Mr. Cris G. Acosta
President, Filminera Resources Corporation (FRC)
How is the new Administration facilitating the ease of doing business in the mining sector?
The fact that the President is supporting the mining sector is very important, and he is being open about it. We need investments to come into the country. We have not had that much new mining activity, so we need technology and investments right now. If the President says that we are open to mining investment coming in and that we will support the investors here, I think that is the first step.
It seems like there are a lot of Australian companies operating here but not so many Canadian and American companies that generally dominate the mining sector around the world, especially in South America and the States. How do you think the new Administration can attract this kind of investment?
If the initial investors are successful and happy, then other investors will follow. I do not think “propaganda” in the mining industry would help much if the actual investors were not happy. The Government has to ensure that it continues to support the current investors whilst trying to encourage new investors to come in.
There are success stories in the mining sector here and people should be made aware of these. There is a lot happening in the country but most people think of other regions when it comes to mining. Do you think that these success stories need more global publicity?
What is good about Filminera is that though still a work-in-progress it already has shown that you can have a world-class mining project in the Philippines.
The Mining Act is one of the only acts within ASEAN (Association of Southeast Asian Nations) region where you can have a 100% foreign-owned company operating here in the Philippines. How do you think Filminera is going to remain competitive in the mining sector if new companies enter the market?
I do not see new entrants to the market as competitors. On the contrary, I see them as friends and partners because the more mining companies there are, the better it will be for the mining industry. The more mining companies that come in, the better it will be for the company. If we have challenges with the Government and other stakeholders, there will be more of us to work together, and there will be more of us to sell the mining industry as well.
The fact that the price of gold closed at around $1,320 is obviously making it more feasible to start mining lower grade ores. Is this changing your business strategy for 2011? What are your predictions for gold over the remainder of 2011? How is Filminera working alongside this?
We have been quite happy with the project so far, and we have an ongoing plan to expand our capacity.
I heard that in December Filminera is going to have a $25 million expansion plan and about $10 million is going to be invested in exploration and $15 million in producing the production capability.
Yes, that is an ongoing process.
Secretary Ramon Paje and Mr. Lito Mondragon both agreed that the mining sector is growing, but it must grow in a sustainable way. You have $1 trillion worth of natural resources here in the Philippines and it has a huge potential to grow, but the communities surrounding the mines must be included in any strategy or regulation.
One of our objectives has always been to ensure that we protect the environment and the safety of the people in the communities we work in, and that we also share whatever profits or benefits we have with the community around us. I agree that whatever a company does has to be sustainable, and the company needs to have a social license to operate, as well as the technical and financial aspects of the project. The community should always be included.
Mining companies create a lot of infrastructure, and the whole community benefits from it. Could you discuss some of the initiatives at the Masbate Gold project please?
We are focused on health, livelihood and education in the communities we operate. Before we started operations we did a baseline study on the needs of the community, and the projects we are implementing are focused on those needs. Community consultation is crucial. Before we do any social project, we make sure that the community owns the project and that it wants the project to take place. We do not want to impose any project on the community.
I believe you are building a second crusher for your ore. How is this going to increase your productivity during 2011 once it is fully operational?
We aim to have a sustainable capacity of around 6.5 million tons per annum, and the current grade we have is around 1.5 grams per ton on average.
I believe that you are now allowed to explore a much larger area of land and you have acquired a new license. Have you started taking samples and drilling down to see what grades are in the surrounding area? Is there going to be huge growth potential over the next few years?
That is still work-in-progress and we come up with results periodically.
How are you working with different government departments such as the Department of Education and the Department of the Environment and Natural Resources (DENR)?
We have an approved process for social development programs, and we work with the Mines and Geosciences Bureau and the community. So the actual projects we implement are agreed with the community and approved by the Mines and Geosciences Bureau or the DENR.
How many new employment opportunities are you going to create with your expansion plans over the next 2 years?
I do not have any number right now.
Are your operating costs increasing or decreasing through technological advances?
We have been operating only for a couple of years, so it is a bit difficult to comment on technological advances because we have the same processing plant today as we had a year ago. But of course, the cost of milling goes down as the quantity milled increases.
The Government has forecasted that $13.5 billion of investment will come into the mining sector; do you think there is the right regulatory framework for mining concessionaires to come into the country and explore and extract in a sustainable way?
We have a good regulatory framework. Filminera is a pioneer because it is one of the companies that are testing these policies and guidelines. Filminera is one of the few companies that are operating under this new mining law.
As you said, you are a pioneer. Is there anything you would like to say to young investors in the U.S.? What opportunities are available in the mining sector in the Philippines from an investor’s perspective?
I think there are lots of opportunities here. If CGA Mining Limited, which is Filminera’s affiliate, was able to do it, then other foreign companies and investors can as well. We have an operating mine and we are operating it successfully. Of course, we would like to improve the way we operate and we would like to expand as well.
What has been your crowning achievement as President of Filminera?
It is not my crowning achievement, but it is more of the project’s achievement. In my view, CGA Mining Limited, along with its affiliate companies in the Philippines, has been able to show that a sizeable mining project can be successfully implemented in the Philippines. You can have a world-class mining project here, and if we can do it, then other companies can come in and do it as well.
This report is going to go out to the readers of USA Today across the United States and we are really trying to build the image of the Philippines. What would be your final message to the readers about the Philippines and Filminera?
I think now is the best time for mining investors to come to the country, and they should come here before other companies come in and the industry becomes too crowded. The country can accommodate many investors at the moment, and world-class mining projects can be implemented here in the Philippines. Some people may think it is quite challenging, but we have shown it can be done.
Thank you very much.