Compromise deal between Oriental Peninsula and Platinum Group okayed

MANILA, Philippines - The Regional Trial Court of Puerto Princesa has approved the compromise agreement between Oriental Peninsula Resources Group (ORE) and Platinum Group Metals Corp., allowing the former, a listed mining and energy holding company, to take possession of the nickel-rich mine sites in Palawan.

“The compromise agreement, having been entered by the parties freely and that its terms are fair and reasonable, and it appearing to be not contrary to law, public policy, order and moral, the same is hereby granted,” said RTC Judge Bienvenido C. Blancaflor in an order dated Oct. 6.

The approval of the compromise deal has also effectively quashed the motion for reconsideration filed by Olympic Mines, originally the claim owner of the metal-rich Pulot and Toronto mines in Palawan.

The Puerto Princesa RTC cited a Supreme Court ruling which stated that Citinickel Mines and Development Corp., 94 percent owned by ORE, is the successor-in-interest of Olympic after the latter divested itself of all its interest in the two mines with the execution of the deed of assignment in favor of Citinickel.

“After Olympic has ceded in toto all its rights to Citinickel and with the compromise agreement entered into by Citinickel and Platinum, there is no damage that Olympic can possibly suffer even the rights of having royalty for ore exported,” Blancaflor said.

The compromise agreement, signed by PGMC chairman Ramon R. Atayde and Citinickel president Ferdinand M. Pallera in June, provided that Platinum turn over the two mine sites, including all infrastructure and improvements, to Citinickel in exchange for 30 million ORE shares.

The ORE shares are valued at P103.5 million based on yesterday’s close of P3.45.

Under the settlement,   PGMC committed to keep the 10 million ORE shares until Dec. 8, except with written consdent of Citinickel. It may dispose of the remaining 20 million ORE shares “at any time after the filing of the compromise agreement.”

Proceeds from the sale of the ORE shares should be used to settle all the outstanding obligations and liabilities of PGMC in its Palawan operations including royalty obligations, unpaid salaries and wages, dues to contractors as well as creditors.

The compromise agreement also stated that PGMC acknowledge that Citinickel is the holder of the 25-year mineral production sharing agreement covering an aggregate 2,176 hectares of land. Of the total area, 1,408 hectares are located in Espanola while 768 are in Narra.

While the cases were pending, PGMC occupied and took control the mine and barred Citinickel from entering the site even as PGMC stopped operations.

The deal puts an end to the long-standing dispute between PGMC and Citinickel, allowing ORE to operate the mine site and move ahead with its plan to make its first shipment of ore. Citinickel originally planned to start mining operations in 2008 but the legal cases with PGMC dragged on, derailing Citinickel’s plans.