San Miguel, Indophil acquisition talks continue

KORONADAL CITY (MindaNews/29 April) — Talks between San Miguel Corp. and Indophil Resources NL continue for a possible full acquisition of the Australian firm which owns a third of the controlling equity at the massive Tampakan copper-gold project, the foreign company said on Friday.

Richard Laufmann, Indophil Resources chief executive officer and managing director, said they have not terminated discussions with San Miguel despite the expiry of their extended exclusivity agreement last February 10.

San Miguel has acquired a 10.1% stake at Indophil last October for at least $40 million, and since then signified a full takeover of the Australian company whose flagship asset is its stake in the Tampakan project.

Both companies then entered into a binding exclusivity agreement which barred Indophil Resources from talking with interested third parties until January 10, which both extended to another month.

In its first quarterly report, Indophil Resources, which owns 37.5% of the controlling equity at Sagittarius Mines Inc., the majority of which is held by global mining player Xstrata Copper, said it was also talking with other interested parties which it did not identify.

“We won’t rule out sale or partnership possibilities, but we reserve the option to focus on the genuine prospect of continuing to participate vigorously and directly in the development of the Tampakan asset,” Laufmann said.

Xstrata Copper, the world’s fourth largest copper producer, exercises management supervision at the Tampakan project, touted as the largest known undeveloped copper-gold resource in Southeast Asia.

But the development of the Tampakan project faces a stumbling block with the passage of the environmental code of South Cotabato province that bans open-pit mining, the method Sagittarius Mines will employ to extract the deposits.

With the code’s implementing rules and regulations already approved, South Cotabato Gov. Arthur Pingoy, Jr. said that he will implement the ban unless a court nullifies the ordinance or if the Sangguniang Panlalawigan lifts the ban on open-pit mining.

The Tampakan project is staunchly opposed by the local Catholic Church and faces security risks from the communist New People’s Army rebels.

Sagittarius had already submitted the Tampakan Mine Project Feasibility Study to the government even before the previous provincial government approved the environmental code.

Constancio A. Paye, Jr., regional chief of the Mines and Geosciences Bureau, recently said that personnel from the main office is still reviewing the company’s feasibility study.

To date, the MGB has found the study to be technically comprehensive, Laufmann claimed.

He also disclosed that a 150-person pioneering camp in Bong Mal Valley, Barangay Kimlawis in Kiblawan town in Davao del Sur province is near to commissioning.

The camp will facilitate logistics for current and future field work as well as form the basis of a larger camp when the construction phase of the project commences, Laufmann added.

Construction phase was earlier slated to start in 2012 while the commercial production was targeted in 2016. (Bong Sarmiento/MindaNews)