The RTG Mining Inc (ASX: RTG) share price is soaring almost 12% after the company shared a decision made by the Philippines Government.
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The government’s decision has caused the RTG Mining share price to surge 11.76%, with shares in the company currently trading for 19 cents.
But why has a Philippines Government decision affected the RTG Mining share price? Let’s take a look.
New mining licences
RTG Mining shared today that Philippines leader President Duterte has lifted a 9-year ban on new mining licences in the country.
This means Mt. Labo Exploration and Development Corporation, of which RTG Mining owns 40%, can proceed with the development and operation of its Mabilo Project.
The Mabilo Project is a high-grade gold/copper magnetite skarn deposit. Its shallow deposit is amenable to low-cost, open-pit mining.
In its release, the miner stated the government expects new mining agreements will stimulate economic growth. Particularly, in remote and rural areas, such as the area in which the Mabilo Project is located.
Mabilo Project controversy
Through a series of interesting events, Mt. Labo owns 100% of the Mabilo Project.
In 2016, Mt. Labo terminated its joint venture agreement with Galeo Equipment Corporation. After this, legal proceedings began, questioning the legality of the agreement’s termination.
In 2020, a tribunal found in favour of Mt. Labo, confirming the joint venture agreement was validly terminated.
Mt. Labo’s interest in the Mabilo Project was then increased to 100% at no cost to the company. It was also awarded $33. 6 million in damages and costs.
RTG Mining share price snapshot
Today’s news will come as a much-needed boost to RTG Mining shareholders.
Even with today’s gains, the company’s share price is down 13.64% since the start of the year. Although, RTG shares are up by an impressive 217% over the last 12 months.
The company is dual-listed on both the ASX and the Toronto Stock Exchange.
RTG Mining has a market capitalisation of around $108 million, with approximately 680 million shares outstanding.
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.