PHilex Mining Corp. on Thursday said that its profit dropped more than half in the first semester of the year, because of lower metal prices and reduction in the operations of its Padcal copper-gold mine in Benguet.
In a disclosure to the Philippine Stock Exchange, Philex Mining said that its net income reached P954 million in January to June 2013, or 53.1 percent lower compared to P2.036 billion a year ago.
“This decrease is a direct result of the company only operating from March 8, 2013, whereas last year the operations were continuous throughout the six-month period,” Philex Mining said.
Padcal mine, which received government authorization for temporary operations after its voluntary suspension since August 1 last year, produced a total of 2.4 million metric tons (MT), or a 5-percent improvement from last year’s 2.3-million MT production.
For the second quarter alone, Philex Mining’s net income dropped by 28 percent to P551 million from P768 million a year ago, reflecting lower metal prices for gold and copper during the period.
Philex produced 19,474 MT of concentrates in the second quarter of 2013, representing a significant increase from the 16,755 MT of concentrate produced in the same quarter last year.
Accordingly, metal production was higher with gold increasing 13 percent and copper increasing 21 percent to 33,235 ounces and 11,244,334 pounds, respectively, reflecting higher grade ore being processed and better recovery rates being achieved.
Despite these improved production figures, lower metal prices pulled down the company’s second-quarter gross revenues by 4 percent to P3.2 billion from P3.4 billion last year.
Philex Mining Chairman Manuel Pangilinan earlier said that the company expects continued profitability for the company in the second quarter of 2013, with Padcal operating at its maximum capacity.
“Despite lower metal prices, we remain on course with our social and environmental commitments to the government, particularly the requirements for the cleanup and rehabilitation of areas affected by the Padcal spill last year,” he added.
During the first six months of 2013, the company completed the cleanup of Balog Creek in Itogon, Benguet, and is now awaiting government permits to clean up the convergence area of the Balog Creek and the affected part of Agno River.
“Although the company has allocated P74 million for this year’s social development and management programs for its host and neighboring communities, it is also undertaking additional environmental studies related to the tailings spill, as well as education and livelihood assistance programs,” Pangilinan said.
The company also completed two of three chutes of the P327-million open spillway, which is being constructed to better ensure the management of water draining into the tailings storage facility No. 3 (TSF3).
Once complete, the spillway can channel as much as 1,000 millimeter of rain over a 24-hour period—equivalent to about two times the amount of rainfall brought by Typhoon Ondoy in 2009, whose downpour brought 455 millimeters of rain over a 24-hour period.
Over 90 percent of the water flowing to TSF3 comes from the surrounding hillsides and the balance from the Padcal milling operation.