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Philippines

Tenements containing the Apical and Corplex Projects are still in the application stage.


Figure 1: Tenement location map showing mines and prospects
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EXPLORATION AND DEVELOPMENT PIPELINE

Over the last eleven years the Company acquired a portfolio of tenements with numerous prospects that range in stages of advancement, from ‘greenfields’ through to ‘resource definition’. Additional information is contained in the announcement dated 21 January 2015.

Currently only the Bananghilig Deposit has significant resources besides the operating Co-O Mine. Bananghilig is undergoing further geological work prior to advancing the scoping studies.

The principal aim is to advance each prospect towards resource definition, to build a resource base and contribute mill feed to the current Co-O Mill operations, and/or develop stand-alone mining/milling operations.

Whilst there are many tenement applications still in the process of approval, the majority of the prospects are located within the granted tenements, and are able to be advanced systematically.

The exploration status classifications for each prospect, up to Scoping Study are shown in Figure 2 and defined as follows:

(i)           Target Inventory: known prospects without any surface work;

(ii)          Target Reconnaissance: known prospects subjected to first pass field assessment, usually involving visual inspection, reconnaissance mapping and surface sampling

(iii)        Target Generation: involves detailed mapping, trenching, possibly ground geophysics and data compilation to generate targets for drilling

(iv)        Scout Drilling: drilling to determine if mineralisation exists has been undertaken

(v)         Resource Drilling: current drill hole spacing is deemed sufficiently close to define a resource

Figure 2 shows the current exploration status for each known prospect. In the Co-O Mine environs, the Tinago Vein set, East Agsao and West Road 17 are high priority.

In the Tambis region, Bananghilig (B1) is undergoing additional geological work prior to estimation of new resources and re-visiting scoping studies. Since B2 is an extension of B1, further work is dependent on the outcome of B1 studies.

Guinhalinan is the current high priority greenfields prospect in the Tambis region.

 

TENEMENT RATIONALISATION

Following a comprehensive evaluation of exploration data acquired and compiled over the last eleven years, the Company has recently completed a review of the prospectivity of its tenement holdings to relinquish areas, which are now considered to not warrant further work.

The reduction in each selected tenement area is based on a combination of downgrading of geological prospectivity, as determined by remote sensing interpretations, reconnaissance exploration, unfavourable surface features, such as extensive swamp areas which do not permit viable exploration, and conflicting land use areas, such as rice fields and urban areas.

The review has resulted in an overall reduction 806.5 km² to approximately 596 km². The reduction consists of a combination of area reductions for granted tenements, tenement application relinquishments and partial area reductions in some tenement applications.

The revised tenement map and schedule is shown in Figure 2 and Appendix D, respectively.  Additional information is contained in the announcement of 21 January 2015.

 

FUTURE POWER SECURITY

As announced on 18 December 2014, the Company has been granted 9 Coal Operating Contracts (COC’s) totalling 9,000 hectares within two areas immediately adjacent to the east side of the Co-O operations (Fig. 1). Multiple coal seams have previously been scout drilled, outcrop sampled and assessed by previous explorers.

Additional geological and other information is contained in the 18 December announcement. Previous work by Philippine National Oil Company (PNOC) in the 1980s, classified the coal in both areas as ‘sub-bituminous B’ to ‘high-volatile bituminous A’ coal using the American Society for Testing and Materials (“ASTM”) classification scheme. Average heating values for samples obtained by PNOC from within COC Area 7 were previously reported ranging from 2,900 BTU/lb up to 10,600 BTU/lb, and averaging 6,500 BTU/lb.

Figure 2.Exploration portfolio showing current status of each target
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