Resource World Magazine

mining St. Augustine bringing a gold-copper giant back to life by David Forest St. Augustine Gold & Copper Limited [SAU-TSX] is drawing on the talents of its seasoned management team at the King-king copper-gold project in Mindanao, Philippines to pave the way for the development of one of the world's largest porphyry projects. "World class" has lately become a promotional rallying cry for a host of mediocre deposits the planet over. But the King-king St. Augustine is advancing the long-dormant King-king copper-gold Project fits the moniker. A measured and indicated resource of project, Mindanao, Philippines. Photo courtesy St. Augustine Gold & Copper Ltd. over 5 billion pounds of contained copper and over 10 million The Russells' effort on King-king paid off in 2010 when, with ounces of gold is the subject of an upcoming pre-feasibility study by St. Augustine. This tropical porphyry holds one of the larg- the underlying ownership situation much clarified, Russell est metal endowments of any project currently in development. A Mining struck a deal to acquire up to 60% of the project and lead its development. The Russells painstakingly assembled historical deposit this size has attracted a lot of interest over the years. Mineralization was discovered in the hills in the far southern data on King-king, forming the basis for an October 2010 resource end of the Philippines island chain as early as 1966, attract- estimate showing over 900 million tonnes grading more than ing Mitsubishi to drill 54 holes. Then things got tricky. In the 0.25% copper and 0.35 g/t gold. "We looked at as much data as early 1980s, King-king's local owners, under an outfit known as we could get a hold of," recalls Russell. When we began developNationwide Development Corp, signed over operatorship of the ing a coherent mine plan we found grades could be higher in the project to Filipino miner Benguet Corporation. A lawsuit over early years of production than what had been anticipated. This is ownership then precluded development, and for the next decade what takes a good project to great." This now-proven giant was unveiled to the market early in all activity ceased. It wasn't until 1995 that Echo Bay Mines stepped up and drilled 2011 when Russell Mining exchanged its interest in King-king to 128 holes into King-king under an option agreement. The proj- become a major shareholder in St. Augustine Gold & Copper, and ect's massive potential was confirmed when Echo Bay came up began trading on the TSX. The Russells' determination would undergo another test from with a resource estimate of over a billion tonnes, grading over 0.3% copper and 0.4 g/t gold. But, just as it looked like King-king St. Augustine's local partners. In May 2012, even as the company would finally move forward, Echo Bay was bought out by Kinross submitted a milestone feasibility declaration to national authoriGold, who abruptly canceled the option agreement when low cop- ties, the underlying owner, Nationwide Development, was split by competing management factions. Reports emerged in local per and gold prices at that time did not support development. King-king's riches would once again have to wait for a differ- media that the project was in doubt. But once again the company was rewarded for braving the ent, more nimble group of developers. Such company arrived in 2009, in the form of the Russell family headed by Robert Russell, waters that had deterred so many others at King-king. By October St. Augustine's current chairman, and a long-time Asia hand who 2012, not only had Nationwide Development resolved its issues, had built the giant Grasberg copper-gold mine in Indonesia as but the company's major shareholder, Philippines business magvice-president of Freeport McMoRan. The Russells, a three-gener- nate Manuel Paolo Villar, agreed to invest $4.7 million directly ation mining family, fresh off completing the bankable feasibility into St. Augustine, and take an option on another block of shares at the Mount Hope molybdenum project and staffed with some of for up to 20% control of the company. Driven by this vote of conthe best in the industry were searching for a global scale copper fidence, St. Augustine's share price soared 350% in two months. Distractions now aside, King-king is closer than ever to project. King-king caught their eye, and they set about doing the realizing a destiny over 45 years in the making. A preliminary feaheavy lifting to strike a deal. "We look for assets that are misunderstood," says St. sibility study is expected imminently, and management believes Augustine's Chief Executive Officer Andy Russell, representing the permitting for a mine here could be accomplished next year. the third generation of Russell miners, "Assets that need some A testament to what an expert management team can do when it finds an asset it truly believes in. n effort and time and patience." february 2013 www.resourceworld.com 63

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