SMI slashes expenditures in Tampakan

MANILA, Philippines - Sagittarius Mines Inc. (SMI), the proponent of the $5.9-billion copper-gold project in South Cotabato, is cutting down expenditures in the Tampakan tenement as it grapples with the requirements for government approval of the project.

In a statement, SMI vice president Justin Hillier said the company’s shareholders have endorsed a revised work plan for the project which entails slashing expenditures in the tenement while regulatory requirements to start of the project are being secured.

The company will also focus on “enhancing collaboration” with the National Government to resolve key issues confronting the project such as the continued imposition of an open-pit mining ban in South Cotabato, the need for clarification on the approvals process from all government levels, and difficulties encountered in securing the free and prior informed consent (FPIC) of the communities that would be affected by the mining operations. 

“Over the past few months, SMI has carried out a review of the project including as assessment of progress to date, ongoing and emerging challenges, and the current approach to advancing the project,” said Hillier.

He said while these concerns are not yet addressed, current plans for the development of the tenement would be put on hold.

 â€œWith these challenges as yet unresolved, it has not proved possible to make adequate progress toward our project goals and, without a fundamental change in approach, progress is unlikely to improve in the foreseeable future. Therefore, it is timely for a change of approach to give the project every opportunity to progress in a reasonable timeframe,” said Hillier.

Indophill Resources, the Australian-based partner in developing the Tampakan project, said it has been notified of the latest developments in the project.

In addition, Indophil said it signed last Aug. 6 its conformity to the Tampakan ECC and submitted the same to the Department of Environment and Natural Resources.

SMI said the revised work plan entails the reduction of activities and expenditures in the tenement, resulting in staff  downsizing and lessened utilization of contractors.

The revised work plan and budget will trim the company’s 1,060  strong workforce by 85 percent. To be laid off are 300 regular and project employees and 620 contract workers.

Expenditures will be reduced to $1 million per month from $4 million per month under the current work plan.

“This decision has not been taken lightly; however, we expect it will take some time to resolve these complex matters effectively before the project can again resume a path toward development...We will continue to support our host communities through our committed development programs,” said Hillier.

The Tampakan copper-gold project is targeted to start operations in 2019 but with the difficulties encountered by the company, commencement of operations may be delayed.

“Until these challenges are resolved, it is not possible to determine when commercial production could commence,” said communications manager John Arnaldo.

He said an updated capital cost estimate “will be determined ahead of the final investment decision that will be made once all necessary approvals are obtained from government and community.”