Unlisted Philippine firm Jake Mining Corporation said on Friday it was in talks with seven to eight foreign groups to develop a gold and copper prospect in southern Philippines that has the potential to be one of the country's biggest mines.
Exploration and development costs of the 950-hectare mining area inside the Diwalwal Mineral Reservation was initially estimated at $1 billion to $2 billion, said Eric Tagle, president and chief executive of Jake Mining.
Jake Mining is able to explore the area, about a tenth of the Diwalwal Mineral Reservation which includes the site of the gold rush in the 1980s, after getting the approval of all four indigenous tribes in the area, as required by law.
The tribes' approval addressed a key concern of potential investors, and Tagle said the company was in initial discussions with listed firms mining based in China, Canada, Australia, the United States and Singapore for a partnership.
"They are all publicly listed," Tagle told reporters. "China is the number one suitor." The site has gold reserves with an average grade of 3 grams per tonne and copper at 13 percent, Tagle said.
The Philippines sits on an estimated $1 trillion of untapped mineral deposits, but foreign miners have found concerns about contracts, governance, corruption and security make it hard to operate in the country and so investment remains low.
HIGH GRADE Tagle said the initial agreement with the tribes, which for years have been at odds among themselves due to competing interests over the mining area in Compostela Valley on Mindanao island, includes a total gross revenue share of as much as 4 percent from the project upon operation. He said the revenue-sharing scheme has to be finalised and approved by any prospective investor. The investor would also need to finance a formal study to determine the exact volume of mineral reserves in the area.
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