Remaining Ore Reserve Estimation and Feasibility Study of Padcal

Remaining Ore Reserve Estimation and

Feasibility Study of Padcal Operations

Tuba and Itogon, Benguet, Philippines

By: Eulalio B. Austin Jr.,

P. Mining Engineer

April 30, 2013



Main Report


P. Mining Engineer

April 30, 2013

PADCAL Operations

ApriI 2013

Chapter 2.0

PADCAL Operations

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Chapter 2 Page 1

2.0 CERTIFICATES AND CONSENTS OF CPs FOR TECHNICAL REPORTS

2.1 Certificates and Consents of CPs for Technical Reports

- Left Intentionally Blank -

Chapter 2 Page 2

PADCAL Operations

April 2013

I, Eulalio B. Austin Jr., Bachelor of Science, and Professional Mining Engineer, of 2509 Lee

Gardens Condominium Mandaluyong City do hereby certify that:

• I am President, Chief Operating Officer and a Director of Philex Mining Corporation.

• The title of this report is “Remaining Ore Reserve Estimation and Feasibility Study of

Padcal Operations” dated April 30th, 2013.

• I graduated with a Bachelor of Science degree in Mining Engineering on March 1982

from Saint Louis University, Baguio City, Philippines.

• I have practiced my profession as a mining engineer continually for the last 30 years as

an employee of Philex Mining Corporation.

• I am a designated Competent Person (CP) as defined by the Philippine Society of Mining

Engineers with CP reference number EM 01814-01810. I have spent 30 years working

in various capacities in the Padcal Mine.

• I am responsible for all technical, operational and exploration activities at Padcal Mine

have been since 2004 up to October 2010.

• The Technical Report has been prepared in compliance with Philippine Mineral

Reporting Code (PMRC).

• I own and control securities in Philex Mining Corporation and I am not independent of the

issuer (Philex Mining Corporation).

• I consent to the use of this Technical Report as a filing with the Philippine Stock

Exchange or Regulatory Authority.

2.2 Scope of Work of each CP involved

PADCAL Operations

April 2013

Mr. Eulalio B. Austin Jr., a CP Mining Engineer, has the primary role in this Technical

Report. He managed the process of estimating the remaining ore reserve of the mine based

on the mineral resource provided by the CP Geologist.

He has verified the capital costs used in the financial analysis using his 25 years of

experience in the Padcal mine.

2.3 Reliance on Other Experts indicating therein objective, nature and coverage

A number of senior engineers and scientists employed in the Padcal mine have contributed

in this Technical Report and to this effect the term Experts apply. These Experts and their

coverage are identified below.

Mr. Roger G. Laraya, a Professional Geologist, is the company’s senior adviser. He heads

the hedging and metal market group in the corporate office before he resigned on April 1,

2013. He wrote the section on the behavior of copper and gold in the global market as part

of the economic assessment of the mining operation. Similar market analyses were used for

the company’s Silangan Project technical report for its Declaration of Mining Project

Feasibility (DMPF) submitted to the Mines and Geosciences Bureau (MGB).

Mr. Libby R. Ricafort, a Professional Metallurgical Engineer, is currently the Vice President

and Resident Manager of Padcal. Prior to this, he was the Mill Division Manager for 16

years. His functions include overseeing the short and long term operation of the 25,000 tons

per day mill plant as well as the concentrate shipment to the smelters. Throughout his

career, he has been employed in 3 more gold and copper recovery operations. He once

held the vice president and board of director positions of the Society of Metallurgical

Engineers of the Philippines (SMEP).

His expertise was used to validate the efficiency of the current mill plant to produce a

realistic and sustainable projection of metal recovery and production. He also verified the

operating and capital costs estimated for the milling operation in the financial assessment of

the mining operation.

Mr. Ricardo S. Dolipas II, a Professional Mining Engineer, is currently the Mine Division

Manager whose functions includes the short and long term planning of the underground

operations and the mining engineering aspects.

Chapter 2 Page 4

PADCAL Operations

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Chapter 3.0

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Chapter 3 Page 1

3.0 EXECUTIVE SUMMARY

Philex Mining Corporation has prepared this Philippine Mineral Reporting Code (PMRC)

compliant technical report on the remaining mineral reserve estimates and feasibility of its

Padcal Copper-Gold Operations in Tuba and Itogon, Benguet, Philippines. The report was

prepared by the management of Philex under the supervision of Eulalio B. Austin Jr.,

Professional Mining Engineer, President and Chief Operating Officer of Philex Mining

Corporation acting as the Competent Person for this report. Padcal is an operating mine.

The Company intends to offer shares in its capital stock for subscription by certain eligible

shareholders as determined by the board of directors in accordance with the Company’s

amended articles of incorporation. The offering will be registered with the SEC and the new

shares will be listed on the PSE. As provided under the PSE Memo on “Documentary

Requirements for Mining Companies” issued on October 2, 2007, mining companies applying

for initial or additional listings are required to submit a Competent Person’s Report that is

compliant with the requirements of the PMRC on public reporting in the country of exploration

results, mineral resources and ore reserves, including the economic viability, of the relevant

mineral properties.

Padcal operation is located thirty kilometers of Baguio City, in the northern part of the Luzon

region in the Philippines. It is hundred percent owned and operated by Philex Mining

corporation. Benguet has since been known as a mining province, hosting a number of mining

operations throughout its history. Adequate infrastructures are in place including grid power,

paved roads, educated labor force and readily accessible technical support.

The Padcal mine has operated continuously for more than 50 years of mining the ore

underground through block caving using Load-Haul-Dump (LHD) units as the mode of ore

extraction and recovering copper and gold through flotation. Three Tailings Storage Facilities

(TSF) have been built to manage the waste from the operations, the first two has already been

decommissioned. The design and construction of an additional TSF is already moving forward.

Since start, Padcal has already produced and sold 201 billion pounds of copper, 6 million

ounces of gold and 6 million ounces of silver. The current ore production rate is 9.4 million

metric tons per annum and the mine produced 38 million pounds of copper, 140 thousand

ounces of gold and 130 thousand ounces of silver in 2011 calendar year.

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Chapter 3 Page 2

Operations were suspended in August 2012, due to a sediment spillage incident on its TSF 3.

Sediments flowed through one of the penstocks after a series of storm events. The main

embankment remains intact. Its stability has been validated by both local and international TSF

experts. Remediation and rehabilitation activities are underway not only to the facility but to the

affected areas as well. As part of the remediation measure, the void created must be filled up

before the onset of the next rainy season and fresh tailings from the operation is the fastest

means to get it done. In March 8, 2013, temporary operations have been allowed by the Mines

and Geosciences Bureau (MGB) and Environment Management Bureau (EMB), which will last

four months.

The orebody is located in the prolific Baguio mineral district, which is underlain by Cretaceous-

Paleogene metamorphosed sediments and volcanic locally known as the Zig-zag-Pugo

Formation. The volcanic units consist of spilitic basalt, andesite flows, green tuffs, tuff breccias

and volcanoclastics overlain by sediments consisting of sandstones and red and green

tuffaceous shales. All metamorphosed in varying degrees.

The recent remaining resource estimate as of end March 2013 was prepared by Jesus C. Cinco

Jr. and Rudy C. Obial, both are independent geologists tapped by Philex and are Competent

Persons under the Geological Society of the Philippines (GSP).

TabIe 3.0-1: MineraI Resource

Sto. Tomas II

Deposit CIassification Tonnes, MT Cu, % Au, g Au/MT CuEq, %

908 ML Measured 89,770,000 0.25 0.50 0.56

Indicated 2,060,000 0.22 0.30 0.41

Sub-Total 91,830,000 0.25 0.49 0.56

Inferred 1,490,000 0.20 0.40 0.40

TotaI 93,320,000 0.24 0.49 0.56

782 ML Measured 86,220,000 0.24 0.51 0.56

Indicated 5,980,000 0.23 0.39 0.48

Sub-Total 92,200,000 0.24 0.50 0.55

Inferred 1,340,000 0.20 0.30 0.40

TotaI 93,540,000 0.24 0.50 0.55

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Chapter 3 Page 3

Combined Measured 175,990,000 0.24 0.50 0.56

Indicated 8,040,000 0.23 0.36 0.46

Sub-Total 184,030,000 0.24 0.50 0.56

Inferred 2,830,000 0.20 0.40 0.40

TotaI 186,860,000 0.24 0.49 0.56

Notes:

1. Ordinary Kriging used

2. CuEq (Copper Equivalent) = %Cu + 0.64 x g/t Au

3. Metal Prices:

a. Copper – 3.00 US Dollar per pound

b. Gold – 1,500 US Dollar per ounce

4. Operating Cost: 687.86 Pesos per ton

5. Cut-off grade: 0.317 % CuEq

6. 782 ML includes 798 ML resource

Padcal Mine Engineering, supervised by the CP, completed a Mineable Reserve estimate as of

end March 2013 using the PCBC module of GEMS software.

TabIe 3.0-3: Remaining MineabIe Reserve

Ore

Sources

Tonnes, MT

Cu,

%

Au, g Au/MT

RecoverabIe Cu

(‘000 pounds)

RecoverabIe

Au

(ounces)

908 ML 12,300,000 0.21 0.49 47,200 150,000

782 ML 21,100,000 0.22 0.48 84,000 254,000

798 ML 40,100,000 0.20 0.39 144,100 333,000

TotaI

Reserves 73,500,000 0.21 0.43 275,300 737,000

PADCAL Operations

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Chapter 3 Page 4

Notes:

1. Metal Prices:

a. Copper – 3.00 US Dollar per pound

b. Gold – 1,500 US Dollar per ounce

2. Metal Recoveries:

a. Copper – 82 percent

b. Gold – 72 percent

3. Forex: 40 Philippine Peso to 1 US Dollar

4. Cash operating Cost per Metric Ton: 687.86 Pesos

5. Conversion Factor for Gold to Copper Equivalent: 0.481

6. Cut-off Grade (percent Copper Equivalent): 0.317

7. Category: Proved

Sustaining the 8-year mine life, inclusive of all underground and surface ancillary structures, will

entail a total capital outlay of 8.96 Billion Pesos. Majority is allotted for mine development and

the design and construction of an additional TSF.

Based on metal prices of 3.00 US Dollar per pound of copper and 1,500 US Dollar per ounce of

gold, this project is expected to realize an average of about 1.28 Billion Pesos annually in net

income after taxes over Padcal’s remaining mine life.

At the same levels of metal prices, this Project is expected to produce a positive cumulative

undiscounted net cashflow of 12.74 Billion Pesos over its project life. With this stream of

cashflows, it is expected to provide an internal rate of return on investment of 27 percent per

annum.

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Chapter 4.0

PADCAL Operations

April 2013

Table of Contents

Chapter 1

1.0 Title Page

Chapter 2

2.0 Certificates and Consents of CP’s for Technical Reports

2.1 Certificates and Consents of CP’s for Technical Reports 1

2.2 Scope of Work of each CP involved 4

2.3 Reliance on Other Experts indicating therein objective, nature and coverage 4

2.4 Signatures of CP 5

Chapter 3

3.0 Executive Summary 1

Chapter 4

4.0 Table of Contents

Chapter 5

5.0 Introduction

5.1 Who commissioned the report preparation and to whom it should be submitted 1

5.2 Purpose for which the report was prepared 1

5.3 Scope of Work or Terms of Reference 1

5.4 Duration of the preparation, including field visits and verification 1

5.5 Members of the technical report preparation team 2

5.6 Host company representative 2

5.7 Compliance of report with PMRC 2

Chapter 6

6.0 Reliance on the other Expert or CP’s 1

Chapter 7

7.0 Tenements and Mineral Rights

7.1 Description of mineral rights 1

7.1.1 Location of area, Barangay, Municipality, Province 1

7.1.2 Coordinate locations as per MGB 4

7.1.3 Number of claims and hectares covered by EP/MPSA/FTAA mode of agreement 5

7.1.4 Type of permit or agreement with government 6

7.2 History of mineral rights 7

7.3 Current owners of mineral rights 8

7.4 Validity of current mineral rights (state date of validity of rights at the date of reporting) 8

7.5 Agreements with respect to mineral rights 8

7.6 In order to make clear the net revenue that may be derived from the project, include the following

7.6.1 Royalties, Taxes, advances and similar payments paid or to be paid by the company

to the mineral rights holder, joint venture partner(s), government, Indigenous People,

local government, and others 11

7.6.2 Receivables and payable sums to the company and mineral rights holder 13

PADCAL Operations

April 2013

Chapter 8

8.0 Geographic Features

8.1 Location and accessibility 1

8.2 Topography, physiography, drainage and vegetation 2

8.3 Climate, population 3

8.4 Land Use 7

8.5 Socio Economic Environment 9

8.6 Environmental features 9

Chapter 9

9.0 Previous Work 1

9.1 History of previous work

9.2 Briefly describe essential work done by previous workers

9.3 Conclusions of each of the previous workers

Chapter 10

10.0 History of Production

10.1 Production history of district and area, if any 1

10.2 Previous Mining Areas 4

10.3 General description of mining, ore beneficiation, concentrate, mineral product market 5

10.4 Tonnage mined and sold 5

Chapter 11

11.0 Regional and Distrinct Geology

11.1 Regional and Local Geology 1

11.2 Local Lithology 2

11.3 Alteration 3

11.4 Structural Geology 3

11.5 Mineralization location(s) and general description 8

Chapter 12

12.0 Mineral Property Geology

12.1 Geological work undertaken by the company in the property, to include scale of mapping and

laboratory tests undertaken for the samples 1

Chapter 13

13.0 Mineralization 1

Chapter 14 - Found in Geology CP Report

14.0 Exploration

14.1 Geological work

14.1.1 Geological data generated from mapping and surface sampling

14.1.2 Geological map and sections

14.2 Sample location map

14.2.1 Outcrop sampling

14.2.2 Trench sampling

14.2.3 Test pit sampling

14.3 Drilling and Sampling

14.3.1 Describe type of drilling program

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April 2013

14.3.2 Drillhole location and surveying

14.3.3 Drillhole orientation and depth

14.3.4 Describe core logging

14.3.5 Drill core/chip sampling procedure and sampling interval

14.3.6 Representative/Drill core photographs

14.3.7 Petrography and Ore microscopy studies

14.4 Exploration Geochemistry

14.4.1 Describe geochemical survey type: drainage, soil, rock, vegetation, bogs, etc.

14.4.2 Describe sampling and analytic methods employed

14.4.3 Define background, threshold and anomaly levels for the elements determined

14.4.4 Apply synthesis and interpretive techniques (for single multi-element) to bring our

significant geochemical features related to mineralization

14.4.5 Describe geochemical anomalies detected

14.4.6 Relate geochemical findings to geology and mineralization

14.5 Applied Geophysics

14.5.1 Describe geophysical method used and objectives of the survey

14.5.2 Describe whether a geophysical contractor, independent consultant or an in-house

staff was engaged in the conduct of the geophysical survey

14.5.3 Describe equipment used, its limitations and the survey parameters adopted

14.5.4 Describe how it was carried out (design of stations with respect to mineralization trends)

14.5.5 Describe interpretive tools used

14.5.6 Discuss essential results with respect to the objective


15.0 QA/QC of Data Used


16.0 Declared Mineral Resources

Chapter 17

17.0 Economic Assessment of the Mining Project

17.1 Description of Mineral Resources estimates used as basis for conversation to Ore Reserves 1

17.2 Type and Level of Feasibility Study 1

17.3 Brief Description of the Project

17.3.1 Mining and processing operations 2

17.3.2 Mining Method and capacity 2

17.3.3 Processing Method and capacity 2

17.3.4 Ore to be Mined / Product to be produced 2

17.3.5 Prospective Markets or Buyers 2

17.3.6 Estimated Mine Life 3

17.3.7 Total Project Cost/Financing 3

17.3.8 Production Cost / Production Schedule 3

17.4 Marketing Aspects

17.4.1 World Supply and Demand Situation 4

17.4.1.1 Gold 4

17.4.1.1.1 Central Bank 6

17.4.1.1.2 Copper 7

17.4.2 Prospective Markets or Buyers 10

17.4.2.1 Gold 10

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April 2013

17.4.2.2 Copper 10

17.4.3 Product Specification 11

17.4.4 Price and Volume Forecasts 11

17.4.4.1 Gold 11

17.4.4.1.1 Fundamental Analysis 11

17.4.4.1.1.1 Easy Monetary Policies 11

17.4.4.1.1.2 Rising Central Bank Buying 13

17.4.4.1.1.3 Basel III Implentation 14

17.4.4.1.1.4 Yuan’s Potential to be a Global Reserve Currency 14

17.4.4.1.2 Technical Analysis 15

17.4.4.1.3 Bank Forecast 16

17.4.4.2 Copper 17

17.4.4.2.1 Fundamental Analysis 17

17.4.4.2.1.1 Supply Demand Outlook 17

17.4.4.2.1.2 Decelerating China 19

17.4.4.2.1.3 Complexities, Declining Ore Grade and Rising Mining Costs 19

17.4.4.2.2 Technical Analysis 20

17.4.4.2.3 Bank Forecast 21

17.4.5 Sales Contract

17.4.5.1 Market 22

17.4.5.1.1 Copper Concentrates Offtakers 22

17.5 Technical Aspects

17.5.1 Mining Plans 23

17.5.1.1 Mining Method 23

17.5.1.2 Mine Design/Mining Parameters/Geotechnical Parameters 25

17.5.1.2.1 Mine Design 25

17.5.1.2.2 Mining Parameters 28

17.5.1.2.2.1 Ore Extraction 28

17.5.1.2.2.2 Ore Transport 32

17.5.1.2.2.3 Ventilation 35

17.5.1.2.2.4 Dewatering 37

17.5.1.2.2.5 Subsidence 39

17.5.1.2.3 Geotechnical Parameters 41

17.5.1.3 Mining Recovery, Dilution and Losses 44

17.5.1.4 Planned Capacity/Production Schedule/Estimated Life of Mine 44

17.5.1.5 Working Schedule 45

17.5.1.6 List of Mining Equipment and Auxiliary Machinery/Mine Infrastructure 48

17.5.1.7 Mine Development Plans and Schedule 54

17.5.2 Processing Plans 66

17.5.2.1 Metallurgical Process Flowsheet/Process Plant Design 66

17.5.2.2 Metallurgical Test Works Result 75

17.5.2.3 Material Balance 78

17.5.2.4 Plant Capacity/Production schedule 80

17.5.2.5 Plant Working Schedule 82

17.5.2.6 Product Specification 82

17.5.2.7 Tailings Specification 84

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April 2013

17.5.2.8 Tailings Dam Siting 84

17.5.2.9 List of Mill Machineries and Auxiliary Equipment 86

17.5.2.10 Mill Plant Layout 89

17.5.3 Mine Support Services

17.5.3.1 Power Source / Power Generation Plant 89

17.5.3.2 Industrial / Domestic Water Supply 93

17.5.3.3 Assay Laboratory 95

17.5.3.3.1 Sample Preparation 95

17.5.3.3.2 Assay Protocols 95

17.5.3.3.2.1 Analytical Procedures 95

17.5.3.3.2.1.1 Copper 96

17.5.3.3.2.1.2 Gold 96

17.5.3.3.2.2 Plant Laboratory Protocol 97

17.5.3.3.3 Quality Assurance – Quality Control Procedures 97

17.5.4 Environmental Protection and Management Plan 98

17.5.4.1 Environmental Impacts 98

17.5.4.2 Environmental Mitigating Measures 99

17.5.4.3 Environmental Infrastructures 100

17.5.4.4 Mine Closure Plan 101

17.5.5 Mine Safety and Health Plan 106

17.6 Financial Aspects

17.6.1 Total Project Cost Estimate and Assumptions 108

17.6.1.1 Engineering Study 109

17.6.1.2 Exploration / Development Cost 109

17.6.1.3 Pre-Operating Overhead 113

17.6.1.4 Capital Equipment and Machinery 113

17.6.1.5 Allied Mine Facilities and Infrastructures 116

17.6.1.5.1 Tailings Storage Facilities (TSF) 118

17.6.1.5.2 Mill Improvements Including Concentrate Shipping Facility 131

17.6.1.5.3 Electrical Facilities and Mechanical Equipment 131

17.6.1.6 Environmental Equipment and Facilities 131

17.6.2 List of Capital Equipment and Works 132

17.6.3 Financial Plans / Sources of Funds 133

17.6.4 Production Cost Estimates and Assumptions 133

17.6.4.1 Mining Cost 133

17.6.4.2 Milling Cost 133

17.6.4.3 Mine Overhead Cost 133

17.6.4.4 Assumptions on Mining, Milling and Overhead Costs 134

17.6.4.5 Marketing Cost 137

17.6.4.6 Mine Overhead Cost 137

17.6.4.7 Environment Cost 137

17.6.4.8 Community Development Cost 137

17.6.4.9 Excise Tax 138

17.6.4.10 Head Office Overhead Cost 138

17.6.4.11 Royalty 138

17.6.4.12 Penalties 138

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April 2013

17.6.5 Government Financial Incentives 139

17.6.6 Basis of Revenue Calculation 139

17.6.7 Pro-forma Financial Statements 140

17.6.7.1 Profit and Loss 140

17.6.7.2 Cash Flow 144

17.6.8 Financial Analyses 145

17.6.8.1 Break even Analysis 145

17.6.8.2 Sensitivity Analyses 146

17.6.8.3 Profitability Analysis 146

17.7 Economic Aspects

17.7.1 Employment / Management 147

17.7.1.1 Number, Nationality, Position and Annual Payroll 147

17.7.1.2 List of Key Personnel and Qualifications 148

17.7.1.3 Personnel Pay Scale 148

17.7.1.4 Table of Organization 148

17.7.1.5 Availability of Technical and Skilled Worker 149

17.7.1.6 Township/Housing 149

17.7.2 Community Development Plan 149

17.7.3 Socio-economic contributions 149

Chapter 18

18.0 ORE Reserve Estimates

18.1 Database Used 1

18.2 Integrity of Database 1

18.3 Data Verification and Validation (Limitations) 1

18.4 Ore Reserve Estimation Method Used 1

18.5 Ore Reserve Estimations 9

18.5.1 Ore Specific Gravity / Density 9

18.5.2 Mining Plans / Mining Recovery / Dilution Factor / Mining Losses 9

18.5.3 Relevant Production Costs considered 12

18.5.4 Basis of Revenue Calculation 12

18.5.5 Cut-off Grade Determination 13

18.6 Ore Reserve Classification Used 13

18.7 Ore Reserve Estimates 13

Chapter 19

19.0 Interpretation and Conclusions

Chapter 20

20.0 Recommendations

Chapter 21

21.0 References

PADCAL Operations

April 2013

Listing of Tables

Table 3.0-1: Mineral Resources CH3 - 2

Table 3.0-2: Contained Metal CH3 - 3

Table 3.0-3: Remaining Mineable Reserve CH3 - 3

Table 5.5-1: List of Technical Preparation Team CH5 - 2

Table 7.1.2-1: List of Tenements CH7 - 4

Table 7.1.3-1: Number of Claims and Hectares CH7 - 5

Table 7.5-1: Head Grade CH7 - 9

Table 7.6-1: Claims Owned and Maintained by Philex Mining Corporation CH7 - 12

Table 8.4-1: List of Land Use CH3 - 8

Table 11.5-1: Baguio Gold Distrinct – Principal Deposits CH11 - 8

Table 17.2-1: Mine Parameters CH17 - 1

Table 17.3-1: Total Project Cost CH17 - 3

Table 17.3-2: Production Schedule CH17 - 4

Table 17.3-3: Total Production Cost CH17 - 4

Table 17.4.4.1.3-1: Bank Forecast CH17 - 17

Table 17.4.4.2.3-1: Bank Forecast CH17 - 21

Table 17.5.1.2.1-1: Area of Influence of a Drawpoint CH17 - 28

Table 17.5.1.2.2.3-1: Tabulation of Ventilation Parameters CH17 - 35

Table 17.5.1.2.3-1: Summary of Geotechnical Parameters CH17 - 41

Table 17.5.1.2.3-2: Laubscher Rock support Matrix CH17 - 42

Table 17.5.1.2.3-3: Laubscher Rock Support Matrix CH17 - 42

Table 17.5.1.6-1: Tabulation of the Major Mine Equipment CH17 - 48

Table 17.5.1.6-2: Facilities Service Bay Capacities CH17 - 50

Table 17.5.1.6-3: Location of Magazines and Capacity CH17 - 52

Table 17.5.1.6-4: Locations Substations CH17 - 53

Table 17.5.1.7-1: Rate of Advances CH17 - 54

Table 17.5.1.7-2: Activities at three (3) Production Level CH17 - 66

Table 17.5.2.2-1: Mill and Metallurgical Parameters CH17 - 75

Table 17.5.2.3-1: Material Balance CH17 - 78

Table 17.5.2.4-1: Plant Capacity/Production Schedule CH17 - 80

Table 17.5.2.4-2: Plant Production Schedule CH17 - 81

Table 17.5.2.5-1: Plant Working Schedule CH17 - 82

Table 17.5.2.6-1: Typical Analysis of Concentrate CH17 - 83

Table 17.5.2.7-1: Typical Analysis of Final Flotation Tails CH17 - 84

Table 17.5.2.9-1: List of Mill Machineries and Auxiliary CH17 - 86

Table 17.5.4.4-1: Summary of Financial Plan for Decommissioning and Rehabilitation CH17 - 105

Table 17.6.1-1: Nominal Cash Flow of Direct and Indirect Costs CH17 - 108

Table 17.6.1.2-1: Schedule of Development Activity CH17 - 110

Table 17.6.1.2-2: Development Works Cost Indices CH17 - 111

Table 17.6.1.2-3: Mine Development CH17 - 112

Table 17.6.1.4-1: 2007 to 2011 Capital Expenditures CH17 - 114

Table 17.6.1.4-2: 2013 to 2020 Capital Expenditure Summary CH17 - 114

Table 17.6.1.4-3: Machinery and Equipment CH17 - 115

PADCAL Operations

April 2013

Table 17.6.1.5-1: Capital Projects CH17 - 117

Table 17.6.1.5.1-1: Tabulation of Impounding Capacity for the Centerline Construction Method

CH17 - 121

Table 17.6.1.5.1-2: Tabulation of Embankment Material Requirement for the Centerline

Construction Method

CH17 - 121

Table 17.6.2-1: Major Capital Equipment and Works CH17 - 131

Table 17.6.2-2: Major Capital Equipment and Works CH17 - 131

Table 17.6.6-1: Revenue Calculation CH17 - 138

Table 17.6.7.1-1: Padcal Profit and Loss for 2013 to 2020 CH17 - 140

Table 17.6.7.2-1: Cash Flow CH17 - 144

Table 17.6.8.1-1: Summary of Production Cost CH17 - 145

Table 17.6.8.2-1: Sensitivity Analyses CH17 - 145

Table 17.7.1.1-1: Position, Number and Annual Payroll CH17 - 146

Table 18.5.2-1: Grade reconciliation for active 908 ML South Blocks CH18 - 11

Table 18.7-1: Mineable Reserve Estimate CH18 - 13

PADCAL Operations

April 2013

Listing of Figures

Figure 7.1.1-1: Location Map of the Padcal Project, Luzon, Philippines CH7 - 2

Figure 7.1.1-2: Location Map of MPSA and APSA under Control by Philex CH7 - 3

Figure 8-1: Type of Climate According to Area CH8 - 4

Figure 10.1-1: Vertical Section of Philex Mine CH10 - 2

Figure 10.4-2: Tonnage Mined and Sold CH10 - 6

Figure 11.4-1: Map Showing Fold Patterns CH11 - 6

Figure 11.4-2: Map Showing Crustal Fractures CH11 - 7

Figure 17.4.1.1-1: India and China’s Gold Demand in Tonnes CH17 – 5

Figure 17.4.1.1-2: India and China’s Gold Demand in Tonnes CH17 - 6

Figure 17.4.1.1.1-1: Historical Gold Prices CH17 - 7

Figure 17.4.1.2-1: China’s significant contribution to copper demand in past 10 years CH17 - 8

Figure 17.4.1.2-2: Copper Price for the last 10 Years CH17 - 9

Figure 17.4.1.2-3: Copper Price for the last 10 Years CH17 - 9

Figure 17.4.4.1.1.1-1: Gold Price and Monetary Base CH17 - 12

Figure 17.4.4.1.1.1-2: Gold Rises on Low Interest Rates CH17 - 13

Figure 17.4.4.1.1.2-1: Official Gold Reserves CH17 - 14

Figure 17.4.4.1.1.4-1: Increasing Gold Demand CH17 - 15

Figure 17.4.4.1.2-1: Gold Technical Analysis CH17 - 16

Figure 17.4.4.2.1.1-1: Copper Supply-Demand Balance (2012) CH17 - 18

Figure 17.4.4.2.1.1-2: Copper Supply-Demand Balance (2011) CH17 - 18

Figure 17.4.4.2.1.2-1: Decelerating China CH17 - 19

Figure 17.4.4.2.1.2-2: Declining Ore Grades CH17 - 20

Figure 17.4.4.2.2-1: Historical Copper Price CH17 - 21

Figure 17.5.1.1-1: Mining Method CH17 - 24

Figure 17.5.1.2.1-1: Details of Production Lines and Draw Crosscut Spacing

and Sizes of Openings

CH17 - 26

Figure 17.5.1.2.1-2: Development Layout of Fanholes at Undercutlines CH17 - 27

Figure 17.5.1.2.1-3: Typical UndercutLine Fanhole Section CH17 - 27

Figure 17.5.1.2.1-4: Details of Trench Fanholes CH17 - 29

Figure 17.5.1.2.2.1-1: 908 Production Level in Plan CH17 - 30

Figure 17.5.1.2.2.1-2: 782ML Production Level in Plan CH17 - 31

Figure 17.5.1.2.2.1-3: 798ML Production Level in Plan CH17 - 32

Figure 17.5.1.2.2.2-1: 908ML Central-East Block Showing Dumping Points CH17 - 33

Figure 17.5.1.2.2.2-2: Feeder Belt Conveyors configuration CH17 - 34

Figure 17.5.1.2.2.3-1: 782ML Showing Ventilation CH17 - 36

Figure 17.5.1.2.2.4-1: Water Sumps at 1020ML and 1015ML and the Supplied Areas CH17 - 38

Figure 17.5.1.2.2.2-2: Schematic Diagram of Pump system from 745 ML to Mill CH17 - 39

Figure 17.5.1.2.2.5-1: Subsidence Area CH17 - 40

Figure 17.5.1.4-1: Production Performance CH17 - 47

Figure 17.5.1.6-1: 908ML Centralized Mechanical Shop CH17 - 51

Figure 17.5.1.7-1: 908ML Production Line Development Layout CH17 – 55

Figure 17.5.1.7-2: 908 Undercut Line Development Layout CH17 - 56

Figure 17.5.1.7-3: 908ML Drawpoint Commissioning Schedule CH17 – 57

PADCAL Operations

April 2013

Figure 17.5.1.7-4: 782 ML Production Line Development Layout CH17 - 59

Figure 17.5.1.7-5: 782ML Undercut Line Development Layout CH17 - 60

Figure 17.5.1.7-6: 782ML Drawpoint Commissioning Schedule CH17 - 61

Figure 17.5.1.7-7: 798ML Production Line Development Layout CH17 - 63

Figure 17.5.1.7-8: 798ML Undercut Line Development Layout CH17 - 64

Figure 17.5.1.7-9: 798ML Drawpoints Development Schedule CH17 - 65

Figure 17.5.2.1-1: Run-of-Mine (CHC Discharge) CH17 – 67

Figure 17.5.2.1-2: Priamary Crushing – Jaw Crusher CH17 - 67

Figure 17.5.2.1-3: Secondary-tertiary Crushing Plant (Tertiary Crusher Top View) CH17 - 69

Figure 17.5.2.1-4: Grinding Plant CH17 - 70

Figure 17.5.2.1-5: Flotation Section CH17 - 71

Figure 17.5.2.1-6: Concentrate Filtering – Drum Filter CH17 - 71

Figure 17.5.2.1-7: Concentrate Shipping Port – Poro, La Union CH17 - 72

Figure 17.5.2.1-8: Tailings Thickening CH17 - 72

Figure 17.5.2.1-9: Process Flowchart CH17 - 73

Figure 17.5.2.1-10 Evolution of Banget Mill Plant CH17 - 74

Figure 17.5.2.8-1: Tailings Dam Siting CH17 - 85

Figure 17.5.2.10-1: Over-all Banget Plant Layout CH17 -89

Figure 17.5.3.1-1: Schematic Diagram Electric Power Facility CH17 - 91

Figure 17.5.3.3.2.2-1: Plant Laboratory CH17 - 97

Figure 17.5.4.3-1: TSF 3 CH17 - 101

Figure 17.5.5-1: Central Safety and Health Plan CH17 - 106

Figure 17.5.5-2: Safety Statistics CH17 - 107

Figure 17.6.1.5.1-1: Plan of Embankment using Downstream Method CH17 - 131

Figure 17.6.1.5.1-2: Sections A and C of Centerline Construction Method of Embankment CH17 - 123

Figure 17.6.1.5.1-3: Sections B and 1 Centerline Construction Method of Embankment CH17 - 124

Figure 17.6.1.5.1-4: Typical Section of Centerline Construction Method of Embankment CH17 - 125

Figure 17.6.1.5.1-5: Preliminary Tailings Conveyance route CH17 - 128

Figure 17.6.1.5.1-6: Schedule of Works CH17 - 129

Figure 17.6.4.4-1: Assumptions on Mining, Milling Overhead Costs CH17 - 133

Figure 17.6.4.4-2: Type of Expense (Average) CH17 - 134

Figure 17.6.4.4-3: Major Materials and supplies CH17 - 135

Figure 18.4-1: Outline of 0.317 % CuEq at 908 ML CH18 - 2



Figure 18.4-4: Economic and Operational footprints at 908 CH18 - 6

Figure 18.4-5: Economic and Operational footprints at 798 CH18 – 7

Figure 18.4-6: Economic and operational footprints at 782 CH18 - 8

Figure 18.5.2-1: Representative drawpoints for discount factor at 908 CH18 - 10

Figure 18.5.2-2: Discounted blocks at 798 ML using factor from 908 ML CH18 - 11

PADCAL Operations

April 2013

ANNEX A. Mine

ANNEX A-1. List of existing machineries and equipment

ANNEX A-2 Development cost indices details ANNEX A-3 Basis of Dilution Grade Factor

ANNEX B. Mill

ANNEX B-2 List of existing machineries and equipment

ANNEX C. Tailings Storage Facility

ANNEX C-1 Philex Padcal Mine TSF 3 Rehabilitation and Clean-up Plan

ANNEX C-2 Integrated Environmental Management Program

ANNEX D. Environment and Community

ANNEX D-1 Environment Compliance Certificate

ANNEX D-2 Key Personnel and Qualifications

ANNEX D-3 Padcal Table of Organization

ANNEX D-4 Community Development Program

PADCAL Operations

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Chapter 5.0

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Chapter 5 Page 1

5.0 INTRODUCTION

5.1 Who commissioned the report preparation and to whom it shouId be submitted

This Technical Report was commissioned by Philex Mining Corporation for submission to the

Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE).

5.2 Purpose for which the report was prepared

The Company intends to offer shares in its capital stock for subscription by certain eligible

shareholders as determined by the board of directors in accordance with the Company’s

amended articles of incorporation. The offering will be registered with the SEC and the new

shares will be listed on the PSE. As provided under the PSE Memo on “Documentary

Requirements for Mining Companies” issued on October 2, 2007, mining companies applying

for initial or additional listing are required to submit a Competent Person’s Report that is

compliant with the requirements of the Philippine Mineral Reporting Code on public reporting in

the country of exploration results, mineral resources and ore reserves, including the economic

viability, of the relevant mineral properties.

5.3 Scope of Work or Terms of Reference

This report was developed internally and did not employ any third party.

5.4 Duration of the preparation, incIuding fieId visits and verification

The preparation of the report took two months from February to April 2013. The preparers are

all personnel of Philex and are assigned in the mine site. They regularly verify information used

in this report as part of their job functions.

PADCAL Operations

ApriI 2013

Chapter 5 Page 2

5.5 Members of the technicaI report preparation team

The following composed the technical preparation team for this Report.

TabIe 5.5-1: List of TechnicaI preparation team

Name Background Scope

Venancio Gel A. Romero Reg. Mining Eng. Over−all coordinator

Ricardo S. Dolipas II

Reg. Mining Eng. Mining aspects including the

ore reserve estimation

Reynold V. Yabe Reg. Metallurgical Eng. Mill and metallurgical aspects

Antonio I. Bumidang Reg. Civil Eng. Tailings storage facility aspects

Jose B. Apil

Prof. Electrical Engineer Auxiliary facilities aspects

including power

Rudy B. Saguid Reg. Forester Environmental aspects

Feliciano N. Diso Jr. Social Development Practitioner

for 20 years

Community development

aspects

Mildred G. Daz

Cert. Public Accountant Financial aspects and

economic analysis

5.6 Host company representative

This report was developed internally. Philex did not employ any third party to prepare the

Technical Report.

5.7 CompIiance of report with PMRC

This Technical Report complies with the PMRC standard of reporting.

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Chapter 6.0

PADCAL Operations

ApriI 2013

Chapter 6 Page 1

6.0 RELIANCE ON OTHER EXPERTS OR CPs

The main CP for the report has relied on Experts to prepare the report. Except the mineral

resource estimation, all are under his direct guidance. He is responsible for the correctness and

truthfulness of this report with the aforementioned exception.

The resource estimate is contained in a separate CP report done by geologists. The resource

model is the basis in mine planning to estimate the remaining mineable reserve.

− Left IntentionaIIy BIank -

PADCAL Operations

ApriI 2013

Chapter 7.0

PADCAL Operations April 2013

Chapter 7 Page 1

7.0 TENEMENT AND MINERAL RIGHTS

7.1 Description of mineral rights

Philex Mining Corporation’s mineral property occupies an area of 14,752 hectares.

7.1.1 Location of area, Barangay, Municipality, Province

Philex Mining’s Padcal Mine is located at the southern tip of the Baguio Mineral District, about

17 aerial kilometers southeast of Baguio City. The mine straddles the municipalities of Tuba

and Itogon, Province of Benguet, Cordillera Administrative Region. The ore body is situated in

Sitio Padcal, Barangay Camp 3 of Tuba centered at latitude 16°15’50” and longitude

120°37’16”. The Mill and Tailings Storage Facility Nos. 1, 2 and 3 are within the sitios of

Banget, Sal-angan, Talnag and Balog, Barangay Ampucao of Itogon, Province of Benguet.

Philex Mining Corporation have three Mineral Production Sharing Agreements (MPSA)

denominated as MPSA-156-2000-CAR, MPSA-157-2000-CAR and MPSA-276-2009-CAR. Two

applications for Exploration Permits (ExPA) and one application for MPSA are still pending at

the office of MGB, Central Office. These tenements cover the Barangays of Camp1, Camp3 and

Ansagan in the Municipality of Tuba and Barangay Ampucao, Municipality of Itogon, all in the

Province of Benguet.


Chapter 7 Page 2

Figure 7.1.1-1: Location Map of the Padcal Project, Luzon, Philippines


Chapter 7 Page 3

Figure 7.1.1-2: Location Map of MPSA and APSA under Control by Philex Mining


Chapter 7 Page 4

7.1.2 Coordinate locations as per MGB

Table 7.1.2-1: List of Tenements

MPSA-156-2000-CAR

Latitude Longitude Latitude Longitude

Corner 1 16˚13'00” 120˚36'30” Corner 7 16˚17'30” 120˚40'00”

Corner 2 16˚17'30” 120˚36'30” Corner 8 16˚14'00” 120˚40'00” Corner 3 16˚17'30” 120˚37'00” Corner 9 16˚14'00” 120˚38'30” Corner 4 16˚18'00” 120˚37'00” Corner 10 16˚13”00” 120˚38'30”

Corner 5 16˚18'00” 120˚38'30” Corner 11 16˚13”00” 120˚36'30” Corner6 16˚17'30” 120˚38'30”

MPSA-157-2000-CAR


Corner 1 16˚10'00” 120˚36'30” Corner 6 16˚10'00” 120˚40'00”

Corner 2 16˚13'00” 120˚36'30” Corner 7 16˚11'30” 120˚39'00”

Corner 3 16˚13'00” 120˚38'30” Corner 8 16˚12'30” 120˚39'00”

Corner 4 16˚14'00” 120˚38'30” Corner 9 16˚12”30” 120˚37'30”

Corner 5 16˚14'00” 120˚40'00” Corner 10 16˚11”30” 120˚37'30”

MPSA-276-2009-CAR

Corner No. Latitude Longitude

1 1616'3.206” 12037'7.288”

2 1615'51.673” 12037'32.910”

3 1615'47.394” 12037'32.910”

4 1615'24.372” 12037'21.897”

5 1615'36.747” 12036'54.323”

ExPA No. 075

Corner No. Latitude Longitude

1 1611'30” 12037'30”

2 1612'30” 12037'30”

3 1612'30” 12039'00”

4 1611'30” 12039'00”


Chapter 7 Page 5

ExPA No. 078


Corner 1 16˚11'00” 120˚34'30” Corner 7 16˚17'30.73” 120˚35'00”

Corner 2 16˚14'00” 120˚34'30” Corner 8 16˚17'30” 120˚35'00”

Corner 3 16˚14'00” 120˚34'00” Corner 9 16˚17'30” 120˚36'30”

Corner 4 16˚17'30” 120˚34'00” Corner 10 16˚11”41.39” 120˚36'30”

Corner 5 16˚17'30” 120˚34'30” Corner 11 16˚11”41.39” 120˚35'50.20”

Corner6 16˚17'30.73” 120˚34'30” Corner 12 16˚11'00” 120˚35'50.20”

7.1.3 Number of claims and hectares covered by EP/MPSA/FTAA mode of agreement

The ore body is within the Nevada group of claims with existing mining lease contracts

denominated as MLC-163 to 165 and MLC-323 to 327. These claims have been superseded

by Mineral Production Sharing Agreements (MPSA). The concentrator plant, tailings

storage facility and other ancillary facilities are located within adjoining and contiguous groups

of mineral claims that have also been superseded by MPSA. Philex filed four (4)

applications for MPSA over the groups of mineral claims and two applications were granted on

April 10, 2000 as follows:

Table 7.1.3-1: Number of claims and hectares

Claim Application Area (Has) Date Filed

MPSA−156−2000−CAR 4,860 06−19−92 MPSA−157−2000−CAR 2,916 01−27−93 APSA No. 68 5,994 09−02−97

APSA No. 29 486 09−24−92

The mineral rights are controlled by Philex Mining Corporation under MPSA implemented by the

Philippine Mining Act of 1995. The claim system in use prior to 1995 was superseded by that


Chapter 7 Page 6

law. Applications for Production Sharing Agreements (APSA) covering all existing claims were

filed in the years following implementation of the 1995 Mining Act. Under the current system,

Philex has entered into a mineral agreement with the Philippine government wherein the

Government grants to the company the exclusive rights to conduct mining operations within the

contract area for a term of 25 years that is renewable for another 25 years, but does not transfer

title to the minerals or surface to the company. Mining operations allowed include

exploration, development and utilization of mineral resources. Under an MPSA, the

government shares in the production of the contractor, in kind or in value, as owner of the

minerals. The company provides the necessary financing, technology, management and

personnel for the mining project. At Padcal, the government’s share is in the form of a 2%

excise tax on gross value (net refining costs) of the mineral produced.

At present time, Philex has two completed MPSA and two APSA (applications for MPSA) The

completed MPSA (MPSA-156-2000-CAR and MPSA-157-2000-CAR) cover the mine and mill

area, Tailings Storage Facility (TSF) 1 and 2 and a portion of TSF 3. The APSA cover areas

that are outside the mine area, but are currently being explored. The MPSA and APSA are

contiguous. Several claim blocks within the area covered by Philex’ MPSA and APSA leased

by Philex. Each of these claim blocks has active APSA that are being handled by Philex Mining

for the underlying owners.

7.1.4 Type of permit or agreement with the government

MPSA confer the exclusive right to mine and use the surface for mining activities and facilities,

but do not transfer title of the surface to the mining company. Annual payments of 50 Philippine

pesos per hectare are required to retain the property. An MPSA confers exclusive mining rights

for 25 years, renewable for an additional 25 years provided the annual payments have been

made. The current MPSA will expire in 2025 and are renewable to 2050.


Chapter 7 Page 7

7.2 History of mineral rights

From the record, it appears that copper and gold were discovered on the property prior to 1933

when some of the early claims in the area were staked. This and other properties in the area

may have been first discovered during the Spanish colonial era. There is none that can discern,

a definitive record of exploration prior to 1956.After that time, exploration was conducted

exclusively by drilling and tunneling.

Ownership of the claims prior to 1955 is largely irrelevant to the current operation. The following

is a brief history of Padcal and Philex as described in Anonymous (2004).

“The Santo Tomas II deposit was acquired by Philex Mining Corporation, incorporated in July

1955 in Manila, Philippines and was one of its principal properties. The company’s main

proponents were Henry A. Brimo, a Philippine national who became its first President, Paul A.

Schafer, an American geologist and George T. Scholey, an American mining engineer. Capital

was raised by a listing of shares in the Manila Stock Exchange. The Santo Tomas II deposit

(Padcal Mine) was a low-grade disseminated copper ore body with gold as by-product. Philex

started immediate exploration works in the area and by the end of 1956, an initial reserve of 18

million tonnes of 0.90% copper and 0.977 grams gold per tonne was blocked after drilling 2,703

meters of diamond drill holes and driving 463 meters of crosscuts and drifts. When Philex first

entered the area, it was completely logged out with very few people found. In fact, the Padcal

Mine, as it is known today, used to be an old saw mill and access to the area was through a 20-

kilometre logging trail.”

”In spite of the difficulties the mining industry faced at that time, primarily a depressed copper

price, the lowest at that time since 1949, development of the mine by open pit and later by

underground and construction of mill facilities at 2,000 tonnes per day ensued. Production

started in the middle of 1958 with a small tonnage of 800 tonnes per day at 0.79% Cu and 1.030

g/t Au. The mine was operated for the first two years by small open pit and shifted ever since to

block caving method using slusher system until 1994. Ore at the lower levels is harder which

necessitated a shift from the traditional slushing method of mining to a more mechanized

method using Load-Haul- Dump (LHD) units. Mechanized mining commenced at the end of

1995. Philex- Padcal was the first mine in the Far East to employ block caving method of

mining.“


Chapter 7 Page 8

“Concurrent with the mine and mill development, the Philex started improvement of the logging

trail into a dirt road and later a hard-surfaced road, construction of houses, a hospital, school,

chapel, and recreational facilities for its workers.“

“Philex Mining Corporation is listed in the Philippine Stock Exchange under SEC registration no.

10044-Vol. 4. The company is currently owned by about 50,000 stockholders and 38 percent of

its outstanding shares are owned by foreign nationals and institutions.“

7.3 Current owners of mineral rights

Section 7.6 describes the ownership of the mineral rights.

7.4 Validity of current mineral rights

Under the Mining Act of 1995 or R.A. No. 7942, all the three MPSA’s of Philex have each a 25

year term and renewable for another 25 years. Both MPSA-156-2000-CAR and MPSA-157-

2000-CAR will expire on 2025 and MPSA-276-2009-CAR will expire on 2034.

7.5 Agreements with respect to mineral rights.

At the present time, Philex has five (5) existing royalty agreements within the area of its

properties. Only one, Nevada claims, is related to current production. The other four are on

adjacent exploration properties.

Nevada has a sliding royalty schedule based on copper head grade during production as

shown. A straight royalty of four percent (4%) of the gross is paid on all other mineral and

mineral products.

Clifton has a royalty of four percent (4%) on gold and one percent (1%) on copper and all other

minerals and metals based on gross monthly production. Clifton has a 4,000 peso per month

advance royalty payment chargeable against future production.

The Butan claims have advance royalty payments of 40,000 pesos per month chargeable

against future production. The table below summarizes the advance royalty payments to date


Chapter 7 Page 9

for the Butan Claims. Production royalties are four percent (4%) of gross product payable

monthly.

Tapaya claims have production royalties of one and a half percent (1.5%) for gold and one

percent (1%) for all other minerals and metals.

New CT claims have royalties of one percent (1%) for each ounce of gold produced and one

percent (1%) for all other minerals and metals.

Table 7.5-1: Head Grade Royalty

%Cu

%

0.00−1.00 1 1.01−2.00 2 2.01−3.00 3 3.01−4.00 4 4.01−5.00 5 5.01−6.00 6

6.01−7.00 7 7.01−8.00 8 8.01−9.00 9

9.01−10.00 10

10.01−11.00 11 11.01−12.00 12 12.01−13.00 13 13.01−14.00 14

14.01−15.00 15 15.01−16.00 16 16.01−17.00 17 17.01−18.00 18 18.01−19.00 19

19.01 − UP 20


Chapter 7 Page 10

7.6 Royalties, taxes, advances and similar payments paid or to be paid by the company

to the mineral rights holder, joint venture partner(s), government, Indigenous People,

local government, and others


Chapter 7 Page 11

Table 7.6-1: Claims owned by Philex Mining Corporation


MINING CLAIMS OWNED AND MAINTAINED BY PHILEX MINING CORPORATION

Tenement Date Approved /

Application Area Claimowner Type of Agreement

Date of

Agreement

MPSA−156−2000−CAR 10−Apr−00 3,848.0348 Philex Mining Corp.

MPSA−157−2000−CAR 10−Apr−00 2,958.1390 Philex Mining Corp.

MPSA−276−2009−CAR 19−Jan−09 80.6688 Nevada Royalty Agreement 29−Aug−55

APSA No. 098

125.3600 Butan Mining Exploration Company Deed of Assignment w/ Royalty

Agreement 24−Mar−87

ExPA No. 075 20−Oct−97 437.0570 Philex Mining Corp.

ExPA No. 078 2−Sep−97 6,156.0000 Philex Mining Corp.

TOTAL AREA 13,605.2596

MINING APPLICATONS UNDER AGREEMENT WITH PHILEX MINING CORPORATION

APSA No. 074 15−Sep−97 637.20 New C.T. Mining Exploration Co., Inc. Deed of Assignment w/ Royalty

Agreement 1−Feb−00

APSA No. 077 15−Sep−97 311.25 Tapaya Mining Association Deed of Assignment w/ Royalty

Agreement 13−May−08

ExPA No. 88

15−Sep−97

162.00

AIba Copper Mining ExpIoration Corp. Deed of Assignment w/ Royalty

Agreement

10−May−07

Note: Areas of APSA No. 074 and APSA No. 077 are largely included in MPSA−157 and a small portion inside MPSA−156. ExPA No. 88 area was included in ExPA no. 078.

Chapter 7 Page 12

PADCAL Operations

April 2013

7.6.2 Receivables and payable sums to the company and mineral rights holder

Financial obligations to claim owners and Indigenous People are governed by the following.

• In the case of Nevada, based on copper head grades as outlined in Table 7.5-1;

• For Butan Mining Exploration, Camp 3 Mining Association, Tapaya Lodestar Inc, New

C.T. Mining Exploration, Co. Inc. and Alba Copper Mining Exploration Corporation: various percentage of gold and copper credits ranging from one to four 1 percent; and

• For Indigenous People Organization of Alang, Pokis, Sabian, Sta. Fe, Obial and Loakan (IPO APSSOL) 1.25 percentage of gross output.

PADCAL Operations

ApriI 2013

Chapter 8.0

PADCAL Operations

April 2013

Chapter 8 Page 1

8.0 GEOGRAPHIC FEATURES

8.1 Location and accessibility

The company maintains a shipping facility at Poro Installation Port in San Fernando, La

Union. From the minesite, the port can be reached in about 2.5 hours via Naguilian Road.

The group of Philex Mining Tenements (MPSA-276, MPSA-156, MPSA-157, ExPA-075,

ExPA-078) is located in the Baguio Mineral District at the southern end of the Central

Cordillera Mountain Range and within the Municipalities of Tuba and Itogon, Province of

Benguet, in the Cordillera Administrative Region (CAR), Philippines. It is 17 aerial

kilometers or (±28) road kilometers south-southeast of Baguio City. The tenement group is

enclosed within geographic coordinates North latitudes 16010’00” to 16018’00” and East

longitudes 120034’00” to 120040’00” and encompasses a land area of approximately

13,317.8990 hectares.

On a provincial scale, Benguet is bounded on the north by Mountain Province, on the south

by Pangasinan, on the east by Ifugao and Nueva Vizcaya, and on the west by La Union and

Ilocos Sur.

The Philex area is conveniently accessible from Baguio City through the 28km well-paved

Kias-Philex Provincial Road (estimated 45-minute drive at an average speed of 50kph).

Baguio City is the chartered city and the only city in Benguet Province. Baguio City from

Manila is easily accessible by land transport cruising via the North Luzon Expressway

(NLEx) and Subic-Clark-Tarlac Expressway (SCTEx), then through the national highway.

This route (about 250km, approximately 4-5 hours) passes through the provinces of

Bulacan, Pampanga, Tarlac, Pangasinan, La Union and Benguet.

The southernmost part of the Philex mining property can be reached from Manila via

Binalonan, Pangasinan. From Binalonan proper, the road takes off from the national

highway thence to San Manuel passing through the San Manuel-Ansagan municipal road.

This route is seasonal in nature, accessible only during the dry season, since a long portion

of the road traverses the Toboy River.

PADCAL Operations

April 2013

Chapter 8 Page 2

8.2 Topography, physiography, drainage and vegetation

The Luzon Central Cordillera, belongs within the Central Physiographic Province, and

stretches from Ilocos Highlands in the north to the northern flank of Caraballo Mountains in

the south. It is 320km long and 85 km wide with rugged topography. The highest peak, Mt.

Pulag (2929m), also the highest in Luzon forms the common boundary of Benguet, Ifugao,

and Nueva Vizcaya. The eastern slopes of Mt. Data have been terraced into the famous

Banaue Rice Terraces. The southern part of the Cordillera is rugged; the northern has flat

areas along the east. Four (4) main rivers, Agno, Magat, Chico and Abra, drain the

Cordillera. Cascades, ravines, and waterfalls are common.

The Baguio Mineral District at the southern end of the Central Cordillera Mountain Range

exhibits similar mountainous and rugged topography with reliefs ranging from 300 to 1800

meters above sea level. The slopes are generally steep with variable range of greater than

45°. The project area is prone to massive mass wasting due to the presence of steep

slopes. Landslides, as a result of heavy downpour, and rock falls are common in the area.

Five (5) major rivers that flow perennially in the Province of Benguet are the Agno River,

Amburayan River, Abra River, Naguilian River, and the Aringay River.

Drainage pattern is mainly controlled by geological structures and rock types. Most of these

are drainages that display dendritic and occasionally rectangular patterns. Major structures

found in the project area such as Sta. Fe Fault, Albian Fault, and Paday Fault manifest as

deeply-incised streams or drainages. The project area is drained to the south by the Toboy-

Ansagan River towards Tagamusing River in Binalonan town in Pangasinan (Philex internal

report). The Albian Creek drains the eastern part of the mine towards Sal-angan River

which eventually converges with the Agno River. To the southeast, water flows through the

Balog Creek which also drains toward the southward Agno River. Located at the northeast

of the site is the southwest-flowing Bued River that runs through the town of Tuba, Benguet

leading to La Union and Pangasinan.

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Pine forest type and secondary growth type and grassland type are generally found in the

project area. Between 800 to 2,000 meters above sea level, the area is dominated by pines,

grasslands and secondary growth. Pine stands are generally abundant in the upper part of

the range and grassland in the lower part. There are two strata of pine forest:

a) Pine layer – mostly consisting of pine trees dominated by Benguet Pine scientifically

known as Pinus Kesiya Royle ex-Gordon.

b) Herbaceous layer - which varies according to altitude. At higher altitude, blacken ferns

are common. Rono grass (Miscanthus sinensis), the Eulalia trispicata and Themeda triandra

occurs at higher and lower elevations, respectively.

In the grassland type, the Themeda triandra, Eulalia trispicata and Imperata cylindrica

(cogon grass) predominate, including the basic unity of pine forest and grassland vegetation.

8.3 Climate, population

The climate of the Philippines is either tropical rainforest, tropical savanna or tropical

monsoon, or humid subtropical (in higher-altitude areas) characterized by relatively high

temperature, oppressive humidity and plenty of rainfall. There are two seasons in the

country, the wet season and the dry season, based upon the amount of rainfall. This is

dependent as well on the location in the country as some areas experience rain all

throughout the year. Based on temperature, the seven warmest months of the year are from

April to October while the winter monsoon brings cooler air from November to March. May is

the warmest month, and January, the coolest.

There are four recognized climate types in the Philippines, and they are based on the

distribution of rainfall. They are described as follows:

• Type I. Two pronounced season: dry from November to April and wet during the rest of

the year.

• Type II. No dry season with a pronounced rainfall from November to January.

• Type III. Seasons are not very pronounced, relatively dry from November to April, and

wet during the rest of the year.

• Type IV. Rainfall is more or less evenly distributed throughout the year.

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Figure 8.3-1 : Type of Climate according to Area

Like most of the provinces in the Cordillera, Benguet Province falls on the Type II Climate

that is characterized by dry season from November to April, followed by the wet season from

May to October. Rainfall has been measured to an average of 2,500 to 4,500 mm annually.

Because of its high altitude, temperature in Benguet can fall to as low as 11°C on the

average and 26°C at its warmest.

The Municipality of Itogon experiences the same climate as Benguet since it also falls under

Type II classification. The climate in the Municipality of Tuba has similar periods of dry and

wet months, however, it belongs under the Type I by the Coronas System of classification.

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Generally Tuba has a foggy and cold temperature during the coldest months of December,

January and has the warmest temperatures during the months of March to May.

Baguio City features a subtropical highland climate under the Köppen climate classification.

The city is known for its mild climate. Owing to its high elevation, the temperature in the city

is eight degrees Celsius lower compared to the average temperature of the rest of the

country. Average temperature ranges from fifteen to twenty three degrees Celsius. It is

usually lower during the late and early months of the year. The climate follows the typical

Philippine seasons: Dry Season from October to May and the Wet Season from June to

September.

Like many other cities with a subtropical highland climate, Baguio sees noticeably less

precipitation during its dry season. However, the city has an extraordinary amount of

precipitation during the rainy season, with the months of July and August having on average

more than 1,000 mm of rain. Baguio averages over 4500 mm of precipitation annually.

The Province of Benguet lies atop the southern end of the Cordillera Mountains and consists

a total land area of 2,833km², thirteen (13) municipalities, and 140 barangays. It has a

population of about 403,494 and a density of 142.4/km² (as of 2010).

The two (2) municipalities of Benguet which host Philex Mine, namely Tuba and Itogon have

a population of 42,874 (as of 2010) and 55,960 (as of 2010) respectively. Population density

in Tuba is 140/km² (as of 2010) while in Itogon is 120/km² (as of 2010).

Baguio City, the nearest and only city north of Philex minesite has a population of 318,676

and a population density of 5,500/km² (as of 2010).

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NATURAL RESOURCES

• Water Resources

Benguet is the source of five (5) major river basins that are harnessed for energy

development and irrigation: Agno River, Amburayan River, Abra River, Naguilian River,

Aringay River.

• Mineral Resources

Benguet is rich in mineral resources, both metallic and non-metallic. There are three large-

scale mining companies still operating in the province.

Lepanto Mine Division Lepanto, Mankayan

Philex Mining Corporation Padcal, Tuba

Benguet Corporation Balatoc, Itogon

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8.4 Land Use

As of 2010, Benguet has a total land area of 2,833.0 square kilometers with most of it falling

within the Cordillera Forest Reserve.

A major portion of the land area of Benguet is devoted to agriculture and is planted with rice,

corn, highland vegetables, root crops, and cutflowers.

Within the Philex tenements, the areas are habitated but not densely populated. Residents

are generally scattered. Some of the residents in the area are engaged in farming, cattle-

raising, small-scale mining. The flat and moderately sloping areas are utilized for agricultural

purposes and the rest covered by vegetation. Some of the areas are as pasture lands.

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Table 8.4-1 : List of Land Use

Camp 3, Tuba Ampucao, Itogon

La

nd

−use

pat

tern

Per barangay profile, land use pattern is as follows:

a) 65.03% is used for industrial use

b) 23.28 % − forest land of which some are being

converted either into agricultural and /or

residential areas

c) 5.43% − Agro−forestry areas

d) 3% − rivers and creeks

e) 1.4% − Agriculture use

f) 1% − Roads

g) 0.86% − Other Uses

The present use of the land is not fully maximized as

most of the agriculture lands are unirrigated. Large

portion of the forestlands had been denuded due to

kaingin and drying up of its water sources.

Per barangay profile, land use pattern is

as follows:

a) 92.5 % of total land area are mineral

and forestland

b) 1.1% are fruit land

c) 0.5% − rice land

d) 5% − pasture land

e) 0.5% − camotal

f) 0.2% residential area

g) 0.2% vegetable

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Soil

Typ

e /

Ve

ge

tati

on

an

d F

au

na

In terms of classification of soil, there are two major

types namely: sandy loam and clay loam. Generally,

the barangay is characterized by clay loam. This

type of soil is suitable to diversified crops. It was

observed however that there are poor soil

conservation techniques among the farmers.

Vegetative cover is primary and secondary

forestland and grassland. There exists mossy and

pine forests and bracken ferns, cogon grass,

hagonoy and lantana.

The kind of soil that is dominant in the

area is mountain sandy soil which

comprises about 45% of the area. Other

types are sand (35%), loam (15%) and clay

(5%). These types of soil are suitable to a

whole variety of agricultural crops. It is

mainly occupied by primary and

secondary forestland and grassland. It is

highly suitable for fruit trees, pasture and

forestland. It is marginally suitable for

vegetable and not suitable for rice.

Average soil pH is 4.96 which mean that

soil is acidic. This can be mitigated with

agricultural lime.

8.5 Socio Economic Environment

In Philex Mines, the three ethno-linguistic groups in Benguet namely, Kankana-ey, Ibaloi,

and Kalanguya intermingle and co-exist harmoniously with the other ethnic groups in the

Cordillera and other people who came from other parts of the country. In Philex mining

camp, the population is almost 14,000 including the 2,300 regular employees and their

dependents.

8.6 Environmental features

The area is within a high-energy drainage zone resulting from the steep slope terrains in the

region, with no marine environment within the immediate vicinity. Vegetation is largely of

secondary classification as the area experienced logging in the past.

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9.0 PREVIOUS WORK

Previous technical works, which makes Padcal as it is now, are integrated to the milestones

the operations have achieved in its 50 plus years of existence.

Philex was incorporated on July 19, 1955 to primarily engage in consultancy services,

mineral exploration, and mining among others. With Mr. Henry A. Brimo, as the first

President, he together with six (6) others formed Philex Mining Corporation. Exploration

program was immediately undertaken, and many mining projects were examined in the

entire Philippines which resulted to the Sto. Tomas I, Sto. Tomas II, and Sto. Tomas III

copper-gold projects, two (2) oil concessions, and other mineral properties on chromite,

mercury, iron, and nickel. The most promising was the Sto. Tomas II referred now to the

Padcal Mine operations.

The 50's…

The company’s income for the first two years was derived from consulting and management

fees. Philex then had a ten-year contract to manage Benguet Exploration, Inc. in Camp 6,

Kennon Road. By April 1957, 18 Million Tonnes of ore was block by diamond drilling in the

Sto. Tomas II property. Development of the mine followed and by June of the same year,

the construction of a 2,000 tonnes per day (tpd) Mill Plant and ancillary buildings were

started. On June 23, 1958, the Mill Plant was inaugurated.

Actual production commenced in August 1958, with a tonnage of 800 tpd. Towards the last

quarter of the year, the first shipment of 860 dry metric tonnes (DMT) of copper concentrate

was realized. A contract with Nippon Mining Company, Unlimited for the sale of the copper

concentrate was signed as early as October 1957.

Mining for the first two years was through an open pit. 1959 marked the Padcal Mine’s first

full year of operation and the start of underground mining using the block caving-slusher

method combined with open pit mining.

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The 60's…

Growth becomes steady through the 60’s due to improved copper prices and substantial

income from gold recovery. The Padcal Mine was indeed a profitable operation, with 20%

stock dividend and first cash dividend of 5% or half centavo per share was given in October

1960 to stockholders. In 1961, the Philex Mines Workers Union, an affiliate of the National

Mines and Allied Workers Union (NAMAWU) was formed. The first 3-year Collective

Bargaining Agreement (CBA) was signed in August 1961. In 1964, the company also signed

a 3-year CBA with then Philex Supervisors and Classified Employees Union. The first

elementary school in the mine site was established in 1961 at Banget with 90 pupils and 3

teachers. A chapel was also inaugurated.

In 1963, Philex shifted to full underground mining at 1414-ML. In the late 60’s, expansion

projects was planned. The new mill site at Banget was constructed. Level 4300 was

developed. The magnetite plant was also inaugurated. The Poro Point Conveyor Loading

pier in San Fernando City, La Union was completed.

In 1967, the employees established the first credit and consumer cooperatives with the

company providing Php 5,000 loan for their capitalization.

As part of the pollution control program, the construction of Tailings Dam No. 1 was the

major project in 1968.

The year 1968 marked several outstanding achievements in the various operations and

growth of Philex. The mine fully recovered from the ravages of the June 28, 1967 incident

(mud rush at underground) where production, development, and installations rose to

accomplishments above any previous annual period in Philex’s history. Also in 1968, Philex

entered into an operating agreement with Baguio Gold to explore, develop, and operate the

Sto. Niño Copper Project in Tublay, Benguet. In 1969, Philex filed applications for twelve

(12) offshore petroleum concessions and signed an agreement with the Philippine Overseas

Drilling and Oil Development Corporation (PHILODRILL). PHILODRILL was to operate the

concessions and pay to Philex a gross royalty. Philex also made a modest investment in

PHILODRILL.

After 15 years of existence, Philex had 10,000 stockholders and 2,200 employees.

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The 70's…

Tailings Pond No. 1 became operational in February 1972. Project 21,000 or increasing the

mill capacity to 21,000 tpd was undertaken in 1972-1973 and project 24,000 in 1974-1975.

1974 was the most unusual year for copper producers and Philex in particular. In almost all

respects, records were set by the company. The mine’s products, prices paid for its output,

gross and net income, foreign exchange generated and taxes, as well as cash dividends to

shareholders, were all at historic highs. Not to be outdone, nature contributed the most

severe late season typhoon yet experienced, causing heavy damage to camp facilities,

moderate damage to roads and bridges, and to a lesser degree to equipment.

The construction of the George C. Henry Shaft (GCH) was started in 1975. The shaft, at

depth of 405 meters, initially served the 1020-ML with fresh air, supplies, and access to

personnel. Later, the shaft was connected to 745-ML for a total distance of 618 meters.

In 1975, the first gold bullion was smelted. Also, in this year, Saint Louis High School –

Philex was established.

In 1976, Philex produced a total of 5,397 kgs or 173,517 ounces of gold, making it the

largest gold producer in the Philippines. In this year, Philex net Php 120 Million and

another Php 152 Million in 1979, two of the golden years of the company.

The 80's…

1980 marked the 25th year of Philex as a corporation and 23rd year of continuous operation.

Gold price at USD 850/oz was at all time high. While the Sto. Niño Mine was about to close,

a management agreement for the operation of the Batong Buhay Mine in Nueva Viscaya

was signed. Investment opportunities were made outside the mining venture – Firestone,

Armco Steel, and Citi Trust Bank among others.

The second Tailings Pond (Tailings Pond No.2) was completed in 1981.

1982, economically, was the most difficult year specially for the mining industry since the

great depression due to destabilizing elements such as inflation, deflation, bank failures,

interest rates, oil prices, and others. Construction of the New Mill at 745-ML was pursued in

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1982 but eventually deferred in 1984 on account of unfavorable economic situation. With

this deferment, the Cable Belt Conveyor (CBC) System was pursued in 1985 to continue the

delivery of the ore to the existing Banget Mill. Development of blocks below 1020-ML

ensued. The GCH shaft was connected to the 745-ML and became fully operational to the

lowest level.

Driving of the CBC tunnel was completed on October 13, 1987 and was commissioned in

April 1989.

Philex started to supply copper concentrate to PASAR in Isabela, Leyte in 1983.

Mr. Gerard H. Brimo, son of the founder Mr. Henry A. Brimo, joined Philex as Vice President

for Finance in 1985. He became Executive Vice President in 1986 and as President and

Chief Operating Officer in 1989.

The late 80’s was also marked by two occasions of labor strike, the first time in the history of

the company, 4 days in August 1986 and 13 days in December 1989. The Philex Mines

Supervisory Union was organized in 1989 and the first set of officers was inducted in

February 1990.

The 90's…

1990 was the most trying time in the 33 years of mining operations in Padcal due series of

natural calamities – the July 16 earthquake and the succeeding typhoons. It was also a year

of heroism. Philex miners risked their lives to help in the rescue operations at Hyatt Hotel in

Baguio City. Even if Philex is suffering from its own operational problems and difficulties, it

still went out of its way to help victims when Mt. Pinatubo erupted in 1991.

The development of first blocks at 908-ML and its subsequent operation in driving the

Bumolo Ramp were the major events in the early 90’s. The mine and mill operation

underwent re-engineering and marked the mechanization of the mine with the shift from

slusher method to LHD mining. The rehabilitation of the 22-km Philex-Kias provincial road

commenced in 1991 and became an all-weather concrete road when it was fully completed

in February 1994.

Tailings Pond No. 3 was operational in 1992.

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For the first time in the history of Philex, manpower downsizing by 20% was implemented

through early voluntary retirement and redundancy, reducing the manpower to 1,010

employees in 1993. The company further reduced manpower by more than 500 in 1996 and

another 124 employees in 1999.

Mr. Gerard H. Brimo became the new chairman of the board when Mr. Henry A. Brimo

retired in 1994 after 39 years with the company. The son took over the helm and led the

mining industry for the passage of the New Philippine Mining Act in 1995. RA 7942 gave the

industry the much needed shot to its revitalization.

In 1997, Philex became the largest copper and gold producer in the Philippines. Gold

production reached 9.4 Million grams, including that of Bulawan. 5.9 Million grams was

produced by Padcal, more than double of its production in 1996 at 2.8 Million grams. It was

the highest in the mine’s 39 years of operation. Bulawan accounts for 3.5 Million grams. It

was ironic that these milestones were achieved at a time of cyclically low metal prices.

The locomotive system of ore delivery was fully phased out in 1997, and the CBC became

the sole ore transport to the Banget Concentrator.

2000 and beyond…

Year 2000 came in with lots of challenges and opportunities for Philex. In Padcal Mine, two

underground crushers were installed in 2000 and became operational in 2001 to provide a

uniform feed to the feeder belts and the Cable Belt to improve productivity.

Philex Padcal’s Environmental Management System earned its ISO 14001 certification in

September 2002.

2003 is another significant year as it marked another transition for Philex. First, Dr. Walter

W. Brown joined Philex as President and Chief Operating Officer and later became the

chairman when Mr. Gerard H. Brimo retired in December 2003. Second, the development of

the 782-ML, the lowest and the last mining level also started in 2003. The first mining block

will be commissioned into production by latter part of 2005. This additional source is

expected to offset very low copper and gold grades of the ore sources from the fringes of

908-ML.

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In 2005, Philex celebrated its 50th year of incorporation. Overall, the company continues to

make progress. On the operational side, continuous programs were undertaken of

upgrading the Padcal mine and mill equipment in order to stabilize operations and increase

operating efficiencies. The 782-ML was inaugurated in November 2005 but was officially

commissioned in January 2006. Declared mine life of the Padcal mine is until 2011.

2006, the 51st year of the company’s existence was again marked by another milestone,

having had the highest earnings in the history of Philex so far. The rise in production levels

as a result of increased production from the 782-ML of the Padcal mine, significant increase

in metals prices, as well as higher ore grades, resulted in record revenues of Php 9.960

Billion. Net income was Php 3.087 Billion, or Php 1.044 per share. As result of careful

review of the ore reserves, anticipated production capability and attendant costs, and after

considering conservative projections of metal prices, the programmed economic life of

Padcal Mine has been extended by three years from the previous plan of closing by year

2011 to 2014.

The favorable trend continued in 2007. The continued rise in both gold and copper prices

coupled with significant increase in the quantity of metals produced, led to another landmark

year. Revenues of Php 12.2 Billion and net income of Php 5.0 billion surpassed 2006

records by 23% and 62%, respectively. Philex continued to focus on stabilizing and

improving operational capability.

After a few years of rising and historical record high for both copper and gold, in 2008, Philex

and the rest of the mining industry were again reminded of the certainty that commodity

prices are cyclical. From its high of around USD 4.00 per pound in April 2008, copper prices

dropped to as low as USD 1.26 per pound in December 2008. There was less severe

correction in the prices of gold, from near USD 1,000 per ounce to USD 712 per ounce in

December 2008. This negative effect of the decline in prices aggravated by lower

production volume and ore grade in both copper and gold, all contributed to the 19%

decrease in operating revenue net of marketing charges from Php 11.2 Billion to Php 9.0

Billion.

In 2008, the First Pacific Group of Hong Kong entered at Philex as a major shareholder.

Their entry, together with the continued involvement of other long-term investment groups,

not only strengthened the financial capability of the company but likewise increased its

capability to expand activities locally and abroad.

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2009 was another year of challenges and transition for the company. Manuel V. Pangilinan,

Managing Director and Chief Executive Officer of First Pacific seated as Chairman of the

Board of the company. First Pacific has chosen Philex to be the key company in its entry to

mineral and natural resource development. This is because of Philex’s reputation of being

responsible and profitable operator with mature mining assets.

Also, in 2009, the company benefitted from the rise in metal prices from the lows seen the

previous year. During the year, gold price reached as high as USD 1,214 per ounce in

December 2009 while copper price rallied towards the latter half of the year, reaching a high

of USD 3.33 per pound in December 2009.

The Padcal mine, however, had unusually high rate of operating setbacks during the year,

such as the entry of watery and clayey material that not only diluted ore grades but also

caused problems in the conveyor belt, frequently interrupting the 2.3 kilometer-long conveyor

that feeds the mill. Consequently, milling tonnage decline to 8.2 Million tonnes from the 8.9

Million tonnes of 2008.

Development works for the year were concentrated in the 908-ML and 782-ML, including the

advance development activities in preparation for the scheduled commissioning of

drawpoints for 2010, undertaken during the later part of the year. During the last quarter of

the year, the Sublevel Mining Project at 867-ML and 840-ML commenced in order to recover

the uncaved portion of the high grade ore source at 782-ML Cental Block.

A new twin-shaft sizer was also installed at 745-ML Feeder Belt Conveyor no. 1, the first of

its kind in the Philippines, which allow the ore to undergo comminution before reporting to

the conveyors. During the year, the installation of the 35 meters Sacrificial Belt between the

loading chutes and the Cable Hauled Conveyor (CHC, formerly termed as CBC) was also

completed. The installation of which is another milestone for the operations that eventually

prolonged belt life and drastically reduced delays.

Along with the improvements in the mine, the mill plant completed the installation of six (6)

units of 50 cum WEMCO Smart flotation cells to replace the old Agitair flotation machines.

This new equipment resulted in an additional flotation volume of about 180 cubic meters to

the rougher flotation circuit which is expected to improve overall metal recovery.

In 2009, Padcal mine life was officially declared to be up to 2017.

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The second half of 2010 saw the Padcal Mine’s full recovery from the operating setbacks

that started in 2008. The 867-ML and 840-ML Sublevel Mining Project were in full

production by July as source of high grade ores in addition to the 66 drawpoints

commissioned at 908-ML South Block. Along with the addition and improvement of ore

sources, the operation has sustained to keep ore handling and conveyance delays to the

minimum and propelled equipment availability with the six brand new LHD units added to the

fleet underground. The mill operations also reaped the benefits of the installation of

WEMCO Smart Cell as it increased the flotation capacity and retention time, thus

contributing to the increased metal recovery by lowering the tails grade. Another

improvement in the Mill is the installation of one (1) unit Metso C100 Jaw Crusher to replace

the old Pioneer Oro Jaw Crusher, increasing mechanical availability and efficiency in the

primary crushing operation.

The outcome of Padcal’s perseverance and creativity was the highest annual tonnage of 9.4

Million tonnes since 1987.

2010 was also a buoyant year for the Philippine mining industry, as gold and copper prices

reached all-time highs. During the year, the price of gold reached a high of USD 1,421 per

ounce and averaged USD 1,224 for the year. The price of copper went as high as high as

USD 4.41 per pound and averaged USD 3.42 per pound. With this favorable trend, re-

evaluation of Padcal’s present mineral resources was undertaken during the year to see if

more of it could be classified as ore reserves, and justify the investment in the development

works needed to extend the mine life beyond 2017.

2011 is another record year for Padcal surpassing its 2010 records in terms of tonnage,

grade and metals production. Tonnage for the year is 9.49 million tonnes, higher by 1%

compared to 2010. Copper grade of 0.221 %Cu and Gold grade of 0.564 g/t were both

higher by 5% and 2% than in 2010, respectively. Copper production of 37.9 Million pounds

is higher by 7% and gold production of 140,113 ounces is higher by 5%, both compared to

last year.

Major improvements in the mine for the year include the modification of Feeder Belt

Conveyor No.17 and installation of Feeder Belt Conveyor No. 19 at 773-ML which resulted

to the flexibility of the conveying system. A total of 100 drawpoints has been commissioned

for the year, 85 drawpoints at 908-ML South Block and 15 drawpoints at 782-ML North

Block. Development works during the last quarter of the year were also focused on the

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driving of extension of drilling drifts at 867-ML and 840-ML as source for 2012, including the

preparation of PL 8,9,10,12, and 13 at 908-ML North Block for the scheduled pillar robbing

by 2012.

In August 2011, Padcal’s mine life was extended further to 3 more years from its previous

declared mine life of up to 2017 to be extended until year 2020. This is the result of the re-

evaluation of its mineral resource, converting a portion of which into reserves based on

better metal prices projections and its mineability. The additional reserves will be coming

from the 798-ML, a new mining level scheduled to be developed by 2012 and will be in

production by 2015.

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10.0 HISTORY OF PRODUCTION

10.1 Production history of district and area

Philex Mining Corporation has been mining the Sto. Tomas II orebody within MPSA 156 as

early as 1958 using surface ore extraction method. Coinciding with the construction of a mill

plant, the operation started at a meager rate of 800 tons per day. The rate gradually

increased as the mill was continuously improved. Three years after the operation grew to

1.2 million tons per annum.

The year 1959 marks the era of first underground production in PHILEX when the first stope

at 1440 meter level was brought into production. A total of 11 million tons was extracted at

this level which sustained the operation for 13 years.

With the need to increase production and waning of better grade ore source at 1440 ML,

1320 meter production level was commissioned in 1967. Mining ore below the existing

haulage level called for the construction of a production shaft that will allow ore from 1320

ML to be hoisted to the 1425 haulage level. Level 1320 contributed 18 million tons of ore

and at some point was producing at the same time with another mining level, the 1190 meter

level to produce 24,000 tons of ore per day.

The 1190 ML was commissioned in 1972 as part of the “Project 24,000” which allowed the

mine to deliver the same amount of ore daily. The mill has undergone major improvements

prior to this, with the construction of Banget Copper Concentrator. This level was able to

contribute 54 million tons of ore. The next mining level by far produced the most tonnage for

the Padcal operations, the 1060/1020 ML, contributing a total of 134 million tons of ore. This

level also was characterized as the first “high-lift” mining level that was mined. 1015 and

975 mining levels were mined because of its high metal grade contents. These levels were

commissioned in 1995 and 1994 respectively.

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Figure 10.1-1 : VerticaI Section of PhiIex Mine

The block caving- slusher type of draw was employed throughout the underground mining

levels until the modernization program. This method consists of ore coming from the blocks

falling by gravity from drawpoints , scraping along the slusher lines by a one ton capacity

buckets and pulled by a 35 horsepower slusher winch towards finger raises.

The operation reached another milestone in 1997 with its shift to Load-Haul-Dump (LHD).

The previous slusher system of draw was beset with operational problems, starting from the

drawpoints down the line to the dump bin which caused production short fall from 1985 to

1993.

There operational problems were associated with:

1. Coarse ore fragmentation - The highly fractured ore condition experienced at the upper

levels is no longer there and the days of easy mining is over. Of the 11 million metric tons

being drawn from more than 1,000 drawpoints, 57 percent of the drawpoints yield a coarse

to very coarse fragments. The drawpoint condition survey also revealed 5.5 percent hang-

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ups above the drawpoint brow. At the 908 meter level, where the rock mass is considered

very competent. All joints and fractures are totally yield with gypsum and anhydrite veins

making the fracture frequency per meter less than 2. Likewise the matrix or ground mass

of the rock is strongly silicified giving an intact rock mass strength of 140 megapascal. The

rock mass rating based on Laubscher’s classification is 60.

At the upper levels, specifically at 1020 meter level there are at least three prominent joint

sets that compose the rock mass. The rock mass rating at this level is 43. Considering

that most of joints are open with in-fillings of gypsum.

The coarse ore fragmentations results to hang-ups at the finger raises, clogged boulders

are brought down by high packing.

2. Excessive water inflow in the caved mass - About 4 million metric tons of ore or 20

percent of the drawpoints are infiltrated with water. Water in the mine generally enters from

the periphery of the cave domain through the failure zone and open structures, only 10

percent of the volume of water is attributed to the direct penetration of rain water at the

subsidence area. The water table is measured at elevation 1100 meters. Water inflow

has increased by 400 percent after the 1990 earthquake. The horse tailing end of the

Albian fault is the main passage of water into the mine. Measurements from all our drain

tunnels indicate an annual average of a little less than 4,000 gallons per minute during the

rainy months of August to November from 1990 to 1994. Approximately 10 percent of this

figure report to our ore passes and into the ore haulage system. The Sta. Fe fault at the

northeast of the orebody is impermeable but the area beyond the foot wall side is watery.

At the drawpoints, the water renders the ore sticky and fluidized. Drawing of stick ore

requires frequent secondary blasting. The fluidized ore result to mudrush which poses

hazards to men. At the slusher lines and transfer raises, the water and ore are scraped at

the transfer raises. When pulled out, this results to blow outs at the loading chutes.

Derailment of mine cars and damage to conveyor structures will result. There is also a

severe siltation at the haulage drift which requires additional equipment to clear the

spillages. In order to control water underground various dewatering measures were

undertaken.

At the underground, dewatering dogholes and drain raises were driven below the slusher

lines in a direction across the orientation of the slusher lines. Closely spaced grizzlies are

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provided to drain the silt and water. At the long transfer raises, at the footwall above the

loading chutes: grizzly, vibrating screen and spiral classifier are installed to dewater the silt

and water from the long transfer raises.

3. Early entry of dilution and weight problems - The uneven drawing of ore from the

drawpoints attributed from hang ups, sticky ore and fluidized ore have resulted to some

extent to an early entry of dilution and pressure.

Comprehensive researches and studies including actual observation from mines abroad

employing LHD mining coupled from the ideas culled from these trips and inputs from foreign

consultants have convinced PHILEX to shift to LHD extraction method. The LHD drawpoint

is capable of handling coarser ore than the drawpoint in the slusher method. It can address

water related problems since the water coming from the drawpoints can be diverted to the

drain level. In the slusher method water from the drawpoint report at the transfer raises.

Early dilution and pressure can significantly be reduced since the coarser ore can be drawn

easily and regularly. The pillars in the LHD method are thicker thus stronger and more

resistant to weight pressure.

The succeeding production levels at 975 ML, 908 ML and 782 ML were mined using this

method that allowed Philex to sustain 9 million tons per annum operation.

In 2005, the Padcal mine commissioned its lowest mining lift, the 782 ML, aimed to replace

better grade ore sources mined out in 908 ML.

10.2 Previous mining areas

The location of the mining activities is within the coordinates of MPSA 156 defined in

Chapter 7.

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10.3 GeneraI description of mining, ore beneficiation, concentrate, mineraI product

market

Extraction was done initially using surface mining method called open pit at a rate of 800

tons per day. Shortly, this shifted to underground mining employing block caving with

slusher as type of draw then later on advanced to a more mechanized Load-Haul-Dump

(LHD) units which ramped up the production rate to 25,000 tons per day. Caved ore were

extracted at slusher drifts (during the slusher era) and drawpoints (LHD mining) of the

production level. The ore underwent size reduction techniques through either manual or

mechanized rock breaking techniques. Recently, underground crushers were installed to

ensure that the biggest size of the run of mine is six inches. Ore was transported to the mill

at the surface using diesel locomotives and presently using cable hauled conveyor.

The flotation method was used to recover the minerals from the ore. First ore undergoes to

a process of communition or the process of further breaking the ore to the mineral’s

liberation size through stages of crushing and grinding. The grinded ore, then is introduced

to reagents which separates the valuable minerals containing copper, gold and silver, to the

gangue. The final product of the milling and metallurgical process is copper concentrate

which are shipped to the smelters.

Philex Mining Corporation has been for decades, one of the largest producer of copper and

gold in the Philippines.

10.4 Tonnage mined and soId

The Padcal operations since start has already mined and processed 362 Million tons of ore

and produced and sold 201 billion pounds of copper, 6 million ounces of gold and 6 million

ounces of silver as of July 2012.

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Figure 10.4-2 : Tonnage mined and soId

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Chapter 11.0

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11.0 GEOLOGY

11.1 Regional and Local Geology

The Philippine Archipelago lies in the West Pacific Ocean, just north of the junction of three (3)

great tectonic plates of the lithosphere, the Eurasian Plate, the Pacific Plate and the Indo-

Australian Plate. It forms a roughly triangular area bounded by the Bashi Channel on the north,

the North Luzon-Manila-Palawan Trench and the ridge system on the west, the Sulu-Sabah

Ridge Complex and Cotabato Trench on the south and the Philippine-East Luzon Trench on the

East.

Morphologically, the Philippines may be described as a composite of linear, subparallel ridges

alternating with basins and troughs following the trend of bordering trenches. The ridges are

upthrusted and/or uplifted belts of ophiolite and volcano-plutonic complexes. The intervening

lows are sedimentary basins and troughs exposed partly on land areas following uplift of folding.

The archipelago is defined by a main arc of islands facing the Pacific and two (2) narrower arcs

projecting from its southwest flank linking it to Borneo. The main arc may be viewed as made

up of convex arcs, the northern arc convex westward and the southern arc, convex eastward

The Baguio Mineral District, where Philex Mine sits, is underlain by Cretaceous-Paleogene

metamorphosed sediments and volcanics locally known as the Zigzag-Pugo Formation. The

volcanic rock units consist of spilitic basalt, andesite flows, green tuffs, tuff breccias and

volcano-clastics overlain by sediments consisting of sandstones and red and green tuffaceous

shales. These are metamorphosed in varying degrees.

Overlying the basement rocks to the western side of the project area are marine sediments of

the Kennon Limestone, Twin Peaks Formation and the Klondyke Conglomerate. The

hornblende – biotite – quartz diorite intrusive of the Agno Batholith intruded the basement rocks

to the east giving a narrow zone of hornfels associated with pyritization. The age of the

intrusive is Middle Miocene with K-Ar date of 15 Million Years.

Intermediate to felsic intrusives in the form of stocks, dikes and flat bodies were found up to the

lower member of the Klondyke Conglomerate. Porphyry copper deposits are localized within

these felsic intrusive stocks.

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11.2 Local Lithology

The following lithologies occur within the Padcal deposit:

Andesite Porphyry (Ap): This rock type is located within the center of the Santo Tomas II ore

body and represents the “low grade” core. It is porphyritic in texture with diagnostic sub-

rounded plagioclase phenocrysts, light gray in color and weakly mineralized. It was dated to be

about 1.9 million years (Early Pleistocene age) through K-Ar dating.

Hornblende Andesite (Ha): This lithology is similar to the andesite porphyry, but has somewhat

coarser hornblende phenocrysts and may somewhat postdate the andesite porphyry.

Clear Diorite (Cd): Texture is medium hypidiomorphic granular. The texture, however

is commonly obliterated where high silicification was observed. Subhedral plagioclases of

andesine to labradorite compositions are fresh, but some are partly altered to sericite, calcite

and alkali feldspar. Mafic minerals, hornblende and to a lesser extent biotite are partly or

wholly altered to chlorite, secondary biotite, calcite and magnetite. The dominant alteration

mineral is strong silicification. This rock type was dated through zircon fission track dating at 2.1

Ma (Late Pliocene).

Dark Diorite (Dd): Subhedral to anhedral plagioclase, hornblende and quartz

phenocrysts in seriate series set in an extremely fine grained to aplitic quartz- feldspathic

groundmass. Plagioclase phenocrysts are composed of andesine- labradorite exhibiting

twinning and zoning. Some phenocrysts partly replaced by sericite and calcite, others have

alkali feldspars along cracks and margins of the crystals. Hornblende is fresh to partly to wholly

replaced by secondary biotite and to a lesser extent by chlorite and calcite. It’s dark color is due

to its fine texture and to fine magnetite and secondary biotite disseminations. This rock is the

most mineralized and altered among the intrusive rocks in the area. It was dated at 3.8 Ma (K-

Ar) or Late Miocene.

Metamorphosed Sedimentary and Volcanic Rocks (Ma): This is the country rock unit belonging

to the Zig-Zag-Pugo Formations of the Baguio District and is believed to be of Paleogene age.

It consists of regionally metamorphosed andesite and tuffaceous rocks with intercalated

sedimentary intervals. The texture is variable ranging from aphanitic to porphyritic

and hornfelsic. It is usually dark in color. Mineralization near contact with the diorite

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intrusive is strong and decreases outward to a maximum radius of about 200 meters from the

contact.

11.3 Alteration

Alteration is typical of porphyry copper deposits. Main alteration assemblage

associated with copper sulfide mineralization is quartz-biotite-chlorite-actinolite-

gypsum/anhydrite that is typical of potassic alteration. Orthoclase, which is characteristic

of alternation in the potassic zone, is absent. Sericite is also weak. Below the 1100ML, or

about 1,100 meters above mean sea level, gypsum fracture fillings give way to anhydrite

fracture fillings. Below 1,100 meters, the anhydrite fracture fillings cause the ore to be

somewhat more competent which causes very coarse in fragmentation when the rock is caved.

Phyllic and argillic alteration with pervasive clay, pyrite and silicification were mapped only near

surface at the subsidence area. A possible pyrite halo is observed underground at the

fringes about 200 meters from the ore boundary. Enveloping these alteration halos is the

propylitic zone with chlorite dominating the fringe ore zone and epidote gradually increasing

outwards.

11.4 Structural Geology

The Archipelago is classified into two major structural units, a mobile belt and a stable region.

The mobile belt is a broad zone of active deformation characterized by pronounced seismicity

and volcanism that runs longitudinally throughout the entire length of the archipelago. Tectonic

activity is defined by active crustal underthrusting or subduction along its bordering trenches.

On the east, the Philippine Sea floor is underthrusted along a west-dipping subduction zone

marked by the Philippine Trench. On the west, the South China Sea bottom is underthrusted

along the east dipping Manila Trench. Active subduction is likewise occurring along the east-

dipping Negros and Cotabato Trenches.

In contrast to the mobile belt, the southwestern part of the archipelago which embraces mainly

Palawan and Sulu Sea is generally considered a stable or aseismic zone. The Sulu and

Palawan trench-arc complexes appear as generally inactive subduction systems which in north

Palawan show a remnant of continental platform developed most probably in the Early Jurassic.

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Geologic structures of the Archipelago consist fundamentally of folds and faults (crustal

fractures). On the basis of their axial trends, the folds may be classified into three (3) distinct

sets:

1. A NW-SE set which includes folds with axial traces ranging between N45W to N10W;

2. A NE-SW set which includes folds with axial traces ranging between N5E to N45E;

3. A N-S set which includes folds with axial traces ranging between N10W to N5E;

Faults are generally described as transcurrent faults, normal faults and thrust faults. The

Philippine Fault is the greatest transcurrent fault in the Philippines. It is traceable for about

1200km, from Lingayen Gulf on the north, thence along the southern border of the Luzon

Central Cordillera, Polillo Strait, Tayabas Isthmus, Masbate, Leyte, Agusan and into the Davao

Gulf on the south. It is determined by many workers as a strike-slip, left-lateral fault.

Normal faults of varying magnitude are sporadically distributed throughout the archipelago.

Among the prominent ones are faults in Ilocos Norte, Cagayan Valley, Mindoro and Cotabato.

The more important thrust faults generally occur along the borders of the main Philippine arc

and Sulu arc. Examples of the significant ones are those along the western edges of Mindoro,

in Panay, in the Bicol Region, in Surigao del Norte, Surigao del Sur, Central Mindanao, Davao

Oriental and some parts of Lanao and Cotabato.

All significant gold mineralization are localized along fault structures bounded by the splits of the

Philippine Rift. Three (3) sets of faults are prominent in the Philex area:

1. North-South fault – almost parallel to the regional structure of the Central

Cordillera. Most prominent of the North-South is located south of Philex in the

headwaters of Toboy River along which shear zones of tens of meters are

developed. Approaching the orebody, it becomes unclear because of later

disturbances in the ore zones.

2. East-Northeast Fault – most conspicuous in regional topography are shear

zones, veins and dikes of gold-bearing quartz, gouge and andesite. Northeasterly

faults are well defined along the western contact of the Agno Batholith and

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named from north to south as Sta. Fe Fault, Bumolo Fault, Albian Fault, Wilson

Fault, San Expedito North and South and North Faults. They are recurrent in

nature.

3. Northwesterly fault is complimentary to the above two and the most closely

associated with porphyry copper mineralization.

In the Philex Mine in Benguet, the two (2) major faults considered of importance are the Sta. Fe

Fault and the Albian Fault.

The Sta. Fe Fault is one of the major structures transecting the Sto. Tomas II orebody. It is a

normal strike-slip fault with a right-lateral component. It extends in a northeast-southwest

direction, intercepting the orebody at around 908ML while dipping southeast at 60°, steepening

to an angle of 70° at depth. Exposures of the fault at the mining levels and drillholes

intercepting the fault exhibit 40-60m thick gougy zones with some slickensides showing dextral

movement. The fault is interpreted to be pre- or syn-mineralization in timing, though a syn- to

post-mineralization activation is also possible due to evidences showing a possible truncation of

the orebody at depth towards the northeast.

The Albian Fault is the structure regarded as the primary conduit of mineralized fluids during the

formation of the Sto. Tomas II orebody. It is a northeast trending, southeast dipping fault similar

to the Sta. Fe, and also being located only a few hundred meters south of the latter. The Albian

fault splits into three branches at the orebody with the northern branch dipping 80° southeast

and the southern branch dipping 50°. Towards the northeast away from the orebody, it is

manifested by the steeply-walled Albian Creek.

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Figure 11.4-1: Map showing fold patterns

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Figure 11.4-2: Map showing crustal fractures

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11.5 Mineralization location and general description

Table 11.5-1: Baguio Gold District – Principal Deposits (taken mostly from the Mineral Resource

Information

Series No. 6 (LGSD, MGB, DENR).

Sto. Tomas II Porphyry copper−gold Operational (Philex Mining Corp.)

Sto. Nino Porphyry copper−gold previously operational

Ullman Porphyry copper−gold previously operational

Black Mountain Porphyry copper−gold previously operational

Cooper King Porphyry copper−gold previously operational

Acupan South Porphyry copper−gold previously operational

Acupan Epithermal gold vein (low−sulfidation) Operational (Benguet Corp.)

Antamok Epithermal gold vein (low−sulfidation) previously operational

Baguio Gold Epithermal gold vein (low−sulfidation) previously operational

Kelly−Baco Epithermal gold vein (low−sulfidation) previously operational

Itogon−Suyoc Epithermal gold vein (low−sulfidation) previously operational

Chico Epithermal gold vein (low−sulfidation) previously operational

Cal Horr Epithermal gold vein (low−sulfidation) previously operational

Sierra Oro Epithermal gold vein (low−sulfidation) previously operational

Omibex Epithermal gold vein (low−sulfidation) previously operational

Kias Epithermal gold vein (low−sulfidation) previously operational

Demonstration Epithermal gold vein (low−sulfidation) previously operational

Macawiwili Epithermal gold vein (low−sulfidation) previously operational

Thanksgiving Mine Gold−bearing zinc skarn deposit previously operational

Wildcat Cu deposit Conglomerate−hosted replacement previously operational

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Chapter 12.0

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12.0 MINERAL PROPERTY GEOLOGY

12.1 GeoIogicaI work undertaken by the company in the property

During the period 2004-2012, the company has undertaken numerous geological work across 8

prospects enclosed in its three tenement claims: Sto. Tomas II in MPSA-276-2009-CAR;

Bumolo, Southwest, Bumolo 2, Butan, Midway and Copper Queen in MPSA-156-2000-CAR;

and Tapaya in MPSA-157-2000-CAR. Focus of the discussion is on the Sto. Tomas II orebody.

MPSA-276-2009-CAR

(Sto. Tomas II)

For MPSA-276-2009-CAR, fifty-three (53) holes were drilled since 2008. The first 3 holes sat at

the NE and SW peripheries of the Sto. Tomas II Orebody at 908ML. They were aimed to find

lateral extensions of the orebody. An aggregate meterage of 1,868.60m was drilled, and it

intersected a discontinuous zone of marginal Cu and Au grades.

Meanwhile, of the 53 holes, 36 were aimed to find vertical ore extensions of the Sto. Tomas II

Porphyry Cu-Au Mine below the current lowest mining level, which is 745ML. This endeavor,

which commenced on October 2008 and ended on September 2011 sunk a total meterage of

18,505.30m of scout and definition drillholes stationed at 5 diamond drilling stations (DDS).

These stations were constructed at accessible drifts at the peripheries of the mineralized

porphyry stocks at 773ML.

Furthermore, 14 of the remaining holes were placed at 840ML. 11 of these holes were

confirmatory, which summed 796.60m. The last three were exploratory, probing through the

northern periphery of the orebody. A total meterage of 1,373.90m were drilled for these holes.

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13.0 MINERALIZATION

The different prospects within the vicinity of Padcal can be generally divided into copper-gold

porphyry prospects and the gold vein prospects. Sto. Tomas II, Bumolo, Bumolo 2/Sta. Fe,

Southwest, Southwest Breccia and Tapaya fall under the copper-gold porphyry prospects while

Butan, Midway and Copper Queen are classified within the gold vein prospects. Discussed

below are the different mineralization characteristics of these areas.

Sto. Tomas II (Below 773ML)

Mineralization Overview

Mineralization within the Sto. Tomas II orebody is associated with the various diorite porphyry

stocks (Dark diorite, Clear diorite, Andesite porphyry, and Quartz diorite/Tonalite) which have

intruded the basement meta-andesite wallrocks of the Pugo-Zigzag Formation. These intrusive

stocks are said to be related to the diorite and dacite porphyries of the Black Mountain Quartz

Diorite. Among the porphyry stocks in the area, the dark diorite (DD) is the principal ore bearing

rock. The inter-mineral clear diorite on the other hand is less mineralized than DD. The andesite

porphyry (AP) is characteristically low in copper but high in gold while the post-mineral quartz

diorite (QD/tonalite) is almost devoid of both copper and gold. Subsequent exploration drilling

activities discovered a structurally controlled gold-rich, copper-poor zone at 400-500 meter level

was also discovered at the northeast fringe of the orebody. It has an apparent thickness of 117

meters along drillhole intercepts and is noted to occur in CD and some meta-andesite. Likewise

a deeper gold-rich interval of post-porphyry copper-gold mineralization was also intersected in

one of the holes collared at the northeast, hosted in a sericitized quartz-gypsum vein in meta-

andesite and located at approximately -150 meter level.

Style and Type of Mineralization

The Sto. Tomas II prospect resembles a typical porphyry style of mineralization. It is a copper-

gold deposit, with rare molybdenite as well as traces of palladium-bearing minerals. Within the

main orebody, chalcopyrite and bornite are the most common copper minerals occurring as

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stringers, veinlets, and disseminations. Covellite and chalcocite are also noted as replacements

of bornite and some chalcopyrite, albeit only partially. Other sulfides noted include galena and

sphalerite.

Occurrence of gold is revealed to be along grain boundaries with some interstitially to quartz.

Observations from microscopy determined them to be either attached or locked in bornite and

chalcopyrite, with more preference for bornite; this shows a 60 percent preference of native gold

as attachments to copper minerals. Other occurrences observed are also in fine pyrite, and

within quartz veins/veinlets.

Four distinct ore zones within the Sto. Tomas II deposit were identified; these are namely the

high bornite zone, low bornite zone, low copper-high gold zone, and the fringe/low copper-gold

zone. The high bornite or high gold zone is regarded as the main ore zone, with bornite to

chalcopyrite ratio from 1:1 to 1:4 and concentrate grade of >27 percent Cu and 40 to 50g Au/t.

Rock types within this zone consist of the dark diorite, clear diorite, and some meta-andesite

portions. The low bornite zone on the other hand envelops the main ore zone, with bornite to

chalcopyrite ratio from 1:3 to 1:8 and concentrate grade of 24 to 25 percent Cu and 30 to 40g

Au/t. Rock types in this zone includes clear diorite and meta-andesite with less quartz

stockworkings than those from the high bornite zone. The low copper-high gold zone is also

known as the barren core zone. This is mainly composed of the andesite porphyry which is

characteristically high only in gold content. Bornite-copper ratios are from 1:3 to 1:4 while the

concentrate grade is 20 to 22 percent Cu and >40g Au/t. The fourth ore zone is the fringe ore

zone, which is generally low in both copper and gold and envelops mainly the low bornite zone.

Bornite-copper ratios are from 1:3 to 1:4 with concentrate grade of 20 to 23 percent Cu and

<30g Au/t.

Subsequent drilling activities were also conducted to characterize the orebody at depth. At 773

meter level and below, copper and gold occurrence is generally related to the persistence of

chalcopyrite along wallrock-intrusive contacts; specks of bornite are also encountered but are

mostly confined in fractures and veinlets. Sphalerite and galena are also present but usually

related to post porphyry copper mineralization. Within the wallrock, chalcopyrite and pyrite

generally occur as fine disseminations, stringers and fracture fills. Short intercepted intervals of

dark diorite exhibited decreased values of chalcopyrite, pyrite, and bornite mineralization, with

strong propylitic alteration. In clear diorite, chalcopyrite and pyrite occur as specks and

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disseminations in fractures and veinlet fills while bornite is rarely seen. For andesite porphyry,

pyrite is dominant with traces of chalcopyrite. The quartz diorite or tonalite body is almost barren

of mineralization, owing to its post-mineral timing. The hydrothermal breccias encountered at

the northwest and southeast peripheries of the main orebody also contained disseminations of

sulfides in matrix and clasts as well as stringers and fracture fills.

An occurrence of a high gold zone at depth was also discovered. This zone at 400 to 500 meter

level is concluded to be a younger structurally-controlled pulse of mineralization unrelated from

the main stage porphyry while a deeper gold rich zone at -150 meter level is likely a bonanza

vein type of mineralization. Within the deep gold zone, mineralization is mostly pyrite occurring

as coarse aggregations, with some occurrences of chalcopyrite, galena, and sphalerite. Copper

content is negligible while gold grade ranges from 0.10 to 9.18g Au/t, correlating with gougy and

sheared zones. Unlike the preference of gold to copper sulfides particularly bornite at upper

levels, gold in lower elevations shows preference for pyrite.

Alteration

Alteration in the Sto. Tomas II orebody is mainly potassic and propylitic. The potassic alteration

is comprised of a quartz-secondary biotite-magnetite-chlorite-actinolite assemblage and is

situated on the north and west zones of the orebody coinciding with the high bornite-high gold

zone. Biotite occurrences, often in association with chlorite, are common as quartz vein/veinlet

infills, stringers, with some stockworks. Propylitic alteration on the other hand is composed of a

chlorite-clay-epidote-calcite-magnetite-pyrite-zeolite assemblage, with the notable chlorite as

replacement and groundmass and epidote mostly as vein infills. Limited phyllic altered zones

are noted, mostly along fractures. Alteration at levels below 773 meter level is also dominantly

potassic (biotite-magnetite-quartz-chlorite±chalcopyrite±pyrite) with minor propylitic (quartz-

chlorite-pyrite-epidote-calcite) assemblages. Furthermore, the major potassic alteration grades

to propylitic with increasing distance from the intrusive complex and eventually grades into

regional metamorphism both laterally and vertically. Strong propylitic altered intervals together

with potassic alteration assemblages are also noted on the dark diorites below 773 meter level.

Sericitic alteration, on the other hand, is exhibited mostly at intercepts where fault planes are

intersected. Gypsum-anhydrite veins are also present and are probably introduced from a later

hydrothermal event. Within the gold rich zone, alteration is strongly propylitic, with chlorite-

epidote-calcite±quartz alteration assemblage. Calcite occurs as open space fillings while

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chlorite grains were observed as complete alteration of primary mafic minerals. Clay-altered

plagioclase grains were also noted.

Geological Structures

Two major north-northeast striking, southeast dipping structures played an important role in the

formation of the Sto. Tomas II orebody; these are namely the Sta. Fe Fault and the Albian Fault.

The latter is considered to be the conduit of mineralization, with the fault splitting into three

branches at the orebody. However, no prominent exposure of the fault was observed at the

mining levels. The Sta. Fe Fault on the other hand is the main structure affecting the behavior of

the intrusive complex at depth, intercepting the orebody from 908 meter level downwards.

Mineralization within the Sta. Fe Fault occurs in short intervals related to the gougy and sheared

zones, as intercepted by different drillholes. Sulfides are observed as fracture fills as well as

disseminated grains usually within the gouge material. The fault is interpreted to be pre- to syn-

mineralization in timing, which would place it contemporaneously with the introduction of the

structurally-controlled gold-rich zone.

Grade Levels

Copper and gold values within the main orebody where bornite-chalcopyrite ratios are 1:1 fall

within the range of 0.60 to 1.20 percent for Cu and 0.80 to 1.50g Au/t for gold. With increasing

depth from 773 meter level, copper and gold values are still appreciable (>0.2 percent Cu,

>0.20g Au/t), though it diminishes at depth and lateral distance. The hydrothermal breccias at

the orebody peripheries, also contained disseminations of sulfides; however, only the breccia

body occurring at the northwest periphery exhibited significant copper and gold, with values

reaching ≤0.48 percent Cu and ≤0.36g Au/t in short intervals.

Localization and Continuity of Mineralization

The Sto. Tomas II orebody forms a roughly pipe-like deposit having lateral dimensions of 500

meters by 550 meters and a vertical extent of 730 meters. Copper and gold mineralization at

levels above 745 meter level is generally focused within the main intrusives, with the occurrence

of the quartz diorite body at 600 meter level causing an abrupt drop in both copper and gold

grades. Subsequent mineralization below 745 meter level was observed to be within the

wallrock-intrusive contact zones with extensions into the meta-andesite. Recent drilling from 773

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meter level has also delineated the extent of the main intrusives up to around 400 meter level,

where the said lithologies seemed to have “floored” into the meta-andesite. Evidences of a post-

mineralization occurrence of the Sta. Fe Fault brought up the possibility of the truncation of the

orebody at depth. Given the fault’s normal sense with a minor right-lateral component, a

possible truncated half of the deposit might be situated to the northeast of the present location

of the orebody.

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Chapter 14.0

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Chapter 15.0

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Chapter 16.0

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Chapter 17.0

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17.0 ECONOMIC ASSESSMENT OF THE MINING PROJECT

17.1 Description of Mineral Resources estimates used as basis for conversion to

Ore Reserves

The mineral resource modeling was done by Company geologist under the supervision of a

CP Geologist. It has undergone a number of iterations done with the guidance of the Joint

Ore Reserve Committee (JORC) standard.

The mineral resource estimate used in this Technical Report is done to a definitive feasibility

study level and reported using the PMRC.

17.2 Type and Level of Feasibility Study

In as much as the company has been operating for more than 50 years, the feasibility

evaluation is considered to be definitive. Almost all of the pertinent unknowns compared to

opening a new mine have been identified if not experienced. Some of these parameters are:

Table 17.2-1: Mine Parameters

Parameters Aspect Decision Affected

Caveability of the orebody

Mining

Mining method

Ground conditions

Mine design, Rock supports,

Equipment selection, CAPEX and

OPEX Mineralogy Mill and Metallurgy Mill process and Mill Parameters

Mill process Mill and Tailings handling Material balance and Tailings storage

facility (TSF) construction parameters

Materials, supplies

equipment supply chain

and

Procurement

Pricing and Lead times

Facilities location Legal Permitting

acquisitions

and Surface rights

Environmental regulations

(ECC) and Company’s social

commitment

Environment

Mine, Mill and TSF construction

parameters, Environmental

monitoring activities and audits and

Design of mine closure plan

Social Social impacts and Design of

community development programs

The Padcal mine has established all of these in the course of its operating life and would be

the basis of this technical report.

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17.3 Brief Description of the Project

17.3.1 Mining and processing operations

Philex employs block caving method of mining to extract ore and utilizes LHDs to draw ore

from drawpoints. Conveyors are used to transport the ore materials to the processing plant.

The processing operations employs flotation process to separate gangue materials from

copper and gold minerals to produce concentrates.

17.3.2 Mining Method and capacity

Block caving being a bulk underground mining method allows high extraction rates. For the

remainder of the operating life of the mine, the average daily throughput is 25,730 Dry Metric

Ton (DMT) or 9.4 million DMT per year.

17.3.3 Processing Method and capacity

Run of mine ore pass through stages of crushing and grinding to a suitable size. Valuable

minerals are recovered using flotation method. The mill, at its present state can process ore

at maximum daily rate of 30,000 DMT.

17.3.4 Ore to be Mined / Product to be produced

The ore being mined contains copper and gold with head grades of 0.21 percent Cu and

0.43 g Au/t, which after going through milling and metallurgical process will be turned to a

copper concentrate containing 25 percent copper and 45.69 grams gold per ton.

17.3.5 Prospective Markets or Buyers

Copper concentrates produced by mining companies in the Philippines are sold to smelters

and refiners (“Offtakers”), either abroad or to Philippine Associated Smelter and Refinery

(“PASAR”) in the Philippines. Sales contracts, either spot or long-term, with Offtakers are

typically denominated in US dollars following the global prices of metals, which are also

denominated in US dollars, as in the London Metal Exchange which is usually the basis of

pricing contracts. The final value of metals from concentrates sold is determined following

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agreed quotational period, typically one to three months from the delivery of concentrates to

Offtakers.

Offtakers who treat the ore and refine the copper, collect treatment charges (TCs) in US$

per dry metric ton and refining charges (RCs) in cents per pound. Additional charges are

also collected for other metals refined such as gold or silver. These treatment and refining

charges are usually negotiated but generally are based on the benchmark rates arrived at

annually by major Japanese smelters with their suppliers of concentrates.

Philex has two current Offtakers for its copper concentrates, namely Pan Pacific Copper Co.

Ltd. and Louis Dreyfus Commodities Metals Suisse SA.

17.3.6 Estimated Mine Life

The technical report illustrates an economic mine life of eight years including 2013 for the

Padcal operations.

17.3.7 Total Project Cost/Financing

The project is in operational state, thus do not require an initial capital cost. However, it will

need a capital investment to sustain its economic viability. In summary, the following costs

will be incurred throughout its 8 year life.

Table 17.3-1: Total Project Cost

Component In Philippine Pesos

Mine Development 4.45 Billion

Tailings Storage Facility 3.57 Billion

Other Capital Expenses 0.45 Billion

Machinery and Equipment 0.49 Billion

Total 8.96 Billion

17.3.8 Production Cost / Production Schedule

The result of the production scheduling software, PCBC is tabulated and shows that the ore

sources are sufficient to sustain 9.4 million tons per year. The production of 2013 takes off in

March 8 on the order of the Mines and Geosciences Bureau (MGB) and Environmental

Management Bureau (EMB), temporarily lifting the suspension order of the Padcal

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operations. The suspension is a result of the sediment spill in the Tailings Storage Facility

(TSF) 3. The order allows operation for four months from March 8, 2013 as part of the

remediation activities.

In conjunction with the remediation activities in TSF 3, the construction of the operational

spillway will be completed before July 2013 which will replace the penstock system as an

outlet for effluents. Upon completion of the remediation works, international TSF consultants

would have certified the reusability of the facility, thus covering all technical bases to

continue the operations using the restored TSF 3.

Table 17.3-2: Production Schedule

2013 2014 2015 2016 2017 2018 2019 2020 Total

Metric Tons

Ore, Millions 7.7 9.4 9.4 9.40 9.40 9.4 9.40 9.40 73.50

Copper, % Cu 0.22 0.22 0.21 0.21 0.21 0.20 0.19 0.19 0.21

Gold, g Au / t 0.50 0.52 0.47 0.44 0.42 0.38 0.37 0.37 0.43

To mine and process a sustained rate of 9.4 million tons per annum for the majority of the

operating life, the Padcal mine will spend 43.33 Billion Pesos as outlined below.

Table 17.3-3: Total Production Cost

Component In Philippine Pesos

Mining 16.14 Billion

Milling 17.70 Billion

Maintenance 0.98 Billion

Tailings Management 1.83 Billion

General Overhead 6.16 Billion

Trucking of Concentrate 0.32 Billion

Drying and Loading of Concentrate 0.20 Billion

Total 43.33 Billion

17.4 Marketing Aspects

17.4.1 World Supply and Demand Situation

17.4.1.1 Gold

India, China and recently, global central banks, have been the major sources of gold

demand for the last ten years. China and India, because of their special affinity and cultural

connections with gold, contribute about 50 percent of global gold consumption, according to

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the World Gold Council (WGC). Central banks on the other hand have become net buyers of

gold since 2009, after many years of only net selling. Figure 17.4.1.1-1 and Figure 17.4.1.1-2

below show the historical demand from India, China and the central banks.

Figure 17.4.1.1-1: India and China's Gold Demand in Tonnes

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Figure 17.4.1.1-2: India and China's Gold Demand in Tonnes

17.4.1.1.1 Central Bank

Demand for gold has been propelled by the US Federal Reserve’s Quantitative Easing (QE)

programs which began in December of 2008. A total of 2 trillion dollars was injected into the

US economy during QE’s 1 and 2. Such policy led to the depreciation of the dollar and gold’s

surge from USD 800 to a record high of USD 1,921 in September 2011. In September 2012,

the Fed announced the third round of Quantitative Easing (QE3) which will inject USD 40

billion per month into the US economy until a substantial recovery is observed. In December

2012 QE3 was escalated by a further USD 45 billion per month to USD 85 billion per month.

This is expected to further boost gold’s price as investors seek a stable store of wealth away

from the depreciating dollar.

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Figure 17.4.1.1.1-1 Historical Gold Prices (Nominal Dollars)

The figure below provides a graphical representation of the gold price for the last 10 years

17.4.1.2 Copper

Infrastructure build out from the emerging markets, especially in China, has been the major

source of demand for copper in the past 10 years. Modernization in these developing

countries pushed copper prices to quadruple from less than USD 1/lb in 2002 to an average

of USD 3.86/lb in 2011. China, which accounts for around 40 percent of global copper

consumption, has been the primary contributor to this price surge.

From 2003 to pre-2008 financial crisis, China played a large role in copper demand.

According to a study by Dr. Masuma Farooki, prepared for The Annual Conference of the

Chinese Economic Association in July 2010, China grew at an average rate of 10 percent

per annum from 1990 to 2007. Contributing to this strong economic growth were industrial

expansion, infrastructure investments, large exports and its large population. It focused on

expanding its infrastructure and manufacturing sectors, both resource-intensive, and

became a large export-oriented country, exporting both low and high technology products,

Figure 17.4-3: Gold and QE

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with such products also being resource-intensive. Its large population also stimulated the

country’s expansion, as they were able to produce more output for China’s economy.

In 2008, another financial crisis hit the global economy. China grew only 9.6 percent in 2008,

after growing by 14.2 percent in 2007. The Chinese government introduced a stimulus

package in November 2008 totaling USD 585 billion to help spur back growth. This package

included infrastructure and construction projects, as well as policies to increase domestic

demand, directly impacting on China’s commodity demand, including copper.

Figure 17.4.1.2-1: Shows China's significant contribution to copper demand in the past 10

years. Trends for Global Refined Copper Consumption

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Figure 17.4-6: Historical Copper Prices (Nominal Dollars)

Figure 17.4.1.2-2 below provides a graphical representation of the copper price for

the last 10 years

Figure 17.4.1.2-2: Copper Price for the last 10 years

Figure 17.4.1.2-3: Copper Price for the last 10 years

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17.4.2 Prospective Markets or Buyers

17.4.2.1 Gold

According to BDO Capital & Investment Corp. President Eduardo Francisco, investors in the

Philippines do not have access to gold bars and coins, consequently Filipinos wanting to

invest in gold choose alternatively to invest in stocks of gold mining companies. Local

demand in the Philippines comes from the Bangko Sentral ng Pilipinas (BSP), which

purchases from small-scale miners in the country. In accordance with Republic Act No. 7076

(People's Small Scale Mining Act of 1991), all gold and silver produced by small-scale

miners must be sold to the BSP.

According to the Department of Environment and Natural Resources (DENR), gold sold to

the BSP declined 95 percent in the first 6 months of 2012 (786 kilograms) from levels seen

in the same period of 2011 (15,000 kilograms). DENR said such a decrease indicates that

the gold from small-scale miners is largely going to the black market and related activities.

Global gold demand in 2011 amounted to 4,067 tonnes, according to the World Gold

Council, equivalent to 4.067 million kilograms. Considering the Philippines’ 17,389 kilograms

of gold purchases in 2011, gold demand from the Philippines as a percentage of global gold

demand is just a mere 0.4 percent and is therefore considered insignificant on a global

perspective.

17.4.2.2 Copper

In 2011, the Philippines imported a total of 56,500 tonnes of refined copper products

(Source: National Statistics Office). During this period, global refined copper consumption

amounted to 19.7 million tonnes (Source: Wood Mackenzie). This means that copper

demand from the Philippines represents only 0.3 percent of copper consumption worldwide,

which makes Philippine consumption irrelevant on a global scale.

On copper concentrates, there is still no demand from the local market according to the

Philippine Industry Roadmap for Copper published by the Board of Investments. Apparently,

the source of demand of copper concentrates from PASAR is being filled by foreign

companies from Papua New Guinea, Peru, Indonesia, Australia, Canada and Chile. This has

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been the case since the late 1990s when Philex Mining Corporation (PMC) and Atlas ceased

to be members of the stockholders of PASAR.

On wires and cables, the same study mentions that 90 to 95 percent of local production is

sold to the local market while the remainder is sold abroad, mostly to Taiwan and Korea. The

domestic market is 60 percent supplied by local producers while 40 percent comes from

imports including possibly smuggled products. Smuggling of rods, bars and profiles is

estimated by the study to have a 1:1 ratio with imports while smuggled wires and cables

were estimated to be 15 to 20 percent of the local market. The study estimated production of

wire rods at about 30,000 MT per year, and is projected to grow by 2 to 3 percent annually.

According to some manufacturers, wire and cable demand grew by an average of 10 percent

recently due to the surge in private sector construction.

17.4.3 Product Specifications

The final product is in the form of copper concentrates with a copper grade of 24 to 26

percent and gold grade of 50 to 60 grams per ton.

17.4.4 Price and Volume Forecasts

17.4.4.1 Gold

The gold price assumption adopted for the financial evaluation of the remaining Life of Mine

of Padcal in this report is USD 1,500 per oz, based upon the fundamental and technical

analysis presented below.

17.4.4.1.1 Fundamental Analysis

17.4.4.1.1.1 Easy Monetary Policies

Global central banks have again embarked on quantitative easing policies in order to

stimulate their ailing economies. The US Federal Reserve has implemented QE3, wherein

the Fed will buy USD 40 billion worth of mortgage-backed securities monthly until their weak

jobs market improves significantly. The European Central Bank (ECB) also announced its

own version of QE, Outright Monetary Transactions (OMT), wherein the ECB will buy

sovereign bonds of nations requesting aid subject to certain conditions. This bond-buying

program is likewise unlimited in nature. The Bank of Japan also announced it will increase its

asset purchasing program by 10 trillion yen (USD 126 billion) to boost its slowing economy.

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Furthermore, global central banks have been cutting down interest rates to encourage

borrowing and stimulate spending.

Over the long-term, we expect countries to continually resort to loose monetary policies as

the solution to this global debt crisis. Some countries, including France and Germany, have

already issued negative-yield debts. As a result, we expect currencies to weaken and

interest rates to continuously decline. This kind of environment bodes well for gold.

Figure 17.4.4.1.1.1-1: Gold Price and US Monetary Base

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Figure 17.4.4.1.1.1-2: Gold Rises on Low Interest Rates

17.4.4.1.1.2 Rising Central Bank Buying

Since 2009, central banks have shifted from being net sellers to become net buyers of gold

as shown in the increasing amount of gold reserves in Figure 17.4.4.1.1.2-1 below. This

should be a good sign since the central banks themselves (who print the money) are starting

to shift their reserves to gold. It signals that they themselves are looking for a stable store of

wealth for protection. This shift translates to less supply and more demand from these big

institutions. Also, given the complexities, declining ore grades and rising costs in mining,

gold supply may further be constrained. These factors should be supportive of gold prices

over the long-term.

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Figure 17.4.4.1.1.2-1: Official Gold Reserves

17.4.4.1.1.3 Basel III Implementation

Beginning January 1, 2013, the Basel Committee on Banking Supervision (BCBS), the body

that sets the standards followed by the industrialized world’s central banks (and the

commercial banks they oversee), will implement Basel III, a policy that will classify gold as a

tier 1 asset (gold was previously classified as tier 3) and require banks’ tier 1 assets to

comprise 6 percent (from 4 percent) of its total assets. Tier 1 assets are counted 100 percent

of their face value on banks’ books while tier 3 assets are counted at 50 percent of market

value only. This will put gold among the banks’ tier 1 asset choices. With the increasing

indebtedness of countries around the world and the depreciating faith in fiat currencies,

banks may start shifting their tier 1 assets to gold, and may even choose gold for the extra 2

percent tier 1 requirement. This policy recognizes gold’s stable store of wealth value and this

may boost demand for gold and therefore prices upon its implementation.

17.4.4.1.1.4 Yuan's Potential to be a Global Reserve Currency

China is expected to emerge as the top gold consuming country this year after demand from

2011 top gold consumer, India, declined significantly following its government’s efforts to

strengthen the deteriorating Rupee by curbing gold demand. Gold import duties were hiked

from 2 percent to 4 percent, while another raise to 7.5 percent is currently being discussed.

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Meanwhile in China, the government is promoting the accumulation of gold. According to an

article published in the Wall Street Journal in June 2012, Chinese officials, led by those at

the People’s Bank of China, have been pushing for the Yuan’s greater role in international

trade and investment. Analysts say China will do this by making the Yuan a gold-backed

currency. With China at 6th spot in terms of official gold holdings (with a thousand tonnes of

gold), it would need to work its way up in terms of demand to reach top spot US with 8,000

tonnes. China’s demand should support gold prices over the long-term.

Figure 17.4.4.1.1.4-1: Increasing Chinese Gold Demand

17.4.4.1.2 Technical Analysis

Figure 17.4-11 below presents the historical gold price for the past 5 years and the

corresponding moving averages (MA) over a variety of time periods. The selected price

assumption corresponds to:

a conservatively adjusted 3-year MA, typically considered as a reasonable price assumption

for Canadian NI43-101 reports (Source: Craig Waldie et al., Ontario and British Columbia

Securities Commission); and

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a strong price support level, including the 2008 financial meltdown period, when gold

collapsed from USD 1,000 to USD 700.

Figure 17.4.4.1.2-1: Gold Technical Analysis

17.4.4.1.3 Bank Forecasts

For comparison purposes, a summary of long-term bank forecasts, traditionally conservative

with their price forecasts, is collated below.

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Table 17.4.4.1.3-1: Bank Forecast

GOLD 2012 2013 2014 2015 2016 LT

Barclays 1,672 1,400 1,125

Citi 1,645 1,695 1,655 1,540

Goldman 1,648 1,703 1,737 1,594 1,442 913

Standard Chartered 1,650 1,864 2,107 1,900

1,606

HIGH 1,672 1,864 2,107 1,900 1,442 1,606

LOW 1,645 1,695 1,655 1,400 1,442 913

AVERAGE 1,654 1,754 1,833 1,609 1,442 1,215

17.4.4.2 Copper

The copper price assumption adopted for the financial evaluation of the remaining Life of

Mine of Padcal in this report is USD3.00 per lb, based upon the fundamental and technical

analysis presented below.

17.4.4.2.1 Fundamental Analysis

17.4.4.2.1.1 Supply Demand Outlook

Forecasts by Commodity Resource Unit (CRU) on copper’s supply-demand balance are

surpluses beginning from 2014 to around 2021, due to the expected commencement of new

brownfield and greenfield projects during the period (see Figure 17.4.4.2.1.1-1). Supply is

expected to start declining beyond that period. Industry experts like CRU see a huge supply-

demand gap moving forward (see Figure 17.4.4.2.1.1-2) unless more new mine projects are

developed. This outlook supports the position that copper prices may start to decline from

current levels by 2014, due to the forecast excess supply, and pick up again beyond 2021

when the supply-demand gap materializes.

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Figure 17.4.4.2.1.1-1: Copper Supply-Demand Balance (2012)

Figure 17.4.4.2.1.1-2: Copper Supply-Demand Balance (2011)

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17.4.4.2.1.2 Decelerating China

Top copper consumer China, (40 percent of global consumption) is showing signs of

deceleration as illustrated in Figure 17.4.4.2.1.2-1. A soft landing of 7.5 percent growth is

expected in 2012, from a 9.2 percent growth rate in 2011. This can be attributed to the

current global economic crisis and the strong growth that China exhibited in the previous

years. This slowing demand further adds to the excess supply pressure on copper prices.

Nevertheless, the country is taking steps to stimulate its economy through monetary and

fiscal policies. Recently, China approved 1 trillion Yuan (USD 157 billion) worth of

infrastructure projects, providing a spur for copper demand and some price support, given

copper is a major component in constructions.

Figure 17.4.4.2.1.2-1: Decelerating China

17.4.4.2.1.3 Complexities, Declining Ore Grade and Rising Mining Costs

The legal and regulatory environment, political instability and growing resource nationalism

are proving to be more complex for the mining industry moving forward. The desire of

governments to get more share of mining revenues is discouraging for investors and the

industry. Ore grades have also been declining as shown in Figure 17.4.4.2.1.3-1. CRU

expects the average grade to be even lower for the next generation of mines. These lower

grades lead to higher unit operating costs which further aggravate the already rising costs in

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the mining industry. The aforementioned problems may have led to the shift in CRUs

forecast surplus years in their studies between 2011 and 2012 (see Figure 17.4.4.2.1.1-1 and

Figure 17.4.4.2.1.1-2) and this supply delay should be supportive of copper prices near term.

Figure 17.4.4.2.1.3-1: Declining Ore Grades

17.4.4.2.2 Technical Analysis

Figure 17.4.4.2.2-1 below presents the historical copper price for the past 10 years and the

corresponding moving averages (MA) over a variety of time periods. The selected price

assumption corresponds to the 8 year MA, a more conservative approach compared to the

typical 3 year MA considered as a reasonable price assumption for Canadian NI43-101

reports (Source: Craig Waldie et al., Ontario and British Columbia Securities Commission).

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Figure 17.4.4.2.2-1: Historical Copper Price

17.4.4.2.3 Bank Forecasts

For comparison purposes, various long-term bank forecasts, traditionally conservative with

their price forecasts, are collated below.

Table 17.4.4.2.3-1: Bank Forecast

COPPER 2012 2013 2014 2015 2016 2017- 2020

LT

Barclays 3.68 4.31 2.81

Citi 3.58 3.72 3.61 3.49 3.31

Goldman 3.57 3.40 3.45 3.50 3.60 2.28

Standard Chartered

3.60 4.03 4.76 4.99 4.08 3.40

HIGH 3.68 4.03 4.76 4.99 4.08 2.81

LOW 3.57 3.40 3.45 3.49 3.31 2.28

AVERAGE 3.61 3.72 3.94 4.07 3.66 2.55

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17.4.5 Sales Contract

17.4.5.1 MARKET

17.4.5.1.1 COPPER CONCENTRATES OFFTAKERS

Philex Mining Corporation has existing engagement to two off takers for Padcal’s copper

concentrate.

Pan Pacific Copper Co., Ltd (Pan Pacific)

Pan Pacific, a joint venture company between Nippon Mining Co. Ltd. and Mitsui Mining and

Smelting Co., Ltd., is the largest buyer of copper concentrate in the world, procuring

approximately 1.7 million tonnes of concentrate . Its principal sources of concentrates

include the Los Pelambres mine, Collahuasi mine and Escondida mine, the world’s largest,

all in Chile, and Cadia Hill & Ridgeway Mines in Australia. The Padcal mine of Philex Mining

Corporation also sells copper concentrate to Pan Pacific under a long-term gold and copper

concentrates sales agreement whereby Philex Mining is committed to sell to Pan Pacific the

concentrates produced from the Padcal Mine now at 60 percent of annual production up to

end of mine life.

Copper concentrates are delivered to Pan Pacific’s Saganoseki smelter and refinery in

Kyushu Island and Hitachi Works, and just recently to the Tamano smelter of Hibi Kyodo

Smelting Co., Ltd., a subsidiary of Pan Pacific, to produce electrolytic copper. The aggregate

production capacity of refined copper totals 710 thousand tons per year (Saganoseki and

Hitachi for 450 thousand tons, and Tamano for 260 thousand tons), which is the largest in

Japan and also one of the largest in the world.

Louise Dreyfus Commodities Metals Suisse SA (LDM)

Louis Dreyfus Commodities Metals Suisse SA (“LDM”) is part of the Louis Dreyfus Group,

which is a French global conglomerate company involved in agriculture, oil, energy and

commodities (global processing, trading and merchandising), as well as international

shipping. It also owns and manages ocean vessels, develops and operates

telecommunications infrastructures and is involved in real estate (development,

management and ownership). The company was founded in 1851, in Alsace, by Leopold

Louis-Dreyfus, who developed a fortune through cross-border cereal trading.

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The Metals Platform began trading non-ferrous metals and raw materials in 2006. LD now

originates, consolidates, exports and transports different metals, including copper, zinc, and

lead concentrates, copper blister and refined base metals. As sales volumes have

quadrupled since the inception of the Metals Platform, LD is now among the top 3 global

merchandisers of Copper, Zinc and Lead Concentrates.

LDM also sends the copper concentrates to the Saganoseki smelting plant.

17.5 Technical Aspects

17.5.1 Mining Plans

17.5.1.1 Mining method

LHD Block Caving will be continually employed in the remainder of the operating life of

Padcal. The method has been used successfully for 50 years now and has undergone

modernization from its roots of slusher machines.

Load-Haul-Dump (LHD) mining is a system of ore extraction in block caving using the Low

Profile Loaders. It was introduced at 908 ML on May 1996 after a series of consultation with

block caving experts and by 1999, Philex became a full LHD block caving operation.

Block caving, in principle, is a method that is suitable to moderately fractured ore bodies,

which when undercut, will collapse by its own weight thereby creating fragments of rocks

that are subsequently extracted.

The process consists of driving a series of evenly spaced openings called drifts in an east-

west direction below the ore column on the production level and simultaneously on the

undercut level. On the production level, openings called crosscuts are driven obliquely

following a northwest-southeast trend at about 60° relative to the production drifts.

The pillars supporting the block at the undercut level are then blasted or undercut which

causes the ore column to cave and thus crushed into fragments due to its own weight and

the weight of the overlying materials.

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Figure 17.5.1.1-1: Mining Method

Broken rocks as a result of the caving process are then extracted at the drawpoints located

at the opposite ends of a crosscut. Ore from the drawpoints is then hauled and subsequently

dumped at strategically located ore passes, which are vertical openings used to direct the

flow of ore by gravity. Ore Passes that are not installed with grizzlies are called muck raises;

those that are with grizzlies are referred to as short or long transfer raises (STRs or LTRs),

as the case may be, which are, in turn, equipped with stationary rock breakers. It is at the

grizzlies where over-sized boulders are reduced in size using the rock breakers.

Ore passing through transfer raises that are remotely located relative to crusher stations are

collected at the Re-handling Level at 840ML. The ore is then hauled by 30-tonner Low-

Profile Trucks (LPTs) and subsequently dumped at LTRs that lead to the Crushing Level at

773ML.

There are two (2) jaw crushers at the 773ML, the 4-4 Crusher Station and the 2-4 Crusher

Station. Ore fragments bigger than 20cm in diameter report to the crushers for size-

reduction.

Ore of suitable size drops to the Haulage Level at 745ML where they are carried by five (5)

Feeder Belt Conveyors (FBCs). The FBCs feed two (2) collecting bins that discharge onto

the sacrificial conveyor then to the 2.7-km long Cable Hauled Conveyor (CHC).

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Finally, the ore is transported by the CHC to the surface and discharged into the dump bin at

the 1015ML.

17.5.1.2 Mine Design/Mining Parameters/Geotechnical Parameters

17.5.1.2.1 Mine Design

The general plan of the mine openings are patterned to the El Teniente lay-out at El

Teniente Mine of CODELCO in Chile, which consists of parallel Production Lines (PLs) and

Draw Cross-Cuts (DXCs) with the DXCs obliquely oriented with respect to the PLs at an

angle of 60 degrees.

The production lines are 4m high by 4m wide and oriented along the east-west direction.

These excavations are 30m apart, center-to-center. Connecting the production lines are

3.5m high by 3.5m wide draw crosscuts oriented along the northwest-southeast direction. At

the back of the openings along the draw crosscuts are the trenches where the caved ore

collects. The draw crosscuts are accessible from two adjacent production lines, the caved

ore is extracted from the two opposite ends of a trench called drawpoints.

At the undercut level, which is 16m above the floor of the extraction level and where caving

of the ore is initiated, excavations are 3.5m high by 3.5m wide.

In the driving of horizontal openings, hydraulic jumbo drills are the primary equipment being

used. The burn-cut drilling pattern is applied with a hole diameter of 45mm and an average

depth of 2.80m. The size of horizontal openings to access the production area is 5m x 4m.

In tandem with the jumbo drills, LHD units with an average capacity of 6 MTs per bucket are

used for muck handling during the drill-and-blast phase.

The three mining levels 908ML, 798ML and 782ML is planned to be mined using the El

Teniente lay-out at El Teniente Mine of CODELCO in Chile, which consists of parallel

Production Lines (PLs) and Draw Cross-Cuts (DXCs) with the DXCs obliquely oriented with

respect to the PLs at an angle of 60 degrees.

As the ore is planned to be extracted using Load-Haul-Dump (LHD) loaders, the openings

are designed to accommodate these units.

Thus, at the extraction level, the PLs are 4m high by 4m wide and oriented along the east-

west direction. These excavations are 30m apart, center-to-center. Connecting the PLs are

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April 2013

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3.5m high by 3.5m wide DXCs oriented along the northwest-southeast direction. At the back

of the openings along the DXCs are the trenches where the caved ore collects. As a DXC is

accessible from two adjacent PLs, the caved ore is extracted from the two opposite ends of

a trench called drawpoints.

Figure 17.5.1.2.1-1: Details of production lines and draw crosscut spacing and sizes of

openings

Undercutting (or Cave Initiation)

The conventional or post undercutting strategy with fan-drilling for undercut extraction is

being utilized. The method has the advantage of flexibility with regard to distances in-

between fan-rings for fragmentation control.

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Figure 17.5.1.2.1-2: Development Layout of fanholes at undercutlines

Figure 17.5.1.2.1-3: Typical undercutline fanhole sections

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The active 908ML and 782ML blocks are being mined through a system of openings laid-out

all across its length and width. The total width of this block is subdivided by production lines

in an east-west alignment, which are initially spaced 26.4 meters apart. Obliquely oriented

with these lines at an angle of 60 degrees are the cross-cuts spaced 15.2 meters apart.

Due to the characteristics of ore at deeper elevation, a wider 30m x 16m spacing of

production lines and cross-cuts was adopted for the 782ML based on discussions with

consultants tapped during the conceptualization of the design. This spacing increases the

size of trenches from 10m x 10m to 18m x 13m that are capable, thus, of handling bigger

sized boulders characteristic of harder ore at depth.

Additionally with this wider spacing, a wider area could be undercut thereby increasing the

caved area above and, therefore, the area of influence of a drawpoint.

Table 17.5.1.2.1-1: Area of Influence of a Drawpoint

Particulars 908−ML 798−ML 782−ML

Size of Trenches 10m x 10m 15.6m x 13.9m 15.6m x 13.9m

PL spacing 26.4 m 30.00 m 30.00 m

DXC spacing 15.242 m 16.00 m 16.00 m

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Figure 17.5.1.2.1-4: Details of trench fanholes

17.5.1.2.2 Mining Parameters

17.5.1.2.2.1 Ore extraction

Two extraction levels are currently being mined, the 908 and 782 meter levels, around 120

meters apart vertically. The 908 ML was the original full-LHD blocks commissioned in 1995

and is now about 80 percent mined out. For the life of mine, significant contribution in

tonnage will be from 2013 to 2015 about 40 to 50 percent of the daily production tonnage.

Ore will be mined out in the succeeding year as a new production level is ushered into

production. The south and southeast blocks are the sources of ore at 908 ML and will be

joined by the central-east block when it is developed in 2013. Ore will be extracted from 108

drawpoints to be able to meet the required tonnage for this production level.

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Chapter 17 Page 30

Figure 17.5.1.2.2.1-1: 908ML production level in plan

The 782 ML was commissioned in 2005 to replace some of the better grade ore sources at

908 ML. For the projected mine life, it will account for 40 to 60 percent of the daily mine

throughput from 2013 up to 2017 when it is mined out on the later. The south and central-

east blocks are currently the sources of ore and will be supported by the north east and west

blocks when commissioned. Active drawpoints will number as high as 170 to as low as 100

to meet the projections.

CENTRAL EAST BLOCK

SOUTHEAST BLOCK

SOUTH BLOCK

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Chapter 17 Page 31


`

The development of 798 ML will begin in 2013 from existing underground mining level 782

ML via an inclined ramp. First mining block will be commissioned in 2015 where it will

contribute 20 percent of the daily mine throughput. From thereon, it will progressively

increase from 50 and support the whole production over the last three years of mine life. At

one point, active drawpoints will number 570 to deliver the required tonnage for this level.

NORTH EAST BLOCK NORTH WEST BLOCK

CENTRAL EAST BLOCK

SOUTH BLOCK

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Chapter 17 Page 32


17.5.1.2.2.2 Ore transport

Ore extracted at the drawpoints will be tipped by LHD to dumping points strategically located

in the production level. Each mining blocks are designated to a two or more dumping points,

typically at the west and east ends. The distance from the farthest drawpoint is limited to

200 meters to optimize the LHD.

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Chapter 17 Page 33

EXISTING DUMPING

POINTS PLANNED DUMPING

POINT

Figure 17.5.1.2.2.2-1: 908ML Central-east block showing dumping points

Each dumping point has one or two stationary rock breakers that resize the ore down to as

small as 0.4 meter into a grizzly with a similar size opening. Each dumping point has a

capacity to handle ore at a rate of 200 metric tons per hour.

At production levels that has a low surge or distance in between the production and

conveyor levels, particularly the 782 ML, it is compensated by increasing the number of

dumping points per mining block.

Ore travels vertically from the dumping points via long and short ore transfer raises and

finally reports to feeder belt conveyors found in 745 and 773 meter levels. The feeder belt

conveyors are conventional roller type and are operated by the company and maintained by

a contractor.

At the west-most part are the conveyor systems 17a, 17b, 18 and 19 moving ore from 782

and eventually 798 meter levels. Conveyors17-b and 18 in series and transport the ore to

the 4-4 crusher and then to conveyor 4. From conveyor 4, ore will be passed to conveyor 5

then to the surge bins then finally to the Cable Hauled Conveyor (CHC). Conveyors 17-a;

and 19 in series on the other hand moves the ore to conveyor 2. From conveyor 2, ore is

PADCAL Operations

April 2013

Chapter 17 Page 34

transferred to either conveyor 5 or 6, where it is collected in the surge bins then to the CHC.

This system can handle the ore at 782 and 798 meter level to as much as 14,800 metric tons

per day.

Conveyors 1, 2 and 4 were the first feeder belt conveyors to be constructed ushering in the

LHD era. These 3 conveyors combined can handle the entire daily mine throughput from all

the 3 production levels.

Figure 17.5.1.2.2.2-2: Feeder belt conveyors configuration

The main ore transport from underground to the mill is the 2.7 kilometer long cable hauled

conveyor, the mine’s showcase since it is the first to be built and operated in the Philippines.

1.2 meter wide conveyor belts are suspended and being hauled by 51 millimeter diameter

cables guided by pulleys. It is powered by a 2 megawatt motor.

Ore is drawn from the surge bin from 5 loading chutes at the 791 meter level. Recently a

sacrificial conveyor was constructed in between the loading chutes and CHC belt as a

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Chapter 17 Page 35

measure to prolong the life of the CHC belt and maximize its operation. The CHC is

operated 20 hours per day, with 4 hour a day window maintenance. It has a rated capacity

of 1,800 metric tons per hour which in turn can transport 11 million metric tons per year.

17.5.1.2.2.3 Ventilation

The Padcal underground operations require 500,000 to 570,000 CFM of fresh air in order to

provide sufficient clean mine air for its underground workers. The operation of diesel

equipment and the mining process itself, of moving the ore from the drawpoint to the CHC

and blasting, are the major users of mine air. To depict this, a tabulation is made below.

Table 17.5.1.2.2.3-1: Tabulation of ventilation parameters

Parameters Unit 2013 2014 2015 2016 2017 2018 2019 2020

UG

Manpower

24,735 24,735 24,735 24,735 24,735 24,735 24,735 24,735

Diesel

Equipment

512,234

511,532

514,436

514,436

487,260

409,313

406,504

393,124

Minimum set

velocity *

44,523 44,523 44,523 44,523 44,523 44,523 44,523 44,523

Cubic

feet per

Ore

Movement 291,668 578,184 578,184 578,184 578,184 578,184 578,184 578,184

minute

(CFM) Highest

Volume

512,234

578,184

578,184

578,184

578,184

578,184

578,184

578,184

Requirement

Projected

Natural Air 11,873 11,873 11,873 11,873 11,873 11,873 11,873 11,873

Flow

Final Air

Requirement

500,362 566,311 566,311 566,311 566,311 566,311 566,311 566,311

Generally, fresh air enters the mine through the 1020 ML-GCH Shaft Access, CHC Tunnel,

745-Tunnel after GCH Shaft and 745-ML Conveyor 5 Tail End while used air exits through

three main exhaust points, namely the 1170ML, 1015ML Haulage, Bumolo I and Bumolo II

Portal. The later cumulatively release 660,000 CFM of used air to the surface, aided by 200-

horsepower mechanical blower.

In a typical production level were majority of the operations occur, fresh air flows from east to

west. East, where generally the fresh air source is and west where the exhaust raises are

developed. Mechanical blowers are used correspondingly in the production level: 15 and

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April 2013

Chapter 17 Page 36

Exhaust raise to lower level

Fresh air

40 HP Blowers

20-horsepower blowers where mine development is being undertaken and 40-horsepower

blowers on ore extraction areas.

Figure 17.5.1.2.2.3-1: 782 ML showing ventilation

The temperature in the mine ranges from 25 to 30 degree Celsius, mainly because the

workings are above sea level.

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17.5.1.2.2.4 Dewatering

Surface water at the subsidence area is drained by two canals namely north and central

canals which are directed towards the Albian Canal or the Albian Creek. The Albian Canal

is being deepened yearly to maintain a -4 to -7 percent gradient of backfill materials. With

this system of draining surface run off at the subsidence area, still unquantifiable seepage at

the subsidence area still reports to the underground workings.

At the underground workings, every opening is dug with ditch at one side to manage the flow

of water. For concrete roadways at 782ML canals are provided at the center. Drain holes

with 0.15 meter diameter are drilled using Cubex Machine from upper level to lower level. A

total of 11 drain holes were drilled from 908ML to 890ML to dewater the 908ML mine

workings. The Bumolo Ramp was also provided with ditch to drain water from 908 control

room going to 890ML. From 890 ML three(3) drain holes were driven to 840ML and

subsequently drained by five (5) drain holes to 745 ML. At 798 and 782 ML at total of 29

drain holes were driven to either 745 ML / 773 ML. The drainage system of the Cable Haul

Conveyor is also directed to 745 ML. The 745 ML tunnel serves as the main dewatering

channel of underground openings.

While water supply is needed in the underground for drilling and washing, the old workings

at 1020ML/1015ML were provided with water sumps to contain water. These sumps are

installed with 150mm diameter pipes going to the old shaft 1020/1015 ML and it supplies all

working levels from 908ML down to 745ML.

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Chapter 17 Page 38

DR A

IN

H O

L E

DR A

IN

H O

L E

1425 M L

V O L U M E = 300 M O L D SH AF T

1020 M L W A T ER C O ND U I T S U M P

V O L U M E = 400.72 M

1015 M L W A T ER S U M P 1020 M L

6" Ø 6" Ø

1015 M L 1015 M L H A U L A G E # 1 to D R IF T 1 6" Ø 6" Ø

975 M L 975 M L O U T L E T V O L U M E = 218.30 M

P R OP OS E D P R O J E C T 908M L , S L 13 W A T E R S U M P 908 M L , L H D W A T E R S U M P

2" Ø S U P P L YI NG 908 M L ( P L 's / U C L ) , 908 M L

4" Ø

4" Ø 4" Ø 4" Ø 6" Ø 4" Ø

S U P P L YI NG 840 M L ( L H D S H O P , D D , S L 11 4- 4 A / F & 4- 6 A / F ) F . D . 2 S L 1 1 , 2 - 4 D ra in H o le F . D . 1 to F . D . 2 B y - p a s s

840 M L 4" Ø 2" Ø

S U P P L YI NG 791 M L , C O NV . 1 ,2 ,4 ,5 ,6 a nd C B C L O A D I NG 791 M L 791 M L O U T L E T

6" Ø

782 M L 779 M L S H A F T S T A T IO N

779 M L

4" Ø 4" Ø

773 M L 773 M L FO LD ING BR ID G E S U P P L YI NG 773 M L , 782 M L ( P L 's / U C L ) , S U P P L YNG C R U S H E R 2- 4 & C R U S H E R 4- 4

C R U S H E R 2- 4 & C R U S H E R 4- 4, C O NV . 17 & 18

745 M L

PH ILEX M INING CO R P O R AT IO N MIN E DIV IS IO N

Padca I, T u ba, B en g u et

W ATE R SO U R C E SC H E M A T IC DIA G R A M

M M R S D E NGR . JM C P AR AAN

PLA N N E R

E NGR . W .D . AG U S TIN

DE P A R T M E NT M A NA GE R 1/ 1

Figure 17.5.1.2.2.4-1: Shows the water sumps at 1020ML and 1015ML and the supplied areas

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Chapter 17 Page 39

1425 ML

WATER TANK

PUMP STATION STAGE 2 TANK SPECIFICATION LINE STAND 162 VOLUME: 663 CU.M

SUMP AREA 3.00 M x 3.40 M x 2.75 M DIAMETER: 9.14 MTR

MOTOR MODEL 25036ET3G447TS HEIGHT: 10.10 MTR

H.P. 250

VOLTS 460

AMP 269

1020 ML RPM 3570 PHASE 3

1015 ML PUMP STATION STAGE 1 PUMP SPECIFICATION CAPACITY 600 GPM

LINE STAND 745 ML TOTAL DYNAMIC HEAD 216 FT. 975 ML

SUMP AREA 3.30 M x 4.00 M x 2.00 M ELEVATION HEAD 184 FT. SUPPLYNG MILL

MOTOR MODEL SIEMENS TOTAL PIPE LENGTH 3,659.45 FT / 1,115.40 METERS

H.P. 510

VOLTS 440 908 ML RPM 3600

PHASE 3

PUMP SPECIFICATION CAPACITY 1000 GPM 12"Ø

TOTAL DYNAMIC HEAD 384 FT.

840 ML ELEVATION HEAD 338 FT.

TOTAL PIPE LENGTH 2,483 FT / 757 METERS LS 447 PUMP STATION

Stage 3 PUMP STATION STAGE 3 WATER PUMP

LINE STAND 447 ML

SUMP AREA 3.20 M x 2.00 M x 1.80 M 791 ML

MOTOR MODEL 25036ET3G447TS

782 ML LS 162 PUMP STATION H.P. 250

779 ML Stage 2 12"Ø VOLTS 460 WATER PUMP AMP 269

773 ML 745 ml PUMP STATION

RPM 3570

PHASE 3 Stage 1

PUMP SPECIFICATION WATER PUMP

12"Ø CAPACITY 600 GPM

745 ML TOTAL DYNAMIC HEAD 184 FT.

ELEVATION HEAD 213 FT.

TOTAL PIPE LENGTH 1,549 FT / 472 METERS

PHILEX MINING CORPORATION MINE DIVISION

PadcaI, Tuba, Benguet

WATER PUMP AT 745 ML & ALONG CBC

GALLERY

M M R S D ENGR. JMC PARAAN

PLANNER

ENGR. W.D. AGUSTIN

DEPARTMENT MANAGER 1/1

Figure 17.5.1.2.2.4-2: Schematic Diagram of Pump system from 745 ML to Mill

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Chapter 17 Page 40

A sump and three stage pump system was installed at 745 ML to supply some of the water

requirement at the mil during dry seasons.

A monitoring system for water flow is being done at the 745 ML portal to quantify the water

outflow from the underground. For the last three years, a maximum of 1,688.99 liters per

second was recorded. An annual average water flow for the last three years was recorded at

576 liters per second.

17.5.1.2.2.5 Subsidence

As an effect of drawing ore underneath brought about by the underground block caving

operation, a subsiding area on top of the deposit is being created. As a safety control to

avoid ponding run-off water on top of the deposit that could cause mine flood underground

once seepage occur and to avoid creation of air pockets/openings on top that could cause

sudden material collapse that produces air blast underneath, backfilling operation is

necessarily being conducted. Historically, backfilling operation uses a ratio of 4:1, where four

(4) tons of materials (ore and waste) mined underneath requires one (1) ton of backfill

materials to be placed at the subsidence area. Also, a gradient between -4 percent to -7

percent is being maintained in order to ensure a continuous flow of surface water away from

the subsidence area towards the drain area.

Figure 17.5.1.2.2.5-1 Subsidence Area

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17.5.1.2.3 Geotechnical Parameters

The PHILEX Santo Thomas II orebody is a typical copper porphyry deposit. The presence

and abundance of gypsum and anhydrite that healed the fractures of the orebody particularly

at the deeper levels resulted in a massive deposit difficult to cave. The fractures are filled

and tightly healed by gypsum and anhydrite, secondary biotite, magnetite, chlorite, pyrite

and copper minerals.

Table 17.5.1.2.3-1: Summary of Geotechnical Parameters

1. Rock Mass Rating (RMR) 41 − 60 (fair − good) outside Sta. Fe fault Zone

29 − 40 (very poor − poor) within Sta. Fe fault

2. Intact Rock Strength 140 MPa outside Sta. Fe fault Zone

110 Map inside Sta. Fe fault Zone

3. Fracture Frequency per Meter 3 − 7 outside Sta. Fe fault Zone

> 8 within the Sta. Fe fault Zone

4. Joint Condition Rating 21 − 29 outside Sta. Fe fault Zone

13 − 18 within Sta. Fe fault

5. Rock Quality Designation 75 − 90 (good)

6. Principal Stress, (1) trending East−West

7. Pillar Strength 34 Map outside Sta. Fe fault Zone

27 Map within Sta. Fe fault

8. Geological Strength Index (GSI) 55

9. Hoek & Brown Mineral Property Index (MI) 25

The Santa Fe Fault is the most prominent geologic structure affecting the mine. The shear

zone of this fault is about 50m wide, characterized by very poor to poor rock classification.

One of the many practical applications of geotechnical parameters in the Padcal mine is the

design of the rock support system which takes off from the determination of rock mass

rating. The rock mass rating determined in the examination of underground openings is

adjusted (for weathering, joint orientation, mining induced stress and effects of blasting) to

become Laubscher’s Mining Rock Mass Rating (MRMR). From the MRMR, Laubscher also

developed a relationship of recommended rock supports.

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MRMR

RMR

1A 1B 2A 2B 3A 3B 4A 4B 5A 5B

1A

1B

2A

2B

3A

3B

4A

4B

5A

5B

Rock reinforcement - plastic deformation→

a a

b b a a

b b b b b c

r r c c c d d

d e f f c + l

f/p h + h + f/l h+ f/l

f/p

h + f/p t t

f/p

Table 17.5.1.2.3-2 Laubscher Rock support Matrix

Support Technique:

Table 17.5.1.2.3-3: Laubscher Rock support Matrix

a − Local bolting at joint intersections

b − Bolts at 1m spacing

c − ”b” and straps and mesh if rock is finely jointed

d − ”b” and mesh/steel−fiber reinforced shotcrete bolts as lateral restraint

e − ”d” and straps in contact with or shotcreted in

f − ”e” and cable bolts as reinforcing and lateral restraint

g − ”f” and pinning

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h − Spiling

I − Grouting

j − Timber

k − Rigid steel sets

l − Massive concrete

m − ”k” and concrete

n − Structurally reinforced concrete

o − Yielding steel arches

p − Yielding steel arches set in concrete or shotcrete

q − Fill

r − Bolts and rope−laced mesh

s − Rock replaced by stronger material

t − Development avoided if possible

For areas not covered by the Sta. Fe fault having a Rock Mass Rating of 41 to 60 falling

under the category 3A to 3B and a Mining Rock Mass Rating of 25 - 30 under the category

4B, the prescribed ground support is

• Rockbolts at 1 meter spacing;

• Mesh/steel fiber reinforced shotcrete;

• Cable bolts.

Areas affected by the Sta. Fe fault having a Rock Mass Rating of 29 to 40 falling under the

category 4A to 4B and a Mining Rock Mass Rating of ≤21 to 22 under the category 4B to 5B,

the prescribed ground support is

• Rockbolts at 1 meter spacing;

• Massive Concrete.

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April 2013

Chapter 17 Page 44

• Steel sets

• Massive reinforced concrete

17.5.1.3 Mining Recovery, Dilution and Losses

Block caving typically exhibits high if not 100 percent mining recovery. Same can be said in

Padcal, which historically show the recovery to average 100 percent, with the exception of

cases wherein block failure occur which stops ore extraction to proceed in that particular

level. When this happens, the lost ore is almost always recovered when the next production

level (lower than the previous) is commissioned into production.

For production planning and ore reserve estimation purposes, wherein the specialized PCBC

software is used, it is assumed that a 100 percent recovery of the broken ore reserve is met.

Padcal, from its experience modeled dilution as: for blocks that are below a previously mined

out area, dilution begins to set in after extracting 20 percent of the mining column and for

virgin blocks, dilutions sets in after extracting 70 percent of the mining column. These

parameters are input to the PCBC software before running a production schedule.

Losses in the form of dilution factor in the metal grades were historically used since 2010

which basically discounts the copper grade by 0.03 percent and gold by 0.10 gram per ton,

based on the assay grades of backfill materials placed in the subsidence are and traces of

previously mined out areas. The factors are applied in the resulting production schedule from

the PCBC software. The factors were derived by constructing a block model of the historical

mined out blocks and depleting it up the current status then.

17.5.1.4 Planned Capacity/Production Schedule/Estimated Life of mine

Mining capacity is dictated by the availability of ore sources at the production levels and the

ability to move the tonnages to the mill. In this technical report, the planned mine throughput

is 9.4 million metric tons per annum or 25,750 metric tons per calendar day. The graph

below shows that Padcal has practically achieved this feat in 2010 and 2011 and was

enroute again in 2012, if not for the suspension of operations.

The improved production is attributed to the improvement in manpower productivity and the

mechanical availabilites of the production equipment including the CHC.

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Chapter 17 Page 45

Figure 17.5.1.4-1: Production Performance

Beginning of August 2012, mining operations has ceased due to the sediment spill in

Padcal’s tailings storage facility number 3. A temporary lifting order has been issued 8th of

March 2013 that allowed the company to operate as part of the remediation and

rehabilitation measures of the said facility. The government has allowed four months as a

condition of the order.

For the production schedule, it was assumed that mining operation will restart in July 2013

and will be continuous thereon. Specifically in 2013, a production equivalent to six months

has been scheduled, a more conservative approach than to run a schedule beginning March

8, 2013.

The 908 and 782 meter levels will be the primary ore sources up to year 2016, after which

the newly commissioned 798 meter will begin a significant contribution. The life of the mine

will last up to year 2020.

17.5.1.5 Working Schedule

The production schedule assumes an operation that runs 365 days in a year. Daily

operating hours for equipment and systems are pegged to 20 hours with a 4 hour window

maintenance allotted. Manpower working shifts are three eight-hours working period.

10,000,000

9,000,000

8,000,000

7,000,000

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

0

27,000

26,000

25,000

24,000

23,000

22,000

21,000

20,000

BUDGET ACTUAL BUDGET (DAILY) ACTUAL (DAILY)

Metric

To

ns p

er d

ay

Metr

ic T

on

s

20

12

*

20

11

20

10

20

09

20

08

20

07

20

06

20

05

20

04

20

03

PADCAL Operations

April 2013

Chapter 17 Page 46

The rationale behind using the calendar days as against projected working days is that the

mine has always been capable of delivering up to 27,000 tons per day. If an operational

shutdown happens the operations compensates by delivering at a higher product ion rate,

thus rendering the days immaterial.

Major preventive maintenance schedules and or major systems repair such as cable and

belt replacements for the CHC are usually jibed with National Power Corporation shutdown

schedules which Padcal usually receives ahead of its intended schedule.

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April 2013

Ye a r-2013 Ye a r-2014

Ye a r-2015

Ye a r-2016

Ye a r-2017

Ye a r-2018

Ye a r-2019 Ye a r-2020 S UM / AV E

SU M M A RY 908 ML Sourc es

908M L Ac tive DP s 3,978,261 4,015,643 3,497,990 802,860 - - - - 12,294,754

Total - MTs 3,978,261 4,015,643 3,497,990 802,860 - - - - 12,294,754

Work ing Days 299 365 365 366 - - - - 1,395

TP D 13,300 11,000 9,600 2,200 - - - - 8,800

No. of Ac tive DP s 263 343 379 379 - - - - 341

%Cu 0.217 0.214 0.207 0.197 - - - - 0.212

gA u/t 0.485 0.510 0.487 0.411 - - - - 0.489


782M L 2,461,452 5,384,357 4,377,228 4,140,586 3,490,537 - - - 19,854,160

840M L P illar Robbing 1,264,760 - - - - - - - 1,264,760

Total - MTs 3,726,212 5,384,357 4,377,228 4,140,586 3,490,537 - - - 21,118,920

Work ing Days 299 365 365 366 365 - - - 1,760

TP D 12,500 14,800 12,000 11,300 9,600 - - - 12,000

No. of Ac tive DP s 211 231 176 158 143 - - - 184

%Cu 0.213 0.221 0.220 0.218 0.217 - - - 0.218

gA u/t 0.515 0.528 0.476 0.452 0.430 - - - 0.484


798M L - - 1,524,782 4,456,554 5,909,463 9,400,000 9,400,000 9,400,000 40,090,799

Total - MTs - - 1,524,782 4,456,554 5,909,463 9,400,000 9,400,000 9,400,000 40,090,799

Work ing Days - - 365 366 365 365 365 366 2,192

TP D - - 4,200 12,200 16,200 25,800 25,800 25,700 18,300

No. of Ac tive DP s - - 291 364 454 568 530 440 441

%Cu - - 0.213 0.207 0.200 0.197 0.193 0.191 0.197

gA u/t - - 0.405 0.424 0.409 0.380 0.373 0.370 0.386

TOTA L Sourc es

908M L Ac tive DP s 3,978,261 4,015,643 3,497,990 802,860 - - - - 12,294,754

840M L P illar Robbing 1,264,760 - - - - - - - 1,264,760

798M L - - 1,524,782 4,456,554 5,909,463 9,400,000 9,400,000 9,400,000 40,090,799

782M L 2,461,452 5,384,357 4,377,228 4,140,586 3,490,537 - - - 19,854,160

Total - MTs 7,704,470 9,400,000 9,400,000 9,400,000 9,400,000 9,400,000 9,400,000 9,400,000 73,504,470

Work ing Days 299 365 365 366 365 365 365 366 2,856

TP D 25,767 25,753 25,753 25,683 25,753 25,753 25,753 25,683 25,737

No. of Ac tive DP s 474 574 846 901 597 568 530 440 616

%Cu 0.215 0.218 0.214 0.211 0.206 0.197 0.193 0.191 0.205

gA u/t 0.500 0.521 0.469 0.436 0.416 0.380 0.373 0.370 0.431

CuE q 0.535 0.551 0.514 0.490 0.473 0.440 0.432 0.428 0.482

Figure 17.5.1.5-1: Production Schedule

Chapter 17 Page 47

PADCAL Operations

April 2013

Chapter 17 Page 48

17.5.1.6 List of Mining Equipment and Auxiliary Machinery/Mine Infrastructure

Table 17.5.1.6-1: Tabulation of the major mine equipment

Equipment Description Number of Units Use

Mechanized face drill

3−meter hydraulic boom;

diesel engine for travel;

440 volts power for drilling operations

4

Development

Mechanized long hole

drill

25−meter maximum

depth; diesel engine for

travel; 440 volts power for drilling operations

2

Development

Mechanized rock bolter

2−meter rebar type

rockbolts; automatic

cement cartridge feeding

mechanism; diesel

engine for travel; 440

volts power for drilling

operations Drill rod − R32 X R 28, 10 Ft

3

Development

Robotic shotcrete

machine

Direct gear driven

Rotor capacity− 5.60 liters

Air motor pressure− 5bar

Air motor consumption−4 cu.m./hour

2

Development

Concrete transport

mixers

4 −5 cu.m. drum capacity,

articulated, can fit in 3.5

meter by 3.5 meter openings

3

Construction

Raise climbers

Maximum load 600 kgs

Upward speed− 9.50 to

12 m/min

Descending speed−15

to20 m/min

Air Consumption @ 600 Kpa 165 to 230 Li/sec

6

Development

Low profile trucks Articulated 3 Logistics/ Production

Load haul dump units 3−cubic meter bucket

capacity 2 Development

Handheld jackleg drills

Pneumatic Rockdrill

Furukawa 322D

Type wet drilling

Shank size 108mm

Weight 25.5 kgs

Length 700mm

Blows per minute 1850

Air consumption 3.2

cu.m./min

Working Pressure 5.5kg/cm

24

Development/ Ore

Management at

Drawpoints

PADCAL Operations

April 2013

Chapter 17 Page 49

Airleg Weight 13.0 kg

Airleg extended 990m

Load haul dump units 3 or 5−cubic meter bucket

capacity 3 Conveyor Cleaning

Load haul dump units 5 to 7−cubic meter bucket capacity

29 Production

Concrete batching plant 10 cubic meter per hour capacity

1 Construction

Stationary rock breakers

1700 to 2400 PSI working

pressure

130 to 160 blows per minute

32

Production

Sizers

Abon Sizers

200 Horsepower motor

2 rolls with 9 rows of

teeth Capacity of 600 TPH

2

Production

Feeder conveyors

Drive motor 150 Kw,

2300 volts, 60 Herts,

Type EM 32L, 1780 RPM.

Gear Box/Speed reducer

ratio 28.526/1200

horsepower

Conveyor belt EP 1250/s,

1200 mm width X 5 ply X

9mm top cover X 5mm bottom cover

11

Production

Cable hauled conveyor

Length − 2,346 m

Max rated capacity 1800

MTPH

Max speed 3.3 m/s

Inspection speed 0.8 m/s

Belt Width 1,150 mm

Cable size 51mm

Cable Length 5148 m Drive Motor 2000 Kw

1

Production

Crusher

C140 Jaw Crusher

(Nordberg)

Fixed Jaw Length−83

inches

Minimum Discharge

Setting−5 inches

Maximum Discharge

Setting−12 inches

Capacity−1000 Metric ton

per hour

2

Production

Pumps (better

description pls)

3−water pumps

(250 horsepower, 4GT

Model)

1−submersible pump (15 horsepower)

6

Production

Speedle Pump (Model: Graco) 2 development

PADCAL Operations

April 2013

Chapter 17 Page 50

Pneumatic

Hoists

2−units ASEA friction

hoists for GCH and

Thomson Shafts.

3−units 5 tonner hoist and 1−unit 3 tonner hoist

6

Production/Development

Mechanical blowers Axial Fans, 10 to 200 horsepower

287 Production & Development

Slusher Machine (description pls)

Model Pikrose 35 horsepower

24 Production/Development

Pertinent infrastructures include the following:

Maintenance shops

Maintenance shops are found at the major underground mining levels to cater for regular

preventive maintenance works. The shops are specialized according to the population of the

equipment.

At 908 and 782 meter levels, production and development works are most prevalent thus the

maintenance facility caters to production and development LHD units and development

mechanized drills. At the 840 meter level, where ore rehandling using Low Profile Trucks

(LPT) is done, the facility specializes to this equipment. The facilities service bays capacities

are tabulated below. An equivalent compliment of mechanics is manning each facility.

Table 17.5.1.6-2: Facilities service bay capacities

LOCATION CAPACITY

908 ML LHD Shop 6−LHDs and 2− drill machines

840 ML LHD Shop 2−LHDs/LPTs

782 ML LHD Shop 4−LHDs

773 ML Drill Shop 4−drill machines

PADCAL Operations

April 2013

Chapter 17 Page 51

Figure 17.5.1.6-1: 908 ML Centralized Mechanical Shop

To comply with the environment standards, waste management systems are in place in each

of the shops, particularly used oil containment area and sludge separators. The company

PADCAL Operations

April 2013

Chapter 17 Page 52

complies with the regulations set by the Mines and Geosciences Bureau (MGB) in securing

construction and operational permits for these facilities.

Magazines

There are a total of ten magazines located at the underground and surface to store

explosives used in the mining operation. Eight are situated underground, four at 908 meter

level to store the explosives requirement for 908, 890 and 840 meter levels and four at 782

and 773 meter levels. The storage is a replica of each and stores specific types of

explosives as tabulated below. Each magazine carries a month supply worth of explosives.

The two major magazines are on the surface. The facilities are manned 24/7, fenced with

locked access and hand held fire extinguishers are available. The surface magazines are

fitted with lightning protection. Also, armed security guards man this area, 24/7. A logistics

truck is used to transport explosives underground and is sufficiently escorted by security

personnel.

Table 17.5.1.6-3: Location of Magazines and Capacity

LOCATION AREA

(Sq. Mtrs) CAPACITY

BODEGA NO.1 782ML and 908 ML

38 60 cases LP/MP Delay 2000 m crimped Safety fuse


38 50 cases Safety fuse 4 boxes ordinary blasting cap


37 200 cases Dynamite 100 cases Stope prime


37 20 tons Ammonium Nitrate with Fuel Oil

URT BODEGA 248 70 tons Ammonium Nitrate with Fuel Oil

MAIN DYNAMITE BODEGA

233 120 cases dynamite/stope prime 100 cases detonating fuse

Electrical substations

A total of fourteen substations are located at different areas underground to provide power

requirements for electrical machineries of the mine operations. Below are the list/locations of

the substations.

PADCAL Operations

April 2013

Chapter 17 Page 53

Table 17.5.1.6-4: Locations of Substations

Location Description

2−4 crusher

substation

o Capacity: 501kVA o Purpose: Provide 440V/220V for 2−4 Crusher Station

2−4 ramp substation o Capacity: 1.251MVA o Purpose: Provide power for 782ml area.

773ML drift 1

substation

o Capacity: 750kVA o Purpose: Provide power for Conveyor1 440 requirements.

773ML drift 4

substation

o Capacity: 1MVA o Purpose: Provide power for 782ml conveyors and rockbreaker stations.

4−3 crusher

substation

o Capacity: 501kVA o Purpose: Provide power for 4−4 Crusher Station.

4−3 Abon sizer

substation

o Capacity: 750kVA o Purpose: Provide power for 4−3 Abon Sizer station.

Conveyor 6 Abon

sizer substation

o Capacity: 750kVA o Purpose: Provide power for Tail Pulley Conveyor 6 and mineral sizer.

CPR main substation o Capacity: 1.5MVA o Purpose: Main supply for both Abon sizers

745 main substation o Capacity: 3MVA o Purpose: Provide power for Feeder Belt conveyor complex.

Drift 1 840ML

substation

o Capacity: 501kVA o Purpose: Provide power for 840ml complex

908ML main

substation

o Capacity: 4.5MVA o Purpose: Provide power for both upper level and 782ml Complex

1020/1015ML main

substation

o Capacity: 501kVA o Purpose: Provide power for Batching Plant and 1020 Complex

745 ML elevated

substation

o Capacity: 501kVA o Purpose: Provide 440V/220V for FBC Complex

745 ML stage 1

pump substation

o Capacity: 750kVA o Purpose: Provide power for stage 1 pump complex

1170 ml Substation o Capacity: 501kVA o Purpose: Provide power for pump station and blower at 1170ml complex

PADCAL Operations

April 2013

Chapter 17 Page 54

17.5.1.7 Mine Development Plans and Schedule

The development of ore sources is the life blood of the Padcal mining operations. Better

grade ore sources are developed yearly to replace the depleted drawpoints. As a major

development parameters, the tabulated rates were used to build the development schedule.

Table 17.5.1.7-1: Rate of advances

PARTICULARS RATE OF ADVANCE per Day

EQUIPMENT Multi−Face Mono−Face

Horizontal Driving

4 meters

2 meters

Mechanized Jumbo Drill

machine tandem with LHD

Vertical Driving

1.8 meters

−

Conventional/Jackleg

machine aided by raise climber

Fanhole Drilling 175 drilled meters

− Mechanized Longhole Drill machine

At 908 meter level, 108 drawpoints will be developed at the central-east block which will be

completed in 2013. Most of the supporting infrastructures are in place for these drawpoints,

with the exception of dumping point, as the production level has been fully developed

already. The undercut is developed simultaneously as works in the production level is

advanced.

PADCAL Operations

April 2013

Chapter 17 Page 55

Figure 17.5.1.7-1: 908 ML Production Line Development Layout

PADCAL Operations

April 2013

Chapter 17 Page 56

Figure 17.5.1.7-2: 908 Undercut Line Development Layout

PADCAL Operations

April 2013

Chapter 17 Page 57

D D S T A .

P R O D U C T I O N L I N E - 4

Y R . 2 0 0 6 Y R . 2 0 0 7

J U N E - S E P T


N E - C

Y R . 2 0 0 5 Y R . 2 0 0 6


A C C . M A N W A Y T O U C L - 6

Y R . 2 0 0 4 C O L L A P S E D Y R . 2 0 0 5 P R O D U C T I O N L I N E - 7

L H D R E P A I R S H O P

N - 340 0 N E - A BR E A KER ST A. P R O D U C T I O N L I N E - 8 N - 340 0

F U E L S T A .

N E - B BR E A K E R S T A . P R O D U C T I O N L I N E - 9

S E R V I C E A R E A O L D SH AF T

P IL L A R R O B B E D Y R . 2 0 0 3 T O O L S BO D E G A T R AN SF O R M E R SU B- ST AT I O N

P R O D U C T I O N L I N E - 1 0


W A S H B A Y


C O L L A P S E D


2- 4 A B B F R E P A I R S H O P

38 39 40 41 42

P IL L A R R O B B E D P R O D U C T I O N L I N E - 1 4 C O N T R O L R O O M

2- 4 B 37 38 39 40 41 42 43

R A M P T O U N D E R C U T L EVEL

P R O D U C T I O N L I N E - 1 5 EXPL O SI VES M AG A Z I N E

2- 5 EXPL O SI VES M AG A Z I N E

N - 320 0 2- 4 C 36 37 38

39 40 41 42 N - 320 0


V E N T . R S E .- 1 6 31 32 33 34 35 37 38 39 40

36 41 1 6 / 1 7 B R E A K E R S T A .

EXPL O SI VES M AG A Z I N E

C O L L A P S E D V E N T . R

S E .- 1 7 Y R . 2 0 1 3


30 31 32 V E N T . R

S E .- 1 8 2 8 d p s 33 34 35 36 37 38 39 40

T R A N S F O R M E R

S U B - S T A . P R O D U C T I O N L I N E - 1 8 M A N W A Y

LT R 3 - 5

29 30 31 32 33 34 35 36 37 38 39

V E N T . R S E .- 1 9

P R O D U C T IO N P R O D U C T I O N L I N E - 1 9 L O C K E R S

V E N T . R S E .- 2 0

28 29 30 31 32 33 34 35 36 37 38

P IL L A R R O B B E D P R O D U C T I O N L I N E - 2 0

31 32 33 34 35 36 37 2 0 / 2 1 B R E A K E R S T A .

23 24 25 26 27 28 29 30

P R O D U C T I O N L I N E - 2 1 4 - 4 AA BR EAKE R S T A . 4 - 3 BR EAKER S T A . B O D E G A - 1

18 19 21 22 23 24 25 27 28 29 30 31 32 33 34 35 36

P I L L A R R O BBE D 4 - 4 BB BR EAKE R S T A .

21 22

Y R . 2 0 1 1 8 5 d p s

29 30 31 32 33 34 35

P R O D U C T I O N L I N E - 2 2 S A T T E L I T E B O D E G A

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7Y R . 128 0 0 8 1 9

A U G - S E P 4- 6 R S E . - 8

24 25 26 27 28

Y R . 2 0 1 0 6 6 d p s P R O D U C T I O N L I N E - 2 3

N - 300 0 N - 300 0

1A 1 2 3 4 5 6 7

Y R . 2 0 0 4 JU L Y - N O V

2 3 4 5 6

9 16

10 11 12 13 14 15 18 19 20 21 22 23 24 26 27 28 29 30 31 32 33 34

4 - 4 A BR EAKER S T A . P R O D U C T I O N L I N E - 2 4

4 - 4 B BR EAKER S T A .

7 9 10 11 12 13 1 4

Y R . 2 0 0 5 S E P T - N O V .

9 10 11 12 13

15 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 2 4 / 2 5 B R E A K E R S T A .

P R O D U C T I O N L I N E - 2 5 P H IL E X M IN IN G C O R P O R A T IO N

P A D C A L , T U BA, B EN G U ET

D D S T A . PR O J EC T :

14 16 17 18 19 20


9 0 8 M E T E R L E V E L

SH EE T C O N T EN T :

9 10 11 12 13

G E N E R A L P L A N

D R A W N BY : R .O . M A M A Y S O N D A T E :

D ESI G N BY :

C H E C K E D BY : J A B

APPR O VE BY: PPL , R S D I I , R P M

D EPAR T M EN T : M I N E E N G I N E E R I N G

SC AL E 1 : S H T . 01 O F 0 1

D W G . N 0 .

Figure 17.5.1.7-3: 908 ML Drawpoint Commissioning Schedule

W -

8 0

0

W -

8 0

0

W -

6 0

0

W -

6 0

0

Y R

. 2

00

7

Y R

. 2

00

9

A U

G -

SE

PT

W -

4 0

0

W -

4 0

0

YR

. 2

0 1

4

35

dp

s

YR

. 2

0 1

5

24

dp

s

Y R

. 2

01

16

2

1d

ps

E A

S T

P

E R

I M

. N

O R

T H

EA

ST

PE

R I

M

ET

E R

R A

M

P

W -

2 0

0

W -

2 0

0

ZE

R O

Z

E R

O

PADCAL Operations

April 2013

The 782 meter level has 157 drawpoints that will be developed in the next three years at the

east and west corners of the mining level. As with the 908 ML most of the supporting

infrastructures are in place for these drawpoints. The undercut is developed simultaneously

as works in the production level is advanced.

- Left Intentionally Blank –

Chapter 17 Page 58

PADCAL Operations

Chapter 17 Page 59

April 2013


PADCAL Operations

April 2013

Chapter 17 Page 60

Figure 17.5.1.7-5: 782 ML Undercut Line Development Layout

PADCAL Operations

April 2013

Chapter 17 Page 61

Figure 17.5.1.7-6: 782 ML Drawpoint Commissioning Schedule

E A S T P E R IM . A C C . R A M P T O 7 9 8 .0 0

P L- 1B N - 3 507. 5544

DD H- H 31 32 33 34 35 36 37 38 39 40 41 42

P L- 1A N - 3 477. 5544 VEN T . R SE .- 1 A G T U

B R EA K E R ST A .1 - 1 A

21 22 23 2 4 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41

A C C . M A N W A Y

P L- 1 N - 344 7.5544 VEN T . R S E .- 1 Y R .2 015

18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 3 7 3 8 3 9 40 4 5 d p s T O E L.81 4.00 ( U C L ) T O 7 73 - 8 40 A C C . R A M P

P L- 2 N - 341 7.5544 Y R .2 013

VEN T . R S E .- 2 4 0 d p s Y R . 2011

28dps Y R .2 014

4 4 d p s NE

N - 340 0 15 16 17 18 19 20 21 22 N - 340 0

13 14 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

B R E AK E R S T A .2 - 3 A C C . M A N W A Y

P L- 3 N - 338 7.5544 VEN T . R S E .- 3

R SE. T O UC L

VEN T . R S E .- 4

DP R A M P T O 791 M L

13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 12

31 32 33 34 35 36 37 38

DP 782 A C C E S S D R IF T

P L- 4 N - 335 7.5544

A C C . R A M P T O U C L

R SE. T O UC L

12 13 14 15 16 17 18 19 20

22 23 24 25 26 27 28 29 11

30 31 32 33 34 35 36 37

P L- 5 N - 332 7.5544

Y R . 2005 NO V - DE C

EX P L O SIV ES B O D E G A B R EA K E R S T A .4 - 5

Y R . 2006 A C C . M A N W A Y Y R .2 013 EX P L O SIV ES B O D E G A

DP DP Y R . 2012

VEN T . R S E .- 5

A P R - S E P T R SE. T O UC L

9 10 11 12 13 14 15 16 17 18 19 20 21 22

DP

23 24 Y R . 2009 28dps 2 8 d p s 25 26 27

30 29 30 31 32 33 34 35 36 P R O P . E L E C T RICA L S U B- S T A T IO N

P L- 6 N - 3 297. 5544 VEN T . R S E .- 6

A C C . M A N W A Y

A P R - J U L Y 37 d ps DP

8 9 1 0 11 12 13 14 15 16 17 18

P L- 7 N - 326 7.5544 VEN T . R S E .- 7 Y R . 2006 JU L - A U G

6 7 8

Y R . 2007

7 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

B R EA K E R S T A .6 - 7

DP 2- 5 D P 2- 4 D P

9 1 0 11 12 13 14 15 16 17 18 19 20 21 22

P L- 8 N - 323 7.5544 DP

DE C 5 6

7 8 9 1 0 1 1 12 13 14 15

DP Y R . 2008 A P R- NO V

16 18 19 20 B R EA K E R S T A .8 - 9

A C C . M A N W A Y

P L- 9 N - 320 7.5544 N - 320 0

VEN T . R S E .- 9 N - 320 0

4 5 18

6 7 8 9

DP

1 0 1 1 12 13 14 15 16 17

P L- 10 N - 3 177. 5544 VEN T . R SE .- 1 0

3 4 5 6 7 8

DP

9 1 0 11 12 13 B R EA K E R S T A.1 0 - 1 1

A C C . M A N W A Y RE F U E L IN G S T A .

P L- 11 N - 3 147. 5544 W AS H B A Y

VEN T . R SE .- 1 1

2 3 4 5 6 7 8 Y R . 2009

P L- 12 N - 3 117. 5544

VEN T . R SE .- 1 2

Y R . 2008 F EB - M AR

1 2 3

Y R .2 0 0D P9 JA N - M A R

4 5 6 7

9 10 11 12

S E P T - D EC 27dps

8 9 1 0 1 1 B R EA K E R S T A .- 1 2

A C C . M A N W A Y

E L.814.00( U C L )

E L.798.00

N - 300 0 N - 300 0

798 - M L B LK S

PH IL EX M IN IN G C O R PO R A T IO N P AD C A L , T U BA, B EN G U ET

PRO J E C T :

782 M IN IN G L IF T SHEE T C O N T E N T :

G E NE RA L L A Y O UT

D R AW N BY: R O M AM AYSO N DA T E :

DE S IG N BY :

DE P A RT M E N T : M IN E E NGIN E E RIN G

SC AL E : 1 : SH EET 0 1 O F 0 1

C H EC KED BY:

AP PRO V ED BY: R SD II, R P M DR A W IN G N O .

T O

E

L.7 98. 0

0 (

P L

)

AC

C E

SS

R

AM

P

T O

P

L

E

L .7

98.0

0

W -

8 0

0

W -

8 0

0

W -

6 0

0

W -

6 0

0

Y R

.2

00

7

JA N

- A

P R

A

C C

ES

S

R A

M P

T

O

U C

L

E L

.814.0

0

Y R

.2

01

2

23

dp

s

SER

VIC

E

A R

E A

AC

C E

SS

R

AM

P

T 0

782

M L

&

U

C L

W -

4 0

0

W -

4 0

0

O U

T L

IN E

O F

7

9 8

B

L K

W -

2 0

0

W -

2 0

0

EA

ST

PE

R I

M .

A

C C

.

R A

M P

T

O

E L

.814.0

0

PADCAL Operations

April 2013

The 798 meter level will be a new production level spinning off from the 782 meter level.

The production level aims to mine the south and east boundaries of the 782 production level.

An initial evaluation carried out finds that mining these at an elevation 16 meters higher will

be more economic than at the 782 meter level.

The development of 798 meter level will be from the undercut of 782 meter level which is

about the same elevation. Around 564 drawpoints will be developed in this mining level from

2014 to 2018. Ventilation drives at the perimeters as well as short ore transfer raises to

support the ore extraction.

Access and block development must commence in 2013 to be able to commission the first

block in 2014.


Chapter 17 Page 62

PADCAL Operations

April 2013

Chapter 17 Page 63


PADCAL Operations

April 2013

Chapter 17 Page 64

Figure 17.5.1.7-8: 798 ML Undercut Line Development Layout

PADCAL Operations

April 2013

Chapter 17 Page 65

EA S T P ER I M . A C C . R A M P T O 798. 00

U C L - 1 B N- 35 07 . 5 5 4 4 E L .7 8 2 .0 0

U C L - 1A N- 3 47 7. 55 4 4

E L .7 9 8 .0 0

YR . 2 01 4 YR . 2 0 1 5 4 5 d p s

E L .8 1 4 .0 0

U C L - 1 N- 3 44 7. 5 5 4 4

YR . 2 0 1 2 4 4 d p s E L . 814. 0 0 ( U C L ) PR O D U C TI O N L I N E - 1

U C L - 2 N- 3 41 7. 5 5 4 4 YR . 2 0 1 3

4 0 d p s Y R . 2 0 1 1

2 8 d p s 2 3 d p s

U C L 1 - 2 NW

NE PR O D U C TI O N L I N E - 2

N- 3 400 N- 3 400

U C L - 3 N- 3 38 7. 5 5 4 4

DU M P I NG PO I NT

PR O D U C TI O N L I N E - 3

U C L - 4 N- 3 35 7. 5 5 4 4 2 0 1 8 1 2 6 d p s

PR O D U C TI O N L I N E - 4

ACC . RAM P

U C L - 5 N- 3 32 7. 5 5 4 4

EL - 798

YR . 2 0 1 2 YR . 2 0 1 3 PR O D U C TI O N L I N E - 5

U C L - 6 N- 3 29 7. 5 5 4 4

YR . 2 0 0 5 N O V - D E C

YR . 2 0 0 6 AP R- SE P T

YR . 2 0 0 9 2 8 d p s 2 8 d p s

AP R - J U L Y PR O D U C TI O N L I N E - 6

Y R . 2 0 0 6 JU L - A U G

2- 3

DU M P I NG PO I NT

U C L - 7 N- 3 26 7. 5 5 4 4 PR O D U C TI O N L I N E - 7 2- 4 O B S E R VAT I O N RAI S E

2- 4D P

U C L - 8 N- 3 23 7. 5 5 4 4 PR O D U C TI O N L I N E - 8

N- 3 200 U C L - 9 N- 3 20 7. 5 5 4 4

YR . 2 0 0 7 DE C

YR . 2 0 0 8 AP R- N O V DU M P I NG

PO I N T PR O D U C TI O N L I N E - 9 N- 3 200

U C L - 1 0 N- 31 77 . 5 5 4 4

2 0 1 7 1 0 9 d p s PR O D U C TI O N L I N E - 1 0

F U E L & L U B E S T A . DU M P I NG PO I NT

U C L - 1 1 N- 31 47 . 5 5 4 4 YR . 2 0 0 9 SE P T - D E C

PR O D U C TI O N L I N E - 1 1

YR . 2 0 0 8 YR . 2 0 0 9 FE B - M A R JA N -M A R

E L .7 9 0 .8 4 7 6

U C L - 1 2 N- 31 17 . 5 5 4 4 DU M P I NG PO I NT

DU M P I NG PO I NT


PR O D U C TI O N L I N E - 1 3 E L . 814. 0 0 ( U C L )


E L .7 9 8 .0 0


2 0 1 6 PR O D U C TI O N L I N E - 1 4


2 0 1 4 7 0 d p s

DU M P I NG PO I NT

1 2 1 d p s DU M P I N G

PO I NT


DU M P I NG

N- 3 000

2 0 1 5 4- 4

DU M P I NG PO I NT

4- 3

DU M P I NG PO I NT

4- 2

N- 3 000


PR O D U C TI O N L I N E - 1 7 1 3 4 d p s DU M P I NG

PO I NT DU M P I NG PO I NT


7 9 8 - M L P R O D U C T I O N L E V E L

P H IL E X M IN IN G C O R P O R A T IO N PA D C A L , T U B A , B E NG U ET

PR O J EC T:

PR O D U C TI O N L I N E - 1 8 7 9 8 M I N I NG L I F T S H E E T C O NTENT:

GE NE R A L L A Y OU T

D R A W N B Y : R O M A M A Y S O N DA T E : D E PA R T M E NT : M I NE ENG I NEE R I N G

DE S I G N B Y : SCAL E : 1 : S H EET 0 1 O F 0 1

CH E C K E D B Y :

A PPR O V E D B Y : PPL , R S D I I , R P M DR A W I NG N O.

Figure 17.5.1.7-9: 798ML Drawpoints Development Schedule ACC E S

S

RAM

P T O

U

C L

E L . 7 9 8 . 0 0

W -

800

W

-

800

W -

600

W

-

600

YR

. 2

00

7

JA N

-A

P R

ACC E

SS

RAM

P

T O

U C

L

E L

. 8 1

4 .

0 0

ACC E

SS

RAM

P

T 0

7 8

2 M

L

&

U C

L

W -

400

W

-

400

W -

200

W

-

200

E A S

T P

E RI M

.

ACC .

RAM

P

T O

E L

. 8 1

4 .

0 0

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Mine development schedule is further summarized in the tabulation below which combines

all activities at the three production levels and their supporting infrastructures. This will also

serve as the basis for capital cost for mine development in the succeeding sections of this

technical report.

Table 17.5.1.7-2: Activities at three (3) production levels

Schedule of Development Activity

Particulars U-M 2013 2014 2015 2016 2017 2018 2019 Total

1.Horizontal Driving

mtr

6,921 9,291 6,895 5,685 3,194 0 0 31,986

2. Vertical Driving

mtr

1,108 1,713 1,740 1,570 1,699 1,332 0 9,162

3. Fanhole Drilling

drm

134,484

162,945

176,195

196,428

185,398

127,441

0

982,889

4. Rockbolting pc 35,612 50,843 39,404 32,121 22,562 0 0 180,541

5. Cable Bolting drm 24,837 25,797 29,683 21,172 16,137 12,775 0 130,400

6. Shotcreting cu mtr

6,482 4,652 5,122 3,436 2,211 2,051 0 23,954

7. Concreting cu mtr

2,391 3,054 4,131 2,711 1,528 1,116 0 14,930

8.SteelSet Installation

set

213 434 407 375 228 186 0 1,843

9. Undercutting drm 226,649 56,316 120,030 192,954 110,715 98,259 114,737 919,660

10 Drawpoints no. 111 75 138 204 121 109 126 884

17.5.2 Processing Plans

Copper and gold will be recovered using flotation process as described in the succeeding

sections.

17.5.2.1 Metallurgical Process Flowsheet/Process Plant Design

Primary Crushing Plant

Coarse ore is delivered from the mine to the primary crushing plant via the Cable Hauled

Conveyor system (CHC) at an average rate of 25,730 tons per day. The ore drops to four (4)

units of vibrating scalper each of which is atop a152.4 cm x 487.68 cm dewatering screen

with 7.6 cm 1st deck opening and 0.95 cm x 12.7 cm 2nd deck screen opening. The minus

0.95 cm material is conveyed via a series of launders and canals to the slimes screen while

the plus 0.95 cm material drops to a 5,600-ton capacity dump bin.

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Figure 17.5.2.1-1: Run-of-Mine (CHC Discharge)

Underneath the dump bin are four units of apron feeders individually feeding four units of

76.2 cm x 106.7 cm jaw crushers. These jaw crushers are set at 10.16 cm closed side

setting. The crushed product of each jaw crusher is fed onto four parallel conveyors each

feeding to a unit of 152.4 cm x 487.68 cm washing screen with 0.95 cm x 12.7 cm screen

opening. The oversize is conveyed to a 30,000-ton capacity Coarse Ore Stockpile (COS)

while the undersize flows through a series of canals to the slimes screens.

Figure 17.5.2.1-2: Primary Crushing - Jaw Crusher

There are four (4) units of152.4 cm x 609.6 cm slimes screens with 2mm opening. The last

panel is fitted with 1.27 cm screen. The minus 2mm material, which is considered as the

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Chapter 17 Page 68

primary slimes, flows and is fed to the ball mill discharge sump box for classification. The

minus 1.27 cm is conveyed to the fine ore bin while the oversize is brought to the secondary

and tertiary crushing section.

Part of the slime generated by the dewatering screen is fed to a bank of sieve bends (8

units) with 2mm opening. The oversize of the sieve bends is conveyed to the slime screens

while the minus 2mm material is fed to two (2) units of rake classifier. The classifier sand is

combined with the sieve bend oversize and is also conveyed to the slime screens. The

overflow of the rake classifier is fed to a cluster of hydrocyclones. The cyclone overflow is

fed to a 7m diameter x 9m high slime surge or conditioning tank. These slimes are treated

separately in a Wemco 164/144 flotation bank. The cyclone underflow is piped to the ball

mill discharge sump box.

Secondary / Tertiary Crushing Section

From the coarse ore stockpile (COS), the ore is withdrawn and conveyed to a set of grizzly

bars with a 5.08 cm opening. The undersize material drops to the Tertiary Surge Bin. The

oversize drops to a 675-ton capacity Secondary Surge Bin. From this bin, the ore is then fed

to three (3) units of 167.64 cm standard cone crushers used for secondary crushing. The

secondary crushers are set at 3.81 cm closed side setting. The crusher product is conveyed

to a 2,800-ton capacity Tertiary Surge Bin.

From this bin, the ore is withdrawn and fed to eighteen (18) units of 152.4 cm x 365.76 cm

vibrating screens with 1.27 cm opening. The oversize of the screens is fed to eight (8) units

of 167.64 cm short head cone crushers. The tertiary crushers are set at 0.95 cm closed side

setting. The tertiary crusher product combines with that of the secondary crusher product for

screening.

The undersize of the screens is considered as the final product of the crushing plant and

must be at least 73 percent passing 10mm. This is conveyed to the fine ore bin (FOB).

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Figure 17.5.2.1-3: Secondary-Tertiary Crushing Plant (Tertiary Crusher Top View)

Grinding Section

There are nine (9) fine ore bins with an aggregate capacity of 17,000 tons. From these bins,

the ore is withdrawn and fed to ball mills. There are nine (9) ball mills of the following sizes –

one 441.96 cm x 670.56 cm, 2 units 502.92 cm x 838.2 cm, 502.92 cm x 670.56 cm, 3 units

350.52 cm x 426.72 cm, 356.76 cm x 487.68 cm and 441.96 cm x 716.28 cm. Two mills

serve as spare to sustain milling tonnage. These ball mills are in close circuit with a cluster

of hydrocyclones. All mills are charged with 32-35 percent steel ball loading at 40 percent

90mm and 60 percent 80mm composition of cast steel balls. The circulating load averages

around 300 – 450 percent. Grinding ball consumption is 320 to 370 grams per ton.

The cyclone overflow or finished product of the grinding section is normally 60 – 65 percent

passing 200 mesh (74 micrometers) at 1,260 – 1,320 grams per liter pulp density. This

material flows by gravity through four (4) parallel trash screens before being fed to the

flotation circuit.

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Figure 17.5.2.1-4: Grinding Plant

Flotation Section

Copper, gold, silver and sulfide minerals are separated from the waste or gangue portion of

the ore by a Rougher Flotation circuit which comprises of five (5) banks having a total

volume of 1,206m3. The first two banks are a combination of four (4) Wemco 164 and six (6)

Wemco 144 cells, the other two banks have nine (9) Wemco 164 cells, and the last bank

consists of six (6) Wemco Smart Cells. The Rougher Concentrate produced is upgraded in a

three-stage cleaning circuit. The first cleaning stage consists of four (4) units of Wemco 164

with a volume of 113 m3 and the second and third cleaning stages consist of two units

Column Flotation Cells with a total volume of 170 m3.

Tailings from the roughers are passed through parallel Sluice Launders to recover mineral

values, such as gold, in the tails before it is fed to the tailings thickeners. Rougher

concentrate is piped to the first cleaner for upgrading. The 1st Cleaner Tails are pumped

back and combined with the Rougher feed. The 1st Cleaner Concentrate is pumped to the 1st

Column Flotation serving as second cleaner. The 2nd CleanerTails drops back and combined

with the Rougher Concentrate which is fed to the 1st Cleaner. The concentrate is pumped to

the 2nd Column Flotation for final upgrading or the 3rd cleaning stage and the 3rd Cleaner

Tails are re-circulated back to the first column.

Chemical reagents used to recover the minerals are Sodium Isobutyl Xanthate (SIBX) added

at a dosage rate of 35 g/t and frother added on a as-required basis. SIBX serves as the

collector for the values while frother is added to stabilize the froth.

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The pH is also regulated at 10.5 to 11.0 in the roughers and 11.0 to 11.5 in the cleaners by

the addition of quicklime. A milk of lime production facility handles the addition of quicklime.

Lime consumption is 1,100 grams per ton.

Figure 17.5.2.1-5: Flotation Section

Concentrate Handling Section

The final concentrate produced from the 3rd Cleaner is first thickened in a 2,286 diameter

thickener before being fed to two (2) units of 304.8 cm x 304.8 cm drum filter. The dewatered

final concentrate filter cake having a moisture content of 10 to 11 percent is hauled by trucks

for shipment to contracted copper smelters in Japan.

Figure 17.5.2.1-6: Concentrate Filtering - Drum Filter

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Figure 17.5.2.1-7: Concentrate Shipping Port - Poro, La Union

Tailings Disposal and Water Handling

The final tails coming out of the rougher flotation is piped to two (2) units of 7,620 cm

diameter thickeners for water reclamation. The thickener overflow is recirculated back to the

plant as process water while the underflow flows to the tailings pond for impoundment.

Additional fresh water is also pumped from Sal-angan creek. A system for flocculants

addition is provided in case the need arises.

Figure 17.5.2.1-8: Tailings Thickening

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Figure 17.5.2.1-9: Process Flowchart

Chapter 17 Page 73

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1960’s

The Banget Mill Plant has evolved from the original plant design in the 60’s. From the

original 27,000 metric tons per day capacity plant it has grown to 30,000 metric tons a day

plant.

Figure 17.5.2.1-10: Evolution of Banget Mill Plant

1980’s 1990’s

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The building structures remain what it was previously; modern equipment and mechanisms

were adapted to achieve an efficient milling operation. An example will be the shift of

concentrator cells from Jameson to Smartcells, a change that allowed the operation an

improvement in the capacities and metal recoveries.

17.5.2.2 Metallurgical Test Works Results

The mill operations in its fifty years of operating the Banget Plant have established the mill and

metallurgical parameters to guide the day to day operations.

Capacity Metric tons per day 25,000 − 28,000

Feed Grade

Copper Percent copper Dependent on mine

projections Gold Grams per ton gold

Concentrate

Copper Percent copper 25.00

Gold Grams per ton gold 49.89

Tails

Copper Percent copper 0.038

Gold Grams per ton gold 0.110

Moisture Percent 11.50

Steel ball Gram per ton of ore milled 350 − 375

Lime Gram per ton of ore milled 500 − 1,000

SIBX Gram per ton of ore milled 25 − 35

Frother Gram per ton of ore milled 11 − 16

Mesh of grind % + 65 mesh 6 − 9

% − 200 mesh 60 − 65

pH at rougher 10 −10.50

pH at cleaner 11.50 − 12

Flotation pulp density Grams per liter 1,270 − 1,300

Table 17.5.2.2-1: Mill and Metallurgical Parameters

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To confirm these parameters, the Mill conduct regular block optimization metallurgical tests

wherein the ore projected to be milled and processed a period ahead will be subjected to

metallurgical simulation in the laboratory.

The Mine operations provide the samples from drawpoints of blocks that are planned to be

mined a month or so ahead. They will assume that ore characteristics will have no significant

change in few regular increments. A monthly period interval is ideally done for this

undertaking. The geologists, in parallel conduct a microscopic mineralogical analysis of the

sample to determine the characteristics. The Mill, upon obtaining the samples, determines the

head grades and work index. A simulation flotation is done using first the current mill and

metallurgical parameters, then varying the following factors:

• Mesh of grind (60, 80, 100 percent passing 200 mesh)

• pH (8, 10 and 12)

• Collector dosage - SIBX (20, 25 to 30 grams per ton)

• Pulp density (35, 45 and 50 percent solids)

The mean metal recoveries and recorded and pitted against the calculated metal recoveries

using the current plant parameters. The results and conclusions are finalized and discussed

with the operations management. A plant wide test is usually done using the optimized mill

and metallurgical parameters from the simulation.

Research and development is a continuing process in the Mill to further enhance the recovery

of copper and gold and efficiently cut the operating cost. The more recent and significant

studies and results are:

• Grinding balls composition. Plant wide tests of both cast and forged steel balls

were made. It was determined that the consumption for the cast steel balls is 370

grams per ton of ore (520 gpt for forged steel ball), which makes it more economical

to use (28.85 percent reduction in consumption).

• Reagents. New reagents are constantly being introduced to the market, promising

higher metal recoveries and cost efficiency. These are being screened in the

laboratory by simulating the Mill flotation process. Reagents with promising results

are subjected to a plant wide test.

• Point of Addition of SIBX. A simulation of flotation varying the point of introduction

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Chapter 17 Page 77

of SIBX was done. The base case is SIBX was introduced during the start of the

process, while the variation was 50 percent of the volume of SIBX was introduced at

the start of the process and the remaining volume added halfway to the flotation

process. All other parameters remain as is. The later resulted to a possible increase

for up to 2 percent and 8 percent (laboratory figures) in copper and gold recoveries

respectively. The result has been incorporated to the Standard Job Procedure (SJP)

in the Mill.

• New Technology. Equipment manufacturers and distributors regularly give product

presentations to concerned departments. Also, both technical and skilled company

personnel are sent to attend seminars, lectures, or conventions to keep mill

personnel updated. The latest innovations are able to offer higher equipment

efficiency, lower operating costs, and lower maintenance costs, among others.

17.5.2.3 Materials Balance

Several assumptions were made for the presented material balance. The specific

gravity of the ore has an average value of 2.6 and the overall plant throughput rate is

27,000 tons per day (1,125 tons per hour) of ore. Most of the moisture contents of the

streams in the crushing section are only based on visual estimates and only some are

based on actual sampling data. The head grade averages at 0.2 percent copper and the

overall recovery at 83 percent. The grades of the final concentrate and the tailings

grade are 25 percent copper and 0.040 percent copper, respectively.

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Table 17.5.2.3-1: Material Balance

Equip-

ment CHC

Disch.

Deadbar Grizzly Scalper Screen Deadbar Grizzly Jaw Crushers Washing Screens Sieve Bends Rake Classifiers

OS US OS US OS US Feed Disch. OS US OS US OF UF

tph

solids 1,125 846 279 120 159 508 401 508 508 907 2 88 71 66 5

liquid 125 44 119 6 68 27 100 27 127 48 1 5 48 56 1

total 1,250 891 398 126 227 534 502 534 636 954 3 92 119 122 6

cu.m/h

solids 433 326 107 46 61 195 154 195 195 349 1 34 28 26 2

liquid 125 44 119 6 68 27 100 27 127 48 1 5 48 56 1

total 558 370 227 52 129 222 255 222 322 396 2 38 75 82 3

SG (MT/cu.

m)

solids 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.51 2.60

liquid 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

slurry 2.24 2.41 1.76 2.41 1.76 2.41 1.97 2.41 1.97 2.41 1.76 2.41 1.59 1.49 1.97

% solids 90.00 95.00 70.00 95.00 70.00 95.00 80.00 95.00 80.00 95.00 70.00 95.00 60.00 54.33 80.00

% of feed 75.23 24.77 42.91 57.09 52.57 47.43 99.74 0.26 55.12 44.88 92.90 7.10

Equip- ment

Slime Screens Stationary

Grizzly Sec. Cone Crushers Tertiary Vibrating Screens Ter. Cone Crushers Slime Cyclones

OS US1 US2 OS US Feed Disch. Feed OS US Feed Disch. Feed UF OF

tph

solids 27 30 38 837 70 837 837 2,629 1,722 907 1,722 1,722 66 10 56

liquid 1 2 66 8 1 8 8 27 17 9 17 17 56 9 108

total 28 32 104 846 70 846 845 2,656 1,739 916 1,740 1,780 122 19 164

cu.m/h

solids 10 12 15 322 26 322 322 1,011 662 349 662 662 26 4 23

liquid 1 2 66 8 1 8 8 27 17 9 17 17 56 9 108

total 11 13 80 33 28 330 330 1,038 680 358 680 680 82 13 130

SG (MT/cu.

m)

solids 2.60 2.60 2.55 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.60 2.51 2.49 2.49

liquid 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

slurry 2.52 2.41 1.29 2.56 2.56 2.56 2.56 2.56 2.56 2.56 2.56 2.56 1.49 1.46 1.26

% solids 98.00 95.00 36.62 99.00 99.00 99.00 99.00 99.00 99.00 99.00 99.00 99.00 54.33 52.84 34.25

% of feed 28.76 31.42 39.82 92.33 7.67 65.51 34.49 15.48 84.52

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Equipm ent

50’ Tknr UF

Ball Mill Hydrocyclone Rougher 1st Cleaner 2nd Cleaner 3rd Cleaner Conc. Tknr UF

Drum Filter Feed Disch. UF OF Conc. Tails Conc. Tails Conc. Tails Conc. Tails

tph

solids 208 5,417 5,417 4,500 1,125 110 1,296 380 129 185 195 9 176 9 9

liquid 1,340 2,213 3,764 1,929 1,624 261 1,878 905 316 347 473 24 395 9 1

total 1,548 7,630 9,182 6,429 2,749 371 3,174 1,285 445 532 668 33 571 18 10

cu.m/h

solids 80 2,084 2,084 1,731 434 39 498 122 47 55 66 3 57 3 3

liquid 1,340 2,213 3,764 1,929 1,624 261 1,878 905 316 347 473 24 395 9 1

total 1,420 4,296 5,848 3,659 2,058 300 2,376 1,026 363 402 539 26 452 12 4

SG (MT/cu.

m)

solids 2.60 2.60 2.60 2.60 2.59 2.83 2.60 3.12 2.75 3.33 2.95 3.45 3.06 3.45 3.45

liquid 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

slurry 1.09 1.78 1.57 1.76 1.34 1.24 1.34 1.25 1.23 1.32 1.24 1.24 1.26 1.55 2.77

% solids 13.43 71.00 59.00 70.00 40.92 29.67 40.84 29.57 28.91 34.72 29.24 27.46 30.76 50.00 90.00

% of feed 100.00 100.00 80.00 20.00 7.83 92.17 74.71 25.29 48.58 51.42 4.88 95.12

17.5.2.4 Plant Capacity/Production Schedule

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The mill plant processes 9.4 million tons per annum. The plant processes an average of

26,000 tons per day at 0.21 percent copper and 0.43 gram per ton gold. The plant can

process a maximum of 30,000 tons per day. The production schedule for the remaining mine

life is shown in the table below:

The designed plant capacity is to a maximum of 30,000 metric tons per day but in order to

meet the current mill and metallurgical parameters the plant is only made to process a

maximum of 28,000 metric tons per day of ore. The planned capacity is dictated by the

flotation process specifically the retention time it needs to separate the copper and gold to

the gangue.

In the production schedule, the mill will be fed 25,736 metric tons per day on the average

and 9.4 million metric tons per annum, with the exception of 2013 as already explained in the

section discussion the mining production schedule.

A short term production target for the mill is tabulated below to meet the life of mine metal

production.

Table 17.5.2.4-1: Plant Capacity/Production Schedule

Average Milling Rate 25,736

Concentrate, DMT per day 200 − 250

Kilograms Copper per day 45,000 − 65,000

Grams Gold per day 6,000 − 12,000

Grades Copper, % Gold, gpt

Feed 0.20 − 0.25 0.35 − 0.60

Concentrate 22.0 − 26.0 35.0 − 60.0

Tails 0.037 − 0.045 0.085 − 0.120

Chapter 17 Page 80

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METALLURGICAL DATA CY-2013 CY-2014 CY-2015 CY-2016 CY-2017 CY-2018 CY-2019 CY-2020 Sum / Ave

MILLING TONNAGE, DMTPD 25,767 25,753 25,753 25,683 25,753 25,753 25,753 25,683 25,737 WORKING DAYS 299 365 365 366 365 365 365 366 2,856

MILLING TONNAGE, TOTAL 7,704,473 9,400,000 9,400,000 9,400,000 9,400,000 9,400,000 9,400,000 9,400,000 73,504,472 MILL HEADS:

A) COPPER, % 0.22 0.22 0.21 0.21 0.21 0.20 0.19 0.19 0.21 B) GOLD (GMS/DMT) 0.50 0.52 0.47 0.44 0.42 0.38 0.37 0.37 0.43

COPPER TAILS, % 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 GOLD IN TAILS, GMS/DMT 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11

CONCENTRATE GRADE:

A) COPPER, % 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 B) GOLD (GMS/DMT) 54.81 56.80 50.74 46.82 45.38 42.26 42.22 42.28 47.79 C) SILVER (GMS./DMT) 56.81 58.80 52.74 48.82 47.38 44.26 44.22 44.28 49.79 D) MOISTURE, % (BANGET) 11.50 11.50 11.50 11.50 11.50 11.50 11.50 11.50 11.50

TONS CONCENTRATE:

A) DMT 54,650.90 67,786.66 66,286.86 65,143.73 63,381.91 59,875.01 58,368.72 57,615.58 493,109.36 B) WMT 61,752.43 76,595.09 74,900.41 73,608.74 71,617.97 67,655.38 65,953.36 65,102.35 557,185.72

METAL PRODUCTION:

A) KGS. COPPER 13,662,725 16,946,664 16,571,715 16,285,933 15,845,476 14,968,753 14,592,180 14,403,894 123,277,340 Pounds Copper 30,121,117 37,360,954 36,534,334 35,904,294 34,933,254 33,000,411 32,170,212 31,755,113 271,779,689

B) GMS. GOLD 2,995,246 3,849,975 3,363,510 3,049,865 2,876,473 2,530,186 2,464,221 2,435,938 23,565,414 C) GMS. SILVER 3,104,548 3,985,548 3,496,083 3,180,153 3,003,237 2,649,936 2,580,958 2,551,169 24,551,632

GMS. GOLD (BULLION) 11,729 14,400 14,400 14,400 14,400 14,400 14,400 14,400 112,529 TOTAL GMS, GOLD W/ BULLION 3,006,975 3,864,375 3,377,910 3,064,265 2,890,873 2,544,586 2,478,621 2,450,338 23,677,943

Ounces, Gold total 96,676 124,243 108,602 98,518 92,944 81,810 79,690 78,780 761,264 GMS. SILVER (BULLION) 828 1,017 1,017 1,017 1,017 1,017 1,017 1,017 7,944 TOTAL GMS, AG. WITH BULLION 3,105,376 3,986,565 3,497,100 3,181,169 3,004,254 2,650,953 2,581,975 2,552,185 24,559,576

Ounces, Silver total 99,840 128,171 112,434 102,277 96,589 85,230 83,012 82,055 789,609 RECOVERY:

COPPER RECOVERY, % 82.46 82.70 82.37 82.11 81.71 80.83 80.43 80.23 81.63 % RECOVERY GOLD TO CONC. 77.83 78.72 76.36 74.55 73.42 70.83 70.28 70.04 74.32 % REC. GOLD TO BULLION 0.30 0.29 0.33 0.35 0.37 0.40 0.41 0.41 0.35 % RECOVERY GOLD TOTAL 78.13 79.01 76.69 74.90 73.79 71.24 70.69 70.45 74.67

Table 17.5.2.4-2: Plant Production Schedule

Chapter 17 Page 81

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17.5.2.5 Plant Working Schedule

The number of working days is set at 365 days per year with manpower shifting working 12-

hours per shift. The primary crushing plant and secondary-tertiary crushers run 20 hours per

day with 4 hours window maintenance. While the grinding up to flotation are run 24 hours

per day. As with the mine, for planning purposes, the calendar days were used. In cases

where there is a shortfall, the mill will compensate by processing to its maximum capacity.

The planned systems availabilities are tabulated below to further ensure the attainment of

production schedule.

Table 17.5.2.5-1: Plant Working Schedule

Area / Plant

Planned

Mechanical

Availability

Dewatering Area 85.00%

Slime Circuit 95.00%

Primary Crushing Plant 85.00%

Secondary-Tertiary Crushing

Plant

95.00%

Grinding Plant 95.00%

Flotation Plant 98.00%

Filtering Plant 98.00%

Mill Water Supply 95.00%

745ML Flotation Plant 95.00%

17.5.2.6 Product Specification

The copper concentrate is the valuable product of the company with copper as the main

product whereas gold and silver are by-products. The component by weight is 82

percent chalcopyrite, 10 percent bornite and 6 percent pyrite. The average grades of the

concentrate are 25 percent copper, 50 gram per ton gold with moisture content of 11

percent.

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Other physical characteristics are:

• Particle size of 80 percent passing 74 microns

• Insoluble to water

• Grayish moist powder

• Odorless

• pH of 10 to 11

• Specific gravity of 3.7 to 4.0

An amount of 200 metric tons per day of concentrate is being hauled from Padcal’s

Banget Mill plant to Poro, La Union for shipment to contracted copper smelters.

A typical analysis of the concentrate done by in-house assay laboratory shows the following

elemental composition.

Table 17.5.2.6-1: Typical Analysis of Concentrate

Element Content Unit

Copper, Cu 24 − 26 %

Gold, Au 50 − 60 gram/ton

Silver, Ag 45 − 55 gram/tom

Sulfur,S 27 − 32 %

Iron, Fe 20 − 25 %

Zinc, Zn 0.10 − 0.20 %

Silica, SiO2 7 − 10 %

Bismuth, Bi 90 − 130 ppm

Manganese, Mn 70 − 100 ppm

Nickel, Ni 30 −50 ppm

Cobalt, Co 90 − 120 ppm

Cadmium, Cd 9 − 13 ppm

Chromium, Cr 17 − 24 ppm

Lead, Pb 200 − 350 ppm

Platinum, Pt <0.167 ppm

Palladium, Pd 1.70 − 2.70 ppm

Mercury, Hg <0.005 ppm

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17.5.2.7 Tailings Specification

Padcal has regularly been analyzing the tailings composition as part of its commitment to

protect its environment. The samples are analyzed by in-house assay laboratory. A typical

sample of tailing is composed of the following.

Table 17.5.2.7-1: Typical Analysis of Final Flotation Tails:

Element Content Unit

Copper, Cu 0.036 − 0.046 %

Gold, Au 0.100 − 0.110 gram/ton

Silver, Ag ND gram/tom

Sulfur,S 5 − 7 %

Iron, Fe 4 − 5 %

Zinc, Zn 40 − 50 %

Insoluble, (Estd. SiO2) 70 − 75 %

Bismuth, Bi 30 − 40 PPM

Manganese, Mn 350 − 420 PPM

Nickel, Ni 14 − 16 PPM

Cobalt, Co 20 − 22 PPM

Cadmium, Cd 2 − 3 PPM

Chromium, Cr 30 − 40 PPM

Lead, Pb 10 − 13 PPM

Platinum, Pt ND PPM

Palladium, Pd ND PPM

Mercury, Hg 0.01 − 0.05 PPM

17.5.2.8 Tailings Dam Siting

Padcal has used three Tailings Storage Facility (TSF) for its operations so far. TSF 1 is

within the mine’s MPSA 276, TSF 2 within MPSA 156. Both are already decommissioned.

TSF 3 is outside of any MPSA but was able to construct it by a Special Land Used Permit

(SLUP) obtained from Department of Energy and Natural Resources (DENR), who exercises

its jurisdiction at the area. The facility is still actively being used and has a remaining

impounding capacity of around two to three years worth of full operations.

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Tailings Storage Facility 4 is at the right tail end of MPSA 156. Currently the area is

undergoing a technical investigation for its feasibility as a TSF site. The planned facility will

be made to contain five to six years of tailings from full operation to meet the requirement of

the planned life of mine.

Figure 17.5.2.8-1: Tailings Dam Siting

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17.5.2.9 List of Mill Machineries and Auxiliary Equipment

A structured summary of mill equipment and machinery is tabulated below.

Table 17.5.2.9-1: List of Mill Machineries and Auxiliary

Equipment Description Number of

Units Use

Apron Feeder

1.5m wide x 7.1m long,

352 tph capacity

4

Primary Crushing

Jaw Crusher

0.762m x 1.1m Pioneer

Oro and Nordberg C100,

213 MTph capacity at

100mm setting

4

Primary Crushing

Standard Cone

Crusher

1.7m Symons Cone

Crushers, 475 tph

11

Secondary Crushing (3

Standard Type) and Tertiary

Crushing (8 Shorthead Type)

Rake Classifier Dorr−Oliver 2 Dewatering

Ball Mill

1 unit 4.4m x 6.7m

2 units 5.0m x 8.4m

1 unit 5.0m x 6.7m

3 units 3.5m x 4.3m

1 unit 3.7m x 4.9m

9

Grinding

Cyclones

660.4 mm Cyclone

Diameter

45

BM1, 2, 3, 4, 5, 7, 8, 11, 12

Cylones

Flotation Cell

Wemco 144

16

Wemco A/ B Scavenger

Flotation and 745 Plant

Rougher Flotation

Wemco 164 30 Wemco A/B/C/D Rougher

Flotation and 1st

Cleaner

Flotation

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Smart Cell

6

Wemco E Rougher/Scavenger

Flotation

Column Cells 2 2nd and 3rd Cleaners

4.9m diameter x 4.9m

high Open−type Wemco

2

745 ML Plant

Galigher Agitair 3 745 ML Cleaner Flotation

Scalper

1.5m x 4.9m, 1st deck:

76.2mm x 76.2mm rubber

screen panel, 2nd deck:

9.5mm x 127mm screen

opening

4

Dewatering

Vibrating Screens

1.5m x 6.1m, 3 mm

screen opening Slime

Screen

4

Dewatering

1.5m x 4.9m, 9.5mm x

127mm screen opening

woven wire cloth

Washing Screen

4

Primary Crushing

1.5m x 3.7m, 9.5mm or

127mm screen opening

woven wire Tertiary

Vibrating Screen

18

Tertiary Crushing

1.5m x 4.9m, 2 mm

screen opening Honert

Trash Screen

4

Grinding

Conveyor Belts

0.762m, 0.914m, 1.2m

89

Primary/Secondary/Tertiary

Crushing and Grinding

Blower

0.305m x 0.914m,

0.178m x 0.381m

6

Flotation/Thickening/Filtering

Thickener


High, 777.49 m3 capacity

1 Slime Thickening


High, 2,222.24 m3 capacity

1

Concentrate Thickening


High, , 23,107.24 m3 capacity

2

Tailings Thickening

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Filter

Dorr−Oliver 3m diameter x

3.7m long Drum Filter

2

Concentrate Filtering

Dorr−Oliver Disc Filter 1 745 ML Concentrate Filtering

Slusher 10 Plant Spillages

Syntron Feeders

F−480,48” wide x 66” long,

700 tph

F−330,30” wide x 48” long,

270 tph F−220,

37

Secondary/Tertiary Crushing

Motors Various types 2 − 4,500 HP 329 Equipment motors

Pumps Various types (3” – 12”

Discharge size)

98 Equipment pumps

Speed Reducers Varioustypes (Speed ratio

range: 2.88 – 6.227)

88 Equipment Reducers

Overhead Cranes Various capacities (5 – 25

tons)

23 Different locations at the Plant

7.5.2.10 Mill Plant Layouts

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In as much as the plant has already been constructed, the following layouts represent the as built plan of the Mill Complex

Figure 17.5.2.10-1: Over-all Banget Plant Layout

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17.5.3 Mine Support Services

17.5.3.1 Power Source / Power Generation Plant

Facility Electric Power Distribution Systems

The Primary Power supply on site is fed at 69 Kilovolts from the La Trinidad Substation

owned by the National Grid Corporation of the Phil. (NGCP). The La Trinidad Substation

feeds power through a 69 Kilovolts, 336.4MCM overhead lines on wood and steel poles to

NGCP’s Itogon substation then a dedicated line to the Philex Substation#69 at sitio Banget.

From the Itogon SS a 23 Kilovolts, American Wire Gauge #4/0 overhead power line feeds

the mine camp site community.


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69kV

Note: Magenta colored box is owned by others

SNAP (Aboitiz)

NGCP

Binga SS

La Trinidad SS NGCP

Itogon SS

69kV

Philex

Camp Residential 23kV 23kV

Philex

4.16kV

Substation#1 Philex 4.16kV

Back-up ckt

Substation #69 4.16kV

23kV

Philex (1) 25MVA 69/23kV

13.8kV

Philex

745ML Underground Power Plant

23kV

23kV Philex

23kV 23kV Philex

Ball Mills Philex Substation#23

Substation#7 Mill Philex

23kV Substation#21

Philex Philex

908ML Underground 782ML Underground

23kV Back up loop

Figure 17.5.3.1-1: Schematic Diagram Electric Power Facility

PEZA Baguio SS

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Primary Power Supply Substation

The 69kV is received at Substation No. 69 by four (4) main power transformers namely:

1. MT01 - 25MVA, 69/23kV, Westinghouse Brand, Mfg. 1973.

2. MT02 - 10MVA, 69kV / 2,300V, Westinghouse Brand, Mfg. 1972.

3. MT26 - 10MVA, 69000/4160V, Philec Brand, Mfg. 2007

4. MT27 - 10MVA, 69000/4160V, Philec Brand, Mfg. 2007

An expansion project to install another 25MVA was planned to be implemented this 2013

and expected to be completed first quarter of 2014. This project is mainly for an N-1

capability of the main substation thus an assurance of very minimal business interruption in

case of shutdown of any of the main transformers.

Electric energy is supplied through a 3 years (2011- 2014) bilateral contract with TEAM

(Philippines) Energy Corporation from their SUAL Power Station, the largest coal-fired power

plant in the Philippines. The contract is fixed energy rate to protect the mine against the

volatility of power rates in the market.

Contracted Minimum Energy Off-take = 15,000,000 kWh

Contract Demand = 36,000kW

Estimated Annual Energy = 250,000,000 kWh

Underground Power Supply

Underground power is fed by two (2) 23kV feeders through the conveyor (CHC) gallery. The

power cables are installed on cable trays and hangers. First, the underground loop feeder

uses a power cable, OKOGUARDR brand, AWG#1/0, 3core, 36kV rated, EPR 133 percent

insulation, with corrugated aluminum guard. This is a reliable, rugged, and durable power

cable which is a product of OKONITE company USA. This power supply feeder has a back-

up loop that enters the underground via the GCH shaft hoist column and meets at the

underground substation at 745ML (substation no.38). Second, the underground feeder #72

uses a power cable GT Kabel brand, 50mm2, 3core, 36kV rated, XLPE 133 percent

insulation, with lead sheathed guard, indent from Indonesia. This provides power to 782ML

underground and other FBC process equipment.

There are four (4) 23kV power distribution feeder circuit breakers that feeds the mine’s 5

main substations (SS). Two feeders for the underground OCB#06 supplies SS#37 and

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SS#38, Feeder OCB#05 supplies SS#01, Feeder OCB#04 supplies SS#09 that has loop

interconnection with OCB#06, and Feeder VCB#08 supplies SS#72.

The five (5) main distribution substations that serve the power requirement of the mine

facilities and the underground are:

1. SS#01, Located at the CHC portal (surface)– supply power to the CHC

conveyor and dump bin.

2. SS#37, Located at 745ML UG – supply power to FBC

3. SS#38, Located at 908ML UG – supply power to 908ML, 840ML, part of

782ML.

4. SS#09, Located at 1425ML surface – supply power to GCH & Thompson

Hoists, 975ML, 1020ML, Bumolo Ventilation, 1425ML repair shops, subsidence

area.

5. SS#72, Located at 782ML CPR UG – supply power to some FBC process

equipment and 782ML UG.

Mill Power Supply

MT01, the 25MVA feeds 23kV to the mill by two feeder Oil Circuit breakers, one duty and the

other as back-up loop. Six power transformers 5x5MVA, and 12.5MVA receives the 23kV

from the 25MVA and three 3x10MVA from 69kV supplies power to the mill. The electrical

network is wired so that each transformer loads can be supplied by other transformers in the

event of shutdown of one.

Camp and Domestic Power Supply

Camp residential area is supplied by a dedicated 2.5MVA power transformer with a demand

of 3MW. Average energy usage is estimated at 1,200,000kWh.

17.5.3.2 Industrial/Domestic Water Supply

The Mill operations consume the biggest volume of water in Padcal. To process 25,730

metric tons per day of ore, around 820 cubic meter per hour of fresh water is required which

in most of the time can be supplied by running two 3,000 gallons per minute pumps from the

Sal-angan river just below the mill complex.

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The mill is also equipped with two thickener cells, 19 and 23 meters in diameter, when

combined has a capacity of 2,000 cubic meters of water storage. These cells are often used

during the dry seasons when the water supply at Sal-angan river diminishes.

The supply for domestic water is sourced from Smith Tunnel and Shimada crosscut

contributing 70 percent and 30 percent of the supply, respectively. The water from these

sources is conveyed by gravity through 25.4 centimeters and 15.2 centimeter diameter

pipes.

a. Minimum monthly requirement : 77,000 cubic meters

b. Maximum monthly requirement : 82,000 cubic meters

c. Minimum annual requirement : 924,000 cubic meters

d. Maximum annual requirement : 984,000 cubic meters

e. Point of delivery : Stage I Pump house and

Chlorination Station located at Banget, Itogon,

Benguet

Supply Alternatives

There are two (2) additional domestic water sources during the first semester of each year to

augment the water requirement.

a. C.Y.M. Tunnel – the water from this source is conveyed through a 25.4 centimeter

diameter pipeline to a cylindrical tank used as reservoir. From the tank, the water is

pumped to Smith line at a higher elevation around 20 meters high.

b. Banawel Tunnel water source

c. Water from the underground mine’s drainage level at 745 ML is also pumped out to a

tank located at the dump bin area of the mill. This serves an additional supply during

summer in milling operations.

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17.5.3.3 Assay Laboratory

The Assay Laboratory is located in the minesite and conducts analysis of ore (core/pulp),

water and wastewater, and oil and used oil samples. Two sites of laboratory in the minesite

are located at Padcal (Main Lab) and Banget (Plant Lab.) The Main Lab caters to all analysis

of different sources and type of samples while the Plant Lab is only for the Mill Plant

products for process control purposes.

For ore samples from exploration, development, production and shipment were prepared

and assayed in the laboratory at the mine site. Wastewater were prepared and analyzed for

self monitoring purposes and used oil is for preventive maintenance. A limited number of

these samples were sent to outside laboratories for check assays.

17.5.3.3.1 Sample Preparation

Samples received are prepared at the laboratory as follows:

• The core sample is dried at 105 degree C and crushed to a -10 mesh

• An approximately 20 percent split until about 150 g representative sample is taken from

the crushed material by setting the Rotary Sample Divider (RSD)

• The 150 g representative sample is pulverized for 5 minutes to get a 95 percent -200

mesh

The sample is then rolled and quartered to obtain approximately 20 grams for copper

analytical sample. The remaining pulp is for the gold analytical sample.

These sample preparation procedures with manual intervention using Jones Splitter have

not changed in at least several years except with the upgrading of equipment like the

integration of RSD with the crusher.

17.5.3.3.2 Assay Protocols

17.5.3.3.2.1 Analytical Procedures

The following assay procedures have been established and documented for the mine

laboratory use. Two sites of laboratory are maintained, the Padcal (Main) laboratory and the

Banget (Plant) laboratory. The Padcal laboratory caters to the analysis for ore, water and oil

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samples while the Plant laboratory caters the samples from the Mill Plant products for

process control purposes.

17.5.3.3.2.1.1 Copper

Total copper is determined by different methods developed as the standard procedures:

Low grade samples: 2-acid digestion & AAS Method. Digest 0.5 g sample in a mixture of

3ml of concentrated HCl and 1 ml of concentrated HNO3. The sample is digested for 30

minutes and then diluted to 50 ml with water without filtration of the sample. The resulting

solution is then read on an AA. Samples containing more than 0.6 percent Cu are diluted by

50 percent and re-read. Some samples are treated with 3-acid digestion namely hydrochloric

acid, nitric acid and perchloric acid.

Soluble copper is determined by leaching 2.5 g of sample in 50 ml of 3 percent H2SO4 for 30

minutes at 60 degree C temperature. The sample is then filtered and read on an AAS.

High grade samples with >1 percent Cu: Acidimetry Titrimetry Method. Digest 0.50/1.0 g

sample with 10 ml Nitric and 20 ml HCl, volume with 100 ml distilled water, boil and add

ammonium hydroxide to precipitate the iron content, acidify with acetic acid and cool. Add

sodium fluoride, potassium iodide and starch as indicator. Titrate with sodium thiosulfate

until the end-point is reached with creamy white solution. Calculate result.

17.5.3.3.2.1.2 Gold

Gold is determined by fire assay with 10/30/60 grams of sample on concentrate, feed and

tails sample, respectively and followed by gravimetric finished. The bead is parted prior to

final weighing of the dore, but silver is not determined on the parting solution. Silver is

analyzed separately. Pre-mixed flux is used.

Results are captured from AAS and microbalance by computer station and automatically

transcribed into the Excel spreadsheets and printed for the appropriate departments.

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17.5.3.3.2.2 Plant Laboratory Protocol

The Plant Laboratory use the analytical procedures above but for copper only. The

additional analysis conducted thereat is the analysis of Sodium Isobutyl Xanthate (SIBX)

purity as sampled by the Metallurgy Dept. for mixing as collector reagent.

Figure 17.5.3.3.2.2-1: Plant Laboratory

17.5.3.3.3 Quality Assurance- Quality Control Procedures

The laboratories use a combination of certified reference material (CRM) or internal

reference standards (IRS) and pulp duplicates of every 10 samples interval to control the

quality of routine analyses. A few samples (limited to tens of samples) have been sent to

other laboratories for check assays.

The Padcal laboratory develops its internal reference standards (IRS) produced from the mill

products, such as mill feed, and final flotation tails. The prepared IRS is sampled into five

batches and sent to commercial labs for analysis in duplicates as well as the Padcal

Laboratory. These IRS are replenished as required, but the IRS are made in a large

quantities so that a single standard will last for months or years. The copper concentrate

standard is taken from the reject sample of outturn shipment samples. The data used is from

the buyer (Smelter), seller (Philex) and the Umpire.

Standards (CRM or IRS) are inserted per batch of analysis for every 25 samples for AAS

Method and Fire Assay/Gravimetric Method. Standards are randomly inserted into the

sample stream by the Manager to insure that the individual analysts do not know the location

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of the standard. Statistical data analysis is done to get the mean and 2-standard deviations

and is plot to come up with a control chart. The laboratory routinely plots the results on a

control chart. The warning limit is set at 2 standard deviations from the laboratory’s mean

and the failure limit is three standard deviations from the laboratory’s mean. These limits are

somewhat liberal relative to current industry standards, which tend to use 2 standard

deviations from the mean as a pass-fail limit. The Analyst refers to the control chart for

reference. Any problematic batches are referred to the Manager.

The Laboratory routinely duplicates one sample (pulp) in every 10 samples interval. These

pulp duplicates are also randomly inserted in the sample stream by the manager as checked

assay to evaluate if the sample deviation exceeds about 10 percent, the batches are re-

analyzed. Any results of duplicates are reported in the Certificate of Analysis and any

deviation from the standard are discussed with the group by the Manager to improve their

performance efficiency.

For titration method, digital burette titrator is used to eliminate bias in reading either in

rounding the numbers or reading in lower or upper meniscus.

For fire assay method, the lead button generated is randomly weighed to check the required

cupel size and weight that collects all the gold content.

The data resulting from AAS and microbalance are captured by computer to eliminate the

transcription error. Laboratory Information Management System (LIMS) was developed and

used.

17.5.4 Environmental Protection and Management Plan

17.5.4.1Environmental Impacts

The category of the project is mining which entails huge amount of earthmoving of the

underground extraction and processing of ore materials and the subsequent dumping of

mine wastes to selected areas and containment of mill tailings, backfilling of the overburden

to the subsidence and hauling of the copper concentrates to the shipping port.

The overall environmental effects of the project could be summarized into two (2) categories,

namely: adverse effects and favorable effects.

Adverse Environmental Effects

▪ Destruction of the ground and vegetation on areas directly affected by mining

operations;

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▪ Alteration of original land configuration;

▪ Change of atmosphere and air quality in the immediate vicinities;

▪ Exploration of natural resources;

▪ Destruction and alteration of the habitats of wildlife;

▪ Reduction of water resources; and

▪ Displacement of some families living within the project area

Favorable Environmental Effects

• Increased dollar reserves and/or income of both the national and local

governments derived from taxes;

• Improvement and addition of roads, bridges, power lines, communication and

transport systems and other infrastructures;

• Increased and/or generation of employment;

• Improvement of lifestyles and standard of living of people in the communities;

• Increased literacy rate due to establishment of educational facilities;

• Promotion of small business and medium scale industries that usually co-exist

with mining operation of the project component;

• Improvement of water supply system sewerage facilities;

• Improvement of the health condition of the community and development of social

services like family planning, housing, education and recreational facilities; and

• Introduction and promotion of Company-assisted income generating projects to

help residents near the mining area to be self-reliant and self-manageable

communities.

17.5.4.2 Environmental Mitigating Measures

A summarized mitigating measures is outlined below. A more detailed discussion is found in

the Environmental Impact Statement in Annex D-1.

• The company continues to implement its reforestation and afforestation projects to

the areas affected by its mining operation. Slopes, roads and embankments will be

designed to minimize erosion and maintain aesthetic appeal of the mines.

• For the original program of Life of Mine (LOM) of until 2017, three (3) tailings

disposal system were originally built where affluent resulting from the processing of

copper ore were stored and being stored. Tailings Ponds No. 1 in Sitio Banget,

Barangay Ampucao, Itogon and Tailings Pond No 2 in Barangay Talnag, Itogon

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were decommissioned on 1981 and 1992, respectively. Tailings Pond No. 3 started

impounding operation in 1992 in Barangay Balog, Itogon, some fifteen (15)

kilometers by road way from the community. However, due to the tail leakage

incident happened last August 1, 2012 at the latter Tailings Pond and in

consideration to the expanded mineable reserve of the project, Tailings Pond No. 4

is currently on its planning and design stage.

• The reforestation is thru Man and the Biosphere (MAB) tree planting program. The

company started implementation of the program since 1976 and more than million

trees in different varieties have been planted and thoroughly scattered within the

mine property.

• Mined-out areas will be backfilled and covered with top soil and shall be reforested

with fast growing trees before being abandoned.

• Adequate drainage network will be maintained to prevent water run-off from tailings

and positively control soil erosion.

17.5.4.3 Environmental Infrastructures

The following infrastructures are maintained and operated by Padcal to address some of the

environmental effects of its operations.

Tailings Storage Facilities (TSF)

These facilities are the most elaborate structures in any mining operation to contain the

waste minerals after milling and processing. Padcal has successfully operated and

decommissioned two TSF and now maintaining and operating its third. The facility contains

the tailings from the mill plant. Tailings are the byproduct of the milling process after the

valuable metals have been recovered. It is 35 percent solids and the rest water. In the

facilities’ containment area, the sediments settle while the water in the tailings along with

water flowing along the catchment area flows out of the penstocks or spillway. The

sediments remain and fill up the TSF.

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Figure 17.5.4.3-1: TSF 3

TSF 3 up to its government approved embankment crest elevation of 623 meter level can

contain around 100 million metric tons of tails; around 80 percent has already been filled up.

Currently, it is being remediated and rehabilitated after the sediment spill in August 2012.

Part of the remediation measure is to fill the void created by the incident with fresh tailings

and reconstructing the offset embankment.

Padcal is venturing into the design and construction of its fourth TSF located west of TSF 3.

It will be designed to contain the remainder of the tailings that will be generated throughout

the life of the mine. The technical evaluation and application of necessary permits are

underway.

Forest Nursery

The mine is maintaining a forest nursery, which was established in 1987 near the Saint Louis

High School. It has an aggregate area of 10,000 square meters (1 hectare) with a capacity

of 300,000-500,000 potted and bareroot seedlings annually. It is generally adequate insofar

as soil, water supply, topography & elevation, exposure, accessibility and other important

features. A building was also constructed within the nursery area purposely for office,

bodega and working or potting area.

17.5.4.4 Mine Closure Plan

The extraction of mineral resources is relatively a short-term land use considering that it is

dependent on its ore reserve. It is inevitable that sooner, when ore reserve is depleted, the

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mine will definitely decommission. Philex Mining Corporation – Padcal Operations in Tuba,

Benguet, which remains one of the surviving mines in the country today, is no exception.

Philex – Padcal Operations is projected to be decommissioned originally by 2017 and for the

next ten years, rehabilitation of the mine shall be a prime activity.

Biophysical Closure Issues:

Public Safety and Human Health

The various phases of mine closure will carry different types and levels of risks to different

groups of people, which include the workers, contractors and community. From

decommissioning to post closure period, public safety and human health within the

community becomes the prime concern. The public should be protected from possible risks

and unsafe conditions.

Philex Mine’s vision is to develop and enhance the area in a manner that leaves all sites as

safe as possible. Part of the activities to be undertaken is to educate the community to

understand the safety hazards and potential environmental impacts of mine closure.

Philex will continue to commit to implement best management practices to identify,

communicate and minimize potential health and safety risks.

Environmental Impacts

Mining is an extractive industry which entails earthmoving consisting of underground

extraction and processing of ore materials and the subsequent containment of mine wastes

in designated tailings ponds, and backfilling of the overburden to the subsidence area.

Negative environmental effects include the disturbance of the ground and vegetation on

areas directly affected by the mining operations; alteration of original land configuration and

alteration of the wildlife habitats; and reduction of water resources.

Socio-Economic Closure Issues:

For the last five decades, Philex continues to contribute to the social and economic life not

only within the workers community but also for its host communities of Camp 3, Tuba and

Ampucao, Itogon. Local industries as well as folks from nearby barangays, trade their farm

products within the mine site and enjoy other benefits that flow from the mine such as for

social services, health and education.

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It remains to be one of the main providers of direct and indirect employment in the area. As

the mine will start decommissioning, many sectors will be affected. Foremost are the

workforce, which will be reduced as production tapers down and consequently community

population follows. Residents from the host and neighboring communities relying on the

services and livelihood provided by the mine will also be affected. Thus, sustaining a

community after mine life shall be a major issue and will be part of the mine transition plan.

Philex is a major contributor of revenue to the Local Government Units from the barangay

level to the national level. Government revenues will be reduced, thus affecting its delivery of

services to its constituents.

Closure of the mine will also have an effect to industries relying on the existence of the mine

such as contractors, suppliers, shareholders and entrepreneurs.

Specific Implication for Mine Closure and Final Land Use per Component of Padcal

Projects

o Mine Component – Underground

Implication for Mine Closure (Situation at Closure)

• After the mine production ceases its operation, the ore resources will be sealed at the

surface and underground portals to prevent unauthorized access.

• After sealing the portals, the vertical shafts, Bumolo 2 and CHC tunnel will also be

sealed. The drainage tunnel at 745ML will be sealed last.

Final Land Use (Stakeholders Aspirations/Options for Closure)

Based on social audit conducted, majority of the stakeholders suggested that the portion of

the underground facilities be preserved and developed as a tourism destination.

o Mill Plant

Implications for Mine Closure (Situation at Closure)

When the processing of ore ceases, it is expected that decommissioning of the mill facilities

and equipment will commence. Part of the activities is to salvage its assets and this could be

PADCAL Operations

April 2013

Chapter 17 Page 104

through selling, dismantling and removing it. After decommissioning, rehabilitation follows to

make the area safe.


The Local Government Units expects that some facilities will be donated to the municipality

for their projects. Other suggestions are to develop it into a commercial center such as

crushing plant for aggregates, tourism site and as a museum.

On the part of the community, majority suggested to use it as a commercial area to support

their livelihood undertaking. Suggestions to develop it as a tourism, education and training

center were noted.

o Tailings Pond 1


Progressive rehabilitation is on-going. The area is already covered with vegetation primarily

cogon grass and has been a productive grazing land. The five hectare bamboo plantation is

being maintained together with alnus trees. Revegetation of the area at the downstream of

the Mill Plant shall also commence.


The LGU of Itogon suggested that the area be converted to agricultural land or pasture land

if its suitable. They also suggested to maintain the bamboo research as well as the mini-golf

area and continue reforesting it.

The community suggested to utilize the area for agricultural purposes, farming, pasture land

and for livestock raising.

o Tailings Pond 2


Revegetation is currently started. At mine closure, revegetation shall be sustained. Patches

not yet revegetated shall be planted with cogon and nitrogen fixing plant species.

PADCAL Operations

April 2013

Chapter 17 Page 105


Itogon LGU suggested that Tailings Pond No. 2 be developed for agricultural purposes,

pasture land, or into a botanical garden.

The community also suggested to use the area for agricultural purpose, pasture land,

piggery, livestock and bamboo production.

o Tailings Pond 3


At closure, the area shall be barren land with fresh tailings. Decommissioning will then be

started with the maintenance of existing roads, plugging of the penstock and completion and

maintenance of the spillway.


Itogon LGU suggested to develop it as an agricultural area. They also suggested portion of it

to be developed as modernized waste management plant as well as continue rehabilitating

and reforesting the area.

For the community, they suggested that the area can be developed as an agricultural land

as well as for commercial purposes and tourist destination area.

Table 17.5.4.4-1: Summary of Financial Plan for Decommissioning and Rehabilitation (For Ten-

Year Period)

Areas and Equipment/Facilities Cost (PhP)

A. Rehabilitation

1. Subsidence Area 30,333,738.00

2. Tailings Pond 3, 2 & 1 18,329,391.00

3. Mine Portals 1,197,749.00

B. Decommissioning

4. Mine UG Equipment/Facilities 793,986.00

5. Mill Plant Equipment/Facilities 2,383,000.00

6. Mechanical and Electrical Equipment/Facilities 525,000.00

Sub-Total 53,562,864.00

7. Inflation rate (10% of sub−total) 5,356,286.00

8. Administration/Supervision/Monitoring & Evaluation of the FMR/DP and SDMP Program/Projects

4,000,000.00

Grand-Total 62,919,150.00

PADCAL Operations

April 2013

Chapter 17 Page 106

17.5.5 Mine Safety and Health Plan

A Central Health and Safety Council (CHSC) has been established by Padcal to govern the

safety and health programs required in the operations as well as the policies of general

camp administration. The Council is composed of assistant to division managers, including

the Vice President and Resident Manager. The chart below depicts the organization of the

CSHC.

Figure 17.5.5-1: Central Safety and Health Plan

The executive and administrative committee is composed by the chairman of the eight

committees as well as the management of the Safety and Loss Control Department. The

Planned Inspection Committee (PIC) and Safety Program and Audit Committee (SPAC) both

have sub-committees that manage the programs for the underground and surface

operations.

An annual Comprehensive Safety and Health Program document is disseminated by the

Council thru the Safety and Loss Control Division covering the aspects of council

leaderships and memberships, committee functions and operational safety goals. This

document serves as the guidelines for the Council’s plans and programs each year.

PADCAL Operations

April 2013

Chapter 17 Page 107

Safety Statistics

As a measure of safety performance, Padcal computes and records the Incident Rate (IR)

and Frequency Rate (FR) for the operations.

The incident rate is the total incidences (first aid, non-lost time, lost time-non fatal and lost

time-fatal) multiplied by a factor of 1,000,000 manhours divided by the actual manhours.

Past five years statistics show an upward trend as the number of reported first aid cases

increased in 2009, 2010 and 2012. However these are just minor in severity as workers

report back to work after treatment was received.

Frequency rate on the other hand is an index for lost time incidences and can be computed

by multiplying the number of lost time incidences (lost time-non fatal and lost time-fatal)

multiplied by a factor of 1,000,000 manhours divided by the actual manhours. The statistics

actually shows a downward trend as the company strengthens its safety programs.

The mining operations are the leading contributors to the incidences with rock fall, pinning

and blowout at drawpoints as the leading causes of major injuries. The CSHC council as

well as the managements of the mining operations and safety and loss control division are

focusing on these causes to further improve on Padcal’s safety performance.

Figure 17.5.5-2: Safety Statistics

6 8,000,000 7,000,000

5

6,000,000

4 5,000,000

3 4,000,000 3,000,000

2

2,000,000

1 1,000,000

0 0

2008 2009 2010 2011 2012

INCIDENCE RATE FREQUENCY RATE MANHOURS WORKED

Ra

te

Ma

nh

ou

rs

PADCAL Operations

April 2013

Chapter 17 Page 108

YEAR 0

2013

1

2014

2

2015

3

2016

4

2017

5

2018

6

2019

7

2020 TOTAL

17.6 Financial Aspects

17.6.1 Total Project Cost Estimates and Assumptions

The total project expenditure for the remaining mine life of Padcal will be 52.14 Billion Pesos

as outlined in the table below:

Table 17.6.1-1: Nominal Cash Flow of Direct and Indirect Costs

Nominal Cash Flow (in millions)

DIRECT COSTS

Capital Costs

Mine Development Costs

703

1,064

985

696

568

299

108

27

4,451

Milling Costs 359 70 44 13 8 − − −

493

Tailings Pond 1,511 449 352 340 292 289 305 322

3,861

Sub-total 2,573 1,584 1,381 1,049 868 588 413 349 8,805

Operating Costs

Mining

1,615

1,983

2,011

2,053

2,104

2,137

2,101

2,137

16,140

Milling 1,667 2,225 2,235 2,250 2,313 2,326 2,307 2,382

17,704

Tailings Pond 47 112 311 262 273 275 269 280

1,827

Hauling Cost 51 65 67 68 70 71 64 65

521

Sub-total 3,380 4,385 4,623 4,633 4,759 4,808 4,741 4,863 36,192

Total Direct Costs 5,953 5,968 6,004 5,682 5,626 5,397 5,154 5,212 44,997

INDIRECT COSTS

Capital Costs

174

150

48

22

12

9

18

13

445

Operating Costs

Maintenance

90

121

126

130

135

140

119

119

980

Overhead 649 735 766 790 810 832 786 794

6,161

Total Indirect Costs 739 856 891 920 945 972 905 913 7,141

GRAND TOTAL

6,692

6,825

6,896

6,601

6,571

6,368

6,059

6,125

52,138

It should be noted that the projected operating and capital expenditures are subject to

modification on an ongoing basis depending on actual expenditures made and results of

operations that may change subsequent year’s operating and capital expenditure

requirements as the mine progresses through its operating life. Ongoing assessment of

these costs could lead to increased or decreased levels of expenditure that may reflect a

change in operational emphasis.

A more thorough discussion on the project cost model is found in the succeeding sections of

this report.

PADCAL Operations

April 2013

Chapter 17 Page 109

17.6.1.1 Engineering Study Cost

Padcal operations do not require any further engineering studies to determine its feasibility.

Engineering aspects of the operations, mostly done by company personnel, are included in

the operating cost expenses.

Project engineering costs on the other hand are included in the project cost estimate which

is grouped under the capital costs. Major project of Padcal in the remaining mine life will be

the design and construction of Tailings Storage Facility 4.

17.6.1.2 Exploration/Development Cost

Exploration works are programmed annually to progress on the investigation of a number of

prospects in the vicinity of the operations site. Capitalizable exploration costs are reflected

under the account of the Corporate expenditure but the general and administrative expenses

on exploration related to Padcal are included in the general overhead of Padcal.

Development Cost Estimate

The continuing development of ore sources underground comprises 39 percent of the total

capital cost. Total amount of 3.51 Billion Pesos will be spent to commission 884 drawpoints

and to construct ventilation, dewatering and ore handling facilities to support the extraction of

ore in the span of 8 years.

Classification of Costs

The tabulation of development cost consists of the following details.

• Capital Project Costs are costs related to development related activities such as

major overhaul or refurbishment of equipment and systems used in mine

development as well as installation of service lines, particularly power from the

nearest existing source to the work area to be developed.

• Block Development Costs are costs of activities resulting to the commissioning of

drawpoints mostly done in the undercut and production levels. Activities include,

development of production, cross-cut and undercut lines, development of trench or

draw bells, installation of initial and final supports to openings and construction of ore

handling, ventilation and dewatering schemes at the production level.

• Level Development Costs are costs to develop the support facilities to be able to

extract and deliver the ore to the mill. Such facilities may include a breaker station

PADCAL Operations

April 2013

Chapter 17 Page 110

with grizzly, drives to connect existing ventilation and dewatering openings, electrical

substations or box out and ore transfer raises.

Basis of Estimate

• The tabulation below was previously discussed in Section 17.5.1.7 which

summarizes the quantities per development activities needed per period to be able to

commission into production the number of drawpoints to sustain mine production.

The quantities for horizontal and vertical drives and installation of rock supports

already combine both block and level developments.

• To aid in the cost estimation, a cost index of the all the major development activities

are developed as tabulated below and the details of which are found in ANNEX A-2.

Table 17.6.1.2-1: Schedule of Development Activity

Schedule of Development Activity (per

Particulars U-M 2013 2014 2015 2016 2017 2018 2019 Total

1.Horizontal Driving

mtr

6,921

9,291

6,895

5,685

3,194

0

0

31,986

2. Vertical Driving mtr 1,108 1,713 1,740 1,570 1,699 1,332 0 9,162

3. Fanhole Drilling

drm

134,484

162,945

176,195

196,428

185,398

127,441

0

982,889

4. Rockbolting pc 35,612 50,843 39,404 32,121 22,562 0 0 180,541

5. Cable Bolting drm 24,837 25,797 29,683 21,172 16,137 12,775 0 130,400

6. Shotcreting cu mtr

6,482

4,652

5,122

3,436

2,211

2,051

0

23,954

7. Concreting cu

mtr

2,391

3,054

4,131

2,711

1,528

1,116

0

14,930

8.SteelSet Installation

set

213

434

407

375

228

186

0

1,843

9. Undercutting drm 226,649 56,316 120,030 192,954 110,715 98,259 114,737 919,660

10 Drawpoints no. 111 75 138 204 121 109 126 884

• To aid in the cost estimation, a cost index of the all the major development activities

are developed as tabulated below and the details of which are found in ANNEX A-2.

PADCAL Operations

April 2013

Chapter 17 Page 111

Table 17.6.1.2-2: Development Works Cost Indices

Particulars

U/M Php Cost per

Unit

1 Production Line (4m x 3.5m) mtrs. 21,658.14

2 Draw Cross Cut (3.5m x 3m) mtrs. 21,658.14

3 Undercut Line (3.5m x 3.5m) mtrs. 21,658.14

4 Pilot Raise (2m x 2m) mtrs. 16,341.88

5 Fanhole Drilling (Trench) drm. 233.54

6 Fanhole Drilling (UCL) drm. 233.54

7 Trench Excavation drm. 347.20

8 UCL Undercutting drm. 347.20

9 Cable Bolting drm. 780.70

10 Rockbolting pcs. 1,058.37

11 Steel set Installation set 27275.49

Shotcreting with fiber (10.2 cm

12 thick)

cu. mtrs.

6526.67

13 Concreting cu. mtrs. 20,245.79

14 Timber Support set 25,554.60

Table 17.6.1.2-3: Mine Development

PADCAL Operations

April 2013

CAPEX SUMMARY 2013 2014 2015 2016 2017 2018 2019 2020 TOTAL

Mine Development

908 ML

Capital Projects 6,033,550 6,300,000 7,200,000 6,300,000 7,200,000 − − − 33,033,550

Block Development 92,475,743 144,297,578 83,123,894 69,944,110 − − − − 389,841,325

Level Development 19,914,837 16,641,682 16,831,138 15,099,234 − − − − 68,486,890

Sub−total − 118,424,130 167,239,259 107,155,032 91,343,344 7,200,000 - - - 491,361,764

782 ML

Capital Projects 40,120,859 34,960,024 32,639,364 44,123,822 26,468,127 19,405,850 19,405,850 14,739,726 231,863,623

Block Development 238,088,874 203,982,524 107,243,882 − − − − − 549,315,280

Level Development 25,207,643 − − − − − − − 25,207,643

Sub−total − 303,417,376 238,942,548 139,883,246 44,123,822 26,468,127 19,405,850 19,405,850 14,739,726 806,386,547

798 ML

Capital Projects − − − − − 20,474,519 21,620,473 8,071,445 50,166,437

Block Development 167,005,148 344,565,134 432,186,746 401,370,989 379,041,552 178,465,156 52,974,248 − 1,955,608,974

Level Development 19,018,074 40,032,774 20,685,652 60,704,861 18,565,004 − − − 159,006,365

Sub−total − 186,023,222 384,597,908 452,872,398 462,075,850 397,606,556 198,939,674 74,594,721 8,071,445 2,164,781,775

840 ML

Block Development

Level Development

49,540,346

−

−

−

−

−

−

−

49,540,346

−

Sub−total − 49,540,346 - - - - - - - 49,540,346

TOTAL - MINE DEVELOPMENT 657,405,074 790,779,716 699,910,676 597,543,016 431,274,683 218,345,524 94,000,572 22,811,171 3,512,070,432

Chapter 17 Page 112

PADCAL Operations

April 2013

Chapter 17 Page 113

Basis of Cost Index

• Labor Cost This comprises the latest 2012 basic pay rates and the equivalent cash

and non-cash fringe benefits of all personnel in the roster of the mine development

from the miners (rank and files) up to supervisors. The number of men and their

respective rates were provided by the Human Resource Department.

• Contract Rates Two major development contractors are currently employed in the

mine. BB Fischer and Co. Inc (BBF) and Consolidated Explosives Group

Corporation (Conex) perform the horizontal development drives and fan hole drilling

using their own equipment and manpower. A fixed rate contract governs the

engagement between the contractors and Padcal,

• Materials and Supplies All materials and supplies costs are based on year 2012

price levels as recorded in Padcal’s purchasing system. Major supplies such as

explosives, diesel and major equipment parts are on consignment basis to Orica,

Petron and Sandvik respectively.

• Power The existing power rate of 6.78 Pesos per Kilowatt-hour was the basis for

power cost estimation. This contracted out yearly. For 2012, power supply is by

Tokyo Electric and Marubeni (TEAM) Energy Corporation.

• Productivity Equipment and manpower productivity are based on actual monitored

productivity for each development works as generated by the General Equipment

Advisory System (GEARS) and as monitored by mine engineering and mine

mechanical personnel.

17.6.1.3 Pre-Operating Overhead

The pre-operating overhead cost is not applicable in this technical report as the status of

Padcal is already operational.

17.6.1.4 Capital Equipment and Machinery

The Padcal mine capitalizes expenditures incurred that will benefit its operations for more

than one year. These assets are classified by the mine under the following categories: Land

and Land Improvements, Mine and Mining Properties (Mine and Mining Properties, Mine

Development and Tailings Pond Structures), Roads and Bridges, Buildings, Structures or

Facilities, Machinery and Equipment, Transportation Equipment, Tools, Office Equipment

and Furniture and Fixtures.

PADCAL Operations

April 2013

Chapter 17 Page 114

Capital expenditures for the last five years averaged P1 Billion per year, a significant portion

of which were for machinery and equipment and for mine development.

Table 17.6.1.4-1: 2007 to 2011 Capital Expenditures

(in millions)

Machinery and Equipment

2007 2008 2009 2010 2011 Average

348

287

561

520

446

433

Capital Projects 201 179 177 119 90 153

Mine Development

908 ML − Level Development

29 30 30 31 27 30

908 ML − Block Development 94 86 53 194 205 126

782 ML − Level Development 28 63 42 35 36 41

782 ML − Block Development 221 236 250 183 265 231

Sub−total − 371 415 375 444 533 427

TOTAL - 920 881 1,112 1,083 1,069 1,013

The P8.9 billion projected capital expenditure for 2013 to 2020 include the rehabilitation of

Tailings Facility Storage No. 3 for P860 million and the cost of the construction of Tailings

Facility Storage No. 4 for P2.7 billion.

Table 17.6.1.4-2: 2013 to 2020 Capital Expenditure Summary

(in millions) 2013 2014 2015 2016 2017 2018 2019 2020 TOTAL

Machinery & Equipment 286 85 70 23 16 6 5 0 492

Capital Projects 247 135 22 11 4 2 13 13 447

Tailings Pond 1,511 449 352 340 292 289 305 322 3,861

Mine Development

908 ML 146 292 174 104 12 2 6 − 736

782 ML 314 332 297 130 51 83 21 17 1,245

798 ML 194 441 514 462 505 214 81 10 2,421

840 ML 50 − − − − − − − 50

Sub − total − 703 1,064 985 696 568 299 108 27 4,451

TOTAL PADCAL 2,747 1,734 1,429 1,071 880 597 431 361 9,250

Machinery and equipment costs of 1.43 Billion Pesos which pertains to the machineries and

equipment to develop the blocks into production; replace current equipment and systems

that have reached its campaign life and/or uneconomical to rehabilitate; to address

operational shortfalls, for safety and compliance to policies and government regulations. The

expenditure contributes 15 percent of the total capital cost.

Table 17.6.1.4-3: Machinery and Equipment

PADCAL Operations

April 2013


Machinery & Equipment:

VPO Group

Safety Dept. 21,819,050 21,819,050

Information Technology 6,179,530 6,179,530

Finance 5,000 5,000

Materials Management 2,230,950 2,230,950

Medical Department 110,824 110,824

- - - - - - - - -

Sub-total - 30,345,354 - - - - - - - 30,345,354

Legal Dept.

General Services Dept.

916,325

-

-

-

-

-

-

-

916,325

Sub-total - 916,325 - - - - - - - 916,325

Mine

908 ML 27,196,854 124,506,413 67,170,182 12,186,022 5,021,000 1,893,252 6,168,058 - 244,141,782

782 ML 10,206,285 93,050,000 156,872,500 85,992,440 24,584,088 63,722,500 1,900,000 1,900,000 438,227,812

798 ML 8,279,108 55,922,240 61,191,699 - 107,200,713 15,253,203 6,200,000 2,300,000 256,346,963

Sub-total - 45,682,247 273,478,653 285,234,381 98,178,462 136,805,801 80,868,955 14,268,058 4,200,000 938,716,557

Mill

Mill Division Office - 26,505 - - - - - - 26,505

Mill Operation 1,298,000 3,440,546 - - - - - - 4,738,546

Assay Dept. 290,456 - 6,050,000 - - - - - 6,340,456

Mill Maintenance 173,859,077 47,339,859 37,565,689 12,719,221 7,710,614 - - - 279,194,460

Metallurgical 840,297 - 356,455 - - - - - 1,196,752

Poro Installation 4,414,810 5,200,000 - - - - - - 9,614,810

Sub-total - 180,702,640 56,006,909 43,972,144 12,719,221 7,710,614 - - - 301,111,528

Mechanical / Electrical

Mechl/Electrical Group -

Banget/Padcal Plant Section 7,000 838,000 300,000 - - 468,000 23,500 - 1,636,500

Compressor Plant/Water Supply 2,741,773 4,186,000 2,150,000 721,000 150,000 3,461,000 850,000 36,000 14,295,773

Machine Shop/Foundry - 390,000 50,000 391,000 230,000 - 98,000 - 1,159,000

Motorpol/Overhauling - 1,500,000 18,200,000 6,000,000 4,700,000 - 1,200,000 - 31,600,000

Transpo/Road Maintenance -

Heavy Equipt. Services 6,198,750 7,080,000 5,500,000 3,500,000 3,536,000 2,500,000 2,500,000 - 30,814,750

Electrical Services 65,186,000 14,750,000 - - - - - - 79,936,000

Sub-total - 74,133,523 28,744,000 26,200,000 10,612,000 8,616,000 6,429,000 4,671,500 36,000 159,442,023

TOTAL - MACHINERY & EQUIPMEN 331,780,089 358,229,562 355,406,525 121,509,683 153,132,415 87,297,955 18,939,558 4,236,000 1,430,531,787

Chapter 17 Page 115

Basis of Estimate - Quantity

PADCAL Operations

April 2013

• Mining machineries and equipment, which comprises majority of the cost, generally

assumed a 5 year or 10,000 running hours campaign life period. An allowance for

overhaul of the equipment’s major parts was considered also to extend the life for

another 2 years.

• Additional work loads, such as the development of the new 798 meter level would

require a dedicated development fleet compliment to drive accesses and the

production and undercut lines without disrupting ongoing development activities at

908 and 782 production levels.

• With the scheduled commissioning of 798 meter level, new dumping points would be

constructed thus requiring new stationary rock breakers.

• The mill would replace one of its flotation cells and two of its primary crushers to

further increase the efficiency of the recovery of metals and address the expected

coarser fragmentation of the new mining level that will be commission, respectively.

• All other machinery and equipment is changed based on the anticipated replacement

schedule.

Basis of Estimate - Price

• The operations have established the machineries and equipment specifications

preferred through the experience it acquired throughout its operating life.

• Padcal has established a good partnership with leading machineries and equipment

suppliers and would likely choose the existing brands and models that best fit its

existing fleet.

• Padcal constantly bench marks in terms of cost and efficiency with other peer

industry on the best machinery and equipment available in the market.

• Projected prices are based on most recent price levels which are at most 12 months

old before the onset of the annual budget.

17.6.1.5 Allied Mine Facilities and Infrastructures

Capital projects are works pertaining to construction, replacement or improvement of support

facilities and infrastructures for other departments not belonging to the mine and mill

operations. The total cost for the remaining life of mine for capital projects is 4.31 Billion

Pesos.

Chapter 17 Page 116

Table 17.6.1.5-1: Capital Projects

PADCAL Operations

April 2013


Capital Projects:

7,704,557

-

-

-

-

-

-

-

7,704,557

VPO Group

Safety Dept.

Sub-total - 7,704,557 - - - - - - - 7,704,557

Legal Dept.

Construction of drainage canal

Construction of retaining wall

734,257

895,281

-

-

-

-

-

-

-

734,257

895,281

Sub-total - 1,629,538 - - - - - - - 1,629,538

ENVIRONMENT & COMREL

EQMED

3,321,591

-

-

-

-

-

-

-

3,321,591

Sub-total - 3,321,591 - - - - - - - 3,321,591

Tailings Pond

New TSF 934,840,882 367,863,415 247,034,209 260,312,635 274,370,307 289,255,763 305,020,696 321,720,172 3,000,418,078

Tailings Pond 3 576,143,410 81,532,921 104,874,196 80,049,578 17,649,188 - - - 860,249,293

Sub-total - 1,510,984,291 449,396,336 351,908,404 340,362,213 292,019,495 289,255,763 305,020,696 321,720,172 3,860,667,371

Mill

Mill Operation -

Assay Dept. -

Mill Maintenance 95,655,654 3,670,959 - - - - - - 99,326,613

Poro Installation 82,746,757 10,308,954 - - - - - - 93,055,711

Sub-total - 178,402,411 13,979,913 - - - - - - 192,382,324

Mechanical / Electrical

Mechl/Electrical Group -

Banget/Padcal Plant Section 2,300,000 59,920,000 - 7,350,258 - - 9,004,382 9,634,689 88,209,329

Compressor Plant/Water Supply 3,004,361 8,305,500 - 1,474,010 1,450,000 - 1,540,175 550,000 16,324,047

Machine Shop/Foundry -

Motorpol/Overhauling 3,000,000 3,000,000

Transpo/Road Maintenance -

Heavy Equipt. Services -

Electrical Services 47,367,489 53,000,000 21,900,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 134,267,489

Sub-total - 55,671,850 121,225,500 21,900,000 11,224,268 3,850,000 2,400,000 12,944,557 12,584,689 241,800,865

TOTAL - CAPITAL PROJECTS 1,757,714,239 584,601,749 373,808,404 351,586,482 295,869,495 291,655,763 317,965,254 334,304,861 4,307,506,246

Chapter 17 Page 117

PADCAL Operations

April 2013

Chapter 17 Page 118

17.6.1.5.1 Tailings Storage Facilities (TSF)

The remediation and rehabilitation of TSF 3 and the design and construction of TSF 4 entails

a capital cost of 3.86 Billion Pesos which is 42 percent of the entire capital cost.

Tailings Storage Facility 3

Padcal began construction of TSF 3 in the 80’s after receipt of a construction permit from

National Pollution Control Commission (NPCC). It is composed initially of a 160 meter high

embankment, two three-compartment penstocks that drain into two decant tunnels,

construction culvert, tailings line and cyclone. Tailing deposition started early 90’s and up to

recently was the operational TSF for Padcal.

In August 1, 2012, during an unprecedented heavy storm event, TSF 3 discharged

sediments to the Balog Creek and Agno River. It was suspected that the discharge was

caused by an opening created in between the stop logs in one of its penstock. MGB

reported that around 20 million tons of sediments were released downstream right after the

incident.

Immediately, Philex, in its own accord stopped operation and began remediating the

situation. It took a number of attempts to stop the discharge and finally around the third

week of September 2012, it was confirmed that penstock was plugged by a nine-meter

diameter concrete sphere. Right then, the connecting tunnel to the penstock was closed by

constructing a 60 meter concrete bulkhead.

Up to now, remediation is still underway and the costs of the remediation and rehabilitation

programs are reflected in this technical and financial analysis. The total cost of the

programs amounts to 0.86 Billion Pesos which are composed of the following major

activities.

• Construction of an operating spillway to replace the penstock system to discharge

decant water amounting to 446 Million Pesos. The spillway has a final width of 32

meters and divided into three chutes. The ready mixed concrete provided by Holcim

Philippines Inc. is the biggest cost for this activity.

• Reinstating the offset dike up to the approved crest elevation of 623 meter level will

involve backfilling and compacting 400,000 cubic meters of materials. The activity is

currently being contracted out to a local contractor. The cost upon completion is

estimated to be 155 Million Pesos.

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• During the early remediation works, Padcal has tapped several consultants to stop

further discharges. International experts in TSF were brought to the site to

recommend action plans. After the incident has been addressed, consultancy works

were moved forward in aspects of spillway design, embankment stability analysis and

an overall independent assessment of the reusability of the TSF. Golder Associates

in various Australian offices and Snowy Mountain Engineering Company (SMEC)

were engaged by Padcal. The cost of all consultancy works will amount to 81 Million

Pesos.

• The concrete block that finally sealed the tunnel connecting to the failed penstock

cost 70 Million PHP. Concrete was introduced from a hole drilled from the surface to

create an initial plug of 15 meters. Thereafter concrete was pumped from the portal

around 600 meters away to the pour site using a long distance capacity concrete

pump. Materials and supply costs and logistics were big cost items.

• The geotechnical investigation to confirm that the embankment is stable cost 36

Million Pesos. This entailed purchasing of stability systems and installing them in the

embankment using a highly specialized drilling methodology that does not use water.

Quest Exploration Drilling Company (QED) was tapped to undertake the drilling.

• Lastly, filling the void with fresh tailings will require additional pipelines to be able to

discharge directly to the void. The piping system cost 22 Million Pesos.

Upon completion of all these programs, Padcal is confident that all technical risks are

mitigated and that the TSF 3 is safe to be used again up to its permitted elevation.

Tailings Storage Facility 4

TSF 3 cannot contain all the tailings from the remaining 8 years of operation, thus a

requirement for another TSF to be constructed. A probable location is found west of TSF 3,

along the Sidweng valley. It is currently being investigated by Padcal thru its consultant

Coffey Mining Pty Ltd. under an Engineering and Construction Management (ECM)

agreement. The following works has been completed as part of the site investigation

• Field geotechnical and hydrological testing

• Seismic study by Geotecnica Philippines Inc.

• Aerial photograph and raw topographic map at 1 meter interval

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Centerline Construction Method of Embankment

The tails from mill will be conveyed down to 745ML plant and is pump up to the proposed

TSF area. From the pump station, the tails will pass thru a cyclone process. The underflow

of which will be conveyed

to the downstream of the starter embankment and will be allowed to consolidate and will

soon serve as foundation of the subsequent offset dikes starting from the rock toe wall up to

its designed final crest elevation. At same time, the overflow will be deposited through

movable spigots to provide even deposition of tails along the embankment onwards.

A 6.0 meter by 3.0 meter size diversion channel is proposed to be constructed at the upper

slope of the proposed TSF area to handle run-off water from the watershed catchment’s

area along 920 ML. A coffer dam would be built to handle silt from the tributaries. A 2.0

meter by 1.5 meter size of runoff drain conduit will be constructed to handle the stream and

allow dry surface for the construction of the starter dam. The drain conduit will be plugged

before the start of tails deposition.

The starter dam shall be constructed simultaneously and be raised from 640 up to 840ML.

The starter dam is estimated to handle a year life. Embankment material is proposed to be

partly sourced out at the side slope within the reservoir which will result a wider containment

and minimizing hauling cost. The embankment will continually be raised up to 900ML as the

final crest elevation by centerline construction method. Tail water shall be stored at the

reservoir at a longer time to allow settlements before discharging to the environment through

siphon and or will be pump out through a pump installed to a floating pontoon that will

discharge to the environment.

The tabulation below shows the estimated tails to be impounded at the TSF is around 27.32

million cubic meters. The TSF embankment’s crest is at 900 ML and a 5-meter free board

will be maintained. A tails specific gravity of 1.5 will result to a 40.97 M tons holding capacity

which can contain 5-years worth of tailings for the 9 million tons per annum milling

operations.

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Table 17.6.1.5.1-1: Tabulation of impounding capacity for the centerline construction method

Elevation

ASL

Area

(Ha)

Incremental

Volume (M cum)

Cumulative

Volume (M cum)

Incremental

Weight (M tons)

Cumulative

Weight

(M tons)

Life

(years)

880-895 41 6.22 27.32 9.33 40.97 5

860-880 33 6.61 21.10 9.91 31.64 4

840-860 26 5.14 14.49 7.71 21.73 2

820-840 20 3.91 9.34 5.87 14.02 2

800-820 14 2.78 5.44 4.17 8.16 1

780-800 8 1.66 2.66 2.49 3.98 0.4

760-780 4 0.77 1.00 1.16 1.50 0.2

740-760 1 0.22 0.22 0.33 0.33 0.0

74 0.1

The TSF embankment will be made of selected random fill materials ranging from rock for its

core and earth to sand for filter. Tailings will also be considered as embankment materials

for this method. The crest width will be maintained at 15-meters with upstream and

downstream slope of 1 vertical and 2 horizontal. The total embankment materials required

will be around 18.14 million cubic meters.

Table 17.6.1.5.1-2: Tabulation of Embankment Materials Requirement for the Centerline

Construction Method

Elevation

ASL

Area

(Ha)

Incremental

Volume (M cum)

Cumulative

Volume (M cum)

880-900 3.23 0.65 18.14

860-880 6.68 1.34 17.50

840-860 8.78 1.76 16.16

820-840 9.89 1.98 14.40

800-820 10.22 2.04 12.43

780-800 10.14 2.03 10.38

760-780 9.84 1.97 8.35

740-760 9.04 1.81 6.39

720-740 7.26 1.45 4.58

700-720 4.88 0.98 3.13

680-700 3.06 0.61 2.15

660-680 1.93 0.39 1.54

640-660 1.34 1.15 1.15

66 1.26

An additional tails volume which will be deposited to the embankment from the proposed

cyclone underflow is equal to a total of 11.01 million cubic meters which if multiplied to tails

density of 1.5 will give an additional capacity of 16.58 million tones.

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17.6.1.5.1-1: Plan of embankment using centerline method

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Figure 17.6.1.5.1-2: Sections A and C of centerline construction method of embankment

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Figure 17.6.1.5.1-3: Sections B and 1 of centerline construction method of embankment

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Figure 17.6.1.5.1-4: Typical section of centerline construction method of embankment

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Hydrologic Considerations

The proposed TSF is located at the Sidweng/Banao area with watershed area of

approximately 1.69 square kilometers. The reservoir is mostly within the tenement area and

generally covered with forest growth. In the absence of a formal hydrologic report,

conceptual design of drainage structures are based on assumed parameters, rule of thumb

and manipulation using empirical formulas.

• Crest design: W = 1.1 H ½

o W is the crest width of dam, in meters

o H is the height of the dam in meters

• Inflow design flood for water drainage structures

o Return period = y in years, evaluated using the range of 5 to 1,000

o Meyers constants

▪ a = 143.38 y 0.2864

▪ b = 19.772 y 0.2249

• Time of concentration using Kraven’s Formula: TK = LH/W

o TK is the time of concentration in seconds

o LH is the horizontal distance from remote point in the watershed in meters

o W is a coefficient = 3.5 for I = or > 0.1

o I = H/LH

o H is the difference in elevation between remote point and the spillway

intake in meters

• Time of concentration using Nakayasu’s Formula: TN = 0.27LS0.7

o TN is the time of concentration in hours

o LS is the inclined distance from remote point in the watershed to the

spillway intake in kilometers

o LS = (LH2 + H2)1/2

o The values of LH and H are the same in Kraven’s formula

• Rainfall intensity: i =a / (T +b)

o i is the rainfall intensity in inches per hour

o a and b are Meyer’s constants

o T is the time of concentration

• Runoff [Q] for various flood returns: Q = 0.278 CiA

o Q is the peak flow rate in cubic meter per second

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o C is a coefficient = 1

o i is the rainfall intensity in inches per hour

o A is the drainage or catchment area in square kilometers

o Plus Q of tail water =0.38 cum/sec

• Diversion channel discharge capacity using Manning’s formula:

Q = 4.43 a [{(H+L sin A)/{(19.58n2L)/(1+Kc+r4/3)}]1/2

o Q is the discharge rate in cubic meter per second

o a is the cross sectional area of the conduit in square meters

o H is the head measured from the water surface to the bottom of the

opening in meters

o L is the length of the channel in meters

o sin A is the difference in elevation between tunnel inlet floor and outlet

floor divided by length of the tunnel in meters

o D is the height of the tunnel in meters

o Kc is the entrance loss coefficient = 0.70

o n is Manning’s friction factor = 0.013

o r =a/p is the hydraulic radius in meter

o p is the wetted perimeter in meters

o d is the difference in elevation between channel inlet and channel outlet

floor

o W is the width of the tunnel in meters

Using the relationships above, a diversion channel with dimensions 6 meters wide and 3

meters high is proposed to be constructed to handle the water discharges during the TSF’s

construction period.

An emergency spillway will also be provided for the starter dam to handle excess water that

the pump on pontoon inadequately handles and to take care of excess run-off. A final

spillway will be designed to handle runoff after the TSF life.

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Discharge of

TSF 2 Tailings Tunnel

745 ML Mill

Plant

Tails Conveyance

Tails conveyance will likely take off from the existing tailings tunnel at the vicinity of TSF 2.

From thereon, tails will be routed to the 745 ML mill plant via gravity if applicable. From the

745 ML mill plant, tails will have to be pumped up to the designated discharge point at the

Sidweng TSF. The pipeline route will be around 3 kilometers long.

Figure 17.6.1.5.1-5: Preliminary tailings conveyance route

Among the design criteria to be incorporated in the final plan will be as follows:

• Dynamic and static heads

• Suitable pipe materials

• Type of pumps

• Power supply and network

• Available road network

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• Ease of operations and maintenance

• Environmental and safety systems

Schedule of Works

The engineering phase will consist of concept, preliminary and detailed design works which

will be done up to the third quarter of 2013 with Coffey Mining taking the lead role. The

product of the engineering phase will be a construction design.

Necessary permits must be obtained towards the start of the fourth quarter of 2013 so that

construction can start thereafter. Construction will be bidded to out to a proven contractor.

It is estimated that the starter dam and tails conveyance system will be completed by the

middle of the third quarter of 2014 which will usher the start of tails deposition.

Figure 17.6.1.5.1-6: Schedule of Works

Cost Estimate

Based on the preliminary design, the cost to design and construct a TSF in the Sidweng

valley using downstream method of construction is 2.71 Billion Pesos with the following

major components.

• Embankment construction including the main embankment, toe dam and drain

blanket costing 1.20 Billion Pesos. Works includes material hauling, deposition and

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compaction an estimated volume of 6.57 Bank Cubic Meters (BCM) and 513,200

cubic meters for the main embankment and drain blanket respectively. The existing

contract rates of RU Aquino in the works performed in the subsidence backfilling

operations were used.

• Construction and operation of tailings conveyance system which is seen to utilize

mechanical pumps costing 1.20 Billion Pesos. The cost consists largely of the power

to operate the pumping system with a total power rating of 3,573 Kilowatt to hurdle a

300 meters total dynamic head. Purchase and installation of slurry pumps, electrical

systems and pipes round off the remainder of the cost.

• Pre-construction works such as engineering and design and permits application and

processing entails a cost of 300 Million Pesos.

• The cost of a decant facility is estimated to be 44 Million Pesos. Initially, pontoon

pumps are being considered in this report. A provision for an eight-meter wide

spillway is included.

17.6.1.5.2 Mill Improvements Including Concentrate Shipping Facility

The Mill operations has included in its capital costs, a budget for the following improvements

worth 192 Million Pesos

• Various programs to improve the efficiency of its grinding and flotation processes

worth 99 Million Pesos particularly the construction of the foundation for the new

flotation cell and refurbishment of existing flotation cells and ball mills to improve

concentrate recovery.

• Structural improvements at the shipping facility in Poro, La Union including the ship

loading system, swivel boom and loading and drying conveyors amounting to 93

Million Pesos.

17.6.1.5.3 Electrical Facilities and Mechanical Equipment

New purchases and upgrades of existing mechanical and electrical facilities, such as a

number of transformer stations, equipment related to power and water supply and

refurbishment of surface heavy and transportation equipment like concentrate hauling trucks,

those assigned to the tailings facility operations and Philex road maintenance.

17.6.1.6 Environmental Equipment and Facilities

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Padcal has included environmental equipment facilities like the dust suppression system in

the Mill plant but most of its environmental related expenditures were incorporated in the

mine closure plan.

17.6.2 List of Capital Equipment and Works

Table 17.6.2-1: Major capital equipment and works

Capital Works

Description Cost (Pesos)

Mine

Development of 908 meter level 458 Million


Development of 798 meter level 2,115 Million


Overhaul and refurbishments of development equipment 315 Million

Mill

Construction of foundation for new flotation cell 63 Million

Various refurbishments of ball mills 36 Million

Improvements at the shipping facility in Poro La Union 93 Million

Other Facilities

Remediation and rehabilitation of TSF 3 860 Million

Design and construction of TSF 4 2,710 Million

Repair and maintenance of various electrical sub-stations and transformers

143 Million

Table 17.6.2-2: Major capital equipment and works

Capital Equipment

Equipment Quantity Cost (Pesos)

Mine

Production LHD unit, 10 metric tons capacity 17 477 Million

Stationary rock breaker with power pack 15 202 Million

Development LHD, 6 to 8 metric tons capacity 1 30 Million

Jumbo drill, 3 meter feed, 45 millimeter bit 3 78 Million

Mill

Flotation cell, WEMCO 1 125 Million

Jaw crusher, C-100 2 18 Million

Surface Operations

Fire truck 1 18 Million

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17.6.3 Financial Plans/Sources of Funds

The Company’s financial plan for the Padcal mine is premised on the achievement of its

production program discussed in the relevant sections of this report. The revenue generated

from operations minus the operating costs and expenses and the capital expenditure

requirements derives the funds that could be provided by or would be needed for the mine’s

continued operations.

The cash flow projections show that the mine could generate sufficient cash flows to support

its operations. Proceeds from the sale of its production can fully cover operating costs and

capital expenditures. Gross proceeds of 74.92 Billion Pesos will be raised, with 42.96 Billion

to be spent for operating costs and 8.96 billion for capital expenditures. The 23 Billion Pesos

remaining cash could provide the necessary funds not only for the mine’s working capital but

also for the exploration activities within the Padcal vicinity with the goal of further extending

the Padcal mine life. With sufficient internally-generated funds, third party funding would not

be necessary.

17.6.4 Production Cost Estimates and Assumptions

17.6.4.1 Mining Cost

Mining cost averages 207.40 Pesos or USD 5.18 per metric ton of ore milled for the eight

year mine life. Mining Cost applies to the operating cost directly attributable to the mining,

crushing and conveying of ore, including costs for labor, supervision, engineering, power,

fuel, supplies, equipment replacement and maintenance

17.6.4.2 Milling Cost

Milling cost averages 215.73 Pesos or USD 5.39 per metric ton of ore milled for the eight

year mine life. Milling Cost applies to the operating costs directly attributable to the

processing of ores or other feed materials to produce copper concentrate, including labor,

supervision, engineering(operations, assaying and metallurgical reviews), power, fuel,

supplies, reagents, and maintenance (including tailing pond maintenance)

17.6.4.3 Mine Overhead Cost

Mine overhead cost averages 83.35 Pesos or USD 2.08 per metric ton of ore milled for the

eight year mine life. Mine General Overhead refers to an ongoing expense of operating

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normal business expenses which includes administrative expenses, accounting fees,

advertising, IT fees, insurance, interest, legal fees, rent, repairs, supplies, taxes, telephone

bills, travel expenditures, utilities, donations and even community relations expenses (e.g.

Social Development and Management Program or SDMP).

17.6.4.4 Assumptions on Mining, Milling and Overhead Costs

Figure 17.6.4.4-1: Assumptions on Mining, Milling Overhead Costs

Mining Cost includes costs for labor, supervision, engineering, power, fuel, supplies,

equipment replacement and maintenance which are directly attributable to the mining,

crushing and conveying of ore. The labor cost or personnel costs (with cash and non cash

fringe benefits) which includes contracted labor are based on the 2012 recent labor rates

with imputed 7% projected rate adjustment. Materials and supplies (MS) were classified as

to fixed and variable cost. For variable cost the standard index was used to predict

expenditure and for fixed cost, historical trending was done to come up with the cost. All MS

should however match the most recent costing recorded in the Padcal’s purchasing system.

Milling Cost includes labor, supervision, engineering(operations, assaying and metallurgical

reviews), power, fuel, supplies, reagents, and maintenance (including tailing pond

maintenance) directly attributable to the processing of ores or other feed materials to

produce copper concentrate. The labor cost or personnel costs (with cash and non cash

fringe benefits) which includes contracted labor are based on the 2012 recent labor rates

with imputed 7% projected rate adjustment. Materials and supplies (MS) were classified as

to fixed and variable cost. For variable cost the standard index was used to predict

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expenditure and for fixed cost, historical trending was done to come up with the cost. All MS

should however match the most recent costing recorded in the Padcal’s purchasing system.

Mine General Overhead refers to an ongoing expense of operating normal business

expenses which was based on 5 year historical trending. For those items, where supporting

documents are readily available or the incurrence of which is highly probable, are included in

the projection.

Figure 17.6.4.4-2: Type of Expense (Average)

Labour costs and contracted services include cash and non-cash fringe benefits for Padcal

employees. Contracted services pertain to the costs of contractors engaged by the mine for

a variety of contract works which include conveyor maintenance, drilling and blasting,

periodic waste movement, cleaning, security and other specific technical areas.

Major materials and supplies expenditures are as categorized the following graph.

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Figure 17.6.4.4-3: Major Materials and Supplies

Power cost, taking up 35% of total production cost, is generally contracted for one year. For

the past three years, power generation was supplied to Padcal by Tokyo Electric and

Marubeni (TEAM) Philippines Energy Corporation, with transmission contracted with the

National Grid Corporation of the Philippines. In the above projections, the power rate was

based on its historical movement since 2010 at an average increase of 20%. At the

projected consumption of 280 million kilowatt hours per year, power cost averages to P1.4

billion per year.

Other Expenses refer to the costs of not normally associated with the general

administration of the mine site.

The projection for 2013 onwards is based on trending of the historical production cost

performance for the past five years. The identified fixed costs generally were kept constant

except for the labor cost which incorporated probable salary adjustments. Production related

or variable costs, accounting for 47% of total production cost, are based on the established

standard cost per tonne of ore milled.

The long-term profitability of the Padcal mine to a significant degree is dependent on its

ability to maintain efficient operations and low production costs. To a great extent it is,

however, unable to influence the cost of the materials and supplies used in operations. Any

fluctuations in these costs can significantly impact the mine site’s profitability in a particular

period. In the above projections, it is assumed that the current price levels will be constant.

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17.6.4.5 Marketing Cost

Marketing charges comprise of ocean freight and insurance in shipping the Padcal mine’s

copper concentrate production, and the treatment and refining costs charged by smelters to

extract the gold, copper and silver from the concentrates. Currently, 60% of Padcal’s

production is shipped to Pan Pacific Copper Co., Ltd and 40% to Louis Dreyfus Commodities

Metals Suisse SA. The smelter charges used in the projections are based on the latest

prevailing terms with these smelters. Ocean freight and insurance are likewise based on the

latest rates. Actual rates, however, are negotiated year-to-year and could significantly vary

from the rates assumed in the projections.

17.6.4.6 Mine Overhead Cost

Mine overhead includes activities related to administration, security, internal audit, safety,

finance, information system, purchasing, medical, community relations, environment and

legal.

17.6.4.7 Environment Cost

As an effect of the sediment spill in its TSF 3, the remediation cost is reflected in the

analysis. The company has completed its clean-up drive in Balog creek and is moving

programs in motion to do the same in parts of Agno River. A document entitled, Integrated

Environment Management Program, containing the technical evaluations done by various

experts and resulting action plans were submitted to the PAB last March 2013. The

environment cost amounts 316 Million Pesos, majority will be spent in 2013.

17.6.4.8 Community Development Cost

Social Development Management Plan (SDMP) is in pursuant to Section 8 of Republic Act

No. 7492 of the Philippine Mining Act of 1995 with revised implementing rules and

regulations under Administrative Order No. 2010-13 requiring operating mines to allot 1.5%

of the total operating cost for the implementation of program for the Development of Mining

Technology and Geosciences; Information, education and communication program; and

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programs of development and to promote general welfare of host and neighboring

communities where the mining area is located.

17.6.4.9 Excise Tax

The excise tax is 2 percent of the net revenue from the value of the copper, gold and silver in

the concentrates. Net revenue is defined as the gross revenue less smelting, refining and

other charges incurred in the process of converting the mineral concentrates into refined

metal, ocean freight and insurance. Gross revenue is the actual market value of minerals or

mineral products or bullion. The government’s intent to change the current fiscal regime on

mining could, however, result to a higher excise tax rate or its equivalent tax structure that

the government may impose in the future.

17.6.4.10 Head Office Overhead Cost

This technical report will not include overhead cost from Philex head office to maintain the

independence of Padcal operations in this evaluation.

17.6.4.11 Royalty

The royalty rates at the current ore grade level of the Padcal mine are 4 percent and 1

percent of the net revenue from gold and silver, and copper, respectively. The royalty rate for

the indigenous cultural community of Padcal is at 1.25 percent of gross sales.

17.6.4.12 Mine Waste Tailings (MWT) Fees

The MGB, in its decision on the sediment spill of TSF 3, found Padcal in violation of the

Mining Act when it discharged tailings to Balog creek and Agno River and has assessed

Padcal 1.03 Billion Pesos. Around 20 Million metric tons of sediments were released to the

two bodies of water. The fee, as stipulated in the MGB decision will be used to rehabilitate

the affected areas of the incident. Philex has paid the amount in full early this year and is

reflected as cost in this evaluation.

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The company has submitted its technical and environmental programs to rehabilitate TSF 3

and affected community to the MGB. It awaits the latter’s decision on which of the programs

can be covered and chargeable to the amount.

17.6.5 Government Financial Incentives

Purchases of goods and services are not subjected to Value-Added Tax (VAT). Under

Revenue Memorandum No. 9-2000 issued by the Bureau of Internal Revenue. Additionally,

VAT amounts on purchases not subject to zero-rating may be filed for refund in the form of

tax credit certificates that can be utilized by the Company to pay its national or local taxes.

.

17.6.6 Basis of Revenue Calculation

The tabulation below is the basis of the ensuing revenue calculation.

Table 17.6.6-1: Revenue Calculation

Description Figure Notes

Metallurgical Recovery

Copper 81.24 % 8−year average

Gold 72.42 % 8−year average

Selling Price

Copper 3 US Dollar per Pound 3.5 USD/lb in 2013

Gold 1,500 US Dollar per Ounce

Exchange Rate 40 Pesos per US Dollar

Smelter Charges

Copper 0.049 US Dollar per Pound

Gold 5 US Dollar per Ounce

Silver 0.30 US Dollar per Ounce

Freight Charges 24.50 US Dollar per Wet Metric Ton of Concentrate

Treatment Charges 46 US Dollar per Dry Metric Ton of Concentrate

Penalties

Copper 1%

Gold 2%

Silver 10%

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Excise Tax

Copper & Ag/Ag−1 2%

Au/Au Bullion 2%

Insurance 0.04%

Royalties

Copper 1%

Gold 4%

Silver 4%

17.6.7 Pro-forma Financial Statements

17.6.7.1 Profit and Loss

The following table reflects the projected results of operation during the anticipated

remaining mine life of Padcal and were provided by the Company based on the operating

parameters discussed in the following sections of this report. These projections were

reviewed and are deemed reasonable as calculated based on the parameters assumed for

this purpose. Nevertheless, these projections, being mere forward-looking statements

reflect management’s current outlook of future operating results.

Profit and Loss projections show that Padcal will have a total after tax net earnings of Php

10.2 billion at the end of its life in operations on 2020 as shown on the following schedule

above.

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Table 17.6.7.1-1: Padcal Profit and Loss for 2013 to 2020

( IN MILLIONS) 2013 2014 2015 2016 2017 2018 2019 2020 TOTAL

Tons Ore Milled

7,704,473

9,400,000

9,400,000

9,400,000

9,400,000

9,400,000

9,400,000

9,400,000

73,504,472

Gross Metals Produced

Gold - ozs. 96,299 123,780 108,139 98,055 92,481 81,347 79,227 78,317 757,646

Gold Bullion - ozs. 377 463 463 463 463 463 463 463 3,618

Copper - lbs. 30,121,117 37,360,955 36,534,334 35,904,294 34,933,255 33,000,412 32,170,213 31,755,114 271,779,694

Silver w/ Bullion - ozs. 99,840 128,171 112,434 102,277 96,589 85,230 83,012 82,055 789,609

PRODUCTION REVENUE : (in millions)

Gold 5,801 7,455 6,516 5,911 5,577 4,909 4,781 4,727 45,676

Copper 3,615 4,483 4,384 4,309 4,192 3,960 3,860 3,811 32,614

Silver w/ Bullion 128 164 144 131 124 109 106 105 1,011

Total - 9,543 12,102 11,044 10,351 9,892 8,978 8,748 8,642 79,300

Less: Smelter, Refining & Freight Charges 592 748 69 71 632 503 465 458 4,797

NET REVENUE 8,950 11,354 10,354 9,641 9,260 8,475 8,283 8,185 74,503

PRODUCTION COSTS & EXPENSES

By Type of Expense (TE)

Labor Cost 1,298 1,537 1,605 1,672 1,738 1,812 1,677 1,696 13,035

Materials & Supplies 1,416 1,755 1,756 1,756 1,756 1,756 1,756 1,756 13,706

Other Expenses 159 168 173 174 173 173 172 172 1,365

Power Cost 1,245 1,780 1,981 1,950 2,037 2,040 2,042 2,153 15,228

Production Cost by TE 4,119 5,241 5,515 5,553 5,704 5,780 5,646 5,776 43,333

By Activity

Mining Cost 1,615 1,983 2,011 2,053 2,104 2,137 2,101 2,137 16,140

Milling Cost 1,714 2,337 2,546 2,512 2,585 2,600 2,576 2,662 19,532

Maintenance Cost 9 121 126 13 135 14 119 119 980

General Overhead - Mine 649 735 766 79 81 832 786 794 6,161

Trucking of Concentrate 51 65 67 68 7 71 64 65 521

Production Cost by Activity 4,119 5,241 5,515 5,553 5,704 5,780 5,646 5,776 43,333

Excise Tax & Royalties

554

706

635

587

560

507

495

489

4,533

Other Charges / ( Income ) (1,017) (31) (31) (31) (31) (31) (30) (30) (1,232)

IEMP Costs 243 35 8 8 8 8 8 - 316

Total Cash Cost - 3,898 5,951 6,126 6,116 6,241 6,264 6,119 6,236 46,950

Non-Cash Charges 1,396 1,914 1,934 1,738 1,469 1,357 1,49 1,736 13,035

TOTAL COST 5,294 7,866 8,061 7,854 7,709 7,621 7,608 7,972 59,985

INCOME FROM OPERATION AFTER TAX AND

BEFORE CORPORATE OVERHEAD

2,560

2,442

1,605

1,251

1,086

598

472

213

10,226

Ave. Gold

- $ / oz.

1,500.00

1,500.00

1,500.00

1,500.00

1,500.00

1,500.00

1,500.00

1,500.00

Ave. Copper Price - $ / lb. 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00

Ave. Silver Price - $ / oz. 32.00 32.00 32.00 32.00 32.00 32.00 32.00 32.00

Ave. Forex - P / US$ 40.00 40.00 40.00 40.00 40.00 40.00 40.00 40.00

$ Cost / Au oz. (net of by product credits)

Production Cost / oz. 97.32 119.45 227.12 282.5 373.34 522.79 526.79 590.51

Total Cash Cost / oz. 193.36 412.79 526.83 605.50 687.74 824.22 821.06 881.54

Total Cost / oz. 554.37 797.99 972.15 1,046.50 1,082.78 1,239.02 1,288.45 1,432.56

The projections assume that operation will be continuous from March, 2013 onwards. It is

very dependent on the permanent lifting by the Mines and Geosciences Bureau and the

Pollution Adjudication Board of the cease and desist order issued at the time of the Padcal

tailings incident in 2012. The Padcal mine is hopeful, however, that a permit to resume

regular operations would be granted in due time after the remediation of the TSF3 is

completed and the government’s conditions are fully satisfied.

Metal Prices

The Padcal mine site is focused on gold and copper mining, and the profitability and cash

flow of its operations are greatly dependent upon the market price of these metals, which

have increased steadily in recent years as demonstrated in the www.bloomberg.com and

http://www.bloomberg.com/

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www.lme.com. These prices, however, are affected by numerous factors including global

economic conditions as well as consumption patterns of industries that utilize these metals.

The effect of these factors on the price of gold and copper, and correspondingly the future

economic viability of the Padcal Mine cannot be accurately predicted. For purposes of the

foregoing projection for 2013, the current prices of gold and copper at US$ 1,500.00 per

ounce and US$ 3.00 per pound, respectively, were assumed. Subsequent years’ average

metal prices were assumed at the constant level of US$ 1,500.00 per ounce gold and US$

3.00 per pound copper.

For every US$10 change in gold price per ounce, Padcal net revenue would change by 277

million Pesos. For every US$0.10 change in copper per pound, Padcal net revenue would

change by 111 million Pesos.

Exchange rates

Padcal’s functional currency is the Philippine Peso, being the applicable currency where the

Mine operates and which comprise the greater portion of the Company’s operating costs.

But because the Company receives its production revenue in US dollars and sourcing of

equipment, materials and supplies could come from different countries, the exchange rates

of different currencies into Philippine peso bear on the mine operating costs and capital

expenditures. Thus, fluctuations in exchange rates can have an impact on the Padcal mine

operating results. To mitigate the impact of exchange rate’s volatility on the peso cost

component, the Company in the past have entered into currency hedging arrangements to

set the average peso to dollar exchange rate. There is a natural hedge on the dollar cost

component as the mine’s revenues are in US dollars.

Mineral Resources and Ore Reserves

Ore reserves provide the basis for the estimates of the volume of gold, copper and silver that

can be produced by the Padcal mine. As additional geological data is obtained during the

course of operations and as the economic assumptions used to estimate ore reserves may

change, estimates of ore reserves may vary from period to period and actual production may

not necessarily reconcile with estimates. Padcal’s current practice is to use the latest

disclosure being made under PSE Circular No. 1850-2013 dated February 28, 2013.

http://www.lme.com/

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Depletion and amortization are calculated based on ore reserves and thus are affected by

changes in ore reserves estimates, which could impact total production costs and operating

income of the Padcal mine.

Marketing Charges, Excise Taxes & Royalties, Other Charges/Income and IRBM Costs

Marketing charges comprise of ocean freight and insurance in shipping the Padcal mine’s

copper concentrate production, and the treatment and refining costs charged by smelters to

extract the gold, copper and silver from the concentrates. Currently, 60% of Padcal’s

production is shipped to Pan Pacific Copper Co., Ltd and 40% to Louis Dreyfus Commodities

Metals Suisse SA. The smelter charges used in the projections are based on the latest

prevailing terms with these smelters. Ocean freight and insurance are likewise based on the

latest rates. Actual rates, however, are negotiated year-to-year and could significantly vary

from the rates assumed in the projections.

Other Charges/Income is expenditures or income items not normally incurred or are non-

recurring. In the above projections, other income of P 1.02 billion for business interruption

insurance claim and interest income from Mine Rehabilitation fund were provided. An

annual estimated income of P30 million from scrap sales have also been assumed.

Expenditures amounting to P 345 million for the Integrated River Basin Management (IRBM)

relates to the rehabilitation of the Balog Creek and Agno River Convergence following the

2012 tailings spillage.

Production costs

Padcal production costs by type of expenses consist of labor, materials and supplies, power

and other expenses. Production costs classified by activity comprise of mining cost, milling

cost, maintenance cost, trucking of concentrate and general overhead. For purposes of

break-even volume analysis, production costs are classified as to fixed and variable in

relation to production output.

The projection for 2013 onwards was based on trending of the historical production cost

performance for the past five years. The identified fixed costs generally remained constant

except for the labor cost which incorporated probable labor costs adjustments. Production

related or variable costs were based on the established standard cost of consumables used

in the operation.

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In the projection, the variable costs account for 47% of total production cost and the

remaining are all considered non-production related or fixed costs.

Any fluctuations in these costs can significantly impact the mine site’s profitability in a

particular period.

Cash Costs (Unaudited)

Cash costs are measure of the cash cost of production of a particular metal or commodity.

Padcal’s cash costs for gold include royalties and selling expenses, less proceeds from the

sale of copper and silver, which is a by-product found within the ore body. They exclude

capitalized production, depreciation and amortization, movement in inventory, and other

costs of sales which do not relate directly to production, such as exploration expenditure

expensed in the income statement. They also exclude head office costs, such as

Administrative Expenses, that are unrelated to production. Total cash costs and cash costs

per ounce are key performance indicators that allow management to monitor costs and to

evaluate operating efficiency while managing those factors that impact production costs on a

monthly basis. Cash costs per ounce are calculated as total cash costs divided by total

ounces of gold produced within a period.

Investors should not consider total cash costs or total cash costs per ounce in isolation. Total

cash costs and total cash costs per ounce as calculated for the mine site in this Prospectus

may not be comparable with other similarly titled measures of performance for other peer

companies.

On the other hand, total cost include non cash charges which is the write down or expense

against profit that does not involve actual cash outflow. This typically includes depreciation,

amortization and depletion. By 2020, unamortized costs of major projects and equipment will

be maintained in the books because of the probability of extension of the life of mine.

17.6.7.2 Cash Flow

The following cash flow projections show that the Padcal mine could generate possible cash

flows throughout its entire eight years declared mine life. It should be noted that while the

cashflow for 2013 will be a deficit of 26 million Pesos, the net cash flow until 2020 will,

however, be a positive of 12.7 Billion Pesos, which justifies maintaining the declared mine

life of up to 2020, this after a total capital expenditure 9.25 Billion Pesos for the entire period,

including a provision of 62 million Pesos for the mine closure plan.

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Table 17.6.7.2-1: Cash Flow

CASH FROM OPERATING ACTIVITIES

Net Income

Non-Cash Charges

Cash provided by Operation

Changes in Non-Cash components of

Working Capital

Decrease (Increase) in -

Other Current Assets

Increase (Decrease) in -

Accts. Payable & Accrued Expenses

Cash provided by Operation

INVESTING ACTIVITIES

Addition to Resource Assets

Mine Development

a) 908 ML and Others

b) 782 ML and 798 ML & Others

c) 840 ML and Others

Machinery & Equipment

Capital Projects

TP # 3 & 4

Cash provided by Investing Activities

Net Inc./(Dec.) in Cash Before Equity Accts.

2013 2014 2015 2016 2017 2018 2019 2020 TOTAL

2,560

1,396

2,442

1,914

1,605

1,934

1,251

1,738

1,086

1,469

598

1,357

472

1,49

213

1,736

10,226

13,035

3,956 4,356 3,540 2,989 2,554 1,955 1,962 1,949 23,261

(23)

(1,212)

(18)

(10)

(6)

(1)

(1)

-

-

(58)

(1,212)

(1,235) (18) (10) (6) (1) (1) - - (1,271)

(146)

(508)

(50)

(286)

(247)

(1,511)

(292)

(773)

-

(85)

(135)

(449)

(174)

(811)

-

(70)

(22)

(352)

(104)

(592)

-

(23)

(11)

(340)

(12)

(556)

-

(16)

(4)

(292)

(2)

(297)

-

(6)

(2)

(289)

(6)

(102)

-

(5)

(13)

(305)

-

(27)

-

(0)

(13)

(322)

(736)

(3,666)

(50)

(492)

(447)

(3,861)

(2,747)

(1,734)

(1,429)

(1,071)

(880)

(597)

(431)

(361)

(9,250)

(26)

2,605

2,100

1,913

1,673

1,357

1,531

1,588

12,740

NET PRESENT VALUE

Discount Factor

Best Scenario (Hurdle Rate) − 30% 5,612

Base Scenario − 10% 9,179

Worse Scenario (Risk free Rate) − 3.7% 11,194

INTERNAL RATE OF RETURN 27%

The Net Present Value (NPV) calculated shows that even at a high 30% discount rate, the

Padcal mine remains to be profitable at an NPV of 5.62 billion Pesos. This assessment is

reinforced by the high internal rate of return of 27%.

17.6.8 Financial Analyses

17.6.8.1 Break even Analysis

For Padcal to break even, determination of its fixed costs was done to show how much

revenue should be generated to offset or cover fixed cost. These costs are those business

costs that are not directly related to the level of production or output. In other words, even if

the business has a zero output or high output, the level of fixed costs will remain broadly the

same. In the long term fixed costs can alter - perhaps as a result of investment in production

capacity or through the growth in overheads required to support a larger, more complex

business.

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Table 17.6.8.1-1: Summary of Production Cost

SUMMARYOFPRODUCTIONCOSTS(inmillions)

2013 2014 2015 2016 2017 2018 2019 2020

FixedCosts 2,196 2,815 3,085 3,113 3,221 3,294 3,156 3,231

VariableCosts 1,923 2,426 2,430 2,439 2,482 2,486 2,490 2,545

TOTAL 4,119 5,241 5,515 5,553 5,704 5,780 5,646 5,776

Padcal’s breakeven ore production volume can be derived by dividing the fixed cost by the

net contribution to fixed cost per tonne (net revenue per tonne minus variable cost per

tonne).

17.6.8.2 Sensitivity Analyses

A sensitivity analysis shows the effects on Net Revenue when forecasted gold and copper

prices are increased or decreased by various percentages.

Table 17.6.8.2-1: Sensitivity Analyses

Change in Padcal Net Revenue (+/-)

For every $10 change in gold price Php 277 million

For every $0.10 change in copper price Php 111 million

17.6.8.3 Profitability Analysis

The forecasted results of operations resulted a total positive after tax revenue of P 10.22

billion and the cash flow statement resulted to a total positive cash inflow of P 12.74 billion.

To further analyze the outlook, despite the negative cashflow of P 26 million in 2013, the

corresponding net cash flow in the coming years is positive at P 12.76 million and the eight

year mine life all registered a total Net Revenue after Tax of P 10.22 billion. The Net Present

Value (NPV) was used to determine if the income stream or the sum of the present values of

the individual amounts in the income stream in the 8 year period is positive. Each future

income amount in the stream is discounted, meaning that it is divided by a number

representing the opportunity cost of holding capital from now (year 0) until the year when

income is received or the outgo is spent. The opportunity cost can either be how much it

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would have earned investing the money someplace else, or how much interest PMC would

have had to pay if it borrowed money.

For NPV analysis, three scenarios were used: worse, base and best case. Discount rate

used in worse case uses the February 2013 year to date core inflation rate taken from

National and Economic Development Authority (NEDA) which is 3.7 percent. This is

assumed as the risk free rate. Base case scenario is the inclusion of prevailing lending rate

from Bangko Sentral ng Pilipinas (BSP) of 5.5 percent plus inflation rate of 3.7 percent which

is approximated to 10 percent. And best case scenario will use the existing Company’s

hurdle rate of 30 percent.

The results were all a positive NPV or that the income stream is higher than its outflows

even by using the highest discount factor of 30 percent. This was further affirmed by the high

internal rate of return of 27 percent

.

17.7 Economic Aspects

17.7.1 Employment/management

17.7.1.1 Number, nationality, Position and Annual Payroll

Padcal currently employs about 2,700 personnel, covering all job categories. The annual

gross income amounts to 770 Million Pesos which constitutes the basic rate of employees.

Table 17.7.1.1-1: Position, Number and Annual Payroll

POSITION No. of Men Annual Gross Income

Rank and File 2,083 455,509,729.18

Supervisors 537 227,766,607.56

Managers 89 87,222,811.84

Grand Total 2,709 770,499,148.58

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17.7.1.2 List of Key Personnel and Qualifications

The details required in this section are found in Annex D-2.

17.7.1.3 Personnel Pay Scale

The personnel pay scale is defined by the following aspects.

Definition of Job Grades

• Skilled/Semi-Skilled/Unskilled (SSU) is Padcal’s equivalent to a rank and file. Most

are miners and equipment operators in the mill.

• Office Administrative Clerk (OAC) is an unskilled office worker whose primary

functions are clerical in nature.

• Professional Technician (PT) is a semi-skilled office worker.

• Supervisory Technical Staff (STS) may be working underground or surface and

possess high level of skills pertinent to his function.

Unions

Padcal nurtures a good relationship with the two unions of both the rank and file and

supervisory employees. The Philex Rank-and-File Employees Union-Associated Labor

Unions-Trade Union Congress of the Philippines (PRFEU-ALU-TUCP) and Philex Mining

Supervisory Employees Union (PMSEU) governs the labor relations of their members to the

Padcal management. Every five years, the Collective Bargaining Agreement (CBA) are

renegotiated and renewed. The stipulations of the CBA have an increasing effect

(historically) to the employees pay rates.

17.7.1.4 Table of Organization


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17.7.1.5 Availability of Technical and Skilled Worker

In the nearest city from the minesite, Baguio City, are several Colleges and Universities that

can offer a wide array of skilled labor. A particular University offers the BS Mining

Engineering program that is very relevant to Padcal.

The industries within Baguio Export Processing Zone are also a good sources of engineers

as well. The mine of Lepanto is the most proximate mining operations that has similar skills

requirement of Padcal.

In Padcal, training and development of high school graduates, who can’t afford college

education are being undertaken. Trainings are specialized in technical skills that can be

utilized in the operations.

17.7.1.6 Township/Housing

Housing and basic amenities (water and electricity) are provided to regular Padcal

employees within the mine site. The Padcal community’s population has already grown to

around 10,000 and is turning to be one of the highly urbanized communities around the area.

With the proximity of Baguio City, some employees choose to commute daily to and from

work. Public Utility Jeeps (PUJ) are the most accessible mode of transport.

17.7.2 Community Development Plan


17.7.3 Socio-economic Contributions

Philex Mining Corporation, has committed to the development of its mining community as

well as its host and neighboring communities. The company has provided stable

employment to about 2,852 (as of Feb 28, 2013). Basic Social services such as education,

medical, water and power utilities were likewise implemented in support to the workers and

their dependents.

The company has adopted the Social Development and Management Program (SDMP) as

its core program in the poverty alleviation of its host and neighboring communities. Through

its SDMP, it aims to uplift the quality of life of the marginalized members of the community

through its livelihood and social services on health and education and establishment of

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social and physical infrastructures to promote economic and social opportunities.

The SDMP is focused on four components dubbed as H.E.L.P., which stands for Health

Care, Education, Livelihood and Employment Enhancement and Public Infrastructure.

For the last ten (10) years from 2003 to 2012, the following were the socio-economic

contribution of the company to its host and neighboring communities.

HEALTH CARE PROGRAM: Provision of health services by medical/dental missions and

free hospitalization at Sto. Nino Hospital; improvement of facilities/equipment on water and

sanitation; provision of assistance to Rural Health Units; nutrition programs; and training of

health workers and families on disease prevention

EDUCATION PROGRAM: To address the poor quality of education, the company has

focused on the School Improvement Projects of partner schools/LGUs and Department of

Education. Schools/classrooms, clinics and teachers quarters were constructed; providing

students opportunities to finish school under the College and Technical Vocation

Scholarship; Employment opportunity for students to earn for their education and projects for

the out of school youth under the Alternative Learning System

LIVELIHOOD PROGRAM: In order to provide employment opportunities for its

communities, the company has instituted a Livelihood and Employment Enhancement

Program. This included strengthening and empowering cooperatives and livelihood

associations. Continuous capability building trainings were conducted. Financial and

technical assistance are regularly extended to ensure the sustainability of the projects.

PUBLIC INFRASTRUCTURE PROGRAM: In support to the Health, Education and

Livelihood Programs is the Infrastructure Development. Over ten years, the company has

constructed an aggregate of 28 kilometers of concrete pavement/farm to market road. 85

units water system projects; 99 units of multi-purpose buildings/schools/clinics were

constructed and improved.

For this period, the company has spent about P255 million as its contribution to the poverty

alleviation in its host and neighboring communities.

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17.8 Project Schedule

The production and development schedules discussed in Section 17.5.1 will be the project

schedule.

17.8.1 EPCM Contract

All operational activities are done by Padcal manpower with the exception of the following

major works.

• Subsidence backfilling

• Construction of tailings storage facility 4

• Maintenance of cable-hauled and feeder belt conveyors

To these, a Department within the Padcal organization still manages the operations.

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Chapter 18.0

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18.0 ORE RESERVES ESTIMATES

18.1 Database Used

The mineral resource model is the primary database used in this Technical Report. Throughout

Padcal’s operating life, seven resource models were produced and used at various stages. The

latest is the 2013 resource model using Ordinary Kriging (OK13) done by Messrs. JC Cinco Jr.

and RC Obial, which is the basis of reserve estimation on this evaluation.

18.2 Integrity of Database

The resource model was done by competent persons as defined by the Geological Society of

the Philippines (GSP). The parameters and methodologies used in the resulting resource

model and estimates are thoroughly discussed in an independent technical report referred to

here as the Geologist CP report.

18.3 Data Verification and VaIidation (Iimitations)

Data verification and validation were conducted using the GEMS program to check for validity of

data in any drillhole or traverse workspace by checking data for inconsistencies, duplication and

missing values and the check duplication of field data to check any type of workspace for

duplicate data. The validation process will produce a record-by-record report of all

inconsistencies.

18.4 Ore Reserve Estimation Method Used

Using GEMS’ PCBC module, a software package specifically designed for application in block

caving operation. The mineable footprint corresponding to a 0.317 total percent copper

equivalent is delineated.

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Figure 18.4-1: OutIine of 0.317 % CuEq at 908 ML

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Chapter 18 Page 5

To proceed with the reserve estimation, the following were done.

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1. Copper and Gold grades of the model blocks classified as Measured and Indicated blocks

are considered in the evaluation. Inferred blocks are dropped to zero.

2. Based on the 30 meter by 16 meters (varying per production level) drawpoint spacing, draw

columns are defined such that each drawpoint is assigned an area of influence net of areas

overlapping with adjacent or neighboring drawpoints.

3. Using an algorithm built-in in PCBC, the block grades are superimposed on the draw

columns so that each slice of a column is assigned with the average grade of the 30 meters

by 30 meters by 10 meters block/s that it transects. The thickness of the slice is defined by

the height of the model blocks, which in this case is 10 meters.

4. Based on the sum of the unit revenue from copper 2,169.2 Pesos per metric ton and from

gold 1,388.8 Pesos per metric ton minus the unit operating cost 687.86 Pesos per metric

ton, the net value of each 10 meter slice in a draw column is computed.

5. The net value of a drawpoint is then cumulated starting from the bottom slice going up

taking track of the number of slices cumulated. Cumulating proceeds until such time that

the net value becomes negative. A negative net value at the bottom slice of a drawpoint,

however, does not pre-empt the cumulating step; instead cumulating proceeds until such

time that the net value switches from positive to negative, if ever; else, cumulating proceeds

until all slices within the draw column are cumulated.

6. The top-most slice with a positive net value, if any, marks the maximum height of a draw

column. A drawpoint whose column height is higher than the break-even height is

classified as economic, else it is tagged as uneconomic.

7. A perimeter enclosing all drawpoints flagged as economic is drawn and called the economic

footprint. As this footprint may contain convex segments that may not allow good cave

propagation in reality, the economic footprint is smoothened into the final operational

footprint.

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Operational footprint

Figure 18.4-4: Economic and operationaI footprints at 908 ML

Economic footprint

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Operational footprint 782 ML

Operational footprint 798 ML


Economic footprint

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Economic footprint

Operational footprint

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Chapter 18 Page 9

8. The maximum height of those drawpoints within the operational footprint is then multiplied

by the area of influence of each particular drawpoint and by the specific gravity of caved ore

in order to arrive at the maximum ore theoretically drawable from each drawpoint. The

summation of these tonnages then serves as the basis of the mineable reserve.

9. This reserve, however, is further trimmed to allow for ore loss due to early entry of dilution

and premature collapse of drawpoints. A dilution factor of 0.03 percent for copper and 0.10

gram gold per metric ton for gold is being applied.

18.5 Ore Reserve Estimations

18.5.1 Ore Specific Gravity / Density

Based on tests, the specific gravity of caved ore in Padcal Mine is 2.7.

18.5.2 Mining PIans / Mining Recovery / DiIution Factor / Mining Losses

The discussion for this section has been tackled in Section 17.5.1.

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Selected drawpoints

Factor applied to these drawpoints

Discount Factors

Discount factors are applied to the resulting copper and gold grades from PCBC based on

historical performance of nearby blocks in a particular production level. In 908 ML, since the

remainder of the producing blocks and planned drawpoints are at the south and south east

portion, the factor was culled on the variance of active drawpoints at the south block. Actual

grades per drawpoint, which are back calculated based on the mill heads and grab grades (from

ore sampling at drawpoints done weekly), are pitted against the PCBC grade, representing the

grade of a particular point at the draw column at a particular extraction life of a drawpoint.

Figure 18.5.2-1: Representative drawpoints for discount factor at 908 ML

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The result is tabulated below, the representative drawpoints are located at production lines 21 to

26. Copper and gold grade variances are minus three and five respectively, which used to

discount the grades of remaining PCBC grades at the level.

TabIe 18.5.2-1: Grade reconciIiation for active 908 ML South BIocks

PL ACTUAL PCBC Variance

%Draw Tons %Cu gAu/t Tons %Cu gAu/t %Cu gAu/t

21 1,101,40 0.127 0.521 1,584,581 0.170 0.547 -25% -5% 70%

22 1,413,323 0.191 0.674 956,058 0.231 0.735 -17% -8% 148%

23 1,431,356 0.225 0.645 1,010,743 0.220 0.698 2% -8% 142%

24 1,270,128 0.241 0.537 1,121,766 0.236 0.600 2% -11% 113%

25 656,957 0.233 0.410 730,139 0.212 0.491 10% -16% 90%

26 149,080 0.21 0.348 251,114 0.210 0.432 3% -20% 59%

Total/Ave 6,022,250 0.203 0.573 5,654,401 0.210 0.604 -3% -5% 107%

The planned mining level 798 ML are the southeast and east portions of the orebody. In

principle, similar ore conditions will be expected as the 908 ML south and east blocks, thus the

same factor, minus three and five percent were used to discount the PCBC grades (copper and

gold respectively) at 798 ML.

Similar method was used to arrive at 23 percent discount on both the copper and gold gradesof

782 ML.

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Figure 18.5.2-2: Discounted bIocks at 798 ML using factor from 908 ML

DiIution Factor

An internal report done in 2004, suggested that the dilution factors be culled from the copper

and gold grades of backfill materials being placed at the subsidence pit floor. In 2004, bulk of

the backfill materials were sourced in the Albian slopes, sampling was done on the area and

subsequently assayed. The resulting mean is 0.03 percent copper and 0.10 grams per ton gold.

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18.5.3 ReIevant Production Costs considered

An average operating cost of 687.86 Pesos per metric ton of ore milled for the first semester of

year 2012 was considered in the parameter. This cost is inclusive of all variable costs and

minesite overhead cost.

18.5.4 Basis of Revenue CaIcuIation

MetaI Price

Metal prices are assumed to be 3.00 US Dollar per pound of copper and 1,500 US Dollar per

ounce of gold.

MetaI Recovery

Metal recovery is set at 82 percent and 72 percent for copper and gold, respectively.

Unit Revenues

Based on these prices and recoveries, the unit revenues per metric ton per unit grade of each

metal are calculated as 2,169.20 Pesos per metric ton for every percent copper grade and

1,388.80 Pesos per metric ton for every gram per ton gold grade

Copper EquivaIent of GoId

As the cut-off grade is normally expressed only in terms of copper, the revenue contribution of

the gold metal has to be expressed in terms of its equivalent in copper. Taking the ratio of the

unit revenue from copper and the unit revenue from gold gives the copper equivalent of each

gram of gold per metric ton of ore. Thus, by adding the copper grade and the copper equivalent

of the gold grade, the total percent copper equivalent (Total %CuEq) grade of a material is

assessed. The copper equivalent of 1 gram gold per ton of material is 0.481 percent copper.

Currency Exchange Rate

The currency exchange rate is pegged at 40 Pesos to a US Dollar over the life of the project.

Cut-Off Grades

A cut-off grade of 0.317 Total %CuEq is applied in the estimation of ore reserve.

18.5.5 Cut-off Grade Determination

PADCAL Operations

ApriI 2013

Chapter 18 Page 14

The cut-off total percent copper equivalent grade of 0.317 used in the ore reserve estimation is

derived from the ratio of the total operating cost per tonne milled to the unit copper revenue per

tonne at 3.00 US Dollar per pound copper.

18.6 Ore Reserve CIassification Used

The declared ore reserves estimates are all classified as proved reserves.

18.7 Ore Reserves Estimates

The resulting ore reserve estimate is tabulated below.

TabIe 18.7-1: MineabIe Reserve Estimate

ORE SOURCES

Tonnes

MT

Cu

%

Au

Grams/Tonne

RecoverabIe Cu

(000 Ibs)

RecoverabIe Au

(oz)

908-ML 12,300,000 0.21 0.49 47,200 150,000

782-ML 21,100,000 0.22 0.48 84,000 254,000

798-ML 40,100,000 0.20 0.39 144,100 333,000

TotaI Reserves 73,500,000 0.21 0.43 275,300 737,000

PADCAL Operations

April 2013

Chapter 19.0

PADCAL Operations

ApriI 2013

Chapter 19 Page 1

19.0 INTERPRETATION AND CONCLUSIONS

19.1 Synthesis of aII the data

Philex owns and operate the Padcal mine in Tuba, Benguet, Philippines which lies in an

approved Mineral Processing Sharing Agreement (MPSA) mining tenement. The ore is mined

through an underground mining method called block caving at a rate close to 26,000 metric tons

per day. The mine transports the ore through an underground to surface conveyor which

operates all year round to deliver 9.4 million tons of ore per year to the mill.

Copper and gold is recovered using flotation process after crushing and grinding stages. The

final product of the whole operation is copper concentrates which are trucked to a concentrate

facility in Poro, La Union and shipped to smelters in Japan. In a year Padcal can produce 33

Million pounds of copper and 80 thousand ounces of gold.

Operations have been sustained for more than fifty years.

A new mineable reserve estimate was completed in February 2013 using a base case copper

price of 3 US Dollar per pound, gold price of 1,500 US Dollar per ounce and operating cost of

688 Pesos per ton of ore milled. Current copper has a wider positive margin to the base case

while the current gold price is closer.

The proven reserve estimate for Padcal at the end of 2012 is 73.5 million metric tonnes of ore

with grades of 0.21 percent copper and 0.43 gram gold per ton which when recovered will

equate to 275 Million pounds copper and 737 thousand ounces of gold. At a planned

production rate of 9.4 million metric tons per annum, the mine life will be 8 years.

Sustaining the mine life will require a capital cost of 8.94 Billion Pesos and when

analysed using a profit and loss projection would yield positive cashflow throughout the

mine life. Using Net Present Value (NPV) analysis with varying discount factors

representing worst, base and best cases, as all are positive, tells of the project’s

viability. The project also resulted to an acceptable Internal Rate of Return of 27

percent

PADCAL Operations

ApriI 2013

Chapter 19 Page 2

19.2 Discuss the adequacy of data, overaII data integrity and areas of uncertainty.

All information leading to the mineable reserve estimation was deemed adequate. Padcal has

been regularly updating the remaining reserves based on the actual mined in the previous year

which keeps the recorded information current.

Some uncertainties lie in these major aspects of the technical evaluation.

• The engineering works done to date in the design of TSF 4 are conceptual and would

require further studies to be made. Therefore the cost estimate for the facility is at least

plus or minus 25% off.

• Continuation of operation after the 4 month period granted by the Department of

Environment and Natural Resources (DENR)

• The volatility of metal prices in the market

19.3 OveraII concIusions by the CP

Overall, given the historical success of Padcal and the results of this evaluation, the

project is viable; hence the objectives set for this technical report have been met

PADCAL Operations

April 2013

Chapter 20.0

PADCAL Operations

ApriI 2013

Chapter 20 Page 1

20.0 RECOMMENDATIONS

The following recommendations are offered as a result of the evaluation.

• Continue the technical investigation of the proposed site for the Tailings Storage Facility

4 to arrive at a detailed design and a more robust estimate of the facility.

• Rehabilitate Tailings Storage Facility 3 as it is the only means to sustain operation,

particularly because TSF 4 is still currently in the engineering phase.

• Vicinity exploration must be pursued to take advantage of the current infrastructures as

well as the available skilled and technical manpower

PADCAL Operations

April 2013

Chapter 21.0

PADCAL Operations

ApriI 2013

Chapter 21 Page 1

21.0 REFERENCES

Amec, 2004, Draft Technical Report Padcal Mines, Philippines

Anonymous, 2005, Transcriptions from the Philex 50th Year Commemorative Video

Anonymous, 2010, Final Mine Decommissioning and Rehabilitation Plan

Anonymous, 2013, Philex Padcal Mine TSF 3 Rehabilitation and Clean-up Plan

Anonymous, 2013, Integrated Environmental Management Program

Anonymous, Annual Reports

Anonymous, Various Internal Reports

Austin, E.B. Jr., Dolipas, R.S. II, Nakihid, J.W. and Romero, V.G.A., 2009, Ore Hauling

Improvement in Philex Mining Corporation – Padcal Operations

Austin, E.B. Jr., Dolipas, R.S. II, Lumpias, J.W. and Romero, V.G.A., 2010, Philex Padcal Mine

– Highlights of Operation

Baluda, R.P. and Galapon, J.B., 2005, Geology of Sto. Tomas II Porphyry Copper Deposit-

Internal Report Philex Mining Corporation

Carandang, F.E.P., 2004, Average Grade of Backfilling Material at Subsidence Pit – Internal

Report

Cinco J.C. Jr., and Obial R.C., 2013, Technical Report Exploration Results and Mineral

Resources of the Sto. Tomas II Copper-Gold Deposit Located in Padcal, Tuba, Benguet

Province, Philippines

Dolipas, R.S. II, Romero, V.G.A. and Sta. Ana, AV, 2005, Ground Support System of Philex –

Padcal Block Cave Operations

Dolipas II, RS, 2000, Rock Mechanics as Applied in Philex Block Cave Operations

Pena, R.A., 1975, Brief Geology of a Portion of the Baguio Mineral District. Journal of the

Geological Society of the Philippines, Volume 24 Number 4

PADCAL Operations

ApriI 2013

Chapter 21 Page 2

Prangan, EL, et.al., 1995, Philex Mine Modernization Program: A Shift from Slushing to LHD

Block Cave Mining

Prangan, EL, Ricafort, LR, Son, JS+, 2013, Comprehensive Safety Program – Padcal

Operations

Victorino, R.S., 1999, Modified Geologic Model of the Sto. Thomas II Deposit, Philex Mining

Corporation Internal Report

Wikepedia, Wikepedia.org



Annexes


P. Mining Engineer

April 30, 2013

PADCAL Operations

April 2013

Annex A: Mine

Annex A-1: List of Existing Machineries

and Equipment

EQUIPMENT LIST _ as of March 31, 2013

1 of 3

EQUIPMENT CODE

BRAND/MAKE

MODEL

DATE ACQUIRED ACQUISITION

COST

AGE (Months)

AGE (Years) OPERATING

HOURS

Concrete Mixers

1 36009 BTI BTI 01-Dec-04 14,847,800.00 101.40 8.33 10,739.60

2 36010 Normet VARIOMEC 01-Oct-05 15,428,671.96 91.27 7.50 12,247.65

3 36011 Normet VARIOMEC 15-Oct-10 15,601,914.04 29.93 2.46 6,126.30

4

36012

Normet

VARIOMEC

15-Oct-10

15,601,914.04

29.93

2.46

2,241.00

Development Rockbolt Drills

1 86003 Sandvik Robolt D05 01-Apr-04 23,121,662.00 109.53 9.00 23,080.18

2 86004 Sandvik DS 310 14-Sep-07 27,211,068.00 67.50 5.55 15,067.21

3 86005 Sandvik DS 311 09-Feb-12 29,670,000.00 13.87 1.14 1,670.78

Development Face Drills

1 89012 Sandvik Axera D05 01-Apr-04 16,218,623.00 109.53 9.00 19,705.46

2 89015 MTI Drift Runner 1SB 01-Dec-05 18,115,559.00 89.23 7.33 6,093.17

3 89016 Sandvik DD 310 29-Oct-08 20,144,298.00 53.80 4.42 9,961.63

4

89021

Sandvik

DD311-40

02-Jul-12

26,391,328.90

9.07

0.75

60.77

Development Fanhole Drills

1 87008 Tamrock Solo 609 26-Nov-05 2,223,240.00 89.40 7.35 7,575.65

2 87009 Tamrock Solo 5V 01-Jun-05 24,855,490.00 95.33 7.84 24,087.82

3 87010 Tamrock Solo 5V 01-Jun-05 24,855,490.00 95.33 7.84 24,039.37

4 87011 Sandvik DL 330 24-Jan-09 26,638,618.00 50.90 4.18 11,966.98

Bouldering Drill Machine

1 89017 Sandvik DC 121R 01-Sep-09 6,941,400.00 43.57 3.58 3,267.72

2 89018 Sandvik DC 121R 24-Nov-11 6,941,400.00 16.43 1.35 1,655.97

Conveyor Cleaning LHDs

1 42619 Atlas Copco ST 6C 01-Apr-04 20,339,471.00 109.53 9.00 42,656.49

2 42620 Atlas Copco ST 6C 01-Apr-04 20,339,471.00 109.53 9.00 42,050.25

3 42321 Sandvik LH307M 28-Aug-09 19,135,999.77 43.70 3.59 10,553.02

Development LHDs

1 42322 Atlas Copco ST3.5 20-Aug-10 14,013,618.01 31.80 2.61 8,973.00

2 42324 Atlas Copco ST3.5 23-Dec-10 14,013,618.01 27.63 2.27 8,132.10

3 42325 Sandvik LH307M 08-May-11 18,226,814.90 23.10 1.90 2,820.50

Production LHDs

1 42071 Sandvik Toro 007 08-Jul-06 22,274,492.86 81.93 6.73 29,766.03

2 42072 Sandvik Toro 007 29-Oct-06 22,257,320.60 78.17 6.42 28,964.96

3 42073 Sandvik Toro 007 17-Mar-07 24,477,414.00 73.53 6.04 26,892.67

4 42074 Sandvik Toro 007 28-Apr-07 24,477,414.00 72.13 5.93 28,799.21

5 42075 Sandvik Toro 007 01-Jun-07 25,086,186.00 71.00 5.84 27,206.72

6 42076 Sandvik Toro 007 23-Nov-07 21,589,325.00 65.17 5.36 24,999.17

7 42123 Atlas Copco ST 1030 09-Mar-07 24,949,200.00 73.80 6.07 18,307.72

8 42124 Atlas Copco ST 1030 10-May-07 24,966,571.00 71.73 5.90 17,817.80

9 42125 Atlas Copco ST 1030 05-Jun-09 22,323,595.40 46.50 3.82 13,163.35



12 42412 Sandvik Toro 1250 01-Jun-04 31,325,388.00 107.50 8.84 40,260.17

13 42414 Sandvik Toro 1250 14-May-05 38,874,615.00 95.93 7.88 37,593.49

14 42415 Sandvik Toro 1250 14-May-05 38,874,615.00 95.93 7.88 36,234.66

15 42416 Sandvik LH 410M 19-Mar-09 24,950,007.85 49.10 4.04 13,937.15

16 42417 Sandvik LH 410M 19-Mar-09 24,950,007.85 49.10 4.04 16,118.63

17 42418 Sandvik LH 410M 25-Apr-09 22,173,812.86 47.87 3.93 15,749.95

18 42419 Sandvik LH 410M 04-Jul-09 22,751,447.33 45.53 3.74 15,869.92

19 42420 Sandvik LH 410M 25-Jul-09 22,751,447.33 44.83 3.68 14,185.33

20 42421 Sandvik LH 410M 28-Aug-09 22,659,494.00 43.70 3.59 13,336.67

21 42422 Sandvik LH 410 19-Jun-10 27,527,437.00 33.87 2.78 13,786.96

22 42423 Sandvik LH 410 03-Jul-10 27,527,437.00 33.40 2.75 12,858.91

23 42424 Sandvik LH 410 03-Jul-10 27,527,437.00 33.40 2.75 10,937.52

24 42425 Sandvik LH 410 22-Jul-10 27,527,437.00 32.77 2.69 12,252.85

25 42426 Sandvik LH 410 26-Apr-11 22,630,149.65 23.50 1.93 8,386.38

26 42427 Sandvik LH 410 14-May-11 22,630,149.65 22.90 1.88 8,017.83

27 42428 Sandvik LH 410 01-Apr-12 26,790,429.91 12.13 1.00 3,338.20

28

42429

Sandvik

LH 410

07-Jul-12

26,790,429.91

8.90

0.73

1,261.42

29 42729 Atlas Copco ST7.5Z 01-Dec-05 35,624,930.00 89.23 7.33 29,175.42

Ore Rehandling Trucks


2 of 3

EQUIPMENT CODE

BRAND/MAKE

MODEL


COST

AGE (Months)


HOURS

1 37309 Volvo A30D 30-Jun-07 14,658,297.00 70.03 5.76 13,324.07

2 37310 Volvo A30E 12-Feb-11 17,000,000.00 25.93 2.13 6,648.20

3 37311 Volvo A30E 13-Feb-11 17,000,000.00 25.90 2.13 6,679.20

Stationary Rock Breakers

1 90013 Teledyne TM16H/TB825XS 29-Jul-97 2,475,480.83 190.80 15.68 21,570.09

2 90014 Teledyne TM16H/TB825XS 30-Sep-97 2,475,480.83 188.70 15.51 16,246.27

3 90015 Teledyne TM16H/TB825XS 18-Jun-98 3,490,940.48 180.00 14.79 24,227.59

4 90016 Teledyne TM16H/TB825XS 18-Jun-98 614,731.18 180.00 14.79 39,403.38



7 90020 Teledyne TM16H/TB825XS 01-May-99 5,355,000.00 169.43 13.93 18,606.75



10 90023 Teledyne TM16H/TB825XS 07-Oct-99 3,409,425.91 164.13 13.49 19,467.01

11 90024 Teledyne TM16H/TB825XS 26-Oct-99 3,409,425.91 163.50 13.44 21,271.95

12 90025 BTI Tech. TM16H/TB830XS 14-May-04 6,144,534.35 108.10 8.88 24,618.78

13 90026 BTI Tech. TM16H/TB830XS 14-May-04 6,144,534.35 108.10 8.88 22,205.02

14 90028 Equipos EMSA-2000/EM830X 29-Dec-05 6,052,096.83 88.30 7.26 20,911.65

15 90029 BTI Tech. TM16H/TB830XS 21-Oct-06 6,521,006.25 78.43 6.45 19,984.49

16 90030 BTI Tech. TM16H/TB830XS 21-Oct-06 6,521,006.28 78.43 6.45 18,076.39

17 90031 Equipos EMSA-2000F 16-Aug-07 5,943,200.77 68.47 5.63 8,141.75

18 90032 Equipos EMSA-2000F 12-Dec-07 5,943,200.77 64.53 5.30 21,695.92

19 90033 BTI Tech. TM16H/TB830XS 08-Sep-07 5,866,024.25 67.70 5.56 14,264.02

20 90034 BTI Tech. TM16H/TB830XS 08-Sep-07 5,866,024.25 67.70 5.56 18,688.19

21 90035 BTI Tech. MRH16/TB830XS 17-Oct-09 7,802,004.18 42.03 3.45 11,036.09

22 90036 BTI Tech. MRH16/TB830XS 17-Oct-09 7,802,004.18 42.03 3.45 14,113.25

23 90037 Equipos EMSA-2000F 17-Oct-09 8,047,985.26 42.03 3.45 8,018.09

24 90038 BTI Tech. TM16HD/TB830XS 24-Sep-10 7,493,832.64 30.63 2.52 8,741.92

25 90039 BTI Tech. TM16HD/TB830XS 24-Sep-10 7,493,832.64 30.63 2.52 10,835.42

26 90040 BTI Tech. TM16HD/TB830XS 09-Nov-10 7,493,832.64 29.10 2.39 8,870.52

27 90041 BTI Tech. TM16HD/TB830XS 09-Nov-10 7,493,832.64 29.10 2.39 6,295.00

28 90042 BREAKER TECHNOLOGY, LTD TM16HD/TB830XS 30-Dec-11 8,085,590.75 15.23 1.25 1,150.50

29 90043 BREAKER TECHNOLOGY, LTD TM16H / TB 830 XS 01-Mar-12 8,085,590.75 13.17 1.08 1,824.50

30 90044 Equipos EMSA-2000F 02-Apr-12 8,527,982.00 12.10 0.99 0.00

31 90045 Equipos EMSA-2000F 02-Apr-12 8,527,982.00 12.10 0.99 276.25

32 90046 Equipos EMSA-2000F 02-Apr-12 8,527,982.00 12.10 0.99

ITH Drill Machine

1 88003 6200 W Cubex Megamatic 01-Jan-95 26,183,876.39 222.13 18.26 505.55

2 88004 6200 Hh Cubex Megamatic 15-Dec-11 32,931,754.40 15.73 1.29 23.33

Volvo Grader

1 39802 Volvo Grader # 2 VOLVO GRADER (G86 24-Oct-03 5,570,753.00 114.87 9.44 13,333.08

U/G Dozer

1 43501 Bulldozer #1 D5K XL 24-May-10 6,028,900.00 34.73 2.85 5,746.00

Shotcrete Machines

1 70100 Spraymec Shotcrete Machine # 100 Spraymec 6050 WPC 16-Jul-04 24,598,836.36 106.00 8.71 4,177.32

2 70200 Spraymec Shotcrete Machine # 200 Spraymec 6050 WPC 11-Dec-08 21,629,768.89 52.37 4.30 4,074.57

Mine Hoist

1 96001 Thompson Hoist 01-Jan-09 51.67 4.25 53,514.97

2 96002 Gch Hoist 01-Jan-09 51.67 4.25 37,051.35

Lube Truck

1 98001 Lube Truck "Getman" A64 31-Aug-09 14,895,000.00 43.60 3.58 2,281.23

Logistic Trucks

1 33070 6X4 Rigid High,T-Ride With Flat Bed Cargo Body # 1 FM370 13-Nov-10 6,085,350.00 28.97 2.38

2 33071 6X4 Rigid High,T-Ride With Flat Bed Cargo Body # 2 FM370 13-Nov-10 6,085,350.00 28.97 2.38

3 37410 Low Profile Truck # 410 EJC-417 07-Mar-09 16,060,750.50 49.50 4.07

4

37415

Low Profile Truck # 410

EJC-417

30-Oct-11

16,916,250.00

17.27

1.42

Volvo Loader

1 35006 Loader 4Yd # 6 L120C 01-Jan-09 9,608,810.00 51.67 4.25

Jackleg / Rock Drill Machines

1 89218 Toyo 24Ld # 218 Toyo24 LD 01-Jan-05 100.37 8.25 14.70


3 of 3

EQUIPMENT CODE

BRAND/MAKE

MODEL


COST

AGE (Months)


HOURS

2 89220 Toyo 24Ld # 220 Toyo24 LD 01-Jan-05 100.37 8.25 264.33

3 89222 Toyo 24Ld # 222 Toyo24 LD 01-Jan-05 81,891.60 100.37 8.25 144.88

4 89224 Toyo T24ld # 224 Toyo24 LD 15-Apr-05 81,891.60 96.90 7.96 117.45



7 89232 Toyo 24Ld # 232 Toyo24 LD 09-Aug-08 130,867.21 56.50 4.64 67.50






13 89317 Furukawa 322D # 317 322D 27-Mar-04 70,000.00 109.70 9.02 131.50

14 89318 Furukawa 322D # 318 322D 27-Mar-04 70,000.00 109.70 9.02 395.40

15 89320 Furukawa 322D # 320 322D 27-Mar-04 70,000.00 109.70 9.02 352.58

16 89601 Pneumatic Rock Drill # 601 OK660 PRD 15-Sep-10 126,786.00 30.93 2.54 189.83












28 89810 Pneumatic Rock Drill # 847 D88L 01-Jan-10 154,768.47 39.50 3.25

Alimak Raise Climbers

1 88016 Alimak # 1 Alimak Raise Climber 01-Jan-10 39.50 3.25





6 88030 Alimak Raise Climber # 6 Alimak Raise Climber 01-Jan-10 39.50 3.25

7 88031 Alimak Raise Climber # 7 Alimak Raise Climber 25-Jan-10 38.70 3.18

8 88032 Arkbro Raise Climber # 8 Alimak Raise Climber 01-Jan-00 161.27 13.25

9 88033 Arkbro Raise Climber # 9 Alimak Raise Climber 01-Jan-00 23,111,647.00 161.27 13.25

PADCAL Operations

April 2013

Annex A: Mine

Annex A-2: Development Cost Indices

Details

HORIZONTAL DRIVING (JUMBO DRILL/LHD)

Company S I Z E O F H E A D I N G

PARTICULAR 3.50m x 3.50m 4.00m x 3.50m 4.00m x 4.00m 5.00m x 4.00m 5.00m x 5.00m

No. of Drilled Holes 40.00 Holes 44.00 Holes 46.00 Holes 52.00 Holes 58.00 Holes

No. of Drilled Holes to be Loaded 39.00 Holes 43.00 Holes 45.00 Holes 51.00 Holes 57.00 Holes

Blast Hole Diameter 45.00 mm Dia. 45.00 mm Dia. 45.00 mm Dia. 45.00 mm Dia. 45.00 mm Dia.

Depth of Holes 2.70 Mtr. 2.70 Mtr. 2.70 Mtr. 2.70 Mtr. 2.70 Mtr.

Rate of Advance 2.40 Mtr. 2.40 Mtr. 2.40 Mtr. 2.40 Mtr. 2.40 Mtr.

Drilled Meter Per Meter Advance 45.00 Drm 49.50 Drm 51.75 Drm 58.50 Drm 65.25 Drm Unit

Particular U/M Cost Qty Amount Qty Amount Qty Amount Qty Amount Qty Amount

1. Blasting Cap #8 Pc 14.00 2.00 11.67 2.00 11.67 2.00 28.00 2.00 28.00 2.00 28.00

- Dynamite, Primer Pc 29.83 39.00 484.79 43.00 534.51 45.00 1,342.50 51.00 1,521.50 57.00 1,700.50

- Anfo (2.80 Kgs/hole) Kg 42.84 92.66 1,653.87 118.42 2,113.65 126.06 5,400.03 148.98 6,381.86 171.98 7,367.11

- Fuse Lighter 7" Pc 3.92 1.00 1.64 1.00 1.64 1.00 3.92 1.00 3.92 1.00 3.92

- Safety Fuse Mtr. 15.10 5.00 31.45 4.88 30.70 4.88 73.67 4.88 73.67 4.88 73.67

- Netex Detonating Fuse Mtr. 14.26 15.00 89.11 15.00 89.11 15.00 213.86 15.00 213.86 15.00 213.86

- Excel (3.60m) Pc 180.07 38.00 2,851.08 43.00 3,226.22 45.00 8,103.06 51.00 9,183.47 57.00 10,263.88

- Cordtex mtrs 47.31 45.00 886.99 15.00 295.66 15.00 709.59 15.00 709.59 15.00 709.59

Total 6,010.58 6,303.15 15,874.63 18,115.87 20,360.52

Sub-Total Cost per Meter 6,010.58 6,303.15 6,614.43 7,548.28 8,483.55

2. Air Hose 6,534.55

- Total Estimated Life (DRM) 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00

- Drilled Meter (DRM) 108.00 118.80 124.20 140.40 156.60

Sub-Total Cost per Meter 147.03 161.73 169.08 191.14 213.19

3. Water Hose 6,534.55

- Total estimated Life (DRM) 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00

- Drilled Meter (DRM) 108.00 118.80 124.20 140.40 156.60


4. Pipe Fittings/Hose Accessories

- Gate Valve, 50.80mm dia. Pcs. 1,285.00 1 1285 1 1285 1 1285 1 1285 1 1285

- Gate Valve, 25.40mm dia. Pcs. 238.91 1 238.9062 1 238.9062 1 238.9062 1 238.9062 1 238.9062

- Spud Male, 25.40mm dia. Pcs. 408.75 1 408.75 1 408.75 1 408.75 1 408.75 1 408.75

- Spud Female, 25.40mm dia. Pcs. 377.14 1 377.14 1 377.14 1 377.14 1 377.14 1 377.14

- Spud Male, 12.70mm dia. Pcs. 150.42 1 150.42 1 150.42 1 150.42 1 150.42 1 150.42

- Spud Female, 12.70mm dia. Pcs. 115.10 1 115.104 1 115.104 1 115.104 1 115.104 1 115.104

- Wing Nut, 25.40mm dia. Pcs. 201.65 1 201.65 1 201.65 1 201.65 1 201.65 1 201.65

- Wing Nut, 12.70mm dia. Pcs. 158.05 1 158.05 1 158.05 1 158.05 1 158.05 1 158.05

- Jointer, 25.40mm dia. Pcs. 55.05 1 55.045 1 55.045 1 55.045 1 55.045 1 55.045

- Jointer, 12.70mm dia. Pcs. 28.89 1 28.885 1 28.885 1 28.885 1 28.885 1 28.885

Total Cost 3,019 3,019 3,019 3,019 3,019

- Total Estimated Life (DRM) 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00

- Drill Meter (DRM) 108.00 118.80 124.20 140.40 156.60


5. G.I. Pipes 6.64464

- G.I. Pipe 50.80mm dia x 20' Lgt 1,459.35 1 1,459.35 1 1,459.35 1 1,459.35 1 1,459.35 1 1,459.35

- G.I. Pipe 25.40mm dia x 20' Lgt 735.75 1 735.75 1 735.75 1 735.75 1 735.75 1 735.75

Total Cost 2,195.10 2195.0965 2195.0965 2195.0965 2195.0965


6. Drilling Cost

- Labor

- Operator 1 1,117.48 465.62 465.62 465.62 465.62 465.62

- Mine Helper 1 1,052.97 438.74 438.74 438.74 438.74 438.74

- Mechanic/ Electrician 0.33 2,170.45 298.44 298.44 298.44 298.44 298.44

- Supervisor 0.33 1,680.71 231.10 231.10 231.10 231.10 231.10


- Drill String

- Button Bit @ 252 drm Pc 2,207.00 394.11 384.72 433.52 423.19 453.22 442.43 512.34 500.14 571.46

- Shank Adapter @ 2000 drm Pc 9,333.00 209.99 230.99 241.49 272.99 304.49

- Drilling Rod @ 1500 drm Pc 10,641.00 319.23 351.15 367.11 415.00 462.88

- Grinding Cup @ 1500 drm Pc 6,458.00 193.74 213.11 222.80 251.86 280.92

- Deisel Fuel (.084 Li/ Drm) Ltr 41.00 108.00 154.98 118.8 170.48 124.2 178.23 140.4 201.47 156.6 224.72

- Oil/ Lubricants (0.46 Li/ drm) Ltr 88.00 1,821.60 2,003.76 2,094.84 2,368.08 2,641.32

Sub-Total 3,093.65 3,403.01 3,557.70 4,021.74 4,485.79


- Tire and Acessories. (P58,889.00/tire) Pc 64,189.01 0.01 270.83 270.83 270.83 270.83 270.83

- Maintenance (P210.37/ drm) Drm 220.89 108.00 3,921.83 118.8 4,314.04 124.2 4,510.10 140.4 5,098.38 156.6 5,686.65

Sub-Total 4,192.66 4,584.87 4,780.94 5,369.21 5,957.48


7. Muckhandling Cost

- Labor

- Operator 1 1,117.48 465.62 465.62 465.62 465.62 465.62

- Mine Helper 0 1,052.97 0.00 0.00 0.00 0.00 0.00

- Mechanic/ Electrician 0.33 2,170.45 298.44 298.44 298.44 298.44 298.44

- Supervisor 0.33 1,680.71 231.10 231.10 231.10 231.10 231.10


- Deisel Fuel (0.959ltr/ Mt) Ltr 41.00 33.08 541.86 37.8 619.27 43.2 707.74 54 884.68 67.5 1,105.85

- Oil/ Lubricants (0.166 Ltr/ Mt) Ltr 88 201.32 230.08 262.94 328.68 410.85

Sub-Total 743.18 849.35 970.69 1,213.36 1,516.70

- Cola 0.00 0.00 0.00 0.00 0.00

Sub-Total Cost per Meter 743.18 849.35 970.69 1,213.36 1,516.70

- Tire (P9.87 /Mton) Pc 9.87 135.98 155.41 177.61 222.01 277.51

- Maintenance (P74.18/ Mt) MT 80.86 33.08 1,114.30 37.8 1,273.49 43.2 1,455.41 54 1,819.26 67.5 2,274.08

Sub-Total 1,250.28 1,428.89 1,633.02 2,041.27 2,551.59


8. Power Cost (Ventilation Flow)

- Average Operating Time (Blower/Fan) Hrs. 8.00 8.00 8.00 8.00 8.00

- Cost per KWH (6.52) Kw 6.52 6.52 6.52 6.52 6.52

- Motor Rating @ 20HP Kw 0.746 26.81 26.81 26.81 26.81 26.81


9. Power Cost (Jumbo Machine)

- Average Operating Time Machine Hrs. 4.00 4.00 4.00 4.00 4.00

- Cost per KWH Kw 6.52 6.52 6.52 6.52 6.52

- Motor Rating @ 40HP Kw 0.81314 55.00 55.00 55.00 55.00 55.00


10. Labor Cost (Company) 2

- Miner/Helper Rate @45% Pipe Men 0.45 1,052.97 473.84 1,014.33 456.45 1,014.33 456.45 1,014.33 456.45 1,014.33 456.45

- Electric/Helper Rate 0.45 2,170.45 976.70 2,090.80 940.86 2,090.80 940.86 2,090.80 940.86 2,090.80 940.86

- Supervisor @ 25% Regular Rate 0.25 1,680.71 420.18 1,619.04 404.76 1,619.04 404.76 1,619.04 404.76 1,619.04 404.76


Total Cost per Meter 20,371.62 21,658.14 22,663.73 25,355.12 28,210.67

SUMMARY:

LABOR COST 3,208.51 3,179.90 3,179.90 3,179.90 3,179.90

MATERIALS/ SUPPLIES COST 10,539.75 11,284.05 11,889.45 13,584.31 15,341.27

TIRES/ MAINTENANCE COST 5,442.94 6,013.76 6,413.95 7,410.48 8,509.07

POWER COST 1,180.42 1,180.42 1,180.42 1,180.42 1,180.42

Total Cost per Meter With Labor 20,371.62 21,658.14 22,663.73 25,355.12 28,210.67

VERTICAL DRIVING

COMPANY

PARTICULAR

Conventional Raise Driving (2.5m x 2.5m) Alimak raise Driving

Standard Double Compartment 2.50m x 2.50m 3.00m x 3.00m

No. of Drilled Holes 20.00 Holes 20.00 Holes 20.00 Holes 24.00 Holes

No. of Drilled Holes to be Loaded 19.00 Holes 19.00 Holes 19.00 Holes 23.00 Holes

Blast Hole Diameter 39.00 mm dia. 39.00 mm dia. 39.00 mm dia. 39.00 mm dia.

Depth of Holes 1.50 Mtr. 1.50 Mtr. 1.50 Mtr. 1.50 Mtr.

Rate of Advance

Drilled Meter Per Meter Advance

1.20 Mtr. 1.20 Mtr. 1.20 Mtr. 1.20 Mtr. 25.00 Drm 25.00 Drm 25.00 Drm 30.00 Drm

Particular

U/M

Unit

Cost

Qty

Amount

Qty

Amount

Qty

Amount

Qty

Amount

1. Explosive/Acessories

- Blasting Cap #8 Pc 14.00 2.00 23.33 2.00 23.33 2.00 23.33 2.00 23.33

- Dynamite, 32mm (7 pcs/hole x 17) Pc 29.83 75.00 1,864.58 75.00 1,864.58 75.00 1,864.58 100.00 2,486.11

- Fuse Lighter 7" Pc 3.92 1.00 3.27 1.00 3.27 1.00 3.27 1.00 3.27

- Netex Detonating Fuse Mtr. 14.26 20.00 237.62 60.00 712.86 20.00 237.62 40.00 475.24

- Exel (3.60m) Pc 101.48 10.00 845.66 10.00 845.66 10.00 810.86 10.00 845.66

- Blasting Stick Pc 13.08 1.00 10.90 1.00 10.90 1.00 10.90 1.00 10.90

Total 2,985.36 3,460.60 2,950.56 3,844.51

Sub-Total Cost per Meter 2,985.36 3,460.60 2,950.56 3,844.51

2. Timber/ Lumber

- 6" x 8" x 10' Bdft 75.21 20.00 1,253.50 40.00 2,507.00 2.00 125.35 2.00 125.35

- 4" x 6" x 10' Bdft 75.21 40.00 2,507.00 40.00 2,507.00 4.00 250.70 4.00 250.70

- 3" x 8" x 10' Bdft 70.85 20.00 1,180.83 83.33 4,920.14 2.00 118.08 2.00 118.08

- 2" x 4" x 10' Bdft 78.48 4.44 290.38 4.44 290.59 0.44 29.04 0.44 29.04

- C.W. Nails kgs 54.50 2.00 90.83 2.00 90.83 0.20 9.08 0.20 9.08

Sub-Total 5,322.54 10,315.57 532.25 532.25

Sub-Total Cost per Meter 5,322.54 10,315.57 532.25 532.25

2. Air Hose Lgt 6,534.55

- Total Estimated Life (DRM) Drm 2,000.00 2,000.00 2,000.00 2,000.00

- Drilled Meter (DRM) Drm 30.00 30.00 30.00 36.00

Sub-Total Cost per Meter 81.68 81.68 81.68 98.02

3. Water Hose Lgt 4,883.20

- Total Estimated Life (DRM) Drm 2,000.00 2,000.00 2,000.00 2,000.00

- Drilled Meter (DRM) Drm 30.00 30.00 30.00 36.00



- G.I. Pipe, 50.80mm dia x 20' Pcs. 984.27 1 984.27 1 984.27 1 984.27 1 984.27

- G.I. Pipe, 25.40mm dia x 20' Pcs. 735.75 1 735.75 1 735.75 1 735.75 1 735.75

- Gate Valve, 50.80mm dia Pcs. 909.06 1 909.06 1 909.06 1 909.06 1 909.06

- Gate Valve, 25.40mm dia Pcs. 422.92 1 422.92 1 422.92 1 422.92 1 422.92

- Male, Spud, 25.40mm dia. Pcs. 408.75 1 408.75 1 408.75 1 408.75 1 408.75

- Female, Spud, 25.40mm dia. Pcs. 377.14 1 377.14 1 377.14 1 377.14 1 377.14

- Male, Spud, 12.70mm dia. Pcs. 150.42 1 150.42 1 150.42 1 150.42 1 150.42

- Female, Spud, 12.70mm dia. Pcs. 115.10 1 115.104 1 115.104 1 115.104 1 115.104

- Wing Nut, 12.70mm, dia. Pcs. 49.05 1 49.05 1 49.05 1 49.05 1 49.05

- Wing Nut, 25.70mm, dia. Pcs. 201.65 1 201.65 1 201.65 1 201.65 1 201.65

- Jointer, 25.40mm dia. Pcs. 55.045 1 55.045 1 55.045 1 55.045 1 55.045

- Jointer, 12.70mm dia. Pcs. 28.885 1 28.885 1 28.885 1 28.885 1 28.885

Total Cost 4,438.04 4,438.04 4,438.04 4,438.04

- Total Estimated Life (DRM) 2,000.00 2,000.00 2,000.00 2,000.00

- Drill Meter (DRM) 30.00 30.00 30.00 36.00


6. Drilling Cost

- Labor

- Operator 1 1,117.48 1,117.48 1,117.48 1117.48 1117.48

- Mine Helper 2 1,052.97 2,105.95 2,105.95 2105.95 2105.95

- Mechanic/ Electrician 0.33 2,170.45 716.25 716.25 716.25 716.25

- Supervisor 0.33 1,680.71 554.64 554.64 554.64 554.64


- Drill steel String (300 drm/rod) 3,908.82 30 325.73 30 325.73 30 325.73 36 390.88

- Grinding Wheel 2,887.22 72.18 72.18 72.18 86.62

- Expansion Rod 1,151.04 1 0.00 0.00 959.20 959.20

- Oil/ Lubricants (0.033 Li/ drm) 104.7163 86.39 86.39 86.39 103.67

Sub-Total 484.31 484.31 1,443.51 1,540.37

Sub-Total Cost per Meter 484.31 403.59 1,443.51 1,540.37

7. Maintenance

- Maintenance (Jackleg) 7.6954 30 192.39 30 192.39 30 192.39 36 230.86

- Maintenance (Alimak) 888.375 per meter 888.38 888.38

Sub-Total Cost per Meter 192.39 192.39 1,080.76 1,119.24

8. Compressed Air Cost 3.97 3.97 3.97 3.97

- Drilled Meters 30.00 30.00 30.00 36.00


9. Muckhandling Cost

- Labor

- Operator 1 1,117.48 1,117.48 1,117.48 1,117.48 1,117.48

- Mine Helper 0 1,052.97 0.00 0.00 0.00 0.00

- Mechanic/ Electrician 0.33 2,170.45 716.25 716.25 716.25 716.25

- Supervisor 0.33 1,680.71 554.64 554.64 554.64 554.64


- Deisel Fuel (0.7335 ltr/ Mt) Ltr 38.15 16.875 393.51 16.875 393.51 16.875 393.51 24.3 566.66

- Oil/ Lubricants (0.34 Ltr/ Mt) Ltr 104.7163 500.67 500.67 500.67 720.97

Sub-Total Cost per Meter 894.19 894.19 894.19 1,287.63

- Tire (P9.87 /Mton) Pc 10.76 16.875 151.24 16.875 151.24 16.875 151.24 24.3 217.79

- Maintenance (P74.18/ Mt) MT 80.85 1,136.96 1,136.96 1,136.96 1,637.23


14. Labor Cost (Company)

- Miner/Helper @ 45% Regular Rate Hrs. 2,170.45 976.70 976.70 976.70 976.70

- Supervisor @ 10% Regular Rate Kw 1,680.71 168.07 168.07 168.07 168.07


9. Power Cost (Ventilation)

- Average Operating Time Machine Hrs. 8.00 8.00 8.00 8.00

- Cost per KWH Kw 6.52 6.52 6.52 6.52

- Motor Rating @ 20HP Kw 0.746 26.81 26.81 26.81 26.81


Total Cost per Meter 19,319.39 24,706.94 16,341.88 18,390.92

SUMMARY:

LABOR COST 6,689.54 6,689.54 6,689.54 6,689.54

MATERIALS/ SUPPLIES COST 9,983.85 15,371.39 6,117.96 7,561.70

TIRES/ MAINTENANCE COST 1,480.59 1,480.59 2,368.97 2,974.25

POWER COST 1,165.42 1,165.42 1,165.42 1,165.43

Total Cost per Meter w/ Labor 19,319.39 24,706.94 16,341.88 18,390.92

ROCKBOLT INSTALLATION

COMPANY

Mechanized

A. Number of drilled holes per ring 9 Holes

B. Hole diameter 39 mm Dia.

C. Depth of Holes 2.13 Mtrs (7')

1. Materials and Supplies Cost

Description U/M Qty. U/C Total

a) Def. bars 3/4" Dia. Pc 1 195.38 195.38 /Pc

b) MS Plate 1/4" thick Sht 1 21.50 21.50

c) Cemextra Capsules pcs 10 12.06 120.55

d) Nut 3/4" pcs 1 10.00 10.00

Sub-total 347.44 /Pc

2. Labor Fabrication (Rock Bolt)

a) Machinist (350 pcs/ day) Men 2 1,117.48 2,234.96

Productivity 350 pcs/day 6.39 /Pc

Total Cost 353.82

3. Fabrication Cost of Base plate

a) Oxygen Cyl 0.0055 457.80 2.52

b) Acetylene Cyl 0.00275 893.80 2.46

c) Labor men 0.0055 1,052.97 5.79

Total Cost 10.77 /pc.

2. Pipe Fittings/Accessories

a) Pipe Fittings/Acc. Cost = 3,200.45

b) Estimated Life = 2,000.00 drm

c) Drilled Meters 2.3217 3.72 /pc.

3. Compressed Air Cost (RDM)

'= (P0.0093/Ft Cubic x 1 Unit x 13 (0.80eff)

(Unit RDM)

9 Holes x 2.13 drm/hole

Cost = P 6.28 x 19.17

drm 9

drm

pc.

Sub - Total = Per Piece

4. Drilling/Installation Cost

4.1 Drilling Cost Productivity =18 pcs/ shift

- Labor

- Operator Miner 1 1,117.48 1,117.48

- Mine Helper 1 1,052.97 1,052.97

- Mechanic/ Electrician 0.33 2,170.45 716.25

- Supervisor 0.33 1,680.71 554.64

Sub-Total 3,441.34 191.19

- Drill String

- Button Bit @ 252 drm Pc - 371.80 3,127.99 2.13 8.41

- Shank Adapter @ 2000 drm Pc - 2,000.00 10,297.87 2.13 10.97

- Drilling Rod Pc - 568.70 11,425.37 2.13 42.79

- Deisel Fuel (.084 Li/ Drm) Ltr - 0.08 38.15 2.13 6.83

- Oil/ Lubricants (0.46 Li/ drm) Ltr - 0.46 104.72 2.13 102.60

- Maintenance (P54.85/ drm) Drm 193.75 193.75 2.13 200.47

Sub-Total 372.07

5. Power Cost (Robolt Machine)

- Average Operating Time Machine Hrs. 4.40

- Cost per KWH Kwh 6.52

- Motor Rating @ 40HP Kw 0.746 55.00

Sub-Total 87.66

6. Power Cost (Ventilation blowers) Sub-Total 39.146

Total Cost per pc 1,058.37

Total Cost per meter advance (3.5x3.5) 7,408.60



SUMMARY:

LABOR COST 203.36

MATERIALS/ SUPPLIES COST 527.73

TIRES/ MAINTENANCE COST 200.47

POWER COST 126.81

Total Cost per Meter w/ Labor 1,058.37

SHOTCRETING COST PER CUBIC METER (w/ Synthetic Fiber)

Assumption: 1 day = 10.35 cubic meter (SPRAYMEC)

Particulars

U/M

Unit/

Cost

SPRAYMEC

Qty. Amount

1. Materials and Supplies

- Crushed Sand Cu.mtr. 593.85 7.56 433.77

- Cement Bag 188.57 51.75 942.85

- Admixture, Set Accelerator Ltr 65.13 103.50 651.34

- Glenium Hyper Plasticizer Ltr 131.50 28.90 367.18

- Hoses mtr 6,431 -

- Synthetic Fiber Kg. 407.38 42.85 1,686.54

Sub-total 4,081.68

2. Delivery Cost

- Crushed Sand Mt 74.00 9.52 68.07

- Cement Mt 74.00 2.88 20.59

Sub-total 88.66


- Labor

Operator 1,117.48 1.00 323.91

Helper 1,052.97 1.00 305.21

Supervisor 1,680.71 1.00 121.79

Sub-total 3,851.17 750.91

4. Maintenance Cost,Oil & Lubricants

- Maintenance Cost (mobile mixer) P/cum 81.83

- Maintenance Cost (shotcrete machine) P/cum 719.47

Sub-total 801.29

- Diesel Fuel (transit mixer/spraymec) Ltr 43.32 98.19 410.94

- Oil & Lubricants (transit mixer/spraymec) Ltr 87.28 6.46 54.47

Sub-total 465.42

5. Batching Plant Operation

- Labor Cost 3,851.17 0.05 18.60

- Maintenance Cost 1.51

- Power Cost 35HP kwh 6.27 78 47.45

Sub-total 67.57

6. Power Cost (Shot. Machine)

- Ave. Optng. Time of Machine Hrs 3.00

- Cost per Kwh P 6.27

- Motor Rating Kw 45

Sub-total 81.35

7. Power Cost (Ventilation)

- Ave Optng Time Hrs 6.00

- Cost Per Kwh P 6.27

- Motor Rating @ 10 HP Kw 7.46

Sub-total 189.81

Total cost 5,725.38

Total cost per cu. m 6,526.67

SUMMARY:

LABOR COST 769.51

PURCHASED COST 88.66

MATERIALS/ SUPPLIES COST 4,547.09


POWER COST 318.61


CABLEBOLTING ACTIVITY

Company

Productivity per shift = 5 pcs/shift

1. Materials / Supplies Cost U/M U-Cost Qty Amount

- Barrel Wedge Lock Cost Pcs. 245.25 1.00 245.25

- Cement Cost Bag/ Drm Bag 188.57 0.79 148.78

- Base Plate 1/4 x 200mm x 200mm Pcs. 40.44 1.00 40.44

Sub-total 434.47

Cost per DRM 434.47

2. Drilling Cost (Base on Fahole Drilling)

- Labor

- Operator 1,025.21 1 1,025.21

- Mine Helper 966.03 1 966.03

- Mechanic/ Electrician 1,991.24 0.33 657.11

- Supervisor 1,541.94 0.33 508.84

Sub-Total 3,157.19

Sub-Total Cost per Drm 44.76

- Button Bits 64mm (291.9 Drm) Pcs. 5,275.00 1 18.07

- MFT Rod (1297.1 Drm) Pcs. 13,015.00 1 10.03

- Shank Adopter (719.9Drm) Pcs. 9,122.54 1 12.67

- Oil/ Lubricants (0.46 Li/ drm) Ltrs 90.67 1 41.71

- Deisel Fuel (0.084 Ltr/Drm) Ltrs 41.00 1 3.44

- Maintenance (Fanhole Machine) Pcs. 60.65 1 60.65


3. Cable Bolt Installation Cost

Components Existing Cost per Drilled Meter

a) Labor

Miner 1 1,025.21 1,025.21

Helper 1 966.03 966.03

Supervisor 0.25 1,541.94 385.49

Sub-total 2,376.73

Cost per DRM 79.22

b) Maintenance Grouting Pump 0.0 11.68

d) Grout Tube 5.34 1.0 5.34

e) Handling/ Hauling Cost 0.04 85.1 3.36

Cost per DRM 20.38


- Average Operating Time (Blower/Fan) Hrs. 7.00


- Motor Rating @ 20HP Kw 26.81

Sub-Total 1,223.69


5. Power Cost (Fanhole Machine)

- Average Operating Time Machine Hrs. 7.00



Sub-Total 1,369.31



- Miner/Helper Rate @45% Pipe Men 0.45 1,025.21 461.34

- Electric/Helper Rate 0.45 1,025.21 461.34

- Supervisor @ 25% Regular Rate 0.25 1,541.94 385.49

Sub-Total 1,308.17


Total Cost per DRM 780.70

Total Cost Per Drilled Meter 780.70

Drilled Meter/Pc.(DRM) 6.00

Pcs/Cablebolt Pattern (Pcs.) 5.00

Spacing/Cablebolt Pattern (Meters) 1.00

Total Cost Per Meter Advance 23,420.99

SUMMARY:

LABOR COST 142.52

PURCHASED COST 3.36



POWER COST 36.75

Total Cost per Meter w/ Labor 780.70

STEEL SET FABRICATION AND INSTALLATION COST

Company

Draw Point U/M Qty. Unit Cost Amount

1. Materials / Supplies Cost

- WF 8" x 8" x 20' Pcs. 1.5 10,800.30 16,200.45

- Oxygen Cyl. 0.25 441.00 110.25

- Acetylene Cyl. 0.125 861.00 107.63

- MS Steel Plate1/2" x 4' x 8' Pcs. 0.06 - -

- Welding Rod Kls. 10 84.12 841.16

Sub-total 17,259.48

2. Fabrication Cost

- Two (2) men Hr 3 273.80 821.39

- Supervisor (25%) Hr 3 53.00 159.01

Sub-total 980.40

3. Installation Cost (Company)

- Labor+ 25%Supervisor Men 4 1,052.97 4,597.39

- Depreciation -

- Drilling Cost (Dowel) Men 2 1,052.97 2,105.95

- Drill Steel (300drm/rod) 300 4,131.09 13.77

- Griding Wheel 1000 5,167.08 5.17

- Oil/ Lubricant (0.033 Ltr/drm) 0.033 104.72 3.46

- Maintenance (Jackleg) 12 8.44 101.26

Sub-total 6,826.99

3. Power Cost (Fabrication/ Installation)

- Welding Machine (45 HP) KWH 211.13 10.46 2,208.62

Sub-total 2,208.62

Total Cost/Set 27,275.49

SUMMARY:

LABOR COST 7,683.74

PURCHASED COST -

MATRIALS/ SUPPLIES COST 17,281.87


POWER COST 2,208.62


CONCRETING

Given : Area of Conc.forms

Top = 138.00 Sq.M Big Size = 1.40 Sq. M

Sides = 194.00 Sq.M Small Size = 1.03 Sq. M

Thickness = 0.70 Mts No. of Nails 4“ = 16.00 Pc.

Total Volume = 368.20 Cu.m No. of Nails 2“ = 84.00 Pc.

Total area = 332.00 Sq.M 1Kl Nails 2“ = 352.00 Pcs

Total No. of Forms =

237.14

1Kl Nails 4“ = 58.00 Pcs

1 Cyl 80 pcs of Drum cut

1/2 Cy 80 pcs of Drum cut 2“ x 2 pcs per 1 form

Productivity

1 day 32 pcs of forms

Materials Supplies QTY U-M Unit Cost Amount

1. Fabrication of Forms

a. Lumber 2“ x 4“ x 10' 474 Pcs 323.44 462.06

b. C. W. Nails 2“ 113 Kgs 48.88 16.66

c. C. W. Nails 4“ 131 Kgs 57.2 22.54

d. Oxygen 6 Cyl 335.92 6.07

e. Acetylene 3 Cyl 700.96 6.33

f. Labor (See attached sheet) 237 157.70 112.64

Sub− Total 626.31

Cost per Sq. Meter 159.00 626.31

2. Forming

a. Lumber 2“ x 4“ x 10' 120.00 pcs 323.44 116.91

b. Lumber 1“ x 10“ x 10' 140.00 Pcs 476.32 200.86

b. Lumber 3“ x 8“ x 10' 40.00 Pcs 1,401.92 168.91

c. C. W. Nails 4“ 25.00 Kgs 57.2 4.31

d. C. W. Nails 2“ 12.00 Kgs 47 1.70

e. Def. Bars 1“ Dia. 150.00 Pcs 776 350.60

f. Cutting Rod 40.00 kls 110.481 13.31

g. Welding Rod 40.00 kls 84.1155 10.13

i. Labor 332.00 Sq.m 1,738.85 1,738.85

Sub− Total 2,605.58

Cost per Sq. Meter 2,605.58

3. Re-bars Installation

a. Def. Bars 1“ Dia. 869.50 Pcs 776 2,032.33

b. Welding Rod 40.00 Kls 84.1155 10.13

c. Cutting rod 40.00 Kls 112.875 13.60

d. G.I. Wire Gage #16 20.00 Kls 110.481 6.66

e. Labor 869.50 pcs 386.29 1,011.69

Sub− Total 3,074.41

Cost per Sq. Meter 3,074.41

4. Dowel Fabrication

a. Def. Bars 1“ Dia. 76.20 Pcs 776 178.11

b. Oxygen 4.00 cly 441 5.31

c. Acetylene 2.00 cly 861 5.19

d. Labor 381.00 Pcs 72.94 83.70

Sub− Total 272.31

Cost per Sq. Meter 272.31

5. Dowel Installation

a. Air Lube 25.00 ltrs 96.10 7.24

b. Drill String 4.00 pcs 3,437.10 41.41

c. Grinding Wheel 1.67 2,892.52 14.55

d. Labor 381.00 pcs 264.73 300.46

Sub− Total 363.65

Cost per Sq. Meter 363.65

6. Concrete Pouring

a. Cement 4,418.40 bags 188.92 6,120.88

b. Gravel 260.00 Mt 629.20 1,199.62

c. Crushed Sand 441.84 Mt 762.32 2,469.92

d. Admixture (Meyco) 1,841.00 Ltr 65.25 880.93

d. Alvenuis pipes 1.25 Lgth 15,177.81 515.27 11,186.61

Cost per Cu. Meter 11,186.61

6.1 Labor Cost for mixing (8 hrs= 52 Cu.m) 509.90

6.2 Labor Cost For Pouring 469.12

Cost per Cu. Meter 979.02

7. Concrete Hauling

a. − Fuel 7.34 ltrs/cu.m 43.40 318

− Oil/ Lubricants 3.23 ltrs/cu.m 91.52 296

b. Energy Cost 73.26 P/cu.m 0

c. Maintenance Cost

c.1 Normet Mobile Mixer Maintainance 150.56 P/cu.m 368.20 151

c.2 Normet Mobile Mixer Tires 15.38 P/cu.m 368.20 15

c.4 Concrete Mixers 27.19 P/ cu.m 368.20 27

c.5 Pump concrete Placer 27.21 P/cu.m 368.20 27

c.6 1015 ML Batching Plnt Maint. 150.56 P/cu.m 368.20 151

d. Hauling Cost from bumolo

d.1 Cement 176.00 Mt 89.00 43

d.2 Gravel 260.00 Mt 58.00 41

d.3 Sand 441.00 Mt 58.00 69

Sub− Total 1,138

Cost per Cu. Meter 1,137.90

Total Cost per Cubic meter 20,245.79

Finish Size Assumed Conc./ mtr

@ 0.70 thickness Cost/ mtr. Advance

5.0m x 4.0m 10.08 204,077.59

4.5m x 4.0m 9.73 196,991.56

4.0m x 4.0m 9.38 189,905.53

4.0m x 3.5m 8.68 175,733.48

3.5m x 3.5m 8.33 168,647.45

3.5m x 3.0m 7.63 154,475.40

3.0m x 3.0m 7.28 147,389.37

SUMMARY:

LABOR COST 4,226.37

PURCHASED COST 153

MATERIALS/ SUPPLIES COST 15,495.56

TIRES/ MAINTENANCE COST 371

POWER COST 0


Total Cost per Meter w/o Labor 16,019.42

FANHOLE DRILLING (COMPANY)

Particular UM U-Cost QTY Cost

Materials / Supplies

1. Air Hose Lgth 6,294.75 1.00

- Total Estimated Life (DRM) Drm 2000


2. Water Hose Lgth 4,194.75 1.00

- Total Estimated Life (DRM) Drm 2,000.00



- G.I. Pipe, 50.80mm dia x 20' Pcs. 1,816.07 1.00 0.91

- G.I. Pipe, 25.40mm dia x 20' Pcs. 708.75 1.00 0.35

- Gate Valve, 50.80mm dia Pcs. 875.70 1.00 0.44

- Gate Valve, 25.40mm dia Pcs. 407.40 1.00 0.20

- Male, Spud, 25.40mm dia. Pcs. 393.75 1.00 0.20

- Female, Spud, 25.40mm dia. Pcs. 363.30 1.00 0.18

- Male, Spud, 12.70mm dia. Pcs. 144.90 1.00 0.07

- Female, Spud, 12.70mm dia. Pcs. 110.88 1.00 0.06

- Wing Nut, 12.70mm, dia. Pcs. 152.25 1.00 0.08

- Wing Nut, 25.70mm, dia. Pcs. 194.25 1.00 0.10

- Jointer, 25.40mm dia. Pcs. 53.03 1.00 0.03

- Jointer, 12.70mm dia. Pcs. 30.45 1.00 0.02

Total Cost 2.63

- Total Estimated Life (DRM) 2000


4. Plastic Pipe (Hose) Mtr 33.00 1 33.00


5. Drilling Cost

- Labor

- Operator 1,589.10 1 22.52

- Mine Helper 1,449.05 1 20.54

- Mechanic/ Electrician 2,986.00 0.5 21.16

- Supervisor 2,312.91 0.5 16.39

Sub-Total 80.62


- Button Bits 65mm (291.9 Drm) Pcs. 5,438.52 1 18.63

- MFT Rod (1297.1 Drm) Pcs. 12,521.82 1 9.65

- Shank Adopter (719.9Drm) Pcs. 9,568.17 1 13.29

- Grinding Cap (291.9 Drm) Pcs. 4,184.97 0.2 2.94

- Oil/ Lubericants (0.40 Li/ drm) Ltrs 84.74 1 35.08

- Deisel Fuel (0.084 Ltr/Drm) Ltrs 36.75 1 3.09

- Maintenance (Fanhole Machine) Pcs. 174.49 -



- Average Operating Time (Blower/Fan) Hrs.

- Cost per KWH Kwh

- Motor Rating @ 20HP Kw

Sub-Total -

Sub-Total Cost per Drm -

9. Power Cost (Fanhole Machine)

- Average Operating Time Machine Hrs.

- Cost per KWH Kwh


Sub-Total -

Sub-Total Cost per Drm -


- Miner/Helper Rate @45% Pipe Men 0.45 1,449.05 652.07

- Electric/Helper Rate 0.45 1,589.10 715.10

- Supervisor @ 30% Regular Rate 0.3 2,312.91 693.87

Sub-Total 2,061.04


Total Cost per DRM 233.54

SUMMARY:

LABOR COST 109.99

PURCHASED COST -


TIRES/ MAINTENANCE COST -

POWER COST -


Total Cost per Meter w/o Labor 123.55

-

UNDERCUTTING COST INDEX PER DRM AT UCL

(Asumption 2 rings/ Blast = 46 Holes = 439.20 drm)

Particular

Qty.

U/M

Unit

Cost

Total

Cost 1. Materials and Supplies

1.1. TE 400 (Explosive and Accessories)

- Stope Prime 4 Pcs. 193.8 21.11

- ANFO )Pre-Mixed) 1,12 Kg. 47.0 125.29

- Exel MS Delays ar 17.40 Mtrs. 4 Pcs. 195.1 20.43

- Powergel Magnum 3151, 32mm 92 Pcs. 28.7 6.26

- OBC with 10' Satefy Fuse 2 Pcs. 38.0 0.17

- Cordtex 5 (Netex) 20 Mtrs. 13.7 0.65

- Low Static Hose at 60.00 Mtrs. 6 Mtrs. 1,043.5 14.26

- Fuse Lighter 2 Pcs. 3.8 0.02

Sub-Total 188.20

1.2. Hoses

- Air Hose 1 Lgth 6,294.75 6,546.54

Sub-Total 14.91

6,734.74

Materials and Supplies Total Cost

439.20 drm

Sub-Total 203.10 Per DRM


- Miner 3 Men 1,537.82 4,613.45

- Mine Helper 3 men 1,449.05 4,347.14

- Supervisor 1 men 2,312.91 2,312.91

11,273.49

Total cost Per DRM 25.67

3. Power Cost

- Average Time Hrs. 8



Sub-Total

4. Muckhandling Cost 232.80 Buckets @ 2 Rings Blasted

- Labor

- Operator 1.00 1,589.1 6.83


- Supervisor 0.50 2,390.0 10.27

Sub-Total Cost per Meter 29.92

- Tire (P9.87 /Mton) Pc 10.85 1.10

- Deisel Fuel (0.959ltr/ Mt) Ltr 105.00 36.75 12.99

- Oil/ Lubricants (0.166 Ltr/ Mt) Ltr 192.63 100.8735 65.43

- Maintenance (P74.18/ Mt) MT 85.30 8.98

Sub-Total 88.50

Sub-Total Cost per DRM 88.50


SUMMARY:

LABOR COST 55.59

PURCHASED COST -

MATRIALS/ SUPPLIES COST 281.52


POWER COST -



UNDERCUTTING COST INDEX PER DRM AT TRENCH

(Asumption 2 rings/ Blast = 18 Holes = 338.20 drm)

Particular

Qty.

U/M

Unit

Cost

Total

Cost 1. Materials and Supplies

1.1. TE 400 (Explosive and Accessories)

- Stope Prime 18 Pcs. 193.8 10.32

- ANFO )Pre-Mixed) 1120 Kg. 41.3 136.66

- Exel MS Delays ar 24.00 Mtrs. 18 Pcs. 195.1 10.38

- Powergel Magnum 3151, 32mm 3 Pcs. 28.7 3.06

- OBC with 3 m Satefy Fuse (Codtex 10) 2 Pcs. 38.0 0.22

- Cordtex 5 (Netex) 15 Mtrs. 13.7 0.61

- Low Static Hose at 60.00 Mtrs. 6 Mtrs. 1,043.5 18.51

- Fuse Lighter 2 Pcs. 3.2 0.02

Sub-Total 180

1.2. Hoses

- Air Hose 1 Lgth 6999.3 6,999

Sub-Total 21

Materials and Supplies Total Cost 7,179.08

338.20 drm

Sub-Total 200.47 Per DRM


- Miner 2 Men 1,076.47 2,152.94

- Mine Helper 2 men 1,014.33 2,028.66

- Supervisor 0.5 men 1,619.04 809.52

4,991.12

Sub-Total 14.76

3. Power Cost

- Average Time Hrs. 8



Sub-Total 3.96

4. Muckhandling Cost 284.58 Buckets @ 2 Rings Blasted

- Labor

- Operator 1.00 1,076.5 3.78

- Mine Helper 0.00 700.4 -


- Supervisor 0.33 1,619.0 5.69

Sub-Total Cost per Meter 13.04

- Tire (P9.87 /Mton) Pc 10.85 1.15

- Deisel Fuel (0.959ltr/ Mt) Ltr 105.00 36.75 13.56

- Oil/ Lubricants (0.166 Ltr/ Mt) Ltr 192.63 100.87 68.28

- Maintenance (P74.18/ Mt) MT 85.30 8.62

Sub-Total 91.61

Sub-Total Cost per DRM 91.61


SUMMARY:

LABOR COST 27.79

PURCHASED COST -

MATRIALS/ SUPPLIES COST 282.32


POWER COST 3.96



TIMBERING COST PER SET

Company Unit Total U/M Cost (P) Cost (P)

1. Timbering

2 Pcs. Post 6" x 8" x 10' 80 Bd.Ft. 70.0 5,600.00

1 Pc. Timber 6" x 8" x 10' 40 Bd.Ft. 70.0 2,800.00

2 Pc. Bridge Cap, 6" x 8" x 10' 80 Bd.Ft. 70.0 5,600.00

2 Pcs. Block 6" x 8" x 10' 40 Bd.Ft. 70.0 2,800.00

6 Pcs. Top Logging, 4" x 6" x 10' 120 Bd.Ft. 67.0 7,980.86

7 Pcs. Side Logging, 4" x 6" x 10' 140 Bd.Ft. 67.0 9,294.40

1 Pc. Scab, 3" x 8" x 10' 20 Bd.Ft. 67.0 1,340.00

5 Pcs. Additional Logging 4" x 6" x 10' 102.92 Bd.Ft. 67.0 6,891.84

10 Pcs. Wedges 4 Bd.Ft. 33.0 132.00

Sub-total 626.92 21,219.55

2. Common Nail

6 Kls CWNails 2 Kl 46.4 92.80

Sub-total 92.80

3. Labor Cost

2 men/ set 2,090.80 2 4,181.60

Mark-up 1,619.04 0.04 60.63

Labor cost 4,242.24

Total Cost Per Set 25,554.59

Total Cost Per Set/ meter Advance 25,554.59

SUMMARY:

LABOR COST 4,242.24

PURCHASED COST -

MATRIALS/ SUPPLIES COST 21,312.35

TIRES/ MAINTENANCE COST -

POWER COST -


Total Cost per Meter w/o Labor 21,312.35

Annex A: Mine

Annex A-3: Basis of Dilution Grade

Factor

PADCAL Operations

April 2013

Annex B: Mill

Annex B-1: List of Existing Machineries

and Equipment

Equipment List

Equipment Description Number of Units

Use

Apron Feeder 1.5m wide x 7.1m long, 352 tph capacity 4 Primary Crushing

Jaw Crusher

0.762m x 1.1m Pioneer Oro and Nordberg C100, 213 MTph capacity at 100mm

setting

4

Primary Crushing

Standard Cone

Crusher

1.7m Symons Cone Crusher,

475 MTph capacity at 38.1mm

setting

3

Secondary Crushing

Shorthead

Cone Crusher

1.7m Symons Cone Crusher,

210 MTph capacity at 9.5mm

setting

8

Tertiary Crushing

Rake Classifier Dorr−Oliver 2 Dewatering

Ball Mill

1 unit 4.4m x 6.7m

2 units 5.0m x 8.4m

1 unit 5.0m x 6.7m

3 units 3.5m x 4.3m

1 unit 3.7m x 4.9m

1 unit 4.4m x 7.2m

9

Grinding

Cyclones 660.4 mm Cyclone Diameter 45 BM1, 2, 3, 4, 5, 7, 8, 11, 12

Cylones

Flotation Cell

Wemco 144

6 Wemco A Scavenger Flotation

6 Wemco B Scavenger Flotation

4 745 ML Plant Rougher Flotation

Wemco 164

4 Wemco A Rougher Flotation

4 Wemco B Rougher Flotation

9 Wemco C Rougher/Scavenger

Flotation

9 Wemco D Rougher/Scavenger

Flotation

4 1st Cleaner Flotation

Smart Cell 6

Wemco E Rougher/Scavenger

Flotation

Column Cells 2 2nd and 3rd Cleaners 4.9m diameter x 4.9m high Open−type Wemco

2 745 ML Plant

Galigher Agitair 3 745 ML Cleaner Flotation

Scalper

1.5m x 4.9m, 1st deck: 76.2mm x 76.2mm rubber screen

panel, 2nd deck: 9.5mm x 127mm screen opening

4

Dewatering

Slime Screen Hewitt−Robins, 1.5m x 6.1m,3 mm screen opening

4 Dewatering

Washing

Screen

Hewitt−Robins, 1.5m x 4.9m,

9.5mm x 127mm screen

opening woven wire cloth

4

Primary Crushing

Tertiary

Vibrating

Screen

Telsmith, 1.5m x 3.7m, 9.5mm

or 127mm screen opening

woven wire

18

Tertiary Crushing

Trash Screen Honert, 1.5m x 4.9m, 2 mm

screen opening 4 Grinding

Conveyor Belt

0.762m 4 Grinding

0.914m

11 Primary Crushing

7 Secondary/Tertiary Crushing

45 Grinding

1.2m 3 Primary Crushing

19 Secondary/Tertiary Crushing

Blower 0.305m x 0.914m 5 Flotation

0.178m x 0.381m 1 Thickening/Filtering

Thickener

15.24m diameter 1 Slime Thickening

22.86m diameter x 4.9m high 1 Concentrate Thickening

76.2m diameter x 8.2m high 2 Tailings Thickening

Drum Filter Dorr−Oliver 3m diameter x

3.7m long Drum Filter 2 Concentrate Filtering

Disc Filter Dorr−Oliver 1 745 ML Concentrate Filtering

Slusher

Pikrose

6

Primary/Secondary/Tertiary

Crushing and Grinding Plant

Spillages

Joy 4 Primary Crushing Plant Spillages

Syntron F−480 20 Secondary/Tertiary Crushing

Feeders 8 Grinding

F−330 3 Grinding

F−220 6 Grinding

Motors

3 HP, 1720 RPM, 440 V 3 Drum Filter 1 and 2 Drives

Disc Filter Drive

3 HP, 1150 RPM, 440 V 2 BM5 Slot Feeders 1 and 2

3 HP, 1120 RPM, 440 V 1 BM11 Slot Feeder 2

3.5 HP, 1140 RPM, 440V 1 745 ML Plant Slime Thickener

5.5kW, 6 poles, 440V 8 Trash Screens

5.5 HP, 1140 RPM, 440 V 1 BM7 Slot Feeder 1

5 HP, 1745 RPM, 440 V 1 75' diameter x 16' height

thickener

5 HP, 1120 RPM, 440 V

3 BM1 Slot Feeders 1, 2 and 3



1 BM4 Slot Feeder

5 HP, 865 RPM, 440 V 5 BM8 Slot Feeders 1, 2, 3, 4 and 5

7.5 HP, 1200 RPM, 440 V 2 250' Thickener Rake Drives

10 HP, 1200 RPM, 440 V 1 BM7 Main Feed Conveyor


10 HP, 1165 RPM, 440 V

1 BM4 Main Feed Conveyor


1 BM11 Slot Feeder 1

15 HP, 1760 RPM, 440 V

2 BM3 Feed Conveyors 1 and 2

1 Steel Ball Charging Conveyor

1 BM12 Steel Ball Charging

Conveyor


15 HP, 1170 RPM, 440 V

1 Conveyor 13 Travel

1 745 ML Plant Denver Cleaner

1 Flotation Cell #3


19.5 HP, 1740 RPM, 440 V 1 OH Crane 1 at Primary Crushing

Plant


20 HP, 1150 RPM, 440 V 2 BM1 Feed Conveyors 1 and 2

25 HP, 1800 RPM, 440 V 1 Sprayer Pump 2

1 Barometric Pump 1

25 HP, 1200 RPM, 440 V 1 Lime Pump 2

2 Rake Classifiers 1 and 2

25 HP, 1180 RPM, 440 V 1 Lime Pump #1

1 75' Thickener Underflow Pumps 1

and 2 1

25 HP, 1175 RPM, 440 V 1 Conveyor 1A−1

Concentrate Spillage Pump 1 1

25 HP, 1170 RPM, 440 V

1 75' Thickener Underflow Pump 3

3

745 ML Plant Water Sealing

Pump, Vertical Spillage Pump,

Concentrate Pump 1

25 HP, 880 RPM, 440 V 1 Blower from Drum Filter

30 HP, 1800 RPM, 440 V 1 BM12 Feed Conveyor

30 HP, 1562 RPM, 440 V 1 3rd Cleaner Booster Pump 2 30 HP, 1200 RPM, 440 V 10 Slushers

30 HP, 1180 RPM, 440 V

4 Scalper Screens

4 Washing Screens

18 Tertiary Vibrating Screens

30 HP, 1170 RPM, 440 V 1 Conveyor 14A

1 Lime Holding Tank Pump 2

30 HP, 887 RPM, 440 V

1 Conveyor 1D−1

1 745 Plant Rougher Cell 1

2 745 Plant Cleaner Flotation Cell 1

and 2

1 Secondary Crusher Feed

Conveyor 2

30 HP, 880 RPM, 440 V


Conveyor

1 Concentrate Spillage Pump 2

1 Tertiary Crusher Feed Conveyor

2

40 HP, 1800 RPM, 440 V 1 Conveyor 13 Drive

40 HP, 1780 RPM, 440 V 1 Fire Hydrant Pump

40 HP, 1775 RPM, 440 V 1 Slime Conveyor 2

40 HP, 1170 RPM, 440 V 4 Slime Screens



1 3rd Cleaner Booster Pump 1

40 HP, 1200 RPM, 440 V 2 745 Plant Slime Thickener Underflow Pumps MP and BP

40 HP, 885 RPM, 440 V

4 Apron Feeders

1 745 Plant Rougher Flotation Cell

2

3 745 Plant Scavenger Flotation

Cells 2, 3 and 4

1 Slime Conveyor 3

40 HP, 880 RPM, 440 V

1 Slime Conveyor 4

1 745 Plant Scavenger Overflow

Pump

2 745 Plant Slime Conditioner 1

and 2

1 Barometric Pump 2

50 HP, 1175 RPM, 440 V 1 Sieve Bend Conveyor

1 Lime Holding Tank Pump 1

50 HP, 1170 RPM, 440 V 1 Cooling Pump 1

50 HP, 880 RPM, 440 V

1 Conveyor 16A

2 Flume Pumps 1 and 2

2 Conveyor 16B HPD and TPD

60 HP, 1775 RPM, 440 V 1 Conveyor 4D

1 Cooling Pump 3

60 HP, 1200 RPM, 440 V 1 Conveyor 6

60 HP, 1190 RPM, 440 V 1 Cooling Pump 2

60 HP, 880 RPM, 440 V

1 Conveyor 15A

12 Wemco 144 Banks A and B Cells

75 HP, 1800 RPM, 440 V 1 Sprayer Pump 1

75 HP, 1785 RPM, 440 V 2 Conveyors 1B and 1C

75 HP, 1775 RPM, 440 V

2 Conveyors 2B and 4B

1 Cooling Pump 4

6 Sealing Water Pumps 2 to 7

2 Conveyor 11 RD and LD

75 HP, 1770 RPM, 440 V 1 Slime Conveyor 1

75 HP, 1760 RPM, 440 V 1 Sealing Water Pump 1

75 HP, 1200 RPM, 440 V 3 Conveyors 9, 14 and 16


75 HP, 1180 RPM, 440 V 1 Scavenger Pump 1


75 HP, 1170 RPM, 440 V 5 Blowers 1 to 5

75 HP, 880 RPM, 440 V

26 Wemco 164 Banks A, B, C and D

Cells

4 Wemco 1st Cleaner Cells 100 HP, 1800 RPM, 440 V 1 Recirculation Pump 3

100 HP, 1780 RPM, 440 V 3 Conveyors 1A, 1D and 2A

100 HP, 1775 RPM, 440 V 1 Conveyor 4C

100 HP, 1200 RPM, 440 V 1 Wemco Rougher Concentrate

Pump 4

1 Ball Mill Spillage Vertical Pump

1 Recirculation Pump 4


1 Scavenger Pump 2

100 HP, 1180 RPM, 440 V 2 Wemco Rougher Concentrate

Pumps 2 and 3

100 HP, 1175 RPM, 440 V 1 Conveyor 2C

100 HP, 1165 RPM, 440 V 1 Water Pump 3


120 HP, 880 RPM, 440 V 4 Smart Cells

150 HP, 1800 RPM, 440 V 1 50' Thickener Underflow Pump 3

150 HP, 1785 RPM, 440 V 1 Cleaner Tails Pump 2

150 HP, 1780 RPM, 440 V 1 Conveyor 10 RD

2 Vacuum Pumps 1 and 2

150 HP, 1760 RPM, 440 V 1 Cleaner Tails Pump 1

150 HP, 1190 RPM, 440 V 1 Conveyor 10 LD

150 HP, 1185 RPM, 440 V 7 12” x 10” Ball Mill Pumps

1 745 Plant Vacuum Pump

150 HP, 1180 RPM, 2300 V 4 Jaw Crusher

200 HP, 1785 RPM, 440 V 1 Froth Pump 2


1 Water Pump 2

200 HP, 1185 RPM, 440 V 1 Recirculation Pump 1


200 HP, 1175 RPM, 440 V 1 Water Pump 1


200 HP, 880 RPM, 2300 V 2 Conveyor 15 RD and LD

215 HP, 1780 RPM, 440 V 1 Vacuum Pump 3


250 HP, 1775 RPM, 2300 V 1 Conveyor 12 RD



300 HP, 1200 RPM, 440 V 1 Froth Pump 1

300 HP, 1180 RPM, 440 V 1 Conveyor 5B

300 HP, 500 RPM, 2300 V 11 Symons 5 ½' Cone Crushers

200−300 HP, 1185 RPM, 440 V

12 14” x 12” Ball Mill Pumps

500 HP, 1786 RPM, 2300 V 1 Sal−angan Stage 2 Pump 3


500 HP, 1780 RPM, 2300 V 1 250' Thickener 1 Pump 1

500 HP, 1775RPM, 2300 V 2 250' Thickener 1 Pumps 2 and 3

400 HP, 1790 RPM, 2300 V

3 Sal−angan Stage 1 Pumps 2, 3

and 4

2 Sal−angan Stage 2 Pumps 1 and

2


400 HP, 1775 RPM, 2300 V 4 250' Thickener 2 Pumps 1 to 4

3000 HP, 720 RPM, 2300 V 1 BM1 Drive Motor

4000 HP, 180 RPM, 4160 V 3 BM2, 3, 8 Drive Motor

1250 HP, 240 RPM, 2300 V 3 BM4, 5, 7 Drive Motor



Pumps

8X23SF IR Water Pump (Single Stage, Double Suction Centrifugal Pump)

3 Water Pumps 1 to 3

7 250' Thickeners 1 and 2 Pumps

8 Sal−angan Stages 1 and 2 Pumps

4MS CASA

1 Fire Hydrant Pump at Conveyor

Staging Area

4 Cooling Pump at Sec/Tec

Crushing Plant

4 Sealing Water Pumps 1 to 4 at

Grinding Plant

PS−125−80−370 Paragon Pump (Single Stage, Double Suction Split Casing Centrifugal Pump

3

Sealing Water Pumps 5 to 7 at

Grinding Plant

203.2mm x 152.4mm SC−type Slurry Pumps

4 Rougher Concentrate Pumps 1 to

4

2 Wemco E Scavenger Pumps 1

and 2

2 Flume Pumps

1 Ball Mill Spillage Horizontal Pump

2 Slime Thickener Underflow

Pumps MP and BP at 745 Plant

203.2mm x 152.4mm L−type Slurry Pumps


254mm MF−type Froth Pump 2 Wemco 164 1st Cleaner Concentrate Pumps 1 and 2

355.6mm x 304.8mm x 914.4mm AH−type Slurry Pump

12 Ball Mill Pumps

304.8mm x 254mm x 30” Slurry Pump

7 Ball Mill Pumps

200 mm Vertical Sump Pumps 2 Wemco 164 1st Cleaner Tails

Pumps 1 and 2


1 Ball Mill Spillage Vertical Pumps

100 mm Vertical Sump Pumps

1 Concentrate Spillage Pump 2

1 Vertical Spillages Pump at 745

Plant

1 Barometric Pump 2

152.4mm x 101.6mm SC− type Pumps

2 Lime Pump

2 Lime Holding Tank Pumps

1 Concentrate Spillage Pump

76.2mm AHF−type Booster Pump

2 3rd Cleaner Booster Pump

101.6mm x 76.2mm AH−type Pump

2 Sprayer Pumps

3 Underflow Pumps

1 Concentrate Pump

1 Scavenger Pump

1 Barometric Pump

PL−1250 Water Ring Vacuum Pump

3 Drum Filter Vacuum Pumps

1 Disc Filter Vacuum Pumps at 745

ML Plant

254mm x 203.2mm SC−type Slurry Pumps

3 50' Thickener Underflow Pump


2 80' Thickener Underflow Pump

3MS CASA−type pumps 1 Sealing Pump at 745 Plant

Speed

Reducers

Buddy Box Gear Motor (LHHM25−3D170L−K1−46)

1 Conveyor 9A

Christian Rite−LO (3DXN) 1 BM11 Main Feed Conveyor


2 Steel Ball Charging Conveyors

Christian Rite−LO (D4XN) 1 BM3 Feed Conveyor 1

Christian Rite−LO (D5XN) 5 BM8 Slot Feeders 1 to 5

Cyclo Gearmotor − Series 6000 (CHHJM506−6215−29)

1 Sieve Bend Conveyor

1 Conveyor 7

David Brown Radicon (6 BUD 800)

3 BM1 Slot Feeders 1 to 3

1 BM3 Feed Conveyor 2


1 BM4 Slot Feeder

2 BM5 Slot Feeders 1 and 2

1 BM7 Slot Feeder 1



Flender (SDN 200) 1

Secondary Crusher Feed

Conveyor 2

Paramax (PHA9030R3−RML− 25)

2 Conveyors 13A and 15A

Paramax (PHA9055P3−RLB 1/31.5)

6 Conveyors 1B, 1C, 1D, 9, 11 RD

and LD

Paramax (PHD9060P3−RLB− 31.5)

2 Conveyors 4 and 16

Paramax (PHD9070P3−RLFB− 40)

1 Conveyor 10 RD

Paramax (PHD9070P3−RLFB− 25)

1 Conveyor 10 LD

Paramax Parallel (PHD9070P3−RLLB−25)

1 Conveyor 15 LD

Paramax Right Angle (PHD9070R3−LLB−25)

1 Conveyor 15 RD

Paramax (PHD9075P3−RLFB− 1/35.5)

4 Conveyors 5 and 12 (RD and LD)

Premium Worm Reducer (GU 1000)

1 Conveyor 14A

General Electric 2 50' Thickener

Holroyd Worm Reducer (9/0) 1 BM1 Main Feed Conveyor

Holroyd Worm Reducer (7 BU10)

2 BM1 Feed Conveyor 1

Linkbelt (HT 2000) 4 Apron Feeders

3 Conveyors 5B, 9 and 13

Linkbelt (HD2000) 1 Conveyor 4B

Linkbelt (HB2250) 2 Conveyors 1A and 2B

Linkbelt (HT 2250) 1 Conveyor 2A

Linkbelt (HT 2300) 2 Conveyors 2C and 17

Radicon (BU 10)

4 Slime Conveyors 1, 2 and 4

1 Conveyor 4D


Conveyor 1

2 BMs 4 and 5 Main Feed

Conveyor

Radicon (NU 10) 1 Slime Conveyor 3

Radicon (NU 12) 2 Conveyors 6 and 16A

Radicon (BU 12) 2 BMs 7 and 8 Main Feed

Conveyors

Radicon (BU 14) 2 Conveyors 4C and 14

Radicon (7 BU 10) 2 BM1 Feed Conveyor 2

Renol Holroyd Crofts (10/0) 2 BM12 Main Feed Conveyor and

Feed Conveyor

Universal Radicon (A2000/UDM)

1 Tertiary Crusher Feed Conveyor

1

Falk Enclosed Gear Type 2 BM1, 12 Speed Reducer

Overhead

Cranes

5−ton capacity 6 Secondary/ Tertiary Crushing/

Flotation/ Lime Plant

10−ton capacity 5 Primary Crushing/ Grinding/

Flotation Plant

12.5−ton capacity 2 Primary Crushing Plant

20−ton capacity 4 Primary Crushing/ Grinding/ Plant

25−ton capacity 5 Secondary/ Tertiary Crushing

Plant

50−tonnes capacity 1 Grinding Plant

GRINDING SECTION FIRE EXIT, HYDRANT AND EXTINGUISHER

LOCATION INSTRUMENTATION

SECTION

MAIN CONTROL

CIRCUIT

MAIN CONTROL

CIRCUIT MAIN CONTROL

CIRCUIT MAIN CONTROL

CIRCUIT CONTROL ROOM C.R.

BM 8

BM 12 BM 11 BM 7 BM 5 BM 4

BM 3 BM 2 BM 1

TS 1 TS 2 TS 3 TS 4

EXIT CLUSTER

CYCLONE CYCLONE

TRASH SCREENS LIME TANK CYCLONE CYCLONE CYCLONE CYCLONE

CYCLONE CYCLONE

EXIT FOB 7 FOB 1

FOB 9 FOB 8 FOB 6 FOB 5 FOB 4 FOB 3 EXIT FOB 2

LEGEND: FIRE EXTINGUISHER

Drum Filter # 1

Drum Filter # 2

FLOTATION SECTION FIRE EXIT, HYDRANT AND EXTINGUISHER

LOCATON

EXIT

POWER PLANT

FINAL

CONCENTRATE

75 FT. Diameter

Thickener

MAIN CONTROL

CIRCUIT

MAIN CONTROL CIRCUIT

EXIT

SMART CELL 5 & 6

SMART CELL 3 & 4 SMART CELL 1 & 2

M F F

WEMCO D

LOWER GROUND

WEMCO C

1st Cleaner

OFFICE

50 FT. DIAMETER

Thickener

EXIT


Filter press

MA

IN C

ON

TR

OL

CE

NT

ER

LO

WE

R G

RO

UN

D

MECHANICAL & MAIN MILL BODEGA

OPEN BODEGA

SETTLING POND SETTLING POND

DOMESTIC PUMP

STATION

WORK AREA

STORAGE AREA 1ST & 2ND FLOOR

CONTROL PANEL


TRANSFORMERS

MILL DIVISION OFFICE FIRE EXTINGUISHER LOCATION

OFFICE OF THE

DIVISION

MANAGER

MINE-MILL LINK

OFFICE CONFERENCE ROOM

EXIT ACCORDION WALL

OFFICE OF THE

OPERATION

MANAGER LOBBY

OFFICE OF THE

PLANNING

MANAGER

MAINTENANCE SUPERVISOR

OFFICE

LIBRARY

SECRETARIAL

OFFICE

C.R.

EXIT

LOBBY

OFFICE OF THE

GENERAL

FOREMAN

PLANNERS OFFICE

DRAFTING

OFFICE OF THE

GROUP

MANAGER

LEGEND:

FIRE EXTINGUISHER

CO

MF

OR

T R

OO

M

METALLURGY LABORATORY FIRE EXIT AND EXTINGUISHER

LOCATION EXIT

EXIT

OFFICE

WORK AREA PANTRY

C.R.

C.R.

SAMPLE

RECEIVING

AREA

WORKING

TABLE

SAMPLE

STORAGE

AREA

LEGEND:

FIRE EXTINGUISHER

WORK AREA WORK AREA

MA

IN E

NT

RA

NC

E

FIRE HYDRANT AND EXTINGUISHER

LOCATION

PUMP

HOUSE

PUMP

HOUSE

Launders

Launders

MINI DAM

Transformer

LEGEND : FIRE HYDRANT

FIRE EXTINGUISHER

80 FT

Dia. THICKENER

Pump House

PIPE 4" DIAMETER PHILEX MINING CORPORATION

MILL SECURITY OFFICE

TO MILL

BATTERY LAMP HOUSE

CHIEF SECURITY

OFFICE

C.R.

OFFICE


EVACUATION AREA

MINI ASSAY AND MET-QUALITY CONTROL LAB. FIRE EXIT AND EXTINGUISHER LOCATION


C. R. C. R.

DIGESTION ROOM

WORKING

TABLE CONTROL PANEL

OFFICE WORKING AREA

EXIT ENTRANCE

INS

TR

UM

EN

TA

TIO

N

Primary Crushing Plant

Apron Feeder and jaw Crusher #4 Main Control

Circuit

Conveyor #1D

LOWER GROUND

Apron Feeder and Jaw Crusher #3


EXIT

Conveyor #1C

Conveyor #1B

Washing

Screen #3

EXIT

Washing

Screen #2

Conv 1A-1

EXIT

LOWER GROUND

MOTOR STORAGE AREA

Oil Storage Area


EXIT

Conveyor #1A

ROAD


FIRE HYDRANT

EVACUATION AREA

Wash

ing

Scre

en #

1

PADCAL Operations

April 2013

Annex C: Tailings Storage Facility

Annex C-1: Philex Padcal Mine TSF 3

Rehabilitation and Clean-up Plan

PHILEX MINING CORPORATION PADCAL MINE

PPHHIILLEEXX PPAADDCCAALL MMIINNEE TTSSFF33

RREEHHAABBIILLIITTAATTIIOONN && CCLLEEAANN--UUPP PPLLAANN

22 November 2012 Benguet

2

I

PREFACE

Philex Mining Corporation (Philex) owns and operates the Padcal Mine (copper and gold), known as Sto. Tomas II Ore body, in Benguet Province, Cordillera Administrative Region, Philippines. The mine has been in operation for the last 54 years.

Tailings Storage Facility No. 3 (TSF3) is the active tailings storage facility for the Padcal Mine which has been maintained and in operation since 1992. It is located in Sitio Catcatbal, Barangay Ampucao, Municipality of Itogon, Province of Benguet.

It has been established that TSF3 was compromised by the intense rainfall which has been recorded during the month of July 2012 and which continued until the month of August. The heavy rainfall was exacerbated by Typhoons Ferdie and Gener which built up in the Luzon region, and even further worsened by the southwest monsoon (habagat). Indeed, the amount of rainfall which fell in the region on August 1, 2012 was completely unprecedented and unexpectedly severe and so had caused TSF3 to discharge water and sediments into the Balog Creek exceeding regulatory standards. Some of these materials found their way into the convergence of the Balog Creek and the Agno River.

This Report contains the Philex’s proposed rehabilitation and remediation plan for TSF3 and the affected environment and communities (the”Plan”). The Plan includes restoration activities to address the environmental effect of the incident and pave the way for the resumption of the Padcal Mine operations. Competent foreign and domestic consultants in the field of mining and environment have been engaged to help in the planning and implementation of the rehabilitation Plan.

Remediation measures undertaken by Philex Padcal Mine

3

Immediately after the occurrence of the incident, Philex undertook the following measures:

(a) Plug the sinkhole. – Various materials were dropped into the sinkhole for the purpose of plugging the leak that created the sinkhole. A land bridge was constructed using borrow materials from available areas to get as close as possible to the location of the sinkhole. A surveying team monitored closely the activities at the pond to approximate the location of the sink hole. The leak was finally plugged by a 9- meter diameter concrete sphere designed and fabricated by Philex. Additional spheres of smaller and various sizes were dropped to form a strata or layer and reinforce the plug created by the 9-meter diameter concrete sphere. To fortify the layer and to construct a filtering medium, sand bags, gabions and concrete using half drums as forms were also dropped using improvised barges powered with 200-HP, 75-HP, and 25-HP motors.

(b) Emergency spillway. – The emergency spillway was originally intended to be used when the Padcal Mine closes and thus, was provisionally cut to 620ML. At the height of the TSF3 incident, it was further excavated down to 600ML from 620ML. It was done to protect the dam (TSF3) in case of strong rains. At that time, slimes elevation infront of the main dike was 605ML.

(c) Removal of concrete shutter boards of penstock B. – Parallel to the cutting of the level of emergency spillway is the removal of concrete shutter boards of Penstock B to a level where the water in the pond could be discharged into Penstock B. Similar to the emergency spillway, this was done to protect the dam (TSF3) in case of strong rains. The pond water was managed mainly by either the addition or removal of concrete shutter boards to avoid the discharge of sediments. At one point, the shutter board elevation was as high as 598ML and was brought down to as low as 585ML.

(d) Water Diversion. – Water diversion activities were undertaken to further manage the water entering TSF3. First, was the diversion of water from the Benguet Creek. Pipes and pumps were immediately laid and installed to allow the pumping of water into the Banawel tunnel and further to the Sal-angan River using a 3,000-gpm pump. At one stage, the Benguet Creek contributed 6,000-gpm of water into TSF3. Second, another 3,000-gpm pump was commissioned at the tailings conveying area so that water will directly go to Sal-angan River. Lastly, water coming from the northwest area of the main embankment of TSF3, particularly along the pipeline coming from the Pusposok Creek was diverted towards Wagis Creek using gravity piping systems.

4

Pusposok Creek is a tributary of water coming from TSF2 which at one point contributed 35,000-gpm of water to TSF3.

(e) Sealed Tunnel A. – When the 9-meter diameter concrete sphere was confirmed to have plugged the sinkhole, Tunnel A was immediately sealed with concrete bulkhead, first, by a sixteen-meter (16) span, then followed by another forty-nine and one-half (49.5) meters, yielding a total length of sixty-five (65.5) meters. The sealing was completed on October 17, 2012.

Figure 1. – Photo showing the sealed tunnel A with steel gate

5

II

REHABILITATION

A. The Spillway

The spillway project designed by Philex is located in the southern area of TSF3

(Figure 1a). The design, however, is being validated by Golder Associates (Golder), a renowned engineering and consulting firm based in Melbourne, Australia. Philex has also commissioned Snowy Mountains Engineering Corporation (SMEC), a group of engineers and development professional consultants also based in Australia, to conduct a peer review of the design. The project has an approved Environmental Compliance Certificate (ECC No. CAR-0411-107-120) for an ‘Open Spillway for Tailings Pond-3.’

Figure 2a. – Spillway location from Google map

6

On August 2, 2012, one of the measures adopted to protect the dam was to immediately cut the spillway crest from a previously cut level of 620masl to 600masl. The spillway consists of several segments that incorporates a decant system to allow deposition of tails and clean water to overflow.

Figure 2b. – Spillway segments

The actual construction of the spillway, however, will be divided into two (2) phases. Phase 1 involves the construction of two (2) compartments of the chute. It will be followed by Phase 2 – the construction of an additional 12-meter width compartment of the spillway chute.

Aside from the construction of the spillway, check dams will be constructed to slow down water velocity running from the end of spillway to Balog Creek. Three (3) check dams have been completed while the other six (6) are still being constructed.

7

Figure 2c. – Location of check dams

B. Sealing Tunnel B

Upon the completion of the first 12-meter compartment of the open spillway (Phase 1), the plugging of Penstock/Tunnel B shall immediately follow. It will be sealed at the sump portion and to be extended or keyed about ten (10) meters towards tunnel B and also about 5 meters towards the penstock-B compartments.

8

Figure 3. – Drawing to show the portion to be concreted in penstock/tunnel B

C. Lining the paddock of the main dike

To prevent further scouring of the tails deposited upstream of the main dike, the

paddock has to be shielded with erosion resistant materials. This activity is already ongoing using boulders and borrow materials from nearby sources. It is a continuing activity until the paddock is fully supported.

Figure 4. – Photo showing the main dike (left) viz the scoured portion of the paddock (right)

9

D. Construction of dike upstream of penstocks

A dike will be constructed across the narrow part of the existing beach and upstream of decants (penstock) A and B. It would be constructed using rock fill and will isolate the tailings beach, void and embankment from the valley which will drain over the spillway. The dike will also help to protect the void area from flooding during the high rainfall season when most of the flood runoff will be discharged over the spillway.

E. Beach Formation

It is necessary and very important that a beach should be formed upstream of

the main dike and fill the void created by the discharge of water and sediments through the sinkhole. The water should be pushed or driven further away from the main embankment and the decommissioned penstock structures. This activity should take undertaken immediately to take advantage of the dry season and to prevent excessive ponding that might be brought by the rainy season. Moreover, the formed beach will also complete the decommissioning of the penstock system and the adoption of the spillway system as the new water management system for TSF3.

The beach formation will reduce the exposure of the main embankment to water. Less water decreases the phreatic level inside the dam that results to the increase of the factor of safety of the dam. An embankment with low phreatic level will hold its ground even during a slightest seismic activity.

Beach formation can best be achieved by using fresh tailings from operation to be deposited evenly and systematically to strategic locations inside the pond. It is best to use fresh tails to fill up the void because of its faster settling rate and quicker consolidation. Aside from its higher specific gravity compared to borrow materials (i.e., weathered diorite), it also contains complete strings of particle sizes essential to its proper consolidation or cohesiveness that will create an impermeable protection against seepage to the main embankment.

For its urgency and importance in the whole remediation process of TSF3, Philex will request the government through the Mines and Geosciences Bureau to allow the Padcal Mine to operate, even at a limited capacity (dry metric tons per day or DMTPD)

10

only, to start filling up the void created by the sinkhole with fresh tailing during the dry season.

F. Consultants engaged

(a) Golder Associates. – The TSF3 Stability Study is being undertaken by

Golder. The engagement started following the site visit of one of its principals, Mr. Brian Wrench on October 26, 2012. Aside from validating the spillway design, Golder is further tasked to assess the stability of the main embankment as well as to make an independent recommendation on the remediation and rehabilitation measures done by Philex, and where possible, to recommend or certify the recommissioning of TSF3.

The assessment of the main embankment’s stability will involve: (a) monitoring and interpretation of information gathered from the existing and additional piezometers and inclinometers strategically placed within the area; (b) gathering and interpretation of hydrology and seismic data from accredited government agencies; (c) geotechnical tests; and (d) extensive stability analysis; while the evaluation of the remediation and rehabilitation measures will involve: (a) the review of as built plans of concrete bulkheads at Tunnel A; (b) review of proposed bulkhead at Tunnel B; and (c) generation of monitoring plans. The timelines and possible costs will depend on the consultant’s review and peer evaluation.

Golder Associates is a global company providing consulting, designing and construction services in the specialists’ area for earth, the environment and the related area of energy. Recently, Golder’s success was recognized at Australia’s leading client service awards, winning in five categories, including Best Professional Services Firm, at the 2012 BW/Beaton Client Choice Awards.

The company had designed and has ongoing involvement with the construction and operation of many of the world’s largest copper/gold TSF including: Antamina TSF (Peru) 570 M MT tailings; PT Freeport Grasberg TSF (Indonesia); Collahuasi TSF (Chile) 700 M MT tailings; Bata Hijua TSF (Indonesia) 1.3 B MT tailings; Kabanga TSF (Tanzania); KCGM TSF (Australia) +500 M MT tailings; and El Pachon TSF (Argentina) 500 M MT tailings, to name a few.

11

Golder staffs have also authored international tailings guidelines for the Mining Association of Canada and the Western Australian government and the GARD acid rock drainage guideline of INAP.

(b) Snowy Mountains Engineering Corporation (SMEC). – It is a professional services firm with Australian origin and a global footprint that provides high-quality consultancy services on major infrastructure projects. SMEC has over 5,000 employees and an established network of more than 70 offices spread in Australia, Asia, the Middle East, Africa and North and South America.

SMEC provides consultancy services for the lifecycle of a project, to a broad range of sectors. These are: Transport, Water, Environment, Geotechnics and Tunnels, Urban Development, Hydropower and Energy, Government and Advisory Services and Social Development. SMEC has been ranked in the Top 100 of Engineering News- Record’s (ENR) Top 200 International Design Firms for the past 14 years. In 2012, SMEC was ranked at Number 58 in the Top 200 International Design Firms and Number 74 in the Top Global Design Firms. In ENR's 2012 'Top Ten by Market' for Water, SMEC ranked at number nine. SMEC was also awarded the 2010 BRW ANZ Private Business Award for ‘Most Successful Private Business Trading Overseas – Asia.’

SMEC was involved in the engineering and construction of many major water and hydropower dams in Asia and Australia the likes of: Bakun hydroelectric power

plant in Malaysia; Son La Hydroelectric project in Vietnam; Hume dam in Australia;

Kohala hydropower project in Pakistan; Taishir hydropower project in Mongolia.

12

III _

CLEAN-UP OF CREEK/RIVER SYSTEMS

A team from the Philex Padcal Mine conducted an inspection of the extent of the impacts of the spill in the Balog Creek and at the convergence area of Agno River. This was followed by the water and sediments sampling conducted by the Philex Multi- partite Monitoring Team (MMT). The MMT is composed of representatives from MGB, EMB, FMS, LGUs, IP and PO.

Figure 5. – Location Map of Clean-up and Rehabilitation Plan

13

Likewise, an inter-disciplinary team of Environmental Specialists from various fields of expertise has been engaged by Philex to help prepare and implement the clean up and rehabilitation program. The team is composed of:

Nicomedes Briones, Ph.D. (Team Leader) – Environmental & Natural Resources Management Planning/Resource Economist

Emmanuel LLeva, Ph.D. ( Asst.Team Leader) – River Basin Planning/Forester

Macrina A. Zafaralla, Ph.D. / Bonifacio Labatos M.Sc., – Limnology/Water Biology

Federico O. Perez, Ph.D., – Soils Management & Upland Agriculture

Armando Espino, Ph.D. – Groundwater Flow & Mass Transport/Hydrologist

Eliseo Ana, Jr., Ph.D. – Water Resources Engineering

Alma Lorelei De Jesus, M.Sc. – Environmental Chemistry

Russel Son Cosico, M. Sc. – Mammalian Conservation/Environmental Science

Alvin Nacu – Aquatic Specialist

Peter McLatchie – Manager Studies, Harmony Gold PTY Limited

Carlos P. David, Ph.D. – Environment & Geology

A. Environmental and Social Rehabilitation Framework

The program for rehabilitation will be undertaken as follows:

14

Figure 6. – The Clean-up and Rehabilitation Framework

B. Objectives

The major objectives of the program are to clean and rehabilitate Balog Creek

and the convergence of Agno River with the implementation of a sustained environment development program.

Towards the goal and accomplishment of the set objectives, the following studies will be undertaken:

1) benchmarking on the affected ecosystems, 2) modelling on sediment load and transport to determine the movement of

sediments from the penstock, creek and river, and

15

3) environmental risk assessment/fate analysis study of the chemical additives used in the processing of the ores and the heavy metals associated with the mine tailings.

Figure 7. – Roadmap of the Clean-up and Rehabilitation Plan

C. Approach and Methodology

As a measure, the clean-up of the sediments along Balog Creek and convergence

of Agno River is a priority. Company employees were tapped, and continuously assigned to the area. Families located within the vicinity of the clean up area are being eyed to assist in the undertaking as well.

16

(a) Balog Creek Clean-up. – The construction of access trails, and tramlines to be used to haul materials and supplies for the construction of sedimentation control measures, has to be continuously undertaken. The following activities were conducted:

1) Cleaning of Sediment. – Sediments deposited along the elevated portions of the creek were scraped manually using ladders in combination with pressurized water spray. To prevent further movement downstream, the sediments are being collected and bagged manually and are deposited in containment areas that were lined with geotextiles and further reinforced with an embankment wall with grouted stone masonry (riprap).

Figure 8. – Photo of a worker showing the washing off the sediments on the river wall

17

Figure 9. – Photo of a workers doing sand bagging along Balog creek

Figure 9a. – Photo showing reinforced embankment wall with grouted stone masonry (riprap)

18

Figure 9b. – Photos showing workers while constructing an embankment wall with grouted stone masonry (riprap)

2) Sediment Traps. – Sediment traps are being constructed along strategic areas of the creek to collect and prevent the sediments from going downstream to further protect Agno River. It will also reduce water velocity that may further cause scouring and erosion of the creek banks. Initially three (3) sediment traps are being conceptualized and additional ones will be constructed as the need arises.

19

Figure 10. – Photo taken from Google of Balog Creek where silt traps will be constructed

Figure 11. – Photo of newly constructed sediment trap

20

(b) Agno River Convergence Area Clean-up

1) Pumping. – Two-stage vacuum pumps will be used to recover

sediments and transported back to TSF3. The particular vacuum pump that will be utilized is an Australian technology and has been successfully used in a number of applications, from mining solutions to factory spill clean- ups.

Figure 12. – Schematic Diagram of the pumping activity

21

Figure 13. – Shows the Access Road and Pump layout

Figure 14. – Shows the Pipe Route

22

D. Environmental Rehabilitation and Enhancement

To complement the clean-up, a medium and long-term environment

management program will be implemented to rehabilitate and enhance the river basin ecosystems. The following components shall also address the environmental impacts as well as issues on the characteristics of the sediments that were deposited along the waterways:

(a) Characterization of the Balog Creek and part of Agno River. – Full characterization will be conducted by collecting sediment and water samples from different management zones. The sediment samples will be analyzed for: soil texture, soil pH, organic matter, NPK contents, electrical conductivity, Hg and Cd contents, and Lime requirement. Results of chemical analyses will be compared to available data and analyzed and interpreted based from critical values established for proper nutrition of the crops to be used in restoration and enhancement.

On the other hand, water samples will be analyzed for: dissolved oxygen, biological oxygen demand, water pH, total suspended solids and salinity and will be compared to applicable government standards.

(b) Reforestration. – Reforestration and Assisted Natural Regeneration (ANR) of the Balog and Agno Convergence watershed will be implemented upon the concurrence of various stakeholders. Various tree seedling stocks for Padcal’s 2013 Reforestration Project kept in the mine’s mine forest nursery is available for immediate planting during the rainy season. If needed, community-based nursery will be established to support this activity.

(c) Enhancement of Terrestrial and Aquatic Ecosystems. – Possible effects on terrestrial and aquatic ecosystem will be determined and remediation actions will be taken if necessary. Remediation of both ecosystems will be based on the benchmark assessments. Restocking of aquatic flora and fauna will be done, when feasible.

(d) Improvement of Monitoring Procedures. – The number of sampling points will be increased from three to ten to be able to get a better environmental indicator. Further, the frequency of effluent monitoring during the rainy season coming from TSF3 will be increased from weekly to daily to detect abnormalities.

23

Figure 15. – Monitoring stations and readings

E. Scientific Studies to be Conducted to Support the Clean Up and Rehabilitation

Program

(a) Environmental Risk Assessment

1) Fate Analysis of Heavy Metals from Mine Tailings and Reagents Used in Flotation Process. – This study aims to determine the life cycle of chemicals or heavy metals and their reactions to the environment.

2) Sediment Transport Modelling from TSF# 3 to Balog Creek and Parts of Agno River including the San Roque Reservoir. – This modelling study aims to quantify and track the transport of sediments given a hydraulic model for

24

waterways. The study shall estimate the amount and rate of sediment flow from the origin to its final destination. Timeframe of the project is from November to December 2012

(b) Economic benefits of the environmental impacts through substitution or offsetting. – The principle of environmental substitution and offsetting will likewise be used in the overall planning and implementation of the IRBM Program. This study aims to estimate the benefits and costs of the environmental projects that will be implemented under the IRBM. The project will be conducted from November to December 2012.

F. Social

Both the Balog Creek and the convergence area in Agno River are within

Barangay Ampucao. The affected households are located in Barangays Ampucao and Dalupirip in the Municipality of Itogon. Breakdown is as follows:

Table 1. – Sitios and Number of Households and Population.

Sitios/Barangay No. of Households Total Population

1. Pangbasan, Dalupirip 26 182

2. Ambalanga, Dalupirip 6 42

3. Pao, Dalupirip 4 28

Sub-Total: Dalupirip 36 252

4. Terong, Ampucao 2 14

5. Kanag-jan, Ampucao 3 21

Sub-Total: Ampucao 5 35

Over All Total 41 287

Source: Community Interview, Rapid Social Assessment – August 8 & 9, 2012

(a) Community Engagement and Development. – A dedicated Community Development Team was formed to engage the affected families for a long-term social development programs. The community program will focus on Health, Livelihood & Infrastructure development. The families will be tapped and trained where they will eventually be the partners of the company in carrying out its environmental programs.

25

Community immersion continues to be implemented until today. Affected families and other effects of the incident were assessed through a rapid impact appraisal.

The following are the breakdown of activities undertaken by our team in partnership with the community:

Table 2. – Activities of the Community Development team and projected costs

Activities Timeframe Cost

1. Provision of food assistance to the affected families

August 27, 2012 50,000.00

2. The debris and trash (that come from the different tributaries of Agno) that annually collects at the eddy was contracted out to the community for cleaning.

August 29/September 3, 7, 10, 24 & 26, 2012

140,000.00

3. Provided materials for the construction of public infrastructure projects such as tramline

September 28 – 29, 2012

50,000.00

4. Carpentry tools were also provided to encourage woodcraft from salvaged wood instead of using it for firewood.

October 14, 2012 5,000.00

5. Conducted medical mission with 89 patients consulted and treated

October 26, 2012 20,000.00

6. Distribution workers

of lifejackets for community September 12, 2012 40,000.00

26

10/17/2012

9/30/2012

10/17/2012

4/30/2013

3/8/2013

12/31/2012

4/7/2013

3/15/2013

4/29/2013

4/30/2013

12/15/2012

3/30/2013

3/30/2013

3/30/2013

4/30/2013

12/15/2012

7/15/2012 PHP 1,059.8 M TOTAL 24

PHP 154.2 M Sub-Total 23

Environmental studies 22

Reforestration 21

Pumping of tails out of water system 20

Manual clean-up at Balog 19

Physical clean-up 18

Stakeholders engagement 17

River Clean-up 16

PHP 715.5 M Sub-Total 15

4/30/2013 Start of formation of beach to protect the main dike

14

Construction of dike upstream of penstocks

13

Stability analysis and certification from Golder Associates

12

Plugging of penstock B 11

3/9/2013 Dam stability analysis and certification 10

Rock lining of upstream face of paddock 9

Construction of spillway 8

Rehabilitation 7

PHP 190.1M Sub-Total 6

10/4/2012 Water diversion 5

Sealing of Tunnel A 4

Plugging of sinkhole 3

8/1/2012 First incident of tails discharge 2

Remediation Measures 1

May Apr Mar Feb Jan Dec Nov Oct Sep Aug Jul

2013 2012 Cost Task Name

ID

IV

SUMMARY OF COSTS & OVER-ALL TIMELINES

Table 3. – Table showing the tasks, target date, and costs

PADCAL Operations

April 2013

Annex C: Tailings Storage Facility

Annex C-2: Integrated Environmental

Management Program

[Type text]

1

3/9/2013

PHILEX MINING

CORPORATION

INTEGRATED ENVIRONMENTAL MANAGEMENT PROGRAM

i

Integrated Environmental Management Program

Contents 1.0 INTRODUCTION ....................................................................................................................................... 1

1.1 Background .......................................................................................................................................... 1

1.2 Goal ..................................................................................................................................................... 1

1.3 Objectives ............................................................................................................................................ 1

1.4 Methodologies .................................................................................................................................... 1

1.5 Components ........................................................................................................................................ 3

1.5.1 Social Component ......................................................................................................................... 3

1.5.2 Physical Component ..................................................................................................................... 3

1.5.3 Biological Component .................................................................................................................. 3

1.5.3.1 Aquatic Ecosystem. .................................................................................................................... 4

1.5.3.2 Terrestrial Ecosystem ................................................................................................................ 4

2.0 BASELINE DATA ........................................................................................................................................ 4

2.1 Physical Environment ........................................................................................................................... 4

2.1.1 Location ........................................................................................................................................ 4

2.1.1.1 Balog Creek ................................................................................................................................ 4

2.1.1.2 Agno River ................................................................................................................................. 4

2.1.2 Meteorology ................................................................................................................................. 5

2.1.2.1 Rainfall ....................................................................................................................................... 5

2.1.2.2 Temperature and Relative Humidity ......................................................................................... 5

2.1.3 Topography, Geology and Seismicity ........................................................................................... 5

2.1.3.1 Topography................................................................................................................................ 5

2.1.3.2 Geology ...................................................................................................................................... 6

2.1.3.3 Seismicity ................................................................................................................................... 6

2.1.4 Hydrology and River Sub-basin ..................................................................................................... 6

2.1.4.1 Hydrology .................................................................................................................................. 6

ii

2.1.4.2 Streamflow and Sedimentation ................................................................................................. 6

2.1.5 Waterbodies .................................................................................................................................. 6

2.1.5.1 Balog Creek ................................................................................................................................ 7

2.1.5.2 Agno River ................................................................................................................................. 7

2.1.5.3 Maligaboy Stream...................................................................................................................... 9

2.2 Biological Environment ...................................................................................................................... 10

2.2.1 Terrestrial ...................................................................................................................................10

2.2.1.1 Flora ......................................................................................................................................... 10

2.2.1.2 Fauna ....................................................................................................................................... 10

2.2. 2 Aquatic Ecosystem ..................................................................................................................... 10

2.3 Socio-economic Profile ...................................................................................................................... 11

2.3.1 Local Government Units ............................................................................................................. 11

2.3.2 Area Characteristics .................................................................................................................... 12

3.0 ENVIRONMENTAL IMPACT ASSESSMENT .............................................................................................. 15

3.1 Physical Assessment ........................................................................................................................... 15

3.1.1 Sediment Deposition .................................................................................................................. 15

3.1.2 Sediment Analysis ....................................................................................................................... 16

3.1.3 Water Analysis ............................................................................................................................ 17

3.2 Biological Assessment ........................................................................................................................ 20

3.2.1 Aquatic Ecosystem. ..................................................................................................................... 20

3.2.2 Terrestrial Ecosystem ................................................................................................................. 26

3.3. Socio-economic Assessment ............................................................................................................ 28

3.3.1 Property Damage ........................................................................................................................ 28

3.3.2 Opportunity Costs....................................................................................................................... 28

4.0 ENVIRONMENTAL AND SOCIAL MANAGEMENT PROGRAM .................................................................28

4.1 Physical Cleanup ................................................................................................................................ 28

4.1.1 Balog Creek .................................................................................................................................29

4.1.2 Agno River Confluence Area ....................................................................................................... 31

4.2. Environmental Enhancement ........................................................................................................... 36

4.2.1 Enhancement of the Watershed ................................................................................................ 36

4.2.2 Biodiversity Enhancement .......................................................................................................... 38

iii

4.3 Participatory Approaches and Community Development Strategies ................................................ 40

4.3.1 Community Engagement ............................................................................................................ 40

4.3.2 Socio-economic Development Programs ................................................................................... 40

4.3.2 Information and Education Campaign. ....................................................................................... 47

4.3.3 Cost Estimates and Schedule ......................................................................................................48

4.4. On-going Scientific Studies to Support the Cleanup and Environment Rehabilitation and

Enhancement Programs .......................................................................................................................... 49

4.4.1 Environmental Risk Assessment .................................................................................................50

4.4.2 Economic Pricing ......................................................................................................................... 50

4.4.3 Budget and Schedule ..................................................................................................................51

5.0 MONITORING AND EVALUATION .......................................................................................................... 51

5.1 Coverage ............................................................................................................................................ 52

5.2 Objectives .......................................................................................................................................... 52

5.3 Composition ......................................................................................................................................52

5.4 Roles and Responsibilities ................................................................................................................. 52

5.5 Operationalization ............................................................................................................................. 53

5.5.1 Location and Number of Sampling Points: .................................................................................. 53

5.5.2 Frequency of Monitoring ............................................................................................................ 55

5.6 Budget ............................................................................................................................................... 55

6.0 SUMMARY OF THE PROGRAM ............................................................................................................... 56

7.0 REFERENCES .......................................................................................................................................... 64

[INTEGRATED ENVIRONMENTAL MANAGEMENT PROGRAM] The Integrated Environmental Management Program (IEMP) discusses the environmental rehabilitation and

enhancement program of the Balog Creek and parts of the Agno River

iv

List of Figures

Figure 1 Integrated components of the environmental rehabilitation of Balog Creek and parts of Agno River.

Figure 2 Components of the social, physical, and biological rehabilitation of Balog Creek and parts of Agno River.

Figure 3 Location of Balog Creek and Maligaboy Stream

Figure 4 Geographic Distribution of the Affected Households

Figure 5 Species Composition of Phytoplanktons at the 12 Sampling Stations along the Lower Agno River.

Figure 6 Relative Mean Density of the Different Phytoplankton Division/Phyla in Lower Agno River

Figure 7 Average Densities of Phytoplankton Communities at the12Sampling Stations Along Lower Agno River.

Figure 8 Cluster Analysis of the Phytoplankton Phyla in 12 Sampling Stations along Lower Agno River.

Figure 9 Segmented Balog Creek Figure 10 Access Road Layout from TSF3 to Agno River Figure 11 Vacuum Pump Diagram

Figure 12 Pipeline Route Figure 13 Indicative of Proposed Reforestation / Agroforestry Project Figure 14 Time dimension of the socio-economic development program. Figure 15 Monitoring area Balog Creek Figure 16 Monitoring Area Agno River

v

List of Tables

Table 1 Water Quality, Physical Parameters, of Balog Creek, October 1999 – December 1999

Table 2 Levels of Heavy Metals in the Agno River Basin (NACIAD et al., 1981) Table 3 Water Quality, Physical Parameters ,of Agno River, Balog Downstream,

Convergence Area, May 27, 2008 Table 4 Presence of Heavy Metals in Water Samples from Agno River,Balog Downstream,

Convergence Area, May 27, 2008 Table 5 Water Quality, Physical Parameters of Agno River and San Roque Dam Inflow,

March 2012 Table 6 Water Quality, Physical Parameters of Maligaboy Creek, February 2013 Table 7 Water Quality, Presence of Heavy Metals, in Maligaboy Creek, February 2013

Data Comparison of Heavy Metals from Tilapia Samples in San Roque Dam, Table 8 October 2011 and January, April and May 2012

Table 9 Relevant Households

Table 10: Tilapia and Eel Production in the San Roque Dam Reservoir Table 11 Heavy Metal Analysis of Sediments at Agno River, Downsteam of Balog Creek,

Convergence of Agno and Balog Creek Table 12 Water Quality, Physical Parameters of Water from Agno River,Balog Downstream,

Convergence Area, San Roque Dam Outlet and NIA Weir, December 18, 2012 Table 13 Monthly Water Analysis for Presence of Heavy metal, September 2012 to

December 2012 Table 14 Water Analysis for Heavy Metals: Agno River,Balog Downstream, Convergence

Area, December 12, 2012 Table 15 Water Analysis for Presence of Milling Reagents, November 2012 Table 16 Heavy Metal Analysis of Different Fish Species in the Agno River Table 17 List of Phytoplankton Species found at the 12 Sampling stations along the Lower

Agno River Table 18 Diversity Indices of Phytoplankton Communities at the 12 Sampling Stations along

Lower Agno River Table 19 Projected Cost and Schedule of Activities for Balog Creek Cleanup Table 20 Projected Cost and Schedule of Activities for Agno River Convergence Area

Cleanup Table 21 Projected Cost and Schedule of Activities for Reforestation Table 22 Projected Cost and Schedule of Activities for Biodiversity Enhancement Table 23 Summary of Settlement of Damages Table 24 Completed Income Generating Projects Table 25 List of SDP Projects and Activities, Budget and Schedule

Table 26 Ongoing Environmental Studies, Budget and Schedule

Table 27 Annual Monitoring Budget (2013-2014)

Table 28 IEMP Budget and Schedule of Implementation

vi

List of Technical Nomenclature and Acronyms

As As- Arsenic

ANR Assisted Natural Regeneration (ANR

BDL BDL – Below Detection Limit

BFAR Bureau of Fisheries and Aquatic Resources

BSWM Bureau of Soils and Water Management (BSWM)

CAR Cordillera Administrative Region

Cd Cadmium

Cr Chromium

CITES Convention on International Trade in Endangered Species (CITES)

CR critically endangered

Cu Copper

DENR Department of Health (DOH), Department of Education (DepEd),

Department of Environment and Natural Resources

EU European Unio

FAO Fisheries Administrave Order

ft Feet

GIS Geographical Information System

Hg Mercury

HEC-HMS Hydrologic Engineering Centers Hydrologic Modeling System

HEC-RAS Hydrologic Engineering Centers River Analysis System

IEMP Integrated Environmental Management Program

IEC Information, Education and Communication

JICA Japan International Cooperation Agency

km Kilometer

LGU Local Government Unit

m Meter

MSDS Materials Safety Data Sheet

MRL Maximum Residue Limit

mg/L milligram/Liter

MGB-CAR Mines and Geosciences Bureau-Cordillera Administrative Region

mm millimeter

NPCC National Pollution Control Commission

NSO National Statistics Office

ND Not Detected

NPC National Power Corporation

NS not supplied

NSO National Statistics Office

vii

oC degrees Celsius

PAGASA PAGASA

PAIC Pleistocene Aggregate Island Complex

PAGOPAFLA Pangbasan Goldpanners amd Fisherfold Livelihood Association

Pb Lead

pH hydrogen ion concentration

PHP Phillippine Peso

PMC Philex Mining Corporation

ppm parts per million

PSS PSS - sampling point

RBW Receiving Body of Water

SRPC San Roque Power Corporation

TBD to be determined

TESDA Technical Education and Skills Development Administration

TDS total dissolved solids

TSS total suspended solids

TSF3 tailings storage facility number 3

UN United Nations

US-FDA United States-Food and Drug Administration

List of Photos

Photo 1 Hydropower through Dynamos

Photo 2 Spraying of Rock face

Photo 3 Sediment Bagging

Photo 4 Stocking with BFAR, Barangay Dalupirip

and Municipality of Itogon

Photo 5 Agno River Stocked with 60,000 fingerlings

Photo 6 Appraisal of Claims

Photo 7 Validation of Claims

Photo 8 Replacement of Damaged Items

Photo 9 Settlement participated by LGU Official

Photo 10 Food Distribution to the affected Households

Photo 11 Medical Mission in Pangbasan

Photo 12 Dental Mission in Pangbasan

Photo 13 Debris Cleaning

Photo 14 Hanging bridge 140 m

Photo 15 Constructed Sediment Trap at Km 0.8 Balog

viii

Photo 16 Grass matting for Dust Suppression

Photo 17 Visit of Residents to Organic Farm in La Trinidad

Photo 18 Organic Farming Training of Pangbasan Residents

Photo 19 Organic Chicken Raising in Pangbasan

Photo 20 Organic Backyard Gardening in Pangbasan

List of Annexes

ANNEX A Protocol for Analysis of Milling Additives by Impact Analytical Laboratory, US

ANNEX B Protocol for Analysis of Milling Analysis by Materials Safety Data Sheet (MSDS)

ANNEX C Protocols for Aquatic Biota including Planktons, Macroinvertebrates, Macrophytes

and Fishes

ANNEX D Methodology for Vegetation Survey

ANNEX E Methodology for Fauna Survey

ANNEX F Steps in Collecting Soil Samples for Analysis

ANNEX G Hydrologic Engineering Centers River Analysis System (HEC-RAS)

ANNEX H The Hydrologic Engineering Center Hydrologic Modeling System (HEC-HMS)

ANNEX I Rainfall Data August 1 to 15, 2012

ANNEX J PMC’s Water Quality Monitoring Report of Balog Creek prior to TSF 3 Incident (October -December 1999)

ANNEX K PMC’s Water Quality Monitoring Report of Balog Downstream, Convergence Area

and Agno River prior to TSF 3 Incident ( May 2008)

ANNEX L San Roque Power Corporation’s Water Monitoring Report of Agno River ( March – May 2012)

ANNEX M PMC’s Water Quality Monitoring Report of Maligaboy Stream (February 2013)

ANNEX N BFAR-R1’s Fish Tissue Analysis prior to TSF3 Incident

ANNEX O DENR-MGB Letter, dated Sept 26, 2012

ix

ANNEX P Heavy Metal Analysis of Sediments at the identified sampling stations after the TSF3 Incident

ANNEX Q Heavy Metal Analysis of water at the identified sampling stations after the TSF3 Incident, December 2012

ANNEX R Heavy Metal Analysis of different fish species in the Agno River

ANNEX S Plant Diversity Assessment of Quadrats and Transects

ANNEX T List of Amphibians and Reptiles (Convention on International Trade in Endangered Species) recorded during the rapid terrestrial vertebrae survey conducted within the Watersheds of San Roque Power Corporation (SRPC) – (Annex F)

ANNEX U List of Claims Settled

ANNEX V BFAR’s Advisory on the Lifting of Fishing Ban

ANENX W National Power Corporation’s Reforestation Cost

ANNEC X List of Environment Consultants

1

Balog Creek and

Parts of Agno River

Rehabilitated

Institutional and legal requirements: DENR, NPC, SRPC, LGUs, PMC, affected households, monitoring teams

Environmental Studies: sediment transport analysis, environmental risk analysis, biological remediation, biological characterization

Environmental Enhancement

Biological remediation and

rehabilitation

Physical Clean Up

Balog Creek & parts of Agno

River – manual, mechanical,

engineering methods

Social

Community

Development

1.0 INTRODUCTION

1.1 Background

The Integrated Environmental Management Program (IEMP) discusses the

environmental rehabilitation and enhancement program of the Balog Creek and

parts of the Agno River of the mine tailings spill from Philex Mining Corporation’s

(PMC) Tailing Storage Facility No. 3 (TSF3) located in Ampucao, Itogon, Benguet

that occurred on August 1, 2012.

1.2 Goal

The goal of the IEMP is to rehabilitate affected areas,

1.3 Objectives

The objectives include the following:

1. To conduct social impact assessment as a basis to compensate

affected persons,

2. To conduct technical studies to support the rehabilitation and

enhancement activities of the IEMP,

3. To provide an action program to rehabilitate the effects of the

breach in TSF3.

1.4 Methodologies

PMC’s strategy in rehabilitating and managing the affected areas through an

ecosystems approach promotes the coordinated rehabilitation and management

of water, land and social resources (Figure 1). Figure 1. Integrated Components of the Environmental Rehabilitation of Balog Creek & Parts of Agno River

2

Immediately after the incident, a team from PMC inspected the extent of the

consequences of the spill in Balog Creek and Agno River.

The planning and implementation of the program is anchored on the institutional

and legal requirements of the stakeholders that include Department of

Environment and Natural Resources (DENR), National Power Corporation (NPC),

San Roque Power Corporation (SRPC), Local Government Units (LGUs) and the

affected households. This is further supported by technical studies on the

consequences of the incident on Balog Creek and parts of Agno River.

For the environmental technical studies, the water, sediments, additives, mine

tailings and fish samples analyses follow the standard protocols. The laboratory

analyses are conducted in government accredited facilities.

In the case of milling additives such as xanthates, nasfroth and dowfroth the

protocol for analysis was developed by a United States (US) laboratory (Annex A)

based on Materials Safety Data Sheet (MSDS) (Annex B). Water samples from the

confluence of Agno River and Balog Creek were sent to the Impact Analytical

Laboratory in Midland Missouri, USA to analyze the possible presence of the

milling reagents.

The sampling of aquatic biota including planktons, macroinvertebrates,

macrophytes and fishes follow internationally accepted protocols.(Annex C).

Analyses for heavy metals for these biota were conducted by government

accredited laboratories and procedures.

The sampling of the watershed biota including vascular plants, reptiles,

mammals, amphibians and avifauna is based on internationally recognized

biodiversity analysis procedures. (ANNEXES D & E)

The sampling of upland and farmland soils is based on the random composite

method and soil samples were analyzed at the Bureau of Soils and Water

Management (BSWM).(ANNEX F)

The determination of mine tailings deposition in Agno River was done through a

hydrographic survey using an echo-sounder with Real Time Kinematic GNSS and

Acoustic Doppler Current Profiler. Geographic Information System (GIS) was used

for mapping and Hydrologic Engineering Centers River Analysis System (HEC-RAS)

(ANNEX G) and Hydrologic Engineering Centers Hydrologic Modeling System (HEC

HMS) (ANNEX H) were used for modelling.

The quantification of opportunity costs and benefits follow standard valuation

techniques. In the case of carbon sequestration, as a benefit for future

remediation, a Plant Canopy Imager will be used to determine above-ground Net

3

BIOLOGICAL

INTEGRATED ENVIRONMENTAL MANAGEMENT PROGRAM

AQUATIC TERRESTIAL

FLORA/FAUNA

Primary Productivity in terms of grams Carbon per square meter per day. The

carbon stock in soil will be determined based on soil organic matter content.

1.5 Components

The IEMP focuses on the Social, Physical and Biological environments with the

following components as presented in the figure below.

Figure 2. Components of the Social, Physical, and Biological Rehabilitation of Balog Creek

and parts of Agno River

1.5.1 Social Component

The Social Component identifies the stakeholders that will serve as partners in the

planning and implementation of the program. These include the Department of

Environment and Natural Resources (DENR), the concerned Local Government Units

(LGUs), the affected households, National Power Corporation (NPC), and San Roque

Power Corporation (SRPC).

1.5.2 Physical Component

The physical component includes manual, mechanical, and engineering measures for

cleaning Balog Creek and the confluence area at Agno River. Sediments will be

collected, hauled and impounded in a staging area or pumped back to TSF3.

1.5.3 Biological Component

The Biological component focuses on the assessment, rehabilitation and

enhancement of both terrestrial and aquatic environments.

PMC

SRPC

NPC

DENR

LGUs

COMMUNITIES

SOCIAL

ENGINEERING

MECHANICAL

MANUAL

PHYSICAL

4

1.5.3.1 Aquatic Ecosystem

The affected aquatic vegetation will be identified and replanted with endemic

species. After further studies, possible introduction of other aquatic plants may be

done to improve the river ecosystem. Likewise, endemic fauna will be identified and

affected areas will be stocked.

1.5.3.2 Terrestrial Ecosystem

The forest ecosystem shall be enhanced through reforestation, forest protection and assisted natural regeneration (ANR) and biodiversity conservation.

2.0 BASELINE DATA

2.1 Physical Environment

2.1.1 Location

2.1.1.1 Balog Creek

Balog is a 2.5 kilometer (km) creek, located downstream of PMC’s TSF3 (16o14’07” N,

120o41’12”E), within Barangay Ampucao, Itogon, Benguet.

Figure 3. Location Map of Balog Creek and Maligaboy Stream

2.1.1.2 Agno River

The Agno River flows in a generally southerly direction through a 120 km-long

narrow valley, formed between two ranges of the central Cordillera mountain

chain: it emerges at barangay San Roque, San Manuel, Pangasinan at an elevation

of about 92 m or 302 feet (ft). From the gorge at San Roque, the river follows a

5

semi-circular route to the west and transverses an additional 150 km. across the

relatively flat plains, gradually changing its course northward into the Lingayen

Gulf. (NPC Website Profile; Lower Agno)

2.1.2 Meteorology

2.1.2.1 Rainfall

The San Roque watershed is considered a Type I classification with two pronounced

seasons: the dry season from November to April and the rainy season from May to

October.

Precipitation throughout the year varies sharply between the dry season when little

or to no rainfall can occur over two or more consecutive months and the wet

period, when practically 90% of the annual precipitation in the watershed occurs.

This results in rainfall accumulation from about 2,000 mm per year in the

southeastern portion of the basin to over 4,000 mm per year in the northern

mountainous region and upper Agno River Basin.

It is notable however, that during the month of August 2012, rainfall was relatively

high specially in the Philex mining area. Data indicates that rainfall at the PMC

Corehouse reached 355.6 on August 1 or the highest rainfall event recorded in the

area which triggered the spill incident. (ANNEX I)

2.1.2.2 Temperature and Relative Humidity

Based on data from the Philippine Atmospheric, Geophysical and Astronomical

Services Administration (PAGASA) station in Baguio City, April is the warmest month

with a mean temperature of 23.3oC and January is the coldest with an average of

12.8oC. Usually the temperature varies with elevation, i.e. lower elevation has higher

temperature readings.

The relative humidity is higher at higher elevations, which are subject to cloud and

mist for most part of the year, than the lower elevations. The average relative

humidity is 84% with a maximum of 91% during the month of August and a minimum

of 78% in January.

2.1.3 Topography, Geology and Seismicity

2.1.3.1 Topography

The area is generally rugged, characterized by narrow ridges, steep slopes and deep

creek channels. The highest elevation located at about one (1) km north of TSF3 is at

963m above sea level sloping downwards to 510 m. The west-northwest (almost

east-west) draining Balog Creek, is the principal drainage in the area and directly

drains towards the Agno River. The creek cuts steeply forming V-shaped valleys with

6

isolated plateaus. Floodplains are limited to several meters across the banks of Agno

River.

2.1.3.2 Geology

The area is within the southern foothills of the Cordillera Mountain Range. It is

underlain by Agno batholiths, a medium grained biotite-hornblende quartz diorite,

which easily crumbles when weathered. Weathering within the diorite can go as

deep as 50 m.

In some areas, malachite staining was observed on outcrops of the quartz diorite

indicating mineralization in the area. Pyrite is also ubiquitous.

2.1.3.3 Seismicity

Major fault structures within the vicinity are north-east trending believed to be an

echelon of the splays of the main Philippine fault located 23 km from the site of the

TSF3.

2.1.4 Hydrology and River Sub-basin

2.1.4.1 Hydrology

The Balog Creek is one of the tributaries of Agno River.

Maligaboy is an intermittent stream that recharges only during the rainy season and

discharges to Balog Creek.

2.1.4.2 Streamflow and Sedimentation

A Japan International Cooperation Agency (JICA) study in 1991 showed that the

Upper Agno River has the highest sediment yield to the Lower Agno River. Despite

the large percentage trapped by the Ambuklao and Binga reservoirs, it is the most

significant source of sediments to the Lower Agno River.

In a 1994 NPC Feasibility Study, the best estimation of the annual sedimentation in

the reservoir was based on Ambuklao and Binga reservoirs. A sediment yield of

7,000m3/km2/yr or annual rate of erosion of 7mm has been identified.

2.1.5Waterbodies

As per DENR Memorandum Circular No.7, February 22, 1993, Agno – Lower located

in Pangasinan (Region 1) was classified in 1976 as Class “C” while Agno-Upper

located in Benguet (CAR) was classified also in 1976 as Class “A”. For Balog Creek,

EMB-CAR has classified this as a Class A Body of Water.

Department of Environment and Natural Resources Administrative Order (DAO) 34,

series of 1990 states that significant parameters for mineral ore processing (mining

industry) are Suspended Solids and Heavy metals(Hg, Cn, Cd, etc), Arsenic.

7

Total Suspended Solids are solids in water that can be trapped by a filter. It

includes a wide variety of materials such as silt, decaying plant and animal

matter, industrial wastes, and sewage. High concentrations of suspended

solids can cause many problems for stream health and aquatic life. High TSS

can block light from reaching submerged vegetation. High TSS also indicates

higher concentrations of bacteria, nutrients, pesticides and metals in the

water.

2.1.5.1 Balog Creek

Table 1 presents the test results on physical parameters of water samples from Balog

Creek, between October to December 1999. pH and TSS passed DENR water standards. For October to November, Total Dissolved Solids (TDS) were within the normal levels and was observed that it increased in December 1999.(ANNEX J)

Table 1. Water Quality, Physical Parameters, of Balog Creek

October 1999 – December 1999

Sampling Station Number

Sampling Station

Destination

Laboratory Reference

Date of

Sampling

Parameters

pH Temp oC

TDS mg/L

TSS mg/L

DENR Standard (Dao 34 Class A) 6.5 – 8.5 1000 50

P7 (RBW) Balog Creek L99-1189 10/13/99 6.71 24.9 764 32

11/04/99 7.65 24.00 413 27

12/02/99 7.40 25.00 1588 36

Source: PMC Internal Monitoring Team Report, 1999

2.1.5.2 Agno River

In 1981, the National Council on Integrated Area Development (NACIAD) conducted

a water quality survey at the Upper Agno River and the Agno River Irrigation System

(ARIS) that services part of Pangasinan.

Table 2. Levels of Heavy Metals in the Agno River Basin (NACIAD et al., 1981)

Heavy Metals

Upper Agno

ARIS Intake

Sediments in ARIS

canals and fields

Iron (Fe) 3.5–17 0.9–3.1 14,500–39,000

Copper (Cu) 0.08–3.5 bdl-8.9 146–997

Zinc (Zn) 0.08–5.1 0.03–0.08 32–133

Lead (Pb) 0.13–1.6 0.09–0.13 9–47

Manganese (Mn) 0.63–4.05 bdl-0.01 -

Cadmium (Cd) bdl-0.04 bdl 0.61–1.24

Nickel (Ni) bdl-0.04 bdl -

Silver (Sg) bdl-0.03 bdl -

Mercury (Hg), ppb 0.2–0.4 bdl-0.9 0.02–0.05

Cyanide (Cn) 6.0–11.2 - -

Sulfates 200–500 157–326 -

Suspended solids 330–500 7.7–8.1 -

pH 7.1–8.1 7.7–8.1 - Source: NACIAD – National Council on Integrated Area Development, et al 1981 Notes: ARIS = Agno River Irrigation System

bdl = below detectable limit

NPCC recommended safe levels for fish: Iron: 0.095 ppm for carp and tilapia; Manganese: 0.007 ppm for carp and tilapia and milkfish; Nickel: 0.054 ppm for carp and tilapia

8

The pH is within the normal levels from 7.1 to 8.1 in both areas. TSS is at 330 to

500ppm. On the heavy metal content, Copper (Cu) is at 0.08 to as high as 8.9 ppm;

Lead (Pb) is at 0.09 to 1.6 ppm; Cd is within the bdl to 0.04 ppm; Hg is from below

detection level (BDL) to 0.9ppm. Comparing it with the current DENR standard for

water quality, TSS is relatively high along the Agno River. Cu, Pb and Cd had

occurrences that are above the current DENR standard. It can be noted that only Hg

passed the standard.

Comparing with current sample analysis conducted by SRPC in 2008, water quality

and heavy metals contents are lower

Test results conducted in May 2008 for physical parameters of water samples from

Agno River showed a passing TSS but relatively high pH and TDS as compared with

the DENR standard.

Test results of water samples from Balog downstream and Confluence1 showed that

the water bodies passed the DENR standards for physical parameters on TDS and TSS

(Table 3 and ANNEX K).

Table 3. Water Quality, Physical Parameters ,of Agno River, Balog Downstream, Confluence Area

May 27, 2008 Sampling Station Number

Sampling Station

Destination


Date of Sampling

Physical Parameters

pH Temp ˚C TDS mg/L

TSS mg/L

DENR Water standard (DAO 34 Class A) 6.5 – 8.5 1000 50

PSS1 Agno River L08-0645 05/27/08 8.66 21.0 1102 9

PSS2 Balog downstream

L08-0645 05/27/08 8.6 21.0 265 36

PSS3 Confluence L08-0645 05/27/08 7.0 21.0 227 14

Source: PMC Internal Monitoring Report, 2008

Results of analysis for heavy metals in water samples from Agno River conducted by

PMC in May 2008 indicated insignificant presence of Cd and Hg. Cr was below the

detection level. Pb was higher than the DENR water standards. (Table 4.)

Table 4. Presence of Heavy Metals in Water Samples from Agno River, Balog Downstream, Confluence Area May 27, 2008


Sampling Station

Destination


Date of Sampling

Presence of Heavy Metals

Cu ppm

Pb ppm

Cd ppm

Cr ppm

Hg Ppm

DENR Water standard (DAO 34 Class A) 1.000 0.05 0.01 0.05 .002

PSS1 Agno River L08-0645 05/27/08 0.003 0.122 0.005 BDL 0.00032


L08-0645 05/27/08 0.003 0.119 0.006 BDL 0.00035

PSS3 Confluence L08-0645 05/27/08 0.009 0.133 0.003 ND 0.00047


PMC is not using Pb in its milling process nor is it mining Pb ore.

1 Confluence – flowing together especially of two or more streams, place where two or more things

merged; example – the location where two rivers merge.

source: www.yourdictionary.com

http://www.yourdictionary.com/

9

Water quality monitoring in portions of Agno River was also conducted by San Roque

Power Corporation in March 2012. (ANNEX L)

Table 5 shows that the water samples passed all physical and heavy metal

parameters (SRPC 2012). The amount of TDS is 211 ppm for the San Roque water

obtained at 0.5 m at the surface while 264 ppm and 300 ppm for the water collected

at ½ of the depth while 300 ppm for the 1.0 m above the bottom.

The pH of the water obtained from Agno River ranged from 8.2 to 8.3. This is within

the DENR standards of 6.5 – 8.5.

For the San Roque Dam inflow, the pH values obtained were 8.58, 8.55 and 8.43 for

0.5 m at the surface, ½ of the depth of the dam and 1.0 m above the bottom,

respectively.

Table 5. Water Quality, Physical Parameters of Agno River and San Roque Dam Inflow March 2012

Parameter

Sampling Site

DENR Standard (DAO 34 Class C)

Agno River San Roque Dam Inflow

0.5 m at surface ½ of the depth 1.0 m above the bottom

pH 8.2-8.3 8.58 8.55 8.43 6.5-8.5

Total suspended solids (ppm)

NDA

11.0

18.0

423 Not more than 30

ppm

Total dissolved solids (ppm)

NDA 211 264 300 1200

Total Hg (ppm) NDA -- -- ND .002

Dissolved Cu (ppm) NDA ND ND ND 0.05

Total Cr (ppm) NDA ND ND ND 0.05

Total Pb (ppm) NDA ND ND ND 0.05

Total Cd (ppm) NDA ND ND ND 0.01

NDA – no data available ND – not detected

Source: San Roque Power Corporation Water Monitoring Report, 2012

2.1.5.3 Maligaboy Stream

Maligaboy is an intermittent stream that recharges only during the rainy season. It

drains into Balog Creek (Figure 3). The spillway is located at the upstream of

Maligaboy Stream.

In the absence of earlier water baseline data, PMC conducted water quality analysis

of Maligaboy Stream in February 2013 to serve as baseline data prior to the

operation of the spillway.

Table 6 data showed low presence of TDS and TSS and a pH of 7.7. These findings are

all within the DENR standards. (ANNEX M).

10

Table 6. Water Quality, Physical Parameters of Maligaboy Stream

February 2013


Sampling Station

Destination

Lab Ref

Date of Sampling

Physical Parameters

pH (on site)

Temp (on site) oC

TDS mg/L

TSS mg/L

Water standard ((DAO 34 Class A) 6.5 – 8.5 1000 50

Maligaboy L13- 02/03/13 7.7 19.0 210 4 Stream 0037

Source: PMC Internal Report, 2013

Tests for heavy metals indicated that Cu and Pb are not detected. Likewise Cr and Hg

are below detection level (BDL). Low traces of Cd were detected (Table 7).

Table 7. Water Quality, Presence of Heavy Metals, in Maligaboy Stream February 2013


Sampling Station

Destination

Lab Ref Date of Sampling


Cu ppm

Pb ppm

Cd ppm

Cr ppm

Hg Ppm

DENR Water standard (DAO 34 Class A) 1.000 0.05 0.01 0.05 .002

Maligaboy Stream

L13- 0037

02/03/13 ND ND 0.004 BDL BDL

BDL – below detection level, ND- not detected


2.2 Biological Environment

2.2.1 Terrestrial

2.2.1.1 Flora

Based on PMC’s 1987 data, the general vegetative cover of the project area consists

mainly of secondary growth dipterocarp species, pine trees and cogon. Vegetation is

thinly distributed along the mountain ranges/slopes and gullies. Dense vegetation is

generally located along the gullies while the vegetation on the mountain ridges and

slopes are sparsely distributed.

Within the area, Themeda triandra, Eulalia trispicata and Imperata cylindrica

predominate. At lower elevation and partly below 600meters above sea level,

dipterocarp and other broad-leaved species abound. Shorea spp, molave (Vitex

praviflora) and other tree species form a dense multi-storey cover and can be

located in undisturbed places. Extensive grassland is also present at these elevations.

2.2.1.2 Fauna

Based on community dialogues, wild animals have been reduced to near extinction

through fire and shifting cultivation (Kaingin) within the area and its vicinities. Wild

pigs and chickens, civets and deer are known to exist but they are restricted in less

accessible mountain slopes.

2.2. 2 Aquatic Ecosystem

The Balog Creek and Agno River aquatic ecosystem is a continuum considering that

the former is a tributary of the latter.

11

Aquatic life along river tributaries and creeks includes frogs, tilapia, carp, eel, goby,

crabs, and shrimps.

Table 8 shows test results of tilapia fish samples from Agno River that was conducted

by the Bureau of Fisheries and Aquatic Resources (BFAR) prior to the incident. Based

on the results during the four sampling periods prior to the incident, Tilapia taken

from Agno River had heavy metals way below regulatory ceilings and are safe for

human consumption.

The details can be found in ANNEX N.

Table 8. Data Comparison of Heavy Metals from Tilapia Samples in San Roque Dam

October 2011 and January, April and May 2012

Heavy Metals

Regulatory

Limit

Date of Tilapia Sampling

October 27, 2011

January 27, 2012

April 27, 2012

May 18, 2012

Arsenic (As) 1 0.00325 0.00675 0.055 0.053

Cadmium (Cd) 1 0.0175 0.0075 0.05 0.02

Lead (Pb) 0.5 0.0625 0.155 0.25 0.0875

Mercury (Hg) 0.5 0 0.01225 0.04 0.02

Copper (Cu) 20 0.23 0.25 0.315 0.3175 Source: BFAR, Region I

2.3 Socio-economic Profile

Data and information on the social and economic profile have been drawn from local

secondary sources including of the barangays and municipality as well as the

National Statistics Office (NSO).

A household survey conducted from October 2012 to November 2012 by PMC in

coordination with the concerned barangays was also used as reference. The

objective of the survey is to gather baseline data that will be used in the formulation

of plans and programs as well as identification of projects for the affected

households. Validation of results was done through neighbors and interviews of key

informants.

2.3.1 Local Government Units

Five household clusters were affected. These are in the areas of Pangbasan,

Ambalanga, and Pao within Barangay Dalupirip and in the areas of Kanagdian and

Terong within Barangay Ampucao. Both barangays are in Itogon Municipality.

Itogon is located 19 km west of Baguio City, and is one (1) of the 13 municipalities of

the Province of Benguet. It is located within the longtitude 120°37 - 120° and latitude

of 16°10 - 16°28. The Municipality of Itogon is bounded on Northeast by the

12

Municipality of Bokod, on the East by the Province of Nueva Vizcaya, on the South by

the Province of Pangasinan, on the Northwest by the Municipality of Tuba and

Baguio City.

Itogon is politically subdivided into nine (9) barangays namely: including Ampucao,

Dalupirip, Gumatdang, Loacan, Poblacion (Central), Tinongdan, Tuding, Ucab and

Virac. Results of the 2010 NSO census show that the total population of Ampucao is

10,450 and Dalupirip has 2,578.

2.3.2 Area Characteristics

2.3.2.1 Relevant Households

Among PMC’s immediate responses to the spill were visits to the downstream

settlements. A rapid assessment of these settlements was conducted to identify the

affected households and to provide immediate response to their needs. Activities

included interviews, meetings and settlement mapping with members of the

households.

Table 9 and Figure 4 below show the location distribution of the 41 relevant

households: near the confluence of Balog Creek and Agno River is sitio Kanag-jan

with three (3) households, across the confluence point of Balog Creek and Agno

River is sitio Pangbasan with 26 households, further downstream of Agno River are

three smaller communities, sitio Ambalanga with six (6) households, sitio Terong

with two (2) households and sitio Pao with five (5) households.

Table 9. Relevant Households

Area No.of

Households

Total Population

Pangbasan 26 182

Ambalanga 6 42

Pao 4 28

Terong 2 14

Kanag-jan 3 14

TOTAL 41 287

Source: PMC Community Social Assessment, 8th August 2012

Based on interviews with the residents, the affected households are not permanent

residents as most of them visit the area only during the gold panning season, which

is from January to April.

13

Figure 4. Geographic Distribution of the Affected Households

Some of the 41 households were not present when the incident happened but were

also considered due to impacts on their gold panning and fishing implements that

were left in the area.

With an average household size of seven (7), the total estimated affected population

of the five areas is 287.

2.3.2.2 Sources of Income2

One of the sources of income in the area is fishing. This usually takes place between

July to December. Based on the results of the household survey, there are 36

fishermen. Agno River near Pangbasan, Ambalanga, Palen, Silag, Pao, Tayum,

Kaipilan, Lebkew, Kalit, and Maadi serve as their fishing grounds. Fishing season is

from July to December. Tilapia and eel are the common catch in the area.

The average volume of tilapia catch in the area is 6,158 kilos for six (6) months. The

19 fishermen earn an average monthly net income of PHP3,214.04 from tilapia

fishing. On the other hand, the average volume of eel catch is 5,406 kilos for six (6)

months. The 36 fishermen earn an average monthly net income of PHP5,318.40 from

eel (Table 10).

2 There are claims from households that they are also engaged in unregulated gold

panning.

14

Table 10: Tilapia and Eel Production in the San Roque Dam Reservoir/Five Clusters of Households

Particulars Unit Tilapia Eel

Number of Fishermen Person 19 36

Volume of Catch in 6 months (July to December) Kilo 6,158 5,406

Volume of Catch per fisherman per day Kilo 2 1

Amount per kilo PHP 70.00 250.00

Amount of Catch in 6 months (July to December) PHP 431,060.00 1,351,500.00

Operational Cost in 6 months (15%) - PHP 64,659.00 202,725.00

Average net income in 6 months PHP 366,401.00 1,148,775.00

Average Annual net income (in 6 months )per fisherman PHP 19,284.26 31,910.42

Average Monthly net income (in 6 months) per fisherman

PHP

3,214.04

5,318.40

Average Daily net income (in 6 months) per fisherman PHP 107.13 177.28

Source: Household Survey, October to November 2012, PMC

Backyard farming is also observed. Some families have goats, ducks, and chickens. A

few have small gardens that are planted with papaya, cassava and sweet potato.

2.3.2.3 Sanitation

Toilet facilities in the area are shared among households. Majority of the households

dispose their wastes through burning, while others dump their wastes in pits.

2.3.2.4 Utilities and Transportation

There is a 24-hour low-voltage electricity in the area through microhydropower. In

Pangbasan, the community has three dynamos that are able to generate electricity

for the whole community. In Ambalanga, there is one (1) dynamo to supply the

needs of the whole sitio. Pao has one (1) dynamo as well.

Photo 1: Micro Hydropower through Dynamos

15

Owners of these dynamos, ask for minimal fees for the maintenance. Most of the

serviced households have 3 light bulbs and an electrical socket.

SMART cellular mobile communication is available especially on higher grounds of

Pangbasan. The residents reported better communication signal when the company

installed a booster at TSF3 Command Post.

Baguio City can be reached via two routes. Most of the residents take a boat to cross

Agno River, hike towards Philex TSF3, hitch a ride to the mine camp and then take a

jeepney ride to Baguio City. This one-way route to Baguio City costs P50.00.

Those with cargos prefer to travel towards San Roque, which cost around P250.00. A

boat ride to SRPC will cost PHP100.00, PHP25.00 for tricycle ride to San Manuel,

PHP35.00 for jeepney ride to Binalonan and PHP90.00 for the van/bus ride to Baguio.

2.3.2.5 Local Organization

There are four (4) local organizations in the area.

Pangbasan Gold Panners and Fisherfolk Livelihood Association (PAGOPAFLA), is a

local organization of 70 members from Pangbasan and adjacent areas.

San Roque Dam Fisherfolks and Resource Users Association, Inc. (SARDAFRUA) is an

association of residents within the San Roque Dam Reservoir. Reports indicate that

they were organized by San Roque Power Corporation as possible implementer of

livelihood projects.

Some of the men in the areas are also “Bantay Gubat” volunteers and serve as forest

guards.

SEBBANG NI PANSEGSHAN is an Indigenous Peoples (IP) association with 78

members within the San Roque Dam Reservoir.

3.0 ENVIRONMENTAL IMPACT ASSESSMENT

3.1 Physical Assessment

3.1.1 Sediment Deposition

The total volume of spill from the tailings storage facility is 13,513,507 cubic meters

of mine tailings3 (ANNEX 0).

3 DENR-MGB letter, Sept 26, 2012

16

3.1.2 Sediment Analysis

3.1.2.1 Heavy Metal Analysis

Tailings are the waste materials generated by the grinding and processing of ores

and other materials containing economically retrievable minerals. They contain

minerals similar to those of the natural surrounding ore material.

After the incident, PMC’s third party environmental consultants conducted a series

of sediment sampling tests for the presences of heavy metals. Three sampling points

were identified: Downstream of Balog Creek, Agno River and the Confluence of Agno

and Balog Creek. (ANNEX P)

Table 11. Heavy Metal Analysis of Sediments from Agno River, Downsteam of Balog Creek, Confluence of Agno and

Balog Creek

Sampling site

Date of sampling

October 2012 November 2012 December 2012

Cu (ppm)

Cd (ppm)

Cr (ppm)

Pb (ppm)

Cu (ppm)

Cd (ppm)

Cr (ppm)

Pb (ppm)

Cu (ppm)

Cd (ppm)

Cr (ppm)

Pb (ppm)

Downstream of Balog Creek

187 ND 35 ND 139 ND 8.5 2.9 173 ND 24 6.6

Agno River 358 ND 43 11 257 ND 41 21 144 ND 34 5.9

Confluence of Agno River and Balog

Creek

533

ND

30

ND

315

ND

16

5.7

520

ND

33

10

Source: PMC Third Party Environmental Consultants, CRL// EPA- Environmental Protection Agency

For October 2012 sampling, Agno River had 358 ppm Cu, non-detectable amount of

Cd, 43 ppm for Cr, and 11 ppm for Pb. At the downstream of Balog Creek, Cu

registered 187 ppm, Cr was 35 ppm while Cd and Pb were at undetectable levels. At

the confluence point, Cu registered a value of 533 ppm, 30 ppm for Cr and non-

detectable amounts for Cd and Pb.

For November 2012 sampling, Agno River had Cu value of 257 ppm, non-detectable

amount of Cd, 41 ppm for Cr and 21 ppm for Pb. At the downstream of Balog Creek,

Cu value is 139 ppm, non-detectable amount for Cd, 8.5 ppm for Cr and 2.9 ppm for

Pb. At the confluence point, Cu value is 315 ppm, non-detectable amount for Cd, 16

ppm for Cr, and 5.7 ppm for Pb.

For December 2012 sampling, Cu was detected at 520 ppm at the Covergence of

Balog and Agno River, 144 ppm at Agno River and 173 ppm at downstream Balog

Creek. Cd was not detected in the three sampling sites. On the other hand, Cr and Pb

were present in all three site. Sediments from Agno River showed 34ppm of Cr and

5.9 ppm of Pb, from downstream of Balog Creek Cr was at 24 ppm while Pb was at

6.6 ppm, and from the Confluence of Agno River and Balog Creek, Cr was 33 ppm

and Pb was 10 ppm.

It should be noted that presence of Cu at the Confluence of Agno River and Balog

Creek were above the 500 ppm level during the October and December sampling

17

tests. However, in December, the presence of Cu in samples from Agno River had

significantly decreased, by more than 50%, from the October level.

It is also worthy to note that the sampling sites near the mine tailings discharge have

the lowest heavy metals content in terms of Cu and Cr as shown in Table 11. Also of

importance is that there are no Philippine standards in terms of heavy metals

content in sediments.

An analysis of the water samples presented in Table 13, show that the heavy metals

in the water samples have all passed the water criteria for heavy metals for Class C

waters based on DENR Department Administrative Order 34.

The very low values in terms of heavy metals found in the water samples could be

explained by the consistently low hydrogen ion concentration (pH level). Alkaline

waters render heavy metals unavailable from the surrounding environment.

3.1.3 Water Analysis

3.1.3.1 Physical Parameters of Water

PMC regularly conducts water quality monitoring of the water bodies to gather data

and assess variations in water quality.

Table 12 shows the December 18, 2012 results of water analysis on physical

parameters from five (5) sampling stations: Agno River, Balog downstream,

Confluence, San Roque Dam outlet, and National Irrigation Administration (NIA)

Weir. The data shows that the registered pH values of the water samples are within

DENR standard. TSS and TDS in the five (5) sampling sites were within the DENR

standards.

Table 12. Water Quality, Physical Parameters of Water from Agno River, Balog Downstream, Confluence Area, San Roque Dam Outlet and NIA Weir

December 18, 2012

Sampling Station Code

Sampling Station Site


Date of Sampling

Physical Parameters

pH Temp ˚C

TDS mg/L

TSS mg/L

DENR Water standard (DAO 34 Class A) 6.5 – 8.5 1000 50

PSS1 Agno River L12-1511 12/18/12 7.2 10.0 424 8


L12-1511 12/18/12 6.9 10.0 872 81

PSS3 Confluence L12-1511 12/18/12 7.1 9.0 397 10

San Roque Dam Outlet

L12-1511 12/18/12 7.1 10.0 310 9

NIA Weir L12-1511 12/18/12 7.0 11.0 395 10

Source: PMC Multi-partite Monitoring Report, 2012

3.1.3.2 Heavy Metals in Water

Monthly analysis for the presence of heavy metals in water was conducted from

September 2012 to December 2012. All heavy metals registered a non-detectable

18

value, which means that the concentrations of Cu, Cr, Pb, and Cd are within the

DENR standard.

Results of the heavy metal analysis of water from the different sampling sites are

shown in Table 13.

Table 13. Monthly Water Analysis for Presence of Heavy metal September 2012 to December 2012

Sampling

Site

Date of Sampling

September 6, 2012 October 20, 2012

November 18, 2012 December 17, 2012

Cu (ppm)

Cd (ppm)

Cr (ppm)

Pb (ppm)

Cu (ppm)

Cd (ppm)

Cr (ppm)

Pb (ppm)

DENR DAO 34-1990 Water

Standards

1

.01

.05

.05

1

.01

.05

.05

Agno River < 0.02 <0.01 <0.03 <0.04 < 0.02 <0.01 <0.03 <0.04

Downstream of Balog

Creek

< 0.02

<0.01

<0.03

<0.04

< 0.02

<0.01

<0.03

<0.04

Confluence of Agno and

Balog

< 0.02

<0.01

<0.03

<0.04

< 0.02

<0.01

<0.03

<0.04

San Roque Dam

Spillway

< 0.02

<0.01

<0.03

<0.04

< 0.02

<0.01

<0.03

<0.04

San Roque Dam Outlet

< 0.02 <0.01 <0.03 <0.04 < 0.02 <0.01 <0.03 <0.04

NIA Weir -- -- -- -- < 0.02 <0.01 <0.03 <0.04

Source: PMC Monitoring Report, 2012

Analysis was done by CRL Environmental Corporation

During the September 6, 2012 sampling conducted by the multi-partite team, Cu

content of water in the Agno River, downstream of Balog Creek, the confluence area,

San Roque Dam spillway and San Roque Dam outlet were all <0.02 ppm, which is

100x lower than the Cu effluent standard of 1 ppm. Cd in the same impact areas was

found to be less than 0.01 ppm, lower than the 0.01 ppm DENR standard. Similarly,

Cr and Pb contents at <0.03 ppm and <0.04 ppm, respectively are far below the 0.05

ppm DENR standard.

The November 18, 2012 sampling generated similar results. The NIA weir

downstream of San Roque dam which was not previously sampled also showed

values lower than the DENR standards.

In terms of water quality, all the values analysed for Cu, Cd, Cr and Pb are below the

0.05 ppm DENR standard. This clearly shows that the water which is categorized as

Class C is safe for fisheries and irrigation. Under this condition, aquatic organisms

(micro and macro) can thrive without impairment in their growth and development.

19

The very low concentration of the heavy metals in water can be attributed to the

alkaline water pH which ranges from 7.9 to 8.1. The alkaline condition of water

renders the availability of the heavy metals at very low concentration. The alkaline

water condition also prevents the heavy metals from undergoing chemical reactions

and thereby inhibits entry into the food chain.

Results of December 2012 water sampling indicated that water from Agno River,

Balog downstream and Confluence passed the DENR standards. (Table 14)(ANNEX Q)

Table 14: Water Analysis for Heavy Metals: Agno River,Balog Downstream, Confluence Area December 17, 2012


Sampling Station

Destination


Date of Sampling


Cu ppm

Pb ppm

Cd ppm

Cr ppm

Hg Ppm

DENR Water standard (DAO 34 Class A) 1.000 0.05 0.01 0.05* .002

PSS1 Agno River 12/17/12 <0.02 <0.004 <0.01 <0.004 <0.0001


12/17/12 <0.02 <0.004 <0.01 <0.004 <0.0001

PSS3 Confluence 12/17/12 <0.02 <0.004 <0.01 <0.004 <0.0001

*DAO 34 - hexavalent chromium Source: PMC Monitoring Report, Analysis was done by CRL Environmental Corporation

3.1.3.3 Fate Analysis of Reagents

PMC uses biodegradable reagents in its milling process. In particular, Dowfroth and

Nasfroth that serves as frothers to create bubbles.

Another reagent, the Sodium Isobutyl Xanthate (SIBX) is used in minute quantities of

25-30grams/ton as a flotation reagent. SIBX is degradable and has a half-life of 4

days.

Half-life is used to describe a quantity undergoing exponential decay,

and is constant over the lifetime of the decaying quantity. So, if the

half-life time of Xanthate is 4 days, this means that it would “decay”

or “degrade” at 50% (or 1/2) in 4 days; the next 4 days would decay

further by 25% (1/4); the next 4 days, 12.5% (1/8), etc.

Water samples at the confluence area were taken on November 2012 and were sent

to the Impact Analytical Laboratory in Midland Missouri, USA to analyze the possible

presence of the milling reagents. Results of the analysis show that the presence of

any of the three reagents – Dowfroth, Nasfroth and SIBX were not detected. (Annex

A).

The absence of the above reagents indicates that they have been degraded and do

not cause any risks for toxicity in the Agno River.

20

Table 15: - Water Analysis for Presence of Milling Reagents November 2012

Milling Additives Results of Toxicity Analysis

Dowfroth Not detected

Nasfroth Not detected

Sodium Isobutyl Xanthate (SIBX) Not detected

Source: Impact Analytical Laboratory, Midland MI, USA / Orica Chemicals MSDS November 2012

3.2 Biological Assessment

3.2.1 Aquatic Ecosystem

The Balog Creek and Agno River aquatic ecosystem is a continuum considering that

the former is a tributary of the latter.

3.2.1.1 Fishery

The fishery resources of the Agno River consist of several species of fish. The

following fish species were collected and observed during the sampling activity:

Glossogobius giuris (Biyang puti), Rhinogobius sp. (Bunog), Oreochromis niloticus

niloticus (Tilapya) and Leiopotherapon plumbeus (Ayungin).

Interviews with key informants and fishermen indicated that the following species

are also present. These include Cyprinus carpio carpio (Karpa), Clarias batrachus

(Paltat), Channa striata (Haroan) and Anguilla marmorata (Igat). A shrimp species

has also been collected and is being identified.

Based on the identified endemic or common species found in Agno River and Balog

Creek, steps will be taken to stock the river with these species in close coordination

with BFAR and in partnership with the other stakeholders.

Incidentally, on August 8, 2012 BFAR declared a precautionary fishing ban in the San

Roque Dam Reservoir and conducted tissue analysis of fish. The same agency lifted

the precautionary fishing ban on August 28, 2012 after tests of tilapia and carp

samples showed that the fishes are safe for human consumption.

Consequently, for continuous monitoring, PMC conducts regular tissue analysis for

several fish species – tilapia, carp and eel. Test results show that the fishes are safe

for human consumption.

Tissue analysis is being done by Sentro sa Pagsusuri, Pagsasanay at Pangangasiwang

Pang-Agham at Teknolohiya Corp. (Sentrotek) which is a government-accredited

laboratory.

Table 16 presents the laboratory results of separate sampling tests of the fishes by

Sentrotek between August 28, 2012 and February 14, 2013. The data showed that

during the three sampling periods the standards set by the Fisheries Administrative

21

Order (FAO) 210 for heavy metal content in fishes were all met by wide margins.

(ANNEX R)

Table 16. Heavy Metal Analysis of Different Fish Species in the Agno River

Heavy Metals Standards

(mg/kg)

Fish Species

Tilapia1

(mg/kg)

Carp2 (mg/kg) Eel3 (mg/kg)

Cadmium (Cd) (FAO, EU)

.50 ND <.05 ND

Lead (Pb) (FAO)

.50 ND .11 .14

Mercury (Hg) (FAO, EU)

.50 <.04 .07 .09

Arsenic (As) (FDA)

0.76 -0.86 ND .0052 <.0005

1 – August 28, 2012 submitted to Sentrotek Laboratory

2 - November 7, 2012 submitted to Sentrotek Laboratory 3 – February 14, 2013 submitted to Sentrotek Laboratory Source: Sentro Sa Pagsusuri, Pagsasanay at Pangangasiwang Pang-Agham at Teknolohiya Corp. (Sentrotek)

Results from the laboratory analysis for Hg, Cd and Pb are below the Maximum

Residue Limit (MRL).

United States-Food and Drug Administration (US-FDA) (1998) sets a critical limit for

Arsenic (As) in fish and fish products at 0.76 – 0.86 mg/kg. The results for the three

(3) fish tissues pass the standards of US-FDA.

3.2.1.2 Phytoplankton

Phytoplanktons are generally phototrophic organisms that play critical roles in the

productivity of an aquatic ecosystem like the Agno River. They are also good

indicators of water quality. Phytoplankton communities, diversity, richness and

dominance in the Lower Agno River revealed an oligotrophic status of the water

based on the analysis of the water samples taken from 12 sampling stations (Figure

16). Many members of phyla Myzozoa and Ochrophyta are known to thrive in poorly

nourished body of water and are generally indicators of pollutants.

Five (5) taxa of phytoplankton were observed in the initial assessment of Lower Agno

River namely Phylum Ochrophyta, Phylum Myzozoa, Phylum Euglenozoa, Division

Cyanophyta and Division Chlorophyta.

There are six (6) species in Phylum Chlorophyta specifically Cosmarium sp.,

Oedogonium sp., Pediastrum sp., Scenedesmus quadricauda, Scenedesmus sp., and

Staurastrum sp, six in Division Cyanophyta which are Anabaena sp., Aphanothece

pallida, Aphanothece sp., Gloeocapsa sp., Merismopedia sp. and Oscillatoria sp., one

in Phylum Euglenozoa which is Trachelomonas sp., two in Phylum Myzozoa

Peridinium sp. and Ceratium furcoides and eight in Phylum Ochrophyta namely

22

Aulacoseira sp., Cyclotella sp., Guinardia sp., Nitzschia sp., Pinnularia sp.,

Pleurosigma sp., Surirella sp. and Synedra sp (Table 17 and Figure 5).

Table 17. List of Phytoplankton Species Found at the Sampling Stations Along the Lower Agno River

Division Chlorophyta

Division Cyanophyta

Phylum Euglenozoa Phylum Myzozoa Phylum Ochrophyta

Cosmarium sp. Anabaena sp. Trachelomonas sp. Peridinium sp. Aulacoseira sp.

Oedogonium sp. Aphanothece pallida

Ceratium furcoides

Cyclotella sp.

Pediastrum sp. Aphanothece sp. Guinardia sp.

Scenedesmus quadricauda

Gloeocapsa sp. Nitzschia sp.

Scenedesmus sp. Merismopedia sp. Pinnularia sp.

Staurastrum sp. Oscillatoria sp. Pleurosigma sp. Surirella sp. Synedra sp.

Source: PMC Third Party Consultants, 2012

Figure 5. Species Composition of Phytoplanktons at the 12 Sampling Stations along the Lower Agno River


Among the phytoplanktons, Phylum Myzozoa showed the highest relative mean

density with 41% followed by Phylum Ochrophyta, Division Chlorophyta, Phylum

Euglenozoa, and Division Cyanophyta with values 30%, 25%, 3%, and 1% respectively

(Figure 6).

100%

90%

80%

70%

60%

50%

40%

PHYLUM OCHROPHYTA

PHYLUM MYZOZOA

PHYLUM EUGLENOZOA

DIVISION CYANOPHYTA

DIVISION CHLOROPHYTA

30%

20%

10%

0%

1 2 3 4 5 6 7 8 9 10 11 12

23

Figure 6. Relative Mean Density of the Different Phytoplankton Division/Phyla in Lower Agno River.

Source:PMC Third Party Consultants, 2012

Notable differences could be seen in phytoplankton average densities among the

sampling stations. The highest was calculated in Station 7 with 844,731 indl’s/m2

followed by Station 6 with 832,032 indl’s/m2 and Station 5 with 717,323 indl’s/m2.

The lowest total mean abundance was observed at Station 2 with 28,489 indl’s/m2

(Figure 7). Although stations 5, 6 and 7 showed the greatest phytoplankton densities,

these were the least diverse, together with station 1. Dominance was also

pronounced in these stations. Peridinium sp. Ceratium furcoides are indicators of

oligotrophic status of the aquatic ecosystem.

Figure 7. Average Densities of Phytoplankton Communities at the12 Sampling Stations Along Lower Agno River


Phytoplankton data analyzed with Cluster Analysis using Bray-Curtis showed that the similarity of phytoplanktons at sampling stations 1, 2, 3 and 4 were approximately

DIVISION CHLOROPHYTA

25%

PHYLUM OCHROPHYTA

30% DIVISION

CYANOPHYTA

1%

PHYLUM

EUGLENOZOA

3%

PHYLUM MYZOZOA

41%

1000000

800000

600000

400000

200000

0

1 2 3 4 5 6 7 8 9 10 11 12

Stations

To

tal M

ea

n A

bu

nd

an

ce

(un

d'l/

m2)

24

42%. Sampling stations 5, 6 and and 7 were grouped at 88% level of similarity, while stations 8 to 12 were grouped at 66% level of similarity (Figure 8).

Figure 8. Cluster Analysis of the Phytoplankton Phyla in 12 Sampling Stations along Lower Agno River


Shannon Diversity Index was used for the computation of phytoplankton diversity.

Variations in values calculated in the 12 sites have values from 1.11 to 1.82. The

highest diversity was observed at Station 4 and lowest at Station 1. The evenness has

close values ranging from 0.30and 0.42 while the dominance has values ranging from

0.24 to 0.49 in the sampling sites (Table 18). Dominance indicates that a certain

organism or group of organisms pervade in that area. In this case, Phylum

Ochrophyta dominates site 1 – the area nearest the spill source. The species thriving

in this site are potentially tolerant to the heavy metals contained in the mine tailings.

On the other hand, the high evenness is an indicator that the area is ecologically

healthy and that there is greater species diversity of the phytoplanktons.

Table 18. Diversity Indices of Phytoplankton Communities at the 12 Sampling Stations along Lower Agno River

INDEX

Sampling Stations

1 2 3 4 5 6 7 8 9 10 11 12

Dominance 0.49 0.37 0.27 0.24 0.39 0.44 0.41 0.28 0.35 0.29 0.38 0.35

Shannon (H') 1.11 1.35 1.69 1.82 1.26 1.21 1.27 1.48 1.41 1.31 1.22 1.33

Evenness

0.3

0.35

0.42

0.41

0.32

0.24

0.27

0.34

0.31

0.4

0.34

0.34

Source:PMC Third Party Environmental Consultants

25

3.2.1.3 Macroinvertibrates

A study of macroinvertebrates in the Mananga River in Cebu, citing various other

studiesconcluded that biological communities can serve as integrators of the

dynamic physicochemical relations in a river. Their ability to do so can be determined

through a study of community structure and functional rates. Aquatic

macroinvertebrates have been found sensitive to changes in their environment, a

feature that has been proven useful in the quest to find indicators of environmental

conditions. The community characteristics of macro invertebrates, such as diversity

and richness, are often used as indicators of the degree of pollution of bodies of

water to supplement and deepen the meanings of physicochemical information.

(Abel 1989, Arimoro et al. 2007, Barton 1996, Hellawell 1978, Plafkin et al. 1989,

Silva et al. 2009, Wright et al. 1984).

Three field investigations were conducted to collect macroinvertebrates. However,

the sampling protocol was not able to collect any species. The limitation is the length

of time needed for the collection and the rapid subsidence of the Agno River. Efforts

however, will be made to review other sampling protocols. It is expected that

macroinvertebrates despite their fragile nature would be able to recolonize the river

systems when provided with the optimum conditions. In Balog Creek, the presence

of butterflies, dragonflies and damsel flies indicate their resilience in recolonization

as assisted by PMC’s rehabilitation efforts.

3.2.1.4 Macrophytes

A macrophyte is an aquatic plant that grows in or near water and is emergent,

submergent, or floating. In rivers, this consists of large algae, flowering plants, ferns

and other plants. Macrophytes provide cover for fish and substrate for aquatic

invertebrates, produce oxygen, and act as food for some fish and wildlife. A decline

in a macrophyte population may indicate water quality problems. Such problems

may be the result of excessive turbidity, herbicides, or salinization.

The mine tailings from TSF3 have also affected the macrophytes in Balog Creek and

part of Agno River. Efforts to do sampling indicate that these plants are not readily

present.

Efforts will be made to do quarterly sampling as an indicator of the river’s

rehabilitation. The affected aquatic vegetation will be identified and after further

studies, possible introduction of other indigenous aquatic plants may be done to

improve the river ecosystem.

26

3.2.2 Terrestrial Ecosystem

3.2.2.1 The Forest Ecosystem

Results of the plant diversity assessment showed that the remnant forests along the

Agno River are still home to tremendous plant diversity. A total of 316 morpho-

species belonging to the seed plants and Pteridophytes were recorded from the

study area. The computed Shannon index (H’) from the different sampling quadrats

vary from a low of 0.808 to a high of 2.936. Cluster analysis based on species

diversity and abundance revealed very small similarity among quadrats. It implies

that in terms of species composition, each quadrat has their unique floral

characteristics.

A matrix to obtain the true biodiversity value of each quadrat was developed taking

into consideration not only the number of species (richness), but also the number of

threatened species and endemic species. Quadrat from Tapwak creek1 (Q15)

emerged as the most important quadrat because it obtained the highest value in

terms of number of threatened and endemic species.

In terms of forest structure, the average number of trees per plot is only 12

individuals or an average density of only 0.03 tree/m2. The low tree density of the

quadrats can be attributed to the relatively young forest in the area. Based on the

computed importance value, the three most important species are Tan-ag, Kamuling,

and Pagsahingin. These are all pioneer species and their dominance demonstrates

the early succession stage of the forest. Since the survey area is generally a young

secondary forest, smaller trees are more abundant than larger trees. The average

density is significantly higher than that of trees at 1.10 individual/m2. The most

frequently occurring understorey species are Buho, Pagsahingin, Alahan and Takulao.

There are 24 ground cover species, mostly weeds and grasses. The high diversity of

lowland grass and weed species is understandable because the area where the

survey was conducted is low-density, open canopy forest stand.

A total of 309 species were recorded from the transect survey. This is far higher than

those recorded from the quadrat (133). In fact, only seven (7) species recorded from

the quadrat survey were not encountered from the transect survey. The list of

species identified is found in (ANNEX S)

The study also recorded a number of noteworthy species including endemics,

threatened, and important reforestation species. Two (2) species have been

recognized as island endemics, meaning found only in mainland Luzon namely

Dagwey (Saurauia bontocensis) and Luzon paginga (Discocalyx luzoniensis). On the

other hand, 48 Philippine endemics (including the two-( 2) island endemics) were

encountered in the study area.

27

Twenty-three species recorded from the area are listed under either the Philippine

Red List or the International Union for Conservation of Nature (IUCN) Red List of

Threatened Species. Noteworthy among the list are the critically endangered (CR)

Dipterocarp species namely Almon (Shorea almon), White lauan (Shorea contorta)

and Tangile (Shorea polysperma), and the island endemic Dagwey (Saurauia

bontocensis), locally known as Aragwey.

3.2.2.2 Forest Ecosystem Fauna Biodiversity

A total of 87 terrestrial vertebrae were recorded during the rapid assessment survey

within the watersheds of SRPC (ANNEX T). Total endemic4 species (all terrestrial

vertebrates) amounted to 34 or 39% (34/87) of the total species recorded. The

highest percentage of endemicity was observed in mammals with 50% (3/6 species

recorded) followed by herpetofauna (amphibians and reptiles) with 44% (4/9 species

recorded) and lastly, birds with 37% (27/72 species recorded). Threatened5 and

near-threatened species accounted to five (5) (three threatened which are all

vulnerable to extinction and two near-threatened species). Likewise, Convention on

International Trade in Endangered Species (CITES)listed and uncommon species both

tallied to six (6). In addition, species that are restricted only to Luzon and satellite

islands or Luzon PAIC (Pleistocene Aggregate Island Complex) which includes one (1)

amphibian and at least three (3) birds were also recorded.

From a total of two herp transects with a total of seven (7) man-hours of searching

augmented by opportunistic search during transects and general observations for

birds, a total of nine (9) herpetofauna6 (three frogs, a toad and five lizards) were

recorded in this study. At least one (1) threatened and another near-threatened

species were recorded for this group. Total endemic tallied to four or 44% (4/9)

while uncommon and CITES listed species tallied to one respectively.

From 13 study sites (three transects and ten observation areas), a total of 72 species

belonging to 39 Families and 64 genera were recorded in the study. Sixty-six species

where actually recorded during the survey (transect and general observation

combine) while eight species were recorded from interview. Total endemic

(Philippine and Luzon) and near-endemic species tallied to 27 or 37% (27/72) of the

total species recorded. Threatened species accounted to one (1) vulnerable species.

Similarly, a near-threatened species was also recorded though only from interview.

From a total of three (3) sampling sites with accumulated 20 trap-nights and five (5)

net-nights (one net/trap-night is equal to a trap/net set from 1730hrs and retrieved

4 Endemic - found only in the Philippines 5 Threatened – are species under threat of extinction which are Critically Endangered, Endangered and Vulnerable (see attachment for more details) 6 Herpetofauna or heps – refers to amphibians and reptiles

28

at 0530hrs onwards) augmented by general observations and interview, a total of six

(6) mammal species were recorded at the site. Endemic species accounted to three

(3) or 50% (3/6 species) of the total species recorded. Only one (1) threatened

species (Vulnerable) is recorded. CITES species accounted to two (2).

3.3. Socio-economic Assessment

Safety of our stakeholders is the primary concern of the company. Immediately after

the incident, PMC personnel went to the downstream area of TSF3 to ensure that

the concerns of the residents are immediately addressed.

3.3.1 Property Damage

The August 1 incident damaged some properties of 41 households downstream of

TSF3. Damaged properties included gold panning and fishing implements, a few

boats and a tramline. Local government officials also visited the areas and helped

validate the damages caused by the incident.

The damages identified by the residents were all considered for investigation and

verification. Activities regarding settlement were coordinated with the local

governments of Barangay Dalupirip, Barangay Ampucao, the Municipality of Itogon,

and NPC.

There were 36 validated and settled claims. Total settlement cost for the 36 claims

amounted to PHP896,000.00.(ANNEX U)

3.3.2 Opportunity Costs

There was a fishing disruption due to the declaration of the BFAR of a temporary

fishing ban in San Roque Dam Reservoir. In response, PMC immediately provided

food assistance.

The ban was lifted on August 28, 2012 after fish samples were tested and confirmed

safe for human consumption.(ANNEX V) Tilapia and carp samples were tested for

presence of lead, cadmium, arsenic, copper and mercury and their presence were

found to be below harmful levels

4.0 ENVIRONMENTAL AND SOCIAL MANAGEMENT PROGRAM

4.1 Physical Cleanup

As an urgent measure, physical cleanup of the waterways was immediately started

after considering and ensuring the safety of the workers.

The physical cleanup entails manual, mechanical, and engineering measures in

clearing the sediments from the affected water bodies. Sediments are collected,

hauled and impounded to a staging area or will be pumped back to TSF3.

29

4.1.1 Balog Creek

Balog Creek was subdivided into 100m-segments for easy management and

monitoring references during the physical cleanup.

Figure 9. Segmented Balog Creek

The following are the components in the Balog Creek cleanup.

4.1.1.1 Construction of Access

A total of 20 units of elevated walkways with an aggregate length of 1,369 m, and 10

hanging bridges, with an aggregate length of 221 m, were constructed to access the

segmented areas of Balog Creek for the cleanup.

4.1.1.2 Cleaning of Balog Creek Banks

Sediments deposited along the elevated portions of the creek were cleaned in a

manner that will not to disturb soil and vegetation.

Photo 2. Spraying of Rock face

30

To prevent further movement downstream, the sediments are being collected and

bagged manually.

Photo 3. Sediment bagging

Bags of sediments are deposited in geotextile-lined and grouted riprap containment

areas to prevent the stockpiled sediments from eroding and spilling back into Balog

Creek. Adequate drainage systems are put in place.

4.1.1.3 Construction of Sediment Traps

Sediment traps have been constructed across strategic areas of the creek to collect

and prevent the sediments from going further downstream to protect Agno River.

The sediment traps also reduce water velocity that causes further scouring and

erosion of the creek banks.

4.1.1.4 Revival and Enhancement

A joint monitoring team composed of the different stakeholders will plan for the long term environmental management and possible socio-economic program of Balog Creek.

4.1.1.5 Cost Estimate and Schedule

The Balog Creek cleanup is estimated to cost a total amount of PHP58,200,000.00, to

be implemented until 2014.

31

Table 19: Projected Cost and Schedule of Activities for Balog Creek Cleanup

Activities

Unit of

Measurement

Annual Budget Total (PHP)

2012 2013 2014

Access construction (walkways / hanging bridges ); Containment areas; manual bagging and washing of creek banks/bed)

Total length of access constructed; total of containment areas constructed; Total volume of sediments bagged; Total length of river washed

28,600,000

10,000,000

38,600,000 Containment area construction (stone masonry)

Manual bagging of the sediments

Washing stream banks/stream bed with high pressure water spray

Removal and transport of sediments from Balog streambanks & streambed

Volume of silt contained

7,500,000

7,500,000

Silt trap construction (4 units) Completed silt traps

1,200,000

1,200,000

Revival and Enhancement of Balog Creek

Access enhancement Total length of access enhanced

5,000,000

5,000,000

Fishpond management Survival rate of tilapia fingerlings; growth rate

25,000

25,000

50,000

Station 3 (Field Office) Improvement (toilet; room improvement; ground improvement)

One unit field office improved

750,000

750,000

Slope Stabilization of scoured creek banks

Total length of river bank stabilized

5,100,000

5,100,000

TOTAL 28,600,000 24,575,000 5,025,000 58,200,000

4.1. 2 Agno River Confluence Area

To remove the sediments within the Confluence area of Balog Creek and Agno River,

a technical team was organized to determine the most feasible strategy.

Factors in deciding the best option for the cleanup, which is to transport sediments

back to TSF3, included identification of possible disposal sites in terms of slope

stability, the potential to hold sediments (volume and weight), accessibility (for

transport of equipment, materials and logistics); distance and elevation of the

sediment collection sites to the storage sites and cost estimates of the sediment

removal (labor, logistics, transport, disposal site preparation and maintenance, etc.).

Stakeholders’ approval for the use of these areas should be secured as well.

32

Based on the thorough study, there are no feasible disposal sites adjacent to the

Confluence area, it being within the watershed reservation of NPC (San Roque

Watershed Reservation is promulgated through Presidential Proclamation No. 2320).

Further, the terrain is generally steep and the identified depression areas have

limited potential to hold the sediments.

Based on the thorough study, there are no feasible disposal sites along or adjacent of

the Confluence area, as it is within the watershed reservation of NPC (San Roque

Watershed Reservation is promulgated through Presidential Proclamation No. 2320).

Terrain is generally very steep and identified depression areas have limited potential

to hold sediments.

Given the foregoing conditions, it was decided to pump back the sediments from the

confluence area back to TSF3. The vacuum pumping system had undergone dry-run

tests at the mine site.

The following are the components of Agno River Confluence area cleanup:

4.1.2.1 Access Road Construction

Road construction will be undertaken as necessary and as appropriate.

The purposes of the proposed road are as follows:

• Facilitate transport of materials and supplies during the installation,

operation and maintenance of the sumps, vacuum units, pipe lines,

electric powerlines and substations, and other materials needed for the

silt transport system.

• Serve as access for the monitoring team.

• Serve also as access for the bonafide residents of Pangbasan, Dalupirip,

Itogon and other sub-sitios.

PMC plans to construct an access road to Agno River from Sitio Banengbeng down to

Sitio Kanagjan, both in Barangay Ampucao, Itogon, Benguet. The proposed road is

6.00 m wide and approximately 1,900.00 m long, which shall start from TSF3,

traverse a ridge, and terminates at Agno River.

To minimize siltation downstream and in compliance with environmental

regulations, excavations will be made through an excavator/backhoe and all

materials will be loaded and hauled by dump trucks to designated disposal sites. The

road will be provided with a proper drainage system, erosion control, slope

protection and silt/sediment traps, which will de-silted regularly specially during

rains. Affected trees will be handled in accordance with existing forest laws, rules

and regulations.

33

Figure 10. Access Road Layout from TSF3 to Agno River

4.1.2.2 Sediment Recovery and Transport

Single-stage vacuum pumps will be used to suck and transport sediments back to

TSF3. This particular pumping system was developed in Canada and has been

successfully used in a number of applications, from mining applications to factory

spill clean-ups.

There will be six (6) units of vacuum pumps. Four stationary vacuum pumps will be

used to recover the sediments from confluence area up to TSF3. Two (2) mobile

pumps will be used to clean the sediments located upstream and downstream of the

Confluence area.

Figure 11. Vacuum Pump Diagram

34

The vacuum pump will suck up sediments and deposit it to TSF3 via a three (3)

parallel pipeline that are three (3)-km long each.

Figure 12. Pipeline Route

Vacuum pumps, pipelines and power lines will be properly decommissioned after

completion of the clean-up project.

The same or similar extraction methods or other remediation strategies shall be

discussed with the San Roque Dam Reservoir stakeholders before implementation.

4.1.2.3 Cost Estimates and Schedule

The Agno River Confluence area cleanup is estimated to cost a total amount of

PHP204,678,655.00 to be implemented until 2014.

35

Table 20: Projected Cost and Schedule of Activities for Agno River Confluence Area Cleanup

Activities

Unit of Work

Measurement

Periodical Budget (PHP) Total (PHP)

2012 2013 2014

A. Access Road

construction

Permitting (LGU, NPC,

Tree cutting)

Acquisition of

permits

1,500,000

1,500,000

Landbanking

5,000,000

5,000,000

Road construction

(pioneering)

Total length of

road opened and

improved

15,787,398

15,787,398

Road maintenance

1,500,000

1,500,000

3,000,000

All Weather road

10,000,000

10,000,000

B. Power

line/substation

installation

Installed total

requirements

22,216,640

22,216,640

C. Dust

suppression

project (grass

matting) in

combination

with showering

using rain bird

Area covered

25,000

150,000

175,000

D. Removal and

transport of

sediments from

Agno River

banks & river

bed to TSF#3

-

Construction of silt

pond at Confluence Area

One unit silt pond

constructed

5,000,000

5,000,000

Pumping of sediment

from Stage 1 to TSF#3

(including pipeline /

pump installation;

operations;

maintenance, cost of

raft)

2.5 MT silt

pumped

141,599,617

TBD

141,599,617

TOTAL

25,000

191,253,655

11,500,000

204,678,655

36

4.2. Environmental Enhancement

To supplement the activities of the physical cleanup of the waterways, the IEMP

includes the implementation of medium and long-term activities to rehabilitate and

enhance the river basin ecosystems.

Vegetation that grows along the riverbanks will be identified and replanted. After

further studies, other erosion-controlling vegetation to help improve riverbank

stability and ornamental plants for better aesthetics and keystone species to

promote biodiversity may also be done.

4.2.1 Enhancement of the Watershed

To further protect the critical watersheds and reservoir, watershed enhancement

through Reforestation, Forest Protection and Assisted Natural Regeneration (ANR)

will be implemented. This is a seven (7) year program covering some 500 hectares of

critical watershed areas.

This project is being coordinated with the NPC, SRPC and will involve the active

participation of the other stakeholders. The 500 hectares is within the Lower Agno

Watershed Area and was identified and recommended by the NPC Watershed

Management Group.

A total of 100 hectares per cycle is programmed to commence starting 2013.

Activities will include the following; a) planting stock production at the

nursery/procurement of fruit tree seedlings including bamboo propagules and other

dipterocarp seedlings from outside sources, b) plantation establishment, and c)

maintenance and protection for three (3) years.

Every year thereafter, a 100-hectare reforestation area will be established and

maintained for three (3) years. Figure 13. Indicative of Proposed Reforestation / Agroforestry Project

37

The reforestation project will adopt the Community Based Reforestation Program

(CBRP) approach. Various tree seedling stocks for Padcal’s 2013 Reforestation

Project in Padcal Mine’s forest nursery are available for planting during this year’s

rainy season.

Based on the results of plant diversity assessment of the area, there are thirty (30)

species that can be best used for reforestation and/or restoration activities in the

area. These include some of the most abundant and highly adaptive species that

grow easily such as the pioneer species, legumes and figs.

Activities to be undertaken are as follows:

• Coordination with the stakeholders and social preparation activities.

• Establishment of fire lines/firebreaks.

• Establishment of community nurseries. The nursery stock shall consist of

indigenous species.

• Site preparation for tree planting. The identification of the possible sites

for tree planting shall be made in cooperation with NPC.

• Tree Planting.

• Maintenance activities shall include ring weeding and fertilization for the

identified marginal soils based on soil analysis. For the existing native

species, efforts shall be made to do ANR in the identified sites.

The total Projected Cost is PHP50,000,000.00 for 500 hectare reforestation,

following the reforestation costs adopted by NPC (Annex W).

Table 21: Projected Cost and Schedule of Activities for Reforestation

Particulars Annual Budget (PHP)

TOTAL (PHP) 2013 2014 2015-2019

Enhancement of the Watershed

10,000,000

10,000,000

30,000,000

50,000,000

Identification and demarcation of reforestation sites

Forge MOA with NPC

Maps and mapping

Site preparation, tree planting and maintenance/protection

Nursery establishment / collection of wildlings

Preparation of tree planting sites

Tree planting and maintenance

Protection of reforested areas

TOTAL

10,000,000

10,000,000

30,000,000

50,000,000

38

Photo 5. Agno River Stocked with 60 ,000 fingerlings

4.2.2 Biodiversity Enhancement

Possible effects on terrestrial and aquatic ecosystem will be determined and

remediation actions will be taken if necessary. Remediation of both ecosystems will

be based on the benchmark assessments.

Stocking of aquatic fauna in Agno River was conducted last November 22, 2012. This

was done in partnership with the Bureau of Fisheries and Aquatic Resources –

Cordillera Administrative Region (BFAR-CAR), and the LGUs. A total of 40,000 tilapia

fingerlings and 20,000 elvers were seeded along the Agno River. Cost incurred was

PHP77,712.00

Photo 4. Stocking with BFAR, Barangay Dalupirip and Municipality of Itogon

hoto 5 Agno River Stocked with 60 000 fingerling

Stocking of aquatic fauna also supports the fishing activity of the residents. Stocking

program of tilapia and eel will be continuously conducted on a yearly basis.

The remaining affected aquatic vegetation will be identified and replanted with

endemic species. After further studies, possible introduction of other aquatic plants

may be done to improve the river ecosystem. Likewise, endemic fauna will be

identified and affected areas will be stocked.

Efforts shall also be made to identify keystone species for both aquatic and

terrestrial ecosystems. A keystone species is a species that has a disproportionately

large effect on its environment relative to its abundance. Such species play a critical

role in maintaining the structure of an ecological community, affecting many other

organisms in an ecosystem and helping to determine the types and numbers of

various other species in the community.

39

In the case of the San Roque’s forest assessment, it was determined that one of the

species with the highest importance value is also Molave (Vitex parviflora). Molave is

one of the hardest and most durable wood traditionally used for railroad ties, farm

equipment, shipbuilding, saltwater piles and other uses being resistant to fungal and

other diseases.

Another common keystone species in forest ecosystems are Ficus spp. In studies

worldwide, Ficus spp. have been identified as a very important food source for most

frugivore mammals and frugivorous birds and insects during times of scarcity

ensuring the survival of a number of species.

For the aquatic ecosystem, efforts will be made to identify keystone flora and fauna

which could be the lynchpin in the rehabilitation of the river system. Efforts will be

made for the seeding and stocking of these flora and fauna.

The total Projected Cost for biodiversity enhancement is PHP5,000,712.00 for five (5)

years the details of which are enumerated in Table 22.

Table 22: Projected Cost and Schedule of Activities for Biodiversity Enhancement

Particulars

Annual Budget (PHP) TOTAL

(PHP) 2012 2013 2014 2015- 2019

Biodiversity Enhancement

Assisted Natural

Regeneration of Molave

100,000

100,000

300,000

500,000

Strategic Enrichment of Ficus spp,

100,000 100,000 300,000 500,000

Restocking of Fishes 77,712 100,000 100,000 200,000 477,712

Restocking of

Indigenous

macrophytes and macroinvertebrates

73,000

50,000

100,000

223,000

Production of Field

Guides for Flora and

Fauna

1,000,000

2,000,000

300,000

3,300,000

TOTAL

77,712

1,373,000

2,350,000

1,200,000

5,000,712

40

4.3 Participatory Approaches and Community Development

Strategies

The IEMP involves a participatory approach in the development and implementation

of socio-economic programs for the identified affected households. This program

aims to bring the affected households to their pre-incident if not better.

4.3.1 Community Engagement

Since August 2012 up to the present, a dedicated Community Relations Team from

the company has been living with the local residents to ensure that concerns are

immediately addressed and also to explore areas for possible partnerships and

community development.

PMC recognizes that the great task of cleanup and rehabilitation of the affected

areas needs the support and cooperation of the different stakeholders including

affected households, local people’s organizations, LGUs, concerned government

agencies and PMC.

Partnership with the non-government sector as well as business entities in the area

will also play a key role in developing a strategic approach to address long term

developmental needs of the community and management of the river basin

ecosystem.

4.3.2 Socio-economic Development Programs

PMC is in constant consultation and continuous to build meaningful partnerships

with the affected families for a possible long-term socio-economic development

program. Identified projects and activities will be prioritized and PMC will tap local

resources including manpower, local organizations and other social structures, and

indigenous materials.

Trainings will be provided so that select members of local organization can become

PMC’s active partners in carrying out its socio-economic development and

environmental programs.

Figure 13 shows the socio-economic development projects and activities in

connection with the time horizons, categorized as short-term (August 2012-

December 2013), medium-term (January 2014- December 2015) and long-term

(2016 and beyond).

41

SHORT-TERM

➢ Stakeholders

identification and

engagement

➢ Social mapping ➢ Settlement of

damages

➢ Assistance and

livelihood support

One year: (August 2012 –

December 2013)

MEDIUM-TERM

➢ Building partnership ➢ Implementation of

of community development projects

o Health o Education o Agri-based Livelihood o Public/Community Facilities

Three years: (January

2014 – December 2015)

LONG-TERM

➢ Sustaining

partnership

➢ Management of

restored ecosystem

➢ Implementation of

community

development

projects

Fifth Year and Beyond

(2016 and beyond)

Figure 13. Time Dimension of the Socio-economic Development Program.

4.3.1.1 Short Term

Short Term Socio-economic Programs include projects and activities to be

implemented in the first year from August 2012 to December 2013.

After conducting social mapping of the affected areas, validated claims were

immediately settled. Food assistance, medical missions, and livelihood support were

also extended to the affected families. Likewise, other stakeholders were identified

and partnerships are being continuously developed. Community immersion is a

continuing undertaking.

Actual cost of social projects and activities implemented as of February 2013 is PHP2,

153,600.00.

Projects and activities under the short-term phase are as follows:

1. Social Mapping and Stakeholders Identification

PMC conducted social mapping and identified the major stakeholders to wit: LGUs of

Itogon, the affected households of Pangbasan, Pao, and Ambalanga of Barangay

Dalupirip, and the households of Kanag-jan and Terong of Barangay Ampucao, NPC,

SRPC, the DENR as represented by the Mines and Geosciences Bureau.

2. Settlement of Claims for Damaged Items

In cooperation with the LGUs of Ampucao and Dalupirip and representatives of NPC

and SRPC, the reported damages were thoroughly validated. PMC settled the claims

for lost or damaged agricultural products, fishing and panning paraphernalia. Total

cost of settlement was PHP895,909.63.

42

Photo 8. Replacement of Damaged Items Photo 9. Settlement participated by LGU Official

Claims settlement was conducted last September 20, 21 and 24, 2012 for the

residents of Kanagjan and Terong of Barangay Ampucao and Pangbasan, Ambalanga,

Pao of Barangay Dalupirip. Completion of the settlement was witnessed by

representatives from the Community Relations, Safety, and Legal Departments of

PMC and participated by the Punong Barangay of Dalupirip. Invited were

representatives from MGB-CAR, the LGUs of the Municipality of Itogon and

Barangays Ampucao and Dalupirip. Claims were paid in cash and, in some cases, lost

or damaged implements were replaced with new ones.

Cash settlement was equivalent to the current market price value of the items

demaged, while items that were replaced were purchased from suppliers in Baguio,

Photo 6. Appraisal of Claims Photo 7. Validation of Claims

43

La Trinidad and Agoo, La Union. These were all transported via San Roque Dam and

Agno River.

Below is the summary of the number of claims settled, the nature of settlement and

the cost of settlement.

Table 23. Summary of Settlement of Damages

Mode of Settlement Number of Claimants Amount (PHP)

Cash 27 767, 720.59

Items for Replacement 9 128,189.04

Total 36 895,909.63

Source: PMC Assessment and Validation of Claims, PMC

3. Food Assistance

Food assistance was provided in support of the affected households when the BFAR

issued a precautionary fishing ban. A total of 41 families benefited from the activity.

Cost incurred was PHP67,000.00

Photo 10. Food Distribution to the affected Households

4. Social Services Assistance

The area lacks access to medical services. The company conducts regular medical

mission to address the immediate health needs of the community.

44

Four (4) medical missions have benefited 212 patients. The cost incurred to date was

PHP42,488.00.

Moreover, the community residents can avail of free medical consultation and

treatment at the PMC’s Sto. Nino Hospital.

Sports and cultural activities are being conducted to promote unity and camaraderie

among the community members.

5. Livelihood Assistance through Employment Generation

The local residents were tapped by the company to work on community projects.

Projects that were implemented include Debris Cleaning, Construction of Hanging

Bridge, and Sediment trap Construction.

Projects that have already been implemented are presented below.

Photo 13. Debris Cleaning Photo 14. CommunityHanging bridge

Photo 11. Medical Mission in Pangbasan Photo 12. Dental Mission in Pangbasan

45

Photo 15

In preparation for the organic farming, residents from Pangbasan visited an organic

farm in La Trinidad, Benguet.

Photo 17. Visit of Residents to Organic Farm in La Trinidad

Photo 18. Organic Farming Training of Pangbasan Residents

Organic chicken raising and backyard gardening has started in Pangbasan.

Photo19. Organic Chicken Raising in Pangbasan Photo20. Organic Backyard Gardening in

Pangbasan

hoto 1 . Constructed Sediment Trap Photo 16. Grass matting

46

Total amount of project implemented is PHP1,187,847.00.

Table 24. Completed Income Generating Projects

Projects and Activities Timeframe Amount PHP

Debris cleanup (that came from the different

tributaries of Agno River) that annually collects

at the eddy was contracted out to the

community for cleaning. 35 lifejackets were purchased for the safety of the workers

August 29/

September 3, 7, 10, 24

& 26, 2012

140,327.00

Hanging bridge (140 meters) January 2013

– February 598,847.00

Silt trap construction at KM0.80 Balog First Quarter 2013 300,000.00

Construction Pangbasan

of a 500meters pathway to January 9, 2013 90,245.00

Grass matting Dec 2012 – February 2013

43,033.00

Assistance in the improvement of electrification

of the community by replacing worn-out

electrical lines

January 2013 15,395.00

TOTAL 1,187,847

4.3.1. 2 Medium Term

The medium term socio-economic program includes projects and activities that are

implemented from January 2014 to December 2015.

1. Partnership Building

Partnerships developed will be continuously strengthened by forging partnerships

and linkages with the local governments, attached government agencies such as

Department of Health (DOH), Department of Education (DepEd), Technical Education

and Skills Development Authority (TESDA), and other stakeholders.

The medium term phase also focuses on the strengthening of local organizations as

well as capability-building.

2. Implementation of Community Development Projects

Community projects to address priority needs will be implemented in partnership

with the identified stakeholders.

a. Health Some of the identified health projects and activities to be continuously implemented

during the medium-term period are:

• Medical and Dental missions

• Conduct of training session for health and nutrition, and

• Continuous provision of free hospital services at the Sto. Nino Hospital

47

b. Education

The medium-term phase will include provision of educational assistance. Some of

the identified programs and projects are:

• College Scholarship Program – for deserving high school graduates and

current college students

• Technical- Vocational Scholarship Program - for interested high school

graduates and out-of-school youth

• Subsidized education at St. Louis High School – Philex and Philex Mines

Elementary School

• Alternative Learning System for the out-of-school and adult learners

c. Livelihood and Income Generating Projects

• Agri-based livelihood projects

Agri-based livelihood projects will be developed and implemented. Organic farming

will be developed and enhanced in partnership with the livelihood association.

Continuous skills training will be provided.

• Employment Generation

The residents will be tapped and trained as possible source of manpower during the

installation and operation of the pumping system for the cleanup and for other

community development projects.

4.3.1.3 Long Term

Proceeding to the long-term phase will require the commitment and participation of

the different stakeholders which include the households, NPC, SRPC, DENR, and the

LGUs.

The long term program will be projects and activities from 2016 onwards. This

focuses on sustaining the environment management and socio-economic

development. Possible program will evolve around Health, Education, Livelihood and

Public Infrastructure.

4.3.2 Information and Education Campaign

Information, Education and Communication (IEC) to inform the communities of the

company’s activities and address relevant community concerns will be sustained

throughout the IEMP. PMC will disseminate information in order to increase public

awareness on IEMP projects and activities of the company and rehabilitation of the

area in general.

Specifically, the company will participate in fora, come up with press releases and

develop information materials on social, environmental and community programs

and activities that the company is undertaking,

48

Likewise, the company will join focus group discussions, conduct of regular

community meetings, and consult with barangay and people’s organization leaders

regarding activities that involve or concern the residents. Projects for development

and implementation will be aligned with the provincial and municipal government

priorities.

Among the subjects that will be covered are the IEMP and the results of the studies

being conducted, including environmental condition and the biodiversity of the area.

The project IEC budget is PHP3,000,000.00 from 2013 to 2015.

4.3.3 Cost Estimates and Schedule

The socio-economic development program and IEC are estimated to cost a total of

PHP23,446,488.00 for identified projects and activities from 2012 to 2015. Table 25. List of SDP Projects and Activities, Budget and Schedule

Particulars Annual Budget (PHP) TOTAL

(PHP) 2012 2013 2014 2015

Health Programs

Conduct of Medical Mission 42,488 50,000 50,000 50,000 192,488

Monthly visit of Company medical staff

Subsidized health

consultation and treatment

at Sto. Nino Hospital

50,000

50,000

50,000

150,000

Health Awareness Seminars

50,000

50,000

50,000

150,000

Enhancement of water

system (construction of

watersystem)

150,000

150,000

Education Program

-

Education Assistance

Program (College,

Technical-Vocation,

Subsidized High School and Elementary Education)

500,000

500,000

500,000

1,500,000

Livelihood / Employment Generation

600,000

1,000,000

115,000

1,715,000

Organic Vegetable

Production

-

Organic Chicken Production

-

Livestock Production

-

Debris Cleaning along Agno

River – Balog Creek Confluence

140,327

140,000

140,000

140,000

560,327

Grass matting 43,033 43,033

Entrepreneurial Skills Training

100,000

100,000

100,000

300,000

49

Public Infrastructure

Hanging bridge

construction

894,000

894,000

Construction of a 500m foot trail

90,245

90,245

Construction of public toilet with water system

250,000

250,000

Community Multi-purpose

Hall

500,000

500,000

Construction of foot trail

from Pangbasan to

Ambalanga

500,000

500,000

Organization Development

Culture/Sports projects 25,000 25,000 25,000 25,000 100,000

Immersion Projects

Strengthening of existing

People's Organization

(Capability Building

Trainings) and community

trainings

100,000

100,000

100,000

300,000

Others

Provision of food assistance 100,000 50,000 150,000

Settlement of claims for damages

896,000

896,000

Contingent Claims 4,000,000 4,000,000 4,000,000 12,000,000

Provision of life jackets

40,000

40,000

Improvement of

electrification facility

15,395

15,395

Information Education Communication (IEC)

1,000,000 1,000,000 1,000,000 3,000,000

Total

1,243,815

8,557,673

7,515,000

6,130,000.

23,446,488

4.4. On-going Scientific Studies to Support the Cleanup and

Environment Rehabilitation and Enhancement Programs

An inter-disciplinary team of Environmental Specialists from various fields of

expertise has been engaged by PMC to help prepare and implement the cleanup and

rehabilitation program. Results of their studies will address issues and concerns

regarding the incident with supporting empirical data.

The team is composed of scientists and academe from the University of the

Philippines, Ateneo de Manila, Central Luzon State University with the assistance of

University of Pangasinan. (ANNEX X)

50

4.4.1 Environmental Risk Assessment

4.4.1.1 Fate Analysis of Heavy Metals from Mine Tailings and Reagents Used in Flotation

Process

This study will track the pathways and endpoints of the target heavy metals and the

additives used in the mining process. Assessments of the identified heavy metals

and chemicals will be done for water, sediments and biota including macrophytes,

plankton, macroinvertebrates and fishes. This is important to be able to elucidate

the modes by which these elements and compounds can enter the food chain and

pose health risks to human.

4.4.1.2 Sediment Transport Modelling to Determine the Extent and Volume of Sediments

Deposited in Agno River

This study will focus on the estimation of sediments deposited in the Agno River

from the confluence of Balog Creek to San Roque Dam using the Hydrologic

Engineering Centers River Analysis System (HEC- RAS) modeling software. A

bathymetric map (map showing the depth of water bodies) will also be generated to

identify the possible deposition areas. It is intended to provide a reliable assessment

of where the sediments have been deposited along the Agno River’s length. It will

also provide PMC with a better understanding of the river and the kind of

remediation that has to be done.

4.4.1.3 Agno River Characterization Study

This study will focus on the characterization of the Agno River’s macrophyte,

macroinvertebrate and fisheries. The purpose of the characterization will be to

provide PMC with a baseline of the biota in the river system and possibly use it for

the environmental remediation of the affected Balog Creek. This is meant to provide

PMC with sound environmental plans in river and creeks rehabilitation.

4.4.1.4 Revegetation through Natural Reconditioning

This study aims to provide an alternative approach to reforestation/stabilization of

decommissioned tailing pond. The study involves reconditioning of the tailing

nutrient content by propagating pioneer plants with microbiological techniques.

4.4.2 Economic Pricing

4.4.2.1 Estimation of the Economic Impact to SRPC and NPC

This study will provide monetary estimates on the costs associated with the

deposition of sediments in the SRPC reservoir.

4.4.2.2 Estimation of the Environmental Benefits of the Rehabilitation and Enhancement

Program of the Watershed and San Roque Reservoir

This study aims to estimate both the benefits and cost of environmental projects

such as environmental substitution or reforestation that will be implemented under

the Integrated Environmental Management Program.

51

4.4.3 Budget and Schedule

The budget for the environmental studies and biodiversity enhancement for 2013 is

PHP4, 951,600.00. Future studies and corresponding budgetary requirement will be

allocated when necessary.

Table 26. Ongoing Environmental Studies and Budget

Environmental Studies

Unit of Work Measurement

2013 Budget (PHP)

Fate Analysis

Study results

918,100

Agno River Biological Characterization Study

254,750

Estimation of Environmental Benefits of Biological Rehabilitation in selected critical watershed of Balog Creek and San Roque Reservoir

185,000

Estimation of Benefits foregone of the filling up of the SRMPP reservoir's dead storage due to mine tailings leakage of TSF of PMC

100,000

Sediment transport modelling 437,350

Revegetation through Natural Tailings Reconditioning

817,400

Determination of extent of Padcal Tailings Spill and potential impact areas

854,000

Rehabilitation and Management Program (PF)

1,145,000

TOTAL 4,951,600

5.0 MONITORING AND EVALUATION A Monitoring and Evaluation (M & E) Program was crafted to ensure the efficient

and effective implementation of the Programs/Projects/Activities (PPAs). The M & E

program is for two years starting 2013.

Results of regular monitoring will also provide information for the company and

other major stakeholders to act on potential and actual concerns and address these

promptly. These will also guide implementing partners to help them identify or

revise project inputs, implementation processes and expected outputs as well as

impacts and effects on the environment and stakeholders.

52

5.1 Coverage

Monitoring activities will focus on the Remediation and Rehabilitation of Balog Creek and the confluence area of the Agno River within Barangays Ampucao and Dalupirip, both in Itogon, Benguet and NIA Weir at San Roque.

5.2 Objectives

The Objectives of monitoring are to:

• Establish monitoring framework and key indicators

• Gather information on the progress of the programmed activities,

timelines and desired objectives as well as problems encountered;

• Recommend appropriate corrective actions; and

• Evaluate stakeholders’ participation

5.3 Composition

A Joint Multi-Partite Monitoring Team (JMMT) will be operationalized consisting of

different stakeholders in the impact area including:

• Philex Multi- partite Monitoring Team

1. Mines and Geosciences Bureau-CAR

2. Environment Management Bureau-CAR

3. LGU-Ampucao

4. LGU - Camp 3

5. Peoples Organization represented by The Indigenouse Host

Communities Association of Philex Outlying Sitios, Inc. (TIHCAPOSI)

6. Indigenous Peoples Representative

7. Forestry Management Services-CAR (RED’s Office)

8. Philex Mining Corporation (5)

• Representatives from the Municipality of Itogon – Municipal Engineer and

Municipal Social Worker (2)

• Representative from Barangay Dalupirip (1)

• Representative from the National Power Corporation (3)

• San Roque Power Corporation (1)

• EMB-R1 (1)

• MGB-R1 (1)

• BFAR-CAR/R1 (2)

5.4 Roles and Responsibilities

• MGB shall chair the JMMT

• Functions of the JMMT

1. Serve as the monitoring arm under this Remediation, Rehabilitation

and Clean-Up Plan

53

2. Monitor every quarter, or more frequently as may be deemed

necessary, the activities defined in the Remediation, Rehabilitation

and Clean-up Plan.

3. Prepare its procedures in the conduct of monitoring, set parameters

and schedules and internal rules to accomplish its

functions/objectives

4. Submits reports to PMC MRFC

5.5 Operationalization

Generally, this proposed Monitoring and Evaluation Program will adopt the

Environmental Monitoring and Evaluation System being implemented by the Philex

Multi-Partite Monitoring Team.

5.5.1 Location and Number of Sampling Points:

5.5.1.1 Balog Creek

There shall be three sampling points along the Balog Creek, as follows:

• TSF3 Outlet – Penstock A/B (P5A & B)

• Spanish Drain Tunnel (P6)

• Balog Creek Upstream (P7)

Figure 14. Monitoring area Balog Creek

54

5.5.1.2 Agno River

Twelve Monitoring Stations have been established along the Agno River

Figure 15: Monitoring Area Agno River

Note: Sampling Points at San Roque Dam shall be subject to agreement with the

Region 1 (MGB/EMB/NPC/SRPC) to jibe with their existing sampling points.

55

5.4.2 Frequency of Monitoring

Joint Monitoring shall be conducted at least 3 days per quarter (inclusive of report

writing/conference) or as the need arises

5.6 Budget

Monitoring budget for two years, 2013 to 2014, amounts to PHP3,053,000.00

Table 27. Annual Monitoring Budget (2013-2014)

Particulars Unit of Work

Measurement

Annual Budget (PHP) TOTAL

(PHP) 2013 2014

Fish Tissue Analysis (eel, carp and tilapia)

Conduct one

monitoring per

quarter

80,000

80,000

160,000

Water analysis

156,000

156,000

312,000

Sediment analysis

156,000

156,000

312,000

Transportation (fuel/rental)

100,000

100,000

200,000

Food stuff

49,000

49,000

98,000

Honorarium JMMT 1

32,400

32,400

64,800

Honorarium Special JMRFC2

27,200

27,200

54,400

Per diem3

192,000

192,000

384,000

Conference expenses (quarterly)

100,000

100,000

200,000

Materials / supplies

100,000

100,000

200,000

Personal Protective Equipment (PPEs)

150,000

150,000

300,000

Purchase of boat & Maintenance

500,000 25,000 525,000

Contingency

121,400

121,400

242,800

TOTAL

1,764,000

1,289,000

3,053,000

6.0 SUMMARY OF THE PROGRAM

The total estimated budget for IEMP is PHP 349,329,855.00

Table 28. Budget and Schedule of the Integrated Environmental Management Program

PROGRAM/PROJECTS/ACTIVITIES

PROJECTED COST

TOTAL

PROJECT

COST

Schedule of Implementation

2012 2013

2014

2015

2016

2017

-

2019

2012

2013

2014

2015-2019

3rd Q 4th Q 1st Q 2nd Q 3rd Q 4th Q

J

A

S

O

N

D

J

F

M

A

M

J

J

A

S

O

N

D

I. Physical Cleanup

1. Balog Creek

Construction of Access

28,600,000

10,000,000

38,600,000

x

x

x

x

x

Cleaning of Balog Creek Banks

Spraying of rock face

X X x X x

Manual bagging of the

sediments

x

x

x

x

x

Construction of

containment areas

x

x

x

x

x

x

Removal and transport of

sediments from Balog

streambanks & streambed

7,500,000

7,500,000

x

x

x

x

x

x

x

x

x

56

Construction of Silt traps

on (4 units)

1,200,000

1,200,000

X

x

X

X

x

Enhancement of Balog Creek

Access enhancement 5,000,000 5,000,000 x

Fishpond management

25,000 25,000

50,000

X x X X x

x

x x x x

x

x

x x x x

Station 3 (Field Office)

Improvement (toilet; room

improvement; ground improvement)

750,000

750,000

x

x

x

x

Slope stabilization of

scoured creek banks

5,100,000

5,100,000

x

x

x

x

Sub-total

28,600,000

24,575,000

5,025,000

-

58,200,000

2. Agno River

Access Road Construction

Permitting (LGU, NPC, Tree cutting)

1,500,000

1,500,000

X x X

Landbanking 5,000,000 5,000,000 X x X

Road construction (pioneering)

15,787,398

15,787,398

X X x x

Road maintenance

1,500,000 1,500,000

3,000,000

x x x x x x x x x x

All Weather road

10,000,000

10,000,000

x x

Power line/substation installation

22,216,640

22,216,640

x X X x

Dust suppression project

(grass matting) in

combination with showering using rain bird

25,000

150,000

175,000

x

x

x

x

x

x

x

57

Removal and transport of

sediments from Agno

River banks & river bed to TSF#3

Construction of silt pond at

Confluence Area

5,000,000

5,000,000

x

x

x

Pumping of sediment from

Stage 1 to TSF#3 (including

pipeline / pump installation;

operations; maintenance, cost of raft)

141,599,617

TBD

TBD

141,599,617

x

x

x

x

x

x

x

x

x

x

x

x

Sub-total

25,000

191,253,655

11,500,000

-

204,678,655

II. Environmental Enhancement

1. Enhancement of the

Watershed

10,000,000

10,000,000

30,000,000

50,000,000

Identification an

demarcation of

reforestation sites

Forge MOA with NPC

x X

Maps and mapping x X

Site preparation, tree

planting and maintenance/protection

x

x

x

Nursery

establishment/collection of wildlings

x

x

x

x

x

x

x

x

Preparation of tree planting sites

x x x x

x x x

Tree planting and maintenance

x x

x x x

Protection of reforested

areas

x

x

x

x

x

x

x

x

x

58

2. Biodiversity Enhancement

Assisted Natural

Regeneration of Molave

100,000 100,000 300,000 500,000

x x x x x x x x x x x x x X

Strategic Enrichment of

Ficus spp,

100,000 100,000 300,000 500,000

x x x x x x x x x x x x x X

Restocking of Fishes 77,712 100,000 100,000 200,000 477,712

X

x x x x x

Restocking of Indigenous

macrophytes and macroinvertebrates

73,000

50,000

100,000

223,000

x

x

x

x

x

Production of Field Guides

for Flora and Fauna

1,000,000

2,000,000

300,000

3,300,000

x

x

x

x

x

x

x

x

x

x

x

x

x

Sub-total 77,712 11,373,000 12,350,000 31,200,000 55,000,712

III. Environmental Studies

Fate Analysis

918,100

918,100

x x

Agno River Biological

Characterization Study

254,750

254,750

x

x

Estimation of

Environmental Benefits of

Biological Rehabilitation in

selected critical watershed

og Balog Creek and San Roque Reservoir

185,000

185,000

x

x

Estimation of Benefits

foregone of the filling up of

the SRMPP reservoir's

dead storage due to mine

tailings leakage of TSF of PMC

100,000

100,000

x

x

Sediment transport x x

59

modeling 437,350 437,350

River Bed Surveys and

Sampling

240,000

240,000

Revegetation through

Natural Tailings

Reconditioning

817,400

817,400

x

x

x

x

x

x

x

Determination of extent of

Padcal Tailings Spill and potential impact areas

854,000

854,000

x

x

x

x

x

x

x

Rehabilitation and

Management Program (PF)

1,145,000

1,145,000

x

x

x

x

x

x

x

Subtotal

4,951,600

4,951,600

IV. Socio-Economic Development Programs

Health Programs

Conduct of Medical Mission

42,488 50,000 50,000 50,000 192,488

x x x x x x x x x x x x x X x

Monthly visit of Company medical staff

x x

Subsidized health

consultation and

treatment at Sto. Nino Hospital

50,000

50,000

50,000

150,000

x

x

X

x

x

x

x

x

x

x

x

x

x

x

Health Awareness Seminars

50,000

50,000

50,000

150,000

x

x X

Enhancement of water

system (construction of

watersystem)

150,000

150,000

x

x

Education Program

-

Education Assistance

Program (College,

Technical-Vocation,

Subsidized High School and Elementary Education)

500,000

500,000

500,000

1,500,000

x

x

x

x

x

x

x

x

x

60

Livelihood / Employment

Generation

600,000

1,000,000

115,000

1,715,000

Organic Vegetable Production

-

x x x x x x x x x x x x x

Organic Chicken Production

-



-


Debris Cleaning along

Agno River – Balog Creek Confluence

140,327

140,000

140,000

140,000

560,327

x

x

x

x

x

Grass Matting 43,033 43,033 X

Entrepreneurial Skills Training

100,000

100,000

100,000

300,000

x x x

x x

Public Infrastructure

-

Hanging bridge construction

894,000

894,000

x x x

Construction of a 500m foot trail

90,245

90,245

x x

Construction of public toilet with water system

250,000

250,000

x

Community Multi-purpose

Hall

500,000

500,000

x

Construction of foot trail

from Pangbasan to

Ambalanga

500,000

500,000

x

x

x

Organization

Development

Culture/Sports projects 25,000 25,000 25,000 25,000 100,000 x x x x x x

Immersion Projects

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

Strengthening of existing People's Organization

100,000

100,000

100,000

300,000

x

x

x x x

61

(Capability Building

Trainings) and community

trainings

Others

Provision of food assistance

100,000 50,000

150,000

x

x

Settlement of claims for damages

896,000

896,000

x

Contingent Claims

4,000,000

4,000,000

4,000,000

12,000,000

x

x

X

x

x

x

Provision of life jackets

40,000

40,000

x

Improvement of electrification facility

15,395

15,395

x x

Information Education Communication (IEC)

1,000,000

1,000,000

1,000,0000

3,000,000

Sub-total

1,243,815

8,557,673

7,515,000

6,130,000.

23,446,488

V. Monitoring and Evaluation

Fish Tissue Analysis (eel, carp and tilapia)

80,000

80,000

160,000

x

x

x

x x

Water analysis

156,000

156,000

312,000

x

x

x

x x

Sediment analysis

156,000

156,000

312,000

x

x

x

x

x

Transportation

(fuel/rental)

100,000

100,000

200,000

Food stuff

49,000

49,000

98,000

Honorarium JMMT

32,400

32,400

64,800

Honorarium Special JMRFC

27,200

27,200

54,400

62

Per diem

192,000

192,000

384,000

Conference expenses

(quarterly)

100,000

100,000

200,000

x

x

x

x

x

Materials / supplies

100,000

100,000

200,000

Personal Protective Equipment (PPEs)

150,000

150,000

300,000

Contingency

121,400

121,400

242,800

Purchase for boat & Maintenance

500,000

25,000

525,000

x

Subtotal

1,764,000

1,289,000

3,053,000

GRAND TOTAL 7

29,946,527

242,474,328

37,679,000

37,330,000

349,329,855

7 Does not yet include/factor in possible claims from NPC /SRPC

63

64

7.0 REFERENCES

A. Franklin, The concentration of metals, organochlorine pesticide and PCB residues in marine fish and

shellfish: results from MAFF fish and shellfish monitoring programmes, 1977-1984, Aquatic

Environment Monitoring Report, Directorate of Fisheries Research, Ministry of Agriculture

Fisheries and Food.

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PADCAL Operations

April 2013

Annex D: Environment and Community

Annex D-1: Environment Compliance

Certificates

PADCAL Operations

April 2013


Annex D-2: Key Personnel and

Qualifications

CENTRAL MECHANICAL SERVICES DEPARTMENT

JG POSITION EDUCATIONAL ATTAINMENT

License Experience-Internal Experience-External

1

2

3

M−3

STS−5

STS−5

GROUP MANAGER

POWER PLANT HEAD

COMPRESSED AIR &

DOMESTIC WATER

SUPPLY HEAD

BS MECHANICAL

ENGINEERING

BS MECHANICAL

ENGINEERING

BS MECHANICAL

ENGINEERING

Professional

Mechanical

Engineer

(PME).

PRC License

required

Licensed Civil

Mechanical or

Industrial Engineer

At least five (5) years experience

as Mechanical Services

Superintendent

At least three (3) years

experience as Mechanical

Maintenance Supervisor.

At least three (3) years

experience as Water Supply

Supervisor, Design Engineer or Planner.

At least five (5) years as Mechanical

Maintenance Manager with exposure in Power

Generation.

At least five (5) years experience as Power Plant

Supervisor of a 10MW power plant capacity.

At least three (3) years experience as Water

Supply Supervisor, Design Engineer or Planner.

ELECTRICAL SERVICES DEPARTMENT



1

2

M−2

STS−4

DEPARTMENT

MANAGER

POWER SYSTEM HEAD

BS ELECTRICAL

ENGINEERING

BS ELECTRICAL

ENGINEERING

Registered

Professional

Electrical

Engineer

PRC License

required


as Electrical Superintendent.

Internal − At least three (3) years

experience as Shift Engineer /

Supervisor in the field of power

system operations.

At least ten (10) years experience in the

Management of electrical power systems

services, electrical installation, maintenance of

electrical generation and utilization equipment

and installation & maintenance of basic

communications equipment.

External − At least five (5) years experience in

the field of Diesel− Electric power plant

operations with a minimum of two (2) units of

installed Generating Sets with a total site capacity of ten (10) megawatt or more

3 STS−4 SECTION HEAD BS ELECTRICAL ENGINEERING

4

5

6

STS−4

STS−4

STS−4

REWINDING SECTION

HEAD

PLANNER

ELECTRONICS &

COMM. SUPERVISOR

BS ELECTRICAL

ENGINEERING

BS ELECTRICAL

ENGINEERING

BSECE

PRC License

required

PRC License

required

PRC License

required

Internal − At least two (2) years

experience as supervisor in

industrial maintenance /

rewinding shop.

4 years supervisory experience in

the Primary Power/Electrical

Construction Section.

Internal − At least two (2) years

experience as Communication

Unit Head / Telephone

Maintenance Unit Head

External − At least three (3) years experience as

supervisor in industrial maintenance / rewinding

shop

5 years supervisory experience in the filed of

Electric Power generation and distribution, and

in the construction/erection of substations and

maintenance of industrial plants.

External − At least three (3) years supervisory

experience in the field of ECE.

MOBILE EQUIPMENT DEPARTMENT



1

2

M−1

STS−4

MOBILE EQUIPMENT

MANAGER

TRANSPORTATION /

HEAVY EQUIPT. HEAD

BS MECHANICAL

ENGINEERING

BS MECHANICAL

ENGINEERING

PRC License

PRC License


as Motorpool Superintendent

At least three (3) Years in Truck,

Light Vehicles and Heavy

Equipment Maintenance as supervisor.

At least five (5) years as Motorpool Maintenance

Manager

At least three (3) Years in Truck, Light Vehicles

and Heavy Equipment Maintenance as

supervisor.

MINE DIVISION



M−4 MINE DIVISION MANAGER BS MINING

ENGINEERING

PRC

License

At least five (5) years experience as Mine

Operations Group Manager


Manager preferably in block caving operation

M−3

M−2

M−1

MINE OPERATIONS GROUP

MANAGER

SHIFT MANAGER

MINE OPTNS. SHIFT SUPT.

(DEVELOPMENT) /

(PRODUCTION)

BS MINING

ENGINEERING

BS MINING

ENGINEERING

BS MINING

ENGINEERING

PRC

License

PRC

License

PRC

License


Development / Production

Superintendent


Development /. Production

Superintendent

Eight (8) years experience in Block Caving


Manager preferably in block caving operation.


Manager preferably in block caving operation.

Ten (10) years experience in Block Caving

Operations, preferably in Mechanized Mining

MINE GENERAL SERVICES

DEPARMENT



STS−

5

STS−

5

MINE LOGISTICS HEAD

MINE ENVT'L / LOSS

CONTROL ENGIN

BS MECHANICAL

ENGINEERING / BS

CIVIL ENGINEERING

BS MINING

ENGINEERING

PRC License

PRC

License

Must have at least five (5) years

experience as Mine Explosives Head,

Maintenance Supervisor and Logistics

Supervisor

3 years experience as a Safety,

Environmental, Productivity SDP & LMC

Enhancement Coordinator/Assistant or

Ventilation Inspector/Supervisor/Engineer

At least five (5) years experience as

Warehousing Supervisor preferably with

experience in handling and storing of explosives

and accessories.

5 years experience as Safety / Ventilation /

Environmental Engineer.

MINE UG ELECTRICAL

OPERATION



M−2

STS−

5

STS−

4

STS−

4

DEPARTMENT MANAGER

GENERAL FOREMAN

ELECTRICAL PLANNER

INSTRUMENTATION

ENGINEER

BS ELECTRICAL

ENGINEERING

BSECE / BS EE

BS ELECTRICAL

ENGINEERING /BS

ECE

BSECE

PRC License

PRC

License

PRC

License

PRC License


Mine Electrical Superintendent

At least six (6) years as shift supervisor or

four (4) years as Underground Electrical

Planner

At least 5 years experience as UG Shift

Electrical shift Supervisor.

At least five (5) years managerial experience

with exposure in conveyor, hoist and other

electrical underground operation.

At least eight (8) years experience in the

planning, installation, operation and

maintenance and other related actual

experience relative to the Electrical Engineering

practice as applied to the different Electrical

utilization and distribution equipment present

at the mine.

At least 5 years experience as Electrical

Planning & Design Engineer.

MINE OPERATIONS - PRODUCTION / MINE OPERATIONS -

DEVELOPMENT



STS−

4

STS−

4

STS− 4

PRODUCTION SHIFT

FOREMAN

PRODUCTION PLANNER

DEVELOPMENT FOREMAN

BS MINING

ENGINEERING

BS MINING

ENGINEERING

BS MINING ENGINEERING

PRC

License

PRC

License

PRC License

At least 5 years experience in UG Block

Operation.

At least 5 years experience in UG Block

Operation.

MINE ENGINEERING / DRAW CONTROL

DEPARTMENT



M−2

M−1

M−1

M−1

M−1

M−1

STS−

5

DEPARTMENT MANAGER

SURVEY SUPERINTENDENT

LIFE OF MINE PRODUCTION

PLANNING SUPERINTENDENT

ROCK MECHANICS

SUPERINTENDENT

DRAW

CONTROL/PRODUCTION

PLANNING SUPERINTENDENT

MINE DEV'T PLANNING

SUPERINTENDENT

DEV'T PLANNING AND

DESIGN HEAD

BS MINING

ENGINEERING

BS Geodetic

Graduate

BS MINING

ENGINEERING

BS MINING

ENGINEERING / BS

GEOLOGY

BS MINING

ENGINEERING

BS MINING

ENGINEERING

BSCE / BSEM / BSME

PRC License

PRC

License

PRC

License

PRC

License

PRC

License

PRC

License

PRC License

At least five (5) years as Mine

Engineering /or Mine Draw Control

Superintendent.

At least three (3) years as Senior

Surveyor

At least three (3) years experience as

Draw Control Engineer or Production

Planner

Minimum of five years in Mine Geology

and Geotechnical Engineering projects.

At least one (1) year experience as

Production Shift Superintendent with

one (1) year exposure in Draw Control

Office Planning or at least four (4) years

experience as underground Ore

Extraction Engineer with one (1) year

exposure in Draw Control Office

Planning.

At least three (3) years experience

working as Mine Technical Designer or

Mine Technical Planner.

Three (3) years as Technical Designer or

Technical Planner.

At least five (5) years as Mine Engineering

Manager preferably in block caving Operation

At least five (5) years in Surface and

Underground Survey

At least three (3) years experience as Draw

Control Engineer or Production Planner

Minimum of five years in Mine Geology and

Geotechnical Engineering projects.

At least five (5) years experience as Draw

Control Superintendent in block cave mines.

At least five (5) years experience in mine

underground development operations;

preferably with working knowledge in mine

development planning and designing.

Five (5) years as Technical Designer or Technical Planner with exposure in Block Cave Operation.

STS−

4

SENIOR SURVEYOR BS GEODETIC

ENGINEERING / BS Civil Engineering

PRC

License

At least three (3) years as Junior

Surveyor

At least four (4) years as Supervisor

Graduate or AGE

Graduate

STS−

4

STS−

4

STS−

4

STS−

4

STS−

4

UG CONC. SUPPORT DESIGN

& PLANNI

RESEARCH & COST COSTROL

ENGINEER

DRAW CONTROL ENGINEER

LIFE−OF−MINE PRODUCTION

PLANNER

DRAW

CONTROL/SUBSIDENCE OPT'N EN

BS CIVIL

ENGINEERING

BS MECHANICAL

ENGINEERING

BS MINING

ENGINEERING / BS

GEOLOGY

BS MINING

ENGINEERING

BS MINING

ENGINEERING

PRC

License

PRC

License

PRC

License

PRC

License

PRC

License


Mine Concreting Planner/Concreting

Supervisor.

Knowledgeable in using any of the

mechanical maintenance software's used

in the mining industry

Minimum of one year exposure in

supervising underground development

works.

Production Foreman 1 year experience in

Block Caving Operation.

At least five (5) years experience in horizontal

and vertical construction with knowledge on

underground rock support.

With actual exposure in highly mechanized

trackless underground mining operation

At least one (1) year exposure in Rock

Mechanics Engineering.

5 years experience as Ore Extraction Engineer in

a Block Cave Mining.

MINE MOBILE EQUIPMENT SERVICES /MINE MECHANICAL

RELATED SERVICES / MCOHD



M−3

M−2

M−2

M−1

M−1

STS−

4

STS−

4

STS−

4

GROUP MANAGER ( MMESD)

DEPARTMENT MANAGER

(MMRSD)

DEPARTMENT MANAGER

(MCOHD)

MINE MECHANICAL SHIFT

SUPERINTEN

LUBRICATION ENGINEER

SHIFT FOREMAN / SHOP

FOREMAN

PLANNER

AUTO

ELECTRONICS/ELECTRICAL

FOREMAN

BS MECHANICAL

ENGINEERING

BS MECHANICAL

ENGINEERING

BS MECHANICAL

ENGINEERING

BS MECHANICAL

ENGINEERING

BS MECHANICAL

ENGINEERING

BS MECHANICAL

ENGINEERING

BS MECHANICAL

ENGINEERING

BSECE

Professional Mechanical Engineer

At least five (5) years experience as Mechanical

Maintenance Manager with experience to

Grizzly, Hoist, Breaker Maintenance

At least five (5) years experience as Mechanical

Maintenance Manager preferably in

underground conveying/bulk handling

At least eight (8) years experience in planning,

installation, maintenance and operation of

Mine Equipment and Machines, such as: CBC,

FBC, Mobile Equipment, Rock− breakers, Hoists,

Concrete Equipment, Apron Feeders and

Pneumatic Equipment and must be a PME .

At least four (4) years experience as Mechanical

Maintenance Foreman.


Maintenance Supervisor with exposure to

operation and maintenance of Underground

Mobile Equipment.

PRC License

PRC

License

PRC

License

PRC

License

PRC

License

PRC

License

PRC

License


Mechanical Maintenance

Superintendent.


Mechanical Maintenance

Superintendent.

At least five (5) years experience in

planning, installation, maintenance and

operation of Mine Equipment and

Machines, such as: CBC, FBC, Mobile

Equipment, Rock− breakers, Hoists,

Concrete Equipment, Apron Feeders and

Pneumatic Equipment.


Shift/Shop Supervisor.

At least two (2) years experience as Mine

Mobile Equipment Supervisor.

LEGAL DIVISION

JG

POSITION EDUCATIONAL ATTAINMENT

License

Experience−Internal

Experience−External

1

2

M−4

M−2

DIVISION MANAGER

DEPARTMENT

MANAGER

BACHELOR OF LAWS

BACHELOR OF LAWS

Licensed

Licensed

At least five (5) years in active

practice of law and industrial

relations administration

At least 5 years exposure to

Administrative Work

Same as Internal

At least 5 years experience in Litigation

3

4

M−1

STS−

5

ASSISTANT MANAGER

LEGAL OFFICER

BACHELOR OF LAWS Licensed

Graduate

At least three (3) years experience in

handling workers relations concerns

and para−legal duties

At least two (2) years experience in assisting lawyers in

various litigation works.

5

6

M−2

STS−

4

DEPARTMENT

MANAGER

CAMP ADMIN SUPERVISOR

BS CIVIL

ENGINEERING

BS SECONDARY EDUCATION

Licensed

Licensed

Safety Department and Loss Control Division



1

2

3

4

M−4

M−3

M−1

M−1

DIVISION MANAGER

GROUP MANAGER

LOSS CONTROL

SUPERINTENDENT

SAFETY

SUPERINTENDENT

BS MINING

ENGINEERING

BS MINING

ENGINEERING

BS ME / BS EM

BS ME / BS EM

PRC License

PRC License

PRC License

PRC License

At least five (5) years in the mining

operation.

5 STS−

4

SURFACE SAFETY

FOREMAN

BS ME/BS EM /BS

CHE/BS EE/BS CE

Holder of Safety Inspector's

permit issued by the Mines &

Bureau Science, First−aid

certification, and certified

membership to the Safety

Organization of the

Philippines.


Safety Supervisor.


as Safety Supervisor in a mining

operation.

6

STS−

4

FIRE SAFETY

FOREMAN

BS ME/BS EM /BS

CHE/BS EE/BS CE

Holder of Safety Inspector's

permit issued by the Mines &

Bureau Science, First−aid

certification, and certified

membership to the Safety

Organization of the

Philippines.

With at least two (2) years experience

in safety work and three (3) years

supervisory experience in mining

operations

With at least two (2) years

experience in safety work and

three (3) years supervisory

experience in mining operations

MILL DIVISION


License Experience−Internal Experience−External

1 M−4 MILL DIVISION

MANAGER

BS MET / BS

MINING/BS CHE

PRC

License

At least ten (10) years as Mill Operations

Manager and five (5) years exposure on

Metallurgy (Quality Control and Research and Development

At least five (5) years as Metallurgical

Department Manager

METALLURGY DEPARTMENT



1 M−2 DEPARTMENT

MANAGER

BS CHE / BS MET PRC

License

At least three (3) years experience as Shift

Metallurgist or Research and Development

Supervisor.

At least five (5) years experience as Senior

Metallurgist with exposure to flotation

processes.

2

3

M−1

STS−

4

QC SHIFT

SUPERINTENDENT

RESEARCH & DEV'T

ENGINEER

BS CHE / BS MET

BS CHE / BS MET

PRC

License

PRC

License

At least three (3) years experience as Shift

Metallurgist or Research and Development

Supervisor.

Internal : At least 3 years experience as Mill

Operations Supervisor / Quality Control Supervisor

At least five (5) years experience as Senior

Metallurgist with exposure to flotation

processes.

External : at least 3 years in Milling operations/

Quality Control/ Test and Research Engineer of a similar mineral processing company

MILL OPERATIONS DEPARTMENT



1 M−2 MILL OPERATIONS BS EM / BS MET /BS PRC

DEPT. MANAGER CHE License

2 M−1 MILL SHIFT BS EM / BS MET /BS PRC SUPERINTENDENT CHE License

3 STS− GENERAL BS EM / BS MET /BS PRC 5 FOREMAN CHE License

MILL MAINTENANCE DEPARTMENT



1

2

3

4

5

M−1

M−1

M−3

STS−

5

STS−

4

MILL ELECTRICAL

SUPERINTENDENT

MILL MECHANICAL

SUPERINTENDENT

/PLANNING

SUPERINTENDENT

/ TECHNICAL

SERVICES

SUPERINTENDENT

GROUP MANAGER

GENERAL

FOREMAN

PLANNER

BS ELECTRICAL

ENGINEERING

BS MECHANICAL

ENGINEERING

BS MECHANICAL

ENGINEERING

BS ELECTRICAL

ENGINEERING

BS MECHANICAL

ENGINEERING

BS ME / CE / EE

PRC

License

PRC

License

PROFESS

IONAL

MECHA

NICAL

ENGINE

ER

PRC

License

PRC

License

PRC License

At least five (5) years experience in Industrial

Maintenance, Electrical Construction,

Installation Planning and Design

At least five (5) years as Mill General Foreman

At least five (5) years experience in Industrial

Maintenance, Electrical Construction,

Installation Planning and Design

At least five (5) years as Mill Maintenance

General Foreman or 5 years as Superintendent

in Mining Industry.


Manager and five (5) years exposure on Mill

Operations


Manager and five (5) years exposure on Mill

Operations

At least three (3) years experience as Electrical

Planner or supervisor in the electrical

installation and industrial maintenance work

At least two (2) years as planner or least two (2)

Years as a Mill Maintenance Foreman

At least two (2) years as Mill Maint. Supervisor

At least five (5) years supervisory experience in

industrial maintenance work and electrical

installation

At least three (3) years as Mill Foreman

At least three (3) years in a related field.

PORO POINT INSTALLATION



1 M−1 PORO

MAINT/OPERATIO

NS SUPERINTENDENT

BS ME / CE / EE PRC

License

ASSAY

DEPARTMENT



1

2

3

M−3

M−2

STS− 4

GROUP MANAGER

DEPARTMENT

MANAGER

CHIEF CHEMIST

BS CHE / BS CHEM

BS CHE / BS CHEM

BS CHE / BS CHEM

PRC

License

PRC

License

PRC License

At least five (5) years experience as Chief

Chemist / Analyst

At least three (3) years as Chemist Analyst or Fire Assay Supervisor.

At least five (5) years experience as Lab.

Manager

At least three (3) years as Chemist Analyst in other chemical laboratories.

JG POSITION EDUCATIONAL ATTAINMENT License Experience-Internal Experience-External

IA STS− SUPERVISING AUDITOR BSC − ACCOUNTING / BS ACCOUNTANCY License

5 or BUSINESS Administartion or

Engineering ( preferably Industrial or

Computer)

IT M−1 IT MANAGER Graduate of IT Related course such as none At least 5 years as At least 3 years as IT, MIS Computer Science, Computer Systems Development or EDP manager Engineering or Engineering Field Head or Systems

Support Head.

STS− NETWORK, HARDWARE & Graduate of IT Related course such as none

4 DATABASE ADM Computer Science, Computer

Engineering or Engineering Field

STS− SYSTEMS DEV. & BS COMPUTER SCIENCE / INFO & none

5 MAINTENANCE HEAD COMPUTER

FINANCE M−3 GROUP MANAGER BSC − ACCOUNTING / BS ACCOUNTANCY Must be Minimum of three (3) Five (5) Years Financial Certified years management Reporting, Accounting, Public responsibility Internal Auditing or Accountant Auditing experience. (CPA) Or Mining Industry Certified Experience is preferred Management

Accountant

(CMA)

STS− SENIOR ACCOUNTANT BSC − ACCOUNTING / BS ACCOUNTANCY License

4

STS− SENIOR ACCOUNTANT BSC − ACCOUNTING / BS ACCOUNTANCY License

4

BUDGET M−2 BUDGET MANAGER BSC − ACCOUNTING / BS ACCOUNTANCY License

HR M−2 DEPARTMENT MANAGER COLLEGE GRADUATE IN ANY OF THE none At least 5 years as At least five (5) years as FOLLOWING FIELDS Wage & Salary Head Human Resource Manager ENGINEERING/COMMERCE/PSYCOLOGY with exposure to & Preferably with Benefits & accrediation from Recruitment. Psychological Testing

Center.

M−3 SENIOR HUMAN RESOURCE MA BUSINESS ADMINISTRATION

MGR

COMREL M−2 COMMUNITY RELATIONS MA EDUCATION none Must have knowledge At least two (2) more MGR in socio−economic years in community project development development projects. and management,

feasibility study

preparation,

community organizing

and background in

networking with

various government

and non−government

organization

EQMED M−2 EQMED MANAGER BS FORESTRY License

STS− FORESTRY HEAD BS FORESTRY License

4

VP−RM M−1 EXECUTIVE ASSISTANT BS MECHANICAL ENGINEERING none

SPROJECT M−2 DEPARTMENT MANAGER BS MINING ENGINEERING License

SECURITY M−2 DEPARTMENT MANAGER BS Criminology or AB Graduate License At least three (3) years At least three (3) years as minimum as Chief a Commissioned Officer of Security Officer. the AFP. M−1 ASSISTANT MANAGER BS CRIMINOLOGY / POLICE SCIENCE License

EXPLORATION M−3 GROUP MANAGER BS GEOLOGY License

M−2 DEPARTMENT MANAGER BS MINING ENGINEERING/BS GEOLOGY License At least five (5) years

experience as

Exploration and/or

Mine Geologist

GEOLOGY M−2 DEPARTMENT MANAGER BS MINING ENGINEERING/BS GEOLOGY License

M−1

STS−

4

GEOLOGIC DATA BASE HEAD

PETROGRAPHER/GEOLOGIST

BS Geology, BS Mining Engineering or

exposure in Geology−related .

BS GEOLOGY

License

License

At least three (3)

years experience as

CAD Operator or

programming

At least two (2) years

work experience as

Geologist, preferably

with experience in petrography

As Geologist with

exposure in Mine Geology

and /or Economic Geology

PADCAL Operations

April 2013


Annex D-3: Padcal Table of

Organization

Table of Organization

PADCAL Operations

April 2013


Annex D-4: Community Development

Program

I. Health Program

No.

Programs/Projects/ Activities

Stakeholders

involved

Location Period of

implementation

Estimated Cost

Expected output

1

Free Medical Services −

Hospitalization

LGU / Host &

Neighboring

communities

Philex Sto. Nino

Hospital, Padcal,

Camp 3

2013 2,500,000.00

Provide Medical services such as

consultation, treatment, provision of

medicines, laboratory services − 7,000

patients

2014 2,600,000.00

2015 2,700,000.00

2016 2,900,000.00

2017 3,100,000.00

2

Health Development

Programs / Projects /

Activities / Safety and

Sanitation programs

LGU/ Barangay Camp

3 community

Torre E.S and

Camp 3 E.S; Camp

3 Sitios; CATBAK

Health Clinic

2013 1,522,199.91 Provide school based health screening

(310 pupils); / Conduct health

education seminars; / repair or

improvements of health clinic center− 2

units; / Provide emergency

preparedness equipments / communal toilet room with septic tank

2014 1,140,000.00

2015 495,000.00

2016 370,000.00

2017

555,000.00

LGU /Barangay Camp

1 Ligay, Camp 1 2015 600,000.00

Construct 1 Unit − Health Clinic

Building

LGU / Sal−angan and

Banget Community

Brgy. Ampucao

2014 800,000.00 Provide Secondary Domestic Water

Pipe Yearly and BP Apparatus, Steel

Cabinet, Weighing Scale, First Aid Kit

for Satellite Health Center, School

Based Health Screening; / Construct 2

Units − Water Works System, 1 Unit −

Concrete Parapet Wall; / Install 1 Unit −

Electric Water Pump; / Repair Existing Water Work System

2015 1,510,000.00

2016 460,000.00

2017

410,000.00

LGU /Philex − Kias

Road Communities

Brgy. Ampucao

2013 1,188,876.43 Improve water system facilities and health clinic center

2014 1,000,000.00 Provide School Based Health

Screening, Seed Capital for Iodized Salt

and Botika Binhi Program; /

Construct 3 Units − Elevated Catwalk, 1

Unit − Slope Protection Masonry Wall, 1 Unit − Pathway Railings

2015 500,000.00

2016 660,000.00

2017 110,000.00

LGU / Host Barangay Polec & 745ml, 2013 6,708.00 Provision of toilet bowls with

Ampucao Ampucao 2015 167,893.53 accessories; construct toilet rooms

with septic tanks. 2017 196,896.32

Lab−ang & Saes,

Ampucao

2014 225,000.00 Conduct illness/disease prevention

program seminars/provision of

equipments and accessories

2015 160,000.00

2016 200,000.00

2017 100,000.00

Lab−ang & Bagbag,

Ampucao

2015

120,000.00 Improve/repair of health center

facilities

Taluan,

Limmingaling, Nay−

en, BATACAT,

Ampucao

2013 340,427.08

Improve water system

2014 673,032.06

2015 450,000.00

2016 460,000.00

2017 250,000.00

Sub- total for Health Pro¡ects : 28,471,033.33

II. Education Program

1

College Educational

Assistance

LGU / Host &

Neighboring

Communities

Baguio / Benguet

Colleges/Universiti

es

2013 5,000,000.00 Provide full scholarship to the

underprivileged but deserving college

students − 100 students per year

2014 5,500,000.00

2015 6,000,000.00

2016 6,500,000.00

2017 7,000,000.00

2

Secondary Educational

Assistance − SLHS

LGU / Host &

Neighboring

Communities

Saint Louis High

School − Philex

Annex

2013 495,043.01 Provide full scholarship to the

underprivileged but deserving high

school students − 50 students per year

2014 500,000.00

2015 550,000.00

2016 600,000.00

2017 650,000.00

3

Subsidized Secondary

Education (SLHS)

LGU / Host &

Neighboring

Communities

Saint Louis High

School − Philex

Annex

2013 497,032.28 Provide subsidized secondary

education to enrolees of SLHS − Philex

Annex − 50 students per year

2014 500,000.00

2015 550,000.00

2016 600,000.00

2017 650,000.00

4

Subsidized Primary

Education (PMES)

LGU / Host &

Neighboring

Communities

Philex Mines

Elementary

Education

2013 3,071,742.99 Provide subsidized elementary

education to enrolees of Philex Mines

Elementary Education − 300 pupils per 2014 3,100,000.00

2015 3,200,000.00

2016 3,300,000.00 year

2017 3,400,000.00

5

Technical Vocational

Scholarship

LGU / Host &

Neighboring

communities

Baguio / Benguet

Colleges/Universiti

es

2013

1,130,283.00

Provide full scholarship to the


school students − 36 students

2014 2,000,000.00 Provide full scholarship to the



2015 2,150,000.00

2016 2,250,000.00

2017 2,350,000.00

6


Assistance − (Twin Peaks

NHS)

LGU / Host Barangay

Camp 3

Twin Peaks

National High

School

2013 250,000.00




2014 300,000.00

2015 330,000.00

2016 360,000.00

2017 390,000.00

7


Assistance − (Ampucao

NHS)

LGU / Host Barangay

Ampucao Community

Ampucao National

High School.

Ampucao, Itogon,

Benguet

2013 111,200.00




2014 120,000.00

2015 125,000.00

2016 130,000.00

2017 140,000.00

8

Special Program for

Employment of Students

(SPES)

LGU /Host &

Neighboring

Communities

Philex − Padcal

Mine site

2014 350,000.00

Accommodate 70 students per year

2015 385,000.00

2016 420,000.00

2017 455,000.00

9

Alternative Learning

System (ALS)

LGU /Host &

Neighboring

Communities

Philex − Padcal

Mine site

2013 190,000.00

Accommodate 160 OSY during review

classes & examination

2014 160,000.00

2015 135,000.00

2016 100,000.00

2017 66,000.00

10

Career Coaching

Development in ANHS

LGU / Host Barangay

Ampucao

Ampucao National

High School.

Ampucao, Itogon,

Benguet

2013 50,000.00

Accommodate 100 graduating

students with parents − provide career

guidance

2014 60,000.00

2015 80,000.00

2016 100,000.00

2017 120,000.00

11

School Improvements/

development programs /

activities / projects

LGU / Barangay

Camp 3

Torre ES & Camp 3

E.S

2013 1,775,000.00 Construct/improve school Facilities

(Building renovation, perimeter fence

and repairs, toilet room)

2014 1,200,000.00

2015 1,500,000.00

2016 1,500,000.00

2017 2,000,000.00

LGU / Neighboring

Communities

Ligay Elem. School,

Piminggan Elem.

School, Evelio

Javier Memorial

National High

School Piminggan

Annex, Sioco

Cariňo Elem. School

2013 450,000.00 Improve school facilities and construct

student quarters/ Construct 2 Units −

600 m School Perimeter Fence, 2 Units

( 80 cu.m) − Stone Masonry Flood

Control, 1 Unit − Water Work System, 1

Unit − Teachers' Quarter, 1 Unit − C.R.,

1 Unit − Teachers' Office, 2 Units −

School Stage;/ Repair / Improvement; / Provide 1 Unit − Solar Power System

2014 769,000.00

2015 500,000.00

2016 1,190,000.00

2017 1,230,000.00

LGU / Barangay

Camp 3

Torre ES & Camp 3

E.S

2013 760,000.00 Provide school equipments/sports

equipments/manual

dictionaries/support of school

programs (journalism) and activities

2014 300,000.00

2015 300,000.00

2016 300,000.00

2017 600,000.00

2014 80,000.00 Conduct proficiency training for the

teachers (12 teachers) and qualified

students/provide funds for the school

journalism/INSET programs

2015 85,000.00

2016 90,000.00

2017 120,000.00

LGU / Host Barangay

Ampucao

TAPSAN ES; Lab−

ang ES, Ampucao,

Itogon

2013

90,000.00

Provide school materials and equipments

2014 314,532.61 Improve/expansion of school buildings

2015 350,000.00

2016 250,000.00

11

School Improvements/

development programs /

activities / projects

LGU / Host Barangay

Ampucao

Banget Elem.

School

2013

425,063.44

Improves school buildings; / Construct

1 Unit − Slope Protection Masonry

Wall, 1 Unit − Perimeter Fence, 1 Unit −

Water Tank w/ Water Lines, 3 Units −

Pathway Shed, 1 Unit − Lunch Counter

(Kiosks), 1 Unit − School Canteen, 1

Unit − Drainage Canal, 1 Unit School

Board Sign; / Repair of Teachers'

Quarters; / Rehabilitate 1 Unit −

Pathway; / Provide First Aid Kits, 1 −

Unit Computer Set with Projector and

LCD

2014 520,000.00

2015 1,390,000.00

2016 320,000.00

2017

470,000.00

Ampucao E.S,

Manganese E.S,

Ampucao NHS,

Simpa Pre−school,

ALS, Hartwell Day

Care Center, Senior

Citizens

Organization

2013 1,001,463.53 Improves school buildings; / Construct

1 Unit − Septic Tank, 2 Units − Slope

Protection Masonry Wall, 1 Unit −

Classroom, 1 Unit Perimeter Fence, 2

Units − Teachers' Quarter, 2 Units −

Water Works System, 2 Units − Comfort

Room; / Concrete 2 Units − School

Ground; / Provide of Trainings /

Seminars to Senior Citizens; / Provide

Teachers' Table and Steel Cabinets, TLE

Equipment, Students' School Uniform, Day Care Equipment and Materials

2014 1,620,000.00

2015 2,125,000.00

2016 845,000.00

2017

1,050,000.00

12

Scholar Capability and

leadership training

LGU /Host &

Neighboring

Communities

College and High

school scholars

2014 48,000.00 Conduct capability and leadership

training for the graduating scholars −

60 pax

2015 60,000.00

2016 72,000.00

2017 78,000.00

Sub-Total for Education Pro¡ects: 92,249,360.86

III. Livelihood Program

1

Work Appreciation

Program

LGU /

Host/Neighboring

Communities

Philex − Padcal

Mine Site

2013 587,520.00 Expose at least 80 new graduates in

their respective fields per year

2014 1,200,000.00

2015 1,360,000.00

2016 1,520,000.00

2017 1,680,000.00

2

In house Cooperative

Trainings

SALBA/TAPSAN/

BATACAT/ EL

DORADO / Ansagan

Consumers Coop

/Damon Producers

Coop

Philex − Padcal

Mine Site

2013

726,900.00

Conduct 14 trainings mandated by CDA

− 90 officers/BODs

A. Area : Ampucao

3

Cooperative and

Associations Enhancement

(facilities improvements,

trainings and seminars)

SALBA MPC, Nalibsan

Group, AFPCAI,

Marcos Nalibsan

Family Association,

Inc., Sta. Fe

Community

Development

Association

Ampucao, Itogon,

Benguet

2013 1,374,088.81 Improve cooperatives buildings; /

Provide Capability Training / Seminars

(Leadership, Bookkeeping, Team

Building, Other Related Cooperative)

Trainings; / Establish ECO − Tourism

Projects; / Training Cum Production on

Cattle Raising, Goat Raising, Coffee and

Agro−forestry; / Construct 2 Units − Slope Protection Wall

2014 862,238.00

2015 500,000.00

2016 620,000.00

2017

620,000.00

Ampucao Organic

Farmers' Association,

Mushroom

Production

Association, Other

Community Groups

2013 362,087.33 Improves production area; / Training

Cum Production on

Sewing/Tailoring/Dressmaking, Cut

Flowers, Coffee/Fruit Trees and

Mushroom; / Construct 1 Unit −

Housing for Composting, 1 Unit −

Building for Expansion; / Provide 1 Unit

− Shredder

2014 300,000.00

2015 200,000.00

2016 550,000.00

2017 550,000.00

BATACAT MP

Cooperatives

Bagbag, Ampucao,

Itogon 2013 790,638.54

Complete Coop

building/facilities/equipments/needed

trainings & sustained operations thru

micro financing & livelihood projects

2014 3,242,838.54

2015 1,500,000.00

2016 1,000,000.00

2017 500,000.00

4


LGU−Ampucao, PO

Banengbeng,

Ampucao

2013

1,458,564.00

Livestock Production; Construct

facilities & provided operating capital

for the piggery & poultry projects for a self−sustained community

5

Agro forestry Projects

LGU−Ampucao, PO

BATACAT &

TAPSAN, Ampucao

2013 1,346,089.90

Agro−Forestry projects: Provide farm

materials for long term livelihood for

the community

2014 826,063.64

2015 2,400,000.00

2016 2,000,000.00

2017 1,650,000.00

6

Farm to Market Road

Improvement

LGU / Host Barangay

Ampucao

Sal−angan and

Banget, Ampucao

2013 2,343,520.86 Construct 16 Units − Slope Protection, 6

Units − Road Widening, 3 Units − Gutter

Canal, 2 Units − Concrete Parapet Wall;

/ Rehab 1 Unit Road Concrete

Pavement/All weather FMR

2014 2,180,000.00

2015 3,060,000.00

2016 3,100,000.00

2017 3,210,000.00

Philex − Kias Road

Area, Ampucao

2013 2,343,520.86 Construct Reinforced Road Concrete

Pavement; / 8 Units − Slope Protection

Wall; / pathway

2014 440,000.00

2015 440,000.00

2016 630,000.00

2017 1,280,000.00

7

Other Livelihoods' Supports

− INFRA

LGU / Host Barangay

Ampucao

SALBA & Philex−

Kias Rd., Ampucao,

Itogon, Benguet

2014 820,000.00 Construct 2 Units − Water Works

System, 3 Units − Perimeter Fences,

Pathway by 300m Yearly, 3 Units −

Hanging Bridges

2015 940,000.00

2016 650,000.00

2017 950,000.00

2014 400,000.00 Construct Pathway by 400m Yearly, 1

Unit − Waiting Shed 2015 400,000.00

2016 485,000.00

2017 400,000.00

BATACAT &

TAPSAN, Ampucao

2013 3,900,677.56 Pave 300m for 2013; 700m for 2014;

400m for 2015; 300m for 2015; 200m

for 2017; 2.) Construct/improve

parapet/masonry/retaining walls,

2014 6,483,655.49

2015 6,994,510.50

2016 5,386,796.03

2017

4,385,000.00 spillways, pathways, footbridges, waiting sheds, drainage canals

B. Area: Camp 3, Camp t and Ansagan

a. Vegetable Production/Agro−Forestry Products/Livestock Products

1

Farm − to − Market Roads

(FMRs) Concreting/road

drainage

LGU/Barangay Camp

3

CATBAK/Colocol /

& Buo−Salat, Camp

3

2013 7,843,849.07

Construct 6.6555 km reinforced road

concrete pavement/drainage canal

2014 6,510,750.00

2015 8,518,800.00

2016 8,086,600.00

2017 5,296,450.00

LGU /Brgy. Camp 1

and Ansagan

Soyucto, Camp 1 −

Ansagan Proper

(Critical Area)

2013 2,178,981.93

Construct 6.245 km road tire path; /

drainage canal = 150m

2014 1,945,000.00

2015 4,414,500.00

2016 4,321,000.00

2017 4,619,000.00

2

FMR Improvements − Soil

Erosion Control/widening/

clearing

LGU / Barangay

Camp 3

CATBAK/Colocol/

Buo−Salat &

Balayan, Camp 3

2013 175,000.00

Construct 2,234.40 cu.m/69 units FMR

erosion control/road improvements

2014 1,259,700.00

2015 1,938,000.00

2016 2,383,740.00

2017 3,389,400.00

LGU − Barangay Camp

1 and Ansagan

Barangay Camp 1

and Ansagan FMRs

2013 279,889.39 Provide 50 drums diesel fuel/Construct

1 unit box Culvert / and 1 unit Masonry

wall

2014 50,000.00

2015 300,000.00

2016 60,000.00

2017 70,000.00

3

Farm Soil Erosion Control /

Protection

LGU / Barangay

Camp 3

Antamok/Torre &

Mangga, Camp 3

2013 383,714.13

Construct 30 units/1,092.00 cu.m farm

soil erosion control/masonry flood

control

2014 360,000.00

2015 736,000.00

2016 1,316,000.00

2017 2,304,000.00

4 Loading Platform (Farm

Products)

LGU / Barangay

Camp 3

CATBAK/Colocol,

Buo

2014 110,000.00 Construct 7 units crops product loading

platform 2015 222,000.00

2016 336,000.00

2017 112,000.00

5

Construction of Concrete

Reservoir

LGU / Barangay

Camp 3

CATBAK/Camp 3

area

2013 100,000.00

Construct 4 units/125.6 cu.m water

reservoir

2014 170,000.00

2015 172,000.00

2016 176,000.00

2017 115,000.00

6

Improvements of Irrigation

System

LGU / Barangay

Camp 3

Mangga &

Antamok, Camp 3

2014 100,000.00

Construct Irrigation Canal/pipes/585m 2015 120,000.00

2016 150,000.00

2017 800,000.00

7

Construction of Agricultural

Tramline/footbridges/footp

aths

LGU / Barangay

Camp 3

CATBAK/Camp 3

Kennon Area

2014 300,000.00 Construct 600 m agricultural footpath

2015 300,000.00

2016 850,000.00 Construct 2 units agricultural tramline −

500m 2017 650,000.00

LGU / Neighboring

Communities Ansagan Proper

2015 250,000.00 Construct 700m Length (2 units)

suspension footbridge 2016 250,000.00

b. Cooperative/Association development or enhancement

1

TABACKFA Livelihood

enhancement program

TABACK Farmers

Association

CATBAK, Camp 3,

Tuba

2013 200,000.00

Conduct advance trainings/seminars

for the enhancement of the

group/Additional livelihood seed

capital

2014 1,000,000.00

2015 1,000,000.00

2016 1,000,000.00

2017 1,000,000.00

2

CAFIA − Caluminga Water

System / Support Infra

Caluminga Farmers

and Irrigators

Association

CATBAK, Camp 3,

Tuba

2013 700,000.00 Provide maintenance of water

system/payment of bills for power

consumption; / conduct advance

trainings; / Seed capital for livelihood;

/ Construct livelihood facilities

2014 200,000.00

2015 1,500,000.00

2016 200,000.00

2017 100,000.00

3

BATIFA

Balding & Tokok

Irrigators Farmers

Association

Balding, Camp 3

2013 620,000.00 Expand production area; / Conduct

advance workshop−training, Financial

Management trainings; / Provide seed

capital for fish culture

2014 250,000.00

2015 30,000.00

2016 40,000.00

2017 250,000.00

4

Colocol − Gangel IA

Colocol − Gangel

Irrigators Association

Colocol −Gangel IA

2013 640,000.00

Provide UV polyfilm for the rain

shelter; / Conduct advanced training

cum production / Construct support

infra buildings.

2014 250,000.00

2015 250,000.00

2016 500,000.00

2017 1,200,000.00

5

UK: 1.) Organizational

preparation 2.) Approved

Feasibility study of the

group

Uwangan ni

Kalanguya

Association

CATBAK, Camp 3,

Tuba

2013 200,000.00

Conduct training cum production for

Camote flour making and advanced

poultry production; / Construct

livelihood facilities; / Provide

equipments for processing

2014 30,000.00

2015 1,000,000.00

2016 1,000,000.00

2017 500,000.00

6

Buo Community

LGU/Barangay Camp

3

Buo/Salat, Camp 3

2013 350,000.00

Conduct advance training cum

production, provide livelihood

facilities; / conduct financial

management training

2014 100,000.00

2015 10,000.00

2016 15,000.00

2017 20,000.00

7

Expansion of Livelihood

programs

LGU / Barangay

Camp 3

Camp 3 (Kennon

Area)

2014 100,000.00

Organize 3 small community group for

the livelihood expansion

2015 100,000.00

2016 100,000.00

2017 100,000.00

8

Cooperative Enhancement

LGU / Brgy. Camp1

and Ansagan

El Dorado MPC and

Ansagan

Consumers Coop.

2014 750,000.00 Rehabilitate 2 Units − Coop. Building; /

Provide construction materials for 1

unit − goat barn 2015 250,000.00

Sub - Total for Livelihood Pro¡ects: ##########

INFORMATION, EDUCATION & COMMUNICATIONS

1

Enhancement/

Establishment

Maintenance of

Information & Publicity

Centers

General Public

Philex

2013 4,640,000.00 Improvements of Philex

museum/Improvements and

installation of Information & Publicity

Centers; Construction of

community/industrial areas models &

audio−visual room; Library on Mining

and Environment; Installation of Virtual Museum and Photo Gallery

2014 4,660,000.00

2015 4,680,000.00

2016 4,700,000.00

2017

4,720,000.00

Information, Education & Communications

2

Publications/

Advertisement

Local Newspapers

Baguio City

2013 100,000.00

Publication of the company's

programs, projects, activities in terms

of Safety, Health, Environment and

social (SHES).

2014 120,000.00

2015 140,000.00

2016 160,000.00

2017 180,000.00

3

Sponsorships

General Public

CAR & Baguio City

2013 200,000.00

Advertise responsible mining thru

sponsoring of souvenirs

2014 220,000.00

2015 240,000.00

2016 260,000.00

2017 280,000.00

Continuing Public Awareness & Education Campaigns

4

Monthly IEC Caravan

Host/Neighboring

Communities

Camp3, Ampucao,

Ansagan, Camp1 &

Pangbasan,

Dalupirip

2013 401,280.00 Information drive to Barangay Camp

3,Camp 1, Ansagan, Tuba; Ampucao

and Dalupirip, Itogon, Benguet

2014 420,000.00

2015 430,000.00

2016 440,000.00

2017 450,000.00

5

Internal Monitoring

Host/Neighboring

Communities

Camp3, Ampucao,

Ansagan, Camp1 &

Pangbasan,

Dalupirip

2013 225,760.00

Monitor SDMP Projects with the SMET

and MGB−CAR

2014 235,000.00

2015 245,000.00

2016 255,000.00

2017 265,000.00

6

Quarterly Monitoring

Host/Neighboring

Communities w/

MGB

Camp3, Ampucao,

Ansagan, Camp1 &

Pangbasan,

2013 228,480.00

2014 238,000.00

2015 248,000.00

Dalupirip 2016 258,000.00

2017 268,000.00

7

Eco/Media forums

SMET (SDMP

Monitoring &

Evaluation Team)

Baguio City

2013 200,000.00 Update the public on status of mining

operations, social and environmental

obligations

2014 210,000.00

2015 220,000.00

2016 230,000.00

2017 240,000.00

Environment Month Celebration

8

Mining & Environment

Forums

SMET (SDMP

Monitoring &

Evaluation Team)

Baguio City

2013 50,000.00 Promote responsible mining towards

accountable stewardship of our

environment

2014 60,000.00

2015 70,000.00

2016 80,000.00

2017 90,000.00

9

Essay, Poster & Photo

Contest

Schools within host &

neighboring

communities

Saint Louis High

School−Philex &

ANHS/Twin Peaks

NHS/Evelio Javier

MHS − Piminggan Annex

2013 200,000.00

Undertake a contest on essay, poster

making and photo concerning

responsible mining

2014 210,000.00

2015 220,000.00

2016 230,000.00

2017 240,000.00

10

Mining for Environment

(Community Bayanihan,

Tree Planting)

All interested

employees &

residents from host

& neighboring

communities

Philex

2013 250,000.00

Continue adoption of watershed

reservoir project and produce a video

on actual activity

2014 260,000.00

2015 270,000.00

2016 280,000.00

2017 290,000.00

Participate in Mining & Environment Exhibits

11

Exhibits During Events

LGU−Barangay,

Municipality,

Province

Itogon, Tuba, La

Trinidad & Baguio

City

2013 300,000.00 Exhibits during

Barangay/Municipal/School

Foundation day of Fiestas as

promotional activity on the impacts of

responsible mining

2014 310,000.00

2015 320,000.00

2016 330,000.00

2017 340,000.00

12

Mining Philippines/PMSEA

Mining Companies

Baguio & NCR

2013 2,300,000.00 Sponsor activities during PMSEA week 2014 2,350,000.00

2015 2,370,000.00

2016 2,390,000.00

2017 2,410,000.00

Synchronized Information, Communications & Education

13

Monthly Meetings

SICE Team

Baguio City

2013 10,000.00

Conduct meeting to confer on the

various activities of SICE Team

2014 15,000.00

2015 20,000.00

2016 25,000.00

2017 30,000.00

14

Mine Cross Visit

SICE Team / LGU /

Host & Neighboring

communities

National/Local

2013 245,000.00

Learn and share from other mining

companies on their best practices

2014 255,000.00

2015 265,000.00

2016 275,000.00

2017 285,000.00

15

Capability Trainings

SICE Team / LGU /

Host & Neighboring

communities

Philex, Baguio City

& CAR

2013 200,000.00

Notify stakeholders on the issues and

concerns of the mining industry

2014 210,000.00

2015 220,000.00

2016 230,000.00

2017 240,000.00

16

PMSEA SICE

SICE Team / LGU /

Host & Neighboring

communities

Baguio City

2013 53,000.00

Participate during PMSEA SICE

Activities

2014 63,000.00

2015 73,000.00

2016 83,000.00

2017 93,000.00

17

Assistance to the

Institutionalization of

Public Awareness &

Education

Philex Livelihood

Centers

General Public

2013 264,816.00

Provide community/industrial Models,

Chairs & Tables

2014 275,000.00

2015 285,000.00

2016 295,000.00

2017 305,000.00

DEVELOPMENT OF MINING TECHNOLOGY & GEOSCIENCES

18

Basic & Applied Research

on Mining Technology &

Geosciences

Employees, LGU &

Community Leaders

Baguio

City/Benguet

2013 1,377,891.00 Participate in the various activities of

the CIERDEC specifically on Research &

Development on the Minerals Industry 2014 1,400,000.00

2015 1,450,000.00

2016 1,470,000.00 in coordination with DOST; Sponsor

basic and applied research related to

mining

2017

1,490,000.00

19

Advanced Studies on

Related Mining by

Qualified Researchers

Employees, LGU &

Community Leaders

Baguio City /

Benguet

2013 1,100,000.00

Sponsor advanced studies elated to

mining which are conducted by

qualified researchers in the form of

research grants

2014 1,200,000.00

2015 1,300,000.00

2016 1,400,000.00

2017 1,500,000.00

20

Trainees/Scholars

(Partnership of PMC w/

Mining Technology &

Geosciences) − Mining,

Metallurgy, Geology &

Chemist

Qualified students

from CAR & Baguio

City

Philex Mines −

Padcal

2013 1,150,000.00

Sponsor scholarship of students in the

field of Mining, metallurgy, Geology

and Chemistry

2014 1,200,000.00

2015 1,250,000.00

2016 1,300,000.00

2017 1,350,000.00

21

PIMQ − Philippine Institute

of Mining and Quarrying

Host/Neighboring

Communities

Philex Mines −

Padcal

2013 775,000.00

Give opportunities to interested and

deserving students for possible

employment

2014 780,000.00

2015 780,000.00

2016 790,000.00

2017 790,000.00

22

On−The−Job Training

Host/Neighboring

Communities

Philex Mines −

Padcal

2013 156,000.00

Provide allowance during training of

students

2014 160,000.00

2015 165,000.00

2016 170,000.00

2017 175,000.00

23

Mine & Mill Practicum

2013 520,000.00

2014 525,000.00

2015 530,000.00

2016 535,000.00

2017 540,000.00

24 Equipment & Capital

Outlay As Assistance to Qualified students

SLU − Mining

Engineering

2013 1,500,000.00 Provide assistance to education

institutions as venue for developing 2014 1,500,000.00

Research/Education

Institutions

2015 1,500,000.00 Mining Technology & Science

2016 1,500,000.00

2017 1,500,000.00

Sub - Total for Information, Education and Communication 86,371,227.00

Documents

Remaining Ore Reserve Estimation and Feasibility Study of Padcal