Alsons Power increases stake in firm that partly owns Tampakan gold mine

MANILA, Philippines — The Alcantara-led Alsons Power Holdings Corp. has increased to 19.99 percent its stake in mining firm Indophil Resources NL, which currently owns part of the $5.9-billion Tampakan gold copper project.

In a regulatory filing, Indophil said this transaction, which was done by way of a US$99.4-million placement agreement, would allow the mining firm to strengthen its local alliance focused on supporting the Tampakan project.

Alsons Power’s investment in Indophil is being undertaken with financial support arranged by BDO Unibank. As part of the placement, Alsons Power will also have the right to nominate two representatives to the Indophil Board.

“As a first step, Indophil will welcome Alsons’ Nicasio Alcantara to the board. Indophil has sought for some considerable time to bolster its local representation, and we are very pleased to confirm that Alcantara, a highly respected Philippine business leader, will fulfill that role and add a new dimension to board representation,” said Indophil CEO Richard Laufmann.

Indophil explained that the placement would consist of two tranches, the completion of which would allow the Alsons Group to control 19.99 percent of Indophil’s revised shares on issue, which would be 1.2 billion ordinary shares. There are 995 million shares currently on issue.

Laufmann added that the completion of the new placement, before costs, would give Indophil a cash position of approximately A$264.1 million, which he described as “a firm foundation upon which Indophil can build its continued participation in securing approvals and proceeding to construction of the world-class Tampakan copper and gold deposit.”

He further disclosed that as part of the longer-term commitment by Indophil to its Philippine investors and the Tampakan project, Indophil is likewise considering seeking an additional listing on the Philippine Stock Exchange in 2012.

Indophil Resources NL holds a 37.5-percent stake in the Tampakan Copper Gold project in South Cotabato, which is now being developed by XStrata Plc, through its local subsidiary Sagittarius Mines Inc.

The Tampakan Copper-Gold Project has been touted to be among the most attractive undeveloped long-life, large-scale and low-cost copper deposits in the world. It was discovered, and is being developed, under formal agreement (known as the Columbio FTAA) with the Philippine government.

The $5.9 billion project is expected to start production by 2016, with an expected mine life of 17 years.

The Tampakan deposit contains a 2.4-billion tonne mineral resource with an estimated 13.9 million tonnes of copper and 16.2 million ounces of gold. Production of copper and gold is estimated at 375,000 tonnes and 360,000 ounces of gold per year, respectively.

To date, more than A$300 million has been spent on exploration and development at Tampakan. Its direct contribution to the Philippine economy over the known mine-life is estimated at US$37 billion, with an estimated US$8 billion being paid in Philippine taxes and royalties. Estimated direct employment during construction is 10,000 people, with a workforce of 2,000 during the operational period.