MANILA - Listed Benguet Corp., the country’s oldest miner, is contesting a notice of default given the absence of an updated list and voting among the group of creditors.

The company told the stock exchange that under a debt restructuring deal, "there is a need for a vote of the majority creditors before the company can be declared in default."

As of end-2008, the miner’s loans subject to the repayment plan amounted to P2.9 billion, higher than the P2.3 billion in 2007.

In separate letters to creditors dated Aug. 13, Benguet said that since 2002, its debt papers have been transferred to various entities several times. Benguet sought a copy of all transfer notices.

"These documents will help us evaluate, properly plan and negotiate for a comprehensive settlement of the debt that we hope to present to creditors," Salvador P. Pabalan, Benguet senior vice-president, said in the letters.

Benguet’s disclosure said: "Until it is established that the special purpose vehicle companies have validly acquired the debt papers, the default declaration is premature."

In February, several creditors demanded the payment of P316 million in matured loans.

In a phone interview, an official of Benguet said "it was just a matter of verifying if we are talking to the right group."

Reynaldo P. Mendoza, assistant corporate secretary of Benguet, said in the disclosure that the miner "has not previously received any demands from Calyon Credit Agricole CIB Philippine Distressed Asset Asia Pacific 1, Bank of America and Asset Pool A 1, Inc."

Benguet, however, admitted it did receive letters from the Philippine National Bank (PNB) citing notices from Calyon, Bank of America and Marathon Master Fund, Ltd. that it was already in default.

As Mortgage Trust Indenture trustee, the Lucio C. Tan-led PNB oversees collateral pledged by Benguet to creditors.

The miner cut its net losses to P106.734 million in the first semester from P212.098 million during the same period last year, following the sale of a mine and lower costs.

"The decline [in losses] was mainly from the P47-million gain on sale of the Catitipan property ... For the second quarter of 2009, the Acupan contract mining project and the Irisan lime project [in Benguet] continued to improve their profitability," Benguet President Benjamin Philip G. Romualdez said early this month.

Revenues were expected to rise given higher gold prices which averaged at $924.45 per ounce in the second quarter, from $890.20 per ounce during the same period last year, the mining firm said in an earlier disclosure to the bourse.

In April, an official of the mining firm said a nickel and gold project was on hold given low metal prices and a pending feasibility study.

Benguet, which stopped its commercial operations in the Sta. Cruz nickel property in Zambales last year, will dispose of its ore stocks this year, Tom Malihan, vice-president for exploration and chief geologist of the miner, said in a presentation to officials of the Mines and Geosciences Bureau.

The price that would give the miner a decent profit would be "at least $13,000 per metric ton," Mr. Malihan said.

Benguet would need to sell its nickel ores for $18,708 per metric ton to attain a 20% return on investment from its $6.042-million nickel plant, the company official added.

Shares in Benguet dropped to P8 apiece yesterday from P8.30 on Wednesday.