Coal Firm To Hold IPO In Q4

COAL Asia Holdings, holder of the country's second largest coal reserves, filed on Monday its application with the Securities and Exchange Commission formally signifying its intent to conduct an initial public offering during the fourth quarter of 2012.

The company plans to list its shares on the Philippine Stock Exchange's first board.

Coal Asia is the parent company of Titan Mining and Energy Corporation (TMEC), which owns mining exploration and development rights in Davao Oriental and Zamboanga Sibugay, is expected to boost market confidence in energy stocks due to continued rising demand for thermal coal fuels both in the domestic and international power-generating sector.

Company sources have confirmed that mine developments are on-track with commercial production of 600,000 metric tons of high grade coal per year starting in 2014.

The same sources have shared that a June 2012 Preliminary Feasibility Study on COC# 159 in Davao Oriental (7,000-hectare area) covering a small 214-hectare area from Old Macopa to Batinan alone concluded the economic viability of the area with an observable coal reserves yield factor of 28,000 tons per hectare which translates to an estimated market value of P23.8 billion.

An earlier Philippine Mineral Reporting Code standard geological report, done in April 2012, on COC# 159, 166 and 167 in Davao Oriental and Zamboanga Sibugay identified total potential coal resource of 120 million metric tons.

Furthermore, company sources have this early confirmed that an independent valuation report prepared by Multinational Investment Bancorporation dated May 2012 valued Titan's coal assets at P12.5 billion.

Coal Asia has already bagged off-take contracts both here and abroad but is also eyeing the export markets including India, Japan, Taiwan, Hong Kong and Vietnam.

Company officials are also confident that as their higher grade coal sources are located in Mindanao, it is in the right place at the right time with the expected explosion in demand by large scale energy producers racing to establish their coal-fired energy generating plants as well as for cement plants already in place in the region as they too prepare for the impending growth of Mindanao through the government's plans to establish key economic zones in the country's southern-most region.