Balabag Gold-Silver Project

At A Glance
Ownership TVI Resource Development Philippines Inc. (100%)
Location Sitio Balabag, Bayog Municipality, Zamboanga del Sur
Business activities Development of gold and silver resources in a proposed open pit and underground mine
Deposit Type Epithermal gold and silver in a proposed open pit and underground mine
Resources 2.5 million tonnes averaging 1.8 g/t gold and 47.8 g/t silver for 213,000 ounces of gold equivalent
Logistics Contract area is within approximately 1.0-hour driving time to nearest airport in the provincial capital of Pagadian

The Balabag Gold-Silver Project is an epithermal gold and silver deposit located in the municipality of Bayog, one of the major rice granaries in the agricultural province of Zamboanga del Sur. As of August 2015, the project has PMRC-compliant mineral resources of 2.5 million tonnes averaging 1.8 g/t gold and 47.8 g/t silver for 213,000 ounces of gold equivalent.

The project is 100% owned by TVI Resource Development Philippines Inc. (TVIRD), which acquired the license to explore and develop the contract area from Zamboanga Minerals Corporation (ZMC) in 2009. TVIRD likewise holds the Environmental Compliance Certificate (ECC) and the social license to operate through signed resolutions of support from both the municipal and provincial governments. In 2014, TVIRD secured the free, prior and informed consent (FPIC) of the indigenous Subanen tribal leaders – the rightful claimants of the Balabag ancestral domain.

The company has entered the final permitting stage for the Balabag Gold-Silver Project and expects to bring operations on-stream in 2016, beginning with the commencement of on-site construction.

The project is situated in a 4,779-hectare Mineral Processing Sharing Agreement (MPSA) area approximately 75 kilometres east-northeast of the Canatuan copper-zinc mine – TVIRD’s former flagship project. It is accessible from Manila by air transportation to either airports in Zamboanga or Pagadian City, which is closer to the project site (approximately one hour driving time). From either point, the property is accessible via the Zamboanga-Pagadian National Highway and through a sealed road from Imelda Town to Barangay Guinoman, Municipality of Diplahan in Zamboanga Sibugay Province.

While the regional geology of the Zamboanga Peninsula remains largely under-explored, Balabag’s local geology is characterized by volcanic rocks, consisting of porphyritic andesite and dacite, pyroclastics or lithic tuff and volcanic flow breccia.

Earlier exploration work which included mapping, outcrop sampling and diamond drilling suggest two major veins that vary in width from less than one metre to more than 10 metres. The main mineralized zone is situated where a relatively more continuous quartz vein system is traceable for several hundred metres. The thickest mineralized zone exposed at surface is exhibited by outcropping veins that are generally banded and crustified with dark sulphidic bands that are about 3 metres to 10 metres thick. Other gold mineralized veins are also apparent in the southern slope of Balabag Hill.

Since 2005, a total of 296 holes have been drilled for a total of 34,156 metres at the Balabag project. During the first half of 2013, TVIRD completed 18 additional infill or extension drill holes equivalent to 1,221 metres. In addition, mapping and sampling activities were carried out in the underground workings, and trenching and soil grid geochemical surveys were done over the eastern and southern part of Balabag hill. The discovery of multi-directional veining has increased the potential of finding more veins. Once all permits to develop the Balabag project have been received, further exploration work and the completion of an updated resource estimate is expected to commence.

While exploration and development work have been put on hold at the Balabag project since mid-2013 pending the receipt of all permits to develop the Balabag project, TVIRD has continued to work on the engineering design for a gold-silver processing plant to process ore on-site. Basic engineering design has now been completed and detailed design work is underway. TVIRD has also constructed and maintained 16 kilometres of access roads to the project in anticipation of the commencement of construction.

TVIRD had established a pilot plant at its nearby Canatuan mine site to carry out metallurgical test work on samples of the different types of mineralization at Balabag. Initial test results from 30 tonnes of sample material grading 4.8 grams per tonne Au and 212 g/t Ag indicated average overall recoveries of 93% for gold and 90% for silver after 36 hours of leach time. Lower grade ore containing 2.7 g/t Au and 98 g/t Ag, which more closely represent the initial mining schedule, was fed into the pilot plant and results confirmed high extraction rates of 94% Au and 92% Ag after 36 hours of leach time. These results validated the Balabag test material’s amenability to leaching as determined from prior laboratory-scale tests.

TVIRD has also completed an all-weather 16-kilometre access road to the mine that will serve as the main access for equipment and product transport.

Upon the approval of its Declaration of Mining Project Feasibility (DMPF) from the Philippines’ Department of Environment and Natural Resources (DENR), TVIRD will commence on-site construction work and aim to bring operations on-stream in 2016. Once all permits to develop the Balabag project have been received, further exploration work and the completion of an updated resource estimate is expected to commence.

Construction work over the near-term will include a gold-silver processing plant, open pit and underground mining facilities and a tailings dam.