Australian gold explorer Red Mountain Mining Ltd. expects its Philippines gold prospects to improve along with the country’s investment grade rating.
The Perth-based company referred to Standard & Poor’s Rating Services’ decision to upgrade the Philippines’ credit standing last month.
In fact, S&P was the second major global credit watcher to do so, after Fitch Ratings undertook a similar move last March.
This development is expected to result in cheaper financing of development projects, including future gold mine developments, the company said in a statement.
“We view the upgrade of the Philippines to investment grade, coupled with the intention of the Philippine government to fast-track mining permit approvals under the Executive Order 79 policy, as very positive developments for a company such as Red Mountain that aims to become a Philippines gold producer,” said Red Mountain managing director John Dugdale.
Red Mountain is trying to raise up to $2.6 million in order to continue the drilling in high-grade gold exploration targets in Batangas.
The company also wants to complete a scoping study on a gold development site—also in Batangas—where 5.78 million tons of resources are believed to be locked. The resources may yield 408,000 ounces of gold.
Red Mountain said that if the outcome of the scoping study turned out to be sufficiently positive, the company would complete a definitive feasibility study, as well as secure the necessary permits in 2014.
Canada-based Mindoro Resources Ltd., which owns 53.3-percent of Red Mountain, clarified that while it is the majority owner, it has no control of the latter’s operations as well as of financing and exploration activities.
“It would be misleading to characterize Red Mountain’s activities as Mindoro’s activities,” Mindoro chair James Anthony Climie said.
Mindoro’s Philippine subsidiary—MRL Nickel Philippines Inc.—is developing the Agata nickel laterite project in Agusan del Norte through a joint venture with TVIRD Philippines Inc., Climie added.
The Batangas projects—such as the Archangel, Lobo, and El Paso prospects—are part of the portfolios of Mindoro and Red Mountain.