Benguet nears deal with US firm on Kingking

MANILA, Philippines - Publicly-listed Benguet Corp. is hoping to reach an agreement by September this year with St. Augustine Mining (a subsidiary of American firm Russell Mining & Minerals) for the turnover of Benguet’s interest in the Kingking mine in Compostela Valley to the North American mining firm.

Russell Mining has been awarded by the National Development Corp. (Nadecor) the contract to operate the Kingking mine.

Nadecor is the estranged partner of Benguet in the Kingking project.

Renato Claraval, chief financial officer of Benguet, said they are hoping to recover “a substantial portion” of the P1.29 billion that they have invested for the Kingking project.

Development of the Kingking project has been delayed for several years due to differences between Benguet and Nadecor.

Nadecor holds the Mineral Processing and Sharing Agreement (MPSA) for the Kingking project and has been at odds with Benguet over the timetable for the development of the copper and gold mine project.

After years of legal dispute, Nadecor won the right to take over the development of the Kingking project and has given Russell Mining the right to operate the Kingking mine, a move which Benguet tried to counter by claiming that it had teamed up with China’s Minmentals to develop the disputed Kingking project. China Minmentals rejected the tie-up.

In a related development, Claraval also revealed that Benguet has improved slightly its offer to buy back up to 30 percent of face value of its outstanding debt from its creditors. Benguet’s previous offer, Claraval said, was only for 20 percent of face value.

However, Claraval said, at least two of Benguet’s original creditors are not happy with the revised offer even though other creditors — mostly Special Purpose Asset Vehicles (SPAVs) “just want out.”