill rigs in the Bayugo area to hasten the step-out and in-fill drilling to elevate the status of inferred resources to the Indicated category which is necessary for the completion of the pre-feasibility study.

The current drilling at Bayugo deposit has defined an outer limit copper-gold zone which approximately measures 1,000 meters by 300 meters in area with thickness of 400 meters.

The resource estimates use the definitions and guidelines of the Philippine Minerals Reporting Code (PMRC) and the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) standards and definitions.

Noel Oliveros, a geologist and a Competent Person (CP) accredited by the Geological Society of the Philippines, is responsible for the technical report.

He is the Exploration Manager of Philex in charge of the Silangan property that includes the Bayugo area. He has more than 20 years in the field of mineral exploration, most of it spent on porphyry copper gold deposits.