Good news. 20 million US for 10%. This is world class. Now the company has no debt. It is obvious what's going to happen.
Philex Gold Inc - News Release
Philex to sell 10% equity interest in SMMCI
Philex Gold Inc PGI
Shares issued 40,181,818 2001-12-17 close $0.56
Tuesday Dec 18 2001 News Release
Mr. Gerard Brimo reports
Philex Gold signed an agreement on Dec. 18, 2001, with Anglo American Exploration (Philippines) to sell an effective 10-per-cent equity interest in Silangan Mindanao Mining Company Inc. (SMMCI) which holds the Boyongan project and surrounding tenements in the province of Surigao del Norte, Philippines. The closing of the transaction is conditional on the completion of certain conditions precedent. The Boyongan copper-gold porphyry deposit, discovered in August, 2000, is under a joint venture between the company and Anglo. Drilling on the tenement is continuing.
The purchase price is $20-million (U.S.), with a resulting valuation of over three cents per pound copper equivalent on the basis of the company's current approximation of the metal content of the deposit, as official mineral resources have not been determined at this time. Additional payments of up to $5-million (U.S.) may be made on the basis of an increase in the metal content of the deposit or from any other discovery within the surrounding tenements, which will be determined on the basis of feasibility studies. The additional payments will be computed by applying 2.51 cents per pound copper equivalent to 10 per cent of the metal content in excess of a threshold of 7.96 billion pounds copper equivalent, multiplied by a factor of 0.5 representing an equal sharing of the upside potential with Anglo.
The proceeds of the sale will be applied to repay the company's bank debts of $14-million (U.S.) and current liabilities, as well as to finance closure costs associated with the impending closure of the Bulawan mine as reported in Stockwatch Nov. 23, 2001. "The situation at the Bulawan mine makes it important for us to raise the necessary funds to pay our liabilities and move ahead," said Gerard Brimo, chairman and chief executive officer. "The terms of the agreement are reasonable given the early stage of the exploration and project definition, while our current low share price precludes other acceptable alternatives."
It is anticipated that the transaction will close early in 2002, at which point Philex Gold's equity in the Boyongan deposit will be reduced to 50 per cent. Should Anglo bring the project through a bankable feasibility study at its sole expense, Anglo would be entitled to an additional 30-per-cent equity either directly or through a joint venture with a qualified entity and will conduct the operations if the project proceeds to development. In such a situation, Philex Gold will be required to raise its pro rata share of the project financing while Anglo would provide 100 per cent of the completion guarantees that may be required by third party lenders.
The company continues to be encouraged by the drilling results from the deposit and by the expanded exploration program for next year. About 15,000 metres of resource definition drilling and 3,000 metres of scout drilling are planned in 2002 using four high-capacity and one to two medium-capacity diamond drill rigs.
(c) Copyright 2001 Canjex Publishing Ltd. canada-stockwatch.com
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