MANILA, Philippines - Listed property holding firm A Brown Co. Inc. is acquiring a 22.87-percent stake in Cayman Islands-based PhiGold Ltd., which owns an upstart local gold mining company.
In a disclosure to the Philippine Stock Exchange yesterday, A Brown said it is paying $5 million for the purchase of PhiGold, a holding company that controls 40 percent of the total voting shares in PhiGold Metallic Ore Inc.
PhiGold Metallic is a new producer of gold concentrate with a yearly capacity of 360,000 metric tons (MT) or the equivalent of 2,343 ounces of gold with an investment of P158.8 million. It has acquired rights through a mineral production sharing agreement over an area in Surigao del Sur.
Of the total acquisition cost, $2 million will be paid immediately by A Brown using currently available funds while the remaining $3 million will be paid over a two-year period from internally-generated funds.
Upon completion of the deal, A Brown chairman Walter Brown will be elected as executive chairman of PhiGold Metallic and chairman of the board of directors of PhiGold Ltd.
To date, PhiGold Metallic has already explored more than 77 percent of the total contract areas of 449.49 hectares.
With total resource estimate of 22,148,307 MT, mine life is expected to reach 62 years, far beyond the minimum 10-year requirement.