Puregold's Lucio Co boosts stake in Alcorn Gold

MANILA, Philippines - Puregold owner Lucio Co has acquired an additional stake in publicly-listed Alcorn Gold Resources Corp. (AGRC), fuelling speculations he may eventually take over the oil and gas exploration firm to gain a backdoor listing in the stock exchange.

In a disclosure to the Philippine Stock Exchange yesterday, AGRC said Co subscribed to a quarter or P575 million of the firm’s latest increase in capital stock from P700 million to P3 billion.

It said Co has already made a downpayment of P143.75 million for the 57.5 billion shares acquired. Prior to the subscription, Co owned 7.38 percent of AGRC.

AGRC was the market’s second top gainer yesterday, rising 37.5 percent to close at a record high P0.011 each share. A total of 1.676 billion shares worth P16.98 million changed hands.

Investors gobbled up the shares of the company on rumors Co might infuse his Puregold supermarket chain into AGRC as a means to obtain a backdoor listing on the local bourse.

In an earlier filing with securities regulators, AGRC said it was studying its possible participation in other industries and projects that are compatible with its long-term plans and funding position. If necessary, the company would use additional capital to finance exploration activities and maintenance of its various concession areas as well as to support general and administrative requirements.

AGRC, as a holding company, may engage in any business that may add to its shareholders’ worth, it added.

As of end-December 2009, AGRC had a cash position of P225.486 million, which is sufficient to support its operations and project commitments for the next 12 months

With a market capitalization of P477.93 million, AGRC is engaged in the exploration, development and production of oil and gas, as well as metallic and non-metallic reserves. The company has participating interests in a number of petroleum and mineral properties in Palawan, the Visayas region and Mindanao, and in Gabon, West Africa.

The company reported a net income of P9.3 million last year, up 91 percent from the 2008 level. Bulk of the increase in net profit was due to the income from sale of petroleum interest amounting to P31 million.

 From a gain of P9.8 million in 2008, AGRC incurred a foreign exchange loss of P4.5 million last year, mainly due to the appreciation of the peso against the dollar. Other income contributed 13 percent to the gross income of the company, consisting of dividend and income from sale of stocks.

In February 2009, AGRC sold its 136,602 shares in Medusa Corp. The income from the sale of petroleum interest reached P31 million, representing 60 percent of the total revenues.

AGRC had total assets of P665 million as of end-2009, slightly higher than the previous year.

While analyzing other businesses that in the future will strengthen its operating revenues, AGRC continues to maintain its commitments to its petroleum and mineral projects.

Among the company’s oil interests, Service Contract 14 in North West Palawan is considered the largest oil discovery in the country’s petroleum exploration history with more than 48 million barrels of oil produced from its wells. However, in December 1995, the consortium decided to temporarily suspend production operations in the West Linapacan oilfields due to high production costs, low production levels and low prevailing price of oil.