Indophil announced this development Friday after Brisbane, Australia-based Xstrata Queensland Limited (Xstrata Copper) formally exercised its option on Thursday to acquire the 62.5-percent controlling interest of the world-class Tampakan mining project.
"Indophil and Xstrata Copper will now work through a period of transition with completion of the exercise and management handover of the project to occur on 30 March 2007," Gavan Collery, Indophil corporate affairs manager, said in a statement.
Xstrata Copper, a subsidiary of Xstrata PLC of Switzerland, had forged an options agreement with Indophil that would allow Xstrata to acquire the majority interest of the Tampakan project.
Indophil previously holds 95 percent interest of the project while its local partner Alsons Corporation owns the remaining five percent.
Collery said that with Xstrata Copper's entry into the Tampakan project, the
new beneficial ownership interests in the project are held by Xstrata at 62.5 percent, Indophil at 32.5 percent and Alsons at five percent.
He said the original holders of the project's mining rights — Tampakan Mining Corporation and Southcot Mining Corporation/Tampakan Group of Companies – were classified as B class shareholders with "limited voting and capped dividend rights."
Tony Robbins, Indophil managing director, declared Xstrata's decision as a major step towards their goal to advance the continuing preparations for the projected start of the mining operations within the next two years.
"Indophil is pleased that Xstrata, one of the world's leading diversified mining groups, has taken a direct involvement in what is one of the world's most exciting copper-gold projects. This is a great step forward for the project, Indophil shareholders and all other stakeholders in the Tampakan project," he said.
Charlie Sartain, Xstrata Copper chief executive, said the company decided to exercise its option to acquire the Tampakan project following a review of the pre-feasibility study report earlier submitted by Indophil.
Last November 1, Xstrata initially signified to fund further works that it considered necessary to determine whether or not to exercise its option.
"The decision to solely fund additional work was a result of the project's increase in scale, complexity and potential viability," he noted in a separate statement.
The pre-feasibility study, which was completed last September, was funded and managed by Indophil and its local arm Sagittarius Mines Inc. (SMI). Indophil so far invested A$27 million in the project.
According to Indophil's pre-feasibility study, the Tampakan resource reaches at least two billion tons containing 11.6 million tones of copper and 14.6million ounces of gold at a 0.3 percent copper cut-off grade.
The Tampakan resource, which also covers portions of Columbio town in Sultan Kudarat and Kiblawan in Davao del Sur, reportedly represents one of the largest undeveloped copper-gold deposits in the South East Asia and Western Pacific regions.
Sartrain said the acquisition of the majority shares of the Tampakan deposit is part of its business unit's growth strategy.
"The decision to exercise our option to acquire a 62.5-percent controlling interest in the Tampakan Project will further expand our position globally.
Promising mineral resource estimates at the deposit indicate the project should become a new long life copper asset for Xstrata," he added. (Allen V. Estabillo/MindaNews)