Philippine Mining

Development CorporationDevelopment Corporation

The Way Forward

Vision

PMDC aims to accelerate the development of RP’s mining industry by:

• Creating wealth for the nation by profitably pursuing its projects.pursuing its projects.

• Enriching the lives of people in the communities where it operates.

Mission

• To pursue projects in consultation with stakeholders considering the welfare of the host community, indigenous peoples, and small miners.

• To earn the respect of its business partners • To earn the respect of its business partners through ethical business practices, transparency, and fairness.

• To remain a competitive enterprise by adopting best practices that continually improve its projects’ productivity and profitability.

Mission

• To attract and retain the best technical expertise and to work as a cohesive team dedicated to the company‘s ideals.

• To ensure that all projects are compliant • To ensure that all projects are compliant with all relevant environmental standards while always striving to be consistent with the framework of sustainable development through responsible mining practices.

Key Objectives

• To optimize the opportunities of the Philippine mining reservations.

• To be the preferred broker of idle government-owned mining assets.government-owned mining assets.

• To be a competitive diversified mining corporation that will engage in strategic projects that have a positive economic impact on the country.

Business Development

1. Bizdev Group 1 for mining reservations (Diwalwal & Dinagat)

2. Bizdev Group 2 for Brokering

3. Bizdev Group 3 for Entrepreneurship3. Bizdev Group 3 for Entrepreneurship

• Exploration

• Commodity trading

• Joint ventures

4. Support Services

Trident Plan for Diwalwal Gold Development

Track 1 (Area 729)

• A: Comprehensive Community Development Program

• B: Mining Development• B: Mining Development

Track 2: Indigenous Peoples’ (IP) Area 800 Development

Track 3: The Rest of the Mining Reservation (Area 6,000)

Macro Recommendations for Three-Tracks of Diwalwal Area

• Goal: To improve the lives of the illegal miners prior to formal mining. Particularly, the aspects of health/sanitation/living conditions.

• Strategy 1: Declare the entire Diwalwal mining • Strategy 1: Declare the entire Diwalwal mining reservation as a Special Economic Zone to avail of special incentives and holidays.

• Strategy 2: Relocate those who are willing.

Micro Recommendations for Diwalwal Special Economic Zone

• Conduct census on all residents in the area.• Provide ID/payment cards to all registered

residents.• Provide cash to families who want to relocate

to hometowns outside of Monkayo. to hometowns outside of Monkayo. • Create zoned townships and provide free

housing, facilities, and infrastructure for investors.

• Apportion agro-industrial area for diversified revenue stream.

Micro Recommendations for Diwalwal Special Economic Zone

• Based on the census, select/recruit/ train miners and workers.

• Establish Diwalwal Miners’ School to train 1,000 miners and workers.train 1,000 miners and workers.

• Buy the ball mills and relocate these to a zoned location to control pollution.

• Establish gold refinery and gold depository.

IP Issues for Diwalwal Special

Economic Zone

• Conduct a census to determine who really are genuine IPs and provide them with ID cards.

• Organize the IPs based on IP Mining • Organize the IPs based on IP Mining Policy Framework.

• Determine the legal basis of providing area for IPs in Area 800 of the Mining Reservation.

Track 2: IP Area Development

Recommended Policy Goals*

1. Support economic development and self-sufficiency for tribal groups.

2. Strengthen self-governance and cooperation 2. Strengthen self-governance and cooperation among tribal groups.

3. Minimize economic and political risk through diversification.

* based on Canada’s Gaming Policy for First Nations tribes in which casinos provided the economic foundation for strong self-government.

Track 2: First Nations Background

• First Nations refers to Indians or Native Americans located in Canada. They are officially recognized by the government as registered Indians and are entitled to benefits under the Indian Act. benefits under the Indian Act.

• In 1985, Canada allowed provincial governments to be the regulators of gaming. First Nation tribes got approval to establish on-reserve gaming.

Track 2: First Nations Background

• As of January 2007, there were 64 casinos and 27 racinos in Canada. Net revenues from these increased from $2.7-B in 1990 to $9-B in 2000 generating more than $5-B in profits.

• Employment in gaming industry increased from • Employment in gaming industry increased from 12,000 in 1992 to 41,000 in 2001

• Tribal nations used proceeds to develop alternative businesses, improve infrastructure, establish educational and social programs in their communities.

Track 2: Recommendation for IPs

In response to unregulated mining and inequitable economic development, it is recommended that:

1. The Indigenous Peoples’ Rights Act’s (RA 8371) provisions on IP’s first priority with the development of their natural resources must be strictly enforced among concerned stakeholders.among concerned stakeholders.

2. PMDC - in alliance with NCIP – forms an Indigenous Peoples’ Mining Regulatory Board to provide a regulatory framework for mining in IP areas.

3. IPs should be turned into shareholders in mining concerns to create a tribal tax base that will enable them to fully fund their social programs and to achieve sustained economic self-sufficiency.

Guidelines in Forming IP Mining

1. Equity Among Tribal Groups

• Distribution of Wealth – To prevent an inequitable distribution of wealth among tribal groups, a certain percentage of revenues can be allocated in trust to benefit tribes across a province or a region as a whole.benefit tribes across a province or a region as a whole.

2. Uses of Revenue

• Revenue Allocation - Mining revenues can be apportioned to social, cultural, and economic development initiatives, as well as education and health programs.

Guidelines in Forming IP Mining

• Revenue Allocation – Tribes cannot be allowed to grant per capita payments to members because it causes them little long-term achievement. Instead revenue can be used for:

� Tribal government operations & programs

� General welfare of tribes and members

� Tribal economic development

� Charitable organizations

� Operations of LGUs’ programs

Guidelines in Forming IP Mining

• Only after revenues are allocated for these purposes can a tribe make per capita payments to its members.

3. Revenue Transparency and Accountability3. Revenue Transparency and Accountability

• Tribal mining groups must have financial controls to ensure that revenues are allocated in the proper manner.

• There should be greater transparency over how funds are spent to benefit all tribal members instead of just certain individuals.

Track 2 Policy Framework

1. Policies should be developed in coordination with IP communities.

2. Policies must consider social costs.

3. Revenues should be directed toward community development.community development.

4. Tribal mining expansion should emphasize industry sustainability.

5. Tribal cooperation - not competition – provide benefits while minimizing social costs and inequalities.

Gold Investment Options

In the light of these, we recommend two major additional options for gold as an investment:

1. Short-term: Digital Gold Currency (DGC)1. Short-term: Digital Gold Currency (DGC)

2. Mid-term:Mining company shares trading

I. Digital Gold Currency Background

• DGC is a form of electronic money denominated in gold weight. The typical unit of account for such currency is the gold gram or the troy ounce, other units such as the gold dinar are sometimes used. DGCs are backed by gold through unallocated or allocated gold storage.

• DGCs are issued by a number of companies, each of which provides a system that enables users to pay each other in units that hold the same value as gold bullion. In terms of the most that hold the same value as gold bullion. In terms of the most popular providers, e-gold has the greatest number of users while GoldMoney holds the greatest quantity of bullion (as of January 2007).

• As of January 2007, 10 DGC providers held in excess of 9.5 tons of gold as disclosed reserves worth approximately $184-M.

Digital Gold Currency Process

• Paper money first developed when gold traders found they could issue “receipts” or IOUs payable to the bearer, in return for gold deposited in their vaults. Then if anyone wanted to cash in, they would simply take the paper money to the vault and demand their gold.

• Digital gold operates on the same principle. The physical gold is stored in a central vault, but ownership is transferred by logging in to one's digital gold account using a secure internet connection and password. gold account using a secure internet connection and password.

• This allows the legal right to a certain amount of the gold to be transferred in an instant to somebody on the other side of the world - and it also allows the gold to be divided up into almost infinitely tiny fractions of an ounce or gram if necessary, which is much more convenient than using physical gold.

• The Perth Mint Certificate Program (PMCP) is the only government guaranteed gold certificate program in the world.

Digital Gold Currency Transactions

Digital Gold has existed since 1996 and is now sufficiently mature that it can recommend it as part of an overall banking strategy. There are three different types of transaction for which a typical portfolio trader might want to use digital gold:

1. Anonymous money transfer: Making small value payments anonymously. For example, you might want to pay to host a website or even buy a book. even buy a book.

2. Pass-Through: Moving larger amounts of money fast and anonymously around the world. DGCs can be compared to something like a high-tech, cheap, and efficient internet-based money transfer system.

3. Golden Egg: Used as a longer-term store of wealth or speculation. As a place to store your wealth offshore, buying gold without governmental interference.

PMDC and Digital Gold Currency

Just like the Perth Mint Certificate Program, PMDC can issue Digital Gold Certificates online thru the following process:

• Four Star Consulting (FSC) organizes the internet merchants, banks, and credit card firms into a network.

• Internet merchants offer DGCs with payment and settlement handled by FSC group. DBP serves as Trust Administrator.handled by FSC group. DBP serves as Trust Administrator.

• Merchant offers 2 payment options: credit card or PMDC bond.• Portfolio trader buys DGC online.• PMDC issues DGC/ bond online.

II. Trading of Mining Company Shares

PMDC by itself or in partnership with investors can set up mining firms and list them for trading and investments:

• These do not represent gold at all, but rather are shares in the gold mining companies.

• If the gold price rises, the profits of the gold mining company • If the gold price rises, the profits of the gold mining company could be expected to rise and as a result the share price rise.

• Increase in share price makes the company more attractive to traders and investors.

II. Trading of Mining Company Shares

Many factors should be taken into account before people invest in the shares of a gold mining company:

1. Has the company hedged the gold price i.e. already sold part of its future gold production through forward sales?

2. Is the company already producing gold, or is it mainly exploring for gold? for gold?

3. Does the company make a profit? 4. How many years of ore reserves are left in the mines before they

have to be closed down? 5. What P/E ratio and dividend yield does the company have now

and in the following years? 6. Are the mines subject to political or economic risks?