CORRECTED-St. Augustine restructures Philippines' $2 bln copper-gold project
(Corrects full name of Nadecor in fourth paragraph)
MANILA Oct 14 (Reuters) - Toronto-listed St Augustine Gold & Copper Ltd has restructured its stake in the $2 billion King-king copper-gold project in southern Philippines, one of Southeast Asia's biggest undeveloped mines, in a bid to kickstart funding.
St Augustine hopes to begin construction next year, although it faces similar problems to those hounding other big mining ventures in the mineral resources-rich country, including tax issues, security concerns and regulatory hurdles.
King-king, located on the west of the southern Mindanao island, could produce up to 3.2 billion pounds of copper, 5.4 million ounces of gold, and 11.7 million ounces of silver, based on St Augustine's 22-year mine plan.
Under the restructure with 50/50 joint venture partner the Philippines' Nationwide Development Corp (Nadecor), St. Augustine will own King-king's ore milling company and 40 percent of the mining concession. Nadecor will hold the rest of the concession and take a 40 percent stake in St. Augustine.
"This restructuring agreement puts St Augustine and Nadecor in the position to advance the King-king project," St. Augustine country manager Clyde Gillespie told a briefing, saying St Augustine would take take responsibility for raising funding.
St Augustine, which has a market capitalisation of $98.5 million, aims to list on the Philippine Stock Exchange by the second half of 2014 and bring in another foreign partner to help fund the project, Gillespie said.
The restive Mindanao region, home to Muslim rebels, is also the site of Glencore Xstrata Plc and Indophil Resources N.L.'s $5.9 billion Tampakan copper-gold project, whose future is in doubt.
Glencore said in August it would eliminate up to 920 jobs and slash spending at Tampakan, which has faced a provincial ban on open-pit mining, public opposition and difficulty in winning regulatory approval.
Gillespie said King-king would face similar issues, but had worked closely with the local community.
"Security is a challenge, we're on Mindanao island. But what we've found is that as we work closely with the community and with the indigenous people in the area, that we have less challenges from the security perspective," he said.
However, Gillespie warned that legislation being drafted by Manila that would increase the government's share of mining revenues, could make the project unviable. (Reporting by Erik dela Cruz; Editing by Richard Pullin)
- White House reverses, says Obama met uncle and lived with him during law school
- South Africans, some fearful, wake to life without Mandela |
- U.S. television, Twitter, alive with new version of 'Sound of Music'
- RPT-UPDATE 1-Ford leans on global Mustang to burnish overseas image
- Ford leans on global Mustang to burnish overseas image