Atlas subsidiary plans $75-M IPO

Atlas Consolidated Mining and Development Corp. (ACMDC) is planning to raise at least $75 million from the local stock exchange to finance the $150-million development cost of its copper-gold mining project under its newly created mining subsidiary Carmen Copper Corp. (CCC).

This was disclosed yesterday by Martin C. Buckingham, executive vice president and chief finance officer of ACMDC, who said that the initial public offering (IPO) for less than 40 percent of CCC would hopefully be done before the end of this year.

The IPO was originally scheduled for October this year but had to be postponed due to some listing requirement from the Philippine Stock Exchange (PSE).

The other $75 million needed by CCC, Buckingham said, would be raised through debt from "off-take" arrangements with foreign smelters being arranged by a financial adviser in London. CCC’s mining operation is located in Toledo, Cebu.

Atlas has decided to create a copper mining subsidiary because the firm is engaged in several other activities that include nickel mining, exploration, water processing, urban development and construction and engineering.

Although CCC’s mining activities in Toledo, Cebu begun in 1955 and was suspended in 1994 due to water intrusion, the Toledo mine site still has an estimated 870,000 copper ore reserve.

With world copper prices at record highs, Atlas is fastracking the rehabilitation of the Toledo mines .

Atlas was formally owned by the Sorianos but has since been taken over by the Alfred Ramos Group.

Meanwhile, the Australian mining firm Climax-Arimco is in the midst of due diligence investigation by two possible equity investors, according to Jose P. Leviste, chairman of the mining firm.

The Korean LG Group, Leviste said, has actually finished conducting its due diligence of the firm, while the Japanese Pan Pacific Group is sending its representative at the end of the month to conduct its own due diligence study.

It is not yet clear, Leviste admitted what equity participation the Korean and Japanese investor would want as Climax-Arimco wants to tie in so-called off-take arrangements for its output.

Climax-Arimco is investing P6.5 billion in the Didipio gold-copper mine located at the boundary of Nueva Vizcaya and Quirino provinces.

The Didipio mine is one of 23 key mining projects identified by the government.

The Didipio project was the first financial or technical assistance agreement (FTAA) agreed by the Philippines with a foreign investor since June 1994.

Under an FTAA, the government allows a foreign mining company to explore and develop up to 81,000 hectares onshore or 324,000 hectares offshore.

The FTAA is valid for a period of 25 years.

Australasian Philippines Mining Inc., (APMI) the local unit of Climax-Arimco , has a contract area of 23,895 hectares at Didipio.

APMI has an annual production capacity of 94,000 ounces of gold and 10,000 tons of copper concentrate.

APMI Chairman Jose P. Leviste Jr. had earlier revealed that construction of the plant is scheduled for the first quarter of 2006 and commercial production within the first half 2007.

APMI senior geologist Chito Gozar said the project could produce 5,000 metric tons of ore per day or an extraction capacity of two million tons per year.

Climax-Arimco, according to Leviste, has already spent P2 billion ($35.7 million) to explore the area.

Didipio reportedly has a total ore resource of 120 million tons, with a mineable reserve of 23.8 million tons consisting of 0.61 percentcopper and 1.6 grams per ton of gold.

APMI plans to mine Didipio for 15 years.

The government said the project was expected to bring in total revenues of $783 million.

The APMI mining deal is one of two active mining FTAAs in the country.

The other FTAA is with Sagittarius Mines Inc. which is now on its third extension since 2000.

APMI’s agreement had also lapsed in 2000 but the government had considered it active since it was seeking an extension.