Sumitomo to acquire 25% stake in Nickel Asia's Cordillera unit

Manila, Philippines - Japan’s Sumitomo Metal Mining Co. is acquiring a 25-percent stake in Cordillera Exploration Co. Inc. (CEXCI), with an option to jack up its stake to 40 percent.

Nickel Asia Corp., the Philippines’ biggest nickel miner and partly owned by Sumitomo, acquired CEXCI in November 2010 from Anglo American Exploration Philippines following the latter’s decision to exit the country.

Under the agreement, Sumitomo has the option to invest $2.8 million for an additional 15-percent equity to bring its total equity in CEXCI to 40 percent. The funds will be used for exploration work on CEXCI’s properties.

CEXCI has four properties in Cordillera in Northern Luzon that are prospective areas for the exploration of gold and copper.

“The Manmanok property in the province of Apayao in particular has been subjected to substantial geological work by the previous owner prior to Anglo, Newmont Philippines, and by Anglo as well. The work included geophysical studies consisting of induced polarization and aeromagnetic/radiometric surveys. On the basis of the overall geological work, Anglo theorized that the property could contain shallower sedimentary-hosted epithermal gold and deeper copper-gold porphyry style deposits and had identified four drilling targets,” Nickel Asia said in a disclosure to the Philippine Stock Exchange.

Sumitomo is the majority shareholder in the country’s first hydrometallurgical nickel processing plant, Taganito HPAL Nickel Corp., in partnership with Nickel Asia and Mitsui & Co., which is currently under construction.

It also has substantial interest and experience in copper (the Toyo copper smelter and refinery in Japan and strategic investments in a number of copper mines around the world) and gold (the Hishikari gold mine in Japan and the Pogo gold mine in Alaska).

The purchase of CEXCI last year marked the first step in Nickel Asia’s strategy to diversify into gold and copper.

Nickel Asia operates four lateritic nickel mines at its Rio Tuba, Taganito, Cagdianao and Taganaan sites.

Rio Tuba nickel mining is located near the southern tip of Palawan island in the southwest portion of the country while Taganito mine is located in the province of Surigao del Norte in the northeast corner of Mindanao. Cagdianao mine, on the other hand, is situated in Dinagat Islands while the Taganaan mine lies approximately 25 kilometers to the east of Surigao City off the northern end of Mindanao.