MANILA, Philippines - Nihao Mineral Resources International Inc. has approved a capital restructuring program to wipe out P223.26 million in accumulated deficit as of end-2011.
In a disclosure to the Philippine Stock Exchange, Nihao said its board of directors approved the restructuring to apply a portion of its additional paid-in capital in the amount of P253.27 million against the deficit.
The company incurred a P27.245-million comprehensive loss on the change in fair value of available for sale financial assets as it started accumulating shares in listed mining holding firm Oriental Peninsula Resources Group of businesswoman Caroline Tanchay. It acquired a total of 68 million shares, resulting in a comprehensive loss of P16.5 million last year, a reversal of the P9.53 million income reported in 2010.
In another development, Nihao said its board likewise approved the execution of an operating agreement with Geogen under which Nihao will have the exclusive right to explore, develop and operate minerals found within its affiliate’s property in Dinapigue, Isabela. The mine site covers an aggregate area of 2,391 hectares, covered by a mineral production sharing agreement (MPSA) dated July 2007.
Under the agreement, Geogen shall pay Nihao an amount equivalent to 90 percent of the invoice value of nickel ore, nickel by-products, chromite and other minerals sold by Geogen to third parties.
“The operating agreement shall take effect upon its execution by the parties and shall remain for the full term of the MPSA or until July 29, 2032, unless otherwise earlier terminated or renewed by the parties,” Nihao said.
Nihao reported a net income of P11.46 million last year, up from P9.53 million a year earlier.
The company formed a joint venture with AGP Industrial Corp. and global commodity trading giant Glencore International AG to identify and develop mines in the Philippines and other countries in the region such as Indonesia. The joint venture, GNA Resources International Ltd., was established in Hong Kong.
Nihao and AGP will take charge of mining, contracting and developing the mines in the country while Glencore will contribute its expertise in marketing nickel ores in the world market using its network of various institutions overseas.