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GEOGRACE Resources Philippines Inc. is set to strike a partnership
with one of the world’s biggest mining companies for the
exploration of the Philippine-listed firm’s copper-rich tenement
in Masbate, a source familiar with the matter said.
The source said Geograce would close the deal
within 30 days with a South American firm that will invest an
estimated $26 million for the copper project within a 60,000-hectare
area.
“The challenge here is to speed up the process
to catch the opportunity in high metal prices in the world
market,” the source said. At present, copper is selling at $3,800
per ton.
Last year, NiHAO Mineral Resources International
Inc., a Geograce associate, signed an agreement with QNI Philippines
Inc., a local unit of mining giant BHP Billiton Ltd. for preliminary
exploration of the 7,102-hectare nickel project in the towns of
Botolan and Iba in Zambales. Under the agreement, NiHAO would
conduct a preliminary exploration and drilling program for the area,
while BHP Billiton would provide technical expertise and advice.
The accord also contains the commercial terms
for the offtake agreement, an option available to BHP Billiton for
its Yabulu nickel refinery in Queensland, Australia , one of the
world’s major facilities of its kind. The agreement will take
effect once the exploration and drilling program is concluded and
would extend for 5 years. NiHAO agreed to deliver 500,000 wet metric
tons of nickel ore a year, based on London Metal Exchange prices.
It also plans to raise P700 million through a
stock rights offering to finance the mining exploration in Zambales.
The additional capital from the planned share sale would also allow
NiHAO to venture into nickel and copper mining in Mindanao. The firm
would be working with four strategic Chinese partners for various
joint venture projects in the area.
The source said the Geograce group plans to put
up nickel smelting and processing plants in Bataan for the Zambales
mines, or within the Philippine Veterans Investment Development
Corp. (Phividec) compound in Cagayan de Oro for its mines in Misamis
Oriental. A group of Chinese investors will foot the bill for the
10,000-ton a year plant, the source said.
Besides nickel and copper, the Geograce group is
also looking into the possibility of mining iron ore and chromite,
prices of which are also climbing in the world market due to
China’s rising appetite for the minerals.
-- Likha C. Cuevas-Miel
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