Australian miner Red 5 Limited has found evidence of gold at the Mapawa drilling site near its Siana gold project in Surigao del Norte.
“We’ll conduct more tests to establish mineralization in the area," Managing Director Greg Edwards said last week.
An updated report showed the inaugural deep drill hole at Mapawa had been extended by 100 meters beyond the original plan to a final depth of 546 meters.
The report said the first hole intersected 189 meters at 1 gram per ton (g/t) of gold and 0.17 percent copper. The second hole was completed at 560 meters.
Edwards said the company was on its third hole, which could go down to a depth of 1,000 meters.
The company started drilling at Mapawa last January.
Edwards said the company has enough resources to pursue an active exploration program. Initial budget for exploration and drilling is about P150 million.
“Estimated development could take about three or four years," Edwards said.
Meanwhile, the company expects to start mining construction at its $35-million Siana Gold project in southern Philippines by the second quarter of next year.
The report said the pre-feasibility study of the Siana Gold project would be completed in the next few months and that the project could start early next year.
The company is in talks with seven foreign banks, including ABN Amro Bank and MacQuarie Bank Ltd., to fund the project.
Tenement holder JCG Resources and Red 5, together with partners Merill Crowe, Surigao Holdings and the Philippine Employee Fund, have pooled their resources to form joint venture company Greenstone Resources Corp. to take care of operations at Siana Mine.
Company comptroller Lolot Manigsaca said 40 percent of the capital investment would come from Australia, where the Red 5 is listed. The balance will be funded by loans.
Based on the feasibility study, inferred resources are about 6.69 million metric tons that will churn out 1.2 million ounces of gold at 5.2 grams per ton and 2.09 million ounces silver at 9.7 grams per ton with a 12-year mine life.
The first six years of development will be operated via an open pit structure, while the last 6 years will be through underground mining.
The project is estimated to contribute as much as P6.8 billion in community and government taxes — P3.11 billion in value-added taxes and duties, P2.45 billion in corporate income taxes, P668 million in excise taxes, P508 million in local taxes and fees, and P130 million in social development management projects. — NPA
