Philippine Metals Inc.

Philippine Metals Inc.

September 23, 2010 14:26 ET

Philippine Metals Begins Drilling on Taurus Project

CALGARY, ALBERTA--(Marketwire - Sept. 23, 2010) - Philippine Metals Inc. ("Philippine Metals" or the "Company") (TSX VENTURE:PHI)(FRANKFURT:PM7) is pleased to announce that it has completed a ground geophysical induced polarization (IP) survey over the Kambalantong-Malayahay corridor (see news release dated June 7, 2010) on the Taurus Project. Elliott Geophysics International Pty. Ltd. ("Elliot Geophysics") based in Cannington, Australia who conducted the ground survey was tasked to complete further data analysis and 3D modeling.

Philippine Metals has now received the results from Elliot Geophysics. The modeling and pseudo sections indicate several anomalous areas of interest untested in the subsurface and sited within the Kambalantong-Malayahay corridor:

1. The Buen Suerte zone:

The 3D modeling of the IP geophysics shows a globular 400 m wide (on NW direction) by 300 m long (on NE direction) chargeability body (>20 mSec), which correlates with an outcropping gossaniferrous-disseminated sulphide bearing zone traversed by moderately spaced, sub-parallel to ladder shape, from 0.3 m to as wide as 14 m, massive sulphide bearing structures trending 330 degree with steep to moderately gentle east dips. These potentially ore-bearing structures, as currently disclosed, are open at depth. The Buen Suerte zone is the location of several historic underground production tunnels mined near surface for a few tens of meters with the potential ore-shoots left open at depth.

2. The Malayahay zone:

The Malayahay zone is represented by a metal factor anomaly of at least 700 m long by 150 m wide using a metal factor of >150 mSec/ohm-m. Metal factor anomalies represent high chargeability zones with attendant resistivity lows. Unlike Buen Suerte, the structural fabric of the >2.0% Cu bearing cross structures in Malayahay has yet to be determined, thus drill holes will be inclined both on the 50 degree and 230 degree azimuths as it is expected that the mineralization will be a combination of west dipping 330 degree trends, and north dipping 90 degree trends representing both feeders to the massive sulphides (stockwork stringer zones) and the massive sulphide mineralization itself. The Malayahay zone is represented on surface by an extensive NNW (330 degrees) trending gossaniferrous body (from L900 extending across L1600 in Malayahay) that was disclosed by several trenches, test pits, development tunnels and adits sited, mapped and sampled within the area. Assay and XRF results of the samples show elevated copper content.

Drill Progam

A drill program designed to test these anomalies has now been initiated using Indodrill Philippines Inc. ("Indodrill") out of Clark Airforce Base, Philippines. Indodrill has now mobilized to the Taurus Project area and has begun drilling.

Drilling in the identified areas within the Kambalantong-Malayahay corridor will initially require ten drill holes totaling 1,550 m with a further seven contingent holes totaling 1,200 m (2,750 m total).

Two other recently identified work areas, which have been the subject of extensive mapping and sampling, include the Salvacion Project area located immediately southeast of Kambalantong-Malayahay, and the Suhi Area where a historical inventory from two strike and dip persistent veins was quoted to have a non NI 43-101 compliant inferred resource inventory of 2.02 million tonnes with a grade of 2% - 3% Cu (Zerda, 19741).

Two priority drill holes are planned in Salvacion area for 100 m and 80 m respectively, while for the Suhi Area, an initial high-priority drill hole of 125 m and a contingent drill hole of 130 m are also planned to be drilled.

Overall the drilling program consists of:

Status Number of Holes Meters
Priority Drill Holes 13 1,855
Contingent Holes 8 1,330
Total 21 3,185

Philippine Metals' current exploration activity is initially focusing on one of several corridors of copper occurrences within the 9,895 hectare Taurus Project. The Company is still finalizing the logistics of a region-wide airborne geophysical survey over the entire Taurus Project and anticipates that several additional targets will be identified for further exploration and drilling.

The Taurus Project is located in central Philippines on the island of Leyte. The project consolidates for the first time a large ophiolitic copper province, which comprises the eastern portion of Leyte. Philippine Metals is testing this historically prolific copper area for the first time using modern exploration techniques. Leyte is the location of one of East Asia's largest copper smelters, the PASAR copper smelter, located on the west side of the island.

"This is an exciting time for Philippine Metals," stated Feisal Somji, CEO of Philippine Metals, "as we are now initiating our first drilling program in the Philippines. The geophysical survey results reveals several chargeability and total metal factor anomalies, which strongly correlates with both the surface mapping, trenching and sampling conducted recently by the Company, and the historical underground workings in the two targeted mining areas. The Company will now test these anomalies and, if successful, has the capital to expand the drilling program."

Malitao Update

The Exploration Permit Application ("EPA") process for the Malitao Project is still ongoing. The Company has been advised that a formal objection to the EPA has been filed during the permitting process. Under the provisions of an EPA as defined in the Philippines Mining Act, any person (including companies) has the ability to file an objection to an EPA. The filing of an objection is facilitated under the normal course of an EPA process whereby a person can claim to have overlapping rights to an area, which is handled through a dispute mechanism comprising the Panel of Arbitrators of the regional Mines and Geosciences Bureau (the "Panel"). The basis of the objection has been previously ruled upon by the Panel in a separate objection last year and at that time the Panel rejected the objection. Philippine Metals believes that this latest objection filed on the Malitao EPA is without merit. The Company is confident that the EPA will be granted in favor of Philippine Metals upon completion of the review by the Panel. The Company will provide a further update when it is formally advised of the timing of the Panel's review.

Investor Relations Update

Philippine Metals wishes to announce that on September 15, 2010 it entered into an investor relations agreement with Marc Andrews of San Francisco, California (the "Agreement").

Mr. Andrews possesses an extensive background in the investment industry, which includes investor relations and corporate communications consultant positions for public and private companies in the energy and mining sectors. Mr. Andrews will leverage his knowledge of and experience with the US investment community and market to enhance Philippine Metals' investor awareness, share liquidity, brand and story.

The Agreement has a term of 12-months with a 30-day termination clause after the initial six months, pursuant to which Mr. Andrews will provide investor relations services to the Company including the development of investor relations strategies relating to advertising programs and investor awareness and fostering broker and analyst interest in Philippine Metals' activities. As compensation for his services, Mr. Andrews will receive a retainer fee of USD$4,000 per month, reimbursement for related expenses and 70,000 options to purchase common shares in the capital of Philippine Metals pursuant to the terms of Philippine Metals' stock option plan with an exercise price of CAD$0.45 per common share.

Background information concerning the Taurus Project set out in this news release has been summarized from, and is qualified in its entirety by a report on the Taurus Project dated October 22, 2009 (the "Technical Report"). The Technical Report was prepared in accordance with NI 43-101 and a copy is available under the Company's SEDAR profile at

1Zerda, Rafael R. 1974: Report on the Verification and Geological Appraisal of the Leyte Base Metal Copper Claims at Barrio Suhi, Tacloban City in connection with their application for licensing and Listing in the Securities Exchange Commission. Report for the Director, thru the Chief geologist, Bureau of Mines, Manila. Internal report submitted to the Director of Mines,

William Dynes P Geol, is the qualified person, as defined in NI 43-101, whom has reviewed and verified the scientific and technical disclosures contained in this press release.

About Philippine Metals Inc.

Philippine Metals Inc. is focused on the exploration, discovery and development of highly prospective copper and copper-gold deposits in the Philippines. Based on the region's geological environment, the company's management team recognizes the country's potential for hosting large, world-class deposits of copper and copper-gold.

The Company's initial projects, Taurus, Malitao and Dilong, are examples of management's ability to source quality, highly prospective targets. The management team combines strong financial capabilities with world-class experience in mineral exploration, discovery and mine development.


Feisal Somji, Chief Executive Officer

This news release contains forward-looking information including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations and potential mineral recovery. Forward-looking information includes disclosure regarding possible future events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action, and therefore, involves inherent risks and uncertainties. When used in this news release. The words "estimated", "plan", "anticipated", "expected", "intend", believe", and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward-looking statements. For any forward-looking information given, management has assumed that the analytical results it has received are reliable, and has applied geological interpretation methodologies which are consistent with industry standards. Although management has a reasonable basis for the conclusions drawn, there can be no assurance that forward-looking statements will prove to be accurate and actual results may differ materially from those currently anticipated in such statements. Forward-looking statements included in this news release are made as of the date of this press release and the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation.

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

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