Philex Mining Corp. on Thursday said its net income dropped by 6 percent in the first half of the year as global metal prices continued to slump to five-year lows.
In a disclosure to the Philippine Stock Exchange, Philex Mining said its net income in the first six months fell 6 percent to P565 million from P600 million in the same period a year ago.
Net income attributable to equity holders of the parent company stood at P607 million from P627 million in the first half of 2014, while core net income amounted to P520 million, also down from P559 million previously.
Philex said the Padcal mine operated for 178 days in the first six months of 2015 and milled 4.47 million tons of ore.
This translated to 53,689 ounces of gold produced, as grades improved to 0.442 grams/tonne (g/t). Meanwhile, copper output reached 16.9 million pounds, with copper grades slightly lower at 0.206 percent.
The Padcal mine operations resulted in revenues of P2.89 billion for gold and P1.87 billion for copper. Average realized prices for gold were lower by 11 percent at $1,190 per ounce and copper prices were lower by 16 percent at $2.61 per pound.
“These price levels were the lowest recorded in the last five years,” Philex said.
Revenues from petroleum and other sources, which were affected by lower output and volatility in world crude prices, fell to P83.5 million from P197.8 million in the first half last year, while revenues from silver amounted P37.6 million from P43 million previously.
Total consolidated revenues for the period amounted to P4.9 billion, down from P5.8 billion in the comparable period last year.
“As the external environment remained extremely challenging, the company remained relentless in managing its costs and reducing expenses across all fronts,” said Eulalio Austin Jr., Philex president and chief executive officer.
Silangan project progressing
“As we navigate through the turbulent global developments, we remain focused on maximizing our operating mine and at the same time setting our sights on the development of the Silangan project,” Austin added.
Right now, the official said Philex is benefitting from its cost-containment measures and they are confident that the results of such initiatives will be more pronounced in the longer term.
Yulo Perez, president of Silangan Mindanao and Mining Co. Inc. (SMMCI), said that the Silangan project is progressing, with the necessary permits and documentation being secured to enable the team to proceed with the next critical steps under SMMCI’s early works program.
The Silangan project is under Silangan Mindanao Mining Co. Inc. or SMMCI, a wholly owned subsidiary of Philex.
The company earlier said they are looking at 2018 or early 2019 for the commencement of initial ore production at Silangan project, which is the company’s next big prospective mine.
Once operational, Silangan mine has a projected life of 30 years for the first phase. The first five years is forecast to produce 5-7 million MT of ore annually, ramping up to an annual tonnage of 10 million MT.
“Just to give you a comparison of how valuable Silangan’s resources are compared to our existing mine, Padcal has mined out 5.9 million ounces of gold and 2.2 billion pounds of copper in its more than five-decade existence, at average metal grades of 0.61 g/t for gold and 0.32 percent for copper,” Austin said.
“Silangan’s current resource estimates, on the other hand, register average metal grades of 0.68 g/t for gold and 0.56 percent for copper and indicate the presence of about five billion pounds of copper and nine million ounces of gold for the first 30 years – classifying the project as a mid- to large-scale mining operation by international standards,” he added.
The Silangan project is located in Surigao del Norte in northeastern Mindanao. It combines the development of the Boyongan and Bayugo deposits, which are comprised of gold, copper, and silver.
Philex Mining has already invested more than P13 billion in the project as of end-2014 for the initial exploration and related works on the site. This is on top of the estimated commercial-operations project cost of about $1.2 billion.