Philex secures P2-B loan for Padcal, Silangan projects

MANILA, Philippines – Pangilinan-led Philex Mining Corp. secured a P2.1 billion loan to fund the capital expenditures of its Padcal mine in Benguet, and its Silangan project in Surigao del Norte.

In a disclosure to the Philippine Stock Exchange, Philex president and chief operating officer Eulalio Austin announced the company signed on November 9 a P2.1 billion loan agreement with an inidrect subsidiary of its parent, Hong Kong-based First Pacific Co. Ltd.

The loan is repayable within a year from the date of the agreement.

“The proceeds of the loan will be used by Philex principally for capital expenditures of its Padcal mine and Silangan project and for general working purposes,” Austin said in the disclosure.

Philex intends to resume the operations of its copper-gold mine in Padcal, Benguet mid-2013. Philex has begun the P400 million-worth construction of a spillway for its broken tailings pond no. 3.

Operations of the mine have been suspended since August 1 because of a tailings spill accident. It will remain closed until the Department of Environment and Natural Resources (DENR) lifts the suspension.

Philex officials said the company intends to settle all its obligation to the government for the tailings spill by yearend.

Philex is contesting an over P1 billion fines and penalties the government has slapped it. 

This amount includes:

• P1.034 billion in fines imposed by the Mines and Geosciences Bureau (MGB) for of Mining Act; 
• P50,000 penalty imposed by the Environmental Management Bureau (EMB) for violation of the Envrionmental Compliance Certificate; and 
• P50,000 to P200,000 per day penalty imposed for violation of the Clean Water Act.

Philex officials earlier said exploration activities are still ongoing in the mining tenement of the Padcal mine. With the completion of the spillway, the remaining estimated ore reserve of around 80 million tons can still be utilized.

Silangan project

Officials also said that amid the remediation measures being conducted in the Padcal mine, preparations for the commissioning of Philex’s copper-gold project in Surigao is on track.

The mine feasibility study for the Silangan project is expected to be completed by February 2013.

The Boyongan and Bayugo ore deposits, together known as the Silangan project, contain an estimated gold and copper reserve worth at least $22 billion.

Philex reported a 53% drop in net income for the first 9 months of the year to P2.03 billion from P4.35 billion recorded in the same period last year because of lower metal production following the suspension of the operations of the Padcal mine.

The company’s performance from January to September was still brighter than the earlier forecast made by its chairman Manuel V. Pangilinan that net income for the whole of 2012 would reach only between P1.5 billion to P1.7 billion. – Rappler.com