Global Ferronickel Holdings, Inc.(FNI), the Philippines’ third largest nickel producer acquired Southern Palawan Nickel Ventures Inc. The latter owns at least 90 percent of Ipilan Nickel Corporation, which mines nickel in Brookes Point, Palawan.
The P2.29 billion acquisition is expected to double the company’s annual production capacity. It will also make it the second largest Philippine producer of nickel after Nickel Asia Corp.
“This new acquisition forms part of our growth strategy to minimize production downtime throughout the year,” said FNI president Dante Bravo. “The company is very much on track with its plans to become a leader in nickel production in the country.”
FNI currently operates two open-pit deposit sites in Cagdianao, Claver in Surigao del Norte. However, these mines only operate from April to October. As a result, the 2,800-hectare Ipilan mine will be tapped to supply output from November to July.
Good prospects despite nickel prices
The depressed and volatile nickel prices have affected the earnings of several nickel mining companies in the country. “The sluggish price movements, particularly for base metals, were due to weaker demand, most especially from China,” the Mines and Geosciences Bureau said in a report.
However, FNI remains optimistic that the nickel prices will rise towards the end of the year. This is if demand from Chinese steelmakers picks up. The company is also considering the possibility of putting up a smelting business. Demand for steel is huge in the Philippines.
Indeed, the mergers and acquisitions climate does not seem to be affected, as the takeover comes on the heels of the news that Nickel Asia has also expanded its mining area with the acquisition of Geogen Corporation. Geogen owns the Isabela Nickel Project, which covers a total area of 2,392 hectares. Nickel Asia will pay the purchased 240 million shares in cash at P2.02 per share, but it will also pay P209.2 million for the assignment of the advances, for a total of P694 million.
Australian nickel miner Sirius Resources also expects a planned takeover. Diversified miner Independence Group has bought it for $1.8 billion in September. Shares of the company rose in 2012 when it discovered the high-grade Nova nickel and copper deposit in the Fraser Range. Sirius CEO Mark Bennett has also reiterated that the low nickel prices will not affect the takeover, saying that “there are no clauses in the deal that make it fall over.”
According to Peter Cook, chief executive of Perth-based gold, tin, and nickel miner Metals X, his company’s recent acquisitions were taking advantage of opportunistic growth options, as many distressed assets are suffering from weak metal prices. “It’s pretty typical of Metals X approach to buying things. There’s a lot of people suffering a lot of stress out there,” he said.
Hence, small cap nickel companies are often potential acquisition targets during these times. This is especially the case for those that exhibit a huge potential for long-term growth. One of them is Russia’s Amur Minerals Corporation with its Kun-Manie nickel-copper sulphide project. This project is one of the top 20 largest nickel deposits in the world. Amur Minerals‘ impressive no-debt record and 500 percent share price increase over the last 12 months puts it in the line of vision of bigger nickel miners looking to acquire assets.
Why being a silver entrepreneur makes a good decision post-retirement
NBA players increasingly use platform to voice stance on national issues
Scientific study finds digital games like Minecraft as educational as off-screen play
Miami Yacht Show announces relocation for 31st event next year
Study says happiness in wealth higher among those who rightfully earned it
Cannabis acceptance grows as hemp industry leader PotNetwork Holding breaks CBD sales records
This fast-growing organic products stock already has space on Whole Foods’ shelves
Why Vapor Group Inc. might be the breakout penny stock you’ve been looking for in 2018
The CBD industry is enjoying a boost from the lifestyle sector
When you should consult your financial advisor
Promoting women’s football in Malta by UEFA projects
Euro NCAP marks its 20th anniversary with two crash tests
European Parliament’s International Trade Committee backs CETA
The American Heart Association has released four new PSAs
PwC presents 20th global CEO survey results in Switzerland
Crypto2 days ago
Could Global Blockchain Technologies change the way we invest in cryptocurrency?
Crypto2 days ago
One of America’s oldest gold mines enters the crypto-century
Featured3 days ago
CBD stocks emerge strong in the growing cannabis industry, marijuana legalization
Featured2 days ago
This hemp market player’s growth is about to go into overdrive
Featured3 days ago
The gig economy has matured — when will the business world catch up?
Business5 days ago
Disney announces price hikes for Disneyland tickets in the US
Business4 days ago
Delving deeper into the Internet of Things
Economy5 days ago
Economics, science, and religion: What role do humans play?