Philippine mining law is primarily regulated by the Philippine Constitution, which provides that all

natural resources are owned by the State.  National laws specifically. Republic Act No. 7942 (the
“Philippine Mining Act”) and its implementing rules and regulations (“IRR”) (as contained in
Department of Environment and Natural Resources (“DENR”) Administrative Order No. 2010–21), local
ordinances and executive issuances on mining must be consistent with the Philippine Constitution. This
regulation is designed to revive the mining industry and attract more foreign investment by defining the
agreements for mineral exploitation, and provide the requirements for acquiring mining rights.

The DENR is the primary government agency responsible for the conservation, management,
development and proper use of the country’s environment and natural resources.  Line bureaus under the
DENR, particularly the Mines and Geosciences Bureau (“MGB”) and the Environmental Management
Bureau (“EMB”), are respectively responsible for the proper management and disposition of mineral
lands and mineral resources and the implementation of environmental laws.  Further, local government
units (“LGUs”) also exercise powers that affect the mining industry pursuant to their mandate to promote
the general welfare within their territorial jurisdictions, provided they do not contravene the Philippine
Constitution and the Philippine Mining Act.

Republic Act No. 6969 (the “Toxic Substance and Hazardous and Nuclear Wastes Control Act”)
regulates the importation, manufacture, processing, distribution, use and disposal of chemical substances
and mixtures. 
Republic Act No. 8749 (the “Clean Air Act”) outlines measures to reduce air pollution. This regulation is
a comprehensive air quality management policy and program which aims to achieve and maintain healthy
air for all Filipinos.

Republic Act No. 9003 (the “Ecological Solid Waste Management Act”) provides for a systematic
ecological solid waste management program. It provides the necessary policy framework, institutional
mechanisms and mandate to the local government unites (LGUs) to achieve 25% waste reduction through
establishing an integrated solid waste management plans

Republic Act No. 8371 (the “Indigenous Peoples’ Rights Act”) recognizes and promotes the rights of
indigenous communities by requiring their free, prior and informed consent (“FPIC”) in specified
instances relating to mining activities, among others. 

Republic Act No. 7076 (the “People’s Small-Scale Mining Act of 1991”) promotes viable small-scale
mining activities. “small-scale mining” is a mineral exploration that employs manual labor with simple
implements and methods and not explosives or heavy equipment.

Generally, the right to conduct mining is granted under MAs or Financial or Technical Assistance
Agreements (“FTAAs”).

MAs are agreements between a contractor and the government wherein the government grants to the
contractor the exclusive right to conduct mining operations within, but not title over, the contract area. 
Mining project feasibility study is mining feasibility study is an evaluation of a proposed mining project
to determine whether the mineral resource can be mined economically.
Certification that mining claims are subsisting
Environmental Compliance Certificate is a document issued by the DENR-EMB that allows a proposed
project to proceed to the next stage of project planning, which is the acquisition of approvals from other
government agencies and LGUs, after which the project can start implementation.
Environmental Protection and Enhancement Program the Company ensures that the impacts of its
activities are mitigated and measures are in place to certify compliance with existing laws, rules and
regulations.
Certification Precondition refers to the certification issued by the National Commission on Indigenous
Peoples (NCIP) that the site covered and affected by any application for concession, license or lease, or
production-sharing agreement does not overlap with any ancestral domain area of any indigenous cultural
community (ICC) or indigenous peoples (IP), or if the site is found to be within an ancestral domain area,
that the required FPIC was properly obtained from the ICC/IP community concerned in accordance with
specific guidelines.

FTAAs may be entered into between a contractor and the government for the large-scale exploration,
development and utilization of gold, copper, nickel, chromite, lead, zinc and other minerals, except for
cement raw materials, marble, granite, sand and gravel and construction aggregates.  Requirements for
FTAAs include:

 Location map/sketch plan.

 Two-year exploration work program.
 Posting of bond.
 Certificate of Environmental Management and Community Relations Record or Certificate of
Exemption.
 EWP.
 Approved survey plan.
 ECC.
 EPEP.
 Social Development and Management Program.
 Mining Project Feasibility Study.
 Three-year development/utilization work program.

Mining industry applies, IFRS 6 Exploration for and Evaluation of Mineral Resources has the effect of
allowing entities adopting the standard for the first time to use accounting policies for exploration and
evaluation assets that were applied before adopting IFRSs. It also modifies impairment testing of
exploration and evaluation assets by introducing different impairment indicators and allowing the
carrying amount to be tested at an aggregate level (not greater than a segment).

Exploration for and evaluation of mineral resources means the search for mineral resources, including
minerals, oil, natural gas and similar non-regenerative resources after the entity has obtained legal rights
to explore in a specific area, as well as the determination of the technical feasibility and commercial
viability of extracting the mineral resource. [IFRS 6.Appendix A]
IFRS 6 permits an entity to develop an accounting policy for recognition of exploration and evaluation
expenditures as assets without specifically considering the requirements of paragraphs 11 and 12 of IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors. [IFRS 6.9] Thus, an entity adopting
IFRS 6 may continue to use the accounting policies applied immediately before adopting the IFRS. This
includes continuing to use recognition and measurement practices that are part of those accounting
policies.

Exploration and evaluation expenditures are expenditures incurred in connection with the exploration and
evaluation of mineral resources before the technical feasibility and commercial viability of extracting a
mineral resource is demonstrable. [IFRS 6.Appendix A]

IFRS 6 effectively modifies the application of IAS 36 Impairment of Assets to exploration and evaluation
assets recognized by an entity under its accounting policy. Specifically:

 Entities recognizing exploration and evaluation assets are required to perform an impairment test
on those assets when specific facts and circumstances outlined in the standard indicate an
impairment test is required. The facts and circumstances outlined in IFRS 6 are non-exhaustive,
and are applied instead of the 'indicators of impairment' in IAS 36 [IFRS 6.19-20]
 Entities are permitted to determine an accounting policy for allocating exploration and evaluation
assets to cash-generating units or groups of CGUs. [IFRS 6.21]
 This accounting policy may result in a different allocation than might otherwise arise on applying
the requirements of IAS 36

For the presentation and disclosure. An entity treats exploration and evaluation assets as a separate class
of assets and make the disclosures required by either IAS 16 Property, Plant and Equipment or IAS 38
Intangible Assets consistent with how the assets are classified. [IFRS 6.25]

IFRS 6 requires disclosure of information that identifies and explains the amounts recognized in its
financial statements arising from the exploration for and evaluation of mineral resources, including:
[IFRS 6.23–24]

 its accounting policies for exploration and evaluation expenditures including the recognition of
exploration and evaluation assets
 the amounts of assets, liabilities, income and expense and operating and investing cash flows
arising from the exploration for and evaluation of mineral resources.