Mining Industry
By Marianne V. Go (The Philippine Star) Updated August 26, 2009 12:00 AM
MANILA, Philippines - British mining firm Metals Exploration PLC’s local subsidiary FCF Minerals Corp. has posted a P175 million bond with the Mines and Geosciences Bureau (MGB) for the conversion of its exploration permit into a financial and technical assistance agreement (FTAA).
FCF is currently exploring for gold and molybdenum in its Runruno project in Nueva Vizcaya. It reportedly plans to spend at least $208 million for the development of the project.
FCFMC has filed for a conversion of its EP into an FTAA, which application has been favorably endorsed by Environment and Natural Resources Secretary Jose L. Atienza Jr. to Malacañang for approval in March this year.
FCFMC has secured an extension of its EP up to July 31 this year.
The EP extension will automatically terminate upon the approval of the conversion of the EP to a FTAA.
Atienza said the grant of an FTAA to FCFMC would advance the revitalization program of the country’s minerals industry. If approved, FCFMC’s FTAA would be the 4th granted under the Philippine Mining Act of 1995.
Atienza said “the approval of FCFMC’s FTAA will show once more the continuing confidence of investors in the Philippines and the government’s sustained efforts to rise above difficulties, thus showing the country remains a sound proposition for investments.”
An FTAA is an agreement between the government and a contractor for large-scale exploration, development and utilization of gold, copper, nickel, lead, zinc and other minerals, except for cement raw materials, marble, granite and sand and gravel and construction aggregates.
Securing an FTAA is open to Filipinos and foreign corporations with up to 100 percent foreign equity. An FTAA has a term of 25 years, renewable for the same period upon expiration.
Atienza said the entry of FCFMC would intensify the development of the gold and molybdenum deposits in the area which the mining firm had identified in its recent exploration activities in the area.
FCFMC said it plans to start operations by the second half of this year.
FCFMC is qualified to apply for an FTAA considering that the company’s current authorized capital of P210 million or $4.468 million is way above the government’s required minimum paid-up capital of P10 million.
By Zinnia B. Dela Peña (The Philippine Star) Updated August 12, 2009 12:00 AM
MANILA, Philippines - Canadian mining firm Siga Resources Ltd. will formally file this week its application for listing on the Philippine Stock Exchange (PSE) as it aims to build a presence in the country.
In a press briefing yesterday, Siga financial consultant Anand Nagin said the company is going ahead with its plan to dual list on the PSE by way of introduction because it does not see the need to immediately raise cash. Siga, which has a mining claim in Fiji, is a publicly-traded company in the US.
Established in Nevada, Siga is a start-up, pre-exploration stage company engaged in the search for gold and related minerals.
Nagin noted that the PSE does not have enough companies with dual listing. “We’d like to create the buzz about our company. I think that the Philippines is a good fit for us as we seek a global presence,” he said.
“Despite the fact that discussions have been held with other exchanges, we have always felt that the PSE was a good marriage for us. Given today’s uncertain economic times, innovative thinking is required on all sides. Thus, the intent to dual list shows that Siga is committed to moving forward with its exploration activities in Fiji and will look for projects to participate, once dual listed, in the Philippines,” Nagin said.
Nagin said the company has held preliminary discussions with local companies for possible investment in some projects as it seeks a foothold in the Philippine mining industry. “I believe that the Philippine economy, at large, will benefit through job creation, from the projects we may participate in,” he said.
“We are prepared to move aggressively into the Philippines in all fronts. We’re branching out into the Philippine economy and looking for sites where we will get good returns,” Nagin said.
Nagin said the company’s mining project in Fiji has proven gold deposit and has been tested well and proven to be ripe for exploration.
He said the company is hopeful that the PSE will move expeditiously as possible to act on its application.
By Charlie C. Lagasca (The Philippine Star) Updated June 30, 2009 12:00 AM
BAYOMBONG, Nueva Vizcaya, Philippines — An Australian mining firm is planning to expand its exploration activities in another remote village in this mineral-rich province.
Royalco Philippines, Inc., an Australian-owned mining firm, through its local subsidiary Buena Suerte Mining is now conducting community consultations for the possibility of conducting exploration activities in Barangay Yabbi, Dupax del Norte town here covering at least 3,000 hectares.
The possibility of exploring gold and copper in Yabbi came about as the firm was still at a standstill in the Pao-Kakiduguen area in neighboring Kasibu town after a group of Church-backed anti-mining residents denied entry of their exploration equipment last year despite having an exploration permit from the government.
“We are offering people in the area of Yabbi and environs development projects, including maintenance and repair of roads, as part of our social measure projects and as a show of our sincerity to develop the area with the affected residents,” said Gemma Talapi of Royalco’s community development affairs office.
Some village officials in the area, including those to be affected in case the exploration project pushes through have also expressed support for the said exploration activities in Yabbi, saying this will help in the development of their community as the firm has been able to provide them with simple infrastructure projects.
“Various projects have been made by the firm in upland barangays in Dupax del Norte town,” said Belance village head Tino Sanchez, the municipal federation chairman of the Liga ng mga Barangay.
Joey Ayson, Royalco’s country manager, said more development projects will be provided to the residents of Yabbi, Binwangan, Macabenga, Belance, Oyao and Bitnong once their exploration permit is approved by the government’s Mines and Geosciences Bureau.
The said 3,000-hectare initial exploration area is part of Royalco’s 16,000-hectare exploration site covering parts of Muta, Kasibu and Nagtipunan town in Quirino province.
The Yabbi proposed site came as exploration activities by another mining firm, the British-owned FCF Minerals Inc. (also known as MTL Corp. or Metals Exploration) continued in Runruno, Quezon town with commercial operations foreseen to start next year.
Another firm, the Aussie-Kiwi giant OceanaGold, was on the verge of commercial operations when the global financial crisis had forced it to temporarily halt its multibillion-peso Didipio Gold-Copper project in Didipio, Kasibu.
At the time of the stoppage, the firm was also facing a legal battle with the provincial government here over unpaid local taxes.
By Des Ferriols
MANILA, Philippines – Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said inflation rate is expected to drop to as low as 1.2 percent in June, mainly due to the decline in electricity rates and the slowdown in food prices.
Tetangco told reporters that the national average inflation rate is projected to drop to 1.2 percent to 2.1 percent in June, reflecting expectations of the Bangko Sentral ng Pilipinas (BSP) for continued milder price increases.
“It’s consistent with our forecast for full-year 2009 and 2010 inflation rates that would both be within their corresponding target ranges,” Tetangco said.
According to Tetangco, the continued decline in the inflation rate in June could have been due to lower electricity rates during the month and slower price increases in certain food items and in domestic pump prices.
“The BSP will continue to monitor price developments, both domestically and in international markets, to ensure that our policy stance remains appropriate and responsive,” he said.
Although the inflation rate would drop down to low single-digit levels, Tetangco has ruled out the possibility of deflation even with the economy likely to go into recession this year.
Tetangco said inflation is heading downwards but there are still no indications that prices of basic commodities would actually start declining.
The inflation rate is a measure of increases in the prices of basic commodities. The higher the rate, the faster prices are increasing. When price increases slow down, the rate drops and when the inflation rate turns negative, it means prices have actually started declining.
But Tetangco said it is unlikely that the inflation rate would turn negative, especially with the world prices of oil starting to go up again.
“At the moment, we see inflation still trending downward, and falling to within target for both 2009 and 2010,” Tetangco said earlier. “While we have reduced our forecasts on inflation, we still don’t see a situation of deflation.”
“As such, there is room for policy to continue to be accommodative,” Tetangco added. “Our primary mandate is price stability, so monetary policy will continue to be determined by our assessment of the risks to inflation.”
According to Tetangco, the BSP is monitoring domestic and global developments to ensure its monetary policy stance is appropriate. He said officials are particularly watchful of liquidity supply.
“We’re watchful the liquidity level doesn’t become excessive,” Tetangco said. “We are also monitoring international oil price developments to see if there is any rise in speculative activity on oil and other commodities due to the expected rise in global demand.”
The BSP has so far reduced its policy rates by 175 points and monetary officials they could and would probably continue to ease monetary policies as long as inflation was coming down.
However, officials have increasingly cautioned that there are concerns over the level of liquidity in the market although the growth in money supply has slowed down to around 13 percent.
“If we can accommodate growth in the process of reducing the policy rate, we shall be accommodative,” said BSP Deputy Governor Diwa Guinigundo. “The other prong of monetary policy is of course the calibration of domestic liquidity to ensure its availability and to help in the proper functioning of the credit market.”
To the extent that the resulting liquidity would not be excessive and would be consistent with non-inflationary growth, Guinigundo said liquidity measures would be considered.
By Marianne V. Go (The Philippine Star) Updated April 06, 2009 12:00 AM
MANILA, Philippines - The “dramatically changed environment for capital projects” is presenting “a way forward” for OceanaGold (Philippines) Inc. to reactivate its stalled Didipio gold project in Barangay Didipio, municipality of Kasibu in Nueva Vizcaya.
This was the optimistic assessment of Blair Way, country president and Didipio project manager, in a briefing of Mines and Geosciences (MGB) officials last Friday regarding the current status of the mine project.
Carefully avoiding any definitive declaration regarding the status of talks regarding the refinancing of the Didipio project, Way admitted though that “we are confident that we will identify a way forward due to the dramatically changed environment for capital projects compared to what we saw in 2008.”
Way assured that “we continue to look at various possibilities for the project, but it would be too premature to rule out any option as this point.”
He vowed that “a full disclosure will be made to the public upon completion of the study.”
All Way would reveal is that “the company continues to examine strategies to resume development of the Didipio project including the effect of reduced scale and capital required to open the mine and process plant.”
Didipio, Way stressed, “remains one of the highest grade gold-copper porphyries at development stage in the world.”
The total mineral reserve of Didipio has been estimated at 34.8 million tons.
The Didipio mine site, Way assured, is being maintained and is ready to operate as soon a the necessary financing is secured.
OceanaGold had hoped to complete and secure by January this year the $185 million financing it needs to finance its continued mining operations for its Didipio copper-gold project.
OceanaGold had previously secured investment bank Stanley Morgan as advisor.
Based on advisor Stanley Morgan’s recommendations, OceanaGold was advised that it could enter into a joint venture, completely sell out or resort to borrowing to finance the continued operation of the Didipio copper-gold project.
Heavy operations at the Didipio mine site had been suspended middle of 2008 due to the lack of funding.
Way also assured the MGB officials that all legal problems it previously had with the local government and community in Nueva Ecija have been resolved, paving the way for the reactivation of the project.
Way reported that the firm currently has 49 personnel to run the Didipio camp and accommodate an 85-man security force on the site, while it also maintains a 41-personnel staff in its Makati office to continuing handling finance, accounts and regulatory compliance works and exploration staff.
Work, Way said, continues in the mine site in terms of environmental works, and maintaining and constructing the main access road and other site areas.
By Marianne V. Go (The Philippine Star) Updated April 22, 2009 12:00 AM
MANILA, Philippines - Lepanto Consolidated Mining Co.has opened the door for other interested group willing to come in and invest in its gold project after discussions with China’s Zijin Mining Group have not progressed as the former hoped it would.
During yesterday’s stockholders meeting at the Rigodon Ballroom of the Manila Peninsula, Lepanto president and chief executive officer Bryan Yap reported that up to now, the Chinese government has not given its support for Zijin’s proposed acquisition of a 20 percent interest in Lepanto’s Benguet gold-copper deposit for $70 million.
He said the Chinese government, appears to be adopting a wait-and-see stance due to the global economic downturn.
Zijin is one of the biggest gold producers in China and is listed on the stock exchange of Hong Kong Limited.
The uncompleted deal covers Far Southeast Gold Resources Inc. which is owned 60 percent by Lepanto.
Yap was quick to clarify that “nobody has walked away from the deal.” He said the memorandum of understanding (MOU) it signed with Zijin is open-ended and does not specify any deadline.
However, since the deal is still pending, Lepanto is talking to other interested parties he added.
“It’s all very preliminary,” Yap said as he refused to identify other parties that have shown interest in the project.
Meanwhile, Lepanto is projecting a P150-million net income this year on expectations of higher gold production, a foreign exchange rate of P48 to $1 and gold prices staying or even higher than $850 an ounce.
Yap said, Lepanto is targeting a production of 45,000 ounces of gold from its Teresa and Victoria mines in Benguet.
It does not intend, however, to resume it copper operations which it had suspended in November last year, Yap said, because of the low prevailing global copper prices.
Lepanto’s Victoria and Teresa mines cover 2,777 hectares with estimated ore reserves of 0.39 million ounces of gold and 16.97 million pounds of copper.
Copper prices dropped to $1.32 per pound in December 2008 from $3.98 per pound in June the same year.
(The Philippine Star) Updated April 09, 2009 12:00 AM
MANILA, Philippines - Manila Mining Corp., an affiliate of Lepanto Consolidated Mining Co., is raising its authorized capital to P3 billion from P1.8 billion to raise funds for further studies and possible mine development.
In a filing with securities regulators, Manila Mining said its geology team, having completed its exploration program, will concentrate on converting the ore resource into reserve to justify the reopening of the Placer mine in Surigao Del Norte.
Manila Mining said a total of 51 holes were drilled last year in addition to the 20 holes drilled the previous year for an aggregate depth of 15.9 kilometers.
The company was incorporated in 1949 to engage in the mining and exploration of metals. It started mining operations in 1981. Until 2000, it was producing gold bullion through a carbon-in-pulp plant. It also produced copper concentrates with its copper flotation plant from 1998 to 2001.
Manila Mining incurred a net loss of P132.04 million last year, a reversal of the P276.98 million profit reported the previous year as expenses nearly doubled to P146.8 million.
Other income amounted to P555.52 million, 64.4 percent higher than the year earlier figure of P337.9 million. This included the equivalent of $7 million that was paid by Anglo American to Manila Mining as its entry cost into the Kalayaan project. — Zinnia dela Peña
(The Philippine Star) Updated March 27, 2009 12:00 AM
MANILA, Philippines - Lepanto Consolidated Mining Co. will focus its efforts this year on its gold projects in Mankayan, Benguet as it has put on hold its copper operations in view of the sharp decline in copper prices.
“There is no immediate plan to resume copper operations. In view of the very low copper prices, the company is studying ways of making copper operations more efficient,” Lepanto said in a filing with securities regulators.
Lepanto said operations this year will be focused on the Victoria and Teresa gold projects with estimated mining tonnage to reach 525,528 averaging 1,480 tons per day.
The company said it would spend P256 million to undertake development work at the Victoria Gold project. Another P138 million has been set aside for the purchase of mining equipment.
Lepanto said funding for these will come from internally-generated cash and existing credit lines.
The company incurred a net loss of P763.3 million with the mining operations accounting for P400 million. Consolidated revenues went up slightly to P1.84 billion.
Revenues from sale of metals reached P1.72 billion compared with P1.71 billion.
Mining operations showed a loss of P400 million compared with last year’s net loss of P183 million. The loss was largely due to lower gold production and the sharp decline in the price of copper.
Copper prices peaked at $3.98 in June 2008 only to go down to $1.32 per pound in December which resulted in the negative adjustments on the copper concentrate sales amounting to P108 million as of year-end.
Silver price hit a record-high of $20.92 per ounce in March but was down to $8.88 by October. The price of gold improved though averaging $871.96 per ounce compared with the 2007 average of $697.71 per ounce.
Gold produced totaled 37,716 ounces compared with 48,918 ounces while copper production amounted to 3.54 million lbs compared with 246,386 lbs. – Zinnia dela Peña
By Marianne V. Go (The Philippine Star) Updated February 18, 2009 12:00 AM
MANILA, Philippines - Lepanto Consolidated Mining Co. is raising its authorized capital stock from P3.35 billion to P6.65 billion.
In a disclosure to the Philippine Stock Exchange (PSE), Lepanto said the planned increase its authorized capital stock will be presented to stockholders for approval during their annual meeting scheduled for April 20 this year.
Lepanto is engaged in gold bullion production and copper flotation operations.
It produces gold from its Victoria and Teresa operations, both located in Benguet.
Lepanto sells its gold bullion production to Heraeus Ltd. (Hong Kong), which is a refinery based in Hong Kong.
Its copper concentrate is sold through Seagate Minerals & Metals Inc. and Trafigura Beheer B.V. Amsterdam metal traders based in Switzerland and New Jersey, United States respectively.
Under the contract with Heraeus Ltd., Lepanto ships gold bars on a weekly basis.
Lepanto’s principal subsidiaries include Shipside, Inc., which is engaged in the hauling business; Diamond Drilling Corp. of the Philippines, which provides diamond drilling services, and Lepanto Investment and Development Corp. (LIDC) which is in the insurance business.
Lepanto, through LIDC, owns 80 percent of Diamant Boart Philippines, Inc. a manufacturer of industrial diamond tools.
By Zinnia B. Dela Peña (The Philippine Star) Updated February 12, 2009 12:00 AM
MANILA, Philippines - Philex Mining Corp., the country’s largest mining company, is raising its capitalization by P3 billion by way of a 25-percent stock dividend.
In a disclosure to the Philippine Stock Exchange, Philex said its board approved a plan to increase the firm’s authorized capital stock to P8 billion and declare a 25-percent stock dividend.
Based on the stock dividend, 32 percent of the increase in capital will be subscribed and fully paid. The number of shares to be issued pursuant to the stock dividend totals 970.4 million shares.
Philex said adjustments will be made to the number of shares reserved for the company’s stock option plan.
Last week, Philex announced it has taken full control of the Boyongan copper-gold property in Surigao del Norte after buying out its partner, the Anglo American group, for $55 million.
The acquisition was done via a share and asset purchase agreement covering the purchase by Philex of the shares of Anglo in joint venture companies Silangan Mindanao Mining Co. Inc. and Silangan Mindanao Exploration Co. Inc. and the acquisition of various assets, receivables and rights and obligations of Anglo and its local subsidiary in the project.
A pre-feasibility study conducted by Philex showed that the Boyongan copper-gold mine would have a positive net present value of $150 million and a payback of 3 1/2 years, using long-term metal prices of $2.75 per pound for copper and $700/ounce for gold.
Based on the pre-feasibility study, the mine life could extend up to 14 years at a constant millfeed rate of five million metric tons of ore a year.
The study showed that the Boyongan site had a proven mineral reserve of 65.8 million tons at 0.87 percent copper and 1.39 grams/ton gold. The company also said there was the possibility of accessing additional mineralized ground in the northwest portion of the orebody.
With the life of Philex’s mine in Padcal, Benguet set to expire in 2014, the Boyongan mine can ensure that Philex can continue mining operations for another 15 to 20 years.
Last month, Philex produced P745 million worth of metals equivalent to 752,261 dry metric tons (DMT) of copper and gold ore.
The ore yielded 6,122 DMT of copper concentrates with an average grade of 23.81 percent copper, 61.6 grams per DMT of gold and 60.03 grams per DMT of silver.
These have equivalent metal contents of 1.46 million kilograms copper, 377,400 grams gold and 367,562 grams silver.
In the nine months ending September last year, Philex reported a net profit of P3.29 billion, 18 percent lower than the previous year, due to the decline in copper sales, higher general and administrative expenses and mark-to-market losses.
By Zinnia B. Dela Peña (The Philippine Star) Updated October 09, 2008 12:00 AM
Philex Mining Corp.’s board of directors, with the exception of Social Security System (SSS) Romulo Neri, confirmed and approved the sale of 20.16 percent of the company to Hong Kong-based conglomerate First Pacific Co. Ltd. for P6.165 billion.
In a disclosure to the Philippine Stock Exchange, Philex said Neri had objected to the planned divestment, saying the block of shares should be “offered first to the state-run pension firm so that the SSS can exercise its pre-emptive rights.”
“We exercise this pre-emptive right as a matter of good governance,” Neri said. “Our action aims to protect the interest of SSS members and other Philex shareholders.”
Neri said his actions were in accordance with the instructions from the Social Security Commission, which is SSS’s highest policy-making body and is mandated to ensure the protection of the value of the investments, which were taken from the contributions of its 27 million members.
“Our goal is not to stop the deal, but for SSS to be given the opportunity to exercise this pre-emptive right,” he said, adding that the exercise of this right is stipulated under Section 39 of the Corporation Code.
“We simply request that the procedures as mandated by law are followed,” he said.
Six out of seven Philex directors present during the special meeting yesterday, gave their thumbs up to the sale of 778.44 million treasury shares to First Pacific at P7.92 per share.
SSS reportedly holds an 18.4-percent interest in the country’s biggest mining firm.
In the same meeting, the six directors approved a resolution requesting the SSS to recall the nomination of Neri as director due to his violation of his fiduciary duties.
“The board believes that such action of Director Neri is adverse to the interests of the corporation and its shareholders,” Philex said.
Philex said the six directors, including the two independent directors, who voted for the transaction, firmly believe that the transaction will be highly beneficial to the company and its shareholders.
“The corporation will generate P560.5 million more and will have cash of more than P6 billion primarily to fund the development of its Boyongan project and the exploration of its various claims and projects,” Philex said.
Philex also stressed that its management consulted external and internal legal counsel as well as its corporate secretary, and they were all of the opinion that a pre-emptive right does not apply in this case.
In a letter to the SSS, Philex chairman and chief executive officer Walter Brown pointed out that no other shareholder has come forward with a similar position as First Pacific nor has there been any desire expressed to buy shares at P7.92 which is understandable since it is possible to buy at lower prices.
The offer price represents a 10-percent premium over the acquisition cost of Philex which shares have been accumulated as part of its completed share buyback program and which are currently held in treasury.
The total consideration for the purchase will be paid in two equal tranches — the first 10.08 percent on Oct. 13, 2008 and the second 10.08 percent on or before Nov. 30.
By Zinnia B. Dela Peña (The Philippine Star) Updated October 05, 2008 12:00 AM
Hong Kong-listed conglomerate First Pacific Co. Ltd. is rapidly expanding its business portfolio in the Philippines through acquisitions in line with its strategy to enhance shareholder value and secure new investment opportunities in sectors that offer long-term value appreciation.
Fresh from its purchase of a 67.1 percent stake in Manila North Tollways Corp. through its local unit Metro Pacific Investments Corp., First Pacific just acquired a 20.16 percent stake in Philex Mining Corp., making it the single largest shareholder of the country’s biggest mining company.
“At 20 percent, that makes us the single biggest shareholder,” said Denis Lucindo, MPIC assistant vice president for investor relations group.
He said the First Pacific group is bullish on the prospects of the mining sector as metal prices continue to appreciate, driven by strong demand for gold and other precious metals.
“Right now, there are a lot of opportunities in the mining sector. Mineral prices remain strong,” Lucindo said.
First Pacific, controlling shareholder of Philippine Long Distance Telephone Co., forged Friday an agreement with Philex to buy 778.444 million common shares of the mining firm at P7.92 each share for a total of P6.165 billion.
The price represents a 10 percent premium over the acquisition cost of Philex which shares have been accumulated as part of its completed share buyback program and which are currently held in treasury.
The total consideration for the purchase will be paid in two equal tranches - the first 10.08 percent on Oct. 13, 2008 and the second 10.08 percent on or before Nov. 30.
The agreement further provides for the appointment of two directors to the Philex board upon completion of the transaction. First Pacific managing director Manuel V. Pangilinan will be nominated to take one of the two board seats.
Philex chairman Walter Brown said the entry of a strategic investor will provide Philex with a strong partner to allow it to vigorously pursue the development of the Boyongan mine and various other claims and prospects.
“That will clearly strengthen Philex’s portfolio of mining assets and, thus, cement its place as the largest and most profitable mining company in the Philippines,” Philex said.
Last week, Philex took over control of the Boyongan site by buying the 50 percent stake of its partner Anglo American Exploration (Philippines) BV for $55 million. Philex Gold Philippines Inc., which is 81-percent owned by Philex, owns the remaining half of the project.
Philex and Anglo discovered the Bongoyan deposit in 2000.
Anglo provided all the funds for exploration and completed the pre-feasibility study on the site where it discovered other mineralized centers in December 2007.
In its recent report to shareholders, First Pacific said it is also looking at mining opportunities in China aside from the Philippines.
Lucindo said the purchase is part of the group’s stategy “to create long term value for its shareholders by actively and carefully considering opportunities in the vital sectors of the Philippine economy, which include mining and port operations. The company is engaged in real estate development through Landco, health care services through Makati Medical Center and Davao Doctors, and the water business through Maynilad Water Services Inc.
“We believe that opportunities continue to exist in Asia and given the recent adverse developments in the global and regional equities markets - where asset values have been marked down - it is likely that a new window of investment opportunities is opening up. It is of course not clear how long this investment window will stay open. We will continue to review and evaluate such opportunities in accordance with our investment criteria,” Pangilinan earlier said.
By Zinnia B. Dela Peña (The Philippine Star) Updated September 13, 2008 12:00 AM
Philex Mining Corp. is selling the shares it acquired from an extended buyback program, representing 20 percent of its issued shares, to foreign strategic investors to raise funds for new mining projects and the acquisition of new equipment to beef up operations.
As part of a program to enhance shareholder value, Philex has repurchased a total of 209.6 million shares in the open market worth P1.57 billion or P7.50 each share, a premium over its closing price of P7 yesterday. The shares acquired represent 6.7 percent of Philex’s outstanding capital stock.
In a disclosure to the Philippine Stock Exchange, Philex said it is “engaged in intensive negotiations with several foreign strategic investors for the sale of these shares.”
Among these investors include the group of former Trade Minister Roberto V. Ongpin and London-based investment fund Ashmore Investment Management Ltd., who has been steadily expanding its investment portfolio from gaming and information technology to oil refining and distribution and mining as it continues to seek new platforms for growth.
“As a 20 percent block, these shares command a significant premium over our acquisition cost due to the fact that the acquiring investor can equity account the income of their investment on these shares in their financial statements,” Philex said.
Of the total shares repurchased, 46.19 million shares were acquired by Philex from Gokongwei flagship firm JG Summit Holdings Inc. and 30.02 million from its food and beverage subsidiary Universal Robina Corp. The shares bought from the Gokongwei Group account for 5.4 percent of Philex’s total issued shares.
Ashmore earlier acquired a 49-percent stake in Philex Petroleum Corp., the oil exploration arm of Philex. It likewise bought Saudi Aramco’s 40-percent stake in oil refiner and retailer Petron Corp.
Philex primarily produces copper concentrates containing copper, gold and silver, which are transported via sea freight and smelted either in Kyushu Island, Japan, in the Sanganoseki smelter of Pan Pacific Copper Co., Ltd. (PPC), a joint venture company between Nippon Mining Co. Ltd. and Mitsui Mining and Smelting Co.
It is also engaged in oil exploration projects in Palawan and in the South Sulu through its unit, Philex Petroleum Corp.
The company owns the Padcal mine in Benguet province, its only operating mine.
By Zinnia B. Dela Peña (The Philippine Star) Updated December 17, 2008 12:00 AM
Philex Mining Corp. reiterated its demand for the ouster of Social Security System (SSS) president Romulo Neri from its board of directors for allegedly violating his “fiduciary duties” to the detriment of the publicly-listed mining firm.
In a letter to SSS chairman Thelmo Cunanan dated Dec. 11, 2008, Philex chairman and chief executive officer Walter Brown insisted that Neri’s move, questioning the sale of 20 percent of the mining company to Hong Kong-based First Pacific Co. Ltd., has cost Philex at least P35.7 million.
Brown said while the deal between Philex and First Pacific went through, the top Philippine gold and copper producer claimed that it lost P31.08 million in interest cost alone and incurred over P4 million in expenses “due to Neri’s actions.”
“Clearly, the actions of Mr. Neri jeopardized a transaction that is beneficial to the corporation and its stockholders, in violation of his fiduciary duties,” Brown said.
Neri, who was caught in the ZTE-National Broadband controversy prior to his transfer to the SSS, had opposed First Pacific’s purchase of 778.44 million of Philex’s common shares, saying the shares should have been offered first to the SSS as a major stockholder owning 18 percent of the mining firm. Neri is a representative of the SSS to the Philex board.
“It is ironic that Mr. Neri’s insistence on exercising the “pre-emptive right” in order to protect SSS members is in fact prejudicial to the SSS and its members. At the time Mr. Neri made his demand, the shares were trading at P7. Today, Philex shares are trading at about P5. The SSS would thus have bought shares at a price way above market and clearly wasting SSS money amounting to more than P700 million,” Brown said on behalf of Philex’s board of directors.
On Nov. 28, First Pacific completed its acquisition of a fifth of Philex for P6.17 billion through a block sale on the Philippine Stock Exchange.
Proceeds from the sale will be used by Philex to fund exploration and development projects, including the acquisition of Anglo-American’s share in the Boyongan property in Surigao del Norte.
Neri earlier said his actions were in accordance with the instructions from the Social Security Commission, which is the pension fund’s highest policymaking body. He said his mandate was to ensure the protection of the value of the investments, which were taken from the contributions of SSS’s 27 million members.
By Zinnia B. Dela Peña (The Philippine Star) Updated July 28, 2008 12:00 AM
Benpres Holdings Corp., the investment arm of the Lopez family, is in talks with two or three private equity fund management companies for the sale of its stake in upscale property firm Rockwell Land Corp.
Benpres president and chief operating officer Angel S. Ong said the sale is in line with the group’s overall strategy to trim debt which stood at around $367 million as of end-December last year from a high of $560 million in 2002.
Aside from Rockwell, Benpres is planning to sell its 33-percent interest in Manila North Tollways Corp. (MNTC) either through a secondary offering or private placement of shares. Macquarie Securities has been appointed as financial advisor for the divestment of its stake in MNTC which is expected to raise over $100 million in fresh equity.
The group’s objective is to reduce its debt by half over a period of two years.
Majority of the original debt was used to fund investments in Bayan Telecommunications Inc. and the failed operations of its then water unit Maynilad Water Services Inc.
Ong said Benpres remains optimistic it could win approval of its creditors for its revised debt restructuring plan which had been on the table since August 2007. The updated plan calls for the restructuring of debt payments over a period of 12 years.
Benpres earlier reported that its net profit for the first quarter of this year fell 91.8 percent to only P60 million, weighed down by the weak performances of its power and tollways holding firm First Philippine Holdings Corp. and ABS-CBN Broadcasting Corp.
posted by taga ilog at 3:06 AM
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