Philex Mining Corp. said that it is pushing through with its planned P13.8-billion stock rights offering of common shares to its existing stockholders to repay loans and fund its capital expenditures.
In a disclosure to the Philippine Stock Exchange, Philex said that the Securities and Exchange Commission has served notice of the filing of its registration statement, which will pave the way for the rights offering to shareholders of record as of October 16, 2013.
The firm had to shelve the rights offering since operations at its Padcal mine was still suspended from a tailings dam spill.
The registration statement was filed in March when government regulators allowed Philex to temporarily resume operations, so it can shore up its tailings dam. The temporary lifting was extended after its July deadline.
The net proceeds from the stock offer will be used by the company for the repayment of loans from the First Pacific Group, capital expenditures and exploration costs related to existing projects, primarily the Silangan and Kalayaan projects, and general corporate purposes.
Philex Mining borrowed P2.1 billion from controlling shareholder First Pacific Co. Ltd. in November last year to fund the capital expenditures of its Padcal mine and Silangan project, and for general working capital purposes.
The firm executed a term loan facility agreement with an indirect wholly owned subsidiary of First Pacific. The interest-bearing loan is unsecured, may be drawn in tranches, and is repayable within one year.
Philex earlier said that it was on-track for the commencement of production in its Silangan Project by 2017. The project covers the Boyongan and Bayugo deposits, which are currently under prefeasibility stage.
In the meantime, the exploration drilling in its Kalayaan Project, also in Surigao del Norte, which is adjoining the Bayugo deposit of the Silangan Project, is proceeding on schedule.
Philex said that the additional resources of Kalayaan will increase the total resources of the Silangan Project, adding said that it will make the disclosure of the Kalayaan resources at the appropriate time.
The Silangan project aims to produce 35,000 metric tons (MT) to 60,000 MT a day, while the firm’s other Greenfield projects are seen to produce about another 15,000 MT a day once these start operations.