Indophil Resources NL of Australia is considering disposing of its mining exploration projects to focus on the Tampakan copper-gold project where it has a minority stake.
“Given the issuance of EO79 (an executive order on mining policy reforms) by the Philippine government and subsequent developments, coupled with the company’s emphasis on developing the Tampakan project, the group is considering a range of options, including divestment of these non-Tampakan assets,” Indophil said in a report to the Australian Securities Exchange.
Non-Tampakan projects of Indophil include the Itogon Gold Project in Northern Luzon, Manat Gold Project in Eastern Mindanao, and the Buda and Mt. Kinabalin projects in Central Mindanao.
Indophil said drilling and testing at Itogon over the past year had not yielded significant copper or gold findings so far. The company had applied for the renewal/conversion of its Mining Lease Contract for Itogon ahead of the expiry date of the initial 25-year term on Sept. 28, 2012. It may be recalled that on March 18, 2013, the government formally ended a long-running moratorium on the processing and renewal of applications.
On the Manat Gold Project, where the Indophil group holds a 25-percent interest, the Declaration of Mining Project Feasibility has been submitted to the Mines and Geosciences Bureau. The document is under review, Indophil said.
In Central Mindanao, the Indophil group holds three tenement applications in the Buda area as well as a joint venture interest with Freeport McMoRan over two blocks of tenement applications at Mt. Kinabalin and Buda.
“Following the issuance of EO79 by the Philippine government and the changes in the MGB approach to permitting matters, these applications were denied as part of an industry-wide policy change. After due consideration and consultation with Freeport McMoRan, the group has opted not to pursue the applications,” Indophil said.
Indophil and Alsons Power Holdings Corp. (APHC), which is controlled by the Alsons Group, completed last year a $99.361-million placement deal. APHC’s investment was undertaken with financial support arranged by BDO Unibank. “The funds raised under the placement will be used for the primary purpose of advancing the Tampakan Project,” Indophil said.
On Tampakan, where Indophil has a 37.5-percent stake, the Australian miner said it had continued to work closely with operating company Sagittarius Mines Inc. to find a resolution to both the challenges in getting permits and the ongoing ban on open pit mining in South Cotabato, one of the host provinces. “It is believed that these issues can be resolved,” Indophil said.
Xstrata plc, which is in a pending merger with Glencore International Plc, holds control of Tampakan through Xstrata Copper. Indophil said the pending Glencore acquisition of Xstrata was one of the largest global resource transactions ever undertaken and it would have implications on the company.