Copper-gold producer Philex Mining Corp. said Friday it has agreed to sell 778.44 million shares in the company, representing a stake of 20.16 percent, to Hong Kong-based First Pacific Co. Ltd. for P6.2 billion.
In a disclosure to the stock exchange, Philex said it sold the shares at P7.92 each, at a 10-percent premium over the price at which it acquired the shares under its earlier launched buyback program.
First Pacific is set to purchase the stake in two equal tranches. The first 10.08 percent will be bought on October 13 and the second, by November 30. The closing of the deal will give it two seats in the Philex board.
Philex said First Pacific managing director Manuel V. Pangilinan will be nominated to take one director seat.
Pangilinan is the chairman of the local flagship of First Pacific, Metro Pacific Investments Corp., whose interests span a variety of industries including water distribution, health care, real estate and recently, the tollroad business. He is also the chairman of telecom giant Philippine Long Distance Telephone Co., another subsidiary of the Hong Kong company.
Philex said the entry of a strategic investor in the firm at this time will provide it a strong partner in pursuing the development of the Boyongan copper-gold project in Surigao del Norte as well as various other mining claims.
"That will clearly strengthen Philex's portfolio of mining assets and thus, cement its place as the largest and most profitable mining company in the Philippines," it said.
Last week, Philex, the country's biggest miner by market value, took over control of the Boyongan by buying the 50 percent stake of its partner Anglo American Exploration (Philippines) BV for $55 million. Philex Gold Philippines Inc., which is 81-percent owned by Philex, owns the remaining half of the project.
Philex and Anglo discovered the Bongoyan deposit in 2000.
Anglo provided all the funds for exploration and completed the pre-feasibility study on the site where it discovered other mineralized centers in December 2007.