*on buyback* Global Ferronickel Holdings, Inc.

Ferronickel pushes P1-billion share sale

Global Ferronickel Holdings Inc. is pushing through with its planned P1 billion share sale this month.

GNFI said in a revised timetable submitted to the Philippine Stock Exchange it would offer the sale of up to 250 million common shares from July 9 to 13 at a price of up to P4 apiece. The listing date is tentatively set on July 20.

GFNI in May deferred the follow-on offering due to a review of its updated prospectus and audited financial statements by the Securities and Exchange Commission the company plans to use the net proceeds from the offering to partially pay the outstanding loan of unit Platinum Group Metals Corp. from Taiwan Cooperative Bank and for working capital purposes to fund the operations in the Cagdianao Mine in Surigao del Norte.

Abacus Capital and Investments Corp. will serve as the underwriter of the fundraising activity.

GFNI, through PGMC, is the third largest nickel ore producer in the Philippines by volume of nickel shipped and the largest nickel ore producer in the Philippines by the value of shipment.

It is also one of the largest single-mine lateritic exporters in the world and one of the biggest global suppliers of nickel ore, accounting for 12.6 percent of the country’s production. The company is currently exploring opportunities in mineral processing.

GNFI last month said PGMC signed a supply contract with Baiyin International Investment Ltd. for the delivery of 1.1 million wet metric tonnes of nickel ore throughout 2018.

The purchase agreement covers a full range of products from low grade to high-grade ore.

Baiyin International is a unit of China state-owned company Baiyin Nonferrous Group Co. Ltd., which is principally engaged in the production and sale of nonferrous metals and operation of smelting and chemical businesses.

PGMC operates the Cagdianao Mine Project covering 4,376 hectares in Sitio Kinalablaban, Barangay Cagdianao Claver, Surigao del Norte province.


Global Ferronickel to raise over P500 million from share sale

GLOBAL FERRONICKEL Holdings, Inc. (FNI) has priced its follow-on share sale at a discount, which will allow it to raise just over P500 million or half of its original target of P1 billion.

In a notice posted on the stock exchange Tuesday, FNI said the final offer price for its follow-on offering (FOO) is P2.07 per share. This represents an 8.48% discount from P2.2618, FNI’s 10-day volume weighted average price from June 8 to 25.

The price will allow FNI to raise up to P517.5 million, around half of the P1 billion the company initially intended to raise as per a registration statement filed last January. FNI then proposed to price the shares at a maximum of P4 each.

FNI’s planned FOO was filed at the Securities and Exchange Commission as early as December 2014, when the listed mining firm applied to raise a maximum amount of P31.03 billion.

The SEC approved in March 2017 a much lower offer size for the FOO at around P2.025 billion.

FNI tapped Abacus Capital and Investment Corp. as the offer’s underwriter. Proceeds of the issuance will be used to fund the prepayment of an existing loan.

The nickel company earlier said that it is hopeful that 2018 will be a better year for the mining industry, following the government’s crackdown on miners in 2017.

FNI, formerly known as Platinum Group Metals Corp., was listed at the stock exchange via backdoor listing with Southeast Asia Cement Holdings, Inc. serving as the vehicle. FNI is the second largest nickel producer in the country, and the largest single lateritic mine exporter in the world.

Last November, FNI entered into an agreement with Vi Holding, LLC for the implementation of joint business projects in the processing of lateritic ores.

The nickel firm recorded a net loss attributable to the parent of P164.77 million during the first three months of 2018, higher than its net loss of P118.02 million in the same period a year ago.


...atras ang shipment Tongue

Global Ferronickel cuts 2018 target shipment volume

GLOBAL Ferronickel Holdings, Inc. reduced its target shipment volume this year by 8% to 5.5 million wet metric tons (WMT) from the original 6.6 million WMT, as the company focuses on higher-grade nickel ore.

This as the lower prices of nickel ore and a decline in shipment volume weighed on FNI’s bottomline during the second quarter, with net income falling by 37%.

“Based on market observations, the group saw the need to take advantage of the higher market price of Saprolite nickel ores. As such, the target was revised to focus more on the shipment of higher-grade ores, thereby changing the product mix (i.e., more high grade and fewer low grade ores) and reducing the overall 2018 target shipment volume from 6.0 million to 5.5 million,” FNI said in a regulatory filing.

The nickel producer said mining higher-grade ore would result in lower shipment volume since this involves more processing, but will have higher average realized ore price.

“It is the first time in the past several years that we are pushing for shipment of higher-grade nickel ores with 1.65% nickel content to take advantage of its relatively high price with better margin,” FNI President Dante R. Bravo was quoted as saying.

In the same regulatory filing, FNI said its net income declined by 37% to P168.74 million during the April to June period, while the first semester figure plunged 97% to P3.98 million from P151.76 million in the same period last year.

Revenues during the January to June period slipped by 23% to P1.43 billion. Sale of nickel ore slipped 19% to 1.91 million WMT, as FNI only shipped 28 vessels of nickel ore during the first semester against 35 vessels a year ago.

“The decrease in the number of shipments, and consequently in the volume of nickel ore shipped, was brought about by the management’s decision to push for the sale of higher grade nickel ores to take advantage of the higher market price,” FNI said.

The listed miner noted the average realized nickel ore price for the first six months of 2018 stood at $17.59 per WMT compared to $19.44 per WMT during first half of 2017. For its export revenues, FNI said the average peso-dollar exchange rate was 5% higher at P52.46 to $1 during the first semester, compared to P49.99 to $1 a year ago.

“Despite a very challenging first half of the year, measures to boost operational efficiency and our ability to adapt to the changing market conditions continue to enable us to achieve positive results,” Mr. Bravo said.


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