Benguet Corp in talks with investors for Kingking copper-gold project

Benguet Corp. is in talks with 12 foreign and local mining firms that have signified interest in its Kingking copper-gold mine in Compostela Valley, according to its president Benjamin Philip Romualdez.

In a briefing with reporters following the company’s stockholders meeting late last Friday, Romualdez said Benguet expects to select a joint partner for its Kingking project by the third quarter of 2006. He declined to name the prospective investors pending completion of negotiations.

The Kingking project requires an estimated $500 million to $850 million to begin mineral extraction.

Romualdez said the company has tapped Citigroup Global Markets as financial adviser in raising funds for the development of the Kingking mine.

Benguet has teamed up with Nationwide Development Corp. to develop the Kingking project, which is located in the eastern part of Mindanao, approximately 20 kilometers northeast of Pantukan, Compostela Valley.

The property has an approved mineral production sharing agreement (MPSA) with the government and has the most advanced level of geological information. It has been identified as one of the top 10 priority mining projects of the Department of Environment and Natural Resources, Benguet said.

Since the Supreme Court upheld in December last year the Mining Act’s constitutionality, there has been no letup to the company’s entertaining potential investors.

Based on records of the Chamber of Mines of the Philippines, the Kingking project has a total mineral deposit of 353 million metric tons (MT) of gold, copper and silver with a gross value of $3.9 billion. It has an estimated daily production rate of 70,000 MT, which could last for around 13 years.

The same records show that potential gross sales would reach $285 million yearly, potential income taxes generated for the government would be worth $20.60 million annually. Besides employing 1,000 workers during construction and 500 during mining operations, it is expected to indirectly employ around 2,500 workers.