Lepanto eyes P3 billion from stock rights offering

MANILA, Philippines - Lepanto Consolidated Mining Co. is seeking to raise around P3 billion through a stock rights offering to fund development works in its Victoria mine in Benguet province as well as pay down loan obligations.

In a disclosure to the Philippine Stock Exchange, Lepanto said the shares to be offered will come from an increase in its authorized capitalization from P3.35 billion to P6.64 billion which was approved by shareholders during their annual meeting in April 2009.

Eligible shareholders can subscribe to one share for every 3.3 shares held on a record date yet to set by the company at 30 centavos per share.

The company is also setting aside a portion of the proceeds for payment of accounts with suppliers and advances from shareholders.

The development of the Victoria reserve is expected to result in the expansion of Lepanto’s gold production to 40,000 ounces this year.

Lepanto also owns 60 percent of Far Southeast Gold Resources Inc., another mining company with resources in Mankayan, Benguet. Last month, Lepanto granted South Africa-based Gold Fields Switzerland Holdings AG (GFS) an 18-month option to acquire one-third of its stake in Far Southeast.

GFS, a wholly-owned subsidiary of Gold Fields Ltd., plans to acquire a total of 60 percent interest in Far Southeast from major shareholders Lepanto and Liberty Express for $340 million. The option requires GFS to solely fund pre-development expenses, including exploration and a feasibility study, of the project and contribute $110 million into Far Southeast Gold.