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The Philippines

Sierra Mining Limited (“Sierra” or the “Company”) holds an interest in six (6) exploration projects covering an area of over 365 km2 in two of the main gold provinces of the Philippines, the Paracale gold district located in eastern Luzon and the prolific eastern Mindanao mineral belt which is located in southern Philippines. All properties are proximal to the Philippines Rift Fault which has a strike length of over 1,200km and hosts a number of world class porphyry copper and epithermal gold deposits.  Sierra’s projects are listed below:

  • Nalesbitan (Paracale)
  • Mabilo (Paracale)
  • Bunawan (Mindanao)
  • Bahayan (Mindanao)
  • Mawab (Mindanao)
  • Taguibo (Mindanao)

Sierra’s Project Location Map

Sierra's Project Location Map

The Philippines has a long history of mining and has significant reserves of copper, gold and nickel. However, it has received a disproportionately small share of exploration and development spending during recent years despite the geological endowments of the country. It remains relatively under explored by modern exploration technology and practices. As a consequence, the country has immense potential for new copper and gold discoveries.

Overview of Paracale province

The Paracale gold district is one of the largest historical gold producing regions in the Philippines, with recorded gold production dating from the 12 century. Government records indicate that prior to the second world war there were 12 gold mines successfully operating in the district producing 250,000 oz p.a. predominantly from narrow quartz-sulphide veins. Total historical gold production including alluvial gold is estimated to have been in excess of 5 million ounces. 

Mabilo and Nalesbitan Project Map

Mabilo and Nalesbitan Project Map

Mabilo Project

The Mabilo Project comprises one permit application APSA-V-001 of approximately 500 Ha. It is easily accessed by 20km of all-weather road from the highway at the nearby town of Labo.

The Company has identified a number of magnetite skarn targets with associated copper and gold. In 2012, Sierra conducted a drilling training program to test various magnetic anomalies. Drilling at 3 of the 5 targets intersected significant magnetite skarn mineralisation containing high grade copper, gold and silver values.  The best intersections are shown in the table below:

 

Hole

Interval

Metres

Au g/t

Cu %

Ag g/t

Fe %

MDH-01

26 -  86

60

2.28

3.28

11.8

49.05

MDH-05

51 - 113

62

2.66

2.76

10.3

48.82

MDH-07

39 - 136

97

2.25

2.22

7.1

50.26

MDH-09

34 - 121

87

2.94

1.74

7.9

43.44

MDH-10

59 - 123.4

64.4

2.25

2.28

10.2

45.25

MDH-12

62 - 119

57

2.30

2.37

8.9

45.02

Results from preliminary metallurgical test-work were positive, with excellent initial recoveries achieved for both copper and magnetite. No work has yet been completed for precious metals. Sierra plans to undertake a more detailed ground magnetic survey in 2013, prior to further drilling. 

Nalesbitan Project

The Nalesbitan Project comprises Mining Lease Contract MRD-459 of 500 Ha and MPSA Application APSA-V-0002 of 600 Ha. The Nalesbitan Project covers a large zone of alteration in which widespread zones of epithermal gold, silver and copper mineralisation have been outlined. The most advanced of these is at Nalesbitan Hill deposit with an Inferred Mineral Resource Estimate of 5 Mt at 1.1 g/t Au and 4.0 g/t Ag using a 0.5g/t cut-off grade.

The mineralisation identified to date includes both low sulphidation and high sulphidation epithermal gold viens, potentially proximal to porphyry copper at depth. Induced Polarisation chargeability anomalies, interpreted to be due to sulphides associated with porphyry copper mineralisation, have been outlined in the southern part of the alteration zone. The Nalesbitan system has similarities to the giant Lepanto / Far South-East copper and gold porphyry system in northern Luzon. 

Overview of the Eastern Mindanao Region

The Pacific Cordillera volcanic arc in East Mindanao is a world class mineral province with many known porphyry copper and epithermal gold deposits. East Mindanao comprises an approximate 400 km strike length section of the Pacific Cordillera arc bound to the west by the Philippine Fault System and the Davao Agussan Basin.

Much of the rugged and remote interior of east Mindanao was relatively unexplored until the 1980’s, when the wide distribution of epithermal gold, porphyry copper and skarn deposits was recognised. Early discoveries in eastern Mindanao included the Masara Mineral Field in Davao in the south and Siana, Mabuhay and Placer Mines in Surigao in the north. Numerous local gold rushes developed, as more deposits were identified, sometimes with the inadvertent help of timber companies through their road-cutting activities. Principal amongst these were Boringot, Kingking, Bango, Mt. Diwalwal, Co-o, Tambis and Manhulayan. Recent copper-gold discoveries include the world-class Tampakan in the south and Boyongan in northeast Mindanao.

Bunawan, Bahayan, Mawab and Taguibo Project Map

Bunawan, Bahayan, Mawab and Taguibo Project Map

Bunawan Project

The Bunawan project comprises two tenement applications which collectively cover 88.8km2 of prospective ground approximately 190km north-northeast of Davao adjacent to the Davao – Surigao highway.

All of ELA 37 and parts of MPSA 03 (along with many other applications in the area) lie within a timber concession held by PICOP (Paper Industry Corp) who have objected to the applications. Previous timber operations in the project area have exposed copper and gold mineralisation.

The tenements are in a highly mineralised area underlain by a thick sequence of andesitic volcanics. There are numerous artisanal workings, both surface and underground throughout the area, as well as a number of small-scale treatment plants. The main production in the area is from the nearby Co-O mine. 

Bahayan Project

The Bahayan project comprises Exploration Permit Application 123 covering 69.2km2 of ground near the Diwalwal mining camp. High-grade gold veins were discovered at Diwalwal in the early 1980’s, although there has been little modern exploration at Diwalwal and surrounding areas.

Production from the low sulphidation epithermal quartz veins at Diwalwal is estimated to have exceeded 8 million ounces of gold. Geologically the steep dipping veins strike west-northwest and occur in highly fractured zones which are deeply oxidized, silicified and chloritised. 

Mawab Project

The Nabunturan Project comprises two contiguous applications which have a combined area of 65.66 km2. They are located in the Masara Mineral Field, one of most highly mineralised section of the Pacific Cordillera where there are a number of past mines and deposits currently at an advanced stage of development.

Taguibo Project 

The project comprises one granted Exploration Permit and two applications for Exploration Permits covering a combined area of 128.7 km2. Exploration Permit No 000001-06-XI was granted on the 18th October 2006. The two applications have been cleared and have priority of application.

Native copper and malachite in quartz veins cutting sediments has been reported in Exploration Permit No 000001-06-XI and quartz and base-metal stockwork zones reported in both EPA 118 and EPA 131. Artisanal gold mining is widespread in all three tenement applications.

The information in this report relating to exploration results, mineral resources or ore reserves is based on information provided to Mr Robert McLean by Sierra Mining Limited.  Mr McLean is an independent consultant geologist and is a corporate member of the Australian Institute of Mining and Metallurgy.  Mr McLean has the relevant qualifications, experience, competence and independence to be considered an “Expert” under the definitions provided in the Valmin Code and “Competent Person” under the JORC Code.  Mr McLean consents to the inclusion in the report of the matters based on the information he has been provided and the context in which it appears.

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