Listed mining company Geograce Resources Philippines Inc. said Wednesday that it has signed an operating agreement with the new claimant to a mineral property in Isabela province that was shut down earlier this month.
Geograce corporate information officer Arsenio C. Cabrera Jr. said in a letter to regulators that Geogen is the "successor-in-interest" of Platinum Group Metals Corp. (PGMC) for the 2,391-hectares mineral property in Dinapigue, Isabela.
The mineral property is covered by a mineral production and sharing agreement or MPSA No. 258-2007-II.
PGMC had entered into an operating agreement with Geograce on September 23, 2008. Under the deal, Geograce obtained the exclusive right to operate and develop about 45 hectares within the total 2,391 hectares of property.
On January 2009, PGMC sold its rights over the property to Geogen, which agreed to respect the contractual obligations of PGMC.
"The Geogen operating agreement supersedes the operating agreement entered into by and between the company and PGMC," Geograce said.
Geograce said the contract area with Geogen shall cover the 45 hectares where it operates plus an additional contract area of 60 hectares.
The deal with Geogen will remain effective until March 23, 2010 and will be subject to renewal by the parties, Geograce said.
PGMC, controlled by the low-key Atayde family, has been one of the mining companies hit by the diving mineral prices.
PGMC's operations all over the the country focus mainly on nickel, which hit a low price of $4 per pound from $14 a pound last year.
Aside from its Isabela mining site, it is also letting go of its ferro-nickel smelter operations in Danao in Cebu province. It was reported that PGMC is about to close a deal with Chinese buyers.