Alcantara Group raises stake in Aussie firm

The influential Alcantara Group of Saranggani and Davao provinces, through its holding company Alsons Corp., has raised its interest in Indophil Resources NL, a publicly listed company on the Australian Stock Exchange. Indophil is Alsons’ partner in developing the controversial Tampakan Copper Gold Project in South Cotabato. In turn, this means an increase in stake by Indophil in the Tampakan project. Under a share swap agreement, Alsons has agreed to exchange its direct interest in the Tampakan project for new Indophil shares and cash. Upon completion of the deal, Alsons will end up as the second largest shareholder in Indophil. The transaction cost Indophil A$4.3 million or some P167.1 million. In a press statement, Alsons welcomed the agreement as a strengthening of the company’s position in the Philippine mining industry. “This strategic partnership with Indophil ensures our long-term commitment as a partner in the Tampakan project and other prospective mining projects to be undertaken by Indophil in the Philippines and the Asia-Pacific region," said Tomas I. Alcantara, Alsons chairman. A former trade and industry secretary, Alcantara is a senior economic adviser to President Gloria Macapagal Arroyo. In a separate press statement, Tony Robbins, Indophil managing director, said the company was very pleased to have raised its stake in the Tampakan project. “This is an excellent outcome for Indophil and its long-term partner Alsons. With Alsons emerging as a significant shareholder in Indophil, it is in both our interests to work closely together to develop the Tampakan deposit, and pursue other exploration and development opportunities in the Philippines," he said. Under the agreement, Indophil will progressively raise its interest in the Tampakan project from 32.5 percent to 37.5 percent. Xstrata Copper, the copper division of the major global mining group Xstrata plc, will hold the remaining 62.5 percent as part of a separate agreement announced last Dec. 21. Xstrata Copper is expected to take over the management of the Tampakan project on March 30. According to Alcantara, the project is expected to yield significant results what with the support of Xstrata. “We are confident that the project, which now has the backing of global copper giant Xstrata, will live up to its potential as a world-class mine that will reap significant returns for the project stakeholders," he said. The Tampakan project is one of the largest undeveloped copper-gold deposits in the world but has engendered some opposition from the local religious leaders and tribesmen who claim that the activity would encroach into ancestral lands and affect a vital watershed area. The transaction will be executed over three tranches as certain key project milestones are met, according to Indophil. As each milestone is achieved, Indophil will receive approximately one third of Alsons’ existing 5 percent stake in the Tampakan project. The 11.1 million new shares to be issued to Alsons under the first tranche of this agreement will increase the number of issued shares in Indophil to 386.7 million from the current 375.6 million. This means that Alsons will immediately hold 3.8 percent of the issued shares in the company while Indophil will raise its equity in the Tampakan project to approximately 34 percent. The share-swap agreement gives Alsons a direct interest in Indophil, and with the implementation of agreed milestones it ensures Alsons long-term involvement in the project is maintained. “This strategic partnership with Indophil ensures our long-term commitment as a partner in the Tampakan project and other prospective mining projects to be undertaken by Indophil in the Philippines and the Asia-Pacific region," Alcantara said. For his part, Robbins said: “Indophil Resources remains in a strong financial position. On exercise of the Xstrata option on 30 March 2007, Indophil will have some A$110 million cash in the bank." The Tampakan mining project is owned by Sagittarius Mines Inc. headed by Paul G. Dominguez, whose is married to Alcantara’s sisters, and sits on the board of Alsons. Estimates indicate that the site sits on some 11.6 million tons of copper and 14.6 million ounces of gold. -GMANews.TV