Lucio Co-led Alcorn Gold Resources to tap capital market options

MANILA, Philippines—Retailer Lucio Co-led Alcorn Gold Resources Corp., a stock market favorite in the last two weeks, has signified an intention to harness capital market opportunities to revitalize itself.

In a disclosure to the Philippine Stock Exchange on Monday, Alcorn (APM) said its board has mandated boutique investment banking firm Evercore Partners as financial adviser “to study and explore capital market and corporate structure options.”

The disclosure did not provide details, only saying that Evercore was tasked to submit its recommendations to the board for approval.

Shares of APM have surged by five times since October on backdoor-listing rumors, which the company has repeatedly denied. Shares of the company has hit as 10 centavos before closing at 9.6 centavos on Monday. As of the end of September, the company’s stock price was only worth 1.8 centavos.

Stock dealers said the run-up was related to an oil exploration play although another earlier angle floated by speculators was the prospective infusion of the Co family’s other retailing businesses, such as the Alfonso brandy line. The Co family also has other retailing interests such as duty-free shops that are not folded into the publicly listed crown jewel Puregold Price Club Inc., which has attracted strong investor interest based on a consumer-oriented theme.

But Alcorn itself also has an array of oil-exploration and mining interests from which it could unlock values. Dealers said on Monday that an oil-exploration play might be possible.

In its latest annual report, Alcorn said it has been “studying possible investments in projects and in other industries that are compatible with its long-term business plans and funding position.”

At present, Alcorn has participating interest in the following oil/petroleum service contracts: 13.55 percent in SC14 (B1) in North Matinloc operated by Philodrill; 1.53 percent in SC14 (C2) West Linapacan Block, offshore Northwest Palawan operated by Pitkin Petroleum plc; 5.83 percent in SC14 (D) in a retained area block operated by Philodrill; 1.57 percent in SC6-A in North Block operated by Philodrill; 0.5 percent in SC6-A Octon Block operated by Philodrill; 2.11 percent in SC6B in Bonita operated by Philodrill; and 9.32 percent in SC51 in East Visayan Basin operated by Norasian Energy Ltd.

Aside from its interests in oil-exploration projects, Alcorn also holds mineral assets in the form of interests either as Mineral Production Sharing Agreement (MPSA) or Exploration Permit (EP), such as:

1.) MPSA for limestone area project located in Leyte. The contract area covers an aggregate of more or less 1,784 hectares located in the municipalities of Merida and Isabel. The exploration and environmental work programs are expected to end with the declaration of mining project feasibility by September 2013 or earlier.

2.) A 3-percent interest in an MPSA application for a gold project in Agusan del Sur operated by PHSAMED Mining Corp.

3.) Two approved EPs for gold and copper properties in Albay and Iloilo.

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