Apex acquires Asia Alliance Mining for $81.5 million

MANILA, Philippines — Apex Mining Co. Inc. is taking over Asia Alliance Mining Resources Corp. (AAMRC) for $81.5 million, allowing it to expand its mining operations in Davao de Oro.

In a disclosure to the Philippine Stock Exchange, Apex Mining said its board of directors cleared the purchase of 1.9 million shares of AAMRC, representing 100 percent of the latter.

The shares will be acquired at $42.8947 apiece or a total of $81.5 million, to be paid over five years.

At the signing of a share purchase agreement, Apex Mining will pay $5.5 million while the $76 million shall be paid in four equal annual installments over the next five years.

The company disclosed it was scheduled to sign a share purchase agreement with sellers Clariden Holdings Inc. and Simon L. Paz, Leo Atayde, Marie Paz Tacorda, Anabelle Dera, and Irene Escueta.

Meanwhile, deeds of absolute sale will be executed when the conditions for closing are complete.

AAMRC’s mining interest is covered by a notice of award issued by the Philippine Mining Development Corp. (PMDC) as the highest bidder for the joint operating agreement over copper mines and mining claims.

The joint operating agreement covers 20,237 hectares in the municipalities of Mabini, Maco and Maragusan in Davao de Oro, which its covered by the North Davao Mining Corp. (NDMC) application FTAA-XI-14.

The project area has been amended to 19,135.12 hectares based on the area status and clearance issued by the Department of Environment and Natural Resources Region XI in February this year.

“The mining operations of (Apex) in Maco, Davao De Oro will be able to expand and (Apex) will have a suitable site for a new tailings storage facility (TSF) when its existing TSF reaches its full capacity in the next three years,” the firm said.

Apex Mining said the transaction is subject to the sellers’ settlement of AAMRC’s litigation over the NDMC claims with PMDC.

This covers the filing of the Joint Motion for Approval of Compromise Agreement by PMDC and AAMRC with the Court of Appeals and Regional Trial Court of Pasig City, Branch 167.

The deal shall also be subject to the execution of a joint operating agreement under which AAMRC shall explore, develop and operate the NDMC mining claims.

The NDMC mining claims that will be developed and operated by AARMC surround the existing mining claims and operations of Apex in Maco, Davao de Oro.

Apex had an application for production sharing agreement (APSA) which overlapped with the NDMC claim but lost the case against PMDC in the Supreme Court in 2020.

Other conditions include assignment to AAMRC of application FTAA-XI-14 by PMDC; approval by PMDC of the transfer of the shares from sellers to Apex; and the execution of the deeds of absolute sale for the shares.

Apex said it shall advance commitment fees to AAMRC due to PMDC under the joint operating agreement, which shall be charged against the five percent royalty fees that AAMRC will pay to PMDC during commercial operations.