Atlas gets $100-M loan guarantee

Atlas Consolidated Mining & Development Corp. (ACMDC) has obtained a loan guarantee of up to $100 million from the state-run Trade and Investment Development Corp. for the rehabilitation of its Toledo copper mines in Cebu.

In a disclosure to the Philippine Stock Exchange, ACMDC said with the approval of the loan, its unit Carmen Copper Corp. will now pursue talks with banks to provide the required debt financing to rehabilitate the mine.

Initial estimates showed that Carmen Copper would need around $160 million for the rehabilitation of the Toledo copper mine.

ACMDC managing director Kim Freeman said the company has already started the first phase of the rehabilitation work, which involves replacing deteriorating facilities and reconditioning submersible pumps that will be used to dredge water from the underground mine.

The first phase would cost $13 million.

Freeman said the mines would be fully operational by January 2007, with the first concentrate production expected in November of the same year.

Based on the updated feasibility study made by Carmen Copper, the mine will produce over a 12-year period an average of 47,000 tons of copper and 41,000 ounces of gold per year.

Regional hedge fund Crescent Asian Special Opportunities Portfolio has pledged to infuse $40 million in total investments into ACMDC and Carmen Copper.

Of this amount, $12 million was already given early this year ($5 million for CCC and $7 million for ACMDC).

Aside from the Toledo copper mine, ACMDC is also expected to commence production work on its nickel project in Berong, Palawan which reportedly contains the fourth largest nickel laterite resource worldwide in terms of contained nickel.

During the last 18 months, ACMDC through Berong Nickel Corp., and its UK farm-in-partner Toledo Mining Corp. have completed a comprehensive environmental impact study, feasibility work, and local infrastructure development. Initial capital cost for the nickel project was placed at $15 million.

A number of foreign companies have signified their intention to invest in the nickel project but no final agreement has yet been reached with anyone of them.

ACMDC earlier approved an increase in its authorized capital stock to P20 billion from P12 billion to accommodate the possible issuance of shares either through a private placement or listing at the stock exchange to raise funds for its various projects.