Xstrata Copper acquired 62.5% of Sagittarius Mines, Inc., in March.
The firm was supposed to have proceeded to the feasibility stage but in a press conference at the Orange Bistro here, SMI officials said Xstrata Copper has decided to extend the pre-feasibility studies made by Australian firm Indophil Resources NL “to validate the extent of resources in the project development site.”
“It is still conducting drillings and the pre-feasibility study is targeted for completion by the third quarter of 2008,” said Bella Lechonsito, SMI community relations and development affairs superintendent.
Resources at the Tampakan project, which straddles the towns of Tampakan in South Cotabato, Columbio in Sultan Kudarat and Kiblawan in Davao del Sur, are pegged at about two billion tons, containing 11.6 million tons of copper and 14.6 million ounces of gold at a 0.3% copper cut-off grade, the Indophil pre-feasibility study completed in September 2006 showed.
The pre-feasibility study, done at the cost of $27 million Australian dollars, proposed that excavation of resources would be conducted using the open pit mining method.
But Roy Antonio, SMI senior coordinator for corporate affairs, said that since the company is still not finished with its technical work, “it can’t be ascertained at this point” if open pit mining would be employed.
He estimated that the additional amount Xstrata will release for the extended pre-feasibility study would cost not less than P1 billion for this year alone. The study will be fully funded by Xstrata.
Antonio added that a separate annual budget for next year’s phase of the extended pre-feasibility study is currently being prepared.
Antonio, however, could not tell reporters how much share the local government, national government and SMI will get but stressed the mining law provides “a basic percentage that should go to the government plus a share that would be determined by the company.”
Antonio noted that the Department of Environment and Natural Resources has issued a new regulation regarding fiscal regime or the sharing scheme between the company and the government.
Rolando Doria, SMI local government and regional affairs superintendent, said the company has reduced its exploration area under the Columbio Financial and Technical Assistance Agreement from 99,000 hectares to around 23,500 hectares.
He added that the final study would have to undergo the scrutiny of the affected communities before the company would be given clearance to excavate the resources.
“Maybe it will take two to three more years before we can start full-blast operations,” Doria said. (MindaNews)