International Pursuit Corporation (TSE-IPJ) ("Pursuit") is pleased
to announce that its Philippine subsidiary International Pursuit
Philippines Incorporated ("IPPI") has signed a Letter of Intent
with Minoro Mining and Exploration Corporation ("Minoro") to enter
into a joint venture agreement on or before April 30, 1998 to
develop IPPI's Hinoba-an copper deposits in the Province of Negros
Occidental in the Philippines. Minoro is currently engaged in the
reopening of the Atlas Consolidated Mining and Development
Corporation's mines in the adjacent province of Cebu. The Letter
of Intent is non binding until the joint venture agreement is
executed which is scheduled to be completed within 90 days of
completion of a scoping study currently being prepared by Kilborn
SNC-Lavalin. Given the current low copper price, volatile capital
markets, and conditions precedent, there can be no assurance that
the transaction contemplated by the Letter of Intent will be
completed. As a result, IPPI and Minoro will be entitled to
negotiate a transaction with other mining companies until the
joint venture agreement is executed, although neither party has
any present plans to do so as both Pursuit and Minoro believe that
the contemplated joint venture has significant advantages to both
IPPI and Minoro for the reasons described below.
The letter of intent is based on the understanding that Minoro can
earn a 60 percent interest by securing US$100 million of project
financing, with the assistance of IPPI, and supplying all of the
necessary mining equipment and infrastructure to bring the
Hinoba-an project into production at a rate of 15 million metric
tons of ore per year. In addition, Minoro will be responsible for
any cost over run in excess of the US$100 million and will pay
IPPI US$15 million as follows: US$ 5 million within 90 days of
completion of the scoping study on the condition that the joint
venture agreement is executed, US$ 5 million 60 days thereafter,
and US$ 5 million 120 days after the date of the first payment.
The present plan envisions completion of a feasibility study by
late 1998 with the start of production in early 2000. Initially,
IPPI management anticipates that the project will produce in
excess of 160 million pounds of copper per year but will average
140 million pounds per year over the life of the present known
resource. The project is anticipated to be a low cost producer,
with the first half of the mine life possibly producing at under
US$0.50 per pound by utilizing higher grade ore at a low strip
ratio, in the early years. In addition to copper, the project
will also produce minor amounts of gold and silver as well as
pyrite. Market studies indicate that pyrite demand, now over 15
million metric tons per year, is growing at a rapid rate in China
and other East Asian countries as their consumption of sulfuric
acid steadily increases. It is anticipated that byproduct values
will make a major contribution to the smelting and refining
charges.
The capital cost of the venture will be low, compared to similar
operations, because of the favourable logistics of the area and
also because of the extensive amount of used mining equipment
which can be refurbished available to Minoro. Of equal importance
to the project is the availability of trained personnel available
from Minoro which will permit efficient construction and
productive management of the operation. As well, the close
proximity to other Minoro operations, in the Philippines, will
permit sharing of services such as general management, power
generation, maintenance and repair shops, accounting, etc.
Initial internal management studies indicate that the cash flow
generated by the operation will permit a rapid capital repayment.
Pursuit is a Canadian public company whose shares are listed on
the Toronto Stock Exchange under the symbol ("IPJ"). The company
is actively exploring for gold and copper deposits in the
Philippines, Indonesia, Mongolia and Nevada.
On behalf of International Pursuit Corporation
Stephen R. Dattels
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Looks like Pursuit is giving up its intention of being purely an exploration company. Apparently low copper prices make it impossible
to sell this property at a decent price. We can forget about making a
quick $80-160 million as some predicted. It will take a couple of years for the loan to be paid back, then Pursuit should make should make a good income from this mine (US$16 million per year?), but that's five years from now. I think Dattels is doing the best he can, given miserable metal prices. In fact, Pursuit is doing surprizingly
well in this historic bear market for gold and copper. This stock should skyrocket after the metals turn back up. But when?!?!?!
Bear |
