VANCOUVER (miningweekly.com) – TSX-listed St Augustine Gold and Copper (SAGC) on Monday reported that its joint-venture (JV) partner Nationwide Development Corporation (Nadecor) has received a renewed mineral production sharing agreement (MPSA) from the Philippine Mines and Geosciences Bureau (MGB) for the King-king copper/gold project, located in Mindanao.

According to Hong Kong-based St Augustine, the 25-year MPSA was an agreement under which the Philippine government granted an exclusive right to conduct mining activities within the contract area and the government received a share of the gross revenues of the mine operations. 

St Augustine advised that it would provide the necessary financing, technology, management and personnel for King-king's development, construction and operation through its JV partner Nadecor.

"The successful renewal of the MPSA represents another milestone in our ongoing efforts to advance and de-risk the King-king Project. With all major mine permits approved, the MPSA renewal now paves the way for the next phase of King-king's development. We look forward to working with Nadecor and local stakeholders to advancing King-king's progress,” commented SAGC president and CEO Paolo Villar stated.

The MGB had in January this year issued SAGC and Nadecor with the required declaration of mining project feasibility, which allows the JV partners to cooperatively advance the project to construction, followed by operation of the mine. 

MAJOR PROJECT
A 2013 preliminary feasibility study on the King-King copper/gold project – believed to be one of the largest undeveloped gold/copper deposits in the world – estimated the pretax net present value to be $2-billion and a pretax internal rate of return of 24.8%, using an 8% discount rate.

The price tag of $2.04-billion included construction of the mine, the mill, an on-off leach pad, a power plant, a port facility and $240-million in contingency costs.

The ore delivery and processing rate would be 100 000 t/d, split between 40 000 t/d to an on-off heap leach pad and 60 000 t/d to a flotation mill with agitated tails leach. The mining rate would total about 178 000 t/d for the 22-year mine plan.

Production from the heap leach process was expected to start one year ahead of starting the mill. The proposed openpit mine and processing plant would produce copper/gold/silver concentrate, copper cathode, and gold doré bullion.

The company said at the time that King-King’s "robust” project economics were largely driven by an initial five-year higher-grade operation, with a low strip ratio and tidewater proximity.

The average yearly output during the first five years of full production was expected to total 270-million pounds of copper, 360 143 oz of gold and 568 958 oz of silver, with an average gold-equivalent total cost of $454/oz.

Over the life of the operation, King-King was expected to produce about 3.16-billion pounds of copper, 5.43-million ounces of gold and 11.65-million ounces of silver.

King-King was one of several significant Philippine mining projects that were unaffected by a moratorium on approvals for new production as the project was already in an advanced stage before the ban took effect.

St Augustine’s TSX-listed stock on Monday rose 4% after the news release to C$0.13, flirting with a potentially new 52-week high.