Benguet pushes forward on its Kingking project

MANILA, Philippines - Benguet Corp. (BC) has confirmed in its disclosure to the PSE that the DENR has issued a resolution denying the petition of Nationwide Development Corp. (Nadecor) to remove BC as operator of the Kingking Copper- gold project.

In the resolution dated Nov. 23, 2009, the DENR secretary directed both BC and Nadecor as co-contractors to move the project forward, in effect upholding BC as the operator of the project.

This order effectively stopped Nadecor’s illegal attempts to cancel the operatorship right of BC. It also confirms that BC is fully vested with authority and rights to operate the project. The DENR order likewise extended the exploration work program for another two years.

BC reacted to the letter of Nadecor to the PSE that it has no authority to enter into a memorandum of agreement with MinMetals, Inc. on the Kingking project.

Benguet disclosed to the exchange on Dec. 8, 2009 that it remains to be the operator of the project under the existing operating agreement dated Aug. 1981, and the tripartite mineral production sharing agreement (MPSA) 009-91-IX dated April 1992 and the amended MPSA dated Dec. 2002.

As stipulated in the operating agreement and its supplemental agreement, BC need not obtain the consent of Nadecor in entering into contracts and agreements with reference to the exploration, development and equipping of the project.

BC is optimistic that with its MOA with MinMentals, as funding source, the Kingking project will move forward at the soonest possible time. In moving the project forward, BC confirms that Nadecor remains a party to the MPSA as co-contractor and BC will continue to honor its contractual obligation to pay royalties to Nadecor as provided in the operating agreement and supplemental agreeement between them.