TORONTO (miningweekly.com) – The Philippine Mines and Geosciences Bureau (MGB) has given the green light to TSX-listed St Augustine Gold and Copper’s (SAGC's) joint venture partner, Nationwide Development Corporation (Nadecor), to proceed with the development of the King-King copper/gold project, located on Mindanao, the second-largest and southernmost significant island of the island nation.
The bureau's approval of the declaration of mining project feasibility (DMPF) was the last step before development could start.
"Receipt of the DMPF removes the last significant hurdle to move forward with the development of the King-King project and represents our most significant milestone to date. We look forward to working with Nadecor and all local stakeholders to take King-King to the next stage of development,” commented St Augustine president and CEO Paolo Villar.
Under the order dated December 29, 2015, Nadecor had been authorised to proceed with the development and operating stages of its mineral production sharing agreement (MPSA), which included the extraction and sale of copper, gold and associated minerals within the 1 548 ha area. St Augustine acted as the exclusive technical services provider of Nadecor.
After five years in the making, the DMPF represented comprehensive technical, environmental, social and community engagement efforts completed by the JV partners and related advisers.
With the approval of the DMPF, Nadecor and SAGC would work cooperatively to advance the project to construction, followed by operation of the mine. Development of the King-King project was expected to impact positively on all project stakeholders and the community at large, and had been designed to minimise any environmental impact.
MAJOR PROJECT
A 2013 preliminary feasibility study on the King-King copper/gold project – believed to be one of the largest undeveloped gold/copper deposits in the world – estimated the pretax net present value to be $2-billion and a pretax internal rate of return of 24.8%, using an 8% discount rate.
The price tag of $2.04-billion included construction of the mine, the mill, an on-off leach pad, a power plant, a port facility and $240-million in contingency costs.
The ore delivery and processing rate would be 100 000 t/d, split between 40 000 t/d to an on-off heap leach pad and 60 000 t/d to a flotation mill with agitated tails leach. The mining rate would total about 178 000 t/d for the 22-year mine plan.
Production from the heap leach process was expected to start one year ahead of starting the mill. The proposed openpit mine and processing plant would produce copper/gold/silver concentrate, copper cathode, and gold doré bullion.
The company said at the time that King-King’s robust project economics were largely driven by an initial five-year higher-grade operation, with a low strip ratio and tidewater proximity.
The average yearly output during the first five years of full production was expected to total 270-million pounds of copper, 360 143 oz of gold and 568 958 oz of silver, with an average gold-equivalent total cost of $454/oz.
Over the life of the operation, King-King was expected to produce about 3.16-billion pounds of copper, 5.43-million ounces of gold and 11.65-million ounces of silver.
King-King was one of several significant Philippine mining projects that were unaffected by a moratorium on approvals for new production as the project was already in an advanced stage before the ban took effect.
St Augustine’s TSX-listed stock on Wednesday closed up 21.05%, or C$0.02 per share, at C$0.12 apiece.
Edited by: Samantha Herbst
Creamer Media Deputy Editor
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