Benguet eyes revival of pre-1990 quake mine

Benguet Corp. is looking at an opportunity to relive its heyday with plans to mine 4 million to 8 million ounces of gold that have remained unreachable since the big Luzon earthquake of 1990.

Renato A. Claravall, Benguet senior vice president and chief finance officer, said in an interview that the company is preparing a detailed plan on reactivating four main tunnels and three subsidiary ones.

The tunnels are part of the Acupan gold project in Itogon town, which in 2013 produced some 12,000 ounces of gold.

Output from these tunnels stopped since late 1992 when metal prices were very low, production costs were high, and the tunnels themselves became inaccessible due to flooding caused by the earthquake.

Before that, during about 65 years of operations, the Ampucao project produced at least 5.5 million ounces of gold.

“We are finishing up the plan,” Claravall said. “The information memo could be done by mid- to late July.”

He said that, if this happens and other regulatory requirements were met, Benguet may be able to proceed with searching for an investor or partner as early as January 2015.

“De-watering the tunnels and (all the other work needed to bring them back online) would need $150 million to $175 million,” the official said.

“This could put us back to where [the company was] 20 or 30 years ago,” Claravall added. “The resource estimate is based on historical information.”

The global mining industry regards the company, which is the Philippines pioneering modern miner, as having been the country’s biggest producer of gold and the 16th-largest in the world.

Claravall said Benguet expects to incur P250 million to P300 million in capital expenses this year, mainly for existing nickel and gold operations.

“That’s smaller than our capex in 2013, which was about P400 million,” he said.

Further, the company is also considering to push exploration activities in the Ampucao copper prospect, also in Itogon.

“Drilling would cost P30 million and, if the company decides to go ahead, may be financed with cash at hand,” Claravall said.

During Benguet’s annual stockholders’ meeting on Thursday, the incumbent board was authorized to continue its functions in a holdover capacity, following a long-standing temporary restraining order (TRO) issued by the Supreme Court in 1993 in relation to litigation over the ownership 16.2 million shares sequestered by the Presidential Commission on Good Government.