Companies: MTL   

AIM-quoted Metals Exploration, which is developing gold and molybdenum prospects in the Philippines, expects drill results in July from its Runruno prospect in the mineral-rich north of the country’s Luzon island, which directors Peter Draper and Gary Powell argue could hold as much as 6.7 million oz of gold. Robert Tyerman reports.

Claiming that latest changes to the Philippines’ mining and foreign investment regulations are kindling fresh interests in the country’s minerals, Draper and Powell say that local miners found 600,00 oz of gold in the vicinity at a very high grade of one ounce per tonne of ore. More modestly speaking of grades below two grammes a tonne, they say that Metals Ex has a deal with its partners (including one owned by beleaguered Thistle Mining, which holds the nearby Masbate prospect) to earn 70 per cent of the project by paying £100,000 and issuing 1.3 million shares over three years and take Runruno to a bankable feasibility study.

Analysts suggest cash extraction costs at Runruno could be a none-too-cheap $250 an ounce, before capital costs and finance, against a $424 market gold price, unless more drilling changes the picture. Meanwhile, Metals Ex will also issue 1.6 million shares to the claimholders at another project, Masapelid on Mindanao Island, where drilling should start in two months.

Metals Ex, which recently announced ‘significant gold and copper mineralisation’ at its Jaclupan prospect on Cebu Island, has £300,000 in the bank and more to come from the exercise of warrants at 3.5p. Draper has a rig company, which should help matters.

He and Powell know some of the prospects well, since they first attracted their former Australian company Egerton Gold, before it turned itself into an IT outfit. They say Metals Ex is likely to tap the market again soon if Runruno and Masapelid look like matching expectations.

At 11.38p, the shares, also quoted on the Toronto Venture Exchange, have speculative appeal.

Metals Exploration	AIM	£18.21m	16.25p	1.25p
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