Maharlika to provide $76.4-M bridge loan to Makilala Mining Company

Maharlika Investment Corp. (MIC), the Philippines’ sovereign wealth fund, is set to provide a $76.4-million bridge loan facility to Makilala Mining Company Inc., (MMCI) the Philippine affiliate of Australia-based Celsius Resources Limited that operates copper and gold projects in the country.

The latest agreement comes after MIC acquired a 20% stake in the National Grid Corporation of the Philippines (NGCP).

In a disclosure to the Australian bourse on Monday, Celsius said MIC and MMCI inked a binding term sheet, with the loan funding the feasibility study and the front-end engineering design (FEED) of the Maalinao-Caigutan-Biyog Copper-Gold Project in the Cordillera Administrative Region (CAR).

According to the MMCI website, the project site is located within Batong Buhay, the ancestral domain of the Balatoc Tribe, and is approximately 9 aerial kilometers to the southwest of the town property of Pasil at Amdalao and 43 aerial kilometers west-southwest of Tabuk City, Kalinga.

The MIC financing will also partially fund early development activities, including main access road construction in coordination with the Kalinga Provincial Government, and skills-based training for the Balatoc community.

“The Maharlika Investment Corporation’s decision to invest in the MCB Project underscores the Philippine Government’s strong commitment to advancing the critical metals sector and fostering a responsible mining industry that delivers meaningful benefits to host communities,” Celsius executive chairman Atty. Julito Sarmiento said.

“In this case, we are particularly grateful for the support extended to the Balatoc Indigenous Cultural Community, which stands to gain from this partnership,” he added.

Under the terms of the agreement, the facility will be covered by two omnibus loan and security agreements (OLSAs) — the first will be available nine months from signing, and the second subject to the completion of the FEED and updated feasibility study, up to 24 months from signing.

It will have a 12.5% fixed interest rate compounded quarterly, with MIC having a right of first offer on any sale or transfer of MMCI’s assets and/or shares, as the company cannot sell or transfer assets or shares without MIC’s prior written consent.  The two parties are also set to negotiate an equity sale to MIC.

“In return, we pledge to fulfill our role as responsible stewards, ensuring the MCB Project’s success while upholding environmental and social responsibilities,” Sarmiento said.

“Achieving full permitting and securing substantial funding within just four years despite the challenges of the pandemic is a testament to their (MCCI team in the Philippines) hard work and commitment, and we express our heartfelt gratitude to them for their achievements,” he added.

For his part, MIC chief executive officer Rafael Consing welcomed the agreement, as he said the project would serve as a “benchmark” for responsible mining in the country.

“Our investment decision reflects a shared commitment to the sustainable, inclusive, and regenerative development of the MCB Project. We envision the MCB Project as a benchmark for the Philippine Government’s call for ‘beyond responsible mining,’ setting a new standard for resource development in the Philippines,” he was quoted as saying in the release.—LDF, GMA Integrated News