Lepanto invites investors for its gold project

MANILA, Philippines - Lepanto Consolidated Mining Co.has opened the door for other interested group willing to come in and invest in its gold project after discussions with China’s Zijin Mining Group have not progressed as the former hoped it would.

During yesterday’s stockholders meeting at the Rigodon Ballroom of the Manila Peninsula, Lepanto president and chief executive officer Bryan Yap reported that up to now, the Chinese government has not given its support for Zijin’s proposed acquisition of a 20 percent interest in Lepanto’s Benguet gold-copper deposit for $70 million.

He said the Chinese government, appears to be adopting a wait-and-see stance due to the global economic downturn.

Zijin is one of the biggest gold producers in China and is listed on the stock exchange of Hong Kong Limited.

The uncompleted deal covers Far Southeast Gold Resources Inc. which is owned 60 percent by Lepanto.

Yap was quick to clarify that “nobody has walked away from the deal.” He said the memorandum of understanding (MOU) it signed with Zijin is open-ended and does not specify any deadline.

However, since the deal is still pending, Lepanto is talking to other interested parties he added.

“It’s all very preliminary,” Yap said as he refused to identify other parties that have shown interest in the project.

Meanwhile, Lepanto is projecting a P150-million net income this year on expectations of higher gold production, a foreign exchange rate of P48 to $1 and gold prices staying or even higher than $850 an ounce.

Yap said, Lepanto is targeting a production of 45,000 ounces of gold from its Teresa and Victoria mines in Benguet.

It does not intend, however, to resume it copper operations which it had suspended in November last year, Yap said, because of the low prevailing global copper prices.

Lepanto’s Victoria and Teresa mines cover 2,777 hectares with estimated ore reserves of 0.39 million ounces of gold and 16.97 million pounds of copper.

Copper prices dropped to $1.32 per pound in December 2008 from $3.98 per pound in June the same year.