Didipio mine project gets A-M loan

By MELODY M. AGUIBA,

http://www.mb. com.ph/BSNS20061 20481422. html

4th December 2006

The Didipio copper-gold project is drawing down this week A million from an ANZ-arranged syndicated loan as it also anticipates A0-million multi-financial instrument deal with a New York-operating international financier. All set to be constructed as the first large-scale mine in Region 2, the Didipio project is nearly complete with all financing requirements totaling to A0 million.

"The forty million Australian dollars, we’ll get that next week. For the 170 million Australian dollars, we’ve had offers from financial institutions in New York, Toronto, London, and Australia," said Stephen Orr, chief executive officer of New Zealand-based Oceana Gold Ltd. (OGL), in an interview during a certificate of merger signing. The A million was syndicated by ANZ Investment Bank together with the Commonwealth Bank of Australia. The on-going negotiation with several equity institutions which may be finalized in two weeks will involve either a convertible bond or a highyield debt or a combination. OGL, New Zealand’s biggest gold producer, is extra bullish about the prospect of mining in the Philippines both in geologic potential and government policies.

"In terms of geologic prospectivity, it’s one of the best in the world in undeveloped ore deposit particularly copper gold porphyry. In terms of government support, we’ve gotten absolutely positive government support through every department we’ve spoken to from the president down," Orr said President Gloria Macapagal Arroyo, who was present at the merger signing of OGL with Australia’s Climax Mining, said the Didipio project along with five other Australia-New Zealand mining projects is among the foreign investments the Philippines had been expecting to host. The copper-gold project in Nueva Vizcaya-Quirino holds a Financial and Technical Assistance Agreement (FTAA) which needs approval of the Office of the President. OGL finds its acquisition of the project strategic not only with its vision in geographic expansion but also in extending its environmental practice outside of New Zealand.

"To us our acquisition of Didipio is transformational. We have a strategy to be a consolidator in the Pcific Rim, and this is our first step. And one of the things we’re looking forward to is in New Zealand, we operate in the highest environmental standard. We want to operate in the Philippines in the same standard," he said. OGL is spending A to A million in exploration for the Philippines as it anticipates more discoveries here. It is separately spending A to A million in exploration in New Zealand.

"Part of our financing was to raise money for exploration. We believe that within one year, we’ll be able to announce a new discovery in the Philippines. That’s how prospective we believe it is. Don’t be surprised to see us drilling in northern Surigao. It will be one of our big focuses. We’re quite optimistic," he said. With the Didipio acquisition, OGL is raising its ability to produce gold from 180,000 ounces to 300,000 ounces as the project is set to be constructed early 2007.

"We acquired a largescale orebody in the Philippines that gave us geopolitical diversity which we didn’t have before and gave us additional revenue sources other than gold because Didipio has copper," he said. While some exploration and mining executives have downgraded the country’s mining environment in a Fraser Institute survey, OGL believes much of a project’s success lies internally in corporate management.

"The Philippines is not any worse than any other place in the world. Companies who have vested interests have to promote their interest to convince the government. And we work very hard to do that and the government has been very supportive," said Orr. The OGL buyout into Didipio also enabled entry of Brazil’s SCRCOR which owns seven percent of OGL and Ospraie Management of New York which holds 11 percent interest. The Didipio project is believed to be the beginning of a string of discoveries in this area. The company has identified new prospects here including the True Blue and the D’Fox which may extend the life of this single mine over many years.