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We welcome 2007 in a celebratory mood for two reasons: The first is that we have finally obtained the release of our renewed Exploration Permit (EP) on January 29, 2007.
A portion of the EP shall be assigned to our 100%-owned subsidiary, Kalayaan Copper-Gold Resources, Inc.
The second reason is of course the signing of a Letter of Intent with Anglo-American for the exploration and potential development of the Kalayaan Property on November 9, 2006.
As expected, we signed with Anglo American, through its wholly-owned subsidiary, Anglo Investments BV, a Farm-In Agreement on March 26, 2007, providing for the funding by Anglo of the pre-feasibility phase, costing US$20 million, to earn equity in Kalayaan Copper-Gold Resources, Inc.
If warranted, Anglo will proceed to solely fund the final feasibility phase, costing another US$15 to 20 million, of the Kalayaan project, for additional equity.
As its initial entry cost into the project, Anglo has remitted US$7 million to MMC which shall be deemed as payment to MMC upon Anglo's commencement of the program in Kalayaan.
We are close to concluding the negotiations for the rest of the definitive agreements for the joint venture with Anglo.
The Board of Directors saw the critical need to address some of the company's long standing financial obligations and therefore decided to raise capital through an offer of 1:2 stock rights (SRO).
The SRO was oversubscribed and raised a total of P895 million.
We were able to pay our major creditors and suppliers.
We are continuing to settle accounts with suppliers to clean up our balance sheet; already as of year-end 2006, our balance sheet shows a substantial reduction in Accounts Payable and Accrued Expenses, Borrowings and Non-trade payables.
P200 million of the SRO proceeds was allotted for an exploration program for MMC properties outside the Kalayaan, which MMC commenced early this year.
Confident of the results of this exploration program, we hope to reopen the mine possibly within a period of two years.
Mr. Lyndon Bradish retired from the Board and was replaced by Atty. Jose G. Cervantes.
We are grateful to Mr. Bradish for his many contributions as President from 2004 to 2005 and as Director for four years.
As we welcome Sycip, Gorres, Velayo & Co., we also wish to thank Isla Lipana & Co. for their quality service for many, many years.
On behalf of the Board of Directors, let me close this short message by expressing our sincere appreciation and thanks to our faithful employees, shareholders and suppliers for their steadfast support of our various short and long-term plans geared towards getting the company to resume operation.
Felipe U. Yap
Chairman of the Board and Chief Executive Officer
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