Philex, Manila Mining near deal

Philex Mining Corp., a mining company controlled by Hong Kong’s First Pacific Co. Ltd., said Wednesday it is close to forging a joint venture agreement with Manila Mining Corp.

Philex chairman Manuel Pangilinan told reporters that the two companies had finalized the basic commercial terms of an agreement to develop the Kalayaan copper-gold project of Manila Mining. The Kalayaan mine is adjacent to Philex’s Boyongan property in Surigao del Norte province.

Pangilinan said Philex Mining would obtain a 60-percent interest in the joint venture and operate the Kalayaan project. Manila Mining will keep 40 percent.

“The basic terms have been agreed but there are some terms which our people want to review,” Pangilinan said.

Pangilinan said the joint venture partnership was advantageous to both mining companies because the two mines would achieve economies of scale.

“We have not yet signed anything with them. But I think it will be advantageous because putting two mines together will achieve economy of scale. You have a more efficient mine, lower cost of production. It would be beneficial to both,” Pangilinan said.

Pangilinan said he hopes to finalize the deal within the year.

Manila Mining said earlier it remained in talks with Philex over the possible sale of a portion of its stake in the 2,463-hectare Kalayaan project. Manila Mining has two mining lease contracts with the government in Surigao del Norte and three mineral product sharing agreements covering Surigao del Norte and Agusan del Norte province. Wholly-owned subsidiary Kalayaan Copper-Gold Resources Inc. operates the mine site.

Philex acquired full ownership of the Boyongan copper-gold project in Surigao del Norte after buying the 50 percent stake of Anglo-American Exploration BV and Anglo-American Exploration (Philippines) for $55 million. It also owns and runs the Padcal mine in Benguet province, the only remaining copper-gold project operating in the country.

Philex firm has budgeted P3 billion for capital expenditures this year, with P1.3 billion to be spent for the development of the Padcal mine.-Jenniffer B. Austria, Manila Standard Today

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