Nihao eyes P500-M stock rights offer

Nihao Mineral Resources Inc. is eyeing to raise P500 million from a planned stock rights offering either in September or October this year, according to a company official.

Carl Ng, head of Nihao’s investor relations, said the offering will start as soon as the company obtains the approval of securities regulators.

In a disclosure to the Philippine Stock Exchange, Nihao said its board has approved the terms and conditions of the stock rights offering where each eligible investor shall be entitled to subscribe to five shares for every one share held as of a record date yet to be fixed by the mining firm.

Proceeds from the offering will be mainly used to finance the exploration, project development and working capital of the firm’s nickel projects in Botolan, Zambales and Manticao, Misamis Oriental. A portion of the other proceeds will be used to settle advances made from shareholders.

The offering involves 500 million to 700 million shares at a par value of P1 each share, to be taken out of the increase in capitalization of the company.

AB Capital & Investment Corp. has been tapped as lead underwriter for the offering.

Nihao is now chaired by former Presidential chief of staff Michael Defensor, replacing businessman-stockbroker Jerry Angping.

In its website, Nihao said it has rights to explore over 6,800 hectares in Botolan, located in one of the country’s top five nickel-rich regions. It currently has an exploration permit and is aiming to secure an MPSA (mineral profit sharing agreement) in the third quarter this year.

Nihao and BHP Billiton Ltd., the world’s largest mining company, earlier signed an agreement to look for more nickel deposits in the country.

BHP Billiton is the world’s largest diversified resources company with a market capitalization of about $225 billion.

Under the agreement, Nihao will conduct a preliminary exploration and drilling program on its property and BHP’s local unit QNI Philippines will provide technical expertise and advice. The agreement also contains the commercial terms for a off-take agreement between Nihao and BHP Billiton’s Yabulu nickel refinery in Queensland, Australia.

The Yabulu refinery is one of the world’s major nickel processing facilities.

Nihao is initially targeting to acquire mining rights covering 7,103 hectares of nickel property located in Botolan and Iba, Zambales.  This is, however, subject to a due diligence and valuation of the Botolan mining rights.