A local miner will spend almost P100 million to start commercial operations in its nickel mine in northeastern Mindanao and produce its first large shipment this year, a senior official said late last week.
"Based on a seven-year mining plan prepared by a competent mining engineer, investment requirements on the delineated 86 hectares amount to P99.417 million," Concepcion C. Sagun, vice-president of Century Peak Corp., said in a presentation to officials of the Mines and Geosciences Bureau.
The total investment for the open-pit project on Dinagat Island consists of P25.5 million for mine development, P27.81 million for capital expenditures, and P46.107 million for working capital, she added.
The area has total resources of 11.900 million wet metric tons of nickel ore, enough to sustain operations for at least 10 years.
Initial production will be one million wet metric tons of ore per year with about 1.1% nickel grade. This will double during peak production, Ms. Sagun said.
About 100,000 wet metric tons of nickel ore will be sold to China, she said. At $10 per pound of nickel, Century Peak will earn an estimated revenue of P616.320 million, she said.
Nickel prices for cash buyers on Friday closed at $7.39 per pound, up from the average $4.75 per pound in the first quarter but lower than the record $24 per pound early last year, data from the London Metal Exchange show.
Asked where the miner will source its funds, Ms. Sagun said "the funds will be from equity contribution. But the problem right now is that there is a worldwide slump."
"We might go into loans, equity and placement in stocks," she told reporters, adding that parent company Century Peak Metals Holdings Corp. might list on the stock exchange.
The miner is also looking for a foreign partner. "We are looking into [partnering with foreigners] especially in smelting because that is capital intensive," she said.
Ms. Sagun said Century Peak Metals Holdings would operate the nickel smelting plant, which will ship processed nickel ore to China.
The tenement was held by Casiguran Mining Corp. from 1992 to 1995. It was later declared a non-performing tenement by the Environment department and was taken from Casiguran. In 2006, it was reinstated to Casiguran, which transferred the rights to Century Peak in the same year.
Century Peak also has nickel projects in Zambales and Palawan. It has eight other nickel properties on Dinagat Island, which includes the 1,935-hectare Rapid City 3 nickel project, the 463-hectare Rapid City 2 project, and the 71-hectare Min Pro area.
Source: Business World Online
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