At the request of the Ontario Securities Commission, Philex Gold Inc. issues the following clarification with respect to its previous press releases issued since June 14, 2004 regarding declared mineral resources for the Boyongan porphyry Cu/Au Deposit in the Philippines; a joint venture with Anglo American Exploration (Philippines) (”Anglo”).

The 2004 announcement of an Inferred Mineral Resource of 219Mt at 0.51%Cu and 0.74g/t Au at a 0.60% copper equivalent (”CuEq”) cut-off in the oxide zone and 0.4 % CuEq cut-off in the sulfide one were footnoted as not having demonstrated economic viability. It was further noted in the said release, that AMEC Americas Ltd. (”AMEC”), estimated that only 67Mt of the said resources had demonstrated “economic viability” as per CIM Standards. The Company believes that it had made these statements in compliance with NI43-101 Disclosure Rules. The OSC has since recommended that the Company remove any reference to the said Inferred Mineral Resources on the Company’s website, which recommendation the Company has duly complied with.

In late 2007, Anglo completed a pre-feasibility study (”PFS”) on the Boyongan Deposit that included an updated Mineral Resource estimate. This study included drill hole data up to May 2007 and yielded Indicated Mineral Resources of 83Mt at 0.68%Cu and 1.10g/t Au at a CuEq cut-off of 0.50%.

In June 2008, the Company engaged the services of an independent consultancy, Independent Resource Estimations (”IRES”) to complete a Pre- Feasibility Study (PFS) using parameters and assumptions more in tune with current operations within the Philippines. As the initial part of this PFS, IRES has completed a new Mineral Resource estimate using drill hole data up to December 31st, 2007.

The Company is pleased to announce that this study has yielded a Measured Mineral Resource of 104.5Mt at 0.80%Cu and 0.99g/t Au, and an Indicated Mineral Resource of 0.87Mt at 0.80%Cu and 0.08g/t Au; for a total Measured and Indicated Mineral Resource of 105.4Mt at 0.80%Cu and 0.98g/t Au at a Cu cut-off grade of 0.50%. The resources have been compiled down to -400m elevation. Due to the various resource figures out in the public domain, the Company has duly filed a clarifying NI43-101 compliant Technical Report.

In addition, IRES has just completed the PFS using long-term metal prices of $2.75/lb for Cu and $700/oz for Au for the base case. The PFS shows a positive NPV and has yielded a Proved Mineral Reserve of 65.8Mt at 0.87%Cu and 1.39g/t Au, and a Probable Mineral Reserve of 1.9Mt at 0.85%Cu and 0.52g/t Au; for a total Proved and Probable Mineral Reserve of 67.8Mt at 0.87%Cu and 1.37g/t Au; at a 0.60%Cu and 0.80g/t Au cut-offs.

As announced in a recent disclosure, the Company’s parent, Philex Mining Corporation, has agreed, in principle, to acquire Anglo’s 50% stake in the Boyongan deposit for US$55M giving it full control of the property.

The Boyongan deposit is a porphyry-hosted Cu/Au occurrence located in an island-arc setting. The current model created to estimate the current resources was constructed using geological domains comprising a 0.25%Cu outer shell and a 0.25g/t Au outer shell - a method typically used in the modeling of similar deposits. The objective of the shells is to control the influence of sampling data to areas which are expected to represent and to limit the undue projection of high grades into lower grade areas and vice versa.

Over 85,823m of drilling on the Boyongan deposit has been completed to date and has resulted in the average distance between samples being 45m; IRES conclude that this spacing is sufficiently dense to accurately outline the mineralization of the domains. Grade capping was applied on Cu at 5% and on Au at 10g/t and a block size of 20m x 20m x 10m (XYZ) was used and ordinary kriging was the method of interpolation to estimate grades. A minimum of 3 samples and a maximum of 20 composites were used to generate an estimate. An initial isotropic search ellipsoid of 75m was used as the first search strategy; a range defining approximately two-thirds of the total variance.

Cross validation tests demonstrate the final ordinary kriged model is robust and adequately mimics the trends observed in the original dataset. The data density within the Cu shell is sufficiently great enough, to have a high confidence in the estimated mineral resources. The resources were only tabulated down to the -400m elevation.

These current Mineral Resource and Reserve figures are reported in accordance to NI43-101 guidelines and conform to CIM Standards. The full reports will be published in the Company’s website and in SEDAR.

This entry was posted by Gold Mining on Wednesday, October 1st, 2008 at 1:29 am and is filed under Copper, Gold, Gold Mining Companies. Tags: AMEC Americas Ltd., America, Americas, Anglo American Exploration, Company, Copper, Drilling, Gold, isotropic search ellipsoid, Joint Venture, long-term metal prices, Ltd, metal, metal price, metal prices, Mine, mining, Ontario, Ontario Securities Commission, Philex Gold Inc., Philex Mining Corporation, Philippines, PROPERTY, Resources, search strategy, the Philippines. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.