philex in talks with indophill

Philex in Talks to Acquire 37.5% Stake of Indophil in Tampakan Mine Project
September 16, 2010, 8:18pm
Philex Mining Corp. said that it is in discussions with Indophil Resources to buy the remainder of Indophil's 37.5% stake in the Tampakan copper-and-gold project in the southern Philippines.

The deal would give Philex a significant stake in one of the Philippines' biggest mining projects, as mining investment in the country is set to pick up sharply over the next few years.

Philex has already acquired a 3% interest in Tampakan from Indophil, and is now in talks to acquire Indophil's remaining 34.5% stake in the project, controlled and managed by Anglo-Swiss miner Xstrata PLC), Philex president Ernesto Villaluna told reporters at a mining conference. Xstrata PLC's Tampakan copper-gold project in the southern Philippines is expected to contribute a total $40 billion to the Philippine economy over the project's mine life, a company official said.

Project manager Mark Williams told a mining conference the project is also expected to contribute an additional 1% every year to the country's gross domestic product.

The company is currently conducting due diligence on the Tampakan project, he said adding that "nothing has been finalized yet."

"All possibilities are being discussed at the moment."

Tampakan has a total resource estimate of 2.4 billion metric tons, at a grade of 0.6% copper and 0.2% grams a ton of gold. Development cost of the project is estimated at $5.2 billion.

Villaluna said Philex is also looking at the possibility of taking a stake in Oceana Gold Ltd.'s Didipio copper-gold project in the northern Philippines.

"We are always looking for good opportunities in mining."

OceanaGold suspended work in Didipio in mid-2007 as project costs increased to $320 million from an initial estimate of $155 million, prompting the company to seek a joint venture partner.

Talks with potential partners haven't progressed.

Didipio has reserves of around 20 million metric tons, at 1.7 grams of gold a ton and 0.65% copper. (Dow Jones)