RAPU-RAPU POLYMETALLIC PROJECT
Pagcolbon, Rapu-Rapu, Albay

Introduction
Rapu-Rapu Island, the largest of the three islands that compose the municipality of Rapu-Rapu in the province of Albay, has been known to be rich in mineral deposits. It has a long history of mining activities, believed to have started as early as the Spanish time. There was a succession of ownership and management of mining activities in the island, by the Hixbar Gold Mines since 1936, the Japanese during the war, the Hixbar Mining Company after the war until 1960, the Benguet Corporation, Inc. (1960-1982), the Toronto Ventures, Inc., Lafayette Philippines, Inc., until the Rapu-Rapu Minerals, Inc. (RRMI) and Rapu-Rapu Processing, Inc. took over in 2003.

Q:        What does RRPP stand for?

A:        RRPP stands for the Rapu-Rapu Polymetallic Project. It is a zinc- copper mining venture owned and managed by the Rapu-Rapu Minerals, Incorporated (RRMI) and Rapu-Rapu Processing, Incorporated (RRPI). The RRMI is responsible for exploration and mining, while RRPI runs the processing plant and attends to marketing. Rapu-Rapu Processing Inc. is the first and only zinc processing plant in the Philippines today. Four other companies hold management, technical and financial interests in the project, namely, the Korea, Malaysia, Philippines Resources (KMP) LG International (LG), Malaysia Smelting Company (MSC), and Korea Resources Corporation (KORES).

Q:        Where do we find the mine site of the RRPP and how do we go there?

A:        The base camp of the mining and processing operation of the RRPP is located at the eastern tip of the Rapu-Rapu Island, the largest of the three islands composing the Municipality of Rapu-Rapu in the Province of Albay. The municipality is about 55 kilometers east of Legazpi City. Rapu-Rapu is accessible by boat from Legazpi port.

A boat ride to the RRPP wharf in Pagcolbon on the island of Rapu-Rapu takes three hours, more or less, depending on the sea current. Return trips to Legazpi are likewise scheduled daily at 5:30 in the morning. Small banca also ply to and from two suitable take off points, Sula in Bacacay, Albay and Bacon in Sorsogon.

Q:        How many hectares of land are involved in the mining project?

A:        The RRPP concession involves 180 hectares on the island of Rapu-Rapu, of which width and breadth encompass areas under the jurisdiction of three nearby three barangay, Malobago, Pagcolbon, and Binosawan. These villages are considered, by law, as “direct impact areas.” Three nearby barangays also affected by the mining activities, and are considered as “indirect impact barangays,” are Linao, Tinopan, and Santa Barbara.

Of the total project area, the open pit has taken up 26 hectares within the Barangay Pagcolbon. The tailings storage facility and embankment took up 41 hectares, largely within Barangay Binosawan. The pier is located within Barangay Malobago.

Q:        What is the technical description of the physical characteristics of the mine pit?

A:        The pit is excavated into a ridge tending east-west at an altitude of approximately 200 meters. A series of small creeks trickle from the upper ridges of the hilly terrain down to the crinkles of the eastern and southern slopes and drain toward to the sea. Of these rivulets, only the Catmon and Maypayo Creeks, in which the tailing waste storage facilities are situated, run a course of more than a kilometer. The Maypajo tributary drains to the south near Malobago before it empties into the sea. The general terrain of the area is characterized by moderately rolling to steep slopes.

Q:        When did RRMI acquire its 100% interest in the RRPP?

A:        The RRMI acquired ownership of the Project in December 1999 when its partner, the TVI Pacific, Inc., sold its joint-venture interest to RRMI. In the same month, the Ungay Malobago Mines, Inc. (UMMI), the previous holder of the Mineral Production Sharing Agreements involving the development of the Ungay Deposit, entered into an agreement with RRMI and Lafayette Philippines, Inc. wherein the option of RRMI to buy the claims and mineral rights belonging to UMMI was confirmed.

In 2000, a comprehensive Environmental Impact Assessment (EIA) of the mine site was finalized. With the completion of a bankable feasibility study in January 2001, the Philippine Government, through its Department of Environment and Natural Resources, granted the RRPP its Environmental Compliance Certificate (ECC) in July of the same year. In April 2002, the Mines and Geosciences Bureau (MGB) approved the Environmental Protection and Enhancement Program of RRPP. This led to the resumption of the mining operations.

Q:        What is the estimated capital cost of the mining project?

A:        At the reopening of the mines in 2003, the Project had an estimated capital cost of U.S. $33,509,812 (about Php1.776-B at the exchange rate then of U.S. $1=Php53), assessed at an overall accuracy of plus or minus 10 percent.

Q:        How vast is the mineral deposit in the Ungay area?

A:        The mineral-rich Ungay Deposit has a proven mineral reserve of 5, 857,756 metric tons and a probable mineral reserve of 121,017 metric tons more (Source: Lafayette 2001). Of the proven mineral reserve in the open pit mine, gold was ascertained at 2.51 g/t and silver at 27.97 g/t where the percentage of copper was 1.23 and the percentage of zinc was 2.10. Of the probable mineral reserve, gold was calculated at 2.07 g/t and silver at 22.8 g/t, where the percentage of copper was gauged at 1.03 and zinc at 1.87. Another study also gave evidence that the Ungay deposit can possibly yield an estimated 7,022,000 metric tons, accordingly classed as follows: measured- 6,397,000 MT, indicated-324,000 MT, and inferred- 301,000 MT (Source: Micromine 2001).

Q:        What is the technical description of the mineral resource in the Ungay area?

A:        Technical descriptions of the mineral reserve in the Ungay field illustrate a massive sulfide deposit occurring within a folded sequence of mafic and felsic volcanic rocks. The deposit “appears localized close to the contact between unaltered mafic and felsic rocks, the latter having altered into a quartz-sericite-pyrite assemblage. The sequence has tightly folded into a magascopic fold plunging shallowly to the west.”

The deposit is further described, as follows: “Mineralization consists predominantly of pyrite (FeS₂) with lesser chalcopyrite (Cu, FeS₂) and sphalerite (ZnS). Chalcocite (Cu₂S), covelite (CuS), tetrahedrite (Cu,Fe)₁₂Sb₄S₁₃), bornitea (Cu₅FeS₄), and visible gold have also been identified. A peripheral halo of disseminated sulfide occurs in the vicinity of massive sulfides within the immediately adjacent quarts-sericite altered wall rocks.”

Q:        What is mineral exploration?

A:        Mineral exploration refers to the process of searching resources by the following processes: geological mapping, geochemical sampling, geophysical survey, subsurface sampling, test pit, drilling, tunneling for the purpose of determining the existence, extent, quantity, and quality (of the mineral reserve) and the feasibility of mining.

Q:        How large is the RRPP open pit?

A:        The open pit is 810 meters along the east-west axis and approximately 300 meters in width at the crest in the west end. It has high walls in the north, south, and west. Mining is being undertaken in four stages; it started from the east. The eastern wall will have a gradual slope following the pit floor as the mine develops. The western half of the ore body will be mined in the latter years of the Project. The ultimate depth of the pit is calculated at 180 meters below ground.

Q:        Who are the people at the helm of the RRPP?

A:        The Corporate Officers are: