"The DENR approval definitely bolsters our chances of completing negotiations with financing institutions before the end of the year," said Jim Askew, chairman of Climax Mining Ltd.
Askew said that the company is currently in talks with six foreign banks and is also negotiating off-take agreements with three Asian companies.
The Didipio project is one of 23 flagship mining projects identified by the DENR that will bring in fresh investments of over $6 billion in the next six years.
Climax is presently discussing the possible participation of two foreign companies, Pan Pacific Copper of Japan and LG International of Korea, which are interested in the copper-gold project in Kasibu, Nueva Vizcaya in northern Luzon.
Some of the banks that Climax is talking to are ABN AMRO, Macquarie Bank, NM Rothschild and Sons, Societe Generale Australia Ltd., Standard Bank London Ltd., Fortis Bank, and Invesytec Bank (UK Ltd.).
Robert Thomson, chief executive officer of Climax, earlier said its local unit, Australasian Philippines Mining Inc. (APMI) expects to firm up negotiations with the two companies in the coming weeks.
"LG and Pan Pacific are deeply interested in taking both equity and off-take agreements. In exchange for financing the project, both companies could have an equity and take a percentage of the project output when it is in full steam," said Thomson.
He said that Korean Resources (Kores), the consultant of LG conducted a field visit in Didipio recently. Both companies, like Climax, have established projects in the Philippine mining sector.
"Pan Pacific has demonstrated long-standing commitments in the country. It has interests in Philex Mining’s Padcal operations near Baguio through direct investment and is purchasing part of the concentrate for shipping to Japan," said Thomson.
On the other hand, Kores and LG have invested in the Rapu Rapu polymettalic project of Australian firm Lafayette Mining Ltd. in Sorsogon province in the Bicol region.
On Climax’s talks with banks that will bankroll the project, Thomson said the company hopes to wrap up talks before the end of the year. The same consortium of banks earlier funded the Rapu Rapu project.
The Didipio copper-gold project is one of 23 flagship mining projects of the government and is only one of two foreign mining companies that have acquired a financial and technical assistance agreement (FTAA).
An FTAA is a 25 -year mining contract that allows foreigners to hold 100 percent ownership of a mining project. The DENR has recently extended APMI’s FTAA by another five years.
APMI chairman Jose P. Leviste Jr. said the investment would be on top of the P2 billion that the company has spent for various exploration projects in the Philippines since 1989.
Leviste said that APMI will be spending between $79 million to $81 million for open cut establishment, processing plant and installation of infrastructure, and within the next five years, raise an additional $35 million to $39 million for its underground mining operations.
The construction of the plant will begin in 2006. The plant, upon completion in 2007, will produce 5,000 metric tons of ore per day and is capable of processing 94,000 ounces of gold and 10,000 metric tons of copper concentrate.