MAC/20: Mines and Communities

Philippines update

Published by MAC on 2007-05-09


Philippines update

9th May 2007

Catholic Bishops have called on voters in the forthcoming Philippine election to consider the track record of every candidate in regard to logging, large-scale mining, and other ecological concerns. DCMI (not to be confused with minerals company, DMCI) has issued a follow-up press release on the April 2nd tailings "incident" at TVI's Canatuan mine - with photographic evidence of the breaches. Using the money, UK-Swiss based Xstrata is investing in the Tampakan project, Indophil is looking to expand its portfolio of mines outside the Philippines, while APC Mining, Philnico and Rusina are all looking to expand within the country.


Subanon Accuse TVI of "Lying Again"

Press Release - Tito Natividad Fiel, DCMI (DIOPIM Committee on Mining Issues)

7th May 2007

The Subanon of Mount Canatuan in Tabayo, Siocon Zamboanga del Norte, under Timuay Jose 'Boy' Anoy, refute the explanation of the Canadian mining company TVI Pacific when it denied the reported collapse of its tailings dam on April 2 2007.

***** Photograph showing TVI's Gossan Dam showing the breach on April 2nd

Anoy's son, Nano, told DCMI (DIOPIM Committee on Mining Issues) on April 26 that he personally witnessed the collapse of TVI's sulphide dam and even provided pictures that he took to validate his findings.

He claimed that TVI's engineering department panicked, and as they could not get their act together they took remedial actions to prevent the information from coming out into the public domain.

"Several pieces of equipment, like welding machines, were dragged away by the force of the water and are now reportedly missing ", Nano Anoy added.

He took issue with the article issued posted by TVI on the internet and in the newspaper which quoted TVI public affairs director Rocky Dimaculangan and Vice President for environment and civil works Jay Nelson, who both said the company's sulphide dam "is still very much standing".

Dimaculangan even challenged those who had circulated the news of the tailings dam collapse to confirm what they said was true. "Those who are peddling the wrong information you may visit the Canatuan Gold and Silver Open Pit mine site in Siocon and see for yourself the actual situation", he said.

Nelson added the "very red" water flowing through the Lituban River after a heavy downpour was not a mine-tailing leak but was from eroded soils and red soil run off.

But Charles Alferez, Executive Director of DCMI whose office released the information to the public about the collapse of the TVI sulphide dam, said that they were relaying the description of the affected communities on Mount Canatuan that the "TVI constructed sulphide dam collapsed".

However, Nano Anoy said that the truth was that different siltation dams surround TVI's open pit mining operation, within the Ancestral Domain of "Timuay" or Chieftain Jose "Boy" Anoy. The company's engineering department refers to them as sedimentation dams. The company built these dams.

Anoy described the layout of the dams noting that from TVI's plant the wastes go to its skyline gossans dam. The water from the gossans dam then flows to the two layers of water treatment dams. Siltation dam 1 lies below or nearby the two layers of water treatment. Next to it is the siltation dam 2, followed by siltation dams 3, 4, 5 and 6. Above siltation dam 6, there is a so-called waste dumpsite. From there, the water and siltation flow into the siltation dam 6. Any release from these dams would eventually flow into the Canatuan creek. The Canatuan creek's destination is the Lituban River.

TVI is constructing its sulphide dam within the Canatuan Creek. To dry up the constructed sulphide dam, TVI has constructed two control dams. The company used water pumps in the control dams to siphon the waters and diverted from the dam construction.

On April 2 this year, in the course of heavy rainfall, the six siltation dams of TVI on Mount Canatuan including the two layers of water treatment dams collapsed, Anoy said.

Due to fear of collapse, the contaminated water of the skyline gossans dam which was shamelessly reported by the company to be standing and intact, was released independently towards the Canatuan creek by TVI without passing through the two layers of water treatment dams.

The water and soils from the siltation dams, the dump site and from the gossans dam subsequently flowed into the Canatuan creek, adding immense pressure to the two layers of control dams causing them to collapse. Consequently the under construction sulphide dam below also collapsed because the water pumps used were already inadequate to siphon the water from the two control dams.

TVI Pacific has clearly been misinforming the public by saying that the discoloration of water in the river was just due to the runoff of soils from their construction of the sulphide dam. The truth is that some water released from the gossans dam went into the Canatuan creek, including water and soil from the collapsed siltation dams.

Since 1997, the Subanon people through the leadership of Timuay Jose "Boy" Anoy, the father of Nano Anoy, have accused TVI of peddling misinformation to the public by denying the allegations of human rights violations, despite the bulk of evidences presented.

But the Subanon People in Canatuan, through Timuay Jose Anoy who is the legal and legitimate holder of Certificate of Ancestral Domain Claim (CADT), is hoping that justice will prevail for them in their continuous struggle against the forced entry of TVI to their Ancestral Domain. This now includes the company dealing honestly with this serious environmental incident.


Pastoral Statement on 2007 Election and Environment Agenda

Statement from Philippine Bishops

8th May 2007

Sisters and Brothers in Christ:

The Church, in fidelity to its mission, has the duty to proclaim the Gospel "to all creation" (Mk 16:15) and "to restore all things under Christ" (Eph 1:10).

As a nation, we are once again strengthening our democratic institution by participating in the forthcoming election in May 2007. The Catholic Bishops' Conference of the Philippines, in its letter to the dioceses and parishes, dated 28 January 2007, has noted the especial importance of this political exercise: "Elections in a democracy allow citizens to choose freely those who will govern them and be instruments of a better life and a more just society for all."

It is saddening to note that historically, we have not been able to genuinely transform our political institution and electoral practices to make it truly at the service of the people, and to bring solutions to injustice and social problems. On the contrary, Philippine politics, the way it had been practiced, "has been the most hurtful of us as a people. It is possibly the biggest bane in our life as a nation and the most pernicious obstacle to our achieving full development . . . If we are what we are today - a country with a very great number of poor and powerless people - one reason is the way we have allowed politics to be debased and prostituted to the low level it is now (CBCP Pastoral Exhortation on Philippine Politics, 1997)

The Church responsibility of fulfilling its evangelizing mission in the sphere of politics is becoming even more an imperative, given the ever worsening situation of poverty, graft and corruption, and political crisis. It is the duty of the Church to emphasize that political authority "must always be exercised within the limits of morality and on behalf of the dynamically conceived common good . . . All of its dignity derives from its being exercised within the context of the moral order" (Gaudium et Spes, 74)

Hence, moral responsibility and commitment to the welfare and genuine interest of the people are fundamental criteria that must be required of the candidates aspiring to assume public office.

It is in this context that we would like to relate the issue of environment and anti-mining agenda to the critical challenge of political engagement in the May 2007 election. The care for the earth, as a core moral issue defining the direction of sustainable development, protecting indigenous peoples rights and ensuring intergenerational equity and integrity of creation, must be highlighted as an indispensable consideration in any political platform for it to deserve serious consideration. This is the premise of the recent appeal of Cardinal Gaudencio Rosales that voters should discern who among those aspiring for public office were truly committed in caring for Mother Nature and that we choose to vote for "ecology-minded" candidates.

It is alarming to note the prevailing situation of ecological crisis and the widespread destruction of the environment. The World Bank study called Philippine Environment Monitor 2004, reported that the Philippines looses over $2 billion dollars annually due to environmental degradation. This estimate excludes social cost and the loss of quality of life. The Food and Agriculture Organization noted in 2001 that we lost 100,000 hectares per year of forest reserves in the decade of 1990-2000, and HARIBON has stated their concern that 18% of our remaining forest areas will be subjected to cutting, after analyzing the 2004 Philippine Forestry Statistics. In addition, PAFID has observed that 1 out of 3 ancestral domains are being threatened by mining, after studying the data from DENR and NCIP.

In our country, the destruction caused by human disregard for the ecology is clearly noted: "because the integrity of God's creation is violated, our people suffer the destruction brought about by droughts and floods. Those disasters cannot be traced merely to uncontrollable powers of nature, but also to human greed for short term economic gain." (PCP II, Acts 323)

The ecological devastation is made even worse by the government's policy to aggressively promote the mining industry, enticing the transnational companies to plunder our natural resources at the expense of the affected communities. It is for this reason that the CBCP in their Statement on Mining Issues and Concerns, dated January 29, 2006, reaffirm their stand for the repeal of Mining Act of 1995 and declared that "allowing the interests of big mining corporations to prevail over people's right to these sources amounts to violating their right to life."

We, as a Church, profess our commitment to care for creation for we believe that it is a matter of urgent challenge and a call of duty to promote the Christian principles of justice and to uphold the common good. With the late Pope John Paul II, we profess that "Christians, in particular, realize that their responsibility within creation and their duty towards nature and the Creator are an essential part of their faith." (THE ECOLOGICAL CRISIS, No. 8, Message of His Holiness Pope John Paul II for the celebration of the WORLD DAY OF PEACE, January 1, 1990; also, Centesimus Annus, 40)

Therefore, we strongly call for our people to include the environmental platform as one primary criterion in choosing candidates, be they for national or local offices. It is our responsibility to scrutinize the track record of every candidate with regard to their stand on logging, mining, and other ecological concerns, including their advocacy for the rights of the indigenous peoples. And we vote accordingly, in favor of pro-environment and pro-people candidates!

We encourage all the communities to be active in seeking information and increasing their awareness on the issues surrounding the elections and the concerns related to choosing our next leaders.

As Christians committed to our vision of promoting life, justice and equity in ecologically sustainable communities, we entrust all our endeavors to God, our Creator, who gives us the mission to care for the earth and all of creation, of which we are part (Gen. 1:28).

We also implore Mary, our mother and mother of creation, to help us to vote according to our consciences so that we may be blessed in the coming years with good government.

May the Risen Lord continue to journey with us and sustain us all with the blessings that we need in proclaiming the Kingdom of justice and love for all his people and for all creation.

Signed by:
Bishop Deogracias Iñiguez of the Diocese of Kalookan,
Bishop Jose Manguiran of the Diocese of Dipolog,
Bishop Nereo Odchimar of the Diocese of Tandag,
Bishop Dinualdo Gutierrez of the Diocese of Marbel,
Bishop Ramon Villena of the Diocese of Bayombong,
Bishop Jose Corazon T. Tala-oc of Diocese of Romblon and
Bishop Warlito Cajandig of Apostholic Bicariate of Calapan, Mindoro


Pastoral letter to voters issued by 7 prelates

By ELLALYN B. DE VERA, http://www.mb.com.ph/MAIN2007050993535.html

9th May 2007

Seven Catholic bishops are calling on Filipino voters to vote for candidates who are "pro-people and pro-environment."

In a pastoral statement, the bishops said it is their responsibility "to scrutinize the track record of every candidate with regard to their stand on logging, mining, and other ecological concerns, including the advocacy for the rights of the indigenous peoples."

The pastoral statement was signed by Bishops Deogracias Yñiguez Jr., Caloocan; Jose Manguiran, Dipolog City, Zamboanga del Norte; Nereo Odchimar, Tandag, Surigao del Sur; Dinualdo Gutierrez, Marbel, Cotabato; Ramon Villena, Bayombong, Nueva Vizcaya; Jose Corazon Tala-oc, Romblon; and Warlito Cajandig, Apostolic Bicariate of Calapan City, Oriental Mindoro.

"I'm sure that more than 90 percent of (Catholic) bishops will be in accord (with the statement)," Yñiguez said.

Meantime, the Philippine Partnership for the Development of Human Resources in Rural Areas (PhilDHRRA) national coordinator Jaybee Garganera said they invited 15 bishops affected by mining activities in their respective dioceses to come out with a pastoral letter, but only seven were able to sign the statement.

Other bishops who also expressed their support were Jose Corazon Tala-oc, Romblon; Pedro Arigo, Puerto Princesa City; Zacarias Jimenez, Butuan Auxialiary Bishop; Juan De Dios Pueblos, Butuan Bishop; Reynaldo Evangelista, Boac, Marinduque; Vicente Navarra, Bacolod; Jose Palma, Calbayog City, Samar; Leonardo Medroso, Eastern Samar; Angel Hobayan, Northern Samar; and Vicente Navarra, Bacolod.

Roy Calfoforo of Alyansa Tigil Mina (ATM) said they chose Yñiguez to lead the signing of the pastoral statement "for his active participation in the church to help carry out the issues and concerns of the 15 dioceses affected by mining."

Enrico Parilla, leader of indigenous peoples (IPs) in Zambales, urged the government to fully implement Republic Act 8371 or the Indigenous Peoples' Rights Act of 1997 for the welfare of more than 20 million IPs nationwide.


Indophil looks for more mines after Xstrata sale

Reuters

7th May 2007

SYDNEY, May 7 - Australia-listed Indophil Resources N.L. said it was looking for more mining projects in the Philippines after a $41 million sale of a majority stake in the untapped Tampakan copper and gold deposit to Xstrata Ltd. XTA.L.

"We would not turn our back on uranium, nickel or something else," Indophil's managing director, Tony Robbins told a mining conference.

Swiss-based Xstrata in March exercised a option to acquire 62.5 percent of the mine, located in Mindanao in the southern Philippines and potentially one of the largest copper and gold deposits in Southeast Asia.

The deposit is estimated to contain 11.6 million tonnes of copper and 14.6 million ounces of gold, which could be extracted at a fraction of today's selling prices, Robbins said.

Robbins said Indophil held A$110 million (US$90.68 million) in cash, giving it the financial clout to look for growth opportunities outside of Tampakan.

"That puts us in an excellent position to grow and it gives us a really strong strategic edge," he said.

Indophil retains 34 percent of the Tampakan project.

He said the plan was to build Indophil into a company producing the equivalent of a half-million ounces of gold a year within five years.

He said opportunities existed in between 10 and 12 countries within a three-hour time zone of the Philippines, including, Australia, Thailand and Papua New Guinea.

"We know how to operate in that part of the world," he said.

Four or five projects were under review "and something could be finalised in the not too distant future," Robbins said.

Robbins in the early 1990s helped identify the Tampakan lode for the then WMC company of Australia before resigning and forming Indophil.

Indophil stock, which has risen 10 percent since Xstrata took control of the Tampakan project March 30, closed off 2.4 percent at A$0.83.


APC Mining files for exploration permit in Palawan

West Australian Business News

9th May 2007

APC Mining Corp., a wholly-owned subsidiary of APC Group, Inc., has applied for a permit with the Department of Environment and Natural Resources (DENR) to explore an area of 2,660 hectares in the province of Palawan.

In a disclosure to the Philippine Stock Exchange, APC Group, Inc. Corporate Secretary Edmundo Tan said the area is situated in Barangay Rio in the municipality of Bataraza in southern Palawan.

The area, which is adjacent to the nickel mines of Rio Tuba Nickel Mining, has probable reserves of 11.5 million metric tons of ore, with an average 2.35 percent of nickel.

Tan said APC Mining has so far filed for seven exploration permits in the provinces of Zambales, Misamis Oriental and Palawan, with a total of 22,461 hectares. The areas contain chromite and nickel.

Once confirmed that the areas applied for have deposits that can be mined at commercial quantities, APC Mining said it will apply for a Mineral Production Sharing Agreement with the DENR.

APC Mining was established by the APC Group in 2006 along with Aragorn Power & Energy Corp. and Aragorn Coal & Resources Inc. in line with efforts to dispose of non-performing assets and increase profitability.

Judith Balea


Boxxer Acquires Option to Purchase 65% of Philippines Gold Project

CCNMatthews - http://www.ccnmatthews.com/news/releases/show.jsp?action=showRelease&searchText=false&showText=all&actionFor=649981

7th May 2007

CALGARY, ALBERTA - Boxxer Gold Corp. (TSX VENTURE:BXX) is pleased to announce that it has executed a letter agreement with ElDore Mining Corporation Limited ("EDM"), an arm's length third party, providing for the entering into of an option agreement to purchase a 28% direct equity interest (the "Option") and the assumption of the opportunity to acquire a further 37% farm-in joint venture equity interest (the "JVA Rights") for a total undivided 65% interest in the Nalesbitan gold project (the "Property") located in the Province of Camarines Norte, within Barangay Dumagman, Municipality of Lobo, Republic of the Philippines.

The Property comprises a contiguous block of 14 mining claims covering 1,184 hectares (approximately 2,800 acres) and is located approximately 300 kms. east-southeast of Manila, on the Bicol Peninsula on the country's main island of Luzon.

The proposed terms and conditions to acquire EDM's equity interest in the Property and the JVA Rights are:

1. Boxxer will assume (by novation) EDM's farm-in rights to the joint venture and the obligations to spend the balance of US$7,000,000 remaining under the farm-in joint venture agreement to earn a 37% interest:

2. Boxxer will acquire EDM's 28% direct Property equity interest by payment of the following cash obligations:

i) a non-refundable payment of US$25,000 to the remaining JV participants Sagacity Holding New Zealand and Eldore Philippines for waiver of their rights of first refusal to allow EDM to transact with Boxxer and for an exclusive 60 day period to complete site visits and technical, financial and legal due diligence

ii) a non-refundable advance of US$40,000 to assist EDM's Philippines incorporated operations company, Nalesbitan Mining Philippines Inc. ("NMPI"), in meeting its financial commitments over the 60 day Property due diligence period.

iii) Payment of US$3,000,000 to EDM, which represents EDM's investment in the Property to date, and an additional US$3,000,000 bonus. The total payments (the "Payments") to EDM would be approximately US$6,000,000, less the expenditures incurred by Boxxer duing the due diligence period, to be paid as outlined in (iv).

iv) the schedule of Payments related to the exercise of the Option will be as follows:

(a) US$50,000 cash payment on signing the Option agreement;

(b) US$100,000 cash payment on completion of a positive feasibility study on the Property

(c) US$250,000 cash payment on the Option being exercised and full transfer of the 28% equity interest;

(d) US$250,000 cash payment on reaching commercial production, and

(e) thereafter US$250,000 per quarter until full payont of the US$6,000,000.

3. A condition precedent to entering into the Option agreement is Boxxer completing a C$1.5 million financing. Boxxer can extend the original 60 day due diligence period for an additional 60 days by making a further US$40,000 cash advance to assist NMPI to cover its obligations.

4. EDM is required to obtain all shareholder and regulatory approvals, if required, in relation to Boxxer's exercise of the Option.

A considerable amount of exploration and development has been completed on the Property over the past 20 years. The Property is underlain by variably altered volcanics and is considered to have potential for epithermal gold-silver mineralization and porphyry related copper-gold-silver molybdenum mineralizatioin. The main area of surface gold-silver mineralization located within the Project is referred to as the Nalesbitan Hill Gold Deposit.

In August 2005, RobSearch Australia Pty Limited, under the direction of Mr. J.M. Blumer; BGenSc, MSc, FAusIMM(CPGeo), MAIG, MMICA, completed a report on the Project for inclusion in a Prospectus filed by EDM for listing of its shares on the Australian Stock Exchange. The report was prepared to conform with the VALMIN and JORC codes of the Australian Institute of Mining and Metallurgy/Australian Institute of Geoscientists, which relate respectively to Expert Reports and the reporting of Mineral Resources and Ore Reserve estimations.

The RobSearch report included the following statement, "Thus an earlier estimate by RobSearch that the Millsite-Singko lode has an exploration target potential to 150 m vertical depth of 1.5 million ozs. gold with a possible grade of 1.5 to 3.0 g/t gold and copper mineralization could well be confirmed by the current drilling program. It should be noted, however, that this exploration target is conceptual and it is uncertain of the current drilling program will result in discovery of a Mineral Resource on the property."

The potential quantity and grade of the "exploration target" are conceptual in nature. There has been insufficient exploration to define a resource and it is uncertain if future exploration will result in the target being delineated as a mineral resource. The basis for the potential quantities and grade are historical and based on diamond drill reverse circulation drilling and trenching results.

It is expected that Boxxer's due diligence should be completed by July 2007. Assuming that Boxxer proceeds with the proposed transaction, Boxxer plans to commence a diamond drilling program and continue metallurgical testwork with the view to completion of a feasibility study on the Nalesbitan Hill Gold Deposit. Mr. Elmer Stewart, P.Geol., a director of Boxxer and a Qualified Person pursuant to National Instrument #43-101, Standards for Disclosure for Mineral Projects, has reviewed the technical information disclosed in this news release.

If you wish to receive company press releases via email, please advise Alison Tullis at alison@chfir.com.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

CONTACT INFORMATION

Boxxer Gold Corp. Colin Christensen
President
(403) 264-4811
(403) 503-0822 (FAX)
Email: colin@boxxergold.com

or

CHF Investor Relations
Jeanny So
Broker Relations Specialist
(416) 868-1079 x225
Email: jeanny@chfir.com
Website: www.chfir.com


Rusina solidifies DMCI partnership for Acoje project

West Australian

9th May 2007

The partnership between West Perth-based nickel company Rusina Mining NL and civil and mining contractor DMCI Holdings group has strengthened, with DMCI signing on to be Philippines partner in the company's Acoje Nickel/Chromite/Platinum project.

Under the agreement, DMCI will initially pay around $3 million for a 10 per cent interest in the project, with a first right of refusal on existing claim owners (CRAU resources) 10 per cent residual interest.

In addition DMCI and Rusina have agreed to form a 60 per cent (DMCI) 40 per cent (Rusina) Joint Venture Company which will comprise;

Mining Joint Ventures, - all properties of DMCI and Rusina (excluding Acoje and its surrounding EPA's) will be vended into a yet to be formed subsidiary. These will include Rusina's and DMCI's Mindanao Cu/Au projects.

A Ferro Nickel smelter, - subject to feasibility, to be constructed on Semirara Island, the site of DMCI's wholly owned coal mine. Under the agreement, Rusina will guarantee ore supply for 5 years. DMCI has also agreed to carry Rusina's equity contribution for the project construction on their balance sheet.

Subject to shareholder approval, DMCI will buy 3.6 million shares in Rusina for around $1.4 million, with an attached option at a strike price of 50 cents and a term of two years.

Rusina has also signed an agreement to fund a heap leach trial on the Acoje deposit with UK nickel group European Nickel Plc, subject to shareholder approval.

Under the agreement, European Nickel will spend around $2.4 million on 5.8 million shares with an attached option at a strike price of 21p [50c] and a term of 2 years to fund drilling exploration. The company will also have first right of refusal over any further Rusina share placements over the next three years.

The full text of a company announcement is pasted below

Rusina Mining Limited (ASX code: RML; AIM "RMLA") is pleased to announce that the Company has signed an agreement with AIM listed United Kingdom nickel group European Nickel PLC (AIM "ENK") to fund a heap leach trial and feasibility study on Rusina's Acoje deposit in the Philippines.

As a separate agreement, DMCI Holdings Inc (PSE : DMC) of the Philippines has agreed to cement its partnership with Rusina by becoming the Philippine partner in the Acoje Project, and formalising the arrangement for the investment into a Ferro Nickel plant on Semirara Island.

Discussions with these parties have been ongoing for some time. Pricing for these transactions have taken into account recent changes of the companies share price.

European Nickel.

Under the Agreement, European Nickel will, subject to Rusina shareholder approval, invest £1 million (5,882,352 shares at 17p [40c] with an attached option at a strike price of 21p [50c] and a term of 2 years). The funds will be used for drilling the nickel saprolite mineralisation at Acoje to JORC indicated resource status. European Nickel has also been granted the right of first refusal to underwrite any future share placement Rusina may contemplate over the next 3 years.

In addition European Nickel will fund a feasibility study for the heap leaching the nickel laterites on Rusina's Acoje property by spending up to US$10 million to earn 40 % of the nickel laterite property. European Nickel's farm in does not apply to the chromite or PGM / Ni sulphide portion of the property that will be separately explored and developed by Rusina.

European Nickel and Rusina have agreed to grant each other first right of refusal to acquire, explore, and develop all other Luzon Island based nickel laterite projects in the Philippines on a 50:50 cost basis cementing a long term relationship between the two companies.

The feasibility study is likely to take between two and three years and will include a trial heap leaching operation to determine whether tropical laterite ores from Acoje can be successfully heap leached. European Nickel is considered leaders in the Industry on Heap Leach technology having successfully demonstrated the process in their Caldag project in Turkey.

The agreement with European Nickel has secured the long term strategy on nickel for Rusina shareholders. Should Heap leach be feasible on Acoje laterites the low operating cost ($US 2.50/lb or $US 5500 / t Ni) with significantly lower capital requirements than HPAL ensures that heap leach operations will remain very profitable under all long term Nickel price projections currently being forecast.

The Chromite and Platinum Group Metal (PGM) mineralisation, that is generally confined to the eastern side of the Acoje property within the dunite zone, is not included in the agreement with European Nickel. The chromite and PGM's will be retained by Rusina (80% equity) and its Philippine partners (20% equity). Rusina has previously announced that it intends to drill the PGM mineralisation via cash flow from direct shipping nickel laterite ore.

DMCI Holdings Inc

DMCI and Rusina have agreed that DMCI will invest subject to shareholder approval, $US1.2 Million (3,658,537 shares at 40c AUD with an attached option at a strike price of 50c AUD and a term of 2 years)

DMCI and Rusina have entered an agreement for DMCI to formally become the Philippine partner in the entire Acoje Project. DMCI will initially pay $US 2.5 million for a 10% interest in Acoje, with a first right of refusal on existing claim owners (CRAU resources) 10% residual interest

In addition DMCI and Rusina have agreed to form a 60% (DMCI) 40% (Rusina) Joint Venture Company which will comprise of;Mining Joint Ventures, - all properties of DMCI and Rusina (excluding Acoje and its surrounding EPA's) will be vended into a yet to be formed subsidiary. These will include Rusina's and DMCI's Mindanao Cu/Au projects.A Ferro Nickel smelter, - subject to feasibility, to be constructed on Semirara Island, the site of DMCI's wholly owned coal mine. Under the agreement, Rusina will guarantee ore supply for 5 years. DMCI has also agreed to carry Rusina's equity contribution for the project construction on their balance sheet.This agreement with DMCI has secured the Medium term strategy on nickel for Rusina shareholders. Rusina and DMCI are in a unique position to quickly develop and bring into operation the above strategies to maximise shareholder value during the current commodity cycle.

Direct Shipping Update

The Company announced during its last quarterly report that a trial shipment of 50,000 (wet) tonnes has been approved on April 24 2007. The Company is also pleased to advise that the Environmental Clearance Certificate (ECC) for a 22.5 Ha starter pit was approved by the Environment Management Bureau on 8 May 2007. This permit now paves the way for ongoing direct shipping at Acoje subject to conditions laid out in the ECC.

DMCI have mobilised equipment to Acoje to begin civil works and are well advanced negotiating port facilities. The first shipment is still on schedule for the third quarter this year.

With the proceeds of these two strategic transactions with European Nickel and DMCI Holdings, combined with the imminent revenue from direct shipping nickel ores, and no requirement to fund the Ferro-nickel smelter, Rusina is in a strong position to drive the Company forward over the coming year.


Jinchuan ups $1-B offer for Philnico

By Ma. Elisa P. Osorio, The Philippine Star

2nd May 2007

China's Jinchuan Group Ltd. has increased its initial investment offer of $1 billion (P47.6 billion) to run Philnico Industrial Corp., Trade Secretary Peter B. Favila said yesterday.

"It's an improvement from their earlier valuation," Favila said when asked about Jinchuan Group's offer to re-open the Nonoc nickel mine.

At the beginning of the year, Philnico chairman Evaristo Narvaez said they have ended talks with the Chinese investor after Jinchuan insisted on conducting a feasibility study. Narvaez said Philnico cannot afford further delays and a feasibility study could stall the opening of the mine which has not been operating since 1982.

Favila said he has received a letter from Jinchuan last week and has forwarded it to Environment and Natural Resources (DENR) Secretary Angelo Reyes Monday.

The trade official said the letter included refinements from the original offer but he refused to give details. He also declined to comment on whether the offer is acceptable to the government.

When asked if there are other investors interested in Philnico, Favila said they are also talking to other parties.

Earlier, Narvaez said four other groups from China, Russia and Japan had started their due diligence on the Nonoc mine, which has the capacity to produce 41,000 tons of nickel a year, equivalent to about three percent of world demand.

In 2005, Jinchuan, in partnership with Baosteel Group, China's biggest steel firm, agreed to invest $1 billion to revive the Nonoc mine.

In July, it signed a debt accord with the Philippine government and Philnico, which needs to settle some $300 million of debts.

Philnico's multi-million dollar debt to the government stemmed from the sale of Nonoc Mining in Surigao del Sur in the mid-1990s. The government sold Nonoc Mining to Philnico for a little over $300 million, the bulk of which remains unpaid.

According to Philnico, if the parties reach an agreement this year, the earliest the Nonoc mine could reopen would be in 2009 as construction of a new facility would take at least 18 months. Philnico is 55 percent owned by Hong-Kong based Compline Resources Co., about 30 percent by Australia's Pacific Energy Ltd., and the rest by local investors.

The Nonoc mines were operating from 1975 to 1982, with annual production at between 9,600 tonnes and 25,000 tonnes of nickel. It was closed due to high energy costs.

 

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