February 6, 2009

Philippine Bullion Report: Nickel Mine Shutdown in Isabela as demand slow-down in Electronics

Price of Gold in the world market went-down, up, down, and up before finally setting to a convincing $900 level. Silver on the other hand made a comfortable performance in the $12 level making it the best performer among the precious metals. "In this times of financial turmoil, nothing is predictable even what had been claimed as certain." a analyst commented.

Local mining industry has not been spared by the brutal impact of the global financial crisis as the slow-down in demand of electronics triggered a domino effect which has now reach minor and medium scale mining companies.

Plunging prices of nickel have forced a mining company in Isabela province to discontinue operations.

The Platinum Group Metals Corp. (PGMC)-Dinapigue Nickel Project has shuttered operations after prices of nickel – a metal used for making coins and magnets – plummeted to $4 currently from $14 a pound last year, said Jerrysal Mangaoang, the company’s manager.

Besides causing massive investment withdrawals by the project’s financiers, 400 workers have also been laid off, Mangaong said.

The workers have already received their severance pays and other benefits to help them start their own livelihood.

Last year, PGMC has signed an agreement with Geograce Resources Philippines, Inc. (Geograce) for an exclusive right to operate and develop a portion of the PGMC’s mining project in Isabela province.

In its disclosure, Geograce announced that it would exclusively operate 45 hectares out of the total 2,391 hectares covered by the Isabela Nickel project in Dinapigue, Isabela through a profit sharing agreement.

Geograce’s board has also reallocated P40 million as a reimbursement to PGMC for the production cost of the ore in stockpile from the mineral property,

However, it remains unclear if Geograce will take over the mining project, now that its local partner has bowed out of the mineral exploration business.

PGMC is allowed to mine up to two million metric tons of ore every year in its Isabela mine site. - GMANews.TV

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