Global Ferronickel buys 90% of Ipilan mine for $50M


NICKEL miner Global Ferronickel Holdings Inc. has acquired 90-percent of Ipilan mine in Palawan after buying Southeast Palawan Nickel Ventures Inc. (SPNV) for $50 million.

The acquisition is part of Global Ferronickel’s vision to grow the company and its operations ahead of expectations of improved demand for nickel starting later this year.

Dante Bravo, Global Ferronickel’s newly appointed president and chief executive officer, said in a briefing over the weekend that the 2,835-hectare Ipilan mine in southern Palawan is projected to generate an additional 3 million wet metric tons (WMT) of medium to high grade nickel ore per year, increasing annual production by about 50 percent.

“This is going to give the company full-year operations compared to the six- to seven-month operations currently, which is going to give us 50-percent volume per year,” Bravo said.

“There’s a shortage of nickel, ferronickel and the others. We believe that the price of nickel will be up and recover immediately in the next six months, unlike other commodities like metal. Now, nickel price is down but there is a shortage of nickel, and only the Philippines is supplying China. So we see a lot of opportunities,” he added.

At present, the third largest nickel miner is primarily exporting its products mostly to China (90 percent) and the rest to Australia.

Bravo said the $50-million acquisition price of SPNV will be generally funded by the internal funds of Global Ferronickel subsidiary Platinum Group Metals Corp. (PGMC), and “will not be dependent on the follow-on offering” expected of them after the group listed on the stock exchange via backdoor listing.

“We are very profitable even if the commodities and capital markets are down. We still continue with our development program with or without the follow-on offering,” Bravo said.

He said the transaction consists of a deferred payment arrangement where Global Ferronickel will pay via internally generated funds and later from the funds raised from the follow-on offering.

“The reason we did a backdoor listing or entered the public is to access the capital markets and grow our investor base. We are capable of funding our own expansion program,” Bravo said.

A follow-on offering is required of a firm that debuted in the stock market via backdoor listing but not more than one year after the listing date. Backdoor listing occurs when a private company acquires a listed company, usually small and dormant, and the operations of both firms are consolidated for the buying company to enter the stock market.

The Ipilan mine operations under Global Ferronickel may start next year, Bravo said.

Aside from the Ipilan mine, the company has 4,376 hectares of reserves in its CASA Surigao del Norte mine, of which only 217 hectares have so far been exploited.

From executive vice president and director, Bravo was appointed president and CEO for his expertise in nickel mining. He replaced Joseph Sy who is now Global Ferronickel’s chairman.


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