| By Donnabelle L. Gatdula (The Philippine Star) Updated October 16, 2010 12:00 AM |
MANILA, Philippines - Food-to-power conglomerate San Miguel Corp. (SMC) is eyeing the construction of a $900-million power plant to support the operation of the Tampakan copper-gold mining project in South Cotabato.
This developed as SMC made a $40-million payment to acquire a 10.1-percent stake in Australia-based Indophil Resources Inc. which, in turn, holds a 37.5-percent interest in the Tampakan project.
In its disclosure to the Australian Stock Exchange yesterday, Indophil said it has received the payment a week after announcing their share placement agreement that allowed SMC to conduct a legal and financial due diligence on an exclusive basis.
“To meet its ongoing financial commitments to the work program and related matters, Indophil sought to secure sufficient funds,” Indophil said.
Since terminating a takeover agreement with China’s Zijin Mining Group last June, Indophil has opened talks with several interested parties.
Indophil then entered into a binding exclusivity deal with SMC, valid until Jan. 10, 2011, to complete a due diligence on Indophil and decide whether to submit a proposal to take over Indophil’s entire stake in the project.
Following its entry into the Tampakan project, SMC is expected to lead in the development of energy resources – a key component in its vaunted diversification thrust – for the world-class mining venture.
“A revised development cost of $5.9 billion (compared with a previous estimate of $5.55 billion for a two-stage development of 66 metric ton per annum throughput capacity), will include the provision of $900 million for a dedicated power station,” Indophil said.
This will make the development of the Tampakan deposit the single largest foreign direct investment in a Philippine project.
Indophil CEO Richard Laufmann, meanwhile, said a mine project feasibility study has confirmed Tampakan’s potential as a world-class copper-gold project.
The Tampakan project is being undertaken by Sagittarius Mines Inc. (SMI) under a contract with the Philippine government. Project manager and global mining giant Xstrata Plc holds a 62.5 percent interest in SMI while Indophil accounts for the remaining 37.5 percent.
The Tampakan deposit, discovered in 1992, now ranks as the fifth largest known undeveloped copper-gold deposit. To date, almost $290 million has been spent on its exploration, evaluation and related commitments.
Tampakan has a global resource of 2.4 billion tons when measured at a 0.3-percent copper cut-off grade. Tampakan contains an estimated 13.5 million tons of copper and 15.8 million ounces of gold.
Over its initial 17-year mine life, annual copper production is forecast to rise to 370,000 tons and annual gold production to 360,000 ounces.
SMI said the project has the potential to become an economic driver for Mindanao, estimating the revenue stream from development of Tampakan to the Philippine economy at $37 billion over life of the mine (first 17 years) at an average contribution of one percent to gross domestic product (GDP) each year.
Total taxes to the National Government is expected to exceed $4.5 billion over the initial mine life, with royalties and taxes paid locally estimated at $1.3 billion. SMI estimates that 10,000 people would be employed during construction and more than 2,000 at the start of operations.
This developed as SMC made a $40-million payment to acquire a 10.1-percent stake in Australia-based Indophil Resources Inc. which, in turn, holds a 37.5-percent interest in the Tampakan project.
In its disclosure to the Australian Stock Exchange yesterday, Indophil said it has received the payment a week after announcing their share placement agreement that allowed SMC to conduct a legal and financial due diligence on an exclusive basis.
“To meet its ongoing financial commitments to the work program and related matters, Indophil sought to secure sufficient funds,” Indophil said.
Since terminating a takeover agreement with China’s Zijin Mining Group last June, Indophil has opened talks with several interested parties.
Indophil then entered into a binding exclusivity deal with SMC, valid until Jan. 10, 2011, to complete a due diligence on Indophil and decide whether to submit a proposal to take over Indophil’s entire stake in the project.
Following its entry into the Tampakan project, SMC is expected to lead in the development of energy resources – a key component in its vaunted diversification thrust – for the world-class mining venture.
“A revised development cost of $5.9 billion (compared with a previous estimate of $5.55 billion for a two-stage development of 66 metric ton per annum throughput capacity), will include the provision of $900 million for a dedicated power station,” Indophil said.
This will make the development of the Tampakan deposit the single largest foreign direct investment in a Philippine project.
Indophil CEO Richard Laufmann, meanwhile, said a mine project feasibility study has confirmed Tampakan’s potential as a world-class copper-gold project.
The Tampakan project is being undertaken by Sagittarius Mines Inc. (SMI) under a contract with the Philippine government. Project manager and global mining giant Xstrata Plc holds a 62.5 percent interest in SMI while Indophil accounts for the remaining 37.5 percent.
The Tampakan deposit, discovered in 1992, now ranks as the fifth largest known undeveloped copper-gold deposit. To date, almost $290 million has been spent on its exploration, evaluation and related commitments.
Tampakan has a global resource of 2.4 billion tons when measured at a 0.3-percent copper cut-off grade. Tampakan contains an estimated 13.5 million tons of copper and 15.8 million ounces of gold.
Over its initial 17-year mine life, annual copper production is forecast to rise to 370,000 tons and annual gold production to 360,000 ounces.
SMI said the project has the potential to become an economic driver for Mindanao, estimating the revenue stream from development of Tampakan to the Philippine economy at $37 billion over life of the mine (first 17 years) at an average contribution of one percent to gross domestic product (GDP) each year.
Total taxes to the National Government is expected to exceed $4.5 billion over the initial mine life, with royalties and taxes paid locally estimated at $1.3 billion. SMI estimates that 10,000 people would be employed during construction and more than 2,000 at the start of operations.
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