Before commissioning the plant, OGPI will begin pre-strip operations for the open pit this year. “We will construct the process facility and do the pre-strip for the open pit in 2008 before starting the commissioning phase in early 2009. The capital cost is expected to be about $5 million although we are still to complete the final engineering at which point we’ll be able to lock down definitive bids from suppliers,” said Orr.

The company, listed with the New Zealand, Australian and Toronto stock exchanges, is bankrolling the project with a capital raised from at least these three countries.

The copper-gold project will have a yearly throughput of 2.5 million mt of ore from open pit and underground mining. Metal production is placed at 227,000 gold equivalent oz yearly during the first 10 years of production consisting of 142,000 oz of gold and 15,000 mt of copper concentrate.

OceanaGold, which has three mines in New Zealand believes its Philippine operation is important with the cost reduction results from here. “In 2008, we anticipate cash costs will be around $320/oz to $340/oz. By 2009 when Didipio is ramping up, we expect that to fall to around $215/oz to $235/oz due to the copper byproduct credit and the high-grade nature of the Didipio gold deposit,” he said.

This will further go down to $175/oz to $195/oz when the local project runs at design capacity in 2009. “By 2011, we expect to generate $100 million in free cash flow based on a gold price of $500/oz and copper price of $1.90/lb.”

The company is also spending $5 million in 2008 for exploration, particularly in Manhulayan in northern Surigao and in the Papaya prospect which is within its Nueva Vizcaya mining permit.

The copper production has a significant impact in cutting the company’s cash cost from the 2007 cash cost of $575/oz of gold “although this year is a redevelopment year for Macraes and we’ve been processing a significant amount of lowgrade stockpile material, resulting in high cash costs. When Didipio is operating at full run rate, it’s going to be making about 50 percent of the gold-equivalent contribution to the company,” Orr said.

The company earlier awarded engineering, procurement, construction and management works at Didipio to Ausenco Ltd.