Canadian partner backs out of joint venture with Omico for Benguet project

MANILA, Philippines - Canada’s Ivanhoe Mines Ltd. has backed out of a joint venture mining project in Benguet province with listed firm Omico Corp.

In a disclosure to the Philippine Stock Exchange, Omico said it was notified by Ivanhoe’s local unit that the Canadian mining firm was withdrawing from the joint venture agreement forged in April 2007. No reason was given for the withdrawal.

The agreement would have involved the exploration and potential development of the Omico-Macawiwili mining property Itogon, Benguet. Ivanhoe had committed to invest initially up to $5.45 million in the exploration.

In view of this development, Omico said it would continue with the exploration, development and mining of the Macawiwili project in partnership with Macawiwili Gold Mining & Development Corp. (MGMDC).

Omico entered into an agreement with MGMDC to operate the latter’s 119 mining claims on 837 hectares in Itogon in September 1968. In January 1996, Omico and MGMDC extended their mining agreement for another 25 years or until 2021.

Omico secured in April this year an MPSA (mineral production sharing agreement) from the Department of Environment and Natural Resources, allowing it to jumpstart the exploration and development of the mine site in Itogon. Under the MPSA, the government awards to a contractor the exclusive right to conduct mining operations within a contracted area.

The company is licensed to operate, prospect, mine and deal with all kinds of ores, metals and minerals. It is also engaged in property investment and development of low-cost subdivision housing units.

Last year, Omico reported a net income of P8 million, a significant turnaround from the P2.8-million net loss incurred in 2007, largely driven by sales from its housing project, Sta. Rosa Homes.

Upon its completion in 2010, Sta. Rosa Homes will have a total of 1,071 housing units.

In addition, Omico has a joint venture with Robinsons Homes Inc. for the development of the mining firm’s three parcels of land located in Tagaytay City into a high-density two-phase residential subdivision, consisting of five 5-storey residential condominium buildings.

Omico also has an agreement with Sta. Lucia Realty and Development, Inc., Asian Pacific Estates Development Corp. (APEDC) and Asian Empire Corp. (AEC). Sta. Lucia will develop into residential and commercial subdivisions properties located in Pinmaludpod, Urdaneta owned by Omico, APEDC and AEC.