By Ben O. Tesiorna
An American mining firm investing in a multi-billion dollar mining project in Pantukan, Compostela would soon be listing in the Philippine Stock Exchange after a restructuring by its Filipino partners.
Clyde Gillespie, country manager of St. Augustine Gold and Copper Limited (SAGCL), announced on Monday the restructuring of their King-King Gold and Copper Project (KGCP) in Pantukan together with their Filipino partner Nationwide Development Corporation (Nadecor).
The KGCP restructuring would result in St. Augustine holding a 100% interest in the joint venture milling company (“Milling Co”) as well as assuming full responsibility for organizing the financing for the Project.
The structure of the joint venture mining company (“Mining Co”) would remain the same as was agreed originally between the parties, with Nadecor owning 60% and St. Augustine owning 40% of Mining Co, in accordance with the nationality requirements under Philippine law.
The relationship between Mining Co and Milling Co would remain as originally planned, with Mining Co selling ore to Milling Co pursuant to an ore sales agreement. Milling Co would process the ore and would subsequently sell it to interested buyers.
The Restructuring would also result in Nadecor shareholders owning 39.96% of St. Augustine.
Nadecor and St. Augustine’s boards have both voted in favor of the Restructuring. St. Augustine’s strategic Philippine partner, Queensberry Mining and Development Corp. (“Queensberry”), has also signed the Restructuring documents and expressed its full support for the Restructuring. Queensberry owns 18% of St. Augustine's.
The closing of the Restructuring is subject to certain approvals and other conditions, including approval from the Toronto Stock Exchange where St. Augustine's is listed. Certain aspects of the proposed Restructuring will be subject to corporate approvals by both companies.
Ian Gibbs of the Bromius Capital, St. Augustine's financial consultant to the project, said the restructuring is one of the conditions imposed by possible future investors to the project. It is anticipated that the cross listing would be completed in the second half of 2014.
IAN GIBBS, BROMIUS CAPITAL
Just last month, SAGCL and Nadecor officials announced the results of the Preliminary Feasibility Study (“PFS”) on the King-king Copper-Gold Project which showed that the planned operation has favorable economic potential, generating an estimated pre-tax net present value ("NPV") of $2.0 billion and an estimated pre-tax internal rate of return ("IRR") of 24.8%.
The mining partners said the result of the PFS confirm that King-king is an attractive project with robust economics that will bring significant value to their shareholders and partners and the Philippines.