San Miguel invests $40M in Australia’s Indophil

Conglomerate San Miguel Corp. (SMC) is investing $40 million in Australian-based Indophil Resources NL, which presently holds a 37.5-percent interest in the Tampakan project, the largest untapped gold and copper deposits in Southeast Asia. San Miguel, in a disclosure Friday to the Philippine Stock Exchange, said its board authorized the corporation to enter into a share placement agreement with Indophil to subscribe approximately 48 million new shares equivalent to 10.1 percent of Indophil's issued shares for $40 million. The transaction is expected to be completed by Oct. 15, 2010, Indophil said. At present, Indophil has 423.4 million issued shares and 2.6 million unlisted options. “Following the placement, Indophil’s issued shares will increase to 471.4 million," Indophil noted. “Engaging the support of San Miguel is a strategically important and postive outcome for the continued successful development of its mining interests. San Miguel brings significant financial strength and regional relationships, underpinned by 120 years of operational experience in the Philippines," said Indophil CEO Richard Laufmann. Indophil said it has also entered into a binding exclusivity period with SMC until Jan. 10, 2011. This means that the food and beverage giant “will complete its due diligence on Indophil" during the period and “decide whether to submit a control proposal" to Indophil later on. “Indophil is immediately ceasing discussions with other interested parties in respect of possible corporate actions involving Indophil. It will remove access rights of those other parties to the Indophil data room," Indophil said. Hong Kong-based conglomerate First Pacific Co Ltd. had earlier expressed interest in the Tampakan project in Mindanao. The $5.2-billion investment in Tampakan only involves the development cost until the project reaches commercial production. When the mine operates from 2015 to 2033, the Philippine economy stands to gain around $7 billion in taxes and royalties from the project over the course of its mine life. Last June, China’s Zijin Mining Group Co. terminated a A$545-million (or $494-million) purchase of Indophil after failing to win approval from the Chinese government. - JE/OMG, GMANews.TV