Benguet Corp trims debt

MANILA, Philippines -  Benguet Corp., the country’s oldest mining company, has further trimmed its debt with the repurchase of 68.7 percent of its unsecured debt, and expects to fully settle all debts by yearend.

In a disclosure to the Philippine Stock Exchange (PSE), Benguet said that with the buyback, the company has settled a total of 85.3 percent of its unsecured debt and paid 81 percent of total outstanding bank debt, both secured and unsecured.

Benguet said it “has been focused on resolving the issue of unpaid bank debt and is continuing to work towards the full settlement of its debts before year end.”

In October, Benguet said it had started buying back its debt paper at a deep discount as it received from a foreign mining group the initial payment for its interest in the Kingking copper-gold project in Compostela Valley.

Proceeds from the sale of Benguet’s interest in Kingking also helped the company pare down its debt.

This development augurs well for the implementation of the various mining projects of the company which include the expansion of the Acupan gold mine as well as the Balatoc Tailings Project ( the first commercial gold tailings recovery project in the country).

Benguet is also in the process of expanding its nickel mining operations. ln addition, the company has other mineral properties in different stages of development.

“With the financial re-structuring nearly completed, Benguet can now proceed to develop these properties with vigor,” Benguet said.

Benguet Corp. Nickel Mines Inc. (BNMI), the nickel unit of Benguet, recently secured the Securities and Exchange Commission’s approval to raise its authorized capital to P2 billion.

The capital hike was made via the transfer of its mining permit covering the Sta. Cruz nickel mine, valued at P1 billion, to BNMI.

BNMI, which was formed in 2009 with an initial capital of only P10 million, is eyeing an initial public offering of shares this year.

Benguet said the capital hike and the transfer of nickel mine will further strengthen its balance sheet and is consistent with its strategy of extracting value from its various mineral properties.

The Sta. Cruz nickel mine, located in Sta. Cruz, Zambales, consists of 1,406.7 hectares covered by a mineral production sharing agreement.

BNMI shipped last year some 1.3 million tons of ore with grades ranging from 1.8 percent to 2.05 percent Nickel through an off-take arrangement.

BNMI is considering the establishment of an intermediate processing facility to improve and maximize the value of its products.  

“Preliminary studies have shown encouraging results and further tests are now being conducted in China,” Benguet said.