Rio Tuba nickel mine operator redeems $1.3-million promissory notes

MANILA, Philippines - MBMI Resources Inc., which operates the Rio Tuba nickel mine in Palawan, has repaid $1.3 million in promissory notes held by lenders pursuant to a loan made July 31, 2009.

In an announcement made with Canadian bourse, MBMI said it would not proceed with a previously announced transaction whereby a portion of the promissory notes would have been exchanged for 10 percent secured convertible debentures.

MBMI said it made the loan repayment following the recent cancellation of its financial and technical assistance agreement (FTAA) with the Philippine government.

MBMI is still appealing the cancellation, but has begun scaling down some of its mining activities.

MBMI is a Canada-based mining company focused on the exploration and development of nickel deposits in the Philippines.

MBMI and its partners control nine nickel laterite projects in the Philippines, covering an area greater than 22,000 hectares. Its objective is to become a major supplier of high-grade nickel material to primary industrial consumers in Asia.

MBMI’s Philippine partners were granted small-scale mining operating permits for the Alpha nickel property in Narra, Philippines which have enabled the evaluation, extraction, testing, and sales of nickel raw materials to Asian industrial consumers.

In June of 2010, MBMI announced the approval of a consolidated FTAA with the Philippine government which allows large-scale exploration, development and utilization of minerals on four properties in Palawan, Philippines.

Last April 19, however, MBMI said it had been notified that the Office of the President issued a decision cancelling the FTAAs.

MBMI, on the advice of its legal counsel, has stated 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, is fighting the decision and is defending the company’s affiliate’s legally issued FTAAs.