Miner OceanaGold (Philippines) Inc. is pricing its initial public offer (IPO) at P13.33 apiece, potentially raising for the company P6.08 billion.
The local unit of Vancouver-based Oceanagold earlier said it may sell the shares at as much as P17.28 apiece.
The local unit will not receive any proceeds from the offer, which is being done as part of the company’s financial technical assistance agreement (FTAA) with the government for its Dipidio gold and copper mine that requires it to list 10 percent of its stake in the Philippine Stock Exchange
OceanaGold is the only miner that has an FTAA with the government.
The IPO will run April 29 to May 6, with listing set by May 13.
Oceanagold tapped BDO Capital & Investment Corp. as the domestic underwriter and bookrunner for the offer, with CLSA Ltd. as international underwriter.
Ed Francisco, BDO Capital president, said at the final price of P13.33 per share, Oceanagold’s IPO gives a dividend yield of 13 percent for the next five years, considering a gold price of 1,855 per ounce.
The offer price gives a huge upside for potential investors given the current upward trajectory of gold prices.
In March, Gerard Bond, OceanaGold chief executive officer said the company looks to spending $5 million to $7 million as capital expenditure this year for drilling and exploration. The company is also looking for another mine site in the country.
OceanaGold expects to produce 120,000 to 135,000 ounces of gold and 12,000 to 14,000 tons of copper at the Didipio mine this year.
Mining operations at the Didipio Mine currently consist of sourcing ore from the underground mine and from its surface ore stockpile. The ore is processed through the company’s processing plant to generate gold and copper concentrate.
