Monday, March 24, 2008 [ manilatimes.net ]
GEOGRACE Resources Philippines Inc. is set to strike a partnership with one of the world’s biggest mining companies for the exploration of the Philippine-listed firm’s copper-rich tenement in Masbate, a source familiar with the matter said.
The source said Geograce would close the deal within 30 days with a South American firm that will invest an estimated $26 million for the copper project within a 60,000-hectare area.
“The challenge here is to speed up the process to catch the opportunity in high metal prices in the world market,” the source said. At present, copper is selling at $3,800 per ton.
Last year, NiHAO Mineral Resources International Inc., a Geograce associate, signed an agreement with QNI Philippines Inc., a local unit of mining giant BHP Billiton Ltd. for preliminary exploration of the 7,102-hectare nickel project in the towns of Botolan and Iba in Zambales. Under the agreement, NiHAO would conduct a preliminary exploration and drilling program for the area, while BHP Billiton would provide technical expertise and advice.
The accord also contains the commercial terms for the offtake agreement, an option available to BHP Billiton for its Yabulu nickel refinery in Queensland, Australia , one of the world’s major facilities of its kind. The agreement will take effect once the exploration and drilling program is concluded and would extend for 5 years. NiHAO agreed to deliver 500,000 wet metric tons of nickel ore a year, based on London Metal Exchange prices.
It also plans to raise P700 million through a stock rights offering to finance the mining exploration in Zambales. The additional capital from the planned share sale would also allow NiHAO to venture into nickel and copper mining in Mindanao. The firm would be working with four strategic Chinese partners for various joint venture projects in the area.
The source said the Geograce group plans to put up nickel smelting and processing plants in Bataan for the Zambales mines, or within the Philippine Veterans Investment Development Corp. (Phividec) compound in Cagayan de Oro for its mines in Misamis Oriental. A group of Chinese investors will foot the bill for the 10,000-ton a year plant, the source said.
Besides nickel and copper, the Geograce group is also looking into the possibility of mining iron ore and chromite, prices of which are also climbing in the world market due to China’s rising appetite for the minerals.
-- Likha C. Cuevas-Miel
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