Penoles 2012 Capital Budget ‘Similar’ to Last Year, CFO Says

Industrias Penoles SAB (PE&OLES*), the world’s largest producer of refined silver, will spend about the same on capital expenses this year as it did in 2011 as it seeks to boost production and reduce energy costs.

Penoles’s 2012 capital budget will be “similar” to the $957 million it spent last year, including $191 million for exploration, Chief Financial Officer Leopoldo Alarcon said yesterday in a mining conference in Mexico City organized by brokerage Corporativo GBM SAB de CV.

Penoles is developing projects to diversify and increase production in Mexico, Peru and Chile. The Mexico City-based mining group, controlled by billionaire Alberto Bailleres, is spending $203 million at its Velardena zinc mine that’s scheduled to open at the beginning of 2013.

The company is also developing energy plants to lower its electricity costs. Penoles is expanding this year its wind farm in the southern state of Oaxaca, Mexico, to 80 megawatts from 50 megawatts. “By 2020, we expect to be self-sufficient in electricity,” Alarcon said.

-- Editors: Will Wade, Robin Saponar

To contact the reporter on this story: Carlos Manuel Rodriguez in Mexico City at

To contact the editor responsible for this story: Dale Crofts at

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