Australian mining firm mulls listing in RP bourse

Royalco Resources Ltd., an Australian mining firm that recently acquired mining assets in the Philippines, is considering listing on the local bourse to take advantage of the renewed interest in the Philippine mining sector following the ruling of the Supreme Court allowing foreigners to take control in large-scale mining ventures.

Chamber of Mines president Benjamin Philip G. Romualdez said Royalco has expressed interest in tapping the Philippine equities market given the uptrend in the share prices of mining stocks in recent months. He said Royalco may form a new company that will be listed on the exchange.

Royalco has shelled out $12 million to acquire all the mining assets of Oxiania in Surigao Del Norte.

Romualdez said Carmen Copper Corp. (CCC) of businessman Alfredo Ramos has also signified its intention to list on the exchange within the year. CCC is a subsidiary of Atlas Consolidated Mining and Development Corp.

CCC is in the process of finalizing various financial arrangements for the $150 million proposed reopening of Asia’s former biggest copper mine located in Toledo City, Cebu. Plans are also underway for the resumption of its operations with rehabilitation works scheduled to start within the year.

Given the reinvigorated interest in the mining industry, the Philippine Stock Exchange (PSE), the Department of Environment and Natural Resources, and the CMP as the industry’s association are finalizing guidelines on the listing of new mining companies.

The proposed guidelines include the adoption of the so-called Joint Ore Reserves Committee (JORC) Code as a measure to determine the profitability of mining firms.

PSE president Francis Lim said the exchange is open to waiving its three-year track record requirement for mining firms that are looking to engage in a public offer of their shares. In place of the track record requirement, the PSE is looking at adopting the JORC Code as an option to measure a mining company’s financial health.

The proposal to adopt the JORC Code has already been brought up last year but it never took off due to a sluggish market.

The JORC Code is utilized and accepted in Australasia (Australia, New Zealand, and neighboring islands in the South Pacific). It has been used both as an internal reporting standard by a number of major international mining companies and as a template for countries in the process of developing or revising their own reporting documents, including the United States, Canada, South Africa and the United Kingdom/Europe.

The purpose of the JORC Code is to provide a minimum standard for reporting of exploration results, mineral resources and ore reserves in Australasia, and to ensure that public reports on these matters contain all the information which investors and their advisers would reasonably require for the purpose of making a balanced judgment regarding the results and estimates being reported.

Lim said the exchange has received a lot of inquiries from mining firms interested in listing their shares on the bourse.

The total mining sector has picked up owing to a Supreme Court ruling in December recognizing the constitutionality of the 1995 Mining Act, thus allowing full foreign ownership of large-scale mining operations in the country.

Lim said the exchange considerably benefited from the mining boom of the 1960’s. From a market share of 19.9 percent in 1961, the mining sector surged to 78.7 percent of the market’s trading value in seven years.

After 30 years, however, the industry suffered a long slump brought about by a series of political woes, economic frailties and global downtrend. In 1993, the mining sector only contributed a mere 5.3 percent to the stockmarket‚s value and dropped even more to 0.2 percent in 2002.