VANCOUVER (miningweekly.com) – TSX-listed St Augustine Gold and Copper (SAGC) this week said its mineral production sharing agreement (MPSA), which covers the King-king copper/gold project in Mindanao, Philippines, will withstand legal scrutiny after authorities earmarked the permit for cancellation.
The Philippine Department of Environment and Natural Resources (DENR) held a news conference on February 14, wherein the DENR Secretary Gina Lopez announced that the MPSA was one of 75 recommended for cancellation on environmental grounds.
SAGC on Tuesday said neither it or its joint venture partner Nadecor have received any formal notification from the DENR. According to Lopez, companies will have seven days to respond from receipt of the notice of cancellation.
SAGC affirmed its position that the King-king project's MPSA is valid and will hold up to legal scrutiny, having obtained all the necessary area clearances from the relevant national and local government agencies as well as certification from the Mines and Geosciences Bureau and various local government units that the project is not within the ‘no go zones’, nor within a critical or proclaimed watershed. The MPSA was awarded on May 27, 1992, amended on December 11, 2002, and renewed in August 2016.
"Despite this unwarranted inclusion in the list of MPSAs recommended for cancellation, King-king Mining Corp (KMC), as assignee of the MPSA, continues to commit to the upholding of the highest environmental and safety standards and to cooperating with the DENR to ensure that the environment is safeguarded at all times," KMC president Conrado Calalang stated.
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 pretax net present value to be $2-billion and estimated 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 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.