2010 Mining Philippines Conference Updates on The Masbate Gold Project And Its Environmental and Social Responsibility

1. 2010 MINING PHILIPPINES CONFERENCE
16 September 2010

2. Updates on The Masbate Gold Project
And It Environmental and Social Responsibility
A d Its E i t l dS i lR ibilit

3. The Masbate Gold Project is jointly operated by:
Filminera Resources Corporation
(FRC) - holds the mining and surface
rights and the Environmental
Compliance Certificate (ECC); and
C li C tifi t (ECC) d
Phil. Gold Processing & Refining
Corp. (PGPRC) - owns and operates
the Project’s central processing
plant.
The two companies are responsible
mineral developers and together
i ld l dt th
adopt and implement high standards
in Occupational Health, Safety,
Environment and Community
Relations.
R l ti

4. Corporate Partner: CGA Mining
Perth, A t li
P th Australia

5. CGA TEAM – FIRST MOVER TRACK RECORD
• First major gold mine to be
developed in Mongolia – Boroo gold
mine
• First major gold mine in Tanzania
– Golden Pride
• First major gold project in Nigeria -
Segilola
• Masbate is the largest gold mine
in the Philippines.

6. THE PHILIPPINES
Rich mineral endowment
• 3rd largest in gold
• 4th l
largest i copper
in
• 5th largest in nickel
• 6th l
largest i chromite
t in h it
Improved Rating in Fraser
Institute Survey
• 35th up from 49th
• Australian States – averaged 31st
g
from 18 th
• Bases: mineral endowments and
p
public p y factors affecting mining
policy g g
and exploration investments

7. PROJECT DEVELOPMENT PARTNERS
Leighton Construction F.P.L.S.
$85M BFO 30MW power
plant
Lycopodium Process engineering
design
GHD Tailings Dam
BNP Paribas Project finance

8. CONSTRUCTION DELIVERY
Total capital expenditure – under
US$ 00
US$200M
Practical completion achieved on the
scheduled date
First Gold Pour – 12 May 2009
Just over 2 years from project
acquisition

9. SAG & BALL MILLS

10. EXPERIENCED TEAM IN THE PHILIPPINES
Rolando Q. Amores Chairman Chemical Engineer;
42 years experience in Mining
& Metallurgy
Cris G. Acosta President BS (West Point); ME (Cornell);
PhD/MS/MBA (MIT); CFA; 11 years with Shell
in London and Manila; 14 years with
Philippine Govt/Military
Danilo S. Latuga Resident Manager Mining Engineer; 32 years
experience
Ramon S. Velasco Resident Geologist/ Mine Exploration Geologist;
Community Relations; 29 years
experience
Sulpicio B. Bernado Compliance Manager BS Mining Engineering; MBA
20 years with Govt/Bureau of
Mines

11. EXPERIENCED OPERATING TEAM
Mark Turner Chief Operating Officer Mining Engineer; 23 years total experience;
16 yrs with Resolute; Responsible for 3 or 4
operations simultaneously
Wayne Foote General Manager Mining Engineer; 21 years gold experience;
Extensive experience in Australia, Ghana,
Tanzania, Egypt and Mali; Commissioned 2
previous operations
Ray Mead Processing Manager 20 years experience In Australia and Africa
Marcus Neville Mill Superintendent BSc Extractive Metallurgy; 10 years experience
in Australia and Africa
Eliza Molloy Technical Services Manager Bachelor of Engineering (Mining); 10 years
experience; Rio Tinto – in Western Australia
and California

15. THROUGHPUT
1,800,000
1,600,000
1 600 000
1,400,000
Design
g
1,200,000
1,000,000
800,000
tonne per quarter
600,000
es
400,000
200,000
Sept Q 2010 – Forecast
- quarters
June Sept Dec March June Sept Target

16. COST PER TONNE MILLED
1,800,000 26.00
1,600,000 25.00
24.00
1,400,000
23.00
1,200,000
Design
22.00
22 00
1,000,000
tonnes per quarter
21.00
annual cost/t milled
800,000
20.00
20 00
r
600,000
19.00
400,000
18.00
200,000 17.00
- 16.00
June Sept Dec March June Sept Target
quarters

18. INTERIM PLANT EXPANSION
Plant expansion to 6.5Mtpa
6 5Mtpa
Capital estimate US$15M
Lead Nitrate Introduced
Benefits:
• Reduction in residence time – Higher throughputs
with minimal capital outlay
• Increased recoveries – Indications of nominal 2%
achievable

19. EXPLORATION
US$10M Initial Budget
- 25,000m RC Drilling
- 30,000m Diamond
Drilling
- 5,000m Trenching
Targeting 3 Key Areas
• Infill drilling of 3.2m
ozs of inferred
resources
• Close to Mine targets
outside of current
reserves/resources
• Regional E l ti
R i l Exploration

24. ENVIRONMENTAL COMPLIANCE
MGP is fully compliant with :
• Philippine regulations &
standards
• Environmental Compliance
Certificate (ECC)
Certificate (ECC)
• Required environmental
permits from EMB & MGB
• Environmental Protection &
Enhancement Program
• Final Mine Rehabilitation &
decommissioning Plan (FMRDP)
• Government reporting
Go ernment reporting

25. KEY ENVIRONMENTAL PROGRAMMES:
1. Undertaken as part of ECC requirements, :
• Limnological & coastal marine studies
• Mangrove survey & conservation program
• Power Plant Stack & Ambient Air Sampling
• Stormwater Runoff Management Plan
• MGP’s Emergency Response Program
MGP s
2. Upgrade of the Company Nursery to achieve best practice nursery
management & target of planting 200,000 trees per year
3. Regular water, air & noise monitoring (daily, weekly, monthly & quarterly)
4. Improvement in waste management towards achieving the goals of
reuse/reduce/recycle scheme (on-site & within Barangays)
(on site
5. Development of an integrated Safety, Health & Environmental Management
System
6. Training employees & contractors in core environmental management
modules (Environmental Awareness, Hydrocarbon Management, Solid
Waste Management)
7. Quarterly Review by the Multi-partite Monitoring Team (MMT) – all issues
raised to date have been minor; the MMT commendable of MGP
performance

26. SDMP and CSR

27. Social Development Management Program (SDMP) –
(totalling 20 million pesos, 2009)
Livelihood – fishing, livestock
raising, agricultural lands and
training and capital
Electricity & Water provision
Roads & infrastructure – schools,
barangay halls, sports
facilities, chapels
Education –scholarships,
transportation, teachers’
allowances, school supplies
ll h l li
Health & Sanitation – medical
supplies & equipment
donations, medical missions,
d ti di l i i
health & nutrition training,
ambulance vehicle
Culture & Sports – sports
equipment, cultural events,
sports fest, etc

28. LIVELIHOOD
Fishing
g
Provided 160
various types of
fishnets and 11
fi h d 11
fishing boats to 131
fishing families in 4
barangays
Organized 4 fisher
folks associations
folks associations

29. Livestock/animal dispersal
90 does and 10 bucks
dispersed to 50 farmers
14 goats re‐dispersed
Dispersed 171 head to new recipients
of livestock/ animals
6 cows
provided to 6
members of
farmers org.
In Lanang

30. Agricultural input
Farm inputs provided to Lanang Fifty heads of hog
farmers association dispersed to 50
women household
women household
members
Provision of sewing
machines
10 units of sewing
machines of various
types provided to
d d
women’s association.

31. ELECTRICITY
Provision of
Provision of • Provide electricity to nearby schools health center and church
Provide electricity to nearby schools, health center and church
electricity
• Installed street lights
• Allow access to the local electricity grid within company
properties

32. WATER SUPPLY
Water line Extension
Installed 1.2 kilometers
waterline extension with 12
distribution points serving 500
households
Regular water rationing and
distribution to 475 households
Financial assistance to
Aroroy Water District
Water District

33. ROADS AND OTHER INFRASTRUCTURE
Pathway Construction
Completed construction
of 201 meter‐long
of 201 meter long
pathway for Lanang and
Panique
Road Repair and
Maintenance
‐ Repaired 1.1 kilometers
of barangay roads in
Panique and Puro
‐ Maintain 8.7
kilometers of roads
around the mine
complex

34. Construction of 3
and renovation
of a barangay
of a barangay CAPSAY – 1 unit, 2 story
unit BANGON – 1 unit, 2 story
unit
multi‐purpose building constructed building constructed
buildings
PURO – Renovation of 1 unit multi- BALAWING – 1 unit, 2 story bldg
purpose bldg constructed

35. EDUCATION Scholarship Programs ‐ 82 recipients (26 high
school and 56 college) of scholarship and
educational assistance
Brgy Lanang Scholars
Brgy Lanang Scholars
Brgy Syndicate Scholars
Brgy Amoroy Scholars
Brgy Puro Scholars
gy
Brgy Caspay Scholars

36. School Building Construction
Bangon Elem. School Panique High School Amoroy Elem. School
Completed construction of 1 classroom building Completed construction of 2 classroom building Completed construction of 2 classroom building
Lanang Elem. School Syndicate Elem. School Balawing Elem. School
Completed construction of 1 classroom building Completed construction of 1 classroom building Completed construction of 2 classroom building

37. Salary assistance for teachers
teachers in various schools of
Brgys. Puro, Balawing & Lanang
Transportation assistance
571 Students from 3 barangays
Students from 3 barangays
(Brgys Puro, Lanang &
Syndicate) being ferried to and
from school

38. Purchase of transportation boat
1 unit of motor boat each
to Brgys Balawing and
Lanang to transport 44
students to and from
students to and from
schools
Purchase of Multi purpose vehicle
1 unit of school
service/jeep purchased
for Brgy Syndicate to
transport students to and
from Aroroy High School

39. HEALTH &SANITATION
Proper waste disposal
Purchased 3 garbage
Purchased 3 garbage
trucks for barangays
Panique, Puro and
Bangon for garbage
collection
Barangay Panique Barangay Puro
Strengthening health
referral system
Provision of Health
Provision of Health
service for Lanang,
Barangay Bangon Barangay Lanang

40. Health facility
development and
development and
Nutrition program
• Equipped the Barangay
Health Station in Puro
Health Station in Puro
• Provided Medicines for
Botika ng Barangay in
two Barangays, Puro and
Panique
• Implemented Feeding
Implemented Feeding
program for
malnourished children‐
BN & VL (46‐Panique and
37 in Puro)

41. CULTURE AND SPORTS DEVELOPMENT
Chapel Renovation and construction
p
Materials and financial assistance provided to barangays for Fiesta celebrations.

42. Corporate Social Responsibility (CSR)
(totalling around 30 million pesos, since 2007)
• MGP implemented various
programs, projects and activities
during the construction and pre-
p g p
operation stages to help in the
economic and social
development of impact
communities
• These i iti ti
Th initiatives were
undertaken even before the
institutionalization of the Social
Development and Management
Program (SDMP)
• These are projects recognized by
the company as pressing needs
and basic human necessities
particularly in health, education
and infrastructure
• Protection and respect of socio-
cultural values were also given
importance

43. Community Health Emergency Response
Company doctor, shows ComRel ambulance for
community patients

44. Livelihood Program for Relocated Farmers
Katupan techno-demo farm visited by the Regional and Provincial High
Value Crop Mobile team.
Katuparan farmers during their graduation
ceremony

45. THE KATUPARAN FARMERS ASSOCIATION

46. Tax Contributions
Estimates
Excise taxes PhP 157 M
Real property taxes 76 M
Expanded withholding taxes 132 M
Withholding tax on wages 25 M
Final tax 27 M
Local business taxes 20 M
Other taxes 38 M
VAT 1.415 B
TOTAL PhP 1.890 B

47. Employment Benefits
Roughly 73% of around 1500
employees are local hires;
capacity and ability to feed
families
Multiplier effects – local
businesses and indirect
jobs created ; income for
Aroroy and Masbate

48. The Masbate Gold Project is Aroroy’s development partner.
….Ito ang ating minahan para sa kinabukasan.