Philex Mining Q1 net income up 14% at P305M

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THE country’s biggest gold producer, Philex Mining Corp., said on Wednesday its net income in the first three months of the year grew 14 percent from a year ago despite the continued slump in metal prices and lower ore grades at the company’s Padcal copper-gold mine in Benguet.

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In a disclosure to the Philippine Stock Exchange, Philex reported that its net profit reached P305.3 million in January-March 2015, up by 14 percent from P267.4 million during the same period last year.

Revenue for the first quarter reached P2.39 billion, down slightly from P2.91 billion a year ago, with the company having operated a total of 88 days during the first three months of this year.

During the period, metal prices were depressed, with the average realized prices for gold plummeting 13 percent to $1,189 per ounce from $1,371 per ounce in the first quarter of 2014; and copper prices dropping 5 percent to $2.71 per pound from $2.85.

The lower metal prices, coupled with the natural depletion of higher grade ores, resulted in lower metal output, it said.

“Specifically, gold grades were at 0.435 in January-March 2015 from 0.439, and copper at 0.204 in 2015 from 0.223 in 2014, which translated to a 2 percent decline in gold output to 25,997 ounces and 12 percent fall in copper production to 8.361 million pounds,” Philex said.

But Philex said it effectively managed cost and expenses across all fronts, particularly at the head office and Padcal mine site, and posted one-off gains as well from the sale of its investments in Indophil Resources, to generate income to offset the impact of the low metal price environment.

Looking ahead, Philex president and CEO Eulalio Austin, Jr. said they expect the completion of the Definitive Feasibility Study for the Silangan project by the second half of this year, which will enable the company to finalize the financial requirements for the project.

Last week, Philex said it received an order from the Department of Environment and Natural Resources (DENR), through the Mines and Geosciences Bureau (MGB), approving the Declaration of Mining Project Feasibility (DMPF) of the Silangan Project.

This authorizes Silangan Mindanao Mining Co., Inc. (SMMCI), the company subsidiary that owns the project, to proceed to the Development and Operating Periods of Mineral Production Sharing Agreement (MPSA), Philex said.

“The approval of the DMPF will facilitate the initial stages of mine development and bring us closer to the targeted commissioning of the project by 2018,” Austin said.

The company also announced an additional 110.9 million tons of estimated mineral resources identified from the 800-600 meter levels (ML) in its Padcal mine, corresponding to incremental contained metal of 473 million pounds of copper and 1.342 million ounces of gold.

“This development increases the possibility of extending Padcal’s declared life of mine, which extension is now the subject of an ongoing technical study,” the executive added.

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