Development of Anglo-Swiss miner Xstrata Plc's (XTA.LN) Tampakan copper-gold property in southern Philippines will cost up to $5.2 billion, its project partner said Wednesday.

Based on extended prefeasibility study by Sagittarius Mines, Inc., Xstrata's local unit, the initial capital outlay of $5.2 billion required for the Tampakan project would include a contingency of more than $800 million.

The project cost was initially estimated at $2 billion.

The study confirms the "world-class, low cost and long-life nature of the deposit," underpinned by a 2.2 billion ton mineral resource containing 12.8 million tons of copper and 15.2 million ounces of gold, Indophil Resources NL (IRN.AU) said in a statement.

"Based on these findings, Tampakan is a stand-out as the most realistic and attractive underdeveloped copper-gold deposit in the world," said Indophil's chief executive Richard Laufmann.

The findings would allow annual production of 340,000 tons of copper and 350,000 ounces of gold, based on a 20-year operation.

The mill recovery rate is estimated in a range of 83% to 90% for copper and 60% to 80% for gold, with a copper concentrate grade of 34% to 37%.

"The latest Tampakan findings warrant immediate commitment to the final feasibility study," Laufmann said.

Indophil owns 34.23% of Tampakan, while project manager Xstrata has a 62.5% interest in the project.

-By Rhea Sandique-Carlos, Dow Jones Newswires; 632-848-5051; rhea.sandique-carlos@dowjones.com
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