TORONTO (miningweekly.com) – Project developer St Augustine Gold and Copper’s shares spiked 22.86% on the TSX on Wednesday after it confirmed that it was in good standing with joint venture partner Nationwide Development Corporation (Nadecor), which owns the permit to explore and develop the substantial King-king gold/copper project, in the Philippines.

St Augustine refuted claims by certain individuals and Philippine media reports that the JV agreement had been annulled.

Nadecor owns the mineral production sharing agreement for King-king, through which the Philippine government had granted it exclusive rights to explore and develop the project.

Individuals who were ousted from the Nadecor board by a shareholder vote in 2011, and who were not currently members of the Nadecor board or management, had been misrepresenting themselves as members of Nadecor’s board in an apparent attempt to obtain control of the King-king deposit. It is not a proxy battle, as none of the ousted board members hold controlling shares in Nadecor.

The individuals, who also do not hold shares in St Augustine, had made a number of false claims to be board members of Nadecor through false websites and media exposure in the Philippines.

St Augustine said the King-king project was advancing as scheduled and according to the memorandum of understanding and the JV agreement with Nadecor.

The company pointed out that in June 2012, by writ of preliminary injunction, the Philippine Court of Appeals ruled that the Nadecor board elected in August 2011, led by president Conrado Calalang and chairperson Roberto Romulo, was indeed the valid board of Nadecor.

The writ had also confirmed that the agreements between St Augustine and Nadecor had not been rescinded during the June 13, 2012, stockholders meeting. The court made the writ permanent in February of this year.

Subsequent to these rulings, St Augustine had also received a letter confirming it was in good standing from Nadecor, the company said.

Nadecor’s Calalang had previously stated that St Augustine continued to meet all required conditions of the agreements and remained focused on advancing the project.

"It is unfortunate that confusion and misunderstanding has arisen because of these media reports. We encourage all King-king project stakeholders to continue working with and supporting St Augustine as we continue to advance the project and aim to maximise project value for stakeholders,” St Augustine CEO Andrew Russell said.

St Augustine said it understood that the misinformation was also a substantial source of concern for Nadecor, which is currently considering necessary measures to redress the problem.

The Philippine government has listed King-king as a top-three-priority project, with its size possibly accounting for the urgency in successfully seeing it through the permitting process.

The latest updated National Instrument 43-101-compliant resource estimate endowed the project with a measured and indicated copper/gold-equivalent resource of 962.3-million tons grading 0.66 g/t gold equivalent, for 5.4-billion pounds of copper and 10.3-million ounces of gold.

The inferred resource held another 3.6-million gold-equivalent ounces, grading 188.8-million tons at 0.21% copper and 0.26 g/t gold.

Initial planning saw the mine operating at a 100 000 t/d capacity, entailing a 40 000 t/d heap leach operation and a 60 000 t/d milling operation, with potential expansion to 120 000 t/d when heap leaching comes to an end. The mine is expected to produce about 242-million pounds a year of the red metal and 319 600 oz of gold a year for the first five years of operation.

St Augustine’s stock listed on the TSX on Monday closed at C$0.215 apiece. The company’s stock had lost 41.38% of its value since the start of the year.