Industry Studies Department Board of Investments THE PHILIPPINES’ MINERAL POTENTIAL 07 April 2010

2. THE PHILIPPINES’ MINERAL POTENTIAL
07 April 2010
Introduction
The Philippines is situated along a well-defined belt of volcanoes called the Circum-Pacific Rim of Fire where
the processes of volcanism and plate convergence resulted in the formation of abundant and important metallic
mineral deposits.
It is considered one of the countries that are richly endowed with metallic resources and it has the potential to
be among the top ten largest mining power in the world. In terms of occurrence per unit area, it ranks third in
gold, fourth in copper, fifth in nickel and sixth in chromite.
The presence of major foreign mining companies such as Anglo American, BHP Billiton, Sumitomo Mining
and Xstrata attests to the attractiveness of mining in the Philippines.
Common metallic minerals extracted in the Philippines:
Category Mineral % of Total Value *
Precious Metals Gold 48.07
Silver 0.26
Base Metals Copper 6.78
Iron &Ferro-Alloy Metals Nickel 16.36
Chromite 0.12
* based on 2008 Gross Production Value of USD 1.84 billion
Market Opportunities
Surging mineral demand from rapidly industrializing economies like China and India is giving bright
prospects for Philippine minerals.
China, Australia, Japan and other trading partners in Asia continue to import mineral ores which they
further process into metals.
Philippine Advantage
Rich mineral resources
The Philippines has a land area of some 30 million hectares but only less than 2% is covered by
mining permits.
30% of the remaining area or an estimated 9 million hectares is regarded as geologically prospective
for metallic minerals and this is expected to increase further with continuing exploration and
geological mapping.
ore reserves:
Ore Reserves Million MT
(2005)
Gold 3,056
Copper 2,968
Nickel 953
Chromite 18
Iron 410
Aluminum 292
New sites discovered with potentially world-class deposits differentiated from previous discoveries
that were of low grade and shallow-seated:
Tampakan (copper) which has a potential to be the biggest in the world
Far Southeast (copper-gold)
Boyongan (copper)
Industry Studies Department 1
Board of Investments

3. THE PHILIPPINES’ MINERAL POTENTIAL
07 April 2010
A long history and experience in mining
Mining in the Philippines predates the Spanish era which started in the 16th century.
New technology
New technologies are adapted to further process and increase the value of mineral products,
particularly for nickel.
- High Pressure Acid Leaching (HPAL) – involves the dissolution of the ores in strong acid
under high pressure and temperature to liberate the nickel and other metals and produce an
intermediate nickel product with higher concentration. It is used with great success by
Sumitomo and Asia Nickel on their Philippine Coral Bay operation.
- Heap Leaching – for nickel laterites as a low-cost and environmentally friendly alternative to
HPAL, which involves irrigation of leach pads with 5% acid solution to produce a mixed
hydroxide nickel product
Presence of support infrastructure
sea ports: 1,607 public ports and 423 private ports
airports: 10 international airports, 34 domestic airports, 41 community airports, 4
unclassified domestic airports
power plants: 43 run by the National Power Corp. and 32 by independent power producers (IPPs)
Identified locations
copper and gold mineralization are mostly found in the Central Cordilleras and in many areas in
Mindanao
major nickel mineralization are in Palawan and Surigao
specific areas with deposits identified by the Mines and Geosciences Bureau are found in each of the
country’s major island groups: Luzon, Visayas and Mindanao
Luzon
1. Luzon Central Cordillera – Au, Cu, Fe, Mn
2. Northern Sierra Madre - Cr, Ni, Cu
3. Zambales – Cr, Ni, Co, Pt, Cu, Au
4. Vizcaya-Aurora – Cu, Au
5. Bicol – Au, Fe, Cu
6. Southern Tagalog – Cu, Au, Ni, Co
Visayas
7. Central Visayas – Cu, Au, Mn
8. Samar-Eastern Mindanao – Au, Cu, Fe, Cr, Ni, Pt, Mn
9. Palawan – Cr, Ni, Co, Pt, Au
Mindanao
10. North Central Mindanao – Cr, Cu, Au
11. Zamboanga Peninsula – Au, Cu, Cr, Fe
12. Southern Mindanao – Cu, Au
Geographical advantage
Many mines are located near the sea or ocean and have the advantage of proximity to ports as
transhipment points.
Proximity to China, Japan, Korea and other Asian markets
Industry Studies Department 2
Board of Investments

4. THE PHILIPPINES’ MINERAL POTENTIAL
07 April 2010
Presence of mining projects that are looking for business partners:
Project Location Status Owner/Operator
Agata Project Municipalities of Santiago, drilling program completed; on-going MRL Gold
Tubay and Jabongga in feasibility study for the establishment (Philippines)
Agusan del Norte of a local processing plant
Didipio Gold Brgy. Didipio, Kasibu, under care and maintenance; area is Oceanagold
Copper Project Nueva Vizcaya partially constructed and undergoing Corporation
final feasibility study
Surigao Coal Municipalities of exploration stage has not commenced Benguet Corporation
Project Marihatag, Tago, San
Miguel, Cagwait in
Surigao del Sur
Sta. Cruz Sta Cruz, Zambales on-going development of pelletizing Benguet Corporation
Nickel Project process and R&D activities on tank
leaching
Nickel Mining Sta. Cruz, Zambales phase 1 of the drilling program LNL Archipelago
Project completed (200 has); phase 2 of the Minerals, Inc.
drilling program on-going
Skilled human resources
abundant labor force that is highly educated, English proficient and has strong and good work ethics
availability of mining engineers and geologists with extensive experience in mineral exploration and
mining operations
considerable number of graduates in mining, geological and metallurgical engineering every year and
a continuing scholarship and training program to address increasing demand for skilled workers
available laborers with extensive experience in mining related jobs
presence of professional organizations accredited by the Professional Regulations Commission:
the Philippine Society of Mining Engineers (PSME),
Geological Society of the Philippines (GSP),
Society of Metallurgical Engineers of the Philippines (SMEP)
Industry Potentials
2004 2005 2006 2007 2008 2009
Gross Production Value $ 904 $ 1,046 $ 1,510 $ 2,129 $ 1,852 $ 1,723
(US$ Million)
Exports (US$ Million) $ 797 $ 820 $ 2,103 $ 2,605 $ 2,482 $ 1,039
% of Total Phil Exports (2.0 %) (2.0 %) (4.5 %) (5.2 %) (5.2%) (3.8%)
Employment 118,000 123,000 141,000 149,000 158,000 166,000
Taxes, Fees and $ 73 $ 118 $ 133 $ 218 $ 150 $ 9*
Royalties (US$ Million)
Note: *Excise tax collected by BIR and taxes collected by national government agencies not yet included
Source: Mines and Geosciences Bureau
Industry outlook
Outlook for 2010 is still good in spite of the global economic crisis because:
– while there has been reduction in shipments of nickel ore, demand for gold, copper, iron ore,
chromite and coal remain strong
– commodity prices still above their last five year averages
– investors from Korea, Japan, Australia, and China are still coming looking for joint venture
projects
Industry Studies Department 3
Board of Investments

5. THE PHILIPPINES’ MINERAL POTENTIAL
07 April 2010
– banks are liquid and project proponents are upbeat in accessing from them their financial
requirements
– several projects are being pushed into operation although some are being re-scheduled. In
2009, six new mines went onstream: Carmen Copper Project in Cebu, Masbate Gold Project in
Masbate, Coral Bay HPAL Line 2 Nickel Project in Palawan, TVI Base Metal Project in
Zamboanga del Norte, PHILSAGA CO-O Gold Project in Agusan del Norte and CTP
Carrascal Nickel Project in Surigao del Sur.
– several projects in the pipeline are expected to be onstream within the next 3-5 years: Xtrata,
Buyongan, Kingking, Far South East
– there is interest from PhilExim to provide sovereign and credit guarantee on local and foreign
loans to mining projects
Government Support
The passage of the Philippine Mining Act of 1995
The revitalization of the Philippine minerals industry is one of the primary focus area of the President
Since 2004, the Philippine government has been supporting and promoting around sixty mineral
development, mineral processing and exploration projects
The Philippine Mineral Reporting Code (PMRC) patterned after Australia’s JORC to reduce risk and
gain investor trust and confidence is being implemented.
The Government supports transparency and is working to enlist in the Extractive Industry
Transparency Initiative (EITI) to ensure good governance and prevent corruption.
The Minerals Development Council was established to advance the government’s policy of
responsible and sustainable development of the country’s mineral resources, enlist the assistance of
government and non-government organizations to harmonize requirements and procedures that
would facilitate inflow of investments, and address the policy and operational problems of the
industry at the national and regional level.
Incentives
In a Financial or Technical Assistance Agreement (FTAA), contractors are entitled to the recovery of
capital investments for a period of five years.
- During this period, national taxes are waived but local government taxes are payable.
- After the recovery period, the benefits are shared 50% - 50% based on the net mining revenue,
inclusive of taxes.
Investors can also avail of the incentives under the Mining Act and the Omnibus Investment Code.
Investors can also apply for ecozone status under the Special Economic Zone Act of 1994 and be
entitled to exemptions from certain national and local taxes if they will engage in downstream
processing.
Under the Mining Act
- Income tax carry forward of losses
- Income tax accelerated depreciation of fixed assets
- Exemption from payment of real property taxes on pollution control devices
- Investment guarantees, repatriation of capital, freedom of expropriation, remittance of earnings and
interest on foreign loans, freedom from requisition of properties and the confidentiality of information
with regards to endeavors and transactions
Under the Omnibus Investment Code
- Income tax holiday for 4-8 years
- Modified duty rate for capital equipment and spare parts
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Board of Investments

6. THE PHILIPPINES’ MINERAL POTENTIAL
07 April 2010
- Exemption from wharfage dues and export tax, duty, impost and fees
- Tax credit on raw materials and supplies
- Additional deduction for labor expense (ADLE)
- Additional deduction for major infrastructure works
- Non-fiscal incentives
Under PEZA (for mineral processing)
- Income tax holiday for 4 to 8 years
- Special 5% tax rate on gross income after the lapse of ITH
- Tax and duty exemption on imported capital equipment
- Exemption from 12% input VAT on allowable local purchase of goods and services
- Unrestricted use of consigned equipment
- Employment of foreign nationals
Mineral Agreements and Fiscal Regime
Mining permits and contracts
Type of Mining Maximum Area Term Qualified Person
Rights/Permits (has.)
Exploration Permit (EP) 32,000 onshore 2 years; renewable to a individuals or Filipinos
81,000 offshore maximum of 6 years or foreign corporations
Mineral Production Sharing 16,200 onshore 25 years; renewable for a individuals or Filipino
Agreement (MPSA) 40,500 offshore like period corporations
Financial or Technical 81,000 onshore 25 years; renewable for a Filipino or foreign
Assistance Agreement (FTAA) 324,000 offshore like period corporations
100% foreign participation is allowed under EP and FTAA as well as in Mineral Processing. For MPSA it
requires at least 60% Filipino ownership.
Fiscal regime under FTAA
allows recovery of Pre-Operating Expenses
set at a maximum of five (5) years
may be extended for projects incurring very large investments with high production rate and
extensive mine life
50% - 50% sharing of the Net Mining Revenue (after recovery of pre-operating expenses)
The government share of 50% comprise the following:
Basic Government Share:
national taxes, i.e., Excise Tax, Corporate Income Tax, Customs Duties and Fees, etc.
local taxes, i.e., Business Tax, Real Property Tax, etc.,
payment to Filipinos, i.e., Special Allowance, Royalty to indigenous people, land
owners or claim owners
Additional Government Share – amount collected to achieve the 50% of the Net Mining
Revenue
Other laws affecting mining
- People’s Small Scale Mining Act
- Indigenous Peoples Rights Act
- Local Government Code
- National Integrated Protected Areas System Act
- Environment Laws
Industry Studies Department 5
Board of Investments

7. THE PHILIPPINES’ MINERAL POTENTIAL
07 April 2010
Major Mining Companies
Mining Company Project (Location) Annual Capacity
Polymetallic Mine
Rapu-rapu Minerals, Inc. Rapu-Rapu Polymetallic Project 3,000 MT/day
(Rapu-Rapu Island, Albay)
Gold Mines
Lepanto Consolidated Victoria Gold Mine Cu concentrates, Au & Ag:
Mining Company (Mankayan, Benguet) 875,000 tonnes
Filminera Resources Corp. Masbate Gold Project (Masbate) Au : 4,000,000 tonnes
Philsaga Mining Banahaw Gold Project
Apex Mining Corp. Maco Mine
(Brgys. Teresa and Maco,
Compostela Valley)
Benguet Corporation Acupan Gold Operations
Johnson Gold Mining Corp. Paracale Gold Mine Au and Ag: 10,800 MT
(Jose Panganiban, Camarines Norte)
PMDC Diwalwal Direct State Dev. Project
(Monkayo, Compostela Valley)
Copper Mines
Philex Mining Corporation Padcal Copper Mine Cu concentrates: 37,601,979 lbs
(Sto. Tomas II, Padcal, Tuba, Au: 171,092 oz
Benguet) Ag: 171,092 oz
Atlas Consolidated Mining Carmen Copper Project
and Development Corp. (Brgy. Don Andres Soriano Toledo)
TVI Resource Development Canatuan Project Cu: 6,198,777 libras
Philippines, Inc. (Brgy. Canatuan, Siocon,
Zamboanga Del Norte)
Chromite Mines
Krominco Inc. Redondo Project Metallurgical Cr: 57,000 MT
(Dinagat Island, Surigao Del Norte)
Heritage Mining Homonhon Chromite Project
Crau Minerals Dinagat Project
Benguet Corporation Benguet Corp.’s Masinloc Project Cr (refractory): 1,000,000 MT
(Masinloc, Zambales)
Nickel Mines
Crau Mineral Resources Sta. Cruz Nickel Project (Zambales)
Corp.
Berong Nickel Corporation Berong Nickel Project Beneficiated Ni Ore: 1,470,000 MT
(Barangay Berong, Quezon,
Palawan)
Cagdianao Mining Cagdianao Nickel Mine Beneficiated Ni: 500,000 WMT
Corporation (Dinagat Island, Surigao Del Norte)
Marcventures Mining Surigao
Corp.
CTP Construction and ACT Project (Surigao del Sur)
Mining Corp. Carrascal Nickel Project Ni Beneficiated ore: 2,000,000 MT
(Surigao del Sur)
Industry Studies Department 6
Board of Investments

8. THE PHILIPPINES’ MINERAL POTENTIAL
07 April 2010
Hinatuan Mining Corp. Sigbanog Project Beneficiates Ni Silicate: 120,000 WMT
(Manicani Island, Guiclan, Eastern
Samar)
Tagana-an Project Beneficiated Ni Ore: 100,000 MT
(Hinatuan Island, Taganaan,
Surigao Del Norte)
Taganito Mining Corp. Taganito Nickel Mine Beneficiated Ni: 150,000 WMT
(Taganito, Claver, Surigao Del
Norte)
Platinum Group Metals Toronto Nickel Project
Corp. (Surigao del Norte)
SR Metals Inc. Tubay Nickel Project (Sitio Benefitiated Ni Silicate ore:
Bugnam, Brgy. La Fraternidad, 1,500,000 tonnes
Tubay)
Oriental Synergy Mountain Top (Surigao)
Urbiztondo South (Dinagat)
Source: Mines and Geosciences Bureau and BOI database
Mining companies with substantial foreign equities
1. Benguet Corporation – 40% American
2. Eldore Mining Corporation – 40% Australian
3. Gold Fields Philippines Corporation – 40% Australian
4. Philippine Gold Processing & Refining Corporation – 99.99% British
5. TVI Resource Development Philippines, Inc.- 40% Hongkong
6. Carrascal Nickel Corporation – 40% Chinese
7. Coral Bay Nickel Corporation – 100% Japanese
8. Platinum Group Metals Corporation – 85.72% Malaysian
9. Rio Tuba Nickel Mining Corp. – 40% Japanese
10. Oriental Synergy Mining Corp. – 31.3% Chinese
Cost of Doing Business
Administrative fees and charges
Based on DAO 2005-08
Filing/Renewal Fee of Mining Permits (Based on DAO 2005-08)
a. Application for EP and MA – P 60.00/ha
b. Application for FTAA - P 60.00/ha
Clearance Fee – P 5,000.00/application
Registration Fee
a. For EP – P 5,000.00/permit
b. For MA – 20,000.00/contract
c. For FTAA – 50,000.00/contract
Occupation Fee (for EP, MA, FTAA)
a. For mineral reservation areas – P 100.00/ha
Evaluation of Feasibility Study Report/ Environmental Protection and Enhancement Program (EPEP)
– P 20,000.00/study report/EPEP
Application for Certificate of Environmental Management and Community Relations Record –
P 5,000.00/application
Filing for Application of Mineral Processing Permit
a. Projects with investments above P 500 million – P 50,000.00/application
b. Projects with investments of P 250 million to P 500 million – P20,000.00/application
c. Projects with investments below P 250 million – P 10,000.00/application
Application of Environmental Clearance Certificate – EMB Processing Fee - P 6,000.00
Industry Studies Department 7
Board of Investments

9. THE PHILIPPINES’ MINERAL POTENTIAL
07 April 2010
Project cost
Gold/Silver (Annual Capacity: Gold – 224,456 oz; Silver dore – 108,427 oz)
Related Expenses Cost
(US$ Million)
Pre-Operating Expenses 18.26
Land and other expenses 10.00
Building / Leasehold improvements 1.01
Machinery and Equipment 121.00
Office equipment, furniture and fixtures
Total US$ 150.27
Nickel (Annual Capacity: Beneficiated Nickel Ore - 735,868 dry MT)
Related Expenses Cost
(US$ Million)
Pre-Operating Expenses 0.10
Deferred exploration & development charges 3.86
Land acquisition 0.06
Civil Works 0.83
Loading systems 1.63
Earthmoving equipment 2.09
Buildings and facilities 0.33
Laboratory equipment, furniture and fixtures 0.10
Working Capital 1.25
Total US$ 10.25
Approval of Mining Permits/Contracts
For exploration
Application and Mandatory Acceptance Requirements Filing of Application in Regional Office
1. Location map
2. Two-year exploration work program
3. Proof of technical competence
4. Proof of financial capability Area Status and Clearance/Consent by
MGB, DENR Sectors and/or other
Government Offices
Certification of Publication/ Posting/ Radio
Announcement
Publication, Posting and Radio
Certification from Panel of Arbitrators Announcement
NCIP Certification Pre-condition
Certificate of Environmental Management & Evaluation by MGB RO & CO
Community Relations Record
2-year Environmental Work Program
Approval by MGB RO, DENR or
Proof of Sanggunian Consultation PRESIDENT
Industry Studies Department 8
Board of Investments

10. THE PHILIPPINES’ MINERAL POTENTIAL
07 April 2010
For utilization
Application and Mandatory Acceptance Requirements Filing of Application in Regional Office
1. Location map
2. Two-year exploration work program
3. Proof of technical competence
4. Proof of financial capability Area Status and Clearance/Consent by
MGB, DENR Sectors and/or other
Government Offices
Certification of Publication/ Posting/ Radio
Announcement
Publication, Posting and Radio
Certification from Panel of Arbitrators Announcement
NCIP Certification Pre-condition
Proof of Sanggunian Consultation Evaluation by MGB RO & CO
Certificate of Environmental Management &
Community Relations Record Approval by MGB RO, DENR or
2-year Environmental Work Program PRESIDENT
Contact Details
Board of Investments
Ms. Evariste Cagatan
Director, International Marketing Department
Industry & Investments Building
385 Sen. Gil Puyat Avenue, Makati City 1200
Tel. No.: (632) 890-1332 or (632) 895-3641
Website: http://www.boi.gov.ph
Mines and Geosciences Bureau
Mr. Horacio Ramos
Director
MGB Compound, North Avenue
Diliman, Quezon City
Telephone: (632) 928-8642 or (632) 920-9120
Website: http://www.minesandgeosciencesbureau.com.ph
Chamber of Mines of the Philippines
Mr. Phillip Romualdez
President
Room 204 Ortigas Building
Ortigas Avenue, Pasig City 1600
Tel. No.: (632) 635-4123 or (632) 635-4159
Fax: (632) 635-4160
E-mail: comp@vaisa.com
Website: http://chamberofmines.com.ph
Industry Studies Department 9
Board of Investments