ACCORD CAPITAL EQUITIES CORPORATION

COMPANY REPORT: Lepanto Consolidated Mining Company [pse: LC / LCB]

Outlook: NEUTRAL / SELL

PRICE (trade date) Price Range (52-wk) PHP PE Ratio Dividend Yield Outstanding Shares % Free Float

“A” 0.37 (10/19/2010) 0.21 – 0.64 -32.8x 19,742,130,050 “A” 85%

“B” 0.435 (10/19/2010) 0.22 – 0.75 -38.6x 13,161,402,180 “B” 84%

COMPANY PROFILE:
The Company shifted to gold bullion production in 1997 through its Victoria Project, which, together with Teresa, continues to produce. Both
mines are located in Mankayan, Benguet Province. Sales over the last three years [2006 to 2008] comes from gold in bullion and copper
concentrates. Principal markets contributing to the firm's revenue are Hong Kong, Canada, Peru and China. Last year, Hong Kong accounted for
97% of foreign sales. It has two (2) existing MPSA's covering nearly 3k hectares in Mankayan, Benguet. Further it has two (2) MPSA applications
over additional hectarage in Mankayan and in Villaba, Leyte, where exploration works are currently underway. (source: 2009 Annual Report)

RECENT DEVELOPMENT
1:3.3 STOCK RIGHTS OFFER The Board has approved the conduct of
an SRO where each holder of 3.3 common shares shall be entitled to 1
Rights Share at an Offer Price pegged at php0.30. Earlier, the
stockholders approved the increase in the miner's authorized capital
from php3.35B divided into 335 billion shares to php6.64B with the
same par value, increasing its authorized shares to 664 billion.

Proceeds of the Offer, whose pertinent details have yet to be defined

by the Board, will be used to fund the development works in the
Victoria Project, retire loans, supplier accounts and shareholder
advances and to update defined retirement benefits obligations.

During its ASM early this year, the firm was reported as appropriating
php600M for the Victoria mine. It is hoped that this will increase the
mine's gold production to 40k ounces this year. Mining revenues for PER SHARE DATA
the first six months of 2010 dropped -16.3% year-on-year to
2010 (1h) 2009 2008 2007
php622.39M. Operating expenses however, exceeded revenues,
sustaining the negative trend in its bottomline traced back to 2005. BOOK VALUE 0.141 0.149 0.153 0.166

EARNINGS -0.0076 -0.0113 -0.0237 -0.0072

As of H1 2010, the Company's long-term debt amounts to php578.891
million, net of current portion of php45.99 million. Total retirement DIVIDENDS
benefits obligations as of balance sheet date is php533.664 million. PE (based on A-24.34 -23.01 -2.530 73.611
current year EPS)
B -28.618 -22.12 -2.954 -72.222

INCOME DATA ( in millions PHP)

Year Ended Revenues/ Sales EBIT Net Income NPM %

2010 (1h) 622.389 -249.016 -249.096 -40.20%

2009 1,455.950 -347.545 -371.858 -25.50%

2008 1,837.274 -735.347 -763.299 -40.55%

2007 1,776.655 -161.841 -206.445 -11.62%

BALANCE SHEET DATA ( in millions PHP)

Year Ended Current Ratio Quick Ratio Debt Ratio Debt-to-Equity ROA ROE

2010 (1h) 0.346 0.052 0.467 0.876 -2.86% -5.36%

2009 0.385 0.067 0.439 0.781 -8.73% -7.58%

2008 0.501 0.067 0.408 0.691 -8.57% -14.48%

2007 0.475 0.051 0.409 0.728 -2.42% -4.10%

DISCLAIMER: THE MATERIAL CONTAINED IN THIS PUBLICATION IS FOR INFORMATION PURPOSES ONLY. IT IS NOT TO BE REPRODUCED OR COPIED OR
MADE AVAILABLE TO OTHERS. UNDER NO CIRCUMSTANCES IS IT TO BE CONSIDERED AS AN OFFER TO SELL OR A SOLICITATION TO BUY ANY
SECURITY. WHILE THE INFORMATION HEREIN IS FROM SOURCES WE BELIEVE RELIABLE, WE DO NOT REPRESENT THAT IT IS ACCURATE OR COMPLETE
AND IT SHOULD NOT BE RELIED UPON AS SUCH. IN ADDITION, WE SHALL NOT BE RESPONSIBLE FOR AMENDING, CORRECTING OR UPDATING ANY
INFORMATION OR OPINIONS CONTAINED HEREIN. SOME OF THE VIEWS EXPRESSED IN THIS REPORT ARE NOT NECESSARILY OPINIONS OF ACCORD
CAPITAL EQUITIES CORPORATION ON THE CREDIT-WORTHINESS OR INVESTMENT PROFILE OF THE COMPANY OR THE INDUSTRIES MENTIONED.