sec form 12-1 registration statement with prospectus.pdf

SECURITIES AND EXCHANGE COMMISSION

SEC FORM 12-1, AS AMENDED

REGISTRATION STATEMENT UNDER THE SECURITIES REGULATION CODE

1. SEC Identification Number .......12942 2. MARCVENTURES HOLDINGS INC.

Exact name of registrant as specified in its charter 3. Philippines 4. 000-000-104-320

Province, country or other jurisdiction of incorporation or organization

BIR Tax Identification Number

5. Holding company

General character of business of registrant. 6. Industry Classification Code: ( SEC Use Only) 7. 16th Floor Citibank Tower, 8741 Paseo de Roxas,

Makati City, Metro Manila TELEFAX NO. (632) 836-8609 Address, including postal code, telephone number, FAX number including area code, of registrant's principal offices

8. ..........................................................................................

If registrant is not resident in the Philippines, or its principal business is outside the Philippines, state name and address including postal code, telephone number and FAX number, including area code, and email address of resident agent in the Philippines.

9. Fiscal Year Ending Date (Month and Day) : December 31

Draft Prospectus as of 29 February 2012

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Computation of Registration Fee

Title of each class of securities to be

registered

1. Common shares underlying the convertible loan

2. Warrants to be issued at no cost upon the conversion to shares of all or a portion of the convertible loan. 3. Common shares underlying the Warrants

Amount to be registered

68,090,909 Maximum number of

common shares underlying the

convertible loan

17,022,727 warrants

17,022,727 common shares underlying the

warrants

Conversion Price per Share

Php 2.20 per share

Warrants are free, but shall only be

issued upon conversion of all

or a portion of the convertible loan.

Php 2.20 per share

Aggregate Conversion Price

Php 149,800,000.00

Warrants are free, but shall only be

issued upon conversion of all or

a portion of the convertible loan.

Php 37,449,999.40

Amount of registration fee

Basic: Php 149,800.00

(For not more than Php

500 million, 0.10% of

the maximum

aggregate price of the

securities to be offered)

Basic: Php 50,000.00

(In case of warrants

which have no issue

value, the filing fee

shall be Php 50,000)

Basic: Php 37,449.99

Total (Basic):

Php 237,299.99

Add 1%LRF:

Php 2,372.99

------------------------------

Total: Php 239,622.499

===========

Registration Statements filed pursuant to Section 12 of the Code shall be accompanied by a fee as follows:

Maximum aggregate price of securities to be

offered

Amount of filing fee

Not more than P500 Million 0.10% of the maximum aggregate price of the

securities to be offered

More than P500 Million but not more than P750

Million

P500,000 plus 0.075% of the excess over P500

Million

More than P750 Million but not more than P1

Billion

P687,500 plus 0.05% of the excess over P750 Million

More than P1 Billion P812,500 plus 0.025% of the excess over P1 Billion

In the case of warrants which have no issue value, the filing fee shall be P50,000.

A legal research fee of 1% of the filing fee paid for filings made pursuant to SRC Rule 8.1

shall also be paid at the time of the filing.


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MARCVENTURES HOLDINGS INC. (Incorporated under the laws of the Republic of the Philippines)

Up to 85,113,636 Common Shares (consisting of 68,090,909 common shares underlying the

Convertible Loan, and 17,022,727 common shares underlying the Warrants)

with a Par Value of P1.00 per Share

to be issued at the price of Php 2.20 per Share

to be Traded at the

Philippine Stock Exchange

and

Up to 17,022,727 Warrants to be issued free of charge

and not traded on the Philippine Stock Exchange

The date of this Prospectus is

29 February 2012

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED THESE

SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE.

ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE AND SHOULD

BE REPORTED IMMEDIATELY TO THE SECURITIES AND EXCHANGE COMMISSION.


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KEY INFORMATION RELATED TO THE SUBSCRIPTION

Number of common shares underlying the

Convertible Loan Series II:

68,090,909 common shares

Number of common shares underlying the

Warrants:

17,022,727 common shares

Total number of outstanding shares:

1,721,460,874 common shares

Total number of shares outstanding upon full

conversion to shares of the Convertible Loan

Series II and exercise of all the Warrants:

1,806,574,510 common shares

Conversion Price for the underlying common

shares of the Convertible Loan Series II:

Php 2.20

Exercise Price for the Warrants:

Php 2.20

Total proceeds raised upon the full

conversion to shares of the Convertible Loan

Series II and exercise of all the Warrants:

Php 187,249,999.2

Brief description of use of proceeds The proceeds of the Convertible Loan Series

II were used to further develop the nickel

mining property of the Company and for

operating expenses. Please see breakdown in

page 19 of this Prospectus.

Dividend policy: The declaration of cash, stock or property

dividends shall depend on the availability of

unrestricted retained earnings. There is no

policy setting aside a certain percentage of

unrestricted retained earnings for purposes of

dividend declarations.

Address and telephone number of the

Companys principal office 16

th Floor Citibank Tower, 8741 Paseo de

Roxas, Makati City, Metro Manila

Telefax No. (632) 836-8609


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TABLE OF CONTENTS

SUMMARY .............................................................................................................................. 8

DEFINITIONS AND INTERPRETATION ............................................................................ 11

TERMS OF THE CONVERTIBLE LOAN, CONVERSION SHARES,

WARRANTS, AND WARRANT SHARES .......................................................................... 13

RISK FACTORS AND OTHER INFORMATION ................................................................ 14

USE OF PROCEEDS .............................................................................................................. 18

DETERMINATION OF CONVERSION PRICE AND EXERCISE PRICE ......................... 20

DILUTION .............................................................................................................................. 21

PLAN OF DISTRIBUTION.................................................................................................... 22

DESCRIPTION OF SECURITIES TO BE REGISTERED .................................................... 22

INFORMATION WITH RESPECT TO REGISTRANT ....................................................... 25

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATION ........................................................................................ 38

INFORMATION ON INDEPENDENT ACCOUNTANT AND OTHER RELATED

MATTERS .............................................................................................................................. 44

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT .............................. 45

FINANCIAL INFORMATION............................................................................................... 50

INDEX TO EXHIBITS ........................................................................................................... 52


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MARCVENTURES HOLDINGS INC.

(A corporation organized and existing under Philippine laws.)

Up to 85,113,636 Common Shares with

a par value of Php 1.00 per Share and

to be issued at the price of Php 2.20 per Share

This Prospectus relates to up to 85,113,636 Common Shares (New Common Shares) with a par value of Php1.00 each Share, to be issued by Marcventure Holdings Inc. (Issuer or the Company or Marcventures) at a price of Php 2.20 per Share in favor of the Lenders according to the terms of the Convertible Loan Series II, and 17,022,727 Warrants. The New

Common Shares consists of 68,090,909 common shares (the Conversion Shares) underlying the Convertible Loan Series II, and 17,022,727 common shares (the Warrant Shares) underlying the Warrants.

All of the New Common Shares shall have identical rights and privileges as the issued and

outstanding Common Shares of the Company.

Unless otherwise stated, the information contained in this Prospectus is accurate as of the date

hereof, and has been supplied by the Issuer who accepts full and sole responsibility for the

accuracy of the information, and confirms having made all reasonable and diligent inquiries

that, to the best of its knowledge and belief, there are no material facts the omission of which

would make any statement in the Prospectus misleading in any material respect. Neither the

delivery of the Prospectus nor any sale made hereunder shall, under any circumstances, create

any false impression that the information contained herein is correct as of any time

subsequent to the date hereof, or that there has been no change in the affairs of the Company

since such date. The Issuer warrants that it has exercised due diligence in ascertaining that (i)

all material representations contained in this Prospectus, its amendments or supplements, as

supplied by its duly authorized corporate officers, consultants, members of the Board of

Directors and shareholders, are, to the best of its knowledge and belief, true and correct, and

(ii) no material information necessary in order to make the statements contained in this

Prospectus not misleading, has been omitted.

No dealer, salesman or other person has been authorized by the Company to issue any

advertisement or to give any information or make any representations not contained in this

Prospectus and, if issued, given or made, such advertisements, information or representations

must not be relied upon as having been authorized by the Company.

This Prospectus does not constitute an offer or a solicitation by anyone in any jurisdiction in

which the issuance of the New Common Shares is not authorized or to any person to whom it

is unlawful to make such Subscription.

The Company has filed a Registration Statement and a copy of this Prospectus with the

Securities and Exchange Commission (SEC) in accordance with the Securities Regulation Code. On ____________, the SEC issued an Order approving the Companys Registration Statement and a Certificate of Permit to Offer Securities (the Permit to Sell) covering the New Common Shares.

Application has been made to list on the Philippine Stock Exchange, Inc. (the Exchange or the PSE) all the New Common Shares. Approval of the listing application will be made only upon compliance by the Company with the requirements for listing. The New Common

Shares will be listed after such shares have been subscribed and fully paid in accordance with


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the terms and conditions of the Convertible Loan Series II and the SEC and PSE have been

duly notified of such. The PSE assumes no responsibility for the correctness of any of the

statements made or opinion or reports expressed in this Prospectus. The PSE makes no

representation as to its completeness and expressly disclaims any liability whatsoever for any

loss arising from or in reliance upon the whole or any part of the contents of this Prospectus.

The listing of the New Common Shares is subject to the approval of the SEC and PSE. Such

approval for listing is merely permissive and does not constitute a recommendation or

endorsement of the New Common Shares by the SEC or PSE.

A registration statement relating to these securities has been filed with the

Securities and Exchange Commission but has not yet been declared effective. No

offer to buy the securities can be accepted and no part of the purchase price can be

accepted or received until the registration statement has become effective, and any

such offer maybe withdrawn or revoked, without obligation of commitment of any

kind, at any time prior to notice of its acceptance given after the effective date. An

indication of interest in response hereto involves no obligation or commitment of

any kind. This prospectus shall not constitute an offer to sell or the solicitation of

an offer to buy.


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SUMMARY

The following information is qualified in its entirety by, and is subject to, the more detailed

information and financial statements contained elsewhere in this Prospectus.

The Company

The Company was incorporated and registered with the Securities and Exchange Commission

(SEC) on August 7, 1957. In 1997, the stockholders and the SEC approved the extension of

the Companys term of existence for another 50 years or until August 7, 2057.

Its primary purpose is to acquire by purchase, exchange, assignment, gift or otherwise, and to

hold, own and use for investment or otherwise, and to sell, assign, transfer, exchange, lease,

let, develop, mortgage, pledge, traffic, deal in, and with, and otherwise operate, manage,

enjoy and dispose of, any and all properties of every kind and description and wherever

situated, including land as and to the extent permitted by law, including but not limited to,

buildings, tenements, warehouses, factories, edifices and structures and other improvements

and bonds, debentures, promissory notes, shares of stock, or other securities or obligations,

created, negotiated or issued by any corporation, association or other entity, foreign or

domestic and while the owner, holder or possessors thereof, to exercise all rights, powers and

privileges of ownership or any other interest therein, including the right to receive, collect and

dispose of, any and all rentals, dividends, interest and income derived therefrom, and the right

to vote on any proprietary or other interest, on any shares of the capital stock, and upon any

bonds, debentures or other securities having voting power, so owned or held; and provided it

shall not engage in the business of an open-end or close-end investment company as defined

in the Investment Company Act (Republic Act 2629), or act as a securities broker or dealer.

On December 15, 2009, the Company entered into a Memorandum of Agreement (MOA)

between the shareholders of Marcventures Mining and Development Corporation (MMDC)

and their partners to exchange their ownership of MMDC for a total value of P=1.3 billion

consisting of: (i) new Company shares worth P=100 million representing the full payment of

the balance for the subscription to the increase in authorized capital stock; (ii) additional

Company shares worth P=1.15 billion to be issued from the authorized capital stock as

increased, and the new par value of the Company after its corporate restructuring; and (iii)

448 membership certificates of The Metropolitan Club, Inc. (Metroclub Certificates) with an

agreed net value of P=50 million together with the Companys rights, obligation and interests.

During the annual stockholders meeting held on February 10, 2010, the Companys stockholders approved the acquisition of 100% ownership of MMDC. In relation to the

MMDC acquisition, the stockholders approved the following specific transactions: (i) the

subscription by the MMDC shareholders, or their nominees or designees, to 450.0 million

shares at the new par value of Php 0.01 per share or total par value of Php 45.0 billion out of

the increase in authorized capital stock of Php 1.8 billion, of which the amount of Php 350.0

million will be paid in cash, and the balance of Php 100.0 million to be payable upon SEC

approval of the increase by way of assignment of 153,846 MMDC shares; (ii) the subscription

by the MMDC shareholders, or their nominees or designees, to an additional 115.0 billion

shares at a par value of Php 0.01 per share from the authorized capital stock, as increased, in

consideration for the assignment of 1,769,231 MMDC shares at an agreed value of Php 1.15

billion; and (iii) the approval and ratification of the assignment of the 488 Metroclub

membership certificates together with all rights and obligations under AJOs contract with Philtown, including the assumption by the assignee of AJOs liabilities to Philtown in the amount of Php 17.5 million, in consideration for the assignment and transfer of 76,923

MMDC shares at an agreed value of Php 50.0 million.


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On March 30, 2010, the SEC approved the change in corporate name from AJO.net Holdings, Inc. to Marcventures Holdings, Inc., and the amendment of the Companys primary purpose to include land ownership. The SEC also approved the equity restructuring

of the Company by way of: (i) the decrease of the authorized capital stock from

P2,000,000,000.00 divided into 20,000,000,000 common shares to P200,000,000.00 divided

into 20,000,000,000 common shares through the reduction of the par value of the common

shares from P0.10 to P0.01; followed by (ii) the increase of the authorized capital stock from

P200,000,000.00 divided into 20,000,000,000 common shares to P2,000,000,000.00 divided

into 200,000,000,000 common shares.

On September 6, 2010, the SEC issued the Confirmation of Valuation for the issuance of

115,000,000 new common shares in consideration of the assignment of 1,769,231 MMDC

shares. The SEC also approved the full payment of 101,000,000 shares subscribed by Mr.

Mario G. Vijungco to the increase in authorized capital stock (dated March 30, 2010) by way

of assignment of 153,846 MMDC shares.

On September 30, 2010, the SEC approved the change in par value of the shares from Php

0.01 to Php 1.00 per share.

On July 21, 2011, the SEC approved the registration of up to 56,818,181 common shares of

the Company with par value of 1.00 each Share at a price of Php 2.20 per Share in relation to

a Convertible Loan entered by the Company in favor of certain lenders of the Company. On

July 27, 2011, the Exchange approved the application of the Company to list an additional

1,307,818,181 common shares with a par value of Php 1.00 per share.

The Companys registered office is located the 16th Floor Citibank Tower, 8741 Paseo de Roxas, Makati City, Metro Manila

Risks of Investing

The Subscription carries with it the usual risks accompanying a Philippine equity investment

due among other things to:

Political and Economic Conditions

Exploration, Development and Operations Risk

Risks in the Estimation of Ore Reserves and Mineral Resources

Volatility of Commodity Prices

Continuity of Demand

Risks in Government Regulation

Risks in Environmental Regulation

Exchange Rate Risk

Weather

Potential Market Volatility and Limited Liquidity

Being a New Mining Company with no history of profitable operations.

Risk Due to Litigation

For a more detailed discussion of these risks, please see Risk Factors and Other Information on page 15.


10

Financial Summary

The following table sets out selected financial information of the Company for the years

indicated.

In Php

Unaudited

Six Months

Ending

December 31

2011

Audited

Years Ended June 30

Income Statement 2011 2010 2009

Revenues 842,901,957 256,419 550,301 11,672

Production Cost 534,272,197 - - -

Operating Expenses 43,100,003 46,943,000 33,704,096 4,484,142

Other Income (Charges) Net

1,822,674

(9,529,087)

18,877,949

(2,367,974)

Net Income (Loss) 267,352,432 (55,705,468) (14,188,191) (6,84,444)

Deficit at Beginning of

Period

(73,868,659) (18,163,191) (444,439,223) (436,485,677)

Net Unrealized loss on

available for sale

securities

-

-

-

(1,113,102)

Effect of quasi

re-organization

-

-

441,097,236

-

Deficit at End of Period 193,483,773 (73,868,659) ( 18,163,191) (444,439,223)

Balance Sheet

Current Assets

539,361,572

195,866,352

61,352,103

2,724,253

Total Assets 2,562,817,526

2,157,276,940

1,876,250,245

92,671,820

Total Liabilities 555,094,656

461,906,500

75,357,824 19,458,195

Stockholders Equity 2,007,722,871

1,695,370,440

1,800,892,421 3,213,625


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DEFINITIONS AND INTERPRETATION

Common Shares or Shares... The unclassified common shares of the Company representing the authorized

capital, or when the context requires, the

Companys outstanding common stock including the unissued Conversion

Shares and Warrant Shares.

Company Marcventures Holdings Inc.

Convertible Loan Series II Refers to the Companys loan in the principal amount of Php 149,800,000

which may be converted into fully paid

shares of the Company.

Conversion Shares Refers to 68,090,909 common shares underlying the Convertible Loan Series

II

Conversion Price... Php 2.20 per Conversion Share

Conversion Option option to convert all or a portion of the Convertible Loan Series II into fully paid

shares of stock of the Company

Directors. The incumbent directors of the Company

Exchange.... Philippine Stock Exchange , Inc.

Exercise Price.. Php 2.20 per Warrant Share

Issuer... Marcventures Holdings Inc.

Marcventures. Marcventures Holdings Inc. or the Company, or the Issuer, or the Registrant

MGB . refers to the Central Office of the Mines and Geosciences Bureau

MGB RO . refers to the Regional Office of the Mines and Geosciences Bureau

MMDC . Marcventures Mining and Development Corporation, a wholly-owned subsidiary

of the Company

MPSA ... Mineral Production Sharing Agreement; a mineral agreement wherein

Government shares in the production of

the contractor, whether in kind or in

value, as owner of the minerals. In

return, the contractor shall provide the

necessary financing, technology,

management, and personnel for the

mining project.

Net Asset Value. Generally represents the fair value of the Companys assets less the current value of the recorded liabilities.

Pesos or Php or P.. Philippine Peso

New Common Share/s. Refers to the Conversion Shares and Warrant Shares in the aggregate.

Prospectus Information required to be submitted together with the Registration Statement

PSE or Exchange Philippine Stock Exchange, Inc.


12

Registration Statement... Information required under the Securities Regulation Code to be submitted to the

SEC for the registration of securities,

whicha re to be offered for sale, or sold

to the public.

SEC or Commission Securities and Exchange Commission of the Philippines

Stock and Transfer Agent ... Banco de Oro Unibank

Subsidiary ..... a company in which the Company owns, directly or indirectly, at least a majority

of the outstanding capital stock;

Marcventures has one subsidiary,

Marcventures Mining and Development

Corporation

Warrants Refers to 17,022,727 warrants to subscribe to an equivalent amount of

common shares under the terms and

conditions of the Convertible Loan

Series II

Warrant Shares Refers to 17,022,727 common shares underlying the Warrants


13

TERMS OF THE CONVERTIBLE LOAN, CONVERSION SHARES, WARRANTS,

AND WARRANT SHARES

Principal Amount: Php 149,800,000.00

Term: One (1) year drawn on the following dates: March 4, 2011; March 14, 2011; and March 21, 2011.

Interest: 10% interest shall be computed on the outstanding balance of the loan from date of drawdown, payable on maturity or upon exercise of the Conversion Option;

Conversion Option: The lenders shall have the option to convert all or a portion of the loan into fully paid shares of stock of the Company (the Conversion Shares) at any time prior to the maturity of the loan. The conversion price shall be at Php 2.20

per share.

Warrants: Upon converting all or a portion of the loan, a lender shall be entitled to a warrant to subscribe to one (1) Warrant Share, for every four (4) Conversion Shares

at a price of Php 2.20 per share. The warrants are subject to a two (2) year exercise

period from issue date of the Warrant.

Prepayment: The Company has the option to prepay all or apportion of the loan at any time, inclusive of any interest due at the time of prepayment. In case of

prepayment, a lender is given 15 calendar days from receipt of the Companys notice of prepayment within which to exercise the Conversion Option.

Default: Incase of default, the lender shall be entitled to convert all or a portion of the loan into fully paid and non-assessable shares of the common stock of the

Company at a price of Php 2.20 per share, or at the prevailing market price at the

Philippine Stock Exchange on the conversion date, whichever is lower.

Upon issuance of all the Conversion Shares and Warrant Shares, the Company will have an

outstanding capital stock of 1,806,574,510 common shares.

Expected Timetable

The listing and trading of each New Common Share will take place upon full payment of the

Conversion Price or Exercise Price in the applicable case, provided all the requirements of the

SEC and PSE have been complied with.


14

RISK FACTORS AND OTHER INFORMATION

Prior to making an investment decision, interested investors may carefully consider, along

with other matters set out in this document, the following investment considerations or risk

factors, which are not intended to be exhaustive.

The price of securities can and does fluctuate, and any individual security may experience

upward or downward movements, and may even become valueless. There is an inherent risk

that losses may be incurred that profit made as a result of buying and selling securities. Past

performance is not a guide to future performance. There is an extra risk of losing money

when securities are bought from smaller companies. There may be a big difference between

buying price and the selling price of these securities. An investor deals in a range of

investments each of which may carry a different level of risk.

This risk disclosure does not purport to disclose all the risks and other significant aspects of

investing in these securities. The investor should undertake his own research and study on the

trading of securities before commencing any trading activity. He may request information on

the securities and issuer thereof from the Commission, which are available to the public.

Furthermore, an investor should seek professional advice if he or she is uncertain of, or has

not understood any aspect of, the securities to invest in or the nature of the risks involved in

the trading of the securities.

The following is a description of what the Company considers its key challenges and risks

presented in the order of their proximate effect on the Company.

Political and Economic Conditions

In general, the profitability of the Company depends to a large extent on the overall level of

business and economic activity in the country and the local government, which in turn is

affected by political and economic factors. Any political instability in the future may have a

negative effect on the mining operations of the Company.


There are numerous hazards and risks normally encountered in the exploration, development,

and production of nickel. These include and are not limited to unusual and hindering

geologic formations, erosion, unfavorable weather conditions, flooding and other occurrences

that may arise out of the drilling and removal of material. Any such occurrence may cause

damage to mines and other production facilities, which may result in environmental damage,

and legal liability.

The Company has started initial extraction activities already. Laboratory tests have been

completed and the main haul roads have been developed. The Company has taken the

necessary steps to maintain the roads and facilities to prevent damage and disturbance to the

mining operations.


The evaluation of the Companys ore reserves and mineral resources is established on the results and estimates of several geological and exploration works as well as rigorous studies

conducted by competent geologists and mining engineers. Nonetheless, the reported figures

for ore reserves are only estimates and are therefore not precise calculations.


15

The Company believes that intensified and continuous in-fill drilling within the mining area

will increase the confidence in the stated ore reserves, as well as possibly increase ore reserve

estimates.


Significant declines in the price of nickel may render exploration, development, and

production activities uneconomical until the price recovers. Life-of-mine estimates may have

to be recalculated. Such conditions may result in a material and adverse effect on the financial

performance of the Company.

In order to mitigate such risk, the subsidiary has signed a contract for the sale of a portion of

its production with a commodity broker, while the balance will be sold on the spot market.

This will ensure revenues at a price that is pre-agreed and beneficial to both parties, while still

enabling the company to earn from any upside in the ore price.

Continuity of Demand

There is no assurance that there will be continuity in demand for the nickel ore extracted by

the Company. Importers and refiners may always choose to acquire nickel ore from other

sources, especially if the global demand for nickel significantly declines and results in a large

nickel market surplus.

In order to manage such risk, the Company has a two-tiered market - China is the primary

market for nickel laterite ore while Japan is the primary market for nickel saprolite ore.

Because of the significant volume of both ore types in the Marcventures property, the

company will have a two-tiered market. This is a unique opportunity for the company, as

most nickel mining companies do not have marketable saprolite ores and are thus limited to

the China market.

Risks in Government Regulation

Numerous permits and licenses from local and national government agencies are prerequisites

to the exploration, production, and exportation of nickel ore. There is no assurance that the

Company will regularly obtain and renew such permits and licenses. Failure to obtain the

necessary permits and licenses on a timely basis may lead to significant delays in operations.

The Company has obtained a Mineral Production sharing Agreement and an Environmental

Compliance Certificate from the government, as well as other local permits and licenses. The

Company continues to abide by all the terms and conditions for the granting of said permits

and licenses.

Risks in Environmental Regulation

Amendments in environmental regulation may require future approvals and permits in line

with MMDCs operations. Delay in compliance may result in curtailment of mine exploration, development, or extraction.

The Company received its Environmental Compliance Certificate on December 2008. It

continues to meet all requirements under the ECC and intends to meet any changes in

regulation that may arise.


16

Exchange Rate Risk

There can be no assurance that: (a) the Peso will not be subject to continued appreciation or

volatility; (b) the current exchange rate policy will remain the same; (c) the Government will

act when necessary to stabilize the value of the Peso, or that any such action, if taken, will be

successful. Since the Company will earn its revenues in dollars, a significant depreciation in

the dollar may adversely affect the financial viability of mining operations.

The Company may possibly enter into forward contracts with banks in order to minimize

foreign exchange risks, if deemed beneficial in the long term.

Weather

Typhoons, continuous rains and floods can limit the operations and production capacity of

MMDCs mine, thus adversely affecting the Companys net income.

The proposed production schedule of the Company takes advantage of the dry season to

maximize ore extraction within period of eight (8) months.

Potential Market Volatility and Limited Liquidity

Although the New Common Shares will be listed in the Exchange, there can be no assurance

that a holder of such Shares will be able to dispose of such Shares in a timely manner. As a

result, a holder of such New Common Shares could be prevented from taking full advantage

of market gains during periods of share price increases and conversely, could be prevented

from fully realizing gains or limiting losses during periods of share price declines.

New Mining Company

Since the Company has only recently begun operating, it has not had any history of operating

profit from its mining activities. The Company also has many capital expenditure

requirements and expenses. However, the Companys officers and employees have a good track record in the industry and have extensive professional experience in the mining of

nickel.

Risk Due to Litigation

The Company is not a party to any legal proceedings. It is not involved in any pending legal

proceedings with respect to any of its properties. It is also not involved in any claims or

lawsuits involving damages that may materially affect it or its subsidiaries.

The Companys wholly-owned subsidiary, MMDC, however, is involved in four (4) pending issues. On November 10, 2010, a case was filed by Jaime Datu Dagsaan Bat-ao, Liquisa Irrigators Association represented by Peter William Olan, Nagkahugpong Managatay Para sa

Kalambuan (NAGMAKAAYO) represented by Crisologo E. Aniono, Sr.; Lydia L. Lascano

and Nick Matthew Q. Irriberi, a minor represented by his father, Vicente Cirilo Irriberi,

before the Regional Trial Court, Branch 41, Cantilan, Surigao del Sur, docketed as Civil Case

No. 224. The said plaintiffs are seeking to stop the mining activities of MMDC but failed to

present their evidence and convince the court to stop the mining operations and extend the

seventy two (72) hours temporary environmental protection order, hence it expired. On May

26, 2011, however, the RTC issued an Order stating that the temporary environmental

protection order issued by the Court is still subsisting and effective until there is an order


17

lifting, revoking or dissolving the same. MMDC has filed a Motion for Reconsideration of the

above Order, which, to date, has not been resolved by the Court. As of February 25, 2012,

the date of hearing has not been set. MMDC has made verifications with the Court and the

Clerk of Court cannot give any date.]

The other three issues involve: (a) a Petition filed by Cantilan Irrigation System Federation of

Irrigators Association (CISFIA) Surigao del Sur Irrigators Federation Association (SURIF)

Cabcant Irrigators Association, Inc., Buyaan Irrigators Association, Inc., CarCanMadCarLan

Baywatch Foundation, Inc. (CBFI), Lovers of Nature Foundation, Inc. before the Office of

the Secretary, Department of Environment and Natural Resources, seeking the cancellation of

the MPSA of MMDC; (b) an Opposition filed by CISFIA before the National Water

Resources Board (NWRB) docketed as WPA No. XIII-SDS 2009-02-036 relative to the

application of MMDC for water rights. The said Opposition has nothing to do with the

present mining activities of MMDC. As of February 25, 2012, the application is still pending;

and (c) a Petition for a Writ of Kalikasan filed before the Supreme Court on May 29, 2011 by

Tribal Coalition of Mindanao [TRICOM], Inc. Daging Manobo Sectoral Tribal Council,

Urbiztondo Manobo-Mamanwa Sectoral Tribal Council, Kinalablaban Sectoral Tribal

Council, Cabangahan Tribal Community Manobo Tribe, Victoriano Vidal and Datu Willy Daging against Taganito Mining Corporation, Platinum Group Metals Corp., Synergy Mining

Corp., Shenzhou Mining Group Corp. and MMDC seeking the issuance of a temporary

environmental protection order.


18

USE OF PROCEEDS

The proceeds of the Convertible Loan Series II of Php 149,800,000 was used to further

develop the nickel mining property of the Company and for operating expenses, specifically

as follows:

Purpose Amount

Capital Expenditures Php 75.23

Working Capital Php 74.69

Total Php 149.92 million

Capital Expenditures

A total of more or less Php 75 million was

used to purchase the following equipment:

dump trucks, bulldozers, excavators

compactors, graders and wheel loaders

used for the operations of the mine,

specifically as follows:Equipment

25 Dump Trucks

24 Excavators

5 Bulldozers

3 Compactors

3 Graders

2 Wheel Loaders

The Company determined the costs of the equipment by soliciting quotations from various

suppliers before purchasing the said equipment. The above account was disbursed from the

period within 2011.

Working Capital

Around a total of Php 75 million was used for working capital of the Company, which include

salaries and wages, as well as fuel, broken down as follows:

Salaries & Wages 36,69 million

Fuel 38.00 million

Total 74.69 million

The above account was disbursed from the period within 2011.

Should all the 17,022,727 Warrants be exercised, the gross proceeds of Php 37,499,999.40 is

intended for the company's Exploration Program

Purpose Amount

Exploration program Php 37.5 million

Total Php 37.5 million


19

The Company plans to use the above Php 37.5 million for additional drilling since the mining

property has not yet been fully explored.

Based on the assumption that the Warrants will be exercised by the investors within the year

2013, the above proceeds will be disbursed within the same year. Since the option to exercise

the Warrants rests with the investor, the Company can only assume when it will be exercised

and when the necessary funds will be available for utilization.

In case the available funds are insufficient due to the exercise of less than all of the Warrants,

the Company may finance any shortfall by way of internally generated funds, loans or other

capital raising exercise.

In the event of any deviation or adjustment in the planned use of proceeds, the Company shall

inform the shareholders and the SEC in writing at least thirty (30) days before its

implementation.

None of the above proceeds will be used to discharge debt.


20

DETERMINATION OF CONVERSION PRICE AND EXERCISE PRICE

The Conversion Price shall be at Php 2.20 per share.

The exercise price for the Warrants at Php 2.20 per Warrant is the same as the Conversion

Price since it is intended to be an incentive for the lender to invest in the Company.

The Conversion Price was determined by the Board after reviewing the Companys trading price and nickel prices during the period of preliminary discussions with prospective lenders

until the time that the Board approved the price, and considering that the last time the

Company issued new shares was in May 6, 2010 for a private placement of 50,000,000 shares

(par value Php 1.00 per share) at a price of Php 2.00 per share. It was determined that the

conversion/exercise price should not be lower than the last issue price of Php 2.00 as it would

be unfair to the private placement investors and considering that additional improvements in

the mining facilities had improved shareholder value.

Around September 2, 2010, when the Company began preliminary discussions with

prospective lenders on the appetite for the first convertible loan (Convertible Loan Series I),

the share price was Php 1.80. Around this time, the LME nickel price was less than USD

21,000 per ton from a high of USD 27,000 per ton in April 2010 and a low of USD18,000 in

June 2010. The volatility increased the market risk on the Companys shares so the conversion price had to be finalized with an attractive premium over the immediately

preceding private placement price of Php 2.00 per share. On September 17, 2010, the

Company finalized the terms of the Convertible Loan and disclosed the conversion price of

Php 2.20 per share. On the same day, September 17, 2010, the share price had a high of Php

2.10 and a low of Php 1.80 per share. The highest share price of Php 2.70 per share was

reached on September 24, 2010 during intraday trading.

For the Convertible Loan Series II, the Company again considered the recent trading history

of the stock as well as the appetite of the prospective lenders. Given the success of the Series

I just six months prior, and considering that its share price for the previous month traded

below Php 2.20, the Company decided to issue Series II at the same conversion price as the

previous convertible loan. The share price traded at a range of Php 1.99 Php 2.06 per share from February 21, 2011 to March 3, 2011.


21

DILUTION

The dilution to current Shareholders upon conversion of the convertible loan offering,

inclusive of the exercise of the warrants, will be 4.9%.

The net tangible book value of the Company prior to the Convertible Loan Series II

Offer is P1.695 billion or P0.98 per share. The net tangible book value per share of

the Company after the conversion of loan and stock warrant offer is P1.09. Net

tangible book value represents the amount of the Companys total assets less its total liabilities. The Companys net tangible book value per share represents its net tangible book value divided by the number of Common Shares outstanding.

After giving effect to the increase in the Companys total assets to reflect its receipt of the net proceeds of the convertible loan amounting to P 149,800,000 (at P 2.20 Offer

Price per share) and the addition of a total of 85,113,636 new Common Shares subject

of the Offer, the Companys pro-forma net tangible book value would approximately be P1.09 per share. The calculation of the net tangible assets per share before and after the Offer is presented

below:

Net tangible assets as of June 30, 2011 (a) P 1,695,370,440

Issued and outstanding Common Shares @ P 1.00/sh. prior to the Offer (b) 1,721,460,874

Net tangible assets per share prior to the Offer (c)1

P0.98

Offer Price (d) P2.20

Pro-Forma net tangible assets after the Offer2

P1,882,620,440

Pro-Forma net tangible assets per Share after the Offer (e) P1.09

Increase per Share to Existing Shareholders attributable to the Offer 3

P0.11

Note: 1 Computed by dividing (a) by (b)

2 Based on the net tangible assets of the Company as of June 30, 2011 adjusted to reflect the net proceeds from the Offer and the subscriptions

receivable

3 Computed by subtracting (c) from (e)

)


22

PLAN OF DISTRIBUTION

The following lenders under the Convertible Loan Series II are entitled to subscribe to the

Conversion Shares and Warrant Shares indicated below:

Name of Lender Loan Amount Number of

Shares at Php

2.20

Conversion

Price

Warrants

(one (1)

Warrant for

every four

(4) shares)

Asian Alliance Investment Corp.

19,800,000.00 9,000,000 2,250,000

Wealth Securities Inc.

30,000,000.00 13,636,363.64 3,409,090.91

United Coconut Planters Life

Assurance Corp. 100,000,000.00 45,454,545.45 11,363,636.36

Total Loan Amount 149,800,000.00

Number of Shares Underlying the Convertible Loan

Series II 68,090,909 17,022,727

Number of Shares Underlying the Warrants 17,022,727

None of the lenders of the Company are considered related parties as defined in Article V,

Part A, Section 1 of the Revised Listing Rules of the Exchange. Asian Alliance Investment

Corporations (AAIC) President, Mr. Roberto Atendido is currently a Director of the Company.

DESCRIPTION OF SECURITIES TO BE REGISTERED

This Prospectus relates to up to 85,113,636 New Common Shares with a par value of Php1.00

each Share, to be issued at a price of Php 2.20 per Share in favor of the Lenders according to

the terms of the Convertible Loan Series II, and 17,022,727 Warrants. The New Common

Shares consists of 68,090,909 Conversion Shares underlying the Convertible Loan Series II,

and 17,022,727 Warrant Shares underlying the Warrants.

All of the New Common Shares shall have identical rights and privileges as the issued and

outstanding Common Shares of the Company.

Share Capital of the Company

As of February 20, 2012, the authorized capital stock of the Company is Two Billion Pesos

(P 2,000,000,000.00), divided into Two Billion (2,000,000,000.00) common shares with a par

value of One Peso (P1.00) per share. The total issued, outstanding, and fully paid up capital

stock of the Company is One Billion Seven Hundred Twenty One Million Four Hundred

Sixty Thousand Eight Hundred Seventy Four (1,721,460,874) common shares. There are no

treasury shares

The Company has no preferred shares. All of the Companys Common Shares are listed and may be traded in the PSE.


23

There is no provision in the Companys charter or by-laws that would delay, deter, or prevent a change in control of the Company.

Pre-emptive Rights

According to Article VII of the the Companys Articles of Incorporation, no stockholder shall, because of his ownership of stock, have a preemptive or other right to purchase,

subscribe for or take any part of any stock or of any other securities convertible into or

carrying options or warrant to purchase stock of the Company, whether out of its unissued

authorized capital stock or any future increases thereof. Any part of such stock or other

securities may at any time be issued, optioned for sale, and sold or disposed of by the

Company pursuant to resolution of its Board of Directors, to such persons and upon such

terms as such Board may deem proper, without first offering such stock or securities or any

part thereof to existing stockholders.

Voting Rights

At each meeting of the shareholders, every shareholder entitled to vote on a particular

question or matter is entitled to one vote for each share of stock standing in his name in the

books of the Company at the time of closing of the transfer books for such meeting. However,

that in case of the election of directors, every shareholder shall be entitled to accumulate his

votes in accordance with the provisions of law in such case made and provided. Every

shareholder entitled to vote at any meeting of the shareholders may also vote by proxy,

provided that the proxy shall have been appointed in writing by the stockholder himself, or by

his duly authorized attorney. The instrument authorizing a proxy to act shall be submitted at

least ten (10) days before the meeting and proxies shall be validated at least five (5) days

before the meeting.

Dividend Rights and the Board of Directors

The Companys by-laws empower the Board of Directors to declare dividends only from the surplus profits arising from the business of the Company. However, according to the

Companys by-laws, no stock or bond dividend shall be issued without the approval of shareholders representing not less than two-thirds of all stock then outstanding and entitled to

vote, at the general meeting of the Company or at a special meeting called for the purpose.

Appraisal Rights

As provided for by law, any stockholder shall have a right to dissent and demand payment of

the fair value of his shares in the following instances:

In case any amendment of the Articles of Incorporation has the effect of changing or restricting the rights of any stockholder or class of shares, or of authorizing preferences in

any respect superior to those of outstanding shares of any class, or of extending or

shortening the term of corporate existence;

In case of sale, lease, exchange, transfer, mortgage, pledge or disposition of all or substantially all of the corporate property and assets as provided in the Corporation Code

of the Philippines;

In case the Company decides to invest its funds in another corporation or business outside of its primary purpose; and

In case of merger or consolidation.


24

Debt Securities, Stock Options, Securities Subject to Redemption or Call, and Warrants

Aside from the Convertible Loan Series II and the Warrants discussed above, there are no

other debt securities, stock options, securities subject to redemption or call, or warrants to be

registered.

Other Material Rights

Other than those described above, there are no other material rights enjoyed by the

shareholders.

INTERESTS OF NAMED EXPERTS AND INDEPENDENT COUNSEL

Castillo Laman Tan Pantaleon & San Jose Law Office has been engaged by the Company as

legal counsel for the registration and listing of the New Common Shares.

The financial statements of the Company, including the notes thereto, have been audited by

Mendoza Querido & Co., independent certified public accountants and are incorporated by

reference herein.

Mendoza Querido & Co. has no shareholdings in the Company, nor any right to subscribe for

or to nominate persons to subscribe for securities in the company.


25

INFORMATION WITH RESPECT TO REGISTRANT

Business

Marcventures is a holding company primarily involved in nickel mining operations in Surigao

del Sur, Philippines, through its wholly-owned subsidiary, Marcventures Mining &

Development Corporation (MMDC). MMDC is primarily involved in exploration, mining,

and development of a nickel mine located in Surigao del Sur and covering an area of 4,799

hectares.

The Company was incorporated and registered with the Securities and Exchange Commission

(SEC) on August 7, 1957. In 2007, the stockholders and the SEC approved the extension of

the Companys term of existence for another 50 years or until August 7, 2057.

Its primary purpose is to acquire by purchase, exchange, assignment, gift or otherwise, and to

hold, own and use for investment or otherwise, and to sell, assign, transfer, exchange, lease,

let, develop, mortgage, pledge, traffic, deal in, and with, and otherwise operate, manage,

enjoy and dispose of, any and all properties of every kind and description and wherever

situated, including land as and to the extent permitted by law, including but not limited to,

buildings, tenements, warehouses, factories, edifices and structures and other improvements

and bonds, debentures, promissory notes, shares of stock, or other securities or obligations,

created, negotiated or issued by any corporation, association or other entity, foreign or

domestic and while the owner, holder or possessors thereof, to exercise all rights, powers and

privileges of ownership or any other interest therein, including the right to receive, collect and

dispose of, any and all rentals, dividends, interest and income derived therefrom, and the right

to vote on any proprietary or other interest, on any shares of the capital stock, and upon any

bonds, debentures or other securities having voting power, so owned or held; and provided it

shall not engage in the business of an open-end or close-end investment company as defined

in the Investment Company Act (Republic Act 2629), or act as a securities broker or dealer.

On December 15, 2009, the Company entered into a Memorandum of Agreement (MOA)

between the shareholders of Marcventures Mining and Development Corporation (MMDC)

and their partners to exchange their ownership of MMDC for a total value of Php1.3 billion

consisting of: (i) new Company shares worth Php100 million representing the full payment of

the balance for the subscription to the increase in authorized capital stock; (ii) additional

Company shares worth Php 1.15 billion to be issued from the authorized capital stock as

increased, and the new par value of the Company after its corporate restructuring; and (iii)

448 membership certificates of The Metropolitan Club, Inc. (Metroclub Certificates) with an

agreed net value of Php50 million together with the Companys rights, obligation and interests.

During the annual stockholders meeting held on February 10, 2010, the Companys stockholders approved the acquisition of 100% ownership of MMDC. In relation to the

MMDC acquisition, the stockholders approved the following specific transactions: (i) the

subscription by the MMDC shareholders, or their nominees or designees, to 45 billion shares

or total par value of Php 450 million out of the increase in authorized capital stock of Php 1.8

billion, of which the amount of Php 350.0 million will be paid in cash, and the balance of

Php 100.0 million to be payable upon SEC approval of the increase by way of assignment of

153,846 MMDC shares; (ii) the subscription by the MMDC shareholders, or their nominees

or designees, to an additional 115.0 billion shares at a par value of Php 0.01 per share from

the authorized capital stock, as increased, in consideration for the assignment of 1,769,231

MMDC shares at an agreed value of Php 1.15 billion; and (iii) the approval and ratification of

the assignment of the 488 Metroclub membership certificates together with all rights and

obligations under AJOs contract with Philtown, including the assumption by the assignee of


26

AJOs liabilities to Philtown in the amount of Php 17.5 million, in consideration for the assignment and transfer of 76,923 MMDC shares at an agreed value of Php 50.0 million.

On February 10, 2010, the Board of Directors approved the decrease in authorized capital

stock of the Company from Php 2.0 billion to Php 200 million by reducing the par value of

the common shares from Php 0.10 to Php 0.01. Moreover, the Board of Directors of the

Company approved the increase in authorized capital stock from Php 200,000,000 to

Php 2,000,000,000 divided by 200,000,000,000 common shares

On March 30, 2010, the SEC approved the change in corporate name from AJO.net Holdings, Inc. to Marcventures Holdings, Inc., and the amendment of the Companys primary purpose to include land ownership. The SEC also approved the equity restructuring

of the Company by way of: (i) the decrease of the authorized capital stock from

Php 2,000,000,000.00 divided into 20,000,000,000 common shares to Php 200,000,000.00

divided into 20,000,000,000 common shares through the reduction of the par value of the

common shares from Php 0.10 to Php 0.01; followed by (ii) the increase of the authorized

capital stock from Php 200,000,000.00 divided into 20,000,000,000 common shares to Php

2,000,000,000.00 divided into 200,000,000,000 common shares. Out of the increase in

authorized capital stock, Php 450,000,000 divided into 45,000,000,000 shares has been

subscribed of which Php 350,000,000 was paid in cash, leaving a subscription balance of

Php 100,000,000. Moreover, the SEC approved the application of the reduction surplus of

Php 459,056,968 (arising from the reduction in par value) to eliminate accumulated deficit.

On September 6, 2010, the SEC issued the Confirmation of Valuation for the issuance of

115,000,000 new common shares in consideration of the assignment of 1,769,231 MMDC

shares. The SEC also approved the full payment of 101,000,000 shares subscribed by Mr.

Mario G. Vijungco to the increase in authorized capital stock (dated March 30, 2010) by way

of assignment of 153,846 MMDC shares.

On September 30, 2010, the SEC approved the change in par value of the shares from Php

0.01 to Php 1.00 per share.

The Companys registered office is located at 16th Flr. Citibank Tower, 8741 Paseo de Roxas, Makati City.

Products/Sales

The principal markets for nickel ore production from the Philippines are currently China and

Japan. In 2007, Philippine nickel ore shipments accounted for around 50% of Chinas total imports of nickel ore. The proximity of the Philippines to China results in lower freight costs,

thus the preference by Chinese companies of Philippine-sourced nickel ore. Currently, due to

the high cost of freight, Chinese importers are favoring higher grade nickel ore (at least 1.6%

Ni) compared to past shipments of low grade ore (1% Ni). The Company does not anticipate

any problem meeting the Ni grade content requirement of Chinese importers due to the high

Ni grade of its reserves.

Japanese companies on the other hand have been in the past ten (10) years a consistent buyer

of Philippine saprolite ore which are used to produce primary nickel.

The Company relies 100% on foreign sales to Asian clients. It started shipments in August

2011. Nickel ore is directly shipped to buyers. Other than the foregoing, the Company has no

other product or service.


27

Competition

The company is primarily engaged in shipping nickel ore in the Asian region - mainly to

Chinese and Japanese clients. The primary differentiator that will give an industry player a

leg up on its competitors is the nickel grade of its ore and the corresponding pricing. The

market leader in nickel ore shipments from the Philippines is Nickel Asia Corporation, which

is several times larger than the Company. The Company believes it is able to compete due to

the quality of its ore, fair pricing, and the high demand for nickel ore which exceeds the

supply the Philippines is able to provide.

Sources and availability of Raw Materials

The Companys nickel ore is extracted from MMDCs mine in Surigao del Sur covered by Mineral Production Sharing Agreement (MPSA) No. 016-93-XI.

Equipment, spare parts, and other operating supplies are readily available both locally and

abroad. Primary suppliers include Dyteban Hardware, Juchem Enterprises, Sungold

Commercial, Datalan Communications Services, Johnco Marketing, Caltex, and Jetty.

Sales Contracts

The company has entered into a 3-year offtake agreement with Dunfeng Internatioanl (Phils.)

Inc. for the sale of 1 million Wet Metric Tons of nickel ore per year on a best effort basis

starting on 2012. This will consist of both low grade and high grade nickel ore.

Properties

Office Space

The Company currently leases its office space located at Unit 16A Citibank Tower, 8741

Paseo de Roxas, Makati City. The office space has a total area of 307.9 square meters. The

lease of the space is for three (3) years starting March 15, 2011 to March 14, 2014. The rent is

Php 169,144.32 per month inclusive of twelve percent (12%) value-added taxes, less five

percent (5%) withholding tax.

MMDC Properties

Owned

The table below sets forth a summary of the properties owned by MMDC.

Payee Area Size

(sq. m.)

Amount Location

Joel Arreza 238 300,000.00 Magosilom, Cantilan

Heirs of Basillisa M. Petros 38,856 4,000,000.00 Consuelo, Cantilan

Isabel Bambina Angeles 26,000 270,000.00 Cabangahan, Cantilan

William Agyan/ Calixtrato

Hunahunan

12,460 216,120.00 Cabangahan, Cantilan

Alfonso Ascarez Jr 6,510 115,200.00 Cabangahan, Cantilan

Virgilio Tuldanes 48,758 4,875,800.00 Bon-ot, Carrascal

Romulo G. Urbiztondo 17,895 1,789,500.00 Bon-ot, Carrascal

Tomasito Bat-ao 7,177 143,540.00 Cabangahan, Cantillan

Venancio Ating Jr 3,893.60 77872.00 Cabangahan, Cantilan

Fabian Ating 4,487.17 89,743.40 Cabangahan, Cantilan


28

Marlon Sumberan 11,.692 146,920.00 Cabangahan, Cantilan

Francisco Sumberan 13,463 134,630.00 Cabangahan, Cantilan

Francisco Sumberan 12,696 126,960.00 Cabngahan, Cantilan

Wenifredo Bat-ao 2,855 28,550.00 Cabanghan, Cantilan

Calicstrato Hunahunan 6,762 67,620.00 Cabangahan, Cantilan

Winefredo Bat-ao 2,855 28,550.00 Cabangahan, Cantilan

Calicstrato Hunahunan 6,762 67,620.00 Cabangahan, Cantilan

Cayetana Ampo 4,341 43,410.00 Cabangahan, Cantilan

Felino Bat-ao 3,538 35,380.00 Cabanghan, Cantilan

Rodrigo Tawide 10,962 109,620.00 Cabangahan, Cantilan

Juanita Agyang 2,487 24,870.00 Cabangahan, Cantilan

Bci House& lot 180,000.00 Bayogo, Madrid

Leased

The table below presents a summary of the properties currently being leased by MMDC.

Land/Owner/Payee No. of

Years of

Contract

Area Size

(sq. m)

Date Start of

Contract

Amount of

Rent

(PhP)

Year ln

Increase

(%)

Location

Juan Bucarile, Sr. 10 3,703.00 10/1/2010 3,703.00 None Pili, Panikian

Pablo B. Arpilleda, Jr. 10 4,848.00 9/1/2010 4,848.00 None Pili, Panikian

Punella Ilagan 10 1,621.00 9/1/2010 1,621.00 None Pili, Panikian

Cosme Emboc 1 2,312.00 9/1/2010 2.312.00 None Pili, Panikian

Ryan Huniog 1 1,037.00 9/1/2010 1,037.00 None Pili, Panikian

Pablo Huniog 1 1,420.00 9/1/2010 1,420.00 None Pili, Panikian

Roberto Dagno 10 1,194.00 9/1/2010 1,194.00 None Pili, Panikian

Antonio Huniog Jr. 10 4,743.00 9/1/2010 4,743.00 None Pili, Panikian

Antonio Huniog Jr. 1 2,300.00

9/1/2010 2,300.00 None Pili, Panikian

Mike Bat-ao 10 345.00 9/1/2010 500.00 None Pili, Panikian

Jimmy Sandag 10 1,057.00 9/1/2010 1,057.00 None Pili, Panikian

Lucas Angeles 10 1,979.00 9/1/2010 1,979.00 None Pili, Panikian

Banjelito Sandag 10 462.00 9/1/2010 500.00 None Pili, Panikian

Lucas Angeles 1 561.00 9/1/2010 561.00 None Pili, Panikian

Danilo Hunahunan 10 281.00 9/1/2010 500.00 None Pili, Panikian

Polito Bat-ao 10 192.00 9/1/2010 500.00 None Pili, Panikian

Ronnie Huniog 10 1,934.00 9/1/2010 1,934.00 None Pili, Panikian

Jemelito Cordita 10 3,288.00 9/1/2010 3,288.00 None Pili, Panikian

Dioneto Cordita

10 4,603.00 9/1/2010 4,603.00 None Pili, Panikian

Myrna Ortiz 10 50,000.00 9/1/2010 25,000.00 5% Banban,

Panikian

Julian Cabadonga 10 1,565.00 9/1/2010 1.565.00 None Banban,

Panikian

Charita Roculas 10 11,905.00 10/1/2010 11,905.00 10% Banban,

Panikian

Alfredo Guiral 10 1,390.00 10/1/2010 2,000.00 None Banban,

Panikian

Edelyn Huerte 10 2,5757.00 9/1/2010 2,575.00 None Banban,

Panikian

Alberta Y. Jacobe 5 696.96 3/1/2011 1,000.00 10% Gamuton

Agustin P. Luarez 10 1,636.20 3/1/2011 1,636.20 10% Gamuton

Helenita Younglove-

Kyle

5 811.60 3/1/2011 1,000.00 10% Gamuton

Allan D. Ajit 5 1,103.26 3/1/2011 1,103.26 10% Gamuton

Decena A. Jubac 5 1,852.86 3/1/2011 1,852.86 10% Gamuton

Alfredo Ajit 5 746.64 3/1/2011 1000.00 10% Gamuton

Fermin A. Ajit 5 1,490.86 3/1/2011 1490.86 10% Gamuton

Eladio Quajao 5 825.12 3/1/2011 1,000.00 10% Gamuton

Emelia C. Moreno 5 1,119.54 3/1/2011 1,119.54 10% Gamuton


29

Marcos Quajao 5 2,742.69 3/1/2011 2,724.69 10% Gamuton

Arturo Buar 5 1,288.91 3/1/2011 1,288.91 10% Gamuton

Arturo Buar 5 1,288.91 3/1/2011 1,288.91 10% Gamuton

Luna Y. Bobias 5 4,803.51 3/1/2011 4,803.51 10% Gamuton

Alfredo Comparativo 5 817.69 3/1/2011 1,000.00 10% Gamuton

Annabelle A.

Yparragurre

5 606.01 3/1/2011 1,000.00 10% Gamuton

Josefa C. Acedo 10 63.99 3/1/2011 500.00 10% Gamuton

Diosdado Solejon 5 501.56 3/1/2011 700.00 10% Bon-ot

Librada C. Rafaila 5 489.91 3/1/2011 500.00 10% Bon-ot

Bernard Ardel Bobias 5 1,919.42 3/1/2011 1,919.42 10% Bon-ot

Winefredo Dagasdas 5 400.32 3/1/2011 500.00 10% Bon-ot

BenitoDagasdas 5 446.32 3/1/2011 500.00 10% Bon-ot

POrferio Bonani 5 1,520.13 3/1/2011 1,520.13 10% Bon-ot

Bisa Pebojot Rodilla 5 2,274.67 3/1/2011 1,520.13 10% Bon-ot

Robinson M.Consad 5 3,346.38 3/1/2011 3,346.38 10% Bon-ot

Merlinita Sampinit 5 573.80 3/1/2011 1,000.00 10% Bon-ot

Bonifacio D. Ciez 5 1,416.51 3/1/2011 1,416.51 10% Bon-ot

Lolito Cotecson 5 2,537.12 3/1/2011 2,537.12 10% Bon-ot

Carmelita Ladroma

Galdo

6 months 2,427.00 3/21/2011 3,000.00 10% Bon-ot

Lolitao Cotecson 10 10,152.00 11/3/2010 16,000.00 10% Bon-ot

Charita Marzon 10 4,539.00 3/8/2011 7,000.00 10% Bon-ot

Rogelio C. Asupra 10 12,293.00 3/12/2011 15,000.00 10% Bon-ot

Richard Polida 10 9,800.00 10/16/2010 15,000.00 10% Bon-ot

Paz Cosmiano 10 18,153 3/7/2011 50,000.00 10% Bon-ot

Valeriano Aranas 10 18,000.00 3/7/2011 51,010.00 10% Bon-ot

Lolito Cotecson 5 2,537.12 3/1/2011 2,537.12 10% Bon-ot

Annabelle A.

Yparraguirre

5 606.01 3/1/2011 1,000.00 10% Gamuton

Pablo B. Arpilleda, Jr. 10 4,848.00 9/1/2010 4,848.00 None Pili, Panikian

The renewals of the above leases are subject to agreement by the parties.

The above leased properties are used by MMDC for roads and stockpile areas.

MMDC will acquire and/or lease additional properties to be utilized for roads and stockpile

areas when needed for its operations. The cost of such acquisitions will depend on

negotiations with prospective owners and lessors. MMDC plans to finance such acquisitions

from internally generated funds.

Mining Properties

The Companys wholly-owned subsidiary, MMDC was granted by the Department of Environment and Natural Resources (DENR) of the Philippine National Government MPSA

No. 016-93-XI covering an area of approximately 4,799 hectares located in Cantilan, Surigao

Del Sur. As the holder of the said MPSA, MMDC has the exclusive right to conduct and

develop mining operations within the mineral property over a period of twenty five (25) years

from July 1, 1993. MMDC has identified Nickel Ore as the primary mineral that will be

extracted from the mine and sold to third parties due to the abundance and favorable

characteristics of nickel within the mineral property.

Deed of Assignment to MMDC

MPSA No. 016-93-XI was originally granted to Ventura Timber Corporation (Ventura) on

July 1, 1993. In January 1995, a Deed of Assignment was executed by and between Ventura

and MMDC, wherein Ventura assigned to MMDC all its rights, title and interest in and to


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MPSA No. 016-93-XI. The Deed was duly registered with the Mines and Geosciences Bureau

(MGB) Regional Office (RO) No. XIII on February 9, 1995, and was subsequently approved

on January 15, 2008, making MMDC the official contractor of the mineral property. The

Companys Chairman, Mario Vijungco, was the former owner of Ventura Timber Corporation, the original holder of MPSA 016-93-XI.

Note that MPSA 016-93-XIII and MPSA 016-93-XI refers to one and the same mining

property. At that time MMDC and Ventura executed abovementioned Deed of Assignment,

Surigao del Sur was still included as part of Region XI. On February 25, 1995, the CARAGA

Region (Region XIII) was created through Republic Act No. 7901, which included five

provinces, namely: Agusan del Norte, Agusan del Sur, Surigao del Norte, Surigao del Sur and

Dinagat Islands. In this Prospectus, the Company refers to the mining property as MPSA 016-

93-XI to avoid confusion.

The Partial Declaration of Mining Project Feasibility of MMDC was approved by the MGB

on October 23, 2009 authorizing MMDC to proceed with the development and operating

periods of the MPSA, including extraction and commercial disposition of nickel ore and

associated minerals within the 300 hectare portion of its contract area. The remaining portion

of the contract area is still under exploration period.

Following is a summary of the major details covered by the Partial Declaration of Mining

Project Feasibility:

Project Cantilan Nickel Project

Product Nickel Laterite

Production Rate 1,200,000 WMT per year

Ore Reserves 11.60 million WMT @ 1.50%

Mine Life 10 years

Government Approvals; Effect of Existing or Probable Government Regulations on the

Business

The Company is already in possession of its Mineral Production Sharing Agreement,

Environmental Compliance Certificate, and has been given Notice to Proceed with its mining

operations by the Mines & Geosciences Bureau of the Department of Environment and

Natural Resources.

Government regulations effect on the Company is primarily on the costs of compliance which are appropriately reflected in the Companys books either as an expense or as a capital asset under the GAAP.

Determination of the effect of probable government regulations cannot be known until

specific provisions are made clear.

Exploration and Development

In April 2008, MMDC engaged Dr. Carlo A. Arcilla, a Competent Person in Geology, to

study the exploration data on the mineral property and verify its nickel resources. Dr. Arcilla

is a director of the National Institute of Geological Sciences of the University of the

Philippines. Dr. Arcillas preliminary geologic resource report showed Inferred Resources of 53 million WMT of nickel laterite at an average Ni grade of 1.2% covering 400 hectares. In

August 2010, he reported Indicated Resources of 15.9 million DMT of laterite (equivalent to

22.7 million WMT) at an average Ni grade of 1.5% covering 120 hectares. It should be noted


31

that these 120 hectares represents about 3.5% of the effective area for mining out of the total

4,799 hectares constituting the Mineral Property.

The Economic Assessment and Ore Reserve Technical Report was completed by Engr.

Orlando S. Cruz, a Competent Person - Mining Engineer, on March 2010 in accordance with

the Philippine Mineral Reporting Code. This report estimated Mineable Ore Reserve at 11.6

million WMT with average grade of Ni grade of 1.5% is also based on 120 hectares.

Costs and Effects of Compliance with Environmental Laws

The Company is strongly committed to its policy of protecting and enhancing the

environment. As of December 2011, it spent Php 12,42 million in accordance with its

Environmental Protection and Enhancement Program. It has allocated a floor amount of Php

26.89 million in 2012 for its environmental program.

Business Transactions with Related Parties

The Company obtained non-interest bearing advances from stockholders which are payable

on demand..Such advances were used by the Company in day to day operations, general

administrative expenses, and for payroll.

As of December 31, 2011, such advances from stockholders amounted to Php 9,621,255,

broken down as follows:

Name of Stockholder Amount Advanced

Dy Chi Hing Php 2,726,308

Mario Vijungco

Php 6,894,947

Total Php 9,621,255

Development Activities

The Company has not spent any amount on development activities. However, its wholly

owned subsidiary, MMDC, spent a total of Php 413 million for mine development from 2008

to 2011. There were no revenues for MMDC during that period.

Risks of Mining


There are numerous hazards and risks normally encountered in the exploration, development,

and production of nickel. These include and are not limited to unusual and hindering

geologic formations, erosion, unfavorable weather conditions, flooding and other occurrences

that may arise out of the drilling and removal of material. Any such occurrence may cause

damage to mines and other production facilities, which may result in environmental damage,

and legal liability. The company has in place its Environmental Protection and Enhancement

Plan which has resulted in structures built to prevent siltation and untoward flooding of the

minesite, a Safety and Health Program, and a Crisis Management Team in place.



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The evaluation of the Companys ore reserves and mineral resources is established on the results and estimates of several geological and exploration works as well as rigorous studies

conducted by competent geologists and mining engineers. Nonetheless, the reported figures

for ore reserves are only estimates and are therefore not precise calculations. The Company

conducts in-fill drilling to validate the estimates further, and conducts a continuous

exploration program to continually increase its estimated mineral reserves.


Significant declines in the price of nickel may render exploration, development, and

production activity uneconomical until the price recovers. Life-of-mine estimates may have to

be recalculated. Such conditions may result in a material and adverse effect on the financial

performance of the Company. The Company can enter into longer term, fixed price contracts

with buyers to mitigate this risk.

Exchange Rate Risk

There can be no assurance that: (a) the Peso will not be subject to continued appreciation or

volatility; (b) the current exchange rate policy will remain the same; (c) the Government will

act when necessary to stabilize the value of the Peso, or that any such action, if taken, will be

successful. Since the Company will earn its revenues in dollars, a significant depreciation in

the dollar may adversely affect the financial viability of mining operations. The company will

take exchange rate risk management measures under advisement from its financial advisors.

Weather

Extended rainy seasons may limit extraction and haulage. The company has measures and

plans in place that can increase daily production rates when weather hampers extraction and

haulage activities. Buffer equipment is in place to increase the equipment complement of any

particular shift. Additional shifts will also be employed in order to meet production targets.

However, these can only mitigate the effects of the weather on production and haulage to a

certain degree.

Employees

Company

The Company currently has a total of five (5) employees, consisting of two (2) in accounting,

one (1) in administrative, two (2) clerical/messenger personnel and two (2) consultants. For

the ensuing twelve (12) months, the Company anticipates it will have the same number of

employees. There is no employees union. There are no employees who are subject to any Collective Bargaining Agreement (CBA). The Company was not threatened by any strike in the past three years. The Company has not given any supplemental benefits or incentive

arrangements with its employees. The Company believes relations with the employees are

good.

Marcventures Mining & Development Corporation:

As of December 31, 2011, MMDC has a total of 352 employees, of which 245 are regular,

107 are contractual.

Of the 352 employees, a total of 34 employees perform administrative work and 318

employees are involved directly in mine site operations.


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There is no employees union nor is there a collective bargaining agreement with the employees. There has not been a strike in MMDCs history.

Mineral Reserves and Estimates

The Company, through its subsidiary MMDC, holds Mineral Production Sharing Agreement

No. 016-93-XI which covers 4,799 hectares in the province of Surigao Del Sur. It is

physiologically located within the Diwata Mountain Range.

Owner Location Area Mineral Permit / Application

Date

Permit

Granted Status

MMDC Cantilan,

Surigao

del Sur

4,799 Nickel MPSA No. 016-93-XI July 1,

1993

In

commercial

operation.

Estimates of the MPSAs mineral resources and reserves are as follows:

RESOURCES Indicated

Volume 15.9 million DMT laterite

(22.7 million WMT)

1.5% average Ni grade

Area 120 hectares

These estimates were prepared by Dr. Carlo A. Arcilla, a Competent Person in Geology, to

study the exploration data on the mineral property and verify its nickel resources. Dr. Arcilla

is a director of the National Institute of Geological Sciences of the University of the

Philippines.

RESERVES

Volume 11.6 million WMT

laterite ore

Ore Grade Average 1.5% Ni grade

Area 120 hectares

These estimates were prepared by Engr. Orlando S. Cruz, a Competent Person Mining Engineer, on March 2010.

The said Competent Persons are accredited under the PMRC. The Competent Persons also

prepared the estimates in accordance with PMRC guidelines. The investor should read the

Report of Competent Persons found in Annex B for a complete and more detailed discussion

of MMDCs mineral project.

Legal Proceedings

As of December 31, 2011, the Company is not a party to any legal proceedings. It is not

involved in any pending legal proceedings with respect to any of its properties. It is not

involved in any claims or lawsuits involving damages that may materially affect it or its

subsidiaries.


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As of December 31, 2011, the Companys wholly owned subsidiary, MMDC, is currently involved in four (4) pending issues:

(a) Petition filed by Cantilan Irrigation System Federation of Irrigators Association (CISFIA) Surigao del Sur Irrigators Federation Association (SURIF) Cabcant

Irrigators Association, Inc., Buyaan Irrigators Association, Inc., CarCanMadCarLan

Baywatch Foundation, Inc. (CBFI), Lovers of Nature Foundation, Inc. before the

Office of the Secretary, Department of Environment and Natural Resources.

This petition was filed on July 20, 2009 and seeks the cancellation of the MPSA of

Marcventures Mining and Development Corporation and the issuance of a Temporary

Restraining Order and Injunction. The Secretary, however, is not vested with the

power to cancel a Mineral Production Sharing Agreement and issue a temporary

restraining order or injunction as the powers belong solely to the court, the MPSA

being a contract constitutionally allowed and protected requiring judicial process.

Temporary restraining order and injunction are ancillary remedies to a case pending

in court. As of December 2011, we did not receive any order from the Office of the

Secretary.

(b) Case filed by Jaime Datu Dagsaan Bat-ao, Liquisa Irrigators Association represented by Peter William Olan, Nagkahugpong Managatay Para sa Kalambuan

(NAGMAKAAYO) represented by Crisologo E. Aniono, Sr.; Lydia L. Lascano and

Nick Matthew Q. Irriberi, a minor represented by his father, Vicente Cirilo Irriberi,

before the Regional Trial Court, Branch 41, Cantilan, Surigao del Sur, docketed as

Civil Case No. 224.

The case was filed on November 10, 2010. The Plaintiffs seek to stop the mining

activities but failed to present their evidence and convince the court to stop the

mining operations and extend the seventy two (72) hours temporary environmental

protection order, hence it expired. On May 26, 2011, however, the RTC issued an

Order stating that the temporary environmental protection order issued by the Court is

still subsisting and effective until there is an order lifting, revoking or dissolving the

same. MMDC has filed a Motion for Reconsideration of the above Order, which, to

date, has not been resolved by the Court.

The court cannot cancel the MPSA not only because the DENR is not a party to the

case but it is contract sanctioned and protected by the Constitution, mining law and

existing laws. The mining activities of MMDC are authorized by the Environmental

Compliance Certificate and Partial Declaration of Mining Project Feasibility.

Moreover, its operation has not been stopped by the DENR and its bureaus which

have jurisdiction and regulatory functions over mining activities.

Equally important, MMDC has not been penalized for violations of environmental

laws or its corporate officers charged and convicted.

The case is set for hearing on July 20 to 22, 2011. This hearing was cancelled due to

the inhibition of the Presiding Judge and no date of hearing has been set.

(c) Opposition filed by the Cantilan Irrigation System Federation of Irrigators Association [CISFIA] before the National Water Resources Board [NWRB] docketed

as WPA No. XIII-SDS-2009-02-036 relative to the application of Marcventures

Mining and Development Corporation for water rights.

This opposition has nothing to do with the present mining activities of MMDC. We

were just notified of an opposition of MMDCs application for water rights. As of the


35

date of this Prospectus, it is still pending. Neither did we receive any order form the

Board or pleadings from the Oppositor.

(d) Petition for a Writ of Kalikasan filed before the Supreme Court on May 29, 2011 by Tribal Coalition of Mindanao [TRICOM], Inc. Daging Manobo Sectoral Tribal

Council, Urbiztondo Manobo-Mamanwa Sectoral Tribal Council, Kinalablaban

Sectoral Tribal Council, Cabangahan Tribal Community Manobo Tribe, Victoriano Vidal and Datu Willy Daging against Taganito Mining Corporation, Platinum Group

Metals Corp., Synergy Mining Corp., Shenzhou Mining Group Corp. and

Marcventures Mining and Development Corp.

The said petition seeks the issuance of a temporary environmental protection order

against the above named companies, including MMDC. To date, MMDC has not

received any Order from the Supreme Court although it was furnished a copy of the

Petition as required by the rules governing environmental cases. The Supreme Court

denied the application of the Petitioners for Writ of Kalikasan and delegated to the

Court of Appeals, Mindanao Station, the reception of the evidence for Temporary

Environmental Protection Order.

Other than the foregoing, MMDC and the Company have no other actual, pending or

threatened litigation. Likewise, MMDC and the Company are unaware of any involvement of

their respective executives, directors and/or officers in any legal proceeding for the past five

(5) years.

Market Price of and Dividends on the Registrants Common Equity and Related Stockholder Matters

Market Information

The principal market for the Registrants common equity is the PSE. The Companys stock symbol is MARC

Stock Prices Common Shares

The following table sets forth the high and low closing sales prices per share of the Com

sec form 12-1 registration statement with prospectus.pdf

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