As Gold-Silver Project ends
At exactly 6:40 a.m. of April 9, 2008, the two ball mills of the Canatuan Gold-Silver Project of TVI Resource Development Philippines, Inc. (TVIRD), which had been grinding ore continously for nearly four years, stopped turning. The “Gossan” phase of the Canatuan Project has almost come to an end. There is a resounding silence in the plant.
The end of the Gossan (gold-silver) phase, however, also signalled the start of the next phase of TVIRD’s operations in this remote mountain village in Siocon, Zamboanga del Norte – the Sulphide (copper-zinc) phase. Employees, many of them Subanon indigenous people (IP) hosting the mining operations in their ancestral domain, will begin construction of the Sulphide plant after the remaining Gossan ore are processed and decommissioning activities for the Gossan phase have been completed.
TVIRD has completed its US$15 million bridge financing facility agreement with LIM Asia Arbitrage Fund Inc. and LIM Asia Special Situations Master Fund Limited (Lenders). The facility will be used for working capital funding of the company and for the construction of the Sulphide Project.
TVIRD Mill Department personnel dismantle one of the two Canatuan Gossan ball mills as part of the decommissioning activities for the gold-silver phase of operations. Construction work on the Sulphide – or copper-zinc – phase will begin soon.
There were mixed emotions as the ball mills came to a halt. Mardino Candawan, ball mill operator for three years looked with sadness at the giant cylindrical equipment. “These equipment had been feeding my family for several years now,” he said.
Luceno Navarro, the mill general foreman, on the other hand, just smiled after he had announced the shutdown. “There is life after the Gossan operation,” he said. “This is not the end of mining in Canatuan, but the beginning of a bigger operation.”
Although a bit apprehensive, Mario Badeo, another ball mill operator, for his part, said he is happy being with TVIRD these past years. He said he was able to send his children to college because of his job in the company.
Bella Alijan, wife of Allan, another employee of the Mill Operations, waxed sentimental: “Mapasalamaton kaayo mi sa Gossan Project sa TVI(RD) tungod kay dinhi naumol ang among gugma sa akong bana ug nagbunga kini ug usa ka anak nga lalaki (We are very thankful for TVIRD’s Gossan Project because it was where our love began which, in turn, gave us our baby boy),” Bella related in Visayan, the lingua franca in these parts. “Sa panahon sa Gossan kami nagminyo tungod kay nagtrabaho man akong bana sa TVI(RD). Nabuhi nga disente ang among pamilya tungod sa operasyon sa TVI(RD). (It was during the Gossan (phase) that we got married. We were able to live decently because of the TVIRD’s operations.”
Bella Alijan, wife of TVIRD employee Allan, and son in front of their house that the company has provided them. Their love began during the Gossan phase of the Canatuan Project.
Bella said she is glad her husband works for the company, the first foreign-financed mining concern that reached production stage after the passage of the Philippine Mining Act of 1995. Aside from providing them regular income to support their daily needs, TVIRD also provided them shelter through the company’s housing project. Allan’s salary is much higher compared with his counterparts in other firms operating within the Zamboanga Peninsula in Southern Philippines.
Johnny Bason, a Subanon like the Alijans, also expressed gratitude because according to him the Gossan Project had given him the chance to grow as a person. The eldest son of Council of Elders member Danilo, Johnny narrated that he had been dependent on his father for quite some time. His employment as company driver, however, made a big difference in his life as a family man: “Nakatindog ko sa akong kaugalingon tungod sa Gossan kay ako nakatrabaho man dinhi. (I was able to stand on my own because of the Gossan Project) I learned how to become a responsible head of the family,” he said.
Subanon Johnny Bason says his employment as TVIRD made a big difference in his life as a family man: “I was able to stand on my own because of the Gossan Project”
Through its socio-economic projects for its host and impact communities, TVIRD’s Gossan Project has provided basic services in the areas of education, livelihood, health and sanitation, and infrastructure that were inaccessible to the Subanons for generations.
“Our brothers and sisters here in Canatuan were able to receive education. This is perhaps the greatest legacy of the Gossan operations. The company contributed a lot to education for the Subanons, particularly when TVIRD built additional school buildings and hired teachers – things that the Department of Education simply could not afford because of lack of budget,” Johnny added.
Education for the Subanons “is perhaps the greatest legacy of the Gossan operations.” The spirits of the mine pit are happy as their people are now enjoying the fruits of their ancestors’ wealth.
Bonifacio Patoh, chairman of the Siocon Subanon Association, Inc. (SSAI), meanwhile, gave a spiritual perspective on the development at the mine. He said the spirits in the mine pit are happy as their people are now enjoying the fruit of their ancestors’ wealth.
SSAI is the legal representative of the Certificate of Ancestral Domain Title holders of Canatuan. It has received from TVIRD royalties amounting to P5 million in 2005, P14 million in 2006, and P14.6 million in 2007.
“On top of the royalties, we have also spent some P19 million in socio-economic community programs for the Subanons over the course of the Gossan Project under our Social Development and Management Plan,” said Feliece Yeban, TVIRD vice president for Social Commitments. “We will continue our sustainable development initiatives for our Subanon partners even as we endeavor to comply with best practices on human rights, health, environment, as well as respect for, and development of our host community.”
The environmental management and protection system for the Canatuan Gossan Project include the implementation of widespread structural erosion control measures, construction of tailings management facilities, water quality monitoring, and reforestation.
“The trees, shrubs, and grasses that we have planted have assisted the natural reforestation process in Canatuan,” Jay Nelson, TVIRD vice president for Environment and Civil Works, explained. “Approximately 100,000 trees have been planted within and around the Mineral Production Sharing Agreement (MPSA) area.
“We take pride in the fact that there had been no untoward incidents involving the environment for the entire duration of the Gossan Project,” he added. “We will soon began rehabilitation activities for the just-concluded phase of our operations, even as we continue constructing environmental protection and management facilities for the Sulphide phase.”
TVIRD began its Canatuan gold and silver operations in Canatuan in July 2004 under an MPSA with the Philippine government, signed in 1996. The MPSA has a term of 25 years, renewable for another period, and grants TVIRD the exclusive rights to explore, develop, and utilize for commercial purposes gold, silver, copper, zinc and other minerals existing within the contract area.
The Canatuan mine produced produced 19,535 ounces (oz) of gold (Au) and 445,859 oz of silver (Ag) in 2005; 45,210 oz of Au and 608,507 oz of Ag in 2006; and 33,078 oz of Au and 653,278 oz of Ag in 2007. On a gold equivalent basis (AuEqOz), the Canatuan mine produced 26,830 AuEqOz in 2005; 56,880 AuEqOz in 2006; and 45,907 AuEqOz in 2007.
Through its Gossan Project, TVIRD paid the government taxes amounting to P2.2 million in 2004; P13.2 million in 2005; P35.4 million in 2006; and P27.2 million in 2007. TVIRD invested a total of over US $25 million for its gold-silver venture.
Yulo Perez, TVIRD vice president for Philippine Operations, said “our experience in the Gossan Project underscores that responsible mining can be done and that, indeed, it can propel the growth of indigenous peoples in the hinterlands.
“We have been able to establish an operating capability that provides us confidence as we move on to the Sulphide Project, which we hope to be in full operation by yearend or within the first quarter of 2009,” Perez said. “We now have the experience and track record in interacting with our stakeholders and we continue to establish mechanisms to deliver what we see as our second `product’: sustainable community development in the Philippine context.”
Once operational, TVIRD’s Sulphide Project is projected to yield over P173 million in taxes and some P160 million in IP royalties over a seven-year period.