Rio Tuba operator to fight cancellation of FTA for nickel project in Palawan

MANILA, Philippines - Canadian mining firm MBMI Resources, Inc., which operates the Rio Tuba nickel project in Palawan in partnership with Olympic Mines and Development Corp., will legally fight the recent decision of the Philippines to cancel MBMI’s Financial and Technical Assistance Agreements (FTAAs) in Palawan.

In its website, MBMI announced that last April 19, 2011, the Office of the President had informed the company of the cancellation of its FTAAs.

MBMI’s FTAA was granted less than a year ago in June 2010 for its Palawan project.

However, MBMI said that “on advice of its legal counsel (it) believes that the decision is not in accordance with legal actions of a similar nature previously settled by the Supreme Court of the Philippines.”

MBMI, thus, said it would “vigorously fight this decision and defend the company’s affiliate’s legally issued FTAAs.”

MBMI has started scaling back non-essential activities, but plans to “continue activities that conform to Philippine law while defending its rights and legally issued permits.”

The cancellation of MBMI’s FTAAs comes just a week after MBMI announced that it has started a drilling program at its Alpha property in Palawan to confirm data needed to expand and define priority areas for continued mining.

The Mines and Geosciences Bureau (MGB), however, has not yet received a copy of the FTAA cancellation order from the Office of the President.

Only upon receipt of the decision from the Office of the President will the MGB issue a cease-and-desist order against MBMI unless the company files a motion for reconsideration.

The FTAAs of MBMI’s affiliates were signed by the authority of the President of the Philippines on April 12, 2010 and were registered with the DENR on May 31, 2010.

The same were formally issued on June 2, 2010 to affiliates of MBMI, Narra Nickel Mining & Development Corp., Tesoro Mining and Development Inc., and McArthur Nickel Mining.

The FTAAs cover the Alpha, Bethlehem and Rio Tuba properties.

MBMI said the decision was made in connection with a case filed by Redmont Consolidated Mines Corp., which has questioned basis for the granting of the FTAAs.