Study confirms viability of Runruno mine

MANILA, Philippines - A study commissioned by Metals Exploration Plc has confirmed the viability of its Runruno gold-molybdenum project in the Philippines.

The mine is expected to produce an average of 96,700 ounces of gold per annum over a mine life of 10.4 years. For the first five years, the study says the mine will produce 101,800 ozs of gold per annum.

From the 6th to the 10th year, the average production is projected at 92,700 ozs gold per annum.

The study classified 780,000 ozs of gold as proven and probable mining reserve.

The average forecast operating cost is $477/oz gold.

Capital cost is estimated at $149.3 million, with a payback period of 3.5 years assuming that the price of gold is at $1,000 per oz.

Jonathan Beardsworth, managing director of Metal Exploration, said the study provides investors with a definitive basis on which to assess an appropriate valuation for the company.”

He said the study has transformed Runruno from a promising resource into a mine-in-waiting.”

Metals Exploration acquired the Runruno project in February 2005, and holds an 85-percent interest with an exclusive option over the remaining 15 percent. Work to date has defined a resource of 1.5 million ozs of gold, and 25.4 million pounds of molybdenum with 850,000 oz gold reporting to the measured and indicated categories.

In January 2010, Metals Ex announced guidance on the economic parameters of Runruno with targeted annual production of approximately 100,000oz gold and 1.0Mlb molybdenum, with capital expenditure of around $150 million including the molybdenum recovery circuit.