Philex posts 33.7% drop in Q1 net income

MANILA, Philippines – Philex Mining Corporation has reported a 33.7% drop in its net income for the first quarter of 2014 – P267.4 million from P403.3 million for the same period in 2013, which included a one-time income from insurance claims it received.

In an announcement posted on the First Pacific website on Wednesday, April 30, the Philex board of directors also reported a core net income  of P278.4 million in the first quarter of 2014,  a 110% increase over its P132.4-million core net income in the same period last year,  based on unaudited financial results.

The company’s core net income in the first quarter more than doubled as consolidated revenues grew 228% to P2.913 billion from P889.3 million in 2013 on higher metal production, the board said.

“We are glad to be starting the year on a positive note, and looking forward to operate finally the Padcal mine for the full 12 months in 2014, after two successive years of partial operations,” said Philex Mining president and chief executive Eulalio B. Austin Jr.

On August 1, 2012, torrential rains damaged the underground drainage system of the Padcal mine’s tailings pond number 3 in Tuba, Benguet, causing tons of sediment to contaminate the Agno River and Balog Creek. It reached the dead storage of the San Roque multipurpose dam in Pangasinan.

Philex paid the Mines and Geosciences Bureau (MGB) a record fine of P1.034 billion, while the Pollution Adjudication Board (PAB) has imposed on it a maximum penalty of P200,000 per day until waterways are completely cleared of contaminants.

Austin said the Padcal mine operated for 3 whole months in 2014, compared with just a month of operation in 2013, “resulting in significantly higher output and increased revenues.”

Pacdal measures completed

The Philex board believes the company “has completed all the remedial measures and investments required to improve the water management system at Padcal and last year, these new facilities were commissioned.”

“The construction of the third and final chute is also currently underway and will be completed by July 1, 2014,” Austin said, adding that Philex has “successfully completed the clean-up of the bodies of water affected by the incident in 2012, and continue to be engaged in constant dialogue with the Pollution Adjudication Board.”

He said Philex’s rehabilitation efforts at Padcal affirm its “strong commitment to ensure the maximum safety of all our people and facilities, and full compliance with all the applicable laws governing our operations.”

The board said that the Padcal mine operated for 3 whole months in 2014 as against approximately one month of operation in 2013, “resulting in significantly higher output and increased revenues.”

In the first quarter of 2014, a total of 2,396,077  tons were milled in the Padcal mine versus 611,801 tons in 2013.

The board reported that gold production in the first quarter of 2014 rose nearly two-and-a-half times to 26,442 ounces from the same period last year. Gold revenue rose by 227% to P1.610 billion, despite realized prices for gold falling to $1,371 per ounce from $1,595 per ounce in the same period a year ago.

Copper produced totaled  9,468,009 pounds, a 246% surge in revenue to P1.178 billion, as realized prices for copper dropped to $2.85 per pound versus $3.42 per pound in 2013.

The board said combined revenues from silver, coal, and petroleum more than doubled to P124.4 million in the first quarter of 2014. The increase in petroleum volume was due to  higher production at the Galoc oil field.  

Meanwhile, Philex is awaiting the completion of the pre-feasibility study of its Silangan project in Surigao del Norte within the second quarter of the year. – Rappler.com