Nationwide Development Corp (Nadecor) has confirmed St Augustine Gold and Copper’s investment of about US$30 million in project expenditures through the end of the first quarter of 2011 in the King-king gold and copper project at Pantukan in the Compostela Valley.
As such, Nadecor has recognized St Augustine’s full payment for its 30% equity interest in the project and all documents relating to this recognition by Nadecor shall be put in escrow pending the incorporation of the joint venture entity that will be the holder of the Mineral Production Sharing Agreement for King-king.
St Augustine expects that it will invest an estimated additional US$60 million to complete its full earn-in interest by quarter 2 of 2012 when the bankable feasibility study (BFS) is forecast to be completed. Upon completion of earn-in, both parties will fund, on a retained interest basis, all future cash calls needed for the joint venture with respect to the remaining project development costs.
Nadecor has also executed several key agreements for the project. Under these agreements, St Augustine will continue to provide technical services to the King-king. They also cover finalization of the JV incorporation documentation and agreement on the parameters of an interim funding arrangement through the completion of the earn-in.
Under the signed agreements, St Augustine has been formally appointed the technical partner of Nadecor and will continue to support the activities that will accelerate the completion of the BFS and shall further infuse capital into the project.
St Augustine is currently assisting Nadecor in completing its exploration and environmental work programs as well as environmental monitoring and activities to make King-king a model of environmental and social stewardship.
Until the MPSA is transferred to the Joint Venture Corporation, Nadecor is the MPSA holder and responsible for completion of the approved exploration and environmental work programs, which includes completion of the required Declaration of Mine Project Feasibility and environmental permit application documents, such as the Environmental Impact Statement (EIS) and Social Development and Management Plan (SDMP).
King-king is one of the Philippine Department of Environment and Natural Resources’ top priority mining projects. The project has been independently confirmed under both Canadian NI 43-101 and Australian JORC regulatory rules to have a measured and indicated mineral resource of 792 million tonnes and an inferred resource of 125 million tonnes, making it one of the largest undeveloped copper-gold projects in the world.
This measured and indicated resource has a gold equivalent grade of 0.815 ounces/tonne of ore, which equates to 20.7 million equivalent ounces of gold. The copper and gold contained resource is 9.4 million ounces of gold and 4.9 billion pounds of copper. Mine life is 23 years with a planned daily throughput of 100,000 tonnes.