Abacore seals Surigao del Sur coal mining deal
Listed holding company Abacore Capital Holdings Inc. struck a deal with Oriental Vision Mining Philippines Corp. (ORVI) to begin developing coal mines in an area spanning 3,000 hectares in Surigao del Sur, Mindanao.
Based on a stock exchange filing on Tuesday, subsidiary Abacus Coal Exploration and Development Corp. said the parties would commence an operating agreement for coal blocks 84, 85 and 86. Each block has a mining area of 1,000 hectares.
Under the agreement, ORVI will develop the coal blocks over the next six to 12 months, the disclosure showed.
“We are pleased to enter into the next phase of our partnership with ORVI that will allow us to fully unlock the strategic value of the assets that we own in Surigao del Sur,” Raul de Mesa, president and CEO of Abacore, said in the filing.
“Considering the current high prices of coal in the world market, this venture will allow [Abacore] to increase its revenue and bottom line and further strengthen its balance sheet and liquidity,” he added.
Prices of Newcastle coal have more than doubled since the start of 2022 due to an energy crisis that erupted after Russia’s invasion of Ukraine last February.
“[Abacore] is confident that ORVI will successfully and responsibly operate our coal assets given its expertise and experience in the industry. We look forward to a productive partnership that will provide long-term benefits to our stakeholders and the communities we serve,” De Mesa said.
Meanwhile, Abacore said it had received P10-million advance royalty from ORVI.
Moving forward, Abacore expects to generate revenues from its coal assets through the royalty fees ORVI will pay out. The fee was set at 8 percent of the gross selling price of coal metric per ton.
In the event that ORVI finds other minerals aside from coal during its exploration, the company will pay Abacore a royalty fee of 5 percent of the gross price per ton, the disclosure showed.
This marks the latest step in Abacore’s efforts to unlock the value of its land assets.
Last year, the company saw profits surge to P4.68 billion—reversing the P84.75-million loss in 2020—mainly on the significant revaluation of property assets in Batangas.
