2010 MINING PHILIPPINES CONFERENCE

16 September 2010

Updates on The Masbate Gold ProjectA d It E i t l d S i l R ibilitAnd Its Environmental and Social Responsibility

The Masbate Gold Project is jointly operated by:

Filminera Resources Corporation (FRC) - holds the mining and surface rights and the Environmental C li C tifi t (ECC) dCompliance Certificate (ECC); and

Phil. Gold Processing & Refining Corp. (PGPRC) - owns and operates the Project’s central processingthe Project’s central processing plant.

The two companies are responsible i l d l d t thmineral developers and together

adopt and implement high standards in Occupational Health, Safety, Environment and Community R l tiRelations.

Corporate Partner: CGA MiningP th A t liPerth, Australia

CGA TEAM – FIRST MOVER TRACK RECORD

• First major gold mine to be developed in Mongolia – Boroo gold mine

• First major gold mine in Tanzania – Golden PrideGolden Pride

• First major gold project in Nigeria -Segilola

• Masbate is the largest gold mine in the Philippines.

THE PHILIPPINESRich mineral endowmentRich mineral endowment

• 3rd largest in gold

4th l i• 4th largest in copper

• 5th largest in nickel

6th l t i h it• 6th largest in chromite

Improved Rating in Fraser Institute Survey

• 35th up from 49th

• Australian States – averaged 31stgfrom 18th

• Bases: mineral endowments and public policy factors affecting mining p p y g gand exploration investments

PROJECT DEVELOPMENT PARTNERS

Leighton Construction F.P.L.S. $85M BFO 30MW power$85M BFO 30MW power

plant

Lycopodium Process engineering designdesign

GHD Tailings Dam

BNP Paribas Project financeBNP Paribas Project finance

CONSTRUCTION DELIVERY

Total capital expenditure – under US$200MUS$ 00

Practical completion achieved on the scheduled date

First Gold Pour – 12 May 2009

Just over 2 years from project acquisition

SAG & BALL MILLS

EXPERIENCED TEAM IN THE PHILIPPINES

Rolando Q. Amores Chairman Chemical Engineer; 42 years experience in Mining & Metallurgy

Cris G. Acosta President BS (West Point); ME (Cornell); PhD/MS/MBA (MIT); CFA; 11 years with ShellPhD/MS/MBA (MIT); CFA; 11 years with Shellin London and Manila; 14 years with Philippine Govt/Military

Danilo S. Latuga Resident Manager Mining Engineer; 32 years experience

Ramon S. Velasco Resident Geologist/ Mine Exploration Geologist; Community Relations; 29 years experience

Sulpicio B. Bernado Compliance Manager BS Mining Engineering; MBA20 years with Govt/Bureau of Mines

EXPERIENCED OPERATING TEAM

Mark Turner Chief Operating Officer Mining Engineer; 23 years total experience; 16 yrs with Resolute; Responsible for 3 or 4 operations simultaneously

Wayne Foote General Manager Mining Engineer; 21 years gold experience;Wayne Foote General Manager Mining Engineer; 21 years gold experience; Extensive experience in Australia, Ghana, Tanzania, Egypt and Mali; Commissioned 2 previous operations

Ray Mead Processing Manager 20 years experience In Australia and Africa

Marcus Neville Mill Superintendent BSc Extractive Metallurgy; 10 years experience in Australia and Africa

Eliza Molloy Technical Services Manager Bachelor of Engineering (Mining); 10 years experience; Rio Tinto – in Western Australia and California

THROUGHPUT

1 600 000

1,800,000

1,400,000

1,600,000

Design

1,000,000

1,200,000 g

600,000

800,000

espe

rqua

rter

200,000

400,000 tonn

e

-June Sept Dec March June Sept Target

quarters

Sept Q 2010 – Forecast

COST PER TONNE MILLED

25.00

26.00

1,600,000

1,800,000

22 00

23.00

24.00

1,200,000

1,400,000

Design

20 00

21.00

22.00

800,000

1,000,000

r qua

rter

mill

ed

18.00

19.00

20.00

400,000

600,000

tonn

espe

r

annu

alco

st/t

16.00

17.00

18.00

-

200,000

June Sept Dec March June Sept Target quarters

INTERIM PLANT EXPANSIONPlant expansion to 6 5MtpaPlant expansion to 6.5Mtpa

Capital estimate US$15M

Lead Nitrate IntroducedLead Nitrate Introduced Benefits:

• Reduction in residence time – Higher throughputsReduction in residence time Higher throughputs with minimal capital outlay

• Increased recoveries – Indications of nominal 2% achievableachievable

EXPLORATION

US$10M Initial Budget

- 25,000m RC Drilling- 30,000m Diamond

Drilling- 5,000m Trenching

Targeting 3 Key Areas

• Infill drilling of 3.2m ozs of inferred resources

• Close to Mine targets outside of current reserves/resourcesR i l E l ti• Regional Exploration

ENVIRONMENTAL COMPLIANCE

MGP is fully compliant with :

• Philippine regulations & standards

• Environmental Compliance Certificate (ECC)Certificate (ECC)

• Required environmental permits from EMB & MGB

• Environmental  Protection & Enhancement Program

• Final Mine Rehabilitation  & decommissioning Plan (FMRDP)

• Go ernment reporting• Government reporting

KEY ENVIRONMENTAL PROGRAMMES:1. Undertaken as part of ECC requirements, :

• Limnological & coastal marine studies• Limnological & coastal marine studies • Mangrove survey & conservation program• Power Plant Stack & Ambient Air Sampling• Stormwater Runoff Management Plan• MGP’s Emergency Response Program• MGP s Emergency Response Program

2. Upgrade of the Company Nursery to achieve best practice nursery management & target of planting 200,000 trees per year

3. Regular water, air & noise monitoring (daily, weekly, monthly & quarterly)

4. Improvement in waste management towards achieving the goals of reuse/reduce/recycle scheme (on site & within Barangays)reuse/reduce/recycle scheme (on-site & within Barangays)

5. Development of an integrated Safety, Health & Environmental Management System

6. Training employees & contractors in core environmental management modules (Environmental Awareness, Hydrocarbon Management, Solid Waste Management)

7. Quarterly Review by the Multi-partite Monitoring Team (MMT) – all issues raised to date have been minor; the MMT commendable of MGP performance

SDMP and CSRSDMP and CSR

Social Development Management Program (SDMP) –(totalling 20 million pesos, 2009)

Livelihood – fishing, livestock raising, agricultural lands and training and capital

Electricity & Water provision

Roads & infrastructure – schools, barangay halls, sports facilities, chapels

Education –scholarships, transportation, teachers’

ll h l liallowances, school supplies

Health & Sanitation – medical supplies & equipment d ti di l i idonations, medical missions, health & nutrition training, ambulance vehicle

Culture & Sports sportsCulture & Sports – sports equipment, cultural events, sports fest, etc

LIVELIHOOD

Fishing  

Provided 160 various types of fi h d 11

g

fishnets and 11 fishing boats to 131 fishing families in 4 barangaysbarangays

Organized 4 fisher folks associationsfolks associations

Livestock/animal dispersal

90 does and 10 bucks dispersed to 50 farmers

14 goats re‐dispersed  to new  recipientsDispersed 171 head 

of livestock/ animals

6 cows provided to 6 members of farmers org. In Lanang

Agricultural input

Fifty heads of hog dispersed to 50 women household

Farm inputs provided to  Lanangfarmers  association

women household members

Provision of sewing machines

10 units of sewing machines of various 

d dtypes provided to women’s association. 

ELECTRICITY

Provision of • Provide electricity to nearby schools health center and churchProvision of electricity

• Provide electricity to nearby schools, health center and church 

• Installed street  lights 

• Allow access to the local electricity grid within company properties

WATER SUPPLY

Water line ExtensionInstalled 1.2 kilometerswaterline extension with 12 distribution points serving 500 households

Regular water rationing and distribution to 475 households

Financial assistance to Aroroy Water DistrictAroroy Water District

ROADS AND OTHER INFRASTRUCTURE

Pathway Construction

Completed construction of 201 meter longof 201 meter‐long pathway for Lanang and Panique

Road Repair and Maintenance

‐ Repaired 1.1 kilometersof barangay roads in Panique and Puro‐Maintain 8.7 kilometers of roads around the mine complex

CAPSAY 1 unit 2 story BANGON 1 unit 2 story

Construction of 3 and renovation of a barangay CAPSAY – 1 unit, 2 story

building constructedBANGON – 1 unit, 2 story

building constructedof a barangaymulti‐purpose buildings

PURO – Renovation of 1 unit multi-purpose bldg

BALAWING – 1 unit, 2 story bldg constructed

EDUCATION Scholarship Programs ‐ 82 recipients (26 high school and 56 college) of scholarship and educational assistance

Brgy Lanang ScholarsBrgy Lanang ScholarsBrgy Syndicate Scholars

Brgy Amoroy Scholars

Brgy Puro Scholarsgy

Brgy Caspay Scholars

School Building Construction

Bangon Elem. School Panique High School Amoroy Elem. SchoolCompleted construction of 1 classroom building Completed construction of 2 classroom building Completed construction of 2 classroom building

Lanang Elem. SchoolCompleted construction of 1 classroom building

Syndicate Elem. SchoolCompleted construction of 1 classroom building

Balawing Elem. SchoolCompleted construction of 2 classroom building

Salary assistance for teachers

teachers in various schools of Brgys. Puro, Balawing & Lanang

Transportation assistance 

571 Students from 3 barangays571 Students from 3 barangays(Brgys Puro, Lanang & Syndicate)  being ferried to and from school

Purchase of transportation boat

1 unit of motor boat each to Brgys Balawing and Lanang to transport 44 students to and fromstudents to and from schools

Purchase of Multi purpose vehicle

1 unit of school service/jeep purchased for Brgy Syndicate to transport  students to and from Aroroy High School

HEALTH &SANITATION

Proper waste disposal

Purchased 3 garbagePurchased 3 garbage trucks for  barangaysPanique, Puro and Bangon for garbage collection 

Barangay Panique Barangay Puro

Strengthening health referral system

Provision of HealthProvision of Health  service for Lanang,  

Barangay Bangon Barangay Lanang

Health facility development anddevelopment  and Nutrition program

• Equipped the BarangayHealth Station in PuroHealth Station in Puro

• Provided Medicines for Botika ng Barangay in two Barangays, Puro and Panique

• Implemented Feeding• Implemented Feeding program for malnourished children‐BN & VL (46‐Panique and 37 in Puro)

CULTURE AND SPORTS DEVELOPMENT

Chapel Renovation and constructionp

Materials and  financial assistance provided to barangays for Fiesta celebrations.

Corporate Social Responsibility (CSR) (totalling around 30 million pesos, since 2007)

• MGP implemented various programs, projects and activities during the construction and pre-operation stages to help in the

• MGP implemented various programs, projects and activities during the construction and pre-operation stages to help in the p g peconomic and social development of impact communities

Th i iti ti

p g peconomic and social development of impact communities

Th i iti ti• These initiatives were undertaken even before the institutionalization of the Social Development and Management Program (SDMP)

• These initiatives were undertaken even before the institutionalization of the Social Development and Management Program (SDMP)Program (SDMP)

• These are projects recognized by the company as pressing needs and basic human necessities

Program (SDMP)

• These are projects recognized by the company as pressing needs and basic human necessitiesand basic human necessities particularly in health, education and infrastructure

• Protection and respect of socio-

and basic human necessities particularly in health, education and infrastructure

• Protection and respect of socio-Protection and respect of socio-cultural values were also given importance

Protection and respect of socio-cultural values were also given importance

Community Health Emergency Response

Company doctor, shows ComRel ambulance for community patients

Livelihood Program for Relocated Farmers

Katupan techno-demo farm visited by the Regional and Provincial High Value Crop Mobile team.

Katuparan farmers during their graduation ceremony

THE KATUPARAN FARMERS ASSOCIATION

Tax Contributions

Estimates

Excise taxes  PhP 157 M

Real property taxes              76 M

Expanded withholding taxes       132 M

Withholding tax on wages            25 M

Final tax                                  27 M

Local business taxes                       20 M

Other taxes                                      38 M

VAT 1.415 B

TOTAL     PhP 1.890 B

Employment Benefits

Roughly 73% of around 1500Roughly 73% of around 1500 employees are local hires; capacity and ability to feed families

Multiplier effects – local businesses and indirect jobs created ; income for Aroroy and MasbateAroroy and Masbate

The Masbate Gold Project is Aroroy’s development partner.

….Ito ang ating minahan para sa kinabukasan.