MRC Allied inks P310-M deal for Mindanao project

MANILA, Philippines - Publicly-listed holding firm MRC Allied Inc. has signed a P310-million deal to operate a gold and copper mining project in Mindanao.

In a disclosure to the Philippine Stock Exchange, MRC said it entered into a mining operations agreement for gold and copper covering a total area of 3,718 hectares in Marihatag, Surigao del Sur.

MRC will subsequently inject this mining agreement into a wholly-owned subsidiary, to be capitalized at P1 billion and to be named MRC Surigao Mines, the company said.

Shares of MRC closed 27.5 percent higher yesterday at P0.88 each from P0.69 Friday.

MRC’s entry into the mining business was formalized following the signing of a mining operations agreement with Alberto Mining Corp., through its president Geronimo Palermo. The agreement covers a 7,995-hectare mine site in Kiblawan and Columbio in Sultan Kudarat which is adjacent to the $5.2-billion Tampakan copper-gold project.

Under the agreement, MRC will issue P300 million worth of shares and cash to Alberto Mining, which is reportedly the same group behind Sagittarius Mines, the majority owner of the 11,000-hectare Tampakan copper gold project.

MRC is upbeat on the Kiblawan project, pointing out that earlier geological studies showed similar findings as those in the Tampakan project during its initial test phase.

To jumpstart the development of its Kiblawan project,

MRC is aiming to raise P750 million through a preferred share offering this year.

MRC’s new business direction is to acquire operating companies or entities that will give the company immediate profitability. The company expects to be in a position of positive operating cash flow by the first quarter of 2011.