The memorandum of understanding signed by Medusa and Bactech is for an initial three-year period with an option to extend. During this period, Bactech will provide its technology, which is particularly successful at recovering gold, silver and copper metal from refractory sulphide mineralization, to the joint venture exclusively for the Philippines.
The purpose of the joint venture is to vend economically viable projects into a newly-created corporate entity to be owned equally by Medusa and Bactech.
The mill tailings of the publicly-listed Dizon Copper Silver Mines Inc. will be the first project to be evaluated by the parties where Medusa is currently undertaking a drilling program to obtain samples on which Bactech will undertake metallurgical testwork.
Medusa will start to source other projects within the Philippines suitable for the application of the Bactech technology.
On May 27, 2004, Medusa signed an agreement with Dizon Mines to evaluate the economic potential of the Dizon tailings project. If the project is deemed to be feasible, Medusa will exercise its option to acquire a 60 percent in a newly-formed joint venture with Dizon Copper owning 40 percent.
In the event Dizon contributes less than 10 percent of the necessary capital to put the project into production, their interest will be converted to a three percent stake.
The Dizon project is located approximately 200 kilometers northwest of Manila. The Dizon Porphyry Copper-Gold Mine operated as 50:50 joint venture between Dizon Mines and Benguet Consolidated Inc. between late 1979 and 1997 with Benguet as the operator.
The open pit mine finally closed in 1997 after mining 110.03 million tons of ore and recovering 749.76 million pounds of copper and 1.91 million ounces of gold. Benguet subsequently withdrew from the joint venture.
Bactech acquired a 55 percent stake in Tonkin Springs LLC, the owner of the Tonkin Springs gold project in north central Nevada in July 2003. It also entered into a series of agreements that will see the company participating in the Chinese gold industry through equity and project participation.