MRC to raise P1.5 B before IPO of mining unit

MANILA, Philippines – MRC Allied Inc. is raising P1.5 billion via private placement this month and plans to undertake an initial public offering (IPO) for subsidiary MRC Tampakan Mines Inc. by the fourth quarter of the year.

In an interview, MRC president Benjamin Bitanga said both fund-raising exercises will finance the development of its 7,995-hectare mine site in Kiblawan and Columbio, Sultan Kudarat which is adjacent to the $5.2-billion Tampakan copper-gold project.

Bitanga said the company is excited about the Kiblawan project, pointing out that earlier geological studies showed similar findings as those in the Tampakan project during its initial test phase.

According to Bitanga, MRC is now negotiating with Chinese, American and local investors who will provide the P1.5 billion to finance the securing of permits, the exploration of the mine site and the setting up of necessary infrastructure.

MRC is currently arranging the private placement, which will amount to about 30 percent of MRC’s outstanding capital, with its underwriters and legal counsel.

Bitanga said the biggest taker for the private placement shares will likely be MRC’s prospective private partner in developing the mine site.

For the second phase of the fund-raising program, Bitanga said the investors who bought shares through the private placement will be given an exit mechanism by converting their MRC shares to shares of MRC Tampakan at a 20 percent discount.

These investors will then be making a profit of 20 percent once they sell these shares during the IPO of MRC Tampakan. Proceeds from the primary portion of the IPO will fund further drilling and the full-scale operation of the mine.

“We would like to be able to mine it as much as we could, make the most out of it in terms of value. I don’t mind being in a minority position for as long as we have an active role in the mine,” Bitanga said.

MRC earlier signed a mining operations agreement with Alberto Mining Corporation under which MRC issued P300 million worth of shares and cash to Alberto Mining, which is reportedly the same group behind Sagittarius Mines, which owns the 11,000-hectare Tampakan copper-gold project.

MRC chief information officer Miguel Bitanga said the company is excited about the Kiblawan project, pointing out that earlier geological studies showed similar findings as those in the Tampakan project during its initial test phase.

He said the company will conduct further studies and drilling activities once it secures the necessary permits. Bitanga said the group is open to forging partnerships with other mining companies for this project, which will serve as MRC’s flagship project and the backbone of its future business ventures.

source: manila bulletin