Philippine Mining

Development 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.
• 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
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
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.
• 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 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
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
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.
• 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.
• 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
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
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.
• 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
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.
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.

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 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.
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)

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
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.

• 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.
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.
• 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
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?
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?