MRC Allied to raise P720M via right issue

MANILA, Philippines - MRC Allied Industries Inc. is planning to raise around P720 million through a rights issue next month or January 2012 to fund the development of a gold processing plant in San Miguel, Surigao del Sur.

The company last week signed an agreement with Manobo Sectorial Tribe Council, the exclusive holder of the Express Priority Rights recently endorsed by the National Commission on Indigenous Peoples for the development of an area of about 20,000 hectares within mineral-rich Surigao del Sur.

The plant, which will require a total capital outlay of P800 million, will produce a minimum of 2,000 tons of gold a day.  It will also process copper later on.

“We are looking initially at processing gold since this is easier to extract and has a faster processing time. Our objective here is to immediately provide revenues to MRC by the first quarter of 2012,” said MRC chairman and president Benjamin Bitanga.

The development of the facility will be done in phases with the first phase slated to begin in December. 

Bitanga said the funding for the project will come from internally generated cash and a rights offering.

He said around P100 million will be used from the proceeds of a share swap deal with an Australian company with respect to MRC Surigao.

MRC’s entry into the mining industry started with the acquisition of the 8,200-hectare Kiblawan prospect, which straddles between Sultan Kudarat and Davao del Sur.

The Kiblawan mine is adjacent to the $5.2-billion Tampakan copper-gold project. 

 The company earlier acquired a 2,059-hectare gold and copper mining project in Marihatag, Surigao del Sur for about P140 million.