Lepanto to revive copper mining operations

Lepanto Consolidated Mining Co. plans to revive its copper mining operations by September this year as global copper prices continue to rise.

In a disclosure to the Philippine Stock Exchange, Lepanto said it will resume work on a copper mine in Mankayan, Benguet which was shut down several years ago due to falling copper prices.

During the time the plant was closed, copper prices were only at $0.70 per pound compared to the current price of $3 per pound.

Lepanto said it has filed with the Board of Investments an application for the registration of the Victoria copper-gold flotation project as a new project on a non-pioneer status.

Lepanto chairman Felipe Yap, however, did not say how much the company is investing in the resumption of its copper operations, but said the company is targeting Chinese smelters and the Philippine Associated Smelting & Refining Corp. (Pasar) as possible markets.

Earlier reports said Lepanto expected to earn $47 million per year from the Victoria copper-gold flotation project.

Lepanto has earmarked between P550 million to P600 million for its capital expenditures this year.

The company is expected to return to profitability this year, driven by higher prices of gold. It is eyeing a net income of P300 million as against a net loss of P409.53 million in 2005.

It intends to produce between 22,000 to 24,000 ounces of gold and silver per quarter.

Lepanto said it can now benefit fully from rising gold prices as it does not have any hedge position.

In the first quarter this year, Lepanto produced 15,500 ounces of gold and 20,000 ounces of silver, allowing it to break-even during the period.

With the full settlement of its $3-million loan to Canada’s Ivanhoe Mines Ltd., Lepanto can now freely explore with any prospective partner the possibility of a joint venture on its assets.

Lepanto, which began mining operations in 1936, was a major copper producer until it shut down its copper operation in 1997. It shifted to gold production through its Victoria project. It now operates two mines, the Victoria and the Teresa, both in Mankayan town in the northern province of Benguet.

It has three wholly-owned subsidiaries: Shipside Inc., Diamond Drilling Corp., and Lepanto Investment and Development Corp.