Mining firm repays $1.3M promissory notes
MANILA, Philippines—MBMI Resources Inc., which is scaling back some of its activities in the Philippines following the cancellation of its large-scale mining contract with government, has repaid $1.3 million in promissory notes related to a loan made on July 31, 2009.
In a disclosure to the TSX Venture Exchange in Canada, which caters to early stage companies, the Canadian miner said that it would not proceed with the previously announced transaction wherein part of the promissory notes would have been exchanged for 10 percent secured convertible debentures.
MBMI, which operates the Rio Tuba nickel mine in Palawan, announced last April 19 that the Office of the President of the Philippines had cancelled the consolidated Financial or Technical Assistance Agreement (FTAA) with MBMI affiliates over several properties in Palawan.
The decision, MBMI said, was made in connection with a case filed by Redmont Consolidated Mines Corp., which has questioned the basis for granting the FTAA.
FTAAs allow for full foreign ownership of large-scale mining projects in order to attract globally competitive investors to the capital-intensive and politically charged mining industry.
MBMI said it has received legal advice that the decision contradicted legal actions “of a similar nature” previously settled by the Supreme Court of the Philippines. MBMI is appealing the decision.
In the meantime, the company said it has started scaling back “non-essential activities” and would continue activities conforming to Philippine law while defending its rights and legally issued permits.
The cancellation of the consolidated FTAAs came shortly after MBMI started a drilling program at its Alpha property in Palawan to confirm data needed to expand and define priority areas for continued mining. Earlier exploration activities identified accessible high-grade, exposed nickel and chrome zones within the 3,200-hectare property.
The FTAAs of MBMI’s affiliates were signed upon the authority of the President of the Philippines on April 12 last year and were registered with the Department of Environment and Natural Resources on May 31, 2010.
The same were formally issued on June 2, 2010, to affiliates of MBMI, Narra Nickel Mining & Development Corp., Tesoro Mining and Development Inc., and McArthur Nickel Mining.
The consolidated FTAA for MBMI’s affiliates cover the Alpha, Bethlehem and Rio Tuba properties, all in Palawan.
Other FTAAs approved by the Philippine government includes one for the 27,945-hectare Tampakan gold-copper project in southern Mindanao. The project is controlled by Swiss firm Xstrata Plc through local unit Sagittarius Mines Inc.
There are also FTAAs with Filipino company Agusan Petroleum & Mining Corp. for a 46,052-ha. iron and copper project in Occidental Mindoro; Australian OceanaGold Corp. for the 19,363-hectare Didipio project in Nueva Vizcaya; FCF Minerals Corp. (FCFMC) and Australian partner Metals Exploration Plc. for the 3,091-hectare Runruno gold-molybdenum project in Nueva Vizcaya; and Altamina Exploration and Resources, Inc. for various magnetite sand properties in Luzon.
The Philippines aims to accumulate $18 billion in mining investments from 2004 to 2016.
