Dominion Holdings Proposes Major Capital Increase for Mining Merger

Dominion Holdings, Inc. (DHI) has announced plans to increase its authorized capital stock to P30 billion from P3.42 billion as part of a proposed merger with Indophil Resources Phils. Inc. and Sonar Holdings Inc. The merger aims to consolidate control over the Tampakan Copper-Gold Project, a significant mining venture located in Mindanao.

According to disclosures made by DHI, the board approved the capital increase on August 19, which will be presented for shareholder approval at the annual stockholders’ meeting scheduled for September 14. The merger would allow DHI to acquire 100% of the voting rights in Sagittarius Mines, Inc. (SMI), the entity that holds the Financial and Technical Assistance Agreement for the Tampakan project.

Juan Paolo Colet, managing director of China Bank Capital Corp., highlighted the potential impact of this merger, stating that the transaction could significantly transform Dominion’s position in the Philippine mining industry given the potential scale of the Tampakan project. He noted that estimates suggest the gross value of the Tampakan copper and gold reserves could range between $150 billion and $200 billion, indicating a substantial opportunity for economic growth and returns for shareholders.

“This deal could potentially transform DHI into the largest mining company in the Philippines.”Juan Paolo Colet, Managing Director, China Bank Capital Corp.

The proposed capital structure will consist of 29.75 billion common shares with a par value of P1 each and 2.5 million preferred shares with a par value of P100 each, significantly expanding from the current 3.4 billion common shares and 200,000 preferred shares. This increase is intended to support future capital-raising efforts and expansion programs, as DHI transitions from its previous focus on real estate and finance to a more concentrated investment in mining.

DHI's recent financial performance reflects challenges, with a reported net income decline of 26.4% in the first quarter, down to P26.87 million from P36.50 million a year earlier. The company aims to leverage the merger to enhance its financial standing and market position.

The merger remains contingent upon several approvals, including those from the stockholders of the involved companies, the Philippine Competition Commission, and the Securities and Exchange Commission (SEC). DHI has yet to finalize the exchange ratio for the merger, which will be determined in consultation with an independent fairness valuator.