Foreign Mining Firm Abandons Coal Project In South CotabatoPublished by MAC on 2007-03-24
Foreign mining firm abandons coal project in South Cotabato
24th March 2007
GENERAL SANTOS CITY – A British mining firm has abandoned its coal project in Lake Sebu, South Cotabato due allegedly to community opposition and its local partner was now scouting for other takers to the rich coal mine deposits in the area. The Daguma Agro Minerals, Inc, the local partner of the United Kingdom-based Crew Gold Corp announced that the latter has abandoned its interest at the former's concession area in Barangay Ned, Lake Sebu. Levitico C. Toquero, Daguma Agro's consulting geologist confirmed on Monday the decision of Crew Gold Corp.
Toquero said that Crew Gold pulled out its equipment late last year due to mounting opposition by residents backed by the local Catholic Church.
Religious leaders criticizing Daguma Agro claimed that the firm allegedly employed deceit in getting the consent of the residents some years back. Toquero belied the allegation saying the attendance sheet the Church distributed for signing had allegedly been used as attachment to their petition to stop coal mining activities in Ned.
He said that the Crew Gold Corp. had conducted a study at the 2,000-hectare area of Daguma Agro concession but backed out despite indication of rich deposit. "Crew [Gold] was dismayed by the [continuing] opposition in the area," Toquero said.
The Daguma coal project holds a 2000-hectare license area under Coal Operation Contract No 126 and consists of two Coal Blocks No. 380 and 381. The area has a potential coal reserve of 104 million metric tons.
Crew Gold Corp. signed an agreement with Daguma last year and paid the latter a non-refundable option fee of $150,000. Had Crew Gold decided to exercise the option, it could have pay a total of $10 million (or nearly P500 million) in cash and equity to Daguma Agro.
Crew would acquire 50 percent of Daguma Agro and entitle the company to purchase the remaining equity, according to Jan Vestrum, Crew Gold Corp. president and chief executive, in a statement last year.
A final payment amounting to $13.75 million (some P710 million) in cash and equity was to be paid later on to acquire the remaining 45 percent of Daguma Agro, Vestrum added.
In February last year, the Department of Energy granted the conversion of the operation contract, from exploration phase to a development and production phase.
Toquero said that Daguma Agro was currently talking to various foreign investors, which he did not identify, for possible partnership. He said these investors were based in London and Russia.
Meantime, Daguma Agro sister company, Bonanza Energy Resources Inc. has eyed 8,000 hectares of land also in Barangay Ned and parts of Sultan Kudarat and Sarangani for a coal exploration.
Another firm, MG Mining and Energy Corp. was already granted a coal operating contract by the Department of Energy to explore 7,000 hectares of land in Barangay Ned in 2004. The four-year exploration stage would cost the company at least P34 million.