A relative newcomer, Philippine Metals started trading on the TSX Venture Exchange on 7 April 2010. Nevertheless, it has wide local knowledge, a strong management team and what company President and Director, Marshall Farris, describes as “three company-maker projects”.
The Bre-X scandal of 1997 resulted in a lack of finance for mining businesses across South-East Asia. At the time, most large-scale projects in the Philippines were controlled by major mining companies. Many of these abandoned the country so that underlying property payments on the projects were left unpaid. This gave the opportunity to renegotiate long-term future payments and pick up some of the best mining projects in the country.
A number of new public companies resulted, including Philippine Metals, who listed through a reverse takeover with New Meridian Mining Corporation. At the time of the listing, Marshall Farris commented: “We’ve just carried out $5 million financing in taking our company public and ended up having it oversubscribed by 45% and closing on $7.2 million.”
Mineral Rich
He explains the attractions of the region: “The Philippines is one of the most mineral rich countries in the world. You’re on the doorstep to China, India, Korea and Japan, which are driving the metal markets.”
Marshall is keen to stress that the company has its roots firmly established in the Philippines: “We’re proud to be in the Philippines. We’ve assembled a very strong team of both Filipino and international mining and business executives. We’ve done that because we want to be viewed as a Philippine mining company exploiting foreign capital to create wealth in the Philippines, not the other way round. Most other companies are foreign mining companies exploiting the mineral wealth of the Philippines. So, we’ve built a strong local team. We have three advanced-stage projects and we’ve got a proven track record of working with local communities and government.”
In addition to Marshall Farris, who has experience in corporate operations and running other Philippine mining companies, there’s Louis Clinton, a past President of Freeport McMoRan Pacific. “With over 35 years experience in South-East Asia, I believe we have one of the most experienced mining executives on the board of our company,” remarks Marshall.
Director Roberto Delgado runs an Asia-based conglomerate of thirty companies that have over 15,000 employees. New Chief Financial Officer Nigel Kirkwood spent the previous nine years working for Citigroup while chief geologist Jose Garcia has extensive experience with exploration activities and mine operations with Lepanto.
Corporate Secretary Leo Dominguez is a senior partner with law firm Baker and McKenzie’s Philippine operations and was co-author of the 1995 Philippine Mining Act. Director Arthur Aguilar previously ran TransCo, the country’s power grid operator, and was responsible for making it the Philippines’ largest privatization transaction.
Three Projects
The experienced team combines local and international knowledge and is responsible for three projects at advanced stages of development. “The first one is the Taurus Project,” says Marshall, “where we’ve consolidated fourteen different landowners’ land packages and, potentially, an entire mining camp. It’s a 17.6 kilometer long mountain range that has six high grade, past producing, copper mines on the property. And none of these mines have ever seen modern-day mining exploration.”
Taurus is the company’s first high-grade copper project and there are historic records indicating that mines were running 5-10% copper. “Our target here is to string together 25 million tons of 2-3 % copper, sign an off take agreement and fast track the project into production,” comments Marshall.
The second project is the Malitao Project. “This is the most exciting project I’ve seen in my career,” remarks Marshall. “The project is in the northern tip of the Philippines, in a province called Kalinga-Apayao, where we have a very strong relationship with the governor and the community. In fact, the community just signed a memorandum of understanding with our company to move the project forward.
“What we have here is a 972 hectare land package. A company called Philex Mining was in there looking for a gold project in 1970 and what they came up with is a 2.5 kilometer circumference copper anomaly, with massive sulphide boulder fields on either side. We have an outcrop on surface 2 to 40 meters wide, 277 meters long with 100 meters of elevation going into the side of the mountain. We sent an NI 43-101 compliance independent geologist in to do a study before we agreed to buy the property. He took 28 bags of grab samples, going up to 277 meters of outcrop, and sent them off for fire assay. The samples came back averaging 34% copper, 3% zinc, 17.5 ounces per ton silver and 1.2 grams gold per ton — just astronomically high grades. Our strategy is to get in immediately and carry out systematic, professional mining exploration techniques to advance this project.”
The third and most advanced project is Dilong, which was initially discovered in 1970 by the Benguet Corporation. The conditions at the time required 3% copper and close proximity to infrastructure in order to make economic sense. However, times have changed and projects that were drilled and abandoned then are now very attractive today.
Marshall comments: “We have all the drill data from Benguet – some 6,000 meters of drilling, 27 drill holes. W.E. Hale and Associates of Australia (1980) took that old data and strung together a historic resource of 40 million tons of positive resources — 0.5% copper and half a gram gold — and 120 million tons of potential reserves running 0.41 copper and 0.35 grams gold. What we’re really excited about is that all the drilling is in just a fraction of the exposure on the surface. We have a five kilometer long copper mineralization and outcroppings on surface up to one kilometer wide.”
“In this historic drilling the deepest drill hole was 250 meters deep and stopped in mineralization. So it’s open at depth in all directions. This has tremendous potential to add significant value to our company. Once we get the exploration permit, the strategy is to go in and turn that entire dataset into an NI 43-101 resource. But we won’t stop at 250 meters, we’ll drill to possibly 700 meters and we’ll step out where it’s still open and see how big the system really is.”
The company’s projects make it an attractive investment. Added to which, it has around 44 million outstanding shares, $6 million in the bank and a small market capitalization. “We think there’s a tremendous opportunity for our company to see significant wealth creation,” concludes Marshall.
For more information:
http://www.philippinemetals.com
Marshall Farris, President; Jamie Mathers, Investor Relations
marshall@philippinemetals.com; jamie@ascentacapital.com
604.684.4743 ext. 222 604.684.4743 ext. 236
604.837.4774 (cell) 1.866.684.4743 ext. 236
www.philippinemetals.com