25 November 2013
Metals Exploration plc (AIM: MTL) ("Metals Exploration" or "the Company"), the natural resources exploration and development company with assets in the Pacific Rim region, is pleased to provide an operations update on matters relating to its Runruno gold-molybdenum project ("the Project") and exploration activities in the Philippines.
- The third and final tranche of the Share Placing announced 26 March 2013 successfully completed on 15 October 2013.
- An International Resource Bank has been mandated to provide a US$70 million debt package to provide sufficient funding to take Runruno through to production.
- Banking due diligence has commenced with the agreed objective of finalising the funding package towards the end of the first quarter 2014
- The construction program continues to ramp to support the objective of commencing operations in Q4 2014.
- On-site and off-site supporting infrastructure is largely complete and continues to progress well.
- Early works proceeding on the Residual Storage Impoundment while detailed design is being finalised.
- Engineering of the Process Plant now at 70% complete.
- All long lead time equipment packages for the construction of the process plant have been awarded and are within budget.
- A screw piling contractor has commenced work on the plant site installing footings for the pipe rack.
- Stage 2 of the 69kV overhead power line from Bayambong to Maddiangat has commenced.
- The forecast project costs to completion remain within budget.
- Drilling south of the Runruno pit continued to extend the Malilibeg South Mineral zone.
- Exploration hole TUD51 reported 5 metres @ 27.07 g/t Au and 8,303 ppm Mo in new mineralised zone adjacent to the Malilibeg South Mineral zone.
- MTL's subsidiary, FCF, defends its position and rights in the Supreme Court of the Philippines through the Court Of Appeals, a second time against a petition to have the Writ of Kalikasan readmitted after having been dismissed.
Ian Holzberger, Executive Chairman, commented:
"Since the Company was able to move the Runruno gold project into full mine construction mode in July, all long lead time equipment packages for the construction of the process plant have been awarded and we continue to see impressive progress. I am pleased to report that all construction work completed to date has been finished to a high standard and within budget, and ongoing cost control is a key constituent of this period for the company.
"The key corporate focus for management is to work with a major resource bank and agree terms to secure the necessary debt finance to take the company through to first gold pour in Q4 2014. Significant progress has been made in this area."
"The continued success in the exploration activities to the south of the Runruno deposit augurs well for the long-term future of the Project."
Metals Exploration is a natural resources exploration and development company operating in the Pacific Rim, with particular focus on the Philippines.
The Company’s principal asset is the Runruno Gold-Molybdenum Project on the island of Luzon in the northern Philippines. The Company acquired the project in February 2005 and recently increased its interest in the project to 100%.
Work to date has a defined mineral resource of 1.39 million ounces (Moz) of gold, and 25.6 million pounds (Mlb) of molybdenum with 1,050,000oz gold reporting to the Measured and Indicated categories and 900,000oz gold within the Mining Proven & Probable Reserve category. For further information please see the Runruno Resource page.
In October 2011, the Runruno Declaration of Mining Project Feasibility ("DMPF") was approved. This paved the way for the Project to move forward to development and construction phase. Early project development works have began in January 2012.
In May 2010 the Company announced the results of the Runruno project Feasibility Study which confirmed the viability of the project, projecting average production of 96,700oz of gold per annum over a mine life of 10.4 years, at an average forecast operating cost $477/oz gold before any molybdenum credits. The capital cost is forecast to be US$149.3 million, with payback within 3.5 years at US$1,000/oz gold. The Runruno project will be an open pit operation, and will use the proven BIOX® and carbon in leach processes to recover gold and molybdenum.
In March 2010 the Company announced the award of the Environmental Compliance Certificate (ECC) for the Runruno project, which was issued after satisfactory evaluation of the project’s Environmental Impact Statement by the Philippine Environmental Management Bureau. The ECC process was conducted with the full participation and involvement of the local community, and under the ECC the Company is committed to implement measures to protect and mitigate against any adverse impacts on the health and welfare of community and the environment. Securing the ECC is a significant point, following the award of the Financial or Technical Assistance Agreement, demonstrating continued support from the Philippine Government for the development of the Runruno project.
In October 2009 Metals Ex reached an important milestone as the Financial or Technical Assistance Agreement (FTAA) was signed by Executive Secretary Eduardo Ermita on the authority of the President of the Philippines. Under the terms of the FTAA, FCF Minerals, the Philippine subsidiary which operates the Runruno Project, is granted the exclusive right for 25 years to explore, mine, process and export minerals from the licence area. In exchange for this right, FCF is required to commit a minimum investment of $50 million in project development, much of which will be spent on local infrastructure benefiting local communities.
Metals Exploration works hard to maintain excellent relations with the local communities in the project areas. FCF Minerals promotes social and economic development through the Runruno Livelihood Foundation, a trust funded jointly by the Company and the Philippine government. We also conduct all our operations in a safe and environmentally responsible manner to industry best practise standards.
Metals Exploration Plc is publicly listed company on the London Stock Exchange and admitted to the Alternative Investment Market (AIM:MTL) on 22 October 2004.