THE country’s biggest nickel miner announced plans on Friday to purchase a tenth of NiHao Mineral Resources International Inc., which has nickel mine operations in Isabela Province in northern Philippines.
Nickel Asia Corp. (NAC), in a disclosure to the Philippine Stock Exchange, said it has signed letters of intent to purchase at least 10 percent of NiHao at P4 per share and up to 100 percent of Geogen Corp. (Geogen) for P720 million.
Geogen is the claim owner of the Isabela nickel project which has an aggregate area of 2,392 hectares located in Dinapigue, Isabela.
NiHao’s operating rights over the Isabela nickel project will be converted into a 20 percent share in the net profits of the project.
“While the nickel market is presently at a crossroads, there is no question that future prospects are bright given the global demand for nickel and other minerals,” said Martin Antonio Zamora, NAC senior vice president for Marketing and Strategic Planning.
“These investments will give NAC flexibility to adapt to the challenges and opportunities that lie ahead. In addition, our newly formed alliance with NiHao will no doubt result in synergies and open doors to more opportunities,” Zamora said.
The resource base of the Isabela project as of April 2013 stood at about 89.89 million dry metric tons at 1.2 percent nickel. Acquiring Geogen would result in a 24 percent increase in NAC’s nickel resource base in terms of DMT, which stood at 287 million DMT at 1.27 percent nickel as of December 2013.
Under the terms of the deal, NiHao will also grant NAC the sole and exclusive preference and priority to explore, operate, and develop the mining claims of the former and its subsidiaries, including the Mina Tierra Gracia in Botolan and Iba, Zambales; Bountiful Geomines in Opol and Manticao, Misamis Oriental; Masbate 13 Philippines, Inc. in Milagros and Mandaon, Masbate.
“If NAC proceeds to explore, operate, and develop the aforementioned properties, NiHao and/or its subsidiary, as applicable, will likewise be granted the same terms as that of the Isabela Nickel Project,” NAC said.
NAC, the Philippines’ largest producer of nickel ore, considers this transaction an important milestone of its growth.
NAC operates four nickel mines, from which it shipped and delivered 17.8 million wet metric tons in 2014. It also has minority interests in two processing facilities, namely the Taganito and Coral Bay HPAL plants.