Located in Surigao del Norte, at the northern part of the Philippines' second-largest island of Mindanao, the Silangan project combines the development of the Boyongan and Bayugo deposits, which are comprised of gold, copper, and silver.
In Februrary 2009, Philex Mining Corp. consolidated its interests in Silangan project by purchasing the remaining 50 percent equity interests held by Anglo American Exploration BV and Anglo American Exploration (Philippines), Inc. for a consideration of $55 million.
The project is covered by the Mineral Production Sharing Agreement (MPSA) 149-99-XIII and Exploration Permit (EP) XII-03. The exploration efforts for 2011 focused on three major objectives: (1) the formal declaration of mineral resource complaint with the Philippine Mineral Resource Code (PMRC); (2) the development of the exploration decline aimed at reaching the deposits at depth needed for further assessment; and (3) the initiation of engineering studies and development infrastructure in support of the feasibility study.
The early part of 2011 was devoted to data compilation, data integrity tests, deposit modeling, and resource estimation. This effort utilized information coming from more than 130,000 meters of drill core samples that were subjected to detailed mineralogical logging, geomechanical logging, specific gravity measurements, and multi-element assays.
In July 2011, a PMRC-compliant mineral resource for the Boyongan-Bayugo deposit was disclosed. The combined Measured + Indicated Mineral Resource for Boyongan is 273 million tons of 0.52 percent copper and 0.72 grams per ton (g/t) gold and, for Bayugo, 125 million tons of 0.66 percent copper and 0.66 g/t gold.
Technical Report on the Boyongan-Bayugo Deposit
Exploration portal and decline
The exploration decline toward the orebody was recommended as part of the prefeasibility study to assess the ground condition of the deeply buried deposit. Geotechnical investigation and detailed mapping was initiated at the proposed site of the portal and along the proposed stretch of the exploration decline. Fifty-eight geotechnical holes, with an aggregate meterage of 3,411 meters, were completed.
The portal development started in April 2011 while the first blast was done on Aug. 10, 2011, after which development ensued swiftly for 60 meters until the poor ground quickly succumbed to high pore water pressures from heavy rainfall. At this point, it was decided that the development of the decline would be put on hold to facilitate the study of various options on how to advance the decline and reach the deposit at depth.
The design of the proposed declaration decline toward the Boyongan and Bayugo deposits
Silangan Project's portal
Engineering studies, infrastructure support
Several support activities were also done to advance the prefeasibility study of the project. These were (a) mining studies by SRK Vancouver; (b) metallurgical test works by Arizona-based KD Engineering and Metcon Research; and (3) engineering studies done by Golder Associates, of Perth, Australia, for the proposed tailings storage facility. Aside from minor infrastructure at the portal site, the Philex Mining also invested P15 million in laying 3 kilometers of electrical transmission line from the local grid to the portal. This was undertaken in partnership with the local power cooperative SURNECO. In addition, the improvement of the access road from the national highway to the portal site was studied and initiated.
The Kalayaan Project covers 286 hectares immediately north of the Silangan Project area. Although this joint venture with the Manila Mining Corp. was signed on May 11, 2011, drilling work did not start until December 8, 2011 due to accessibility issues with the local communities and surface landowners. Until that time, the exploration team concentrated on drilling preparations and the development of community projects, which primarily involved the rehabilitation of the Makalaya-Anislagan Provincial Road, the construction of the Kalayaan Project tree nursery, 10 major silt traps, drilling camp, and stockyard. The drilling started with the initial mobilization of two drilling rigs tasked with definition drilling of the resource previously identified by Anglo American. By the end of 2011, the drilling meterage totaled 900 meters.
The Magpayang Project was implemented to follow up on the old exploration work done by Anglo-American in the surrounding areas south of the Boyongan deposit. It was deemed that the previous exploration work was not conclusive enough as only two scout drill holes reached the paleosurface. In order to refine the drilling targets, Philex Mning conducted a more traditional approach of detailed mapping simultaneously with multi-element soil geochemical survey. These were all accomplished in 2011, and the results will undergo processing and interpretation. Relevant geochemical anomalies will be subjected to geophysical surveys, hoping that the methods would enable the exploration team to peek through the sedimentary cover and select credible targets for scout drilling in the future.