The Pao gold prospect in N. Luzon, is an example of a high sulphidation epithermal gold system hosted in Mid-Tertiary alkaline volcanics, in the Philippine Arc. Styles of mineralization include: quartz-enargite veins, vuggy silica alteration bodies, and pervasive low grade (0.5ppm) gold mineralization, associated with kaolinite- pyrite-quartz alteration, and geochemically characterized by high As and Hg. Early magnetite-epidote-chlorite alteration linked to an unexposed granitoid is overprinted by an extensive zone of advanced argillic alteration (kaolinite-pyrite-quartz). No alunite is recorded. Important controls of mineralization include; a broad anticline intersected by axial faults, permeable pyroclastic units, and upward confinement of the alteration system by a highly impermeable, clay-rich volcanic unit. At this stratigraphic position the most important mineralization waz developed. The Pao high sulphidation system is not closely related to a stratovolcanic centre, and has formed subsequent to deformation of the volcanic field. It may, however, be related to an unexposed comagmatic intrusion.