Resource World Magazine

J U N E / J U L Y 2 0 1 6 www.resourceworld.com 31 a u s t r a l i a n u p d at e G r e g B a r n s ThE PhILIPPINES has been in the head- lines in recent weeks with the election of new President Rodrigo Duterte, a popu- list compared to Donald Trump. What President Duterte means for mining remains a question; however, RTG Resources [RTG-TSX; ASX] continues to focus on its high-grade Mabilo copper and gold project in southeast Luzon. RTG released an inde- pendent NI 43-101 feasibility study which shows a 33% IRR after tax. It's two years since RTG invested in the project and CEO, Justine Magee, says that they have moved quickly to delineate a substantial resource. Probable reserves are 7.792Mt of 2.04 g/t Au; 1.95% Cu; 8.79 g/t Ag; and 45.5% Fe, containing 1.3Moz gold equivalent at 5.26 g/t and 316kt Cu at 4.1% equivalent, both pre-recovery. Resources in the indi- cated category are 8.86Mt at 1.9% Cu; 2g/t Au; 9.8 g/t Ag; 45.6% Fe; 169 Kt Cu metal; 577.6 oz Au and 4,034 Kt Fe. Inferred resources are 3.91 Mt at 1.5% Cu; 1.5 g/t Au; 9.1 g/t Ag; 29% Fe; 57Kt Cu metal; 184.9oz Au and 1,134 Kt Fe. The project will advance in two stages. Stage 1 is intended to minimize initial capi- tal requirements through a Direct Shipping Ore (DSO) operation of the high-grade, near surface oxide portion of the Mabilo resource. In a March 2016 announcement, RTG said, "By utilization of existing infrastruc- ture within easy transport of the project, the joint venture is able to defer the more capital intensive components of primary production. The early cash flow generated by the DSO should then also minimize any possible equity dilution in the financing of the Stage 2 primary production plant." Stage 1 will mine the oxide ore down to 95m below surface. Three main prod- ucts at this stage will be gold cap ore to be crushed on site and trucked to a nearby existing CIL processing plant. Both oxide skarn and high-grade supergene chalcocite will be crushed on site with a plan to truck to the existing port 40 km away for direct shipping. Stage 2 will involve processing of primary ore through a purpose-built plant on site. The Mabilo process plant is planned to be built in parallel with the oxide mining phase and Stage 2 permitting process. The processing plant will be a crush, grind, float plant with low technical risk, produc- ing three concentrates and is estimated to require 15 months for construction. The company is looking at annual pro- duction of 38,300t copper equivalent and 160,000 oz gold equivalent. CAPEX on the plant is US $161.4M with an impressive 2.5 years for payback. According to RTG, the DSO will lead to early cash flow in 4-5 months of finalizing the DSO operating permits. "The capital expenditure required for the DSO is relatively nominal at about US $18M and is capable of generating net operating cash flow after tax of some US $68M," the company said. A major issue in the Philippines is regu- latory approvals, community relations and sovereign risk. The newly elected President Duterte has outlined a broadly pro-business agenda, particularly welcom- ing foreign investment. He has pledged to cut approval times for projects. n rTG resources advancing Luzon polymetallic project

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