Lepanto to focus on gold projects

MANILA, Philippines - Lepanto Consolidated Mining Co. will focus its efforts this year on its gold projects in Mankayan, Benguet as it has put on hold its copper operations in view of the sharp decline in copper prices.

“There is no immediate plan to resume copper operations. In view of the very low copper prices, the company is studying ways of making copper operations more efficient,” Lepanto said in a filing with securities regulators.

Lepanto said operations this year will be focused on the Victoria and Teresa gold projects with estimated mining tonnage to reach 525,528 averaging 1,480 tons per day.  

The company said it would spend P256 million to undertake development work at the Victoria Gold project. Another P138 million has been set aside for the purchase of mining equipment.  

Lepanto said funding for these will come from internally-generated cash and existing credit lines.

The company incurred a net loss of P763.3 million with the mining operations accounting for P400 million. Consolidated revenues went up slightly to P1.84 billion.  

Revenues from sale of metals reached P1.72 billion compared with P1.71 billion.

Mining operations showed a loss of P400 million compared with last year’s net loss of P183 million. The loss was largely due to lower gold production and the sharp decline in the price of copper.  

Copper prices peaked at $3.98 in June 2008 only to go down to $1.32 per pound in December which resulted in the negative adjustments on the copper concentrate sales amounting to P108 million as of year-end.  

Silver price hit a record-high of $20.92 per ounce in March but was down to $8.88 by October. The price of gold improved though averaging $871.96 per ounce compared with the 2007 average of $697.71 per ounce.  

Gold produced totaled 37,716 ounces compared with 48,918 ounces while copper production amounted to 3.54 million lbs compared with 246,386 lbs. – Zinnia dela Peña