Philex Mining Corporation (PMC) is buying out minority shareholders in Canadian listed Philex Gold Inc. (PGI), paving the way for it to fully own the Silangan mining project.
In a disclosure to the Philippine and Toronto stock exchanges, PGI said it has entered into a definitive arrangement agreement with PMC and Philex Gold Holdings Inc. (PGHI).
Under the agreement, PMC would indirectly acquire, through PGHI, via a plan of arrangement, all of the outstanding common shares of PGI from the existing minority shareholders for $0.75 per share. PMC currently owns 81 percent of PGI.
As a part of the transaction, PGI would transfer all of the shares of its wholly-owned subsidiary Philex Gold Philippines Inc. to PGHI in exchange for a promissory note in the amount of Can$82.4 million.
This amount will, in turn, be set off against the outstanding amounts that PGI owes PGHI. Following completion of the transaction, PGI will be a wholly-owned subsidiary of PGHI.
Philex president J. Ernesto Villaluna Jr. said that the transactions will make the Silangan project (formerly Boyongan and Bayugo deposits) in Benguet fully owned by PMC.
In 2006, the Boyongan deposit was deemed by a qualified person to be economic and technically and financially feasible. In addition to the reserves extractable from Boyongan, another opportunity exists for additional resources in the northwest area, the Bayugo prospect.