Climax Mining Ltd has secured a permit to operate its $US100 million ($A131 million) Dinkidi copper project in the Philippines.
It is the second Australian mining company to to be given permission to develop a project in the country.
The junior explorer's permit came as part of a push by the Philippines government to attract foreign money back into the country.
The government's new attitude to mining was confirmed earlier this year when the supreme court in the Philippines ruled that foreign companies could own up to 100 per cent of mines - legislation that had been on hold since 1995.
Lafayette Mining was the first Australian company to test the theory and poured first gold from its Rapu Rapu mine in July this year.
Climax hopes to follow in its footsteps by 2007.
It has completed a revamped feasibility study taking into account industry wide increases in the cost of developing and running a mine.
Chairman of Climax, James Askew said the company was fortunate to take advantage of the lower cost structure in Asia.
"In Asia, most costs are less than most other places and we have captured the local cost structure," Askew said in Manila.
The company is still considering the best way to mine the Dinkidi project, either with an open pit mine or using block caving method.
While block caving is a cheaper method it also has higher safety risks and Askew said it was more likely Climax would go ahead with an open cut mine.
Once it comes online the project will initially produce 160,000 ounces of gold equivalent, with plans to increase this to 200,000 early on in the life of the mine.
Operating costs are forecast at around $US178 an ounce but Askew said Climax was looking at ways to reduce the cost and increase profit margins.
Financing the project is at the top of Climax's to-do list and the company is in advanced discussions with banks.
The response so far had been pleasing and Askew expected to close the funding by the end of the year.
Wary of not putting all its eggs in one basket, Climax has a portfolio of other exploration assets, but intends to keep its focus on the Philippines.
Source: AAP NewsWire
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