MANILA, Philippines – Listed Philex Mining Corporation has earmarked P4 billion ($91.11 million) for capital expenditures this year to finance the operations of the Padcal copper-gold mine in Benguet and the pre-development of the Silangan copper-gold project in Surigao del Norte.
Interviewed on the sidelines of the company’s annual stockholders’ meeting on Wednesday, June 25, Philex Mining Chairman Manuel Pangilinan said they were putting on hold the planned P12-billion ($273.31 million) stock rights offer and would source this year’s capital needs from operational cash flow and bank borrowings.
About P3.2 billion ($72.88 million) will be devoted to the development of the Silangan Mine in Surigao del Norte, while P600 million ($13.67 million) to P800 million ($18.22 million) will go to exploration activities in Padcal, Pangilinan said.
Pangilinan also ruled out any equity sale this year.
“Not yet, not this year. There will be a bit of borrowing but the capital expenditure for Padcal can be funded with operational cash flows. But the capital expenditure for Silangan is a big number for Philex so we may need to borrow,” Pangilinan said.
Philex eyes to ramp up production in Padcal and extend its lifespan beyond 2020.
“There are continuous survey efforts being undertaken to determine additional resources. I believe there is a good chance of discovering more resources in Padcal. I’m quite optimistic that the mine life can be extended beyond 2020,” Pangilinan said.
Drilling operations are now being conducted beyond the lowest level of the mine to find additional resources, Philex president and CEO Eulalio Austin, said.
“We are pursuing the declaration of additional resources in Padcal to ramp up production and extend the mine life. The area beneath the lowest level of the mine is being explored,” Austin reported to stockholders.
Additional reserves are also being determined in the company’s defunct Bulawan gold project in Negros Occidental and Sibutad gold project in Zamboanga del Norte.
The company also intends to complete the pre-feasibility study for the Silangan Project next year.
The company will need a partner for the Silangan mine because of the immense capital needed to develop the project, Pangilinan said.
It will cost the company around $1.5 billion to operate the Silangan project.
“This is a big project. Maybe if we finish the bankable feasibility next year we can present the final numbers,” Pangilinan said.
The company is also studying if an underground mining method is feasible for the project or if an open-pit mining method should be used.
Pangilinan said it would be cheaper and faster to bring the mine into operation using the open-pit mining method.
“The expenditure would be significantly lower than using the underground method,” Pangilinan said.
Meanwhile, Philex is still awaiting clearance from the Mines and Geosciences Bureau (MGB) to resume regular operations in Padcal.
The company still has to complete the required rehabilitation work imposed by the bureau before it can be allowed to resume regular operations, MGB Director Leo Jasareno earlier said.
“With Padcal, we paid a lot of penalties with the government arising from the incident but we still haven’t received the document from the MGB. If Director Jasareno still has additional requirements, we don’t know. We still don’t have the final piece of the puzzle,” Pangilinan said.
The Pollution Adjudication Board lifted a cease and desist order it had imposed on Philex due to the massive tailings spill that occurred in Padcal.
The decision helps pave the way for the permanent resumption of operations at Padcal, said Philex. It comes after Philex paid the fines imposed by government agencies concerned and completed the cleanup of affected rivers.
“As soon as we receive the MGB lifting order, we would be able to operate the Padcal until the end of its mine life,” Austin said. – Rappler.com
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