MANILA, Philippines (UDPATE) - Top miner Philex Mining Corp. estimates its Silangan Project, containing the Boyongan-Bayugo deposit, in southern Surigao province has gold and copper reserve worth at least $22 billion.

Philex said Boyongan-Bayugo contained 5 billion pounds of copper and 9 million ounces of gold, at a cut-off grade of 0.5% Cueq. The cut-off grade is based on $2.75 for copper and $900 for gold and varying recoveries according to ore types established following the metallurgical test works.

The findings were included in a recently completed independent mineral resource estimate by SRK Perth, Australia for the project, which is managed by Philex's wholly-owned unit Silangan Mindanao Mining Co. Inc.

The study was based on results from more than 80,000 meters (263,000 feet) of drilling by Philex by June 2010.

The project is adjacent to the Kalayaan copper-gold prospect in the southern Mindanao region, which Philex plans to explore with partner Manila Mining Corp.

"We are excited about the Silangan project and the prospects of further exploration into the Kalayaan tenement," Philex Chairman Manuel Pangilinan, said in the statement.

"We estimate that the cost for developing the Silangan project will be in the region of $1 billion over a period of three years," he said. "It will be a significant project and will probably be one of the most important for Mindanao."

Pangilinan said the project would generate employment in the area both during the development phase and throughout its mine life.

“We also expect that the roads, schools and hospitals and other infrastructure associated with the Silangan Project will benefit directly the residents of Surigao."

The Philippines, which sits on about $1 trillion worth of mineral deposits, expects mining investments this year to hit a new peak of $1.4 billion since the government further opened up the sector in 2005. The estimate is up 40% from an initial investment forecast this year. - With a report from Reuters