OceanaGold Philippines begins subscription period for IPO

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OCEANAGOLD Philippines, Inc. (OGPI) commenced its initial public offering (IPO) on Monday and is scheduled to be listed on the Philippine Stock Exchange (PSE) on May 13.

The IPO offer period will run until May 6, during which investors can purchase shares at P13.33 each.

Once the offer period ends, OGPI will be listed under the trading symbol “OGP” on the PSE, OGPI said in a statement on Monday.

The IPO consists of 456 million common shares, equivalent to a 20% ownership stake in the company.

It is expected to generate approximately P6 billion in net proceeds, which will be received by OceanaGold (Philippines) Holdings, Inc. (OGPHI), a wholly owned subsidiary of OceanaGold Corp.

OGPI operates the Didipio gold and copper underground mine in Nueva Vizcaya.

“This listing represents the first IPO in the mining industry in the Philippines in the last decade. We have received strong interest to date from both local and international institutional investors, and we look forward to now opening up the IPO to local retail investors,” said OGPI President Joan D. Adaci-Cattiling.

OGPI is conducting the IPO as a requirement under the company’s renewed financial or technical assistance agreement (FTAA) with the Philippine government.

The FTAA was renewed in July 2021 for an additional 25-year period, applied retroactively from June 19, 2019.

 “The Didipio mine is an established, low-cost, long-life, operating mine that has a long history of generating strong free cash flow (FCF). The mine is the second largest producer of gold and copper in the Philippines,” BDO Capital & Investment Corp. President Eduardo V. Francisco said.

OGPI’s dividend policy aims at distributing 90% of FCF. The mine is expected to generate an FCF yield of about 14.8%, while the expected dividend yield is around 13.3%, subject to market and operating conditions and the 2025 estimated FCF based on the reserves-only mine plan at an assumed gold price of $1,910 per ounce.

The company said it will be the first FTAA holder to list on the PSE and was the first to remit an additional government share payment for the year-ending 2023, worth P1.13 billion.

BDO Capital & Investment Corp. is the global coordinator, domestic underwriter, and bookrunner, while CLSA Ltd. is the international underwriter for the offer. — Revin Mikhael D. Ochave