Atlas Mining needs $75M to reopen Cebu copper mines

Atlas Consolidated Mining and Development Corp. (ACMDC), once Asia’s biggest copper producer, needs $75 million (approximately P4.15 billion) to re-open its copper mine site in Toledo, Cebu.

In a disclosure to the Philippine Stock Exchange, ACMDC said it expects the Toledo mine to generate significant profits with the improvement in copper prices in the last six months.

The Toledo mine was closed down in 1994 due to the depressed prices of copper in the international market.

ACMDC said 25 percent of the funds needed to re-open the Toledo mine will be by way of equity. The company recently raised its authorized capital to P12 billion.

Apart from the Toledo mine, ACMDC said it has various assets which it plans to develop to generate future profits which will positively impact on the residual deficiency.

ACMDC has a major interest in nickel deposit in Palawan which the company plans to develop this year. It also owns a water dam and reservoir in Cebu and is at an advanced stage in its feasibility work to demonstrate that the reservoir can be developed commercially.

"The company believes that its inherent asset base is strong and can be the source of significant profits which will eliminate any remaining deficiency," ACMDC said.

ACMDC said the development of the water project in Cebu will likewise involve equity infusion, most likely through the sale of new shares.

ACMDC earlier settled P878.3 million worth of debts through a debt-to-equity swap with a group led by Alakor Corp., an investment and holding firm controlled by Alfredo Ramos of the National Bookstore chain.

The share issue was covered by the debt-to-equity agreement entered with Alakor in October 2000 and has been approved by the PSE and the Securities and Exchange Commission.

Under the memorandum of agreement (MOA), Alakor assumed and completely settled ACMDC’s debts, including all unpaid interest and penalties owed to local and foreign bank creditors amounting to P1.9 billion, in exchange for new shares equivalent to a 41-percent stake in the company.

ACMDC said negotiations ongoing with other creditors are at an advanced stage and by mid-2004, inclusive of the write-off of prescribed liabilities, the deficit will be reduced from P7.06 billion to only P160 million when shares are issued to Alakor in lieu of the settlement of Atlas debts.

ACMDC was established through the merger of assets and equities of three distinctive companies. These are Masbate Consolidated Mining Co., IXL Mining Co. and the Antamok Goldfields Mining Co.

The company is into mineral and metallic mining and exploration and primarily produces copper concentrates and gold with silver and pyrites as major by-products.