OceanaGold may reactivate Didipio gold project in Nueva Vizcaya

MANILA, Philippines - The “dramatically changed environment for capital projects” is presenting “a way forward” for OceanaGold (Philippines) Inc. to reactivate its stalled Didipio gold project in Barangay Didipio, municipality of Kasibu in Nueva Vizcaya.

This was the optimistic assessment of Blair Way, country president and Didipio project manager, in a briefing of Mines and Geosciences (MGB) officials last Friday regarding the current status of the mine project.

Carefully avoiding any definitive declaration regarding the status of talks regarding the refinancing of the Didipio project, Way admitted though that “we are confident that we will identify a way forward due to the dramatically changed environment for capital projects compared to what we saw in 2008.”

Way assured that “we continue to look at various possibilities for the project, but it would be too premature to rule out any option as this point.”

He vowed that “a full disclosure will be made to the public upon completion of the study.”

All Way would reveal is that “the company continues to examine strategies to resume development of the Didipio project including the effect of reduced scale and capital required to open the mine and process plant.”

Didipio, Way stressed, “remains one of the highest grade gold-copper porphyries at development stage in the world.”

The total mineral reserve of Didipio has been estimated at 34.8 million tons.

The Didipio mine site, Way assured, is being maintained and is ready to operate as soon a the necessary financing is secured.

OceanaGold had hoped to complete and secure by January this year the $185 million financing it needs to finance its continued mining operations for its Didipio copper-gold project.

OceanaGold had previously secured investment bank Stanley Morgan as advisor.

Based on advisor Stanley Morgan’s recommendations, OceanaGold was advised that it could enter into a joint venture, completely sell out or resort to borrowing to finance the continued operation of the Didipio copper-gold project.

Heavy operations at the Didipio mine site had been suspended middle of 2008 due to the lack of funding.

Way also assured the MGB officials that all legal problems it previously had with the local government and community in Nueva Ecija have been resolved, paving the way for the reactivation of the project.

Way reported that the firm currently has 49 personnel to run the Didipio camp and accommodate an 85-man security force on the site, while it also maintains a 41-personnel staff in its Makati office to continuing handling finance, accounts and regulatory compliance works and exploration staff.

Work, Way said, continues in the mine site in terms of environmental works, and maintaining and constructing the main access road and other site areas.