Benguet to close P450-M loan this mo

MANILA, Philippines - Benguet Corp. expects to close by the end of this month a P450 million loan it is securing from local domestic banks to fund its Balatoc tailings project.

Processing operations for the Balatoc tailings project is targeted for the first quarter of 2013.

According to Renato A. Claravall, chief finance officer of Benguet, the cost of the Balatoc project is P700 million. Benguet will finance P250 million and is in the process of securing P450 million from a domestic bank.

He said the bank has approved the loan in principle and is now awaiting final board approval.

Even so, Claravall said the company is still open to other financing offers. “We are still validating our options.”

Claravall said that over a 10-year period, the tailings project is expected to generate around 180,000 ounces of gold at a production cost of $600 to $800 per ounce.

Benguet’s existing mine tailings is 16.7 million tons, Claravall said, adding that the continuing high price of gold has made the tailings project feasible.

He said gold prices could breach $2,000 per troy ounce, although it has recently corrected and fallen to around $1,600/oz.

According to Claravall, if inflation is factored into metal prices, gold prices should be at $2,400/oz.

Benguet’s gold production for this year is placed at 4,500 ozs.

For 2012, Benguet’s Acupan mine gold production alone is expected to increase to 6,000 ozs.