MANILA, Philippines - UK-based fund management firm Global Emerging Markets Ltd. (GEM) is investing P2 billion in listed mining firm Century Peak Metals Holdings Corp. (CPMHC).
In a disclosure to the Philippine Stock Exchange, CPMHC said it has signed an investment agreement with GEM for the subscription of P2 billion worth of shares in the mining firm.
Under the terms of the deal, CPMHC has sole and discretionary option of deciding how many shares it would issue to GEM. The transaction also involves the issuance of up to 150 million warrants to GEM that, when exercised, would generate an additional P900 million in funds for CPMHC.
The warrant is effective for a period of three years, commencing from the issue date.
CPMHC said the money will be used mainly for the Century Hua Guang smelting project, a nickel-chromite smelting plant that the company is building in joint venture with the owners of Zheijiang Hua Guang, one of China’s top nickel pig iron producers.
The company earlier said it might spend up to P10 billion to build and operate the nickel-chromite smelting plant.
Wilfredo Keng, president of CPMHC, said: “We are very pleased to have entered into this agreement and partner with the GEM Group. Their investment highlights the strong China-Philippines cross border investment opportunities, Century Peak being one of them.”
“GEM Global Yield Fund is a welcome addition as an institutional investor into the company given their global expertise and proven reputation in capital markets and structured transactions worldwide,” he added.
GEM is $3.4-billion investment group which completed 275 transactions in 55 countries.
Nickel imports into China hit a record high in the recent months. Last month, CMPHC shipped 522,873 metric tons of nickel to China.
CPMHC owns 100 percent of Century Peak Corp., which holds a mineral production sharing agremeents in Loreto in the Dinagat Islands, and holds an existing exploration permit over a 3,188-hectare property in Albor, Dinagat.
CPMHC is aiming to become a major player in the local mining industry through a vertically integrated mining operation with its smelting operations and a diversified mineral resource base through the acquisition of additional mining tenements with potential for other mineral deposits aside from nickel.