Wednesday, November 24, 2010

San Miguel considering buying 100% of Indophil

Business World Online
Posted on 11:57 PM, November 24, 2010

CONGLOMERATE San Miguel Corp. is looking at acquiring 100% of an Australian mining firm with a stake in the $5.2-billion Tampakan copper-gold project in Mindanao.
San Miguel, said company President Ramon S. Ang, was currently conducting due diligence on Indophil Resouces NL, where it already has a 10.1% stake.
"We already acquired 10% and we have an agreement until January to do due diligence. If everything is fine, we’ll have to do a tender offer to buy 100%," Mr. Ang told reporters.
San Miguel last month announced that it was purchasing the 10.1% stake in Indophil for $40 million. The terms included an exclusivity period that will expire on Jan. 10, 2011.
"After buying 100% of Indophil, we have to talk to Xstrata," Mr. Ang said.
Indophil a owns a 37.5% in Tampakan owner Sagittarius Mines, Inc. The majority stakeholder of the Tampakan project in South Cotabato is Xstrata Copper, which has a 62.5% share.
The Tampakan mine is considered Southeast Asia’s largest undeveloped copper-gold prospect. It is estimated to contain 13.5 million tons of copper and 15.8 million ounces of gold, at a grade of 0.6% copper and 0.2 grams per ton of gold.
Listed as a priority project by the government, it is scheduled to start production in 2016. An open pit mining ban ordered by South Cotabato provincial officials, however, could prevent it from taking off.
The national government is currently working to have the ban repealed.
San Miguel has diversified from its slow but stable core businesses of food and beverages into high-growth sectors like power, infrastructure and telecommunications.
Sought for comment, First Grade Holdings, Inc. managing director Astro C. del Castillo, said: "I am not surprised because San Miguel continues to be aggressive in expansion."
"Given the war chest of San Miguel, they want majority control," Mr. del Castillo said in a phone interview, adding that current attractiveness of the mining sector -- world prices have been rising -- was also probably and incentive for the diversifying conglomerate.
San Miguel shares closed P5.20 lower at P117.80 each yesterday. -- Neil Jerome C. Morales with a report from Reuters

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