July 11, 2014

Top Frontier exploring mine sites

News website interaksyon.com today reported that Top Frontier Holdings (TFHI, Not Rated) is exploring sites for potential nickel and gold mining projects. The newspaper quoted company management as saying that such sites would be operational in four years.

Management also said that it was open to acquiring operating mines either domestically or overseas, although no targets have yet been identified. It is also looking at opening an ore processing plant. Further, management dropped plans of conducting a follow-on offer, saying it would finance its mining activities through cash dividends from its stake in San Miguel (SMC, Not Rated) or project financing.

Our take: Top Frontier currently holds the rights to a number of nickel, gold and limestone projects, but has yet to undertake any active development. From a holding firm, the company is thus transforming itself into a mining company to benefit from current high prices of metals such as nickel.

It is however still too early to speculate on the economic viability of its existing or future mine sites pending results of ongoing tests and exploration. Also, we are uncertain as to how the company will address rules of the PSE which requirefirms which listed by introduction to conduct a follow-on offer a year from their listing date. TFHI listed by way of introduction in January 2013.– WealthSec