MIRA
INFORM REPORT
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Report Date : |
30.11.2007 |
IDENTIFICATION
DETAILS
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Name : |
SOCIEDAD CONTRACTUAL MINERA EL ABRA |
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Registered Office : |
Camino Conchi Viejo
Km.75 San José, Calama/El Loa |
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Country : |
Chile |
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Financials (as on) : |
31.12.2006 |
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Date of Incorporation : |
28.06.1994 |
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Legal Form : |
Limited Liability Company |
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Line of Business : |
Exploration and
exploitation of the mining copper |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
IDENTIFICATION
CORRECT
COMPANY NAME : SOCIEDAD CONTRACTUAL
MINERA EL ABRA
TRADE
NAME : "MINERA EL ABRA"
TAXPAYER
REGISTRATION : RUT 96.701.340-4
OPERATING
STATUS : Active
MAIN
ADDRESS : Camino Conchi Viejo Km.75 San José
CITY/PROVINCE/STATE :
Calama/El Loa
COUNTRY : CHILE
TELEPHONE : (5655)81.8300
FAX : (5655)34.8709
COMMENTS -
Mailing address: Casilla
79
SUMMARY
Incorporation :
1994
Operating
Status : Active
Last
Capital : Ps$340,805,975,000.=
Pesos
Shareholders'
Equity : US$1,219,086,631.= Dólares (31.12.2006)
Annual
Sales : 1,540,130,759.00 US$
Dollars
Finantial
Situation : SATISFACTORY
Employees :
886
Rating :
Excellent
Payments :
Usually to terms/good
QUALIFICATION
RATING
: Excellent
PAYMENTS
: Usually to terms/good
LEGAL BACKGROUNDS
DATE
OF INCORPORATION : 28JUN1994
REGISTERED
IN : Antofagasta
NOTARY
OFFICE : Victor Manuel
Correa Valenzuel
DURATION : Indefinite
CURRENT
PAID-IN CAPITAL : Ps$340,805,975,000.= Pesos
LAST
CAPITAL INCREASE : March 20, 2006
SHAREHOLDERS'
EQUITY :
TYPE
OF SHARES : Nominal- unique series
CURRENT
EXCHANGE RATE : Ps$3.08 per USD1
COMMENTS
-
With regards to the
concept of Sociedad Contraactual Minera, be advised these companies are those
who have been created as a result of a contract for prospecting or exploration
of the concession exploration, or the exploitation of the latter and the
processing of their mineral (Section 200, Mining Code).
For tax purposes,
SOCIEDAD CONTRACTUAL MINERA EL ABRA Contract Mining is body corporate.
On June 16, 2005, the
Chilean Government enacted an Act which states a progressive tax rate on
operating margin generated by the mining industry in Chile (5% for companies
whose annual sales exceed 50,000 MT of copper equivalent) effective as from
January 2006. The Internal Revenue Service published regulations of the Act in
October 2005. The Act stipulates the
benefits for companies whose foreign investor will waive tax stability clauses
set forth in its contract Decree Law 600 before November 30, as required by the
Act itself.
Thus, EL ABRA will have a
specific tax rate for the mining activity accounting for 4% which will be
unchangeable for a period of 12 years and without changes for other taxes
associated with mining operations, including the costs of patent mining.
Additionally, the company is required to disclose regularly certain financial
information to the Superintendence of Securities and Insurance, including
quarterly and annual audited financial statements. All other benefits granted
by the contract for foreign investment under DL600 continue to be in full
force.
The 51% of the shares is
controlled by CYPRUS EL ABRA CORPORATION. CODELCO holds a 49% of the shares.
This percentage has not changed since Subject was incorporated.
Relationship between
CODELCO and Subject Company consist of the sale of copper cathodes by EL ABRA
to CODELCO. Annual quantity has been set forth in the Marketing Agreement. In
said document, the sale of the 49% of the production to CODELCO is stipulated,
with a minimum of 30,000 MT.
Additionally, CODELCO
sells sulfuric acid to EL ABRA. Quantities and prices are negotiated every
year.
Copper sale is set forth
in the "Marketing Agreement" executed on June 15, 1995, between
Sociedad Contractual Minera El Abra and Codelco Services Ltd., under which
contract shall terminate on January 1st, 2012, automatically renewed on a year
basis.
HISTORY
Sociedad Contractual
Minera - El Abra was organized in accordance with Notarial Act dated June 28,
1994 as a contractual mining company. Its incorporation was published in the
official gazette on July 23, 1994, Page 1.
Shareholders are CYPRUS
EL ALBA CORPORATION with 51,000 shares and CORPORACION NACIONAL DE COBRE DE
CHILE (CODELCO CHILE) with 49,000 shares.
Main goal of this
corporation is to develop and execute the mining project of copper called
"El Abra", located in Calama, region of Antofagasta, Chile.
During the year 2000, the
majority shareholder of the company, CYPRUS EL ABRA CORPORATION became part of
the group PHELPS DOGDE CORPORATION, as a result of the merger of CAV
CORPORATION, an affiliate of PHELPS DODGE CORPORATION with CYPRUS-AMAX MINERALS
COMPANY.
On June 28, 1994, CYPRYS
EL ABRA CORPORATION executed a contract of foreign investment with the Chilean
Government under the provisions of Executive Order 600, which cobres
investments in the project during the first twelve years, amounting to USD3,000
Million Dollars which states a maximum rate of income tax of 42% during a
period of twenty years as from starting of operations and the right to withhold
the export product in bank accounts abroad.
DIRECTORS / EXECUTIVES / SHAREHOLDERS
FULL
NAMES / COMPANY NAME TITLE OWNERSHIP %
MUNIZAGA B., MIGUEL Executive
President
SNIDER, TIMOTHY Director
CONGER, HARRY M. Director
RIQUELME BRAVO, JORGE
E. Director / Representative
BARTLETT, DENIS M. Alternate
Director
NACCARATI, DAVID C. Alternate
Director
MORAN, CRISTIAN E. Alternate
Director
PUGMIRE, MCKAY Operations
Manager
MAYTA H., PERCY Plant
Processing Manager
FUNES M., RUBEN Exploitation
Manager
PESCE B., HERNAN Mining
Manager
COMER, DOUGLAS Admin.
& Finance Manager
NEIRA, MARIANO Controller
Manager
YAÑEZ A., VICTOR Human
Resources Manager
MONTECINOS M., CLAUDIO Materials
Manager
CANELLO S., RENE Projects
Manager
RUBIO G., LORETO Environment
Manager
PINO G., MARCELO Saf.
& Occ.Health Manager
GORDON, DAVID Eng.
& Geog. Manager
CORPORACION NACIONAL DEL COBRE DE CHILE Shareholder 49%
WHO IS WHO ?
CORPORACION
NACIONAL DEL COBRE DE CHILE
Chilean company
dba: "CODELCO"
RUT 61.704.000-K
Headquarters: Huérfanos
1270, Santiago.
Tel. (562)690.3000 / Fax:
(562)690.3059
CORPORACION NACIONAL DEL
COBRE DE CHILE "CODELCO" is a state-owned autonomous Chilean company
created in accordance with Executive Order 1350 in 1976 as a mining, industrial
and commercial company. Codelco´s operations are carried out mainly through its
Divisions, Codelco Norte (formed by the former divisions - Chuquicamata and
Radomiro Tomic), Salvador, Andina, El Teniente and until May 31, 2004, Workshop
Division. Said company also carries out similar activities in other fields in a
association with third-party.
RELATED COMPANY(IES)
COMPANY
NAME COUNTRY TAX.REG. RELATION
CORPORACION NACIONAL DEL
COBRE DE CHILE CHILE
61.704.000-K Related
BUSINESS
MAIN
ACTIVITY -
Exploration and
exploitation of the mining copper deposit of "El Abra", located in
the northern region of Chile (Tarapacá), 75 kilometers of the city of Calamá.
It is the largest copper deposit in the world, using the lexiviation process.
Ore processing is carried
out in the plant located inside the mine premises and design production is
225,000 MT/year of copper cathodes.
Cooper production is sold
in the national and international markets. Most part of the production is sold
by long-term contracts to foreign clients.
IMPORT : Yes (Germany, Australia, Austria, Belgium, Bulgaria, Canada, China,
South Korea, Denmark, Spain, Finland, Netherlands, England, Ireland, Israel.
Annual Imports in US
$(CIF) :
Year Amount
2005 32,810,434.70
2006 531,541.44
EXPORT : Yes (Germany, Brazil, Canada, China, North Korea, South Korea, Spain,
France, Netherlands, England, Italy, Japan, Malaysia, Singapore, Taiwan..
Annual Exports in US
$(FOB) :
Year Amount
2005 779,038,415.42
2006 66,813,381.95
%
FOREIGN SALES(COUNTRIES) : 100%
%
DOMESTIC PURCHASES : 5%
%
FOREIGN PURCHASES : 95%
EMPLOYEES : 886
FACILITIES
–
Premises :
Own
Valued in :
Ps$3,319,592,000
Condition :
Good
Use : Headquarters and industrial plant
Remarks and other
Premises -
Facilities are located in
an industrial area. Regular traffic.
No branches were found.
COMMENTS
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IMPORTATIONS:
Subject also imports from
Italy, Japan, Mexico, Peru, Czech Republic, South Africa, Switzerland, Sweden
and United States.
EXPORTATIONS:
It also exports to
Thailand, USA and Venezuela.
Registered Business
Purpose: Exploration and exploitation of the mining deposit EL ABRA, located in
the Second Region of Antofagasta, including its areas of extension, as well as
those adjacent or near areas to said deposit; ore extraction and processing
obtained from the operation carried out in said deposit; transportation and
commercialization of products and by-products of the processing of minerals and
other exploitation activities of the deposit.
The Company shall be able
to construct and operate plants and production facilities; carry out
processsing operations and benefit from it; form a mining firm or acquire it
and carry out all type of operations and related activities. Subject shall be
able to execute any and all acts and to enter into every kind of contracts and
agreements that direct or indirectly cause its purpose to be achived.
EL ABRA produces more
copper pounds by person than any other plant in the world and its service life
is estimated to be 25 years. The ore content is approximately of a 0.47 percent
of copper.
Overseas sale products
are transported by train from the mine to Antofagasta port facilities, Chile
and there products are unloaded to be sent to clients.
Major clients include
foreign companies, being the most important one, Empresa Nacional de Minería.
One of the most important
risk factors affecting continuity and sustainability of the Company is the sale
price per copper pound because it is listed in international metal stock
markets.
FINANCIAL INFORMATION
Despite we insisted, it
was not possible to get information directly from Subject.
Hence, all the information
contained in this report was obtained from external sources (public and
private) and from our files.
The following are Balance
Sheets for the Fiscal Years ended as of December 31, 2006 and December 31,
2005, expressed in US$ Dollars.
BALANCE SHEET DATE : 31DEC2006 31DEC2005
TYPE OF BALANCE SHEET : Annual Annual
BALANCE SHEET OF : 12 months 12 months
CURRENCY : US$ Dollars US$ Dollars
EXCHANGE RATE PER US$ : 1.00 1.00
ASSETS
CASH/BANKS
: 574,099,071.00 236,117,614.00
RECEIVABLES
: 139,767,359.00 107,040,271.00
INVENTORY
: 2,980,224.00 39,642,445.00
OTHERS
: 99,435,547.00 36,007,430.00
TOTAL CURRENT :
816,282,201.00
418,807,760.00
FIXED : 390,298,302.00
464,582,103.00
OTHERS
: 341,005,307.00 379,271,693.00
TOTAL ASSETS :
1,547,585,810.00 1,262,661,556.00
LIABILITIES
TOTAL CURRENT : 247,525,670.00 194,076,851.00
LONG TERM
: 80,473,509.00 88,837,586.00
SHAREHOLDERS' EQUITY :
CAPITAL
: 647,059,000.00 647,059,000.00
PROFITS (LOSS)
: 889,339,512.00 202,320,269.00
OTHERS
: -317,311,881.00 130,367,850.00
TOTAL EQUITY :
1,219,086,631.00
979,747,119.00
TOTAL LIABILITIES :
1,547,085,810.00 1,262,661,556.00
SALES :
1,540,130,759.00
693,581,167.00
PROFIT (LOSS) :
889,339,512.00
202,320,269.00
LIQUIDITY RATIO : 3.30 (Current
Assets/Current Liabilities)
DEBT-TO-EQUITY RATIO: 492.51%
(Shareholders'equity/Current Liabilities)
PROFITABILITY
MARGIN: 57.74% (Profits/Sales)
WORKING CAPITAL :
568,756,531.00 (Current
Assets - Current Liabilities)
FINANCIAL
SITUATION : SATISFACTORY
Based on the last
Financial Statement, Subject's Financial Position is considered satisfactory.
Liquidity ratio is adequate and is over average. Working capital is good and allows company to meet payments
promptly. Relation between shareholders' equity and obligations is acceptable.
Economic results have been satisfactory.
PROPERTIES
OF THE COMPANY -
Real estates: Subject has
a total of 20 real estates, being the most important ones:
- Main offices and
industrial plant: Camino Conchi Viejo Km.75 San José
Calama-Chile. Appraisal:
Ps$3,319,592,000.= Record 3500-1.
- Premises: Camino
Vecinal La Banda 1226 Local 1, Calama-Chile
Appraisal:
Ps$96,374,000.= / Record 4100-6
- Premises: Camino
Vecinal La Banda 1226 Local 2, Calama-Chile
Appraisal:
Ps$96,373,000.= / Record 4100-5
- Premises: Camino
Vecinal La Banda 1226 Local 3, Calama-Chile
Appraisal:
Ps$96,371,000.= / Record 4100-4
- Premises: Camino
Vecinal La Banda 1226 Local 4, Calama-Chile
Appraisal:
Ps$96,372,000.= / Record 4100-3
- Premises: Camino
Vecinal La Banda 1226 Local 5, Calama-Chile
Appraisal:
Ps$83,905,000.= / Record 4100-2
- Premises: Camino
Vecinal La Banda 1226 Local 6, Calama-Chile
Appraisal:
Ps$61,383,000.= / Record 4100-1
- Premises: La Banda 1226
C-14, Calama-Chile
Appraisal:
Ps$56,731,000.= / Record No.4100-14
- Premises: La Banda 1226
C-15, Calama-Chile
Appraisal:
Ps$56,731,000.= / Record 4100-15
- Premises: La Banda 1226
C7, Calama-Chile
Appraisal:
Ps$56,408,000.= / Record 4100-7
Vehicles: To be used by
the company.
- Trucks: Caterpillar
793-B
- Service vehicles
Machinery and plant. No
detailed information was provided
INSURANCE
–
Company Against Validity
CHILENA CONSOLIDADA
SEGUROS GENERALES SA All risk Annually
Coverage: All assets
PAYMENTS RECORD
TRADE
REFERENCES –
Line of Credit Monthly Average Terms(days)) Performance?
Supplier
1 US$ Open US$ 1,000,000.= 30 days Prompt Domestic
LIST
OF DOMESTIC SUPPLIERS –
Suppliers
listed Alphabetically. There is not
relationship as for the order above
Supplier
Artel SAIC
Ferrocarril de
Antofagasta a Bolivia FCAB
Finning Chile SA
Microcare SA
S.K. Comercial SA
Xerox de Chile SA
CREDIT
RISK CENTRAL -
Subject does not appear in
the trade information bulletin as for protested drafts, promissory notes or bad
checks.
Neither labor nor
anticipatory infringements or delinquent debts were traced against this
Company.
However, on January 30,
2006, a delinquent payment for Ps$37,380,000 Pesos was reported, concerning an
overdue invoice in favor of Eueocapital SA, locality of Calama.
CREDIT
HISTORY -
Trade backgrounds as of
year 2005 - 2006 show a good payment performance by Subject. For the previous
period 2004, some delayed payments were reported.
BANKING INFORMATION
BANKERS
Bank
BANCO DE CHILE
BANCO DE CREDITO E
INVERSIONES
CITIBANK NA
Subject is a client of
the aforesaid banks. Further information was not available.
CREDIT OPINION
Consulted
Credit Amount : US$600,000 Dollars/15
days Viable ? :
Subject Company is
eligible for the above mentioned line of credit.
NOTE:
The Opinion given is confidential, referential
and without liability.
RATING
EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)