Mining firm files IPO bid

Amid a volatile market, mining holding firm Oriental Peninsula Resources Group has filed an application with the Securities and Exchange Commission (SEC) for its initial public offering (IPO), estimated to raise about P894 million.

It will be the first local mining company to list on the Philippine Stock Exchange (PSE) in 24 years after Semirara Mining Corp. in 1983.

Oriental Peninsula is selling a total of 300 million new shares at a price ranging from P1.98 to P2.98 each share. The offer shares will account for 20.67 percent of the company’s issued and outstanding capital stock of 1.45 billion shares after the IPO.

Oriental Peninsula is expected to have a market capitalization of P2.87 billion to P4.33 billion.

The company has tapped Asian Alliance Investment Corp. as sole issue manager and underwriter.

Proceeds will be used to finance capital expenditures for initial large-scale operation and further explorations of the company’s mineral property.

About 246.75 million will go to acquisition of capital equipment and machineries while P100 million will be used to fund pre-operating capital and P78 million will be channeled to infrastructures.

Oriental Peninsula was organized on April 16, 2007 to primarily consolidate and operate companies with mining tenements. It owns 94 percent of Citinickel Mines and Development, which has two nickel mining projects in the province of Palawan – the Pulot Mine and Toronto Mine.

The company envisions itself as the principal listed vehicle for Philippine mining tenements.

It plans to fold in additional mineral properties in the near future by applying for exploration permits.

Citinickel’s Mineral Production Sharing Agreement with the government encompasses a total contract area of 2,175 hectares, of which 1,408 is situated in the Pulot Mine and 768 in the Toronto Mine.

The MPSA gives Citinickel the exclusive right to conduct and develop mining operations within the mineral property over a period of 25 years from Jan. 3, 2007.

The property has been the subject of interest of several geological and exploration works conducted by various local and foreign mining and development companies, including Olympic Mines and Development Corp. in the 1970s and later on in 1996, Vantage Mining Group as commissioned by Pacific Nickel Holdings Ltd. in 1997 and QNI Philippines in 2001.

A pre-feasibility study affirmed that Citinickel’s property exhibit high grade nickel laterite ore bodies relative to the average nickel ore content of most explored mineral deposits in the country.

As of end-July 2007, Oriental Peninsula had assets of P1.15 billion comprising mostly cash and advances to and investment in Citinickel.

Oriental Peninsula said proceeds from the IPO will be used to further intensify its marketing and production efforts with the end in view of shipping nickel ore to China and Australia.

The company is targeting to make its first large-scale shipment of nickel laterite ore during the first quarter of next year and intends to produce 600,000 to 1.2 million metric tons annually.