Canadian firm Mindoro Resources Ltd. said it had renegotiated an option to acquire another 25 percent interest in the Agata nickel project in Agusan del Norte.
This means that Mindoro—through its local unit MRL Nickel Philippines Inc.—may get full equity in Agata from its local partner Minimax Mineral Exploration Corp., since it currently has a 75-percent stake in the project.
However, Mindoro said in a statement it had granted TVI Pacific Inc., also Canadian and designated operator of the planned project, an option to earn 60 percent interest in Agata.
The company said that assuming the exercise of all options by both TVI and Mindoro, Mindoro would keep 40 percent interest in the Agata project.
“Acquiring the additional 25-percent interest…represents a major milestone in our strategy to rebuild the company,” Mindoro chief executive Tony Climie said.
Under the renegotiated option agreement, MRL may purchase the remaining 25 percent in Agata in exchange for the writing off of $5.3 million that Minimax owed MRL and an upfront payment of $200,000.
Mindoro said $81,400 of this initial payment had been settled.
In addition, MRL must pay Minimax $4 million over four years provided the planned direct shipping operation (DSO) at Agata would earn a net of $1 million yearly.
If this condition will not be met, the payment of the $4 million may be made through cash flow from future processing operations.
Mindoro said the renegotiated option terms still need the approval of its board and of regulators.
“The robust economics outlined in the high iron DSO feasibility study (made public last Sept. 10) indicate a compelling investment case for this additional interest,” Climie said.
He added that exercising the option would assure Mindoro a 40-percent interest in any future nickel processing operation at Agata. Ronnel W. Domingo