DENR approves deals with Philsaga Mining, SR Metals

Environment and Natural Resources Secretary Jose L. Atienza has approved the mineral production sharing agreement (MPSA) of Philsaga Mining Corp. and SR Metals Inc. (SRMI).

Philsaga president Samuel G. Afdal said the MPSA would now allow the Agusan del Sur-based gold mining firm to ramp up its existing production from 200 tons a day to 500 tons a day with a projected gold output of 13.251 grams per ton, much higher than the industry average of six to seven grams per ton.

Philsaga is one of the priority mining projects of the Arroyo government and is expected to be the largest gold producer in the country once fully operational.

According to Afdal, a total of $18 million has so far been invested in the underground mining operations of Philsaga in Bunawan and Rosario in Agusan del Sur covering almost 2,539 hectares.

Philsaga’s foreign investor is the Australian-listed Medusa Mining Co. which is conducting further exploratory work on other areas.

The grant of Philsaga’s MPSA was finally cleared after the Supreme Court ruled with finality last year against the petition of PICOP (Paper Industries Corp. of the Philippines) questioning the grant of mining rights to Philsaga even as PICOP holds the timber/logging rights to a portion of the mining area.

In a landmark decision, the SC ruled in favor of the National Government in retaining its mineral rights over the disputed timber land.

SRMI, on the other hand, is a primary nickel producer in Agusan del Norte.

It is owned by the Gutierrez family, which is investing P420 million for a surface mining, nickel-cobalt project in Tubay, Agusan del Norte.

SRMI is targeting a production rate of 800,000 to 1.5 million metric tons of nickel-cobalt per year within its mining area of 573 hectares located at La Fraternidad, Binuangan and Sta. Ana, Tubay, Agusan del Norte estimated to have mineable deposits amounting to 12 million tons of nickel ore.

However, the DENR’s grant of an MPSA to SRMI is conditional on the eventual decision of the courts to a legal petition by Basiana Mining Exploration Corp. regarding the transfer of Basiana’s original mining claim to SRMI.

Basiana had transferred its original mining claim to Manila Mining Corp. (MMC) through a deed of assignment.

MMC subsequently transferred the claim to SRMI through another deed of assignment which the DENR recognized.

However, unknown to the DENR, Basiana and MMC supposedly had a separate side agreement, the terms of which MMC allegedly violated when its assigned in mining rights to SRMI.