Mount Ridley Mines has put its foot on a Filipino gold project close to Medusa Mining’s prodigious Co-O mine.

Mount Ridley (ASX:MRD) announced today it would buy Singapore’s Prometheus Developments, which owns the rights to a high-grade epithermal gold project on the Filipino island of Mindanao.

Epithermal gold is usually found in high-grade, economic deposits at shallow depths — and hence is often easily mined.

The project, known as “Dilwalwal”, is on the eastern side of the island, 80km south of ASX-listed Medusa’s Co-O gold mine.

Co-O is the second biggest primary gold producer in the Philippines, giving up 776,000 ounces of gold in the past ten years.

Medusa’s shares have jumped from 30c in October as high as 51c in January — giving the company a market cap of $87 million.

Mount Ridley shares have also been on a steady rise over the past six months, gaining about 160 per cent since July. The shares were trading at 1.3c on Friday, giving the company a $20 million market cap.

Under the deal, Mount Ridley will issue 1.59 billion shares for Prometheus, which has rights to 80 per cent of three mining tenements at the Dilwalwal site.

About 2.7 million ounces of gold have been dug up by local “artisanal” miners over the past 30 years.

However the artisanal workings have previously caused some environmental contamination, which Prometheus has been working to remedy with the government over the past 12 months.

“The Philippine government has been very clear in its desire to improve working and living standards in the area and bring mining practices in line with modern day expectations,” said Prometheus co-founder Kabir Osman, a mining engineer who will join Mount Ridley as Managing Director under the deal.

“We see our role as not only conducting responsible exploration and mining activities but ensuring the community and the Phillipine government share in the growth of Dilwalwal,” Mr Osman said.

“More specifically our community programs will focus on more immediate needs such as employment, health, clean drinking water and education.”

Dilwalwal has only 21 existing diamond drilling holes dating back to 2006. Prometheus is now planning a modern diamond drilling program to confirm high-grade mineralisation encountered in the earlier drilling.

Recent rock chip sampling completed by the company returned grades of up to 42 grams of gold per tonne.

Anything above 5 grams per tonne is considered high grade.

The acquisition is subject to shareholder approval at a meeting scheduled for late March and a capital raising.


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