Metals Exploration has experienced another unexpected delay in getting its Runruno Gold-Molybdenum Project in the Philippines into production with the company now awaiting a water discharge permit.

While plant construction has made good progress, late last week Metals Ex said that it could not complete the commissioning until it received a water discharge permit from authorities and was uncertain when this would come through.

In a statement Metals Ex said that it had entered into staged commissioning of the processing plant and the general pre‐operations phase of the project following substantial completion of construction of the process plant.

Construction of the stage one phase of the residual storage impoundment (RSI) construction had been finalized and by mid‐August would be near complete to stage two of construction, weather dependent.

It said surpassing stage one was necessary for operations to commence. The discharge pipe to the RSI and return water pipe from the RSI, together with the project discharge permit were the final requirements for the RSI to be operational.

“Currently commissioning is proceeding within the following areas of the process plant -ROM crusher, apron feeder, conveyors, mill and gravity, flotation cells, air services, switch‐rooms, cooling towers and water services.

“The remainder of the plant is scheduled to become progressively available for commissioning by the end of August. The technical aspects of commissioning are proceeding well and no material defects have been identified.”

The Metals Ex August 7 statement also said: “The project cannot proceed from commissioning into operations without first having obtained all necessary permits, and because the timing is largely unknown at this juncture the company is not in a position to forecast when this will be achieved.

“This has a consequential time and cost impact on the project not previously anticipated, such that the company now requires immediate additional funding for general working capital purposes. Management is currently in talks with its major shareholders to ensure ongoing support for the company, but no agreement has been reached at this time.”

The Runruno project is on the island of Luzon in the northern Philippines. Metals Ex acquired the project in February 2005 and has increased its interest in the project to 100%.

Work to date has defined a resource of 1.39 million ounces of gold, and 25.6 million pounds of molybdenum with 1.05 million ounces of gold reporting to the measured and indicated categories and 900,000 ounces within the mining proven and probable reserve category.

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