Photo credit: Mining Journal
- TVIRD acquires 100% of outstanding GRC shares for a total consideration of US$19 million
- Red 5 will retain a 3.25% NSR payable on gold sales from succeeding operations at Siana
- GRC assets include a state-of-the-art processing facility with a throughput capacity of 1.10 million tons per year as well as key infrastructures in the Siana, Mapawa and Ferrer tenements
TVI Resource Development Philippines Inc. (TVIRD), local affiliate company of Canada’s TVI Pacific Inc. and majority shareholder Prime Asset Ventures Inc., earlier signed a binding agreement with Australia-based listed gold company Red 5 Limited. The agreement pertains to TVIRD’s acquisition of 100 percent of Red 5’s outstanding equity in its Philippine affiliated company, Greenstone Resources Corporation (GRC), which is the owner and operator of the Siana Gold and Mapawa Projects in Tubod, Surigao del Norte Province.
The agreement was signed by TVIRD President Engr. Yulo E. Perez and Red 5 Managing Director Mark Williams in July this year. The inked agreement is a landmark deal that underscores the restored investor confidence in the Philippine mining and extractives sector. As of September 20, the company has completed the acquisition of 100 percent of the outstanding equity of GRC.
“The acquisition of Greenstone, particularly the Siana Gold Project, dovetails with our group’s long-term growth strategy that is hinged on building a robust mining portfolio staggered across multiple commodities,” according to Perez.
Investment agreement
“We are likewise encouraged by the current market performance of precious metals as well as the overall positive investment climate for mineral and resource development in the country,” he said.
Further to the agreement, TVIRD invested US$19 million in cash to Red 5 to obtain 100 percent of GRC shares. The company also confirmed that the cash portion of the purchase price was funded from internal resources.
Parallel to this, Red 5 is entitled to a 3.25 percent net smelter royalty (NSR) to be paid from the sale of up to 619,000 oz. of gold produced from Siana. The recognized NSR value is US$35 million based on a gold price of US$1,750/oz.
Project status
While the Siana project is currently on voluntary care and maintenance, it holds all the necessary government permits to restart operations, including an Environmental Compliance Certificate and an approved Declaration of Mining Project Feasibility.
“The company is currently developing plans to bring Siana back on-stream,” said Perez, citing TVIRD’s plan is to restart operations at Siana as soon as possible.
The project site is located in a 3,289-hectare Mineral Production Sharing Agreement area and includes a modern 1.1 million tonne per annum Outotec mill, gravity and Carbon-in-Leach (CIL) mill facility commissioned in 2012 at a capital cost of US$54 million that includes a single stage SAG mill and six CIL tanks.
Prior to signing the agreement, Red 5 confirmed that GRC spent over US$200 million in the development of Siana, which has the only modern gold plant in the region.
Resources and expansion plans
In its 2020 annual report, Red 5 cited a combined historical Indicated JORC12 mineral resource estimate for the Siana open pit and underground mine of 4.3 million tonnes @ 4.6 grams per tonne of gold and 6.8 grams per tonne of silver. It also cited a combined Inferred JORC12 mineral resource estimate of 0.5 million tonnes @ 8.9 grams per tonne of gold and 10.6 grams per ton of silver.
In addition to Siana, the agreement also covers the 1,482-hectare Mapawa MPSA and the 595-hectare Ferrer APSA claim. All assets and properties have obtained government approvals and relationships with key stakeholders.
The plant receives Grid power with a back-up 8MW diesel fired power station while the project has the necessary infrastructures in place: an administration building, warehouse, mess hall, camp facilities and accommodation, an engineering building and maintenance facilities
With the necessary technology, equipment and facilities, there also lies the potential to establish Siana as a processing center for other nearby prospects and gold deposits.
TVIRD key officers believe that the Siana and Mapawa tenements hold the potential for exploration. Meantime, Mapawa and Ferrer are in the early stages of exploration.
"This represents a strategic acquisition for TVIRD", said TVI Pacific Inc. Chairman and CEO Clifford M. James. "Management and the directors of TVIRD are excited about the acquisition, which coincides with the start-up at Balabag and positive changes in the Philippines Government and financial community attitudes towards mining projects.”
