Metals Exploration PLC (LON:MTL) said an updated resource and reserve report for its Runruno gold-molybdenum project in the Philippines has increased the proven and probable (2P) mining reserves by 15 percent to 900,000 ounces of gold from 780,000 estimated previously in the feasibility study.
Both the mineral resource and the mining reserve have been updated by Mining Associates to include 13,400 metres of infill drilling completed post-feasibility study.
In an operational update covering the first quarter 2011, the group said the mining reserve now has 2P reserves of 15 million tons of ore with an average grade of 1.85 grams per ton gold for 900,000 ounces and 603 parts per million molybdenum for 18.2 million pounds of the metal.
The measured, indicated and inferred resources for the project stand at 25.7 million tons of ore with 1.69 g/t Au for 1.39 million oz and 453 ppm Mo for 25.9 million lbs.
The total in-pit scheduled mining reserve and mineral resource now contains 1.06 million oz Au, representing a 10.3 year mine life.
The mine pit has also been re-optimised resulting in a substantial reduction in the operating strip ratio.
Chairman Ian Holzberger said: "I am pleased to be able once again to provide this positive update on the work completed at the project further building on the work reported in the December 2010 operations report and the results of the feasibility study. It is particularly satisfying to be able to confirm the scheduled "in pit Mining Reserves and Mineral Resources" in an optimised pit with a significantly improved strip ratio.
"As this announcement demonstrates, despite the uncertainty surrounding the outcome of the Solomon Capital offer for all of the shares in the company it does not own, work has continued across a range of fronts.”
Back in July Solomon Capital – an investment vehicle controlled by property tycoon Christian Candy - launched a 13 pence per share offer for the company, which valued the company at £35.76 million.
The offer became unconditional in September, before stalling in October after an independent shareholder appealed to the UK takeover and mergers panel.
Since then Solomon and the complainant shareholder reached an agreement which saw the latter’s concerns withdrawn, and the UK takeover panel declared itself satisfied that there is no requirement under the City Code for Solomon Capital to revise the terms of the offer.
Metals Exploration’s shareholders will vote on the recommended bid at a general meeting tomorrow, March 31.
The company is currently awaiting approval of its ‘Declaration of Mining Project Feasibility’ filed in December 2010 to the Mines and Geosciences Bureau (MGB) in the Philippines.
The declaration, based on the results of the feasibility study, demonstrates that the Runruno project is viable - using internationally accepted sound mining practices. Submitting the declaration was a requirement under the Financial or Technical Assistance Agreement (FTAA) awarded to the project in October 2009.
Folowing the approval, the company can move Runruno into the ‘Development and Construction Period’, as defined by the FTAA.