Benguet Corp. on expansion mode

Benguet Corp. is planning an aggressive nickel and gold expansion program now that it has paid most of its debts from the sale of its rights to the Kingking copper-gold project in Compostela Valley.

Benguet chief finance officer Renato A. Claravall said in an interview that the company was working on three programs: turning mine waste into gold at its Balatoc property, for which $15 million has been set aside; expanding and implementing a $120-million nickel processing program for the Sta. Cruz nickel project; and reviving underground mining at the Acupan gold project, which may cost up to $60 million.

The finance officer also confirmed that Benguet has received the $25 million as payment for its interest in Kingking. “We have done our housecleaning, pretty much cleaned up our debts, and now we are on the lookout for expansion,” Claravall said.

Claravall said the recovery of gold from mine waste under the Balatoc tailings project in Benguet would likely be the first to be implemented.

Benguet’s subsidiary, Balatoc Gold Resources Corp., has set aside $15 million to put up the gold recovery facility by the first quarter of 2013. The facility will produce gold bars, unlike the gold buttons currently produced from the Acupan gold mine.

In a parallel program, Claravall said Benguet was drilling to find new ore sources at the Sta. Cruz nickel project in Zambales. He said another subsidiary, Benguetcorp Nickel Mines Inc. (BNMI), has allocated P65 million for drilling in Sta. Cruz over the next six months.

A Beijing-based technology company would help determine the most cost-effective way of processing nickel from Sta. Cruz to maximize the value of BNMI’s product, Claravall said.

Clavarall said the company would decide on its strategy for ore processing in Sta. Cruz in the first quarter of 2012. By then, Benguet would decide whether or not to push through with the value-adding plan and how it would finance the venture.

“We had an MOU [memorandum of agreement] with Chinese think tank Bejing Shen Wu Thermal Energy Corp. since they have new innovations in processing that will minimize the cost of power. Can BNMI provide all the feed or should we buy a new nickel mine somewhere? That’s where the shopping component is,” Claravall said.

The revival of underground gold mining at the Acupan contract mine project in Benguet would likely develop later than the nickel processing project and the tailings project, Claravall said.

Acupan’s five tunnels were flooded in the 1990 earthquake in the Baguio area and Benguet had to abandon the tunnels because it was too costly to drain them and reconstruct the damaged support, ventilation and other facilities. The price of gold at the time was $200 per ounce, Claravall said.

“Now it makes sense, with gold at $1,800 per ounce,” he said.