Baker & McKenzie, Freehills and TransAsia Lawyers are advising Melbourne-based copper and gold producer Indophil on a A$545m approach for the company from China’s Zijin Mining Group. China’s largest gold producer is being advised by Charltons Hong Kong, Minter Ellison in Australia, Yorac Arroyo Chua Caedo & Coronel in the Philippines and Fujian Zenith in the PRC.
Although Indophil is an Australian company, its focus has been the development of the Tampakan Copper-Gold Project in the southern Philippines. Indophil owns 34.23% of the Tampakan project and has arrangements in place to acquire a further 3.27% from Philippine company Alsons, which would lift its stake to 37.5%. The remaining 62.5% is held by Xstrata Queensland. Xstrata also owns 19.9% of Indophil, making it the largest shareholder. It has entered into a pre-bid acceptance agreement with Zijin in the absence of a superior proposal.
Richard Lustig is leading the Baker & McKenzie team on the deal and Jesse Change is leading the TransAsia Lawyers team, which is working on the Chinese end of the deal particularly the interface with the Chinese bidders. Marcus Best is running the show for Minters out of its Melbourne office and Charltons Hong Kong principal Julia Charlton is leading the team for her firm.
Freehills partner John Tivey, however, has been centrally involved in the Tampakan project since it was owned by Western Mining Company in the mid-90s. Tivey worked for WMC at the time along with the current Indophil CEO Richard Laufmann. They went their separate ways and Tivey was set up as a partner in Freehills' Melbourne office when WMC took the asset to market in late 1999. A couple of his former colleagues had set up Indophil as a junior explorer composed of a handful of exploration leases in the Philippines and Tivey was sure that the Tampakan project would be right for their new company.
“I went to see them and said ‘guys, you should buy Tampakan off Western Mining,” Tivey said. However, things would not go that smoothly and Western Mining rebuffed the new company and sold it to another Philippine company.
Not to be put off, Tivey and his new client Indophil did a deal with the original claim holders who had a preemptive right to the project and supported them to exercise that right allowing Indophil to gain control of the project. Tivey again worked with Indophil at the beginning of a long-running case in the Philippines’ Supreme Court that resulted in a restructure in the ownership of the asset.
Tivey hopes that his involvement in Tampakan does not end with the sale to Zijin. “The hope for me is that we get to have an ongoing role with Zijin and their investment in the project given that we’ve formed a really close relationship with the company and their Hong Kong counsel as part of the journey,” he said. Although the Indophil board has unanimously recommended acceptance of the offer, this does not necessarily represent the end of that journey. Tivey said that the rivalry between China and the West could lead to one of the major Western mining companies to come in with a rival bid.
