After Nonoc, Jinchuan turns to GeoGrace’s nickel
Mining firm GeoGrace Resources Philippines Inc. is negotiating with Chinese giant Jinchuan Nonferrous Metals Corp. on a joint venture involving its nickel mining rights, a source in GeoGrace said.
The source said discussions began in earnest after talks with Philnico Industrial Corp. on a $1-billion deal to rehabilitate Philnico nickel mines on the southern island of Nonoc collapsed last month.
Jinchuan has expressed interest both in buying nickel from GeoGrace and in taking an equity position in GeoGrace, the source said, requesting anonymity.
GeoGrace president David de la Cruz declined to comment on negotiations with Jinchuan, noting that the Chinese firm might have its own confidentiality requirements, but he confirmed that GeoGrace was ”engaged in discussions” with potential investors and partners on its nickel mining projects.
De la Cruz said GeoGrace was contemplating a capital-raising exercise now that its share price had risen above the par value of P1.00.
”As you know, we can only do capital raising above par,” he said, when asked about a stock rights offer that the company had earlier proposed. ”That’s one of the things we’re looking at now.”
GeoGrace hopes to raise at least $10 million to develop its nickel mines in the provinces of Zambales and Palawan.
De la Cruz said the company’s recent acquisition of the mining rights of Saprolite and Garnierite Mining were part of a plan to consolidate mining assets under one company.
Saprolite and Garnierite are owned by stockbroker Jerry Angping, who is also GeoGrace’s chairman.
The source said Angping was now in China for talks with potential mining partners, including Jinchuan, the second-largest Chinese mining group.
De la Cruz said, ”The Chinese are gobbling up all the nickel. There is a nickel rush going on.”
He said nickel prices were hovering near $40,000 per metric ton in the world market, partly because of strong demand in China for the metal, which is the main element in producing stainless steel.
Last week, GeoGrace acquired 6,726 hectares of nickel property in Palawan, adding to the 12,957-hectare property of Garnierite and the 5,503-hectare mining concession of Saprolite, both in Zambales.
GeoGrace’s share price on Thursday closed at P1.02, rising from P0.95 on Wednesday, with P219.3 million worth of shares traded.
Source: INQUIRER.net
