St Augustine renews talks with EMB

MANILA, Philippines - US-based miner St. Augustine Copper and Gold Ltd. (SAGC), the contractor for the proposed $2 billion copper-gold mine in Pantukan, Campostela Valley, has resumed engagement with the Environmental Management Bureau (EMB) for obtaining an Environmental Compliance Certificate (ECC) for the project

SAGC country manager Clyde Gillespie said the company has held initial meetings with the EMB for the resumption of the approvals process for its Environmental Impact Statement (EIS) which is required to secure the ECC.

An ECC guarantees that the project will not harm the environment.

SAGC submitted an intial draft of it EIS in February 2012 which the EMB reviewed and gave comments on.

The review process was stalled for about two years as SAGC completes the technical requirements set by the EMB and partly because of the ongoing intra-corporate dispute with its Philippine partner Nationwide Development Corporation (Nadecor), the holder of the Mineral Production Sharing Agreement (MPSA) for the tenement.

"We've had initial meetings with the EMB to get the process restarted and we've been doing some drilling at the site to get some information for geohazard survey which is needed as part of the EIS. We are working closely with the EMB," said Gillespie.

"They (EMB) have conducted an intial review of the first draft of our EIS and have given us comments (on technical matters) and the partnership issues that have held us. Now we have an updated version that is almost ready to go back to them," he added.

The project's biggest hurdle remains the ownership dispute within Nadecor between two boards headed by Conrado Calalang and Jose Ricafort.

Nadecor is currently controlled by the Calalang faction which is actively engaged with SAGC.

A group of mainority shareholders led by Jose Ricafort is challenging the legitimacy of the board headed by Calalang.

A Court of Appeals decision dated Feb. 18, 2013, upheld the legality of the election of the current board composed of Roberto R. Romulo (chairman), Conrado T.Calalang (president), Leocadio Nitorreda (COO and general counsel), Alfredo I. Ayala, Juan Kevin G. Belmonte, John Engle and Peter Mutuc.

Representatives of St. Augustine, Tom Henderson and Kee Ming Chi were also elected to the Board.

The Ricafort faction is appealing the case before the Supreme Court.

"For now, the Court of Appeals decision still stands," said Gillespie.

While the current board has repeatedly expressed confidence that the ongoing corporate dispute would be resolved soon, the ownership dispute remains a huge factor in getting through the permitting process.

"The (King King) project has already done several technical scoping, but there are still concerns that need to be resolved.

"The EIS process really takes time because we are looking at several areas that can be affected (by operations) such as land, air, and water. But it is a proponent-diven activity so the completion of the study is up to the proponents," said lawyer Mike Matias, chief of the EMB Environmental Impact Assessment Division.

"The ownership issues will be a factor in the granting of the ECC because we have to determine in the ECC who will be liable if there will be a mishap. But for the meantime, we are focusing on the technical aspect of the study. But the ownership issue will also be discussed at our level," he added.

Gillespie said that to fulfill the technical requirements of the EMB, SAGC has commenced with the geotechnical drilling on the site to gather information on surface conditions needed for the geohazard survey.

"We understand that one of the biggest issues in Pantukan is landslide. The geohazard survey helps us understand the conditions in landslide-prone areas as we design facilities to accommodate such conditions," said Gillespie.

He said that for now, SAGC and Nadecor are keeping the original production target in 2015.

After hurdling the ECC, the proponents have to get approval from the Mines and Geosciences Bureau (MGB) for the project's Declaration of Mining Project Feasibility (DMPF), a document containing an assessment on

the commercial viability of deposits. Securing the DMPF is the final step to commencement of operations.

The King King copper-gold project is expected to produce 3.1 billion pounds of copper and 5.43 million ounces of gold over its 22-year mine life.