AN OVERVIEW OF MINERALS POTENTIAL AND OPPORTUNITY IN THE PHILIPPINES Mining and Minerals – The new drivers of growth Mines and Geosciences Bureau Department of Environment and Natural Resources

Slide 2 Mining Philippines 2005 Philippines Porphyry Cu belts

Slide 3 Mining Philippines 2005 TRENCHES IN THE PHILIPPINES Volcanic arc terrane (Au, Cu, Fe, Pb, Zn) Ophiolite Terrane (Cr, Pt, Co, Ni, Cu- Pb-Zn, Au) 1.Manila Trench 2.Philippine Trench 3.Negros Trench 4.Sulu Trench 5.Cotabato Trench

Slide 4 Mining Philippines 2005 THE MINING INDUSTRY : BRIEF OVERVIEW  PHILIPPINE MINING DATES BACK TO 16 TH CENTURY  RICH DIVERSITY IN BOTH METALLIC AND NON-METALLIC MINERAL RESOURCES  SIGNIFICANT CONTRIBUTION TO ECONOMIC DEVELOPMENT OF THE COUNTRY & SKILL TRAINING OF WORKFORCE  INDUSTRY SUBJECT TO GROWING SOCIAL NEEDS AND DEMANDS, COUPLED WITH GREATER AWARENESS AND ACTIVISM  FAST EVOLVING REGULATORY REGIMES – MINING ACT OF 1995 (RA No. 7942)  ONGOING REVITALIZATION OF THE MINERALS INDUSTRY WITHIN THE CONTEXT OF SUSTAINABLE DEVELOPMENT

Slide 5 Mining Philippines 2005 ONSHORE MINERAL RESOURCES  Only 1.4% are covered by mining permits  9 million hectares more of potential sites for metallic minerals

Slide 6 Mining Philippines 2005 OPERATING MINES 2 Big mines: Victoria Gold Mine Padcal Copper Mine 4 Medium-scale nickel mines Rio Tuba Nickel Mine Cagdianao Nickel Mine Sigbanog Project of HMC Taganito Nickel Mine 3 Medium-scale chromite mines Masinloc Project of Benguet Corp., Omasdang Project of Crau Minerals Homonhon Project of Heritage Res. 5 medium-scale gold mines Canatuan Project of TVI Acupan SSM Operations of Benguet Diwalwal Direct State Development Project of NRDC Banahaw Gold Project of Philsaga Mining Corp. Johson Gold Mining Corp. in Panganiban 15 Cement plants and quarries

Slide 7 Mining Philippines 2005 ECONOMIC CONTRIBUTIONS OF THE MINERALS SECTOR (FY 2004) Production ValueP 41.5 Billion or 19% increase from CY 2002 Value Added ContributionP 18.0 Billion or 1.6% of Phil. GDP or 1.52% of the Phil. GNP (CY 2003) ExportsUS$ 638 Million or 1.8% of total Phil. Exports Paid-up InvestmentsP 367 Million (CY2002) Employment104,000 Wages and BenefitsP 4 to P5 Billion Taxes and Fees EstimateP 2.1 Billion (CY 2002) Multiplier EffectFor each mining job, 4 to 10 allied jobs created upstream and downstream

Slide 8 Mining Philippines Potential areas and deposits: 1.Luzon Central Cordillera – Au, Cu, Fe, Mn 2.Northern Sierra Madre – Cr, Ni, Cu 3.Zambales – Cr, Ni, Co, Pt, Cu, Au 4.Vizcaya-Aurora – Cu, Au 5.Bicol – Au, Fe, Cu 6.Southern Tagalog – Cu, Au, Ni, Co 7.Central Visayas – Cu, Au, Mn 8.Samar-Eastern Mindanao – Au, Cu, Fe, Cr, Ni, Co, Pt, Mn 9.North Central Mindanao – Cr, Cu, Au 10.Zamboanga Peninsula – Au, Cu, Cr, Fe 11.Southern Mindanao – Cu, Au 12.Palawan – Cr, Ni, Co, Pt, Au, REE

Slide 9 Mining Philippines 2005 RESERVE: 163 million tons with 0.81% copper and 1.76 grams per ton gold; 1.8 Cu eq. FAR SOUTHEAST porphyry copper - gold deposit RESOURCE: 300 million tons with 0.6% copper and 1 gram per ton gold. BOYONGAN porphyry copper - gold deposit RESOURCE: 700 million tons with 0.81% copper and 0.32 gram per ton gold TAMPAKAN porphyry copper - gold deposit MAJOR DISCOVERIES

Slide 10 Mining Philippines 2005 Far Southeast porphyry-copper gold deposit 163 M tons reserve 0.81% Cu 1.76 g/t Au 1.8% Cu eq.

Slide 11 Mining Philippines 2005 Simplified geologic map of Surigao peninsula Boyongan porphyry- copper gold deposit 300 million tons 0.6% Cu 1 g/t Au

Slide 12 Mining Philippines 2005 Tampakan Cu-Au deposit Tampakan Cu-Au deposit > 1 billion T resource 0.7% Cu 0.3 g/t Au

Slide 13 Mining Philippines 2005 DIDIPIO porphyry copper - gold deposit (20.4 MMt, 0.65% Cu, 1.7 g/t Au) AROROY gold deposit (71.3 MMt, 1.34 g/t Au) PALAWAN HPP Project (11.5 MMt, 2.3% Ni) PIPELINE PROJECTS RAPU-RAPU polymetallic deposit (7 MMt, 2.61g/t Au, 14 g/t Ag, 1.24% Cu, 2.06% Zn) CANATUAN gold project (954,763 Mt, 3.81 g/t Au; 1.4 MMt, 2.6% Cu, 1.61% Zn, 1.07 g/t Au, 63.3 g/t Au) DIWALWAL gold deposit (>6 MMt, 0.8 g/t Au)

Slide 14 Mining Philippines 2005 BATONG-BUHAY porphyry copper-gold project (85.9 MMt, 0.6% Cu, 0.25 g/t Au, 2.7 g/t Ag) SAN ANTONIO porphyry copper project (178.3 MMt, 0.44% Cu, 0.09 g/t Au, 1.19 g/t Ag) AMACAN porphyry copper- gold project (110 MMt,0.3% Cu, 0.43g/t Au; 133 MMt, g/t Au) KINGKING porphyry copper- gold project (353.5 MMt, 0.39% Cu, 0.44 g/t Au OTHER PROJECTS ATLAS porphyry copper project (872 MMt, 0.41% Cu) COPPER

Slide 15 Mining Philippines 2005 TERESA gold project (7.3 MMt, 5.29 g/t Au) GOLD SIANA gold project (18.8 MMt, 1.9 g/t Au) OTHER PROJECTS DIWALWAL gold project (9.7 MMt, 7.0 g/t Au)

Slide 16 Mining Philippines 2005 OTHER PROJECTS MINDORO nickel project (>200 MMt, 0.94% Ni) NONOCnickel project (60 MMt, 1.13% Ni, 0.094% Co, 33.31% Fe) ADLAY project (18 MMt, 1.6% Ni, 0.1% Co)

Slide 17 Mining Philippines 2005 Other Mineral Exploration Projects 1)Cordillera Au (Anglo-American) - Benguet 2)Surigao Cu (Climax) – Surigao del Norte 3)Siana Au (Red 5) – Surigao del Norte 4)Labo Au and Leyte Au (Indophil) – Camarines Norte & Southern Leyte 5)Nueva Vizcaya Au, Southern Leyte Au, Surigao Au (Oxiana) 6)Del Gallego Au (Phelps Dodge) – Camarines Norte 7)Pujada Ni (QNI/BHP-Billiton) – Davao Oriental) 8)New Bataan Au (Sur American) – Compostela Valley 9)Bayug Au (ZMC) – Zamboanga del Sur 10)Pan de Azucar Au and Lobo Cu-Au (MRL) – Iloilo & Batangas 11)Zambales Platinum (Kinloch Res.) - Zambales 12) Mabuhay Au (Pelican) – Surigao del Norte 13) Libona Au (Great Horizon) - Bukidnon 14) Pamplona Sulfur (Crew Dev) – Negros Oriental

Slide 18 Mining Philippines 2005 OFFSHORE RESOURCES Manganese Magnetite Chromite Gold  Philippines offshore area including EEZ 2.2 million Km 2 Placer minerals including gold, chromite, magnetite, silica  Potential offshore mineral resources: Aggregate resources (sand & gravel) Decorative stones, manganese nodules/encrustrations with associated copper, gold, zinc, cobalt Polymetallic sulphide deposits containing gold, copper, cobalt, etc. Offshore Palawan also holds resources of manganese

Slide 19 Mining Philippines 2005 Areas of high interest COPPER-GOLD Relatively unexplored extensions of mineral districts are highly prospective Baguio-Mankayandistrict Northern Luzon Central Cordillera Vizcaya-Ecija Northern part of Luzon Central Cordillera remains relatively unexplored but is probably the best potential area Encouraging geologic and mineral indications in Vizcaya- Ecija area Known district Areas of interest

Slide 20 Mining Philippines 2005 Surigao gold district holds promise for porphyry copper mineralization COPPER-GOLD Areas of high interest Time for rational exploration in Diwalwal-Masara area Zamboanga is an emerging district Discovery of Tampakan grabs attention for Cotabato Central Cordillera of Mindanao remains unexplored; gold panning activities reported. Surigao-Agusandistrict Diwalwal-Masaradistrict Zamboanga Cotabato MindanaoCentralCordillera Known district Areas of interest

Slide 21 Mining Philippines 2005 We learn from success stories Recognition of telescoped epithermal-hypothermal deposit pairs offers a new dimension in copper-gold exploration

Slide 22 Mining Philippines 2005 Recognition of telescoped epithermal-hypothermal deposit pairs offers a new dimension in copper-gold exploration We learn from success stories

Slide 23 Mining Philippines 2005 OTHER METALS NICKEL The Philippine nickel resource is the biggest in Southeast Asia Improved technology makes low-grade lateritic ore viable IRON The increasing demand for iron is reviving exploration for the commodity in the Philippines The spatial relationship of carbonate rocks with younger intrusives in the Philippines offers the possibility of finding new skarn deposits Improving chromite prices could revive Philippine chromite mines in Zambales, Palawan, Samar, Dinagat and Zamboanga. CHROMITE LEAD and ZINC Ophiolitic and Early Tertiary arc terranes in the Philippines holds much promise for VMS deposits similar to those of Lafayette in Rapu-Rapu island.

Slide 24 Mining Philippines 2005 THE NEW MINERALS INDUSTRY AND SUSTAINABLE DEVELOPMENT Enshrined in the 1987 Philippine Constitution, acknowledged in Philippine Agenda 21 and recognized in the WSSD Plan of Implementation. Given flesh through the Philippine Mining Act of 1995, its revised implementing rules and regulations and recently, in EO No. 270, the National Policy Agenda Revitalizing Mining in the Philippines. Advances the critical shift from purely regulatory compliance to sustainable development where: “Mineral resources development is undertaken in a transparent and sustainable manner guided by relevant laws, rules and regulations, industry guidelines and corporate responsibility and accountability; committed to the highest technical standards, management systems and practices; and engaged in a sustained process of consultation with local governments and communities, business groups, civil society and other industry stakeholders.”

Slide 25 Mining Philippines 2005 FORTIFYING THE FOUNDATIONS FOR A REVITALIZED MINERALS INDUSTRY  CLEAR, STABLE & PREDICTABLE POLICIES  Streamlined procedures for mining applications  Stable fiscal regime and equitable sharing  ADDRESS ENVIRONMENTAL & SOCIAL CONCERNS  Rationalize environmental standards  Strengthen protection measures and sureties  PROVIDE STRATEGIC DIRECTIONS ON MINERAL RESOURCES DEV’T

Slide 26 Mining Philippines 2005 OUTCOME OF THE REVITALIZATION OF MINERALS INDUSTRY An industry with sustained exploration activities dominated by new generation, high profit potential mines able to absorb the profit objective of the contractor and the social and environmental costs of modern mining and contributing to the sustained economic well-being of the nation and in countryside community development; A value-added minerals industry that paves the way to industrialization by generating wealth, employment and other benefits in both rural and urban regions and exporting finished products rather than raw materials;

Slide 27 Mining Philippines 2005 Recognition of multinational and state corporations with proven track record as pace-setter in modern technologies in mineral exploration, mine environmental management and social culture, and experience in the application of innovative technologies from whom the country could benefit in the discovery of new mineral deposits and in the management of mines; Enhanced contribution of the mining sector to the economy with reduced social and environmental impacts; OUTCOME OF THE REVITALIZATION OF MINERALS INDUSTRY

Slide 28 Mining Philippines 2005 A socially accepted and vibrant minerals industry demonstrating a track record of good corporate practice and engaging in enduring relationships with stakeholders; Retrofitting of local operating mines & quarries and the management of public health & safety and environmental risks associated with abandoned/ inactive mines and their cost-effective transformation to targeted end-uses acceptable to local communities and other stakeholders; OUTCOME OF THE REVITALIZATION OF MINERALS INDUSTRY

Slide 29 Mining Philippines 2005 A culture of change leading to a self-regulating minerals industry driven by the highest degree of professionalism, responsibility and accountability and dedication to continual improvement and commitment to Best Practice and sustainable development; Improved environment for research & development and enhanced collaboration among Government, industry and academic research sectors, with increased participation of stakeholders, to build up the scientific base needed to support policy development and innovative response to unique industry challenges and opportunities; OUTCOME OF THE REVITALIZATION OF MINERALS INDUSTRY

Slide 30 Mining Philippines 2005 Strong linkage with international organizations and active participation in international initiatives to learn and share and be part in developing international consensus and response to common issues on mining; and Full government support at the local and national level, to mineral resources development as a development option for the country. OUTCOME OF THE REVITALIZATION OF MINERALS INDUSTRY

Slide 31 Mining Philippines 2005 VISION A MINING AND MINERALS INDUSTRY THAT IS NOT ONLY PROSPEROUS BUT ALSO ECONOMICALLY, SOCIALLY AND ENVIRONMENTALLY SUSTAINABLE, WITH BROAD COMMUNITY AND POLITICAL SUPPORT, WHILE POSITIVELY AND PROGRESSIVELY ASSISTING IN THE GOVERNMENT’S PROGRAM ON POVERTY ALLEVIATION AND CONTRIBUTING TO THE GENERAL ECONOMIC WELL-BEING OF THE NATION

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