Benguet Corp mulls IPO for new nickel mining unit

MANILA, Philippines - Benguet Corp. is planning to take its newly-incorporated nickel mining subsidiary public.

In a disclosure to the Philippine Stock Exchange (PSE), Benguet said it has appointed First Metro Investment Corp. (FMIC) as financial advisor, issue manager and lead underwriter for the planned initial public offering (IPO) of Benguetcorp Nickel Mines Inc.

The new company, initially capitalized at P10 million, will “undertake listing and public offering in the near future,” Benguet said.

The mining property, encompassing a total area of 1,406 hectares located in Sta. Cruz, Zambales, is covered by an approved mineral production sharing agreement.

From December 2000 to September 2009, Benguet invested P317 million in completing the exploration program and pre-development of the nickel mine area. 

Last Oct. 7, Benguet signed an off-take/contractor agreement with DMCI Mining Corp. for the production and sale of high grade nickel ore (2 percent cut-off grade) for up to 200,000 tons per year for the next three years, extendible upon mutual agreement.

Aside from direct ore shipment, the company is currently conducting a feasibility study on tank leaching of middle grade nickel ore and on pelletizing technology for value-added/semi-processed nickel product.

“It is to be noted that the LME prize of nickel has recovered in the recent month and is expected to improve further with the eventual opening of the China market,” Benguet said.