Foreign mining firms keen on listing at PSE

Several foreign companies are keen on listing at the Philippine Stock Exchange (PSE) in their bid to raise funds for their ongoing mineral exploration projects in the country.

One of these companies, Red 5 Ltd., a Perth, Western Australia- based gold exploration company whose shares are traded on the Australian Stock Exchange, hopes to raise between $10 million to $15 million by listing its shares at the PSE.

"Our company is definitely looking into raising funds for our exploration projects in the Philippines. We have already held discussions with officials of the local stock exchange and we are quite optimistic that we could go public here in the next three to six months," said Greg Edwards, Red 5 managing director for the Siana gold project in the Surigao gold district in Mindanao.

"We are already trading at several stock exchanges and what we want is to get shareholders from within our investment area in the Philippines," added Edwards.

Edwards said the company is in the process of consolidating requirements that will need to be submitted to the PSE and the Department of Environment and Natural Resources (DENR).

Very recently, PSE relaxed its listing rules, waiving the required three-year track record of profitability to encourage more mining companies to raise capital through the stock market.

This is especially good for junior mining companies, or those that are still mostly in the exploration stage in prospective mining areas in the Philippines. The downside however, is that this would open up opportunities for dubious mining companies. Thus, mining companies taking this route will be subject to very stringent rules.

For one, mining companies will be required to submit a geological report from accredited mining engineers and geologists, and this should be validated by the Mines and Geosciences Bureau, an attached agency of the DENR.

Earlier, Red 5, whose Siana gold project in the Surigao gold district is estimated to yield more than 800,000 ounces of gold, signed an agreement with Manila-based JCG Resources Corp. n that gives it an 80 percent equity in the project upon completion of a bankable feasibility study at any time prior to June 2007.

Red had also formed a strategic alliance with First Metro, the Philippines largest investment bank.

Another company, Mindoro Resources Ltd. Gold Philippines Inc. (MRL) , a Canada-based mineral exploration and development company with holding interests in the Philippines has also expressed interest in listing its shares at the PSE.

"It is certainly in our plans (to list), we are seriously studying on how we could go about it," said MRL president and chief executive officer Tony Climie during the sidelights of the ongoing 6th Asia Pacific Mining Conference in Makati.

Climie said that for 2006, the company will be spending an estimated $2.5 million for more geological surveys in its prospective sites in Batangas.

MRL, which has been prospecting for mineral resources since 1996, is set to undertake more drilling program for its Lobo and Archangel projects in Mindoro.

"Work on Lobo in recent years has been very encouraging, along with Archangel. We believe that these areas have the potential to be one of the best places for investment, our prospects are getting more and more attractive as our program progresses,‰ stressed Climie.

An earlier report by MRL noted impressive high gold grades from its drilling activities in Lobo and Archangel. Climie said that preliminary metallurgical tests were encouraging, warranting additional metallurgical testing.

Aside from Mindoro, MRL is also undertaking exploration work in Surigao with the Tapian San Francisco, Tapian Main, Agata and Mat-I projects, encompassing 24,000 hectares.

The Surigao gold district has recently seen increased exploration activity, as another company, Anglo-American has identified two large porphyry copper-gold discoveries in the gold district and Red 5 is also currently drilling another potentially significant porphyry copper-gold target located near the border of Red 5 and MRL’s Tapian Extension.

"We are really optimistic about the Philippines’ potential as a mining area, especially with the recent support by the government in terms of more favorable policies. With new and growing demand for metals by China, India, Korea and Japan, we hope to be in a position to become a significant supplier of copper and gold in these markets," said Climie.

The Philippines continues to experience a resurgence of its mining industry with the Supreme Court late last year affirming the constitutionality of the 1995 Philippine Mining Act.

The results of the SC decision which validated the financial technical assistance agreement (FTAA), a regulation of the mining law allowing 100 percent foreign ownership in exploration and mines development, were immediate.

For the first half of 2005, the PSE’s mining index emerged as the best performer among the six sectors, surging 111.2 percent to 3,109.34 points from 1,472.07 a year ago.

There is a serious bid to regain the Philippines’ former prominence as one of the world’s top mineral producers. To stir things up, the government has identified 23 flagship mining projects. These will produce gold, copper, nickel, bauxite and aluminum, and require total investment of $7 billion. So far, data show that there are now $1.5 billion in firm or committed investments.