“Right now, we can only promise them up to 29 years,” said Leo L. Jasareno, Mines and Geosciences Bureau (MGB) director, in an interview on Friday.
Last March, Gold Fields announced its acquisition of a 40 percent stake in listed miner Lepanto Consolidated Mining Co.’s Far Southeast (FSE) project in Mankayan, Benguet through Liberty Express Assets, a private holdings company, for $220 million.
Gold Fields has a remaining option to acquire an additional 20 percent interest in FSE through Lepanto to hike its stake to 60 percent.
Lepanto, in turn, had filed an application in November to convert the project’s current permit, which is a mineral production sharing agreement (MPSA), to a financial or technical assistance agreement (FTAA) license to make way for Gold Fields’ buy in.
A FTAA is the permit required by the Philippine government of any foreign miner looking to own or control a majority share of any large-scale mineral resource in the country.
In line with this, Jasareno explained that Gold Fields is seeking a “fresh start” to its permit’s term once Lepanto’s MPSA is converted into an FTAA as it intends to operate the Far Southeast mine for 40 years.
“We can only give them the remaining term of Lepanto’s current MPSA even after they convert it to an FTAA,” he said.
According to the Mining Act of 1995, a MPSA is valid for 25 years from the date of its execution, and is only renewable for another 25-year term.
The MPSA for the Far Southeast project was granted by the MGB to Lepanto in 1990, according to records on the agency’s Web site.
“One option for them to get their desired ‘fresh slate’ would be to let go of the current permit and apply for a new one,” said Jasareno, but said that this would come with the risk of letting other companies apply for a permit for the site.
The MGB official further said that the conversion of Lepanto’s license might be delayed due to the ongoing moratorium on the processing and approval of mining permits.
“The moratorium covers permit conversions, and as long as the new mining policy is not in place, we can’t lift the moratorium,” said Jasareno.
Gold Fields’ exploration target for the project is 52 million ounces of gold equivalent to be discovered through drilling a total of 900 meters below surface area. The firm currently has eight drill rigs operating at the site.