Wednesday, July 25, 2012

Philippine Mining Sector Reform

Wednesday, 25 July 2012
(MELBOURNE) OceanaGold Corporation (ASX: OGC, TSX: OGC, NZX: OGC) (the “Company”) wishes to provide an update regarding the recently signed Executive Order 79 by President Benigno S. Aquino III of the Philippines in regards to mining sector reform. The Executive Order lays the foundation for the policy framework which will guide stakeholders and the Philippines Government in the implementation of mining laws, rules and regulations for responsible, sustainable and equitable mining. It is a result of consultation from various stakeholders including environmental groups, church groups, Philippines Government agencies, mining and mining services companies.
Key factors under Executive Order 79:

• The Government shall rationalise the existing revenue sharing schemes. Existing contracts such as OceanaGold’s Financial or Technical Assistance Agreement (“FTAA001”) shall continue to be valid and binding.
• Granting of new mineral agreements has been suspended until the fiscal sharing arrangements between the Government and the Contractor are rationalised and legislated. We note that the Government has clarified however that this moratorium does not preclude the negotiation of FTAAs for future mining projects.
• Exploration permits may be granted following the release of the Implementing Rules and Regulations (IRR) expected within 60 days of the Executive Order. The Company remains in “drill ready” status for some near mine prospects at the Didipio Project and expect the extension of the exploration period following release of the IRR.
• The Executive Order aims to align national interest with local governments’ interests.
• Measures will be introduced to improve the regulation and control of small scale mining activities for metallic minerals and will be restricted to gold, silver and chromite mining only.
• The Government shall ensure strict enforcement of the environmental standards in mining.
• There will be improved transparency of the mining industry.

Implementing rules and regulations will be issued by the Philippines Government in the following weeks which will provide further direction.
Mick Wilkes, Managing Director and CEO of OceanaGold said: “The release of this Executive Order is a positive outcome for OceanaGold and the Philippines mining industry. In my recent discussions with senior Government officials I was pleased that the Government remains committed to the FTAA Contract for Didipio and comfortable with the current fiscal sharing arrangements. We are committed to working with the Government to achieve the outcomes of responsible mining and ensure benefits to local communities and Government through the development of our mining projects. OceanaGold’s Didipio Project FTAA001, set to be commissioned in fourth quarter this year, will be the first of its kind to operate under this type of mining contract, and we look forward to helping shape best practice for the mining industry in the Philippines.”

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