Galactic options portion of Philippines project to major

Philippines President Corazon Aquino was in Vancouver just before the announcement was made, inviting Canadians to consider investment opportunities in the Pacific Rim country.

Galactic agreed to sell the mystery buyer 75%, with an option to acquire 100%, of its 40% interest in Far Southeast Gold Resources Inc., which has the rights to develop and mine the bulk tonnage deposit.

Southeast Gold Resources is owned 60% by Philippines-based Lepanto Consolidated Mining, an established and internationally recognized mining company.

Although Galactic President Robert Friedland wouldn’t disclose details of the agreement, still subject to certain conditions, or a purchase price, he did say the deal was expected to be closed by year- end. Details of the transaction would be released at that time.

“I can only comment that we are very happy with the agreement,” said Friedland. “It was always our intent to select a major industry partner to participate with us in this project.”

Friedland also said Galactic intends to retain its minor interest in the project. At last report the deposit had reserves totalling 292.2 million tons grading 0.041 oz gold and 0.77% copper. This calculation is based on 300,000 ft of drilling by Lepanto. However, the deposit is considered to have signific ant potential for reserve expansion.

“With capital costs in the order of $325 million, this will be the largest new project in the mining sector and one of the largest in the Philippines economy in general,” Friedland said.

Galactic’s move to include a major mining company as a partner in the project is expected to be applauded by mining analysts, many of whom criticized the company for taking on the venture when it was first announced in the summer of 1988.

At the time, analysts cited the political instability of the country and Galactic’s weakened financial position in view of operating problems at its Summitville gold mine in Colorado.

The political stability of the Philippines is widely considered to have improved of late, but that aside, Galactic is now firmly in the black because of its 48% interest in the successful Ridgeway gold mine in South Carolina.

“We wouldn’t be in the Philippines if we weren’t bullish,” Friedland stressed.

In other news, Galactic announced that the next phase of drilling is under way on the Ivanhoe gold project in the Carlin district of Nevada. Galactic can earn a 50% interest from Cornucopia Resources (TSE) in return for arranging financing and putting the mine into production.

The results of the drill program are to be incorporated into the feasibility study with a view to enhancing the project by using a modular and expandable higher grade operation with initial lower throughput. The partners are considering a combined milling and conventional heap leach operation.

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