$2B Kingking mine project to start operation by 2017-A A +A
Friday, September 20, 2013
MINING partners US-based St. Augustine Gold and Copper Limited (SAGCL) and its local partner Nationwide Development Corp. (Nadecor) announced on Thursday that their Kingking project in Pantukan, Compostela Valley will generate at least $2 billion once they start operation in 2017.
In a press conference in Makati City, SAGCL and Nadecor officials announced the results of the Preliminary Feasibility Study (“PFS”) on the King-king Copper-Gold Project.
"We are pleased that the millions of dollars and years of intensive technical work that St. Augustine has invested in the PFS have paid off and confirmed that this flagship mining project has the potential to generate great value and thousands of jobs for the Philippines," said Conrado Calalang, Nadecor's president.
"The results of the PFS show that the planned operation has favorable economic potential, generating an estimated pre-tax net present value of $2.0 billion and an estimated pre-tax internal rate of return of 24.8 percent," stated Andrew J. Russell, St. Augustine’s chief executive officer.
"The strong results of the PFS pave the way for St. Augustine and our joint venture partner Nadecor to continue the development of King-king, including the remaining technical work and the advancement of project financing," he added.
The Declaration of Mine Project Feasibility (“DMPF”) was submitted to the Philippine Government in May 2012. The final feasibility study will incorporate any required amendments to the DMPF once comments are received from the government's final review of the document.
Tom Henderson, chief operating officer of SAGCL, said the mining project in Kingking will have a 22-year life with an estimated initial capital cost of $2.04 billion including the mine, the mill, on-off leach pad, power plant, port facility and $240 million in contingency costs.
So far, SAGCL has already invested $80 million in the past three years that their partnership has started with Nadecor.
Henderson said the project would create 4-5,000 jobs with 1,700 direct employment during construction.
Clyde Gillespie, SAGCL country director, said that by the end of 2014 all necessary permits would have already been complied with then they will start construction thereafter.
He said the construction phase would take an estimated three years to finish before commercial operation starts.
He said they expect to produce 100,000 tons per day once operation starts which will be split between 40,000 tons per day to an on-off heap leach and 60,000 tonnes per day to a flotation mill with agitated tails leach.
The mining rate will be approximately 178,000 tons per day for the 22-year mine plan. Production from the heap leach process is expected to start one year prior to commencing mill operations.
The proposed open pit mine and processing plant will produce copper/gold/silver concentrate, copper cathode, and gold ore bullion.
A dry stack tailing facility is proposed for handling tailings from the process plant. Tailings will be filtered to remove moisture prior to stacking. Mining officials said that the technology is more expensive but it would eliminate the long-term risk to the environment.
The Nadecor Calalang group is presently locked in a legal battle with the Ricafort Group. Cases are pending before the Court of Appeals (CA) and the Supreme Court (SC).
But the Calalang Group is however optimistic that they will be favored by the courts over their rival.
The Calalang Group noted that the CA decision dated February 18 which recognizes their group as the legal representatives of Nadecor is legally binding and immediately effective, and removes any doubt as to who is authorized to represent Nadecor as its Board of Directors, and therefore the authority of the newly elected Board and the Board immediately preceding it is clear.
The challenge of dissident shareholder Jose Ricafort was thrown out by the CA, and the administrative complaint filed against the CA justices who rendered the same decision, was dismissed by the SC by a vote of 15-0 on February 19.
Published in the Sun.Star Davao newspaper on September 21, 2013.