Philex 9-mth net income falls 20% on lower metals prices

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PHILEX Mining Corp., the country’s biggest gold producer, on Thursday said its net income dropped by a fifth in the first nine months of the year due to depressed metals prices in the world market.

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In a disclosure to the Philippine Stock Exchange, Philex said its net income declined to P756 million in January-September 2015, down 20.5 percent from P951 million a year earlier.

Its core net income was at P811 million from P901 million in the same comparable period, while net income attributable to equity holders of the parent company went down at P851 million from P1.205 billion. Last year’s figures were boosted by the gain on the sale of a property in Pasig.

Revenues declined to P7.3 billion from P8.3 billion, despite a record output in the third quarter of 2015 which failed to offset lower metals prices.

The average quarterly metal output for January-September 2015 was 8.57 million pounds for copper and 27,199 ounces for gold.

In the third quarter alone, copper production rose by 2 percent to 8.82 million pounds while gold output rose 5 percent to 27,910 ounces due to operational enhancements and equipment upgrades that improved the recovery rates.

The average realized prices of gold went down by 10 percent at $1,171 per ounce from $1,299, while average copper prices fell by 19 percent to $2.45 per pound from $3.03.

In a related development, an engineering study on the mineral resource estimates from the 800-600 meter level (ML), identified an additional 20 million tons of ore reserves which will extend the Padcal’s mine life by two more years to 2022.

“The validation of additional reserves in the 800-600ML is indeed a very welcome development for the company. Aside from extending Padcal’s life-of-mine, the incremental reserves also enhance the company’s value and provide us with more flexibility before the Silangan project comes on stream,” Philex President and Chief Executive Eulalio B. Austin Jr. said.

With respect to the Silangan project, Austin said that they are currently evaluating several techniques on waste materials handling and refining the mine design that will enable Philex to develop the Silangan project into an efficient and environment-friendly operation.

“These initiatives will extend the completion of the project’s definitive feasibility study to the first quarter of 2016 from our original projection this year,” he said.

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