The Villar group has acquired a 13.33-percent interest in Canadian firm Mindoro Resources Ltd., shoring up hopes that the Agata nickel project in Agusan del Norte could start production within this year.
This develops after Prime Resources Holdings Inc. (PRHI), a subsidiary of Prime Asset Ventures Inc., took steps to acquire a 68.42-percent interest in Mindoro Resources’ joint-venture partner in Agata, TVI Resources Development Philippines (TVIRD).
“We previously welcomed PRHI to the joint venture as a strong local partner and we are now pleased to also welcome PRHI as a strong shareholder in our company,” Mindoro Resources chief executive Tony Climie said in a statement.
“We believe PRHI’s purchase of Mindoro securities in the market sends a significant message of support for the Agata project and meeting our production objectives in 2014,” Climie added.
In a statement, PRHI said it had acquired some 39.6 million common shares in Mindoro Resources through a secondary trade at the Australian Securities Exchange for about $849,295 or some P33.6 million.
TVI Pacific Inc., also based in Canada, last December announced that it had executed various definitive agreements with PRHI relating to financing and investment in TVI and its indirectly held Philippine assets, including Mindoro’s Agata and Pan de Azucar projects.
These agreements included PRHI acquiring a 5-percent direct equity interest in TVI and a 68.42-percent direct equity interest in TVIRD, through which TVI holds an option to earn a 60-percent interest in Agata and Pan de Azucar.
According to TVIRD, a feasibility study completed last August suggested that Agata had “a high internal rate of return (IRR) of 187 percent, a payback within the first year of operation, and a post-tax net present value of $37.9 million.”
TVIRD also said that funds received from the issuance of shares to PHRI were expected to be used for working capital and to advance various projects, including a planned direct shipping ore project in Agata.
In 2012, Mindoro entered into joint-venture agreements with TVI to undertake a two-stage development strategy for Agata.
The first stage involves the direct shipment of ores to a buyer or buyers while the second involves the processing of ores on site.
Regarding direct shipping, TVIRD has acquired all the property needed for a road network while 90 percent of land needed for a port facility has been acquired as of October 2013.
According to TVI, the planned direct shipment ore project already had an environmental compliance certificate and the company was pursuing permits related to Agata’s environmental protection and enhancement program and the final mine rehabilitation and decommissioning plan.