Philex Gold Inc.

Philex Gold Inc.

July 09, 2008 21:00 ET

Philex Gold Inc.: Clarifying Press Release

TORONTO, ONTARIO--(Marketwire - July 9, 2008) - Philex Gold, Inc. (the "Company" or "PGI") (TSX VENTURE:PGI) has been selected by the Corporate Finance Branch of the Ontario Securities Commission (the "OSC") for review of its continuous disclosure record. As a part of this review, the Company has been requested to issue a press release in respect of certain of its previous disclosure.

The Company wishes to clarify and expand on certain previous disclosure it has made in respect of the disagreement with the results of the pre-feasibility report (the "PFS") in February 2008 from Anglo American Exploration (Philippines) B.V. ("Anglo"), the joint venture partner with Philex Gold Philippines, Inc. (PGPI), PGI's wholly-owned subsidiary in the Philippines, in respect of the Boyongan copper-gold porphyry deposit within the Mineral Production Sharing Agreement No. 149-99-XIII.

In a press release of February 22, 2008, the Company disclosed that it has different points of view from Anglo on a number of assumptions and conclusions made in the PFS. Specifically, the Company disagrees with the PFS with respect to various assumptions and conclusion therein, but have enumerated below only the more substantial disagreements.

Anglo increased the basic capital expenditure estimate by 24% to cover engineering and owners' costs and by another 25% for contingency provisions. The Company appreciates that the project's external consultants and the Anglo technical staff must be compensated, and contingency provisions for cost estimation errors should be made, but in the opinion of the Company the above amounts are excessive in the Philippine context.

It is natural for a project proponent to be conservative on metal price assumptions, and to use long term averages as compared to "current prices". However, the assumptions made in the PFS regarding metal prices are very much below current market and at the same time assume current or anticipated/inflated capital costs, thereby rendering the project uneconomic from the very start. Simply, since costs are "modern", prices should be near-modern as well.

In the PFS, Anglo assumes constant copper prices of $1.50 per pound and gold at $600 per ounce. Currently, copper is priced at $3.65 per pound and can be hedged for as long as five years for at least $2.50 per pound. At this time, gold can be hedged at approximately $950/ per ounce. The Company views it possible to protect prices higher than the $600/oz that is used in the PFS.

In respect of smelter charges, Anglo assumed treatment charges (TC) of $85/ton of copper concentrate and refining charges (RC) of $0.085/lb of copper metal. These charges are almost double the current annual terms in the Japanese Smelter Pool which are $45 TC and $0.045 RC and do not take into account any potential negotiated discounts on these amounts.

The Company has engaged Mr. Dexter Ferreira of Independent Resource Estimations cc. to provide a National Instrument 43-101 compliant Technical Report in respect of the Boyongan project. The Company expects that this will be completed by the end of the third quarter 2008. Until such time as the Company has received and filed the 43-101 report, it will not be providing technical updates on its resource properties, unless the qualified person is in a position to verify the contents of the disclosure.

The Corporate Finance Branch of the OSC has also requested that the Company amend its website in respect of the disclosure of the resource estimate included in the 43-101 Technical Report filed in August 2004 (the "2004 Report") to comply with 2.2(a) of NI 43-101. In accordance with this request, The Company hereby quotes the following excerpt taken from page 54 of the 2004 Report prepared by Michael C. Corey and Harry M. Parker and filed on SEDAR at on August 4, 2004.

"To assess the 'reasonable prospects for economic extraction' provisions in the CIM Standards on Mineral Resources and Reserves, AMEC developed generalized costs for oxide and sulphide ore types. Utilizing this cost profile AMEC created a pit shell. Table 10 provides a summation of the material contained within this shell.

Table 10: InPit Tabulation (Inferred Mineral Resource)
Equivalent Cu
Tonnes Cutoff Equivalent Cu Au
Type (t) (%) (%) (%) (g/t)
Sulphide 7,000,000 0.40 0.69 0.54 0.80
Oxide 60,000,000 0.60 1.31 0.77 1.27
Combined 67,000,000 - 1.25 0.75 1.22

References in the 2004 Technical Report to the 219 million tonne inferred resource estimate were not in accordance with the requirements of section 2.2(a) of NI 43-101 and have been removed from the Company's website.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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