Name and Location
Batangas gold project, Philippines.

Client
Batangas Joint Venture (BJV), comprising Red Mountain Mining and Bluebird Merchant Ventures.

Project Description
A prefeasibility study (PFS) completed on the Batangas project has shown that the project will generate A$46-million in free cash flow during the first seven years of production.

The PFS includes a maiden probable ore reserve of 1.44-million tonnes grading 2.6 g/t of gold, 9.0 g/t of silver, or 2.8 g/t of gold, including silver credits, containing 128 000 oz of gold. This includes high-grade gold ore of 746 000 t grading 4 g/t of gold, 9.2 g/t of silver or 4.2 g/t of gold, including silver credits, containing 100 000 oz of gold.

The probable ore reserve is derived from optimised openpit designs based on indicated resources only, and represents a mining and production schedule that is expected to recover 116 000 oz of gold during the initial seven years of production.

Importantly, the PFS has added 26 000 oz of recoverable gold, compared with the scoping study that was completed in March 2014.
In the first two years, mining is planned to be undertaken from the high-grade South West Breccia (SWB) and Japanese Tunnel openpits at Lobo, grading 6.6 g/t of high-grade gold ore. Thereafter the Kay Tanda openpit ore grading 2.2 g/t gold will be transported and processed at the Lobo carbon-in-leach (CIL) plant at 250 000 t/y for the subsequent five years of initial operations.

Mining will involve conventional openpits using selective mining, drilling, blasting and ore haulage contractors. The initial mine development to the SWB pit will involve the construction of access roads using small excavators and dozers.

Mining will be undertaken on 2.5 m benches. The mining fleet will comprise 40 t to 50 t excavators in backhoe configuration, loading 35 t to 40 t payload articulated dump trucks, a hydraulic drill rig and ancillary fleet for dump management and road maintenance.

Ore and waste will be blasted using ammonium nitrate explosives or packaged explosives depending on wet ground conditions. Some free digging is expected in the upper zones of the topographic profile.

Drilling and blasting will be performed on 5-m-high benches, with blasted material excavated in two 2.5 m flitches.

The processing plant, to be located at Lobo, includes a preliminary CIL circuit.

Net Present Value/Internal Rate of Return
The project has a net present value, at a 5% discount rate, of A46-million and an internal rate of return of 27%.

Value
Preproduction capital is estimated A$22-million.

Duration
Not stated.

Latest Developments
The BJV partners have approved the PFS and the immediate transition to definitive feasibility study (DFS).

In parallel with completion of the DFS, the BJV aims to complete all final permits and approvals to allow for project development.
The BJV partners will continue financing discussions with identified debt providers that have expressed interest in funding project development.

The opportunity exists to increase reserves and confirm an expanded ten-year mining plan through drilling and conversion of inferred resources in the vicinity of optimised openpits and to also test immediate high-grade gold targets within the 14 km of identified epithermal structures on the Lobo mineral production sharing agreements.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Red Mountain Mining, tel +61 8 9226 5668.