Lepanto Mining sees turnaround this year

Lepanto Consolidated Mining Co., the country’s oldest and biggest gold miner, expects to turn around its financial performance this year with a projected net income of P200 million as against a net loss of P35.8 million in 2006.

Lepanto president and chief operating officer Bryan Yap told reporters after the company’s stockholders meeting late Monday that the company can return to profitability this year even as its first quarter performance still showed a net loss of P66 million.

Last year’s net loss, in fact, was already an improvement from 2005’s net loss of P355.2 million.

Yap said the company expects to produce a total of 69,000 ounces of gold this year, about 18,000 ounces per quarter for the remainder of the year.

For the first quarter, Lepanto registered revenues of P500 million, producing over 13,000 ounces of gold, 215,000 pounds of copper and 29,000 ounces of silver.

"The performance of the first quarter can be attributed to mine operational problems and delays in development work. Following the refleeting and rehabilitation of our equipment after the stock rights offering, we expect improvements in operational efficiencies. More importantly, we are catching up on much needed development work and will soon be accessing the better grade areas for mining," Yap said.

He said the company has budgeted P500 million for its capital expenditures this year as it begins to aggressively develop areas in the Victoria/Teresa minesite with the aim of increasing daily tonnage from the current 1,500 tons per day to 2,000 tons per day.

Since the steep rise in copper prices last year, Lepanto has been reviewing all its copper-bearing resources. Based on its review, the most immediate of these would be the Enargite orebody which the company mined for 60 years until 1996.

"We started development of the Enargite structures last quarter and we hope to produce copper concentrates out of these areas very soon. The Enargite currently holds over eight million tons of resource grading, 1.7 percent copper and 3.5 grams per ton gold," Yap said.

Yap said the company continues to hold discussions with prospective investors for a joint venture of its assets.