Nihao units bag mining permits

Publicly-listed Nihao Mineral Resources International Inc.’s two mining subsidiaries in Zambales  province have been granted small-scale mining permits, the company said yesterday.

In a disclosure to the Philippine Stock Exchange, Nihao said Companhia Nube Minerale Inc. and Companhia Minera Tierra Inc. were authorized by the Office of the Provincial Governor of Zambales to extract and remove 50,000 metric tons per annum of nickel .

The mining permits are effective for a period of two years from June 13, 2008 and cover five hectares each site.

Nihao corporate information officer Carl Ng said since the issuance of the temporary permits, the company and its subsidiaries have actively developed access roads, conducted environmental assessments, explored and performed other preparatory activities.

Ng said funding for the group’s exploration activities will come from a proposed stock rights offering amounting to P500 million.

The company is planning to issue 500 million shares at par value of P1 per share. The offering will be handled by AB Capital & Investments Corp.

Other proceeds from the offering will be used to finance the exploration and working capital of the firm’s project in Manticao, Misamis Oriental as well as settle shareholders’ advances.

Chaired by former Presidential Chief of Staff and Department of Natural Resources Secretary  Michael Defensor, Nihao said it has rights to explore over 6,800 hectares in Botolan, located in one of the country’s top five nickel-rich regions.  It currently has an exploration permit and is aiming to secure an MPSA (mineral profit sharing agreement) in the third quarter this year.

Nihao earlier entered into an agreement with BHP Billiton Ltd., the world’s largest mining company, to look for nickel deposits in the country.

Under the agreement, Nihao will conduct a preliminary exploration and drilling program on its property and BHP’s local arm QNI Philippines will provide technical expertise and advice. The agreement also contains the commercial terms for a off-take agreement between Nihao and BHP Billiton’s Yabulu nickel refinery in Queensland, Australia.

The Yabulu refinery is one of the world’s major nickel processing facilities.

Nihao is initially targeting to acquire mining rights covering 7,103 hectares of nickel property in Botolan and Iba, Zambales.  This is, however, subject to a due diligence and valuation of the Botolan mining rights.