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  | Project Overview Located in Barrio Dilong, the Dilong Project (also known as the Hale Mayabo Claim) is roughly 285 kilometers north of Manila and about 130 kilometers north of Baguio. It reportedly has reserves of 40.0 million mT with average grades of 0.5 percent Cu and possibly 0.5 g/T Au (not NI 43-101 compliant). This is based on 27 inclined and vertical drill holes with a specific gravity of 2.75 T/m3, a 0.25 percent cut-off for copper, and utilizing a modified volume-assay method of computations. The Dilong copper property is located in Barrio Dilong, municipality of Tubo, Abra Province. It straddles close to the boundary of Abra and Ilocos Sur and forms part of the projected belt of porphyry copper deposits extending from Pangasinan from the south up to Ilocos Norte to the north following the western flanks of the Cordillera Central Mountains. Access to the property is available via a number of commercial and private airstrips and helipads within the project site and in the area. Local and international port facilities are also available The property was initially discovered in 1970. Based on reconnaissance and semi-detailed geological studies, a three-kilometer geological environment of strong hydrothermal alterations of classic potassic, phyllic, silicic, argillic and propylitic zones with lateral zoning patterns was discovered. These zones roughly coincide with discontinuous and roughly concentric to arcuate alteration halos sliced by strong northeast, northwest, east-west and north-south fault systems. Aerial photographs discovered an outcrop of copper 450 meters long by 250 meters wide exposed along the Linang and Punglao creeks. Prospecting, geological mapping, preliminary exploration and delineated drilling of exploration targets were conducted by W. E. Hale & Associates. Detailed geological mapping was also done with delineation of hydrothermal alteration halos, such as potassic, phyllic and prophylitic zones, leached capping studies, biogeochemical studies, petrographic and ore microscopy, test pitting, trenching and 22 short x-ray holes. In 1974, Mission Exploration Company, in cooperation with the Benguet Province, conducted detailed geological, structural and lateral zoning alteration patterns of porphyry copper studies in the Dilong area. They indicate 1.5 kilometers of stockworks copper mineralization trending south 65 degrees west. Two "wildcat" holes intersected higher grade ore sections of 50 meters thick with an average grade of about 0.86 percent Cu. Benguet Corporation drilled a total of 27 diamond drill holes totalling approximately 6,000 metres. These partial and incomplete drill results blocked the aforementioned indicated ore reserves of 40.0 million tons of about 0.5 percent Cu, 0.5 g/T Au and about 0.006 percent Mo.* *The reader is cautioned that all resource estimates quoted herein are based on data and reports obtained and prepared by previous operators. The Company has not completed the work necessary to independently verify the classification of the mineral resource estimates and is not treating the mineral resource estimates as National Instrument 43-101 defined resources verified by a qualified person. The historical estimates should not be relied upon. The Dilong project will require considerable further evaluation, which the Company's management and consultants are in the process of completing. Philippine Metals has recently acquired an extensive historical database from the previous work done at Dilong by Benguet and other operators. This database includes all previous drill hole locations, drill logs, assays, maps etc. The company is currently evaluating the data using modern computer modelling methods in order to better interpret the historical data. Philippine Metals is acquiring 100 percent of the Dilong project in exchange for $712,500, plus 2.5 million shares. As of June 30 2011, the company had paid a total of $307,500 and issued 2.5 million shares. Update Since the date of the local elections in Tubo, Abra last October, the Company has accelerated its constructive efforts to work with the new local government and community leaders to gain their support for its Exploration Permit Application ("EPA") at Dilong. Negotiations with the rightful indigenous peoples to acquire Free and Prior Informed Consent (FPIC) have been initiated and are progressing positively and consultation with the Local Government Unit's Sanggunian has been ongoing, both key aspects of the EPA process. However, as a result of the Philippine government Mines and Geosciences Bureau's (the "MGB") "use it or lose it policy", which it has now taken steps to enforce, the Company has recently received formal notification from the MGB that its Dilong EPA has been cancelled. The Company believes that its permit has not been cancelled legally and it is currently in discussions with the MGB to resolve this matter and has filed with the MGB central office the appropriate objection notice, supported by documentation already filed with the MGB regional office demonstrating that the Company has been actively progressing its permit application and complying with all of the requirements set by the government, as described above. In addition, the Company notes that in its case, the MGB appears not to have observed its "three-letter-policy" of notification in exacting compliance in respect of its Dilong EPA. The Company will continue to engage with the MBG to rectify this situation and expects that its Dilong EPA will be reinstated in due course. The Company is supportive of the MGB's efforts to drive reform in the Philippines mining industry and will continue to engage with and support the government in its efforts to implement its reform program. The Company will provide a further update as developments require. Corporate Strategy Philippine Metals plans to bring Dilong into 43-101 compliant indicated and measured categories and will drill define the boundaries of the deposit laterally and to depth. Once this exploration work is completed, the company will be seeking development partnerships and off-take agreements with Asian companies. |
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