Wednesday, June 25, 2008 Xstrata fails bid to corner Indophil's shares in SMI By Edwin G. Espejo Correspondent
GENERAL SANTOS CITY -- Reports coming from Australia indicated that Xstrata Copper has apparently failed to acquire substantial shares of Lions Selection in Indophil Resources NL in a costly takeover war between two partners that own the multi-billion dollar gold and copper project of Sagittarius Mines Inc.
In a shareholders meeting of Lions Selection Monday evening, investors of the company was reported to have voted against the sale of majority of its stake at Indophil Resources NL of Australia to Switzerland-based Xstrata, which owns 62.5 percent of SMI, earlier offered to buy out Indophil Resources for $1 per share.
Indophil now virtually controls 37.5 percent of SMI after Alsons Group began delivering its commitment to sell the latter's five per cent stake at SMI for cash and substantial shares in Indophil.
Alsons shares in SMI are reported to be valued at $54 million.
A consortium of investors, led by Crosby Capital of Hong Kong and Filipino conglomerate Alsons Group, made a counter offer to buy out Indophil at $1.28 per share triggering an intra-corporate bidding war.
Xstrata earlier tendered an offer to buy 17.7 percent of Lion Selection's 25 percent stake at Indophil in a prelude to gaining complete control of SMI.
Indophil chief executive Mr. Richard Lauffman was reported to have vowed to fend off any takeover attempt from Xstrata.
"But I will make it clear that we will review their offer and that we are here to play," he was quoted as saying.
Lauffman has aligned himself with the consortium that is waging a battle to takeover Indophil's stake at SMI.
One June 13, Xstrata sent a bidder's statement citing several risks and uncertainty in an effort to convince Indophil shareholders to sell their stakes at the company.
Among the risks Xstrata cited are uncertainty of approval process from the Philippine government and strong opposition from cause-oriented groups and the local Catholic churches in Central Mindanao.
Xstrata likewise warned of growing threats from armed rebels in the region.
But Indophil shareholders, led by Luaffman, viewed the takeover bid as a hostile maneuvering of Xstrata to gain absolute control of SMI and its gold and copper project in Tampakan, South Cotabato.
SMI is reported to come out with a report on its extended pre-feasibility studies in the third quarter of this year.
Last year, SMI announced that the Tampakan Gold and Copper project has a potential two billion tons of mineral deposits, containing 11.6 million tons of copper and 14.6 million ounces of gold at a 0.3 copper cut-off grade.
SMI holds a financial and technical assistance agreement (FTAA) with the Philippine government to explore copper and gold deposits in more than 20,000 hectares of land covering three towns in three provinces in Central Mindanao.
The mineral development area of SMI cuts across scores of villages in the towns of Tampakan in South Cotabato, Kiblawan in Davao del Sur and Columbio in Sultan Kudarat.
Its main mineral development site is located in the hinterland village of Tablu in Tampakan, South Cotabato.
