LONDON (Thomson Financial) - Xstrata PLC said the resource...

LONDON (Thomson Financial) - Xstrata PLC said the resource estimate for the Tampakan copper-gold project in the Philippines has been increased by over 10 pct, consolidating Tampakan's position as one of the largest undeveloped copper deposits in South East Asia, and raised inferred resource estimates at the Raglan nickel operation in northern Quebec.

The upgraded measured, indicated and inferred resource at Tampakan totals 2.2 bln tonnes at a grade of 0.6 pct copper and 0.2 grams per tonne gold and contains 12.8 mln tonnes of copper and 15.2 mln ounces of gold using a 0.3 pct copper cut-off grade. The resource estimate also includes average grades for molybdenum of 70 parts per million (ppm).

It is the first resource estimate published by Xstrata Copper since it assumed management control of Tampakan in March 2007. The previous resource estimate of 2 bln tonnes at 0.6 pct copper, using the same cut-off grade, was published in April 2006.

Xstrata said the Tampakan deposit is the largest development project in Xstrata Copper's portfolio.

"We continue to look for growth opportunities through improvements at existing operations, acquisitions and the development of our strong project pipeline," said Peter Forrestal, Xstrata Copper's executive general manager of project development.

Xstrata Copper, the world's fourth-largest copper producer, plans to complete a feasibility study in the second half of 2009.

The company also announced it has signed a strategic alliance with engineering and construction group Bechtel to help accelerate the development of Xstrata Copper's pipeline of copper projects.

Xstrata hopes the alliance will result in the design of a replicable copper concentrator and other facilities that could be applied to Xstrata Copper's individual projects and help reduce the engineering time and costs on individual projects.

Future work to assess Antapaccay and Las Bambas in Peru and El Pachon in Argentina will be undertaken under this alliance and additional projects will be added as appropriate.

In a separate statement, Xstrata Nickel said exploration results at the Raglan operation have confirmed Zone 5-8 as the largest mineralized zone in Raglan's history, adding an estimated 4.5 mln tonnes of inferred resources in 2007, up from the 2 mln tonnes of resources previously announced.

Zone 5-8 now contains proven and probable mineral reserves of 0.8 mln tonnes at 3.02 pct nickel and 0.80 pct copper, measured and indicated mineral resources of 0.4 mln tonnes at 1.30 pct nickel and 0.35 pct copper, and inferred mineral resources of 11.5 mln tonnes at 3 pct nickel and 0.8 pct copper.

In August, Xstrata Nickel announced plans to increase mine production at Raglan to more than 2 mln tonnes of ore a year. Work is under way to increase production to 1.3 mln tonnes per annum by the end of 2008 and additional infrastructure is expected to allow a further expansion to 1.5 mln tonnes by 2011 and potentially double current output by 2013.

After the expansion, Xstrata said Raglan will be one of the largest nickel mines in the world, with output approaching 50,000 tonnes of contained nickel-in-concentrate per annum, together with copper and platinum group metal by-products.

The company will invest more than 200 mln usd in further exploration activity at Raglan over the next five years.

Raglan consists of three mines and has a fourth mine under construction. Ore from the mines is crushed, ground and processed into nickel-copper concentrate at the Raglan concentrator, and shipped to Xstrata's Sudbury smelter for further processing before being sent to the group's Nikkelverk refinery in Norway.

Late last night, Xstrata also announced that it had made 960 mln aud cash offer for Australian coal miner Resource Pacific Holdings Ltd, beating an earlier 780 mln aud share offer from Queensland coal miner New Hope Corp.

At 8.09 am, Xstrata shares were up 93 pence, or 2.8 pct, at 3,413 pence. [email protected] jc/lam