History of Apex Mining Company (1970 – 2006)

The founder of Apex Mining Company (known as “Apex Exploration and Mining Company” until 1978) was Dr Fernando Muñiz, who began exploring and prospecting in the Masara area of Eastern Mindanao’s Compostela Valley in 1970.

Apex’s first venture was copper mining but the low prices copper was fetching on the market in the early 1970s forced the move towards gold. Apex posted its first profit in 1978 and was able to wipe out its debt by 1980 as gold prices continued to soar. Apex entered the 1980s on a stable financial footing and began its programme of building housing, recreation and schooling facilities for mine site workers and their children.

In early 2004 Apex entered into an operating agreement with Viclode Mining Corporation that gave Viclode the right to explore, develop and exploit Apex’s Masara veins. In 2004 Apex earned a royalty income from Viclode in Philippine Pesos (PhP) of approximately 1.9 M and a rental income of 10.0 M from the agreement.

Around the same time Apex requested the Mines and Geosciences Bureau (MGB) to conduct an inspection of the mine and evaluate its mineral claims. In its report the MGB concluded that the total existing gold ore reserves of Apex were 529,000 t at 9.15 g/t Au  and that the copper ore reserves stood at 85,027,000 t at 40/100 percent (0.40% Cu). The MGB estimated that Apex at that time had a value of US$33.2 M.

In October 2004 Apex entered into an operating agreement with Mintrecorp Inc. allowing the latter absolute possession, control and full enjoyment of the beneficial use of the tailing ponds materials at Masara.  Under this agreement Mintrecorp was to pay Apex a royalty fee of PhP30.00/t of tailings materials processed every month. This agreement had a five-year term from the date of signing and was renewable for another five years upon mutual agreement.

In August 2005, an international mining company, Crew Gold Corporation, and its Philippine affiliate, Mapula Creek Gold Corporation, entered into an interim share purchase agreement with Apex’s majority stockholders for the sale and purchase of approximately 72.8% of the total issued and outstanding capital stock of Apex. Over the following two months the agreements between Apex and Viclode and Apex and Mintrecorp were terminated and Apex’s days of sub-contracting to small mining organizations and earning income through rentals and royalties from these organizations terminated with them.

After the completion of a due diligence process, Crew and Mapula signed a definitive agreement in December 2005 with Apex relating to the acquisition of 72.8% of the share capital.

Since then, Crew management has focused on commencing production from the existing plant facility. The agreed objectives in 2005 were initially to establish a 500 t/d working mine and to further establish a much bigger working mine after permitting issues had been resolved. It was also agreed that the Philippines-based management would work closely with the local communities to ensure that no social distress arose from the transformation of small-scale mining to a modern operation.

In the first quarter of 2006, under the new management, Apex started its rehabilitation of the Masara plant. Other site infrastructures, like power upgrades, roads, accommodation, technical services and operations staff, office buildings for administration, workshops and stores were also upgraded.

On August 9, 2006, the Apex reported the confirmation of the historical resource data together with the discovery of additional veins in the Masara-Bonanza system and the expanded potential for porphyry copper-gold ore systems

The first phase of plant construction at the Masara Gold Mine was completed as part of the overall mine development. The 500-t/d plant comprising crushing, grinding, flotation and carbon-in-pulp leach circuits became mechanically operational on 30 November 2006 and hot commissioning commenced at that time. The main purpose of this plant is to enable Apex to carry out full-scale test treatment of the different ore types encountered at Masara before the design of the additional 2400 t/d plant is finalized.