East Coast mineral listing via backdoor

MANILA, Philippines — The backdoor listing of miner and politician Hilario Pagauitan’s East Coast Mineral Resources Co. Inc. (ECMRC) has now moved a step closer to reality, two years after signing a memorandum of agreement with the Ramos Group to acquire Vulcan Industrial and Mining Corp. (VIMC).

VIMC, now East Coast Vulcan Corp. (ECVC), is a listed shell company owned by the Ramos family, the owner of National Book Store Inc.

In July 2021, Pagauitan, the current mayor of Isabela, signed a MOA with VIMC wherein Pagauitan’s ECMRC will subscribe to 5.18 billion shares of VIMC for P5.18 billion.

As a result, ECMRC’s assets, including three Mineral Production SharingAgreements (MPSA) containing nickel ore deposits, are folded into VIMC, paving the way for the backdoor listing of ECMRC.

One MPSA covers an area of 4,226 hectares in Libjo, Dinagat Islands while another covers an area of 697.05 hectares in Cagdianao, Dinagat Islands.

From these MPSAs, ECMRC currently earns royalties and marketing fees. For 2022, total revenues generated by the company for the two MPSAs amounted to P736.5 million and P612.4 million, respectively, and net income of P503.6 million and P363.7 million, respectively.

ECMRC also holds another MPSA covering an area of 248 hectares in Loreto, Dinagat Islands.

“The transaction involves the assignment of 486,055,662 outstanding partially paid shares of VIMC to HGP Group; and subsequently, the subscription to 5,180,000,000 new shares of VIMC (arising from an increase in authorized capital) by HGP Group in exchange for cash, assets and/or shares in ECMRC,” VIMC said in its comprehensive corporate disclosure last week.

At present, VIMC has no ongoing commercial operations. However, it has always been studying and exploring strategies to generate the most value to its shareholders.

Recent changes in the mining climate have prompted VIMC to reconsider its previous decision to exit the mining industry, it also said in its disclosure.

“On a global scale, metal commodity prices have surged, and its outlook continues to be positive. Locally, the moratorium on mining/mineral agreements has been lifted, opening the possibility for new mining projects.”

The transaction will result in VIMC owning a consistently profitable going concern and cash flow-generating mining business which will allow VIMC to immediately recognize income.

In previous years, National Book Store was supposed to do a backdoor listing via VIMC, but decided not to proceed with the plan.