New Meridian Mining Corp.
TSX VENTURE : NWC.H

March 30, 2010 09:30 ET

New Meridian Mining Corp.: Execution of Amalgamation Agreement With Philippine Metals Corp.

FINANCIAL AND MINERAL PROPERTY INFORMATION REGARDING PHILIPPINE METALS CORP. AND NAME CHANGE, CONSOLIDATION AND COMPLETION OF TRANSACTION

CALGARY, ALBERTA—(Marketwire – March 30, 2010) –

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

NEW MERIDIAN MINING CORP. ("New Meridian") (TSX VENTURE:NWC.H) is pleased to announce that, further to the letter of intent entered into among New Meridian and Philippine Metals Corp. ("Philippine Metals" or "PMC") announced on May 28, 2009 and July 29, 2009, New Meridian entered into an amalgamation agreement dated March 22, 2010 (the "Amalgamation Agreement") with Philippine Metals and 1520944 Alberta Ltd. ("Newco"), a recently incorporated wholly-owned subsidiary of New Meridian. Pursuant to the Amalgamation Agreement, New Meridian, Philippine Metals and Newco have agreed to complete a business combination (the "Transaction") such that Philippine Metals will become a wholly-owned subsidiary of New Meridian and the resulting issuer will carry on Philippine Metals' business under Philippine Metals' current management. The Amalgamation Agreement sets out the definitive terms of the Transaction and the amalgamation of Philippine Metals and Newco. Pursuant to the policies of the TSX Venture Exchange (the "Exchange"), the Transaction is a reverse takeover of New Meridian by Philippine Metals.

In connection with the Transaction, on March 25, 2010, New Meridian filed on SEDAR a filing statement of New Meridian dated March 22, 2010 (the "Filing Statement"), which contains full disclosure regarding the Transaction, the business of Philippine Metals and the proposed business of the issuer resulting from the Transaction (the "Resulting Issuer").

The Transaction was completed on March 25, 2010.

Prior to, and as a condition of, the completion of the Transaction, Philippine Metals completed a three tranche private placement of 16,017,667 subscription receipts (the "Subscription Receipt Financing") at a price of $0.45 per subscription receipt to raise gross proceeds of $7,207,950. As disclosed in a press release on February 26, 2010, Philippine Metals completed the first tranche (the "First Closing") of the Subscription Receipt Financing of 11,519,167 subscription receipts for gross proceeds of $5,183,625 on February 24, 2010. The First Closing was completed in two tranches, one of which was brokered by PI Financial Corp. acting as agent for Philippine Metals in respect of the sale of 9,136,167 subscription receipts for aggregate proceeds of $4,111,275. The other tranche of the First Closing of 2,383,000 subscription receipts for aggregate proceeds of $1,072,350 was completed on a non-brokered basis. As disclosed in a press release on March 17, 2010, Philippine Metals completed the second tranche of the Subscription Receipt Financing of 1,822,000 subscription receipts for gross proceeds of $819,900 on a non-brokered basis on March 12, 2010. On March 22, 2010, Philippine Metals completed the third closing of the Subscription Receipt Financing by the sale of 2,676,500 Subscription Receipts for gross proceeds of $1,204,425 on a non-brokered basis. The net proceeds of the Subscription Receipt Financing will be used by the Resulting Issuer to fund operating, exploration and administration costs and for general working capital, all as more particularly described in the Filing Statement.

Each subscription receipt entitled the holder to receive one unit (a "Unit") of Philippine Metals without the payment of additional consideration immediately preceding the closing of the Transaction. Each Unit is comprised of one common share of Philippine Metals (the "PMC Share") and one half of one Philippine Metals share purchase warrant (the "Warrants"), with each whole warrant entitling the holder to acquire one Philippine Metals share at a price of $0.65 until February 24, 2012. The gross proceeds (the "Escrowed Funds") from the Financing were held in escrow and were released to Philippine Metals concurrently with the issue of the Units on the fulfillment of certain conditions.

PI Financial Corp. received a commission of 7% of the gross proceeds of the brokered portion of the Subscription Receipt Financing, payable in cash, upon the issue of the Units in exchange for the subscription receipts. In addition, PI Financial Corp. was granted compensation options entitling the holder to purchase PMC Shares equal to 8% of the aggregate number of Subscription Receipts sold under the brokered portion of the Subscription Receipt Financing at a price of $0.55 per PMC Share during the period commencing when the Units are issued in exchange for the subscription receipts and expiring on August 24, 2011. The compensation options were exchanged for options of the Resulting Issuer under the Amalgamation on the same one for one basis. Under the terms of a financial advisory engagement letter from June 2009, PI Financial Corp. will also be issued 207,162 success warrants upon completion of the Transaction, with each warrant having an exercise price of $0.525 per PMC Share and a term expiring on March 25, 2010, being 24 months from the closing date of the Transaction. Additionally, PI Financial Corp. will also be paid the balance of a success fee and bonus fee in the aggregate amount of $87,148.66 upon completion of the Transaction. Arm's length finders in respect of the second and third tranche of the Subscription Receipt Financing received fees of $19,032 (payable in cash) and a maximum of 124,561 Units upon the issue of the Units in exchange for the subscription receipts.

Pursuant to the Amalgamation Agreement immediately prior to the completion of the Transaction, the common shares of New Meridian (the "New Meridian Shares") were consolidated on a two for one basis (the "Consolidation"). On closing of the Transaction, the Shares and the Warrants issued under the Financing were exchanged for resulting issuer shares and warrants on a one-for-one basis and the net proceeds of the Escrowed Funds were released to Philippine Metals. In addition, concurrent with the completion of the Transaction, New Meridian changed its name to "Philippine Metals Inc.".

Immediately prior to the completion of the Amalgamation, a total of 40,990,312 PMC Shares will be outstanding, comprised of 24,848,084 PMC Shares outstanding prior to the issue of Units in exchange for the subscription receipts, 16,017,667 PMC Shares issued in exchange for the subscription receipts and a maximum of 124,561 PMC Shares issued to finders under the Subscription Receipt Financing. As such, it is anticipated that 40,990,312 post-Consolidation New Meridian Shares will be issued at the deemed price of $0.45 per share pursuant to the Amalgamation ("Resulting Issuer Shares") in exchange for these 40,990,312 PMC Shares.

A total of 14,308,432 Resulting Issuer Shares were deposited into escrow upon the completion of the Transaction, as set out in the following table.

    After Giving Effect to the Consolidation, Subscription Receipt Financing and the Transaction
Name and Municipality of Residence of Securityholder   Number of Resulting Issuer Shares Held in Escrow   Percentage of Resulting Issuer Shares Held in Escrow(1)
Feisal Somji, Proposed Chief Executive Officer and a director of the Resulting Issuer(2)(Calgary, Alberta)   1,942,100   5.2%
Marshall Farris, President and a director of the Resulting Issuer(3)(Vancouver, BC)   260,000   0.7%
Nigel Kirkwood, Proposed Chief Financial Officer of the Resulting Issuer(Vancouver, BC)   275,000   0.7%
Tom Vaillancourt, Proposed Vice President, Operations of the Resulting Issuer(Calgary, Alberta)   100,000   0.2%
Jose Sayo Garcia, Proposed Vice President, Exploration of the Resulting Issuer(Vancouver, British Columbia)   183,332   0.5%
Edward Farrauto, Proposed Director of the Resulting Issuer(Vancouver, British Columbia)   40,000   0.2%
Louis A. Clinton, Proposed Director of the Resulting Issuer(Jakarta, Indonesia)   140,000   0.3%
J. Roberto Delgado, Proposed Director of the Resulting Issuer(Makati City, Philippines)   98,000   0.2%
Andrew Harry McGucken (Vancouver, BC)   875,000   2.2%
William Dynes (Calgary, Alberta)   875,000   2.2%
Tamara Shawa (Calgary, Alberta)   250,000   0.6%
Ascenta Finance Corp. (Vancouver, BC)   4,270,000   10.6%
Metex Mineral Resources Corporation (Makati City, Philippines)   5,000,000   12.3%
  Total   14,308,432    

Notes:

  1. As at March 22, 2010, PMC had completed three tranches of the Subscription Receipt Financing by the sale of 16,017,667 Subscription Receipts for gross proceeds of $7,207,950. See "Part III - Information Concerning the Resulting Issuer - Financing" of the Filing Statement. As a result, a minimum number of 43,763,853 Common Shares to be outstanding after giving effect to the Consolidation, the Minimum Subscription Receipt Financing and the Transaction.
  2. Includes Resulting Issuer Shares owned by a company controlled by Mr. Somji. Mr. Somji and this company own a total of 1,942,100 PMC Shares, all of which are to be exchanged for an aggregate of 1,942,100 Resulting Issuer Shares. The Filing Statement incorrectly disclosed that Mr. Somji and this company own a total of 2,117,100 PMC Shares, all of which were to be exchanged for an aggregate of 2,117,100 Resulting Issuer Shares.
  3. Includes Resulting Issuer Shares owned by a company controlled by Mr. Farris.

New Meridian has received conditional acceptance of the Transaction from the Exchange. The completion of the Transaction is conditional upon the consent of the holders of 50% plus one of the outstanding New Meridian Shares, regulatory approval (including the final acceptance of the TSX Venture Exchange), receipt of third party consents and other conditions customary in a transaction of this nature. There can be no assurance that the Transaction will be completed as proposed or at all.

Harry McGucken, a director of Philippine Metals, is the President, Chief Executive Officer and a director of New Meridian. Mr. McGucken will not serve as a director or officer of the issuer resulting from the Transaction or any of its subsidiaries.

The TSX Venture Exchange has exempted the Transaction from the sponsorship requirements set out in Policy 2.2 of the TSX Venture Exchange.

Trading in New Meridian Shares and the Resulting Issuer Shares will remain halted pending final acceptance of the Transaction by the TSX Venture Exchange.

For further information on the Transaction, please see the Filing Statement found on New Meridian's profile on SEDAR at www.sedar.com.

Financial and Mineral Property Information Regarding Philippine Metals

New Meridian is also pleased to announce the following information regarding Philippine Metals. 

Financial Information Concerning Philippine Metals

The following information is derived from audited financial statements of Philippine Metals as at and for the years ended March 31, 2009 and March 31, 2008 and the unaudited interim financial statements for the nine months ended December 31, 2009. Such information is subject to all other information contained in the relevant financial statements as included in the Filing Statement.

Financial Statement Data March 31, 2008 ($) March 31, 2009 ($) December 31, 2009 ($)
       
Net loss 1,082,110 837,150 611,285
Total assets 3,876,406 3,143,253 3,370,389
Cash 1,977,670 323,572 139,053
Working capital (deficit) 1,925,241 193,887 (146,994)
Long-term liabilities Nil Nil Nil
Total expenses 1,062,967 909,924 585,440
Net loss per share - basic and diluted 0.22 0.06 0.03

Information Concerning Mineral Properties of Philippine Metals

Philippine Metals was formed under the laws of Alberta in order to acquire, explore and develop mineral properties in the Philippines.

Philippine Metals, through its subsidiaries, is operating in the Philippines with respect to three mineral projects, the Leyte Copper Project, the Malitao Project and the Dilong Project. Based on its geological environment, PMC's management believes that the Philippines has the geological potential to host mineralization.

On November 18, 2007, PMC entered into a letter of intent (the "Metex LOI") with Metex Mineral Resources Corporation ("Metex") pursuant to which PMC acquired all of Metex's right, title and interests to the Taurus Block, the Malitao Project and the Dilong Project. On November 5, 2008, PMC entered into an agreement (the "Suhi Agreement") for the purchase of Exploration Permit Applications EXPA 0059-VIII and EXPA 0096-VIII in respect of the Suhi 0059 Block and the Suhi 0096 Block, respectively.

Metex, of Makati City, Philippines, is presently the controlling shareholder of Philippine Metals. Peter Draper of Makati City, Philippines owns and controls Metex.

Leyte Copper Project

The following information concerning the Leyte Copper Project, the Malitao Project and the Dilong Project has been summarized from, and is qualified in its entirety by a report on the Leyte Copper Project dated October 22, 2009 (the "Technical Report") which is available at www.sedar.com. The disclosure in this news release and in the Filing Statement has been prepared with the consent of Daniel A. Beauchamp, one of the Technical Report Authors. Mr. Daniel A. Beauchamp, one of the Technical Report Authors, has read the definition of "qualified person" set out in NI 43-101 and certifies that by reason of his education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, he fulfills the requirements to be a "qualified person" for the purposes of NI 43-101. Mr. Beauchamp has certified in the Technical Report that he is independent of PMC (as defined in NI 43-101).

The property related to the Leyte Copper Project, comprised of the Taurus Block, the Suhi 0059 Block and the Suhi 0096 Block, are located in the northern part of Leyte Island in the East Visayas region and covers an area of 9,895 contiguous hectares and features an ophiolite hosted massive sulphide belt and a consolidated historic mining belt within one tenement. The Taurus Block of the Leyte Copper Project is Philippine Metal's only material property at this time.

The Taurus Block is approximately 12 km long and 3 km wide and covers an area of 3606.5 ha. The block hosts several zones of mineralization including Palo, Palanog-Kambalantong, Salvacion A and B, Malayahay and San Roque Prospect

Suhi 0059 Block and Suhi 0096 Block extend over a length of about 20 km to the northwest, cover 6289.44 ha, and lie to the immediate east and north of the Taurus Block. The current known zones of mineralization on Suhi 0059 Block and Suhi 0096 Block include the Caibaan, Suhi Bagacay, San and Cabalawan-Barrio Suhi areas. Exploration Permit Applications EXPA 00059-VIII and EXPA 000096-VIII have been submitted for these properties but are not yet approved.

Mineralization was known in the area prior to the 1940s. In 1936 several test pits and adits were excavated in the search for gold.

In 1961, near Caibaan, on the Suhi 0059 Block, the area was prospected and staked by prospectors. The claims were transferred to Palo Consolidated Mines Inc. on June 26, 1963. The company carried out 17 X-Ray drill holes at 10m spacing for a total of 487.7m on the property and made three shipments of ore, of approximately 1000 tons each, from three test pits. The rocks are intensely faulted at 340°NW strike 80°NE dip. One tunnel was estimated to contain 51,000 tonnes of ore grading 5.09% Cu (Fontanos, 1964). This resource was not calculated according to National Instrument 43-101 regulations and should not be relied upon.

In late 1963, Palo's claims were transferred to Marcelino Collado who carried out rock sampling of the Caibaan claims and also of the Palanog, San Jose and Bagacay areas. He reported values of 0.13-11.2% copper from these samples. He also reported 1.0 g/t Au and 78.5 g/t Ag from the sample that contained 11.2% Cu (Fortanos and Fajando, 1964).

In 1968, Francisco Garcia staked 168 claims in the Palanog area of the Taurus Block and later sold them to Minero Chemical Corporation, which later turned its rights over to Taurus Minerals and Oils Corporation ("Taurus Minerals") in early 1970. Taurus Minerals carried out geophysical and geological surveys and drilled several holes. Test pits and trenches outlined significant sulphide mineralization.

In 1968, E. Gamus and J. Lauron, geologists with the Bureau of Mines in Manila, carried out field investigations of the eight claims owned by Leyte Base Metals, at Cabalawan, in the Barrio Suhi area. They reported copper mineralization in pods and lenses or disseminated in veins, mainly as replacement along disturbed zones in the green schist underlying the property. Mineralized sulphide bodies were exposed by trenches and several lenses measuring 0.1m × 1m were encountered. The rocks are faulted by two structural systems striking northeast and northwest. In one section, the lenticular veins, sheets and pods of pyrite and chalcopyrite contain an average of 0.45% Cu. One outcrop 0.35m × 6m averages 4.48% Cu, another schist area grades 1.07% Cu and in a third area a trench grades 5.95% Cu (Gamus and Lauron, 1968).

In 1970, Taurus Minerals applied for a listing on the Philippine Stock Exchange with its main asset being a resource of 4.5 million tonnes grading 2.2% Cu at the Kambalantong area of the property (Paderes, 1970). This resource was not calculated according to National Instrument 43-101 regulations and should not be relied upon.

In early 1974, Rafael Zerda, Senior Geologist at the Bureau of Mines and Geology in Manila carried out an appraisal of the Leyte Base Metal claims of the Barrio Suhi area at the request of Argonaut Mineral Exploration Inc. in connection with its applications for a listing on the Philippine Stock Exchange and reported the presence of high grade copper mineralization in lenses and pods at the intersections of fractures in the gabbro.

He reported that the property is underlain by an undifferentiated sequence of metamorphosed sedimentary and volcanic rocks and minor gabbro that have been metamorphosed to greenschist facies. Massive pyrite and chalcopyrite with minor bornite, covellite and chalcocite occur as pods and lenticular bodies in schistose sedimentary rocks. The resource was estimated at 2,025,000 tonnes grading 2-3% Cu (Zerda, 1974). This resource was not calculated according to National Instrument 43-101 regulations and should not be relied upon.

Although the mineralization at Palo is along major faults striking northwest, at the Leyte Base Metals property the mineralization is along structures that strike northeast and east and are proposed as complementary faults to the main northwest structures. Assay results of 2.2% Cu over 4m, and a grab sample of 8.37% Cu were reported to have been obtained from a stockpile of rock visually estimated at 20 tonnes (Zerda, 1974).

In 1979 the Bureau of Mines and Geology performed an electromagnetic dip angle, ShootbackTM survey at 50m coil separation over 9075 line metres at the Curajo Copper Prospect in Palo using a Crone EM instrument (Morante and Ignacio, 1979). The depth of penetration was about 33m and several conductors striking north and northwest were identified. The authors noted that although the conductors could represent water-filled structures, several of the anomalies coincide well with mineralized outcrops, geochemical anomalies and trace mineralization in outcrop and one of them extends for 500m to the north and north-northeast.

In 1997, L. Solkoski carried out a brief field visit of the Barrio Suhi area for Homestake Mining, Canada. Although he noted ultramafic rocks, he believed that rather than being of Cyprus-type origin, the mineralization appeared to be likely of volcanogenic massive sulphide origin but was redeposited by faulting and folding. He reported results of 149-22,600 ppm Cu from 12 rocks, rock-chips and pyritic sand from stockpiled ore samples. Relatively high values of 170-580 ppb Au were obtained from three of these samples (Solkoski, 1997).

Philippine Metals cannot determine the assay methods used in performing the analyses listed in the preceding paragraphs, nor can it identify the name or location of the laboratory that undertook the assay from the historical reference source cited. For these reasons, these assay results should not be relied upon.

In 2007, Brian Lueck wrote a summary report on the Taurus Block for Metex. He reported that at Kambalantong the mineralization appears to be syngenetic, but that it had been later sheared, brecciated and steeply faulted into breccia-vein faults. The best exploration targets for high grade mineralization are the intersection of structures that are a few metres wide, up to 1.5 km long and strike 060°. He recommended a fence of ten drill holes from five collars at an azimuth of 270° and at 40m spacing, to minimum depths of 120m (Lueck, 2007b).

In 2009, Pacific Metals Canada Philippines, Inc., a subsidiary of Philippine Metals, carried out a field exploration program of geological mapping and rock and soil geochemical sampling on the Taurus Block.

The principal objective was to document and confirm the mineralization in the historical workings and to characterize the type of mineralization on the property. The geological mapping is based on field examination of five areas on the property.

A NI 43-101 report for the Leyte Project was filed on Sedar on March 25, 2010. The report states that to further define and outline zones of massive sulphide mineralization on the Leyte Copper Project it is recommended that two activities be carried out simultaneously as part of Phase 1: a detailed evaluation of one of the corridors of mineralization on the Taurus Block evaluated in the 2009 field program consisting of geophysics, follow-up geological mapping and drilling, and an airborne geophysical survey over the entire Leyte Copper Project area. Upon the return of positive results, a Phase 2 program of additional drilling is recommended.

Phase 1

The area from Kambalantong to Malayahay of the Taurus Block contains several zones of sulphide mineralization that could be further defined and outlined by a ground EM and magnetometer survey. This corridor extends over a width of 500m and a strike length of about 1500m. New conductors hosting potential mineralization should be mapped and prospected. Diamond drilling is recommended on existing and new targets for a total of 2000m of drilling in ten holes to better understand and define the extent of the mineralization. The Phase 1 drilling program details on existing targets is in the process of being finalized. The cost of this part of the work is estimated at CDN$427,000.

Once the approval of the Exploration Permits on Suhi 0059 Block and Suhi 0096 Block have been received (EXPA 00059VIII and EXPA 000096-VIII), a helicopter-borne EM and magnetometer survey should be carried out over the entire Leyte Copper Project area to explore the property at a line spacing of 100m for a total of about 1100 line kilometres. The results of the survey should be further evaluated by an independent geophysicist to determine and prioritize anomalies on the property.

The cost of this survey is estimated at CDN$613,000, of which amount CDN$223,455 is attributable to the Kambalantong-Malayahay corridor of the Taurus Block and CDN$389,545 is attributable to Suhi 0059 Block and Suhi 0096 Block.

It is presently anticipated that the survey will be conducted in respect of the Kambalantong-Malayahay corridor of the Taurus Block and, depending on the status of the application for the Exploration Permits for Suhi 0059 Block and Suhi 0096 Block, in the spring or early summer of 2010. The total cost of Phase 1 is estimated at CDN$1,040,000. 

Phase 2

Upon the return of positive and encouraging results from the Phase 1 geophysical surveys and drilling, a second round of drilling consisting of 4000m of drilling in 20 holes is recommended to further refine the zones of mineralization in the Kambalantong-Malayahay corridor of the Taurus Block and to evaluate the new targets that may have been identified in other parts of the property. The cost of Phase 2 drilling is estimated at CDN$760,000.

The total cost of Phase 1 and Phase 2 are budgeted at CDN$1,800,000.

The Taurus Block acquisition obligation is a total of $775,000 USD over 4 years ending January 31, 2011, of which $350,000 USD has been paid as at December 31, 2009. In addition a one time payment of US$1,500,000 is payable upon actual commencement of commercial mining operations on the Taurus Block and a 1.5% net smelter royalty on all recovered metals for the life of the mine.

As consideration for the Taurus EXPA under the Metex LOI, Philippine Metals issued 2,500,000 Common Shares to Metex at a value of $0.20 per share ($500,000) and agreed to pay US$100,000 to Metex upon Philippine Metals being listed on a recognized stock exchange. These Philippine Metals Shares were issued and deposited into escrow and were releasable therefrom upon approval of the Taurus EXPA by the DENR of an exploration permit in Philippine Metal's name. Exploration Permit No. EP-2009-000008-VIII was approved on April 17, 2009 in favour of Philippine Metals in respect of the Taurus Block. As a result, 2,500,000 PMC Shares were released from escrow to Metex.

Philippine Metals is current in respect of all of its obligations under the Metex LOI and the Taurus Exclusive Option other than the January 31, 2010 payment pursuant to item 2(c) above, which payment will be made upon completion of the Transaction.

Suhi 0059 Block and Suhi 0096 Block

On November 5, 2008, Philippine Metals acquired the exclusive option ("Suhi Exclusive Option") to acquire Applications for Exploration Permits No. 0059-VIII and 0096-VIII (collectively, the "Suhi EXPA") in respect of Suhi 0059 Block and Suhi 0096 Block, subject to certain terms and conditions. In consideration for the Suhi Exclusive Option, Philippine Metals is required to pay US$675,000 of which US$300,000 will be paid by the issuance of Philippine Metals shares at a deemed price of $0.80 per share. As at December 31, 2009, US$202,500 and 125,000 common shares have been paid and issued.

Philippine Metals is also required to pay US$1,500,000 to the vendor prior to the start up of any mining operations on either Suhi 0059 Block or Suhi 0096 Block and a 1.5% NSR for the life of the mine.

The Suhi Exclusive Option and the Suhi Deed of Assignment were executed on November 5, 2008. 

PMC is current in respect of all of its obligations under the Suhi Exclusive Option.

As described above, once the approval of the Exploration Permits on Suhi 0059 Block and Suhi 0096 Block have been received (EXPA 00059VIII and EXPA 000096-VIII), a helicopter-borne EM and magnetometer survey is anticipated to be carried out over the entire Leyte Copper Project area to explore the property at a line spacing of 100m for a total of about 1100 line kilometres. The results of the survey should be further evaluated by an independent geophysicist to determine and prioritize anomalies on the property.

The cost of this survey is estimated at CDN$613,000, of which amount CDN$223,455 is attributable to the Kambalantong-Malayahay corridor of the Taurus Block and CDN$389,545 is attributable to Suhi 0059 Block and Suhi 0096 Block. It is presently anticipated that the survey will be conducted in respect of the Kambalantong-Malayahay corridor of the Taurus Block and, depending on the status of the application for the Exploration Permits for Suhi 0059 Block and Suhi 0096 Block, in the spring or early summer of 2010. 

Malitao Project

The Malitao Project is located in the Calanasan municipality, Kalinga-Apayao Province, northern Luzon. Philippine Metals is in the process of finalizing an Exploration Permit Application for the Malitao Project. The property consists of 971 hectares and is predominantly a Cu-Au massive sulphide prospect interpreted as a "Manto Replacement Deposit", which is located in proximity to a large granitic batholith and a prominent dyke swarm that intersects shallow marine volcanoclastics and massive limestone.

The Malitao Project is underlain by basinal sedimentary rocks of shallow marine origin and by volcaniclastic rocks of andesitic composition. A limestone cap unconformably overlies all rocks. Extensive near-vertical dykes of diorite and andesite composition are accompanied by sulphide alteration and replacement over widths of tens of metres at the contact with the sedimentary rocks (Lueck 2007a). Although the area was explored in the 1960s and several property visits have been carried out since then, no exploration work has been carried out on the property in about 35 years. An historical chip sample reported 3.5% Cu and 0.556 g/t Au in a 93.29m long, and recent chip sampling reported 14.8-34% Cu, 1.4-26.4% Zn, 1.18-1.57 g/t Au and 303-534 g/t Ag from 27 samples (Lueck 2007a). Other historical work shows a sinuous anomaly of unknown intensity for copper in soils has been outlined over an area of about 400×800m and seven holes were drilled but there is no report of assays. Geological models of manto-type and porphyry mineralization have been proposed for the property.

Philippine Metals' obligation to purchase 100% interest in Malitao is a payment of US$75,000 upon the execution of the Malitao Deed of Assignment which has been completed and paid by Philippine Metals and then upon approval and granting by the DENR of the Exploration Permit (the "Malitao EP"), Philippine Metals will pay a total of US$550,000 as follows:

  1. US$275,000, payable upon granting of the Malitao EP;
  1. US$91,667, payable one year after the date of approval of the Malitao EP;
  1. US$91,667, payable two years after the date of approval of the Malitao EP; and
  1. US$91,666, payable three years after the date of approval of the Malitao EP.

The vendor of the Malitao property will be entitled to a Royalty of 1% of Gross Proceeds of Products. Philippine Metals will have the right to purchase 50% of the 1% Gross Proceeds of Products of AMMEC for a total amount of US$5,000,000.

As consideration for the Malitao EXPA under the Metex LOI, Philippine Metals issued 2,500,000 PMC Shares to Metex at a value of $0.20 per share ($500,000). These Philippine Metals Shares are held in escrow and are to be released to Metex upon the assignment of the rights and obligations of Metex between Metex and the vendor in favour of PMC (which was completed on July 14, 2008); and The Mines and Geosciences Bureau granting of the Malitao EP.

An exploration program and associated budget will be prepared in respect of the Malitao Project upon the grant of the Malitao EP. 

Dilong Project

The Dilong Project is a Cu-Au exploration project located in Barrio Dilong, and is also known as the Hale Mayabo Claim. PMC is in the process of finalizing an Exploration Permit Application for the Dilong Project which is approximately 285 kilometers north of Manila and about 130 kilometers north of Baguio. Historical work completed on the project includes 27 included and vertical drill holes totalling approximately 6,000m.

The property is underlain by Late Cretaceous to Paleogene volcanic and sedimentary rocks that have been intruded by dykes, stocks and plutons of diorite and granodiorite, followed by later dykes of basalt, andesite and dacite composition. Extensive faulting and fracturing have four general orientations. Porphyry copper mineralization is reported in a quartz stockwork within diorite and in nearby Cretaceous sedimentary rocks.

The Dilong Project was explored from 1970 to 1974 by geological surveys including alteration mapping, by soil, stream and biogeochemical surveys, by an induced polarization survey and 6160m of drilling in 29 holes. A resource of 45.35 million tonnes grading 0.5% Cu, 0.5 g/t Au and 0.006% Mo was estimated (Motton, 2008). This resource was not calculated according to National Instrument 43-101 regulations and should not be relied upon.

Philippine Metals' obligations to acquire 100% interest in the Dilong Project is as follows:

  1. US$2,500 per month until the Dilong EXPA application is approved; 
  1. US$25,000 upon formal and final approval of the EXPA application by the Secretary of Environment and Natural Resources (the "First Payment"). The cumulative amount of the monthly payments outlined in (a) will be applied as a deduction from the First Payment; and
  1. US$25,000 per year on each anniversary date of the First Payment up to a maximum of US$375,000. 

As at December 31, 2009, PMC paid a total of US$62,500 in monthly payments and therefore payment of the First Payment is not required.

As consideration for the Dilong EXPA, Philippine Metals issued 2,500,000 Philippine Metals Shares to Metex at a value of $0.20 per share ($500,000). These Philippine Metals Shares are held in escrow and will be released to Metex upon approval by the Department of Environment and Natural Resources of the:

  1. Assignment of the Dilong EXPA to PMC (which was completed on July 28, 2008); and
  1. The approval of an Exploration Permit in PMC's name; and

Philippine Metals is also required to:

  1. pay to Metex US$100,000 upon completion of the US$2,000,000 financing of Philippine Metals at US$0.50 per share (which fee was paid by Philippine Metals to Metex in fiscal 2008); and
  1. pay to Metex US$100,000 upon Philippine Metals being listed on a recognized stock exchange.

Under the Dilong Deed of Assignment the vendors of the Dilong Project will be entitled to a 1% Gross Smelter Royalty.

An exploration program and associated budget will be prepared in respect of the Dilong Project upon the grant of the Dilong EP.

Reader Advisory

Investors are cautioned that, except as disclosed in the Filing Statement prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of New Meridian should be considered highly speculative.

This press release does not constitute an offer to sell or solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to a U.S. Person unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Information contained in this press release was reviewed and validated by Daniel A. Beauchamp, P. Geol., MBA. Mr. Beauchamp is independent from New Meridian and Philippine Metals and is a Qualified Person as defined in NI 43-101. Please refer to the Filing Statement under the heading "Data Verification - Independent Verification" for a description of the independent verification of quality assurance and quality control program of Philippine Metals undertaken by Mr. Beauchamp.

Forward-Looking Statements

Certain statements contained in this news release may constitute forward-looking statements. These statements relate to future events or the future performance of the issuer (the "Resulting Issuer") resulting from the Transaction. All statements, other than statements of historical fact, may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "propose", "potential", "targeting", "intend", "could", "might", "should", "believe", "budgeted", "scheduled", "forecasts", and similar expressions or variations (including negative variations). These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. New Meridian and Philippine Metals believe that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon by investors as actual results may vary. These statements speak only as of the date of this news release and are expressly qualified, in their entirety, by this cautionary statement. New Meridian, Philippine Metals and the Resulting Issuer undertake no obligation to update any forward-looking statement or information to reflect information, events, results, circumstances or otherwise after the date of which such statement is made or to reflect the occurrence of unanticipated events, except as required by law.

In particular, this news release contains forward-looking statements, pertaining to the following:

  • capital expenditure programs;
  • development of resources;
  • treatment under governmental regulatory and taxation regimes;
  • expectations regarding the Resulting Issuer's ability to raise capital;
  • expenditures to be made by the Resulting Issuer to meet certain work commitments; and
  • work plans to be conducted by the Resulting Issuer.

With respect to forward-looking statements listed above and contained in this news release, management of New Meridian and Philippine Metals have made assumptions regarding, among other things:

  • the legislative and regulatory environment;
  • the impact of increasing competition;
  • the requirement to obtain certain governmental approvals;
  • unpredictable changes to the market prices for copper and other minerals;
  • that costs related to development of copper and other minerals will remain consistent with historical experiences;
  • anticipated results of exploration activities and mine development; and
  • the Resulting Issuer's ability to obtain additional financing on satisfactory terms.

The Resulting Issuer's actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth below and elsewhere in this news release:

  • volatility in the market prices for copper and other minerals;
  • changes to the legislative and regulatory environment
  • uncertainties associated with estimating resources;
  • geological, technical, drilling and processing problems;
  • construction problems regarding development of a mining operation;
  • liabilities and risks, including environmental liabilities and risks, inherent in mineral exploration, development and production operations;
  • fluctuations in currency and interest rates;
  • incorrect assessments of the value of resources;
  • unanticipated results of exploration activities;
  • competition for, among other things, capital, acquisitions of resources, undeveloped lands and skilled personnel; and
  • unpredictable weather conditions.

The Resulting Issuer's actual results could differ materially from those anticipated in these forward-looking statements as a result of these risk factors set forth above. 

New factors emerge from time to time and it is not possible for management to predict all such factors, and to assess in advance the impact of such factor on PMC, the Issuer or the Resulting Issuer's business or the extent to which any factor, or combination of factors, may cause actual results that differ from those contained in any forward looking statements or information.

Neither the NEX nor its Regulation Services Provider (as that term is defined in the policies of the NEX) accepts responsibility for the adequacy or accuracy of this release.

The TSX Venture Exchange has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • New Meridian Mining Corp.
    Harry McGucken
    President
    (403) 236-2222
    (403) 398-0693 (FAX)
    or
    Philippine Metals Corp.
    Marshall Farris
    President
    (604) 684-4743
    (604) 628-5595 (FAX)