Drill results boost re-listed Philex

Less than three weeks after being delisted from the Toronto Stock Exchange for failing to meet the required $2-million market capitalization, Philex Gold (PGI-V) has seen the market value of its stock, now listed on the Canadian Venture Exchange (CDNX), soar to beyond $5.1 million. The increase is a reflection of assay results from a high-grade hole drilled at the junior’s Boyugnan copper-gold prospect in the Philippines.

“We met all the revised listing requirements except the minimum market value of the company’s float,” says Philex’s vice-president of finance, Paula Kember. “We needed to trade at about 27 per share to meet the requirements, but depressed market conditions did not allow this to happen.”

As result, on Sept. 1, the junior gold producer began trading on the less-restrictive Canadian Venture Exchange at 10 per share.

Philex Gold was formed in 1996, when Philex Mining, a well-established Manila-based copper-gold producer, spun off its gold assets and raised $80 million through an initial public offering of 7.3 million shares priced at $11 per share. With 42 million shares outstanding, the Philippine parent now holds an 82% stake in its subsidiary.

With production halted at its flagship Bulawan gold mine on the island of Negros and its share price hitting all-time lows, the company received welcome news in mid-September: reconnaissance drilling by its joint-venture partner, a subsidiary of Anglo-American (AAUK-Q), on the North gold property on Mindanao Island, had cut an impressive 365 metres grading 0.81% copper and 1.9 grams gold per tonne. The intercept sent shares of the junior soaring. With more than 1.5 million shares changing hands, Philex was the most actively traded stock on the CDNX, closing at a 52-week high of 80.

Comprising 5,186 ha, the North property is in the northeastern portion of Mindanao in the province of Surigao del Norte. Work over the past year has enabled Anglo-American to identify four induced-polarization anomalies.

At the Bagacay prospect, where mineralized andesite porphyry float was located over a 1-sq.-km geophysical anomaly, the first five holes failed to cut any significant mineralization.

The South African-based company then moved the rig 1.5 km south to the Boyugnan prospect, where similar coincidental geophysical anomalies and mineralized boulders were encountered. The first hole hit a pyritic zone, possibly representing a halo of a copper porphyry system. The second hole intercepted altered pyroclastics with localized copper-bearing sulphides, again indicating the possible presence of a copper porphyry system. Hole 6 finally cut the high-grade mineralization below volcanic cover at a down-hole depth of 57 metres. The copper-gold mineralization is hosted in a diorite porphyry intrusive with ore-grade material continuing to the end of the hole at 422 metres.

Based on cutoffs of 0.1% copper and 0.1 gram gold to the hole, the weighted values of a 329-metre intercept (from 93 to 422 metres) averaged 0.9% copper and 2.07 grams gold.

Anglo-American has mobilized a second rig to the property and is stepping out 300 metres north-northwest of the discovery hole to delineate the extent of the mineralization.

The international mining conglomerate can earn a 40% stake in the property by spending $2.2 million on exploration over five years. The major can then increase its stake to 70% by completing a bankable feasibility study.

Despite limited exploration expenditures resulting from foreign-ownership restrictions and political instability, several foreign companies have discovered significant deposits in the Philippines over the past 10 years. Few, however, have succeeded in advancing these deposits to the production stage.