Business as usual says IndophilPublished by MAC on 2004-01-30
Business as usual says Indophil
Friday, January 30, 2004
Indophil Resources maintains that a Supreme Court ruling made this week in the Philippines that appears to put at risk its exposure to the massive Tampakan copper-gold project is merely a short term "hiccup".
Indophil said it structured its agreements with its Philippines partners with an eye to just such a "negative" ruling being made.
Indophil also pointed out that the Philippine Government is appealing the court's decision, which ruled that the Financial and Technical Assistance Agreement that was awarded to original project owner WMC was unconstitutional and void.
An FTAA is an agreement with the President of the Philippines granting the right to conduct mining operations.
According to a Dow Jones report, the Court nullified several provisions of the 1995 Philippine Mining Act that empowered the Government to grant contracts that allow foreign companies to own and manage mining claims in the country.
After WMC decided to get out of the Philippines, the FTAA was subsequently transferred to Sagittarius Mines, which is the entity through which Indophil and its Philippine partners, Alsons Corp and the Tampakan Group of Companies, hold their interest in Tampakan.
The Court reserved its position in relation to the effect of this transfer, with Indophil saying Sagittarius is a 60% owned Philippine entity.
Even should the ruling(s) on the FTAA remain in place, Indophil argues its bases are covered by the fact that the Tampakan Group of Companies hold the preferential rights to Mineral Production Sharing Agreements over the Tampakan area.
Indophil further said drilling and pre-feasibility studies were continuing as normal.
Investors took fright with today's announcement, with Indophil's share price initially dropping as low as 18 cents after closing last night at 41 cents. However by early afternoon the stock had recovered part of its losses to 32.5 cents.
Fellow Philippine hopefuls were also down on a day the gold price dropped below US$400/oz, with Lafayette Mining shares off 2 cents to 11 cents, Red 5 down a similar amount to 19 cents, Climax Mining down 1.5 cents to 15 cents, and Medusa Mining down 1c to 43.