Philex earnings slightly lower

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THE country’s biggest gold producer Philex Mining Corp. said net its income slipped in the first six months of the year due to several production issues that affected the extraction of gold and copper ore.

In a statement, Philex said its net income amounted to P719 million in January-June 2017, lower by 5 percent compared to the P757 million recorded during the same period last year.

Core net income also dropped to P748 million from P774 million previously.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) amounted to P1.82 billion, 7 percent higher than the EBITDA for the same period last year at P1.697 billion.


During the period, its Padcal copper-gold mine milled 4.14 million tons of ore, lower than the 4.7 million tons milled last year, due to low mine delivery brought about by equipment availability issues, limited capacities of ore passes at lower mining levels affecting operational flexibility, and bouldery ore in newly commissioned draw points that affected the ore extraction and transport processes.

Philex also said the lower metal production negated the impact of improved copper prices and favorable exchange rates, resulting in a drop in consolidated revenue to P4.756 billion from P4.788 billion in the first half of last year.

Revenue from copper reached P2 billion this year, from P1.795 billion previously, as higher average realized copper prices – at $2.65 per pound from $2.14 per pound – offset lower copper production of 14.992 million pounds from 17.341 million pounds.

Gold revenue totaled P2.71 billion, lower than the P2.95 billion a year ago as production reached 43,251 ounces from 49,589 ounces in the first half of 2016, and realized gold prices averaged at $1,258 per ounce, down from $1,263 per ounce.

Revenues from silver rose to P38.9 million from P37.3 million a year ago, as the average realized price also went up to $17.60 per ounce from $16.60 per ounce.

Eulalio B. Austin, Jr., Philex president and CEO, said the company is further intensifying its adherence to global mining standards.

“In fact, we have tapped Australian and Canadian counsel to assist us in our efforts to align further with these countries’ mining, safety, and environmental standards,” Austin said.

“In addition, we are also spearheading efforts for the possibility of Canada’s Towards Sustainable Mining or TSM initiative being adopted by the local industry while continuing to be ISO 14001 (Environment Management System) and OSHAS 18001 (Occupational Health and Safety Standard) certified,” he added.

“This is in addition to the tailings storage facility designed by global experts and developed under international standards and the Definitive Feasibility Study (DFS) of the Silangan Project currently being finalized by our consultants from Australia,” he said.

Philex Chairperson Manuel V. Pangilinan earlier said they expect a flat net income this year as the company addresses the production issues.

“Nothing serious, but it may lead to a slight decline in production of ore and, therefore, could impact the amount of gold and copper production for 2017,” he added. The miner reported a core net income of P1.657 billion in 2016, up 83 percent from P905 million a year earlier, after registering record-high production.

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