Lepanto aims to convert MPSA to FTAA this year

MANILA, Philippines - Listed miner Lepanto Consolidated Mining Company intends to acquire within the year all the requirements needed for the conversion of the mineral production sharing agreement (MPSA) of its Far Southeast gold project in Benguet into a Financial or Technical Assistance Agreement (FTAA) within the year, according to an executive.

In an interview on the sidelines of the company’s annual stockholders meeting late Monday, Lepanto president and chief operating officer Bryan Yap told reporters said the company is fast-tracking the acquisition of the Free and Prior Informed Consent (FPIC) of indigenous peoples which is crucial to obtaining the conversion.

The company is also ramping up the geological survey to acquire data for the pre-feasibility study required for the conversion.

Yap said the company is also stepping up the information campaign for obtaining the FIPC.

“We are accelerating the data collection so we can get all the data required for the pre-feasibility study,” he said.

During the first quarter of 2013, underground geological drilling targeting the high grade areas in the property resumed.

“Data from the underground drilling is sufficient for the pre-feasibility study,” said Yap.

Early last year, South African Miner Goldfields Ltd. acquired a 40 percent stake in the Far Southeast project valued at $220 million.

The company has the option to acquire another 20 percent in the project upon the conversion of the property’s MPSA into an FTAA.  

Meanwhile, Lepanto recorded a lower net income of P251 million in 2012 from P254 million a year ago.

 â€œAlthough tonnage was higher, the ore grades were lower,” said Yap.

He said several expenditures incurred in 2011 were defrayed in 2012.

Revenues from sale of metals totaled P2.1 billion, up from P1.6 billion recorded a year ago. The rise in revenue was due to higher metal production and better metal prices.

The company delivered 519,767 tons of ore in 2012 to its mill, up from 548, 930 tons in 2011. Processed were 494,660 tons for 2012.

In the first quarter of 2013, Lepanto produced 7,600 ounces of gold and 13,000 ounces of silver, enabling it to break even in production during the period.

Yap said the company suffered a setback which started in December last year when several panels in its Victoria gold deposit in Benguet pinched out and affected productivity, but production started to improve in February and the company made a profit of over P60 million in the month of March.

Lepanto expects to produce 36,000 ounces of gold this year and rake in a net income of P150 million.