Chase gearing up to develop Taysan

By the end of 1993, Chase Resources (VSE) hopes to have a bankable feasibility study in hand for its Taysan copper-gold project in the Philippines.

The company plans to start the first phase of a development program on the property this summer to upgrade reserves on the Taysan deposit as well as test for additional reserves to the west.

Chase holds an option to purchase a 59.9% interest in Taysan Copper, the Filipino company which owns the property. The option can be exercised by either paying US$1 million by May 10, 1992, $2 million by May 10, 1993, or US$2.75 million by May 10, 1994. In return for the purchase option, Chase is issuing the vendors 1.8 million treasury shares. The shares will be issued on regulatory approval.

The Taysan deposit is situated about 50 miles south of Manila. Previous work on the property includes about 89,000 ft. of drilling on 300-ft. sections covering an area measuring about 4,000 ft. by 4,300 ft.

The work outlined preliminary sulphide reserves totaling 387 million tons grading 0.30% copper and 0.010 oz. gold per ton.

The deposit also has a well defined oxide cap containing an estimated 23 million tons grading 0.50% copper and 0.016 oz. gold.

Preliminary work on pit outlines for Taysan indicates a starter pit of 110 million tons grading 0.34% copper and 0.010 oz. gold, with a stripping ratio approaching 0.5-to-1, could be used.

The overall stripping ratio for the 400-million-ton deposit is estimated at about 1.2-to-1, although the figure assumes a large area along the eastern edge of the pit is waste. Further drilling in this area may prove it to be ore.

In addition, work done by metallurgical consultants Benguet Corp. indicates that the gold grade may be closer to 0.013 oz. in the sulphide zone. Benguet estimated recoveries at 90% for copper and 70% for gold. The mill circuit is expected to be simple with only a minimum requirement for regrinding and cleaning.

The company plans to start a confirmatory drilling program in late August to test Benguet’s findings as well as upgrade reserves to the proven-minable category.

There are two large geophysical and geochemical anomalies on the property, one to the west and one to the south, which Chase President Ian Rozier said have the same signature as the known deposit.

The planned drilling program will test the West Taysan anomaly, located about 2,300 ft. to the west of the main deposit area. Rozier said drilling on the main deposit indicates that the West Taysan anomaly could represent an extension of the Taysan deposit.

Although the Philippines is perceived by some as having political risk, Rozier noted that the country has had a long history of mineral production and a number of major companies including, Conzinc Riotinto and Broken Hill Proprietary, have made major property investments recently.

Rozier added that the Philippines offers the advantage of the possibility of arranging debt swap financing for a mining project.

The basics of a debt swap, he explained, involve buying Filipino pesos from a U.S. or international bank at a discount. The pesos are then used to purchase equipment for the project.

He noted the discount could be as high as 40%. This would give a project such as the Taysan, with an estimated capital cost of US$200 million, an effective cost of about US$120 million.

Rozier added that the company was exploring the possibility of receiving funding support for the project from the World Development Bank, the Asian Development Bank or the Commonwealth Development Bank. Following a number of recently completed private placements, Chase has about $700,000 in working capital for work programs on the property. On a fully diluted basis, including the 1.8 million shares for the property option, Chase has 5.8 million shares outstanding.