LISTED Apex Mining Co. Inc. decided to more than double its capital expenditures for the year to P1.9 billion from P914 million a year ago in a bid to expand its projects.
The bulk of the 2015 budget will be used to acquire property and equipment, finance mine development and exploration initiatives, Chief Financial Officer Renato Migriño said in a statement.
President Walter Brown said the 2015 capex will be partly sourced from operational cash flow and a P2.2 billion loan the firm got from BDO.
The budget does not cover expenses for the recently-acquired Itogon mine in Benguet, which requires P150 million to restore and about P500 million to P600 million to make it profitable in three to four years, Brown noted.
The company acquired 98 percent of Itogon Suyoc Resources for P182.67 million or P0.007456 per share. Around P32.67 million of the P182.67 million transaction will be paid in cash, while P150 million will be paid in shares. The cash payment was also partly financed by the BDO loan.
Apex will infuse at least P238 million in Itogon Suyoc to pay down its debts and restart its Sangilo operations.
The Sangilo mine is expected to produce small amounts of ore this year, and is seen to generate up to 1,000 tons in the next three to four years.
“They have a very small mill. We’ll just start it up and it can mill 50 to about 70 tons.
And in over two years, we can go to 200 tons a day. It’s minimal but, when we hit about a thousand tons a day, it will become income generating,” Brown said, noting that the mine previously stopped operating because of low gold prices.
“But it has a substantial amount of ore… right next to Benguet. It has a lot of potential. We feel it has the potential of another Lepanto, but we think it will take us three years to get established and seven to 10 years before it make a contribution,” he said.