Oriental Peninsula pegs IPO at P2.68

Mining property holding firm Oriental Peninsula Resources Group has set the price for its initial public offering at P2.68 per share.

Based on the circular released by the Philippine Stock Exchange, the offering starts today (Dec. 6) and will run until Dec. 12. Shares of Oriental Peninsula will begin trading on Dec. 18.

The IPO was priced at the upper end of the planned range of P1.98 to P2.98 per share.

Oriental Peninsula, owned by Filipino groups Golden Spin Realty Inc. and Citimax Group Inc., expects to raise around P804 million from the sale of upto 300 million shares to the public.

Asian Alliance Investment Corp. is the sole issue manager and underwriter for the first local mining IPO in 24 years after Semirara Corp. In 1983.

The offer shares will account for 20.67 percent of the company’s issued and outstanding capital stock of 1.45 billion shares post-IPO.

Oriental Peninsula, through 94-percent-owned unit City Nickel Mines & Development Corp., has two mining rights in Palawan —  the Pulot Mine and the Toronto Mine which are both covered by a mineral production sharing agreement (MPSA) with the government.

The MPSA is valid for 25 years from Jan. 3, 2007 and is renewable for another 25 years. It gives the company the exclusive right to conduct large-scale mining operations within a contract area.

Proceeds from the offering will be used by the company to fund ongoing site development, initial large-scale operation and exploration of its mineral property.

About P246.75 million of the total proceeds will go to acquisition of  capital equipment and machinery while P100 million will be used as pre-operating capital.

Another P78 million will be used for infrastructure development while P58 million will cover civil structure costs.

Oriental Peninsula envisions itself as the principal listed vehicle for Philippine mining tenements by folding in additional mineral properties.

Citinickel’s MPSA 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 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.