Padcal mine, which Philex Mining Corp. has been operating since 1958, is the first underground block cave operation in the Far East. It produces copper concentrates containing copper, gold, and silver. A majority of the copper concentrates are shipped to Saganoseki, Japan, for smelting by Pan Pacific Copper Company Limited, a joint venture between Nippon Mining Co. Ltd. and Mitsui Mining and Smelting Co. Ltd.
The Padcal mine is under 12 mineral holdings, with an aggregate 95 hectares in Benguet province which are subject to royalty agreements with claim owners.
Exploration activities in Padcal and its vicinity were pursued in three areas in 2011: the Sto. Tomas II orebody, which is below 773 meter level (ML), Bumolo, and in Southwest prospects. The Sto. Tomas II orebody is covered by the Mineral Production Sharing Agreement (MPSA) 276-2009-CAR, or Cordillera Administrative Region. The Bumolo and Southwest prospects are within MPSA 156-2000-CAR.
Within the Sto. Tomas II orebody, underground diamond drilling was continued at 773 ML which aimed to explore the vertical extension of the orebody. An additional 10 holes were drilled in 2010 for an aggregate meterage of 4,802 meters. This meterage and those in the previous two years resulted in the definition of a significant volume of mineral resource between 600 ML and 782 ML that could potentially extend the mine life of Padcal beyond 2020.
In Bumolo prospect, located northeast of the Sto. Tomas II orebody, the target drilling--started in 2010 to investigate the soil geochemical anomaly--was followed by the completion of three additional holes with an aggregate meterage of 1,286 meters. The drill holes intersected intrusive bodies with lower grade mineralization that appears to have diluted an originally good grade deposit delineated earlier near the surface. Good grade mineralization thus appears to be limited near the surface of the prospect. A modest mineral resource tonnage maybe realized from the prospect when the ongoing estimation is completed.
The southwest prospect lies less than a kilometer from the Sto. Tomas II orebody. A breccia body, which was identified as a diatreme breccia, was confirmed after the old drill cores were reviewed and relogged in 2011. Gold and copper mineralization was validated after the old drill cores were re-assayed. Limited mapping and sampling was conducted in 2010 due to community issues. Pending the resolution of access to the property, the company decided to drive an underground exploration tunnel at 908 ML leading to the prospect. The tunnel reached 300 meters and a drilling pad was constructed near its face. The first of a number of exploration holes was collared in that pad and reached 148.5 meters depth as of Dec. 31, 2011. Drilling intercepted a breccia body with marginal grade of gold and copper.
Two other prospects--Clifton and Bumolo 2--that were lined up for investigation in 2011 did not materialize. The social license for Clifton has been stalled as the communities raised new demands and the National Commission on Indigenous Peoples (NCIP) suspended the Free and Prior Informed Consent (FPIC) pending the issuance of a new guideline. Bumolo 2, located northeast of the Sto. Tomas II orebody, similarly became inaccessible to the exploration team because of overlapping claims among surface owners. Only limited stream sediment sampling in a small area outside of the known target was allowed.