Citinickel to end contract with Platinum

MANILA, Philippines - Citinickel Mines & Development Corp. is planning to terminate the operating contract of Platinum Group Metals Corp. (PGMC) to extract nickel from its mine site in southern Palawan following the Supreme Court’s decision acknowledging Citinickel as the successor-in-interest of Olympic Mines and Development Corp.

PGMC had an operating agreement with Olympic Mines, which held the mining lease contracts from the government to operate two nickel mine sites in Palawan. Olympic Mines canceled the agreement for alleged gross violations and transferred its application for mining agreement, including its rights, to Citinickel.

In a disclosure to the Philippine Stock Exchange (PSE), Citinickel’s parent company — Oriental Peninsula Resources Group (ORE) — welcomed the High Court’s decision which states that Citinickel is indeed the successor-in-interest of Olympic Mines.

At the same time, ORE lauded the High Court’s ruling as it clarified the jurisdiction and power of regional trial courts in resolving civil cases pertaining to the cancelled operating agreement with PGMC but not over matters related to environmental law violations under the ambit of the Department of Environment and Natural Resources (DENR).

“Contrary to claims by PGMC, this [SC] decision does not in any way nullify the right of Citinickel over any of its mineral properties in Palawan. We reiterate our previous disclosure that the validity of the termination of the operating agreement is still in issue and has not been resolved,’’ said ORE corporate secretary Joy Caneba.

She stressed that the SC decision laid down clearly which direction ORE could take in pursuing its termination of the small mining contract with PGMC — the regional trial court for PGMC’s violation of the terms of its operating agreement; and the DENR for transgression of environmental laws such as over-extraction. In both cases, Citinickel claimed that it was justified in cutting PGMC’s deal.

“With the decision by the Supreme Court that Citinickel is a successor-in-interest of Olympic, then it now has the personality to terminate the operating agreement based on the violations of PGMC,’’ said Caneba.