GENERAL SANTOS CITY (MindaNews/31 May)—Security risks did not deter officials of a major Chinese mining firm from visiting the mines development site of the Tampakan copper and gold project in which they have shown interest, giving hints it could only be a matter of time before the firm actually obtains a sizeable equity of the project.
Top executives of Zijin Mining Group Co. Ltd were recently given a briefing and toured around the site to help them understand better the project, John B. Arnaldo, Sagittarius Mines, Inc. corporate communications manager, said.
“The top SMI management welcomed them,” said Arnaldo on Monday when asked if the visit of Zijin would mean its impending entry in Sagittarius, which is controlled by Xstrata Copper, the world’s fourth largest producer of the same mineral.
Zijin is China’s biggest copper producer.
“The site visit was part of Zijin’s due diligence, they’re doing the right thing,” he added.
The Tampakan project, which straddles the towns of Tampakan in South Cotabato, Columbio in Sultan Kudarat and Kiblawan in Davao del Sur has been adopted by the Regional Development Council and the Regional Mineral Development Council as Southwestern Mindanao’s flagship project.
But it is facing stiff opposition from the local Catholic Church and the communist New People’s Army, the latter twice launching violent attacks against the company since 2008.
Zijin’s entry into the Tampakan project, if ever, would be via the interest of Australian firm Indophil Resources NL, which owns 37.5% of Sagittarius’ 40% controlling equity in the Tampakan project. The rest of the 40% is held by Xstrata Copper.
The 60% non-controlling equity shareholders of Sagittarius are the Tampakan Mining Corp. and Southcot Mining Corp. (known as the Tampakan Group of Companies).
Zijin Mining has set a July 9 deadline for its A$1.28 cash offer per Indophil share.
In a recent statement, the Indophil Directors noted that the takeover process is taking longer than originally anticipated, largely due to the extended process required of Zijin in obtaining the necessary approvals from Chinese regulatory authorities.
Richard Laufmann, Indophil chief executive officer, said that based on the company’s ongoing communications with Zijin, it is clear the Chinese miner remains fully committed to successfully completing the transaction.
Laufmann expressed optimism the site visit familiarization three weeks ago will lead to Zijin obtaining the necessary approvals from the Chinese regulatory authorities.
He said the site visit provided officials with the opportunity to discuss the project with various Philippine government representative groups, local community representatives, local project staff and Xstrata as lead manager for the world-class Tampakan copper-gold project.
“I appreciate that Indophil shareholders have shown considerable patience to date. I am confident that all parties are focused on obtaining the required approvals and successfully completing the transaction, which values Indophil at approximately A$545 million,” Laufmann said.
Accordingly, Indophil’s directors continue to unanimously recommend that Indophil shareholders accept the Zijin offer, in the absence of a superior proposal.
In April, Sagittarius confirmed it has delivered the Mining Project Feasibility Study, which was undertaken at a value of U$74 million, for the Tampakan project to the Philippine government.
Based on the company’s latest resource estimates, the Tampakan project involves 2.4 billion tons of minerals, containing 13.5 million tons of copper and 15.8 million ounces of gold. It is touted as the largest undeveloped copper deposit in Southeast Asia. (MindaNews)