Corporate News

By Krista Angela M. Montealegre, Senior Reporter

Philex secures approval for Silangan copper mine

Posted on April 22, 2015

PHILEX Mining Corp. has secured government approval to start the development of its $1.2-billion Silangan copper-gold mine on the island of Mindanao, giving the miner a new revenue source with the life of its Padcal mine expected to end in the next five years.

FILIPINO miners make their way out after their work in the mine tunnel of Philex Mining Corp., in Padcal, northern Benguet. -- AFP
Philex told the stock exchange the Department of Environment and Natural Resources, through the Mines and Geosciences Bureau, approved on April 10 the Declaration of Mining Project Feasibility of the Silangan project.

Likewise, the government authorized Silangan Mindanao Mining Co., Inc., a subsidiary of Philex, to proceed to the Development and Operating Periods of Mineral Production Sharing Agreement No. 149-99-XII, subject to compliance with the conditions of the order.

The approval is important for Philex with the mine life of Padcal, currently the company’s biggest revenue generator, seen ending by 2020.

“Philex needs a replacement for Padcal, which is running out of reserves. This will ensure the continued growth of Philex because the go signal allows it to develop the area and begin production,” Alexander Adrian O. Tiu, research analyst at AB Capital Securities, Inc., said in a phone interview.

The company’s shares rose 3.28% or 0.21 centavos to close at P6.62 apiece.

The Silangan mine is expected to start production in 2018, Philex Chairman Manuel V. Pangilinan said last week.

Philex is looking to fund 70% of the Silangan project through borrowing, Mr. Pangilinan had said, with the remaining 30% to be financed by equity.

The Silangan project involves the development of Boyongan and Bayugo mineral deposits comprised of gold, copper, and silver. It has estimated reserves of five billion pounds of copper and nine million ounces of gold in its 25-year mine life.

The company gained full ownership of the mine site when it consolidated its interest by purchasing the 50% equity interests of Anglo American Exploration BV and Anglo American Exploration (Philippines), Inc. in February 2009 for $55 million.

Philex is partly owned by Hong Kong-based First Pacific Co. Ltd., a major shareholder of Philippine Long Distance Telephone Co. (PLDT).

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