the ba$%rds have got us, page-3

re: capital raising @ 10c...
Three Australian mining firms plan to trade the shares of their Philippine units on the Manila bourse to help raise funds to bankroll their mining ventures in the country.

They include Lafayette Mining, Red 5 and ElDore Mining Corporation, says Philippines Stock Exchange (PSE) president and chief executive officer Francis Lim.

He says the PSE has eased its listing rules, one of which is the waiving of the required three-year track record of profitability, to woo foreign mining companies to raise capital via the stock market.

"We have adopted a liberal interpretation of our listing rules to accommodate mining firms that are worth listing," he says.

PSE's move was spurred by a deluge of mining firms from Australia, Canada, China and other countries after Manila a year ago allowed full foreign ownership of mining projects.

In the first nine months this year, mining investments totalled $US345 million ($A460 million) from almost nil last year, says the Mines and Geosciences Bureau (GSB).

This, in turn, sparked a heavy buying of PSE's mining issues, with volume turnover skyrocketing by a whopping 609.57 per cent to 130.37 billion shares in this year's first half from 18.37 billion shares in the same period last year.

With more foreign companies coming in, GSB expects investments to reach US$581 million in 2006, US$1.5 billion in 2007 or US$6 billion over the next five years.

Officials of Australian mining firms themselves expressed interest to list their shares on the PSE and use the proceeds for their capital-intensive exploration projects.

Latest central bank data showed the Philippines gaining $US5.2 billion ($A6.95 billion) in foreign portfolio investments in the first 11 months as against $US2 billion in the same period last year. Of the total amount, 68.7 per cent was accounted for by the stock market.

"We are keen on listing on the PSE. The PSE has relaxed its listing rules and we would like to take advantage of that. This would also allow public and local ownership of the company," says Lafayette Philippines director and country manager Rod Watt.

Lafayette, also listed on the Australian Stock Exchange, operates a gold mining facility on Rapu-Rapu Island in Albay province, 400 km south of Manila.

Red 5, which is exploring gold in Surigao del Norte province, 1000 km south of Manila, is eyeing to raise between $US10 million and $US15 million ($A13.4 million-$A20 million) through the PSE.

"We are looking into raising funds for our exploration projects in the Philippines. We are hopeful that we could go public here," says managing director Greg Edwards at the recent 6th Asia-Pacific mining conference in Manila.

"We are already trading at several stock exchanges and what we want is to get shareholders from within our investment area in the Philippines," he adds.

The ASX-listed ElDore also holds a 65 per cent interest in a gold and copper mining project in Nalesbitan, Camarines Norte, south-east of Manila.

Analysts admit the Philippines is now back on the radar screens of foreign mining companies.

"Our analysis indicates that the Philippine mining sector is headed for a strong recovery, fuelled by foreign investment," says Alfred Dy, head of Credit Lyonnais Securities Asia Philippine Research.

"We expect investments to continue pouring in on the heels of the government move to adopt a pro-mining stance and expectations for an extended cycle of high commodity prices," he says.

© 2005 AAP