Australian miner OceanaGold said on Tuesday it had signed an offtake agreement with Geneva-based commodity trader Trafigura for all the copper and gold concentrate output of its Didipio mine in the Philippines.
The deal comes as the Southeast Asian nation seeks to lift revenue from mining, although optimism that an 18-month moratorium on new mining projects would be lifted was countered by Manila's plan to raise royalty rates.
The offtake will be for a minimum of five years from the start of production by the end of the year at the mine located in Nueva Vizcaya province in the country's main island of Luzon, OceanaGold said in a statement.
A binding contract for the offtake arrangements would be finalised soon, the miner said. It did not disclose the volumes and terms of the deal.
Last month OceanaGold said Didipio, which will have a 16-year mine life and a large open-pit operation, would produce an average 100,000 ounces of gold and 14,000 tonnes of copper each year.
Trafigura will take delivery of copper and gold from Didipio and manage all land and sea transport to smelters in Asia, OceanaGold said.
The copper/gold concentrate produced from Didipio will be high quality and we are very pleased with the commercially competitive terms that we have agreed with Trafigura, said OceanaGold Managing Director and Chief Executive Mick Wilkes.
In February, Wilkes said OceanaGold would spend up to $10 million for exploration projects this year around Didipio to boost the mine's output and extend its life beyond 16 years.
The $350-million mine is estimated to have 1.68 million ounces of gold deposits and 229,000 tonnes of copper.
The Philippines this month issued a long-awaited executive order that clarifies its mining policy in its bid to attract more investments while ensuring protection for the environment.
While the executive order lifts a moratorium on the processing of exploration permits in place since January 2011, the government will not grant new mining contracts until Congress approves a proposal to impose royalties on industry operators, as the Southeast Asian nation seeks to increase its share of mining revenues.
The Philippines sits atop an estimated $1 trillion worth of mineral wealth, but anti-mining groups led by the influential Catholic Church, have ensured many mining projects will not go beyond the drawing board.