Celsius Resources Ltd (ASX, AIM: CLA)’s Philippine affiliate, Makilala Mining Company, Inc., has signed a binding term sheet with Maharlika Investment Corporation (MIC) which outlines the key terms of a bridge loan facility of up to US$76.4 million, to fund CLA’s flagship MCB Project.
The Facility is intended to fully finance updating the company’s feasibility study (FS) and Front-End Engineering Design (FEED), and 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 binding term sheet is also intended to enable MMCI to comply with the financial capability requirements under its Mineral Production Sharing Agreement with the Philippine Government.
“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. In this case, we are particularly grateful for the support extended to the Balatoc Indigenous Cultural Community, which stands to gain from this partnership,” Celsius executive chairman Atty. Julito R. Sarmiento said.
“In return, we pledge to fulfil our role as responsible stewards, ensuring the MCB Project's success while upholding environmental and social responsibilities. Immense credit goes to the dedicated MMCI team in the Philippines, whose efforts, alongside the unwavering support of the CLA Board, have brought the MCB Project to this pivotal stage of construction and development. Achieving full permitting and securing substantial funding within just four years despite the challenges of the pandemic is a testament to their hard work and commitment, and we express our heartfelt gratitude to them for their achievements.”
Driving national development and sustainability
MIC is a Philippine Government owned and controlled corporation mandated to manage the sovereign wealth fund of the Philippines. Its mission includes driving long-term national development by fostering job creation, accelerating poverty reduction, and promoting economic growth while achieving optimal investment returns.
The MIC Board’s approval follows an extensive due diligence process, which assessed technical, legal, financial, and socio-economic aspects of the Project. Initial results highlight promising technical and economic feasibility, environmental compliance, and social license.
The proceeds of the Facility mark a critical milestone in the Project’s funding, enabling immediate commencement of work with the initial funding amount of US$10 Million. Consequently, these works will no longer require direct funding from CLA.
Discussions on the additional equity funding required are ongoing, given total estimated capital expenditure of the Project. We look forward to updating investors once binding equity agreements have been finalised.
“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,” MIC’s chief executive officer Rafael D. Consing, Jr. said.
Next Steps
The companies are in the advanced stages of finalising the Omnibus Loan and Security Agreements reflecting the terms of the binding term sheet. A further announcement will be made once concluded.
Meanwhile, MMCI is in the process of selecting a suitable engineering company to update its Feasibility Study (FS) and Front-End Engineering Design (FEED). The company awarded will be announced after the signing of the loan agreements, alongside the resumption of drilling and onsite activities to support engineering and early works.
MCB Copper-Gold Project
The MCB Copper-Gold Project (MCB) is located in the Cordillera Administrative Region in the Philippines, approximately 320 kilometres north of Manila (Figure 1). It is the flagship project within the Makilala portfolio, which also contains other key prospects in the pipeline for permit renewal or extension.
Location of the MCB Project in the province of Kalinga, Northern Luzon, Philippines.
A maiden JORC-compliant Mineral Resource Estimate was declared for the MCB Project in January 2021, comprising:
- 313.8 million tonnes @ 0.48% copper and 0.15 grams per tonne (g/t) gold, for 1.5 million tonnes of contained copper and 1.47 million ounces of gold, of which:
- 290.3 million tonnes @ 0.48% copper and 0.15 g/t gold is classified as Indicated
- 23.5 million tonnes @ 0.48% copper and 0.10 g/t gold is classified as Inferred
An updated JORC-compliant Mineral Resource Estimate was announced on December 12, 2022, comprising:
- 338 million tonnes @ 0.47% copper and 0.12 g/t gold, for 1.6 million tonnes of contained copper and 1.3 million ounces of gold, of which:
- 249 million tonnes @ 0.44% copper and 0.11 g/t gold is classified as Indicated
- 42 million tonnes @ 0.52% copper and 0.11 g/t gold is classified as Inferred
- 47 million tonnes @ 0.59% copper and 0.19 g/t gold is classified as Measured
A study for the MCB Project was announced by CLA on December 1, 2021, identifying the potential for a 25-year copper-gold mining operation. The study was based on an underground mining operation and processing facility to produce a saleable copper-gold concentrate.
Key highlights from the study:
- Post-tax Net Present Value (NPV) (8%): US$464 million
- Internal Rate of Return (IRR): 31%
- Assumed copper price: US$4.00 per pound
- Assumed gold price: US$1,695 per ounce
- Initial capital expenditure: US$253 million
- Payback period: Approximately 2.7 years
- Mine production: Matched to a 2.28 million tonnes per annum (Mtpa) processing plant
- Ore grade (first 10 years): 1.14% copper and 0.54 g/t gold
- Cash costs: US$0.73 per pound of copper, net of gold credits