Unit 16A, 16th floor, Citibank Tower 8741 Paseo de Roxas, Makati City 1227

TELEFAX NOS. (632) 836-8609 (632) 856-7976

29 April 2014 THE PHILIPPINE STOCK EXCHANGE, INC. 3F Philippine Stock Exchange Plaza Ayala Triangle, Ayala Avenue Makati City

Attention: Ms. Janet Encarnacion

Head, Disclosure Department Gentlemen:

We write in reply to your letter dated 28 April 2014 regarding the letter issued by the Mines and Geosciences Bureau (“MGB”) to Marcventures Mining and Development Corporation (“MMDC”) dated 22 April 2014 concerning its mining operations in Surigao del Sur. Please find our response to your following inquiries below:

1. The date of the Company’s receipt of the MGB letter; As disclosed earlier, the Company’s subsidiary, Marcventures Mining &

Development Corp. (MMDC) received MGB’s letter dated 22 April 2014 on 23 April 2014 and the same was forwarded to the Company on 25 April 2014.

2. A copy of the MGB directive, including other relevant documents A copy of MGB’s letter dated 22 April 2014 was attached to our earlier

disclosure. Nonetheless, for your convenience, we are attaching herewith a copy of the said letter.

As we have mentioned in our disclosure dated 25 April 2014, the Company

strongly believes that it is fully compliant with existing laws and regulations as well as the terms and conditions of its MPSA based on existing permits, licenses, and approvals. Nevertheless, MMDC intends to comply with any and all additional requirements as may be required by MGB in order to immediately resolve this issue.

2

3. The status and/or effect(s) on the Company and MMDC’s mining operations in the municipalities of Carrascal, Cantilan and Madrid, Surigao del Sur as a result of the MGB directive

As a result of MGB’s directive, MMDC had to temporarily suspend extraction and hauling of minerals in the Municipalities of Carrascal, Cantilan and Madrid. However, the Company continuously maintains the mine site in a state of readiness in order to resume operations as soon as it is directed to proceed. Since MMDC is well-equipped with its own fleet of 82 dump trucks, 32 excavators and 9 bulldozers, it may resume operations at any time. The Company had likewise advised its contractors to stand-by and be ready for resumption of mining operations.

MGB’s directive has no impact on MMDC other than its temporary inability to extract, ship and export nickel ore. The other effects however, includes the temporary lay-off of MMDC’s 600 mine workers, loss of tax revenue to the Local Government Units and the Bureau of Internal Revenue, loss of contribution to the Social Development Management Program (SDMP fund) which benefits the communities where MMDC operates, and loss of royalty payments to the indigenous people.

4. The impact of the said suspension on the Company's financial

condition;

The Company’s financial condition is not affected by MGB’s directive. It is liquid and has adequate capital to sustain its operations to cover the period

of suspension and to fund its operating expenses and payables. Notably, the Company’s Audited Financial Statements for the year 2013 shows its consolidated income of P1.0 billion.

MMDC’s current Cash and Near Cash Position is about P523.0 million consisting of (1) cash on hand in the amount of P174.0 million, (2) P220.0 million representing receivables collectible within 30 days from buyers of nickel ore shipments that have already been actually delivered; and (3) P129.0 million collectible from loaded shipments where downpayments have already been made.

It is noteworthy that the Company has no outstanding loan or financial obligation other than the payables that will arise from operating expenses to maintain the mine site and minor equipment amortizations amounting to P19.0 million per month, which can easily be met by its substantial cash position.

3

5. The expected timetable of the resolution of the issues raised by MGB

MMDC is coordinating with MGB to address and resolve this matter immediately. We are highly confident that MMDC can resume its operations reasonably soon subject to the processes and procedures of MGB.

Very truly yours, Diane Madelyn C. Ching Asst. Corporate Secretary