SMI has fallen on hard times
MANILA, Philippines – Just how serious is the ‘scaling down’ of the activities of Sagittarius Mines Inc. (SMI) following a decision by controlling owner Glencore-Xstrata to cut by half its global operations?
Aside from declaring 85% of its job positions as redundant, which led to nearly 1,000 workers and office employees losing their jobs, SMI is now selling a lot of its vehicles and equipment.
A source said more than 30 vehicles in the SMI General Santos City office are up for sale at not-so-fire-sale prices. Most of these vehicles are Toyota 4x4 pick-up trucks and Fortuner SUVs that have seen better days at the rugged mountain terrains of Tampakan. No, these vehicles are no rundowns. But neither are they brand new. The source also said SMI is selling them at 20-25% less their acquisition costs - cash.
They could end up being bid as lot sale, however.
SMI is also selling a lot of unused office equipment, split-type airconditioning units, tables and chairs and many more after the company decided to shut down its newly built Koronadal and Tupi offices and the barely year-old Digos City field station.
Funding for the operations of the beleaguered mining firm was likewise reduced in August this year, with Glencore announcing a spending cut of $18.9 million for the rest of 2013, forcing its minority partner Indophil Resources NL to also slash its budget for the second semester this year by more than half – from $4.4 to not more than $2 million for the rest of the year.
When Glencore decided to write off $8 billion in assets of Xstrata following the takeover this year, Indophil was also compelled to reassess the carrying value of its $174.7 million interest in SMI after it shares were traded at below its “net asset value.”
“This has resulted in an impairment charge of US$107.5M,” according to a release by Indophil Resources in.
Still, Indophil has remained optimistic the multi-billion dollar Tampakan Copper and Gold Project of SMI will see daylight.
SMI is now practically back to its 2003 level, when the then-Tampakan Mineral Resources Corporation took over the mining project from MIM, which earlier acquired it following the decision of Western Mining Corporation to abandon the project due to widespread opposition from the local Catholic Church. - Rappler.com