NICKEL Asia Corp (NAC), the Philippines largest producer of nickel, aims to increase its nickel capacity through acquisition of a mining project in Isabela. NAC is buying a controlling stake in Geogen Corp, a subsidiary of NiHAO Mineral Resources and which owns the mineral rights over the property in Dinapigue, Isabela, for up to P720 million.
NiHAO is the operator and general contractor of the Isabela project, where it mines nickel saprolite and limonite ores for direct shipment and export. Geogen owns the claim.
Under the deal, NiHAO will turnover operations of the Isabela project to NAC and will receive a 20% share in net profits. At the same time, NAC will acquire a 10% stake in NiHAO from a group of its existing and controlling shareholders at P4 per share.
According to a recent mineral resource estimate report shared by NAC, the resource base of the Isabela project stood at about 89.89 million dry metric tonnes (DMT) at 1.2% as at April 2013. Acquiring Geogen will result in a 24% increase in NAC’s nickel resource base in terms of DMT, which stood at 287 million at 1.27% nickel as at December 2013.
NAC’s senior vice-president for marketing and strategic planning Martin Antonio Zamora said the investments would give NAC flexibility to adapt to the challenges and opportunities that lie ahead in the mining industry. “While the nickel market is at a crossroads, there is no question that future prospects are bright, given that global demand for nickel and other minerals will continue to grow. In addition, our newly formed alliance with NIHAO will result in synergies and open doors to more opportunities.”
NAC operates four nickel mines from which it shipped and delivered 17.8 million wet metric tonnes in 2014. It also has a minority interest in two processing facilities, namely the Taganito and Coral Bay HPAL plants.
NAC fully intends to carry over its brand of responsible mining in this first foray into the Northern Luzon region.
According to NAC, NiHao will grant them the sole and exclusive preference and priority to explore, operate, and develop its mining claims and subsidiaries, such as the Mina Tierra Gracia Inc in Botolan and Iba, Zambales province, the Bountiful Geomines Inc in Opol and Manticao, Misamis Oriental, and the Masbate 13 Philippines Inc in Milagros and Mandaon, Masbate.
“If NAC proceeds to explore, operate and develop the aforementioned properties, NiHAO will be likewise granted the same terms as the Isabela project,” Zamora said.