Wednesday, 7 October 2009

Nickel mining firm lists by way of introduction, to invest P10B

Neil Jerome C. Morales

NICKEL MINER Century Peak Metals Holdings Corp. will invest almost P10 billion to put up a nickel mine and processing plant in northeastern Mindanao.

The announcement came after Century Peak listed 2.82 billion common shares by introduction to the Philippine Stock Exchange yesterday, making the miner the second firm to list by way of introduction this year.

"[For the] phase one we are actually investing P2 billion... [and] at least $100-$150 million for full operation," Century Peak president and chief executive Wilfredo D. Keng told reporters. "We are going to start [phase one] next year."

During the first stage of operation in the 4,000-hectare nickel property in the province of Dinagat Island, the miner will produce 5,000-10,000 metric tons (MT) of nickel per year. Output will be doubled to 20,000 MT per year when operations go full-scale.

An 86-hectare area has total resources of 11.900 million wet MT of nickel ore, enough to sustain the company’s operations for at least 10 years. "Actually we discovered that we can go for 15-20 years [of operations] but we will still continue explorations in the area," Mr. Keng said, adding that about 3,000 hectares of the property has yet to be explored.

The mining area was held by Casiguran Mining Corp. from 1992 to 1995. However, it was categorized by the Environment department as a nonperforming tenement and was taken away from Casiguran. In 2006, it was reinstated to Casiguran, which transferred the rights to Century Peak that same year.

Aside from nickel mining, Century Peak will put up a processing plant with Century Hua Guang Smelting, Inc., where the miner has a 55% stake.

"With our smelting plant, even if the price drops to $10,000 per MT ($4.53 per pound), we still make money," he said. "We could add more value in the company."

The nickel price for cash buyers yesterday closed at $7.75 per pound (lb.) from the average $5.64 and $4.75 per lb. in the second and first quarters, respectively, data from the London Metal Exchange showed.

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