Olympus inks Philippine JV

THE BOURSE WHISPERER: Internationally multi-listed company Olympus Pacific Minerals has entered a formal Joint Venture agreement for the Capcapo gold property located in Northern Philippines.

The company has entered the JV with Abra Mining & Industrial Corporation, Jabel Corporation, Kadabra Mining Corporation (a wholly-owned subsidiary of Olympus), and PhilEarth Mining Corporation.

The Capcapo gold property is located in Abra Province, Northern Luzon, Philippines, north of the Baguio-Mankayan gold district that, according to Olympus, has combined production, current reserves and resources in excess of 60 million ounces of gold.

“This acquisition is an integral part of our strategy to become a multi-mine producer and complements our development stage Malaysian property in diversifying our company over three countries in Southeast Asia,” Olympus Pacific Minerals chief executive officer John Seton said in the company’s announcement to the Australian Securities Exchange.

“Our due diligence drilling at Capcapo indicates we have a truly world class copper-gold discovery typical of the premium deposits found in the Philippines.

“I believe our success in negotiating this exciting ground is twofold; first, our successful track record commissioning two gold processing plants that generate us operating cash and second, our recent announcement that we are starting feasibility at Bau Central in the Bau goldfield, East Malaysia.

“We are excited about the major potential at Capcapo and our strategic partnership with Abra Mining & Industrial Corporation.”

Under the terms of the JV, Olympus, in consortium with a Philippine company, which is controlled by Philippines nationals and is currently in the process of incorporation, has an option to acquire a 60% interest in the Capcapo gold project.

The deal is subject to compliance with Philippine foreign ownership laws.

Olympus paid to Abra Mining US$300,000 upon signing the JV agreement.

The company is required to pay a further US$400,000 upon gaining unencumbered access to the property and may fully exercise its option over three stages of expenditure.

Jabel Corporation will also be paid a royalty based on a calculation that yields the highest payment.

This will be either 3% of the gross value of production from the Capcapo gold project or 6% of the annual profit of the JV corporation.

Olympus will be obligated to make a milestone payment to Abra Mining of US$2 million plus two million common shares of Olympus, or common shares having a value of US$5 million, whichever is of lesser value.

These payments will come due each time a specific level of mineral reserves is defined or daily production rates are achieved.

The JV also grants Olympus a right of first refusal over a mineral production sharing agreement held by Jabel Corporation over the Patok property, also located in Abra Province, Northern Philippines.