Investors pick Apollo as unit’s Cagayan offshore mining operations begin

By Jobo E. Hernandez, Researcher

MARKET investors snapped up Apollo Global Capital, Inc. shares last week after it firmed up its majority owned unit’s 10,000-ton-per-day magnetite iron ore offshore mining operation in Cagayan this month.

A total of 13.05 billion Apollo shares worth P2.78 billion were traded from Feb. 1 to 5, data from the Philippine Stock Exchange showed, making it the third most actively traded issue last week.

Shares in Apollo finished the week at 20.3 centavos apiece, 4.6% up from Jan 29’s 19.4 centavos. These have jumped by 24.5% since the start of the year.

“There was already a lot of positive speculation regarding Apollo’s mining operations beginning mid-January, which drove its share price to significant highs. [S]o once the firm confirmed the news [last] week, it was more or less already priced in — as seen from the thin price range Apollo has been trading at since the start of February,” Regina Capital Development Corp. Equity Analyst Anna Corenne M. Agravio said in an e-mail.

“It looks like investors are overall pretty optimistic about the prospects of the country’s mining industry, which could have also fueled Apollo’s trading volume,” Ms. Agravio added.

Mercantile Securities Corp. Analyst Jeff Radley C. See shared a similar view saying that the huge mineral reserve as well as iron ore gave a boost to Apollo’s share price.

“The market reacted positively even last year as news came out that it is the first ever offshore mining in the Philippines,” he said in a text message.

In a disclosure last Tuesday, Apollo said that its 90.47% owned subsidiary JDVC Resources Corp. is set to begin its magnetite iron ore offshore mining in Cagayan this month after it secured all environment and mining requirements.

JDVC also secured “satisfactory community acceptance” from the local government of Gonzaga, Cagayan.

It also said that JDVC partnered with Kinetic Holdings Corp. of nickel and restaurant magnate Frank Lao, who invested in three deep-sea mining vessels for a combined minimum output of 10,000 tons of ore per day.

Apollo said that its mining vessel MB Siphon I is already positioned to the mining site pending “favorable” weather conditions.

Apollo’s unit has a mining area of 1,902.59 hectares located 14 kilometers offshore the municipality of Gonzaga, Cagayan.

Magnetite ore is a source of iron for the iron and steel industries.

Last December, the Environment department gave the go-signal for the country’s largest offshore mining operations to JVDC to start in January after it secured necessary permits.

Apollo secured an up to P416-million credit line from the Development Bank of the Philippines last October to jump-start its iron ore production.

Incorporated in 1998, JDVC’s prime businesses are exploring, prospecting, and operating mines and quarries of all kinds of ores and minerals.

“The question now is how much can the company actually mine per vessel, and if the weather condition will cooperate. This is what the market is waiting for,” Mr. See said.

“On a technical standpoint, Apollo’s price range also attracted a lot of retail investors because of its volatility,” Ms. Agravio said.

This mining operation may provide a boost to the company’s earnings in the long term, not immediately, she said.

Apollo’s attributable net loss in the nine months to September widened to P11.11 million from P7.27-million loss in the same period in 2019.

For this week, Ms. Agravio pegged the stock’s support and resistance levels at 18 centavos and 24 centavos, respectively.

Mr. See expects Apollo to trade in a range for now between 19 centavos and 25 centavos.