Nihao Mineral Resources International Inc. is raising a total of P348 million from a combination of private placement of shares and a stock rights offering to fund more acquisitions of mining rights.
In a disclosure to the Philippine Stock Exchange, Nihao said it is raising P108 million from the private placement of new shares to stockbroker Jerry Angping at a huge discount to market price.
The firm is issuing 80 million shares via private placement to Angping at the issue price of P1.35 per share for a total consideration of P108 million in cash. The firm’s shares closed at P3.15 each at the PSE.
“Proceeds of the share issuance shall be used to fund business expansion that the Company plans to undertake in 2011, including acquisition of mining tenements and mining rights together with incidental expenses for due diligence and research and development,” Nihao said.
The shares to be issued to Angping shall be subject to the appropriate regulatory approvals.
In order to provide shareholders equal opportunity to subscribe to new share issuances of the company, the Nihao board approved the issuance of additional shares of stock via stock rights offering (SRO) at an even lower price.
The SRO shall be implemented on a 2:5 proportion i.e. five shares held by a qualified stockholder shall entitle said stockholder to subscribe to two shares at the par value of one peso (P1.00) per share.
NiHAO has an outstanding capital of 600 million shares and this will translate to 240 million rights offer shares at the rate of two rights shares for every five held.
Earlier this year, NiHAO invested a total of P203 million in privately-held nickel mining firm Oriental Vision Mining Philippines Corporation (ORVI).
NiHAO corporate secretary Arsenio Cabrera Jr. said NiHAO is has initially bought 30 percent of ORVI by acquiring 3,000 shares from various shareholders for P3 million.
In addition, NiHAO has agreed to extend shareholder advances amounting to P140 million in favor of ORVI for the purpose of funding the existing mining projects of ORVI.
Cabrera said NiHAO had also committed to buy an additional 60,000 shares from current ORVI shareholders for a purchase price of P60 million once the Securities and Exchange Commission approved the increase in ORVI’s authorized capital to P400 million.
ORVI is currently developing and operating three nickel projects in Dinagat Island, Surigao del Norte and Isabela provinces.
Among these is the Palhi nickel project in Mount Palhi, Tubajon, Libho and Cagdianao, Surigao del Norte comprising 2,314 hectares containing deposits of chromite, nickel and other associated mineral depoits.
Also containing nickel and chromite is ORVI’s 1,225 hectare Sangay nickel project in Carmen, Loreto, Surigao del Norte and the 2,391 hectare Dinapigue nickel project in Dinapigue, Isabela.