Xstrata Copper is likely acquire anytime this September 62.5 percent of the Australian firm Indophil Resources NL, which in turn holds a 40-percent stake at Sagittarius Mines, Inc., the company doing explorations in the area, said Rolando Doria, Sagittarius project coordinator.
The remaining 60 percent of Sagittarius is owned by local stakeholders, he added.
The Australian partner, however, has been providing management, technical and financial assistance to the mining venture as local stakeholders have no capability and resources yet.
The mining project straddles the towns of Tampakan in South Cotabato, Columbio in Sultan Kudarat and Kiblawan in Davao del Sur. It was resurrected in 2003 by Sagittarius from previous owner Western Mining Corp.
Tony Robbins, Indophil managing director, said that it will cost Xstrata only A$50 million to make its move, which he described as like “winning the lottery.”
The global resource estimate for the Tampakan project is two billion tons at a 0.72-percent copper equivalent, containing 11.6 million tons of copper and 14.6 million ounces of gold at 0.3 percent copper cut-off grade, said Damien Nihill a full time Sagittarius employee and member of the Australasian Institute of Mining and Metallurgy.
Xstrata’s acquisition attempt of the Tampakan project has been around since 2005.
This time last year, Xtrata Copper chief executive Mick Davis has expressed satisfaction over the way things are progressing at the Tampakan project.
Davis said in a statement that Xstrata is propped up by the prospects of the mining venture in the Southern Philippines given the quality of the deposits.
Last March, Xstrata and Indophil also strengthened their ties with the appointment to the Indophil board of directors of Xstrata executive Louis Irvine.
“He brings a wealth of mining and project finance experience to the company. Mr Irvine’s appointment strengthens the link between Indophil and Xstrata Copper. His acceptance of a seat on the Indophil board further demonstrates Xstrata’s strong interest in the development of the company’s Tampakan copper-gold project,” Indophil chairman Brian Phillips said.
The value of Indophil shares listed at the Australian Stock Exchange has reportedly been rising since late last month as time ticks in for Xstrata to exercise its option.
The expected takeover of Xstrata this month will reportedly lead to major changes among the local management staff, but a Sagittarius insider doubted. “We’re hoping the entry of Xstrata will not cause management disturbance,” said the source who requested anonymity, stressing they have been very professional in carrying out their work, especially in getting the support of the communities and the government.
Also this month, Sagittarius is expected to finish its prefeasibility study worth A$27 million but interesting development in the field is forming towards a drilling extension.
Company officials noted, however, that the prefeasibility study is on schedule and would be delivered on September 30 to the boards of Indophil and Xstrata.
Sagittarius said that evaluation program continues in the vicinity of the Tampakan deposit, and it is expected that it will be followed up with an extended drilling program later this year or early next year.
Sagittarius has been drill testing ground to the east of its Tampakan project as part of an evaluation program to identify possible sites for infrastructure placement.
Results from three of five diamond drill holes have been known.
“The drillhole results may not prove to be economic in their own right. However, the level and consistency of mineralization support the belief that there may be other significant copper-gold deposits in the Tampakan district. There is growing evidence that the district will evolve into a mineralised ‘camp,’ comparable to other world class porphyry copper deposits, and this is exciting,” said Robbins said.