MANILA, Philippines - With a legal tussle now out of the way, listed mining holding firm Oriental Peninsula Resources Group (ORE) is looking forward to better prospects as it aims to make its first shipment of high-grade nickel ore to Japan and Australia in December this year.
In a statement, ORE said its unit Citinickel Mines & Development Corp. is already preparing for its initial overseas shipment of 150,000 metric tons of nickel ore with an average grade of 2.1 percent or higher.
Citinickel is the holder of a 25-year mineral production sharing agreement issued by the Department of Environment and Natural Resources covering 2,176 hectares of land in southern Palawan. Of the total area, 1,408 hectares are located in Española town while 768 hectares are in the municipality of Narra.
Caroline Tanchay, chairman and president of ORE, said Citi-nickel, which has been operating since August, could have produced more were it not for the heavy rains in Palawan. “I’m glad we can finally ship out high-grade nickel ore which is good news for our shareholders,” she said.
The initial shipment follows the approval by the Puerto Princesa Regional Trial Court of the compromise agreement entered into between Citinickel and erstwhile rival Platinum Group Metals Corp. (PGMC), ending a long-running dispute that has hobbled ORE’s mining operations.
Citinickel and PGMC were at odds over the right to operate the metal-rich Toronto and Pulot mines, both located in southern Palawan.
The settlement augurs well for ORE as it came at a time when nickel prices are trading higher. Data from the London Metal Exchange showed that nickel is currently trading at around $25,000 per metric ton, more than double the levels recorded in March 2009.
Global nickel consumption is forecast to increase this year, mainly driven by an expected rapid recovery in consumption in Asia.
The company is aiming to produce a combined 1.2 million metric tons of ore next year, resulting in a net income of P1.01 billion based on its estimates. This figure is forecast to increase further to P1.54 billion by 2012 on the production of one million MT for each mine site.
ORE has seen wild swings in its share price for the past two weeks in anticipation of its first overseas shipment. It closed 4.6 percent higher yesterday at P3.61 per share.