Aussie mining company spins off gold operations

RESTRUCTURING. Mining industry in the Philippines is on the upswing. INQUIRER FILE PHOTO

MANILA, Philippines—The Australia-based Mindoro Resources Ltd. is restructuring its mining business in the Philippines.

The Melbourne-based mining company said in a statement Wednesday that it was focusing on nickel project development and spinning off key gold and copper-gold assets into another publicly listed company. This way, Mindoro Resources said, it can better capitalize on the value of its assets.

Shareholders of Mindoro Resources must approve the sale of the Batangas gold projects (including Archangel and Lobo) and the Tapian an Francisco (TSF) copper-gold properties near Surigao to Red Mountain Mining Ltd. (which is focused on gold mining) in exchange for the latter’s shares as well as funding.

As part of the transaction, Red Mountain will provide a secured draw-down facility for up to some $1 million to enable Mindoro to commence drilling that would define the high-grade “feeder” structures below the Kay Tanda resource at Archangel, Batangas.

Upon completion of the transaction, Mindoro shareholders are expected to hold up to 65 percent of Red Mountain’s issued capital. Top officials of Mindoro Resources, including president and CEO Jon Dugdale, will take key management positions in Red Mountain.

Mindoro Resources said both parties are continuing with a due diligence period and may sign a binding agreement by June 15, 2012. The completion of the sale, which entails approvals from shareholders and from the Australian Securities Exchange, is expected in August 2012.