Volcan Cia. Minera SAA (VOLCABC1) , Peru’s largest silver and zinc producer, plans to double its silver output during the next five years to tap higher metal prices.
Silver prices, which have fallen from a 31-year high of $49.845 an ounce in April 2011, should remain between $30 and $35 an ounce this year because of demand for the metal as an investor haven, Paulo Cabrejos, commercial manager for Lima- based Volcan, said in an interview. Silver has declined 27 percent over the past year, according to data compiled by Bloomberg.
“We’re focusing more on silver than zinc as it’s still a very good price,” Cabrejos said at a Metal Bulletin conference in Warsaw today. “This was the first year in which income from silver was higher” than from zinc, he said.
Volcan, which sold $600 million of bonds in January, plans to invest $1 billion in the expansion of zinc, silver and copper mines including its $350 million Rondini copper project over the next five years, Chief Executive Officer Juan Jose Herrera said Sept. 14. Volcan, which boosted net income by 33 percent to $370 million last year, increased silver output by 5 percent to 21 million ounces, while zinc fell 9 percent to 318,000 metric tons.
Silver futures for May delivery on the Comex fell 1.7 cents to $31.373 an ounce yesterday. Zinc for delivery in three months increased $6, or 0.3 percent, to $2,002.50 a metric ton in London.
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