Canadian firm to increase output of its Zamboanga del Norte gold-silver mine

Canadian listed mining firm TVI Pacific Inc. will increase by yearend its daily Canatuan gold and silver production in Zamboanga del Norte to 1,200 metric tons (MT), from 700 MT.

TVI, through its local unit TVI Resource Development Phils. Inc. (TVIRD), said phase I of its mill operations at the Canatuan orebody in Zamboanga del Norte in Mindanao has reached a production level exceeding 700 MT and is expected to increase throughput capacity to 1,200 MT.

"The feasibility study for mining and milling the sulphide ore body is progressing, following receipt of positive metallurgical results from previous tests. TVI’s Canatuan project is very much on a roll," said TVI chief executive officer Clifford M. James.

James said TVI commissioned mining experts to help fast-track the company’s planned expansion initiatives.

"The building of two significant dams by our construction team, under the close supervision of international engineering expertise and our manager of environmental protection, was a tremendous achievement under difficult conditions," said James.

The costs to expand the mine, plant and tailings dam facilities from 250 MT to 800 MT operation were originally estimated at $7.4 million. Actual expenditures only amounted to $2.4 million which management attributed to lower than anticipated expenditures to the successful procurement and installation of good, used, local equipment and the availability and use of good, competent local engineering and construction services.

The new tailings dam facilities can support increased production from the mine and the mill.

These new facilities are part of the company’s plan to increase its investments for its Canatuan mining activities this year to $10 million or about P540 million from the original allocation of $7 million.

James said the company expects to spend $10 million this year in ongoing operating activities, including local employment, capital investment and operation expenditures.

TVI operates the Canatuan orebody in Zamboanga del Norte in Mindanao.

James earlier told President Arroyo of TVI’s plans to initiate additional exploration in the Canatuan area in the near term.

James said the company is convinced there is potential for further discoveries on strike with the Canatuan orebody which could create a long-term mining camp in the region and spur significant economic development for a depressed area of the country.

TVI also reportedly filed applications for new exploration projects in the Zamboanga Peninsula and also plans to pursue exploration of other properties in its inventory.

The company said it remains bullish about the prospects of the local mining sector, especially with the Supreme Court decision allowing 100-percent foreign ownership of mining concessions in the Philippines.

The mining company is also working on the immediate re-activation of the company’s existing precious metals processing plant, also in Zamboanga del Norte.

The project which started in 2003, includes the development of both a gold and silver-rich oxide zone, and an underlying gold, silver, copper, and zinc – rich, volcanic-hosted massive sulphide (VMS) zone.

The re-activation of the existing processing plant represents the first step of a multi-phase plan to develop the established Canatuan deposit mineral resources and to realize the full production potential of the extensive metal-bearing VMS belt surrounding the Canatuan deposit.

Under the plan, TVI is supposed to process 80 metric tons (MT) of high-grade gold and silver tailings supply for an initial period of 15 months, then undergo upgrades in two additional production phases to 250 and 500 MT, processing the oxide zone over a period of five to six years.

During this period, TVI will expand the Canatuan operation to start production from the underlying massive sulphide zone. This activity will be carried out along with an exploration program to add to the project’s overall resource base.

The exploration program will begin with follow-up work on five previously identified massive sulphide prospects located close to the Canatuan orebody.

Financing for the various phases of the Canatuan project will initially come from internally generated funds, but external financing may be sought in the future to accelerate production growth.

Gold and silver production from the first phase used TVI’s existing processing plant, which operated in 1997 as a pilot/metallurgical testing facility.

TVI’s mining activities continue despite opposition from indigenous Subanon, Muslims, and other residents in the Siocon/Canatuan area.

The Subanons of Canatuan said downstream communities in the fertile valley below the mine are already observing negative effects from the mine’s operations on the Siocon and Lituban Rivers which they rely on for irrigation and fish farming. They said further expansion will displace many more residents. <