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Renewable Energy project with German Biogas Tech and METPower Venture Partners

by Marcelle P. Villegas - June 29, 2021

[Photo credit: Metro Pacific Investments]

To support the Philippines’ renewable energy transformation initiatives, a comprehensive training series on biogas technology was launched by a German biogas technology provider -- Lipp GmbH, and the German Biogas Association (GBA), along with German-Philippine Chamber of Commerce and Industry (GPCCI / AHK) [Deutsch-Philippinische Industrie-und Handelskammer]. Their training series covers the functionality, use and maintenance of biogas system in the Philippines.

Lipp GmbH teams up with MetPower Venture Partners in building a first industrial-scale biogas plant in Mindanao where the plant will process pineapple waste from Dole Philippines. The waste material from pineapples will be used to generate biogas energy. “Once fully operational, the two plants will generate clean energy to replace fossil fuel for power, steam and heat generation,” according to GPCI’s special report. [1]

[Photo credit: German-Philippine Chamber of Commerce and Industry (GPCCI / AHK)]

MetPower Venture Partners is owned by Metro Pacific Investments. MetPower Venture Partners’ major ongoing project, “Waster-to-Energy Project” with Dole Philippines is a Php1 billion investment. “The project will derive biogas from the anaerobic digestion of fruit waste from Dole’s canneries in South Cotabato.” [2]  This will generate 5.7 MW of clean energy for Dole and contribute to reduction of CO2 emission by 100,000 tons per year. The facilities are targeted to be completed by the first half of 2021.

Marc Reinhard, Trainer and International Affairs Consultant at GBA said, "Biogas is a renewable energy but can also offer multiple environmental and climate services for a sustainable and circular economy in the Philippines. It even helps to create local jobs and economic development in rural areas.”

The training organised by GPCI, Lipp GmbH and GBA is attended by current and future biogas plant staff, participants from Department of Energy (DoE), Department of Science and Technology (DOST), and the academe.

The training program is part of a develoPPP.de Project which is 50% co-financed by the German Investment Corporation (Deutsche Investitions- und Entwicklungsgesellschaft – DEG) through public funds of the German Federal Ministry for Economic Cooperation and Development. “GPCCI supports this initiative as project manager in the Philippines.” [1]

Biogas is a gaseous fuel, mostly containing methane, that is an end product of fermentation of organic matter. Biogas is a renewable resource or renewable energy source because its production-and-use cycles is ongoing and continuous. It does not generate net carbon dioxide. Biogas is different from natural gas. Biogas is created through biological process of anaerobic digestion or generated by the breakdown of organic matter by anaerobic bacteria and is used in energy production. [3] Natural gas comes from fossil fuel produced by geological processes.

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References:

[1] Special Projects AHK News (2 March 2021). " Supporting Philippines’ Renewable Energy Transformation with German Biogas Technology and Know-How". German-Philippine Chamber of Commerce and Industry (GPCCI / AHK) website.

Retrieved from - https://philippinen.ahk.de/news/news-details/supporting-philippines-renewable-energy-transformation-with-german-biogas-technology-and-know-how

[2] https://www.mpic.com.ph/investor-relations/investments/power/metpower-venture-partners/

[3] https://www.britannica.com/technology/biogas

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Photos credit:

Pineapple photo – image from Pixabay by igorovsyannykov

 

 



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Mining

Philippine Resources - June 09, 2021

Philippine Mining Gives Communities Full Support in Time of Covid-19 – and Beyond

Philex Mining Corp. distributed noche buena packs to PWDs, senior citizens, and front liners the company’s host communities in Barangay Tabaan Norte in Tuba, and Barangay Gumatdang in Itogon, both in Benguet province. After mining firms heeded the government’s call last year to help ease the nation’s burdens from the Covid-19 pandemic, over a million families and hundreds of thousands of front liners nationwide felt the industry’s all-out support in addressing their most pressing needs. From food, medicines, and PPEs in the early months of the lockdown, to healthcare infrastructure, education, and livelihood assistance, host and neighboring communities of mining projects continue to find solace in the industry amidst the lingering contagion. All told, the industry spent over P380 million in 2020 for Covid-19 initiatives from mining companies’ Social Development and Management Program (SDMP) funds, realigned to buttress the government’s pandemic response. A total of 1.1 million households and nearly 300,000 front liners all over the country benefitted from the effort. The SDMP is a 5-year budgeted plan for development programs in mining communities, which the Mines and Geosciences Bureau (MGB) has allowed to be realigned during this pandemic. Some companies even complemented their SDMP spending with Corporate Social Responsibility funds to ensure greater positive impact and to reach more beneficiaries. RELIEF, MEDICAL and LOGISTICS SUPPORT According to the MGB, the industry distributed nearly 390,000 relief packs and goods, over 6,000 boxes of medicines, some 1,600 hygiene and medical kits, 11,000 PPEs, 194,000 face masks, 5,000 face shields, 3,000 gallons of alcohol, 2,000 gallons of disinfectant and other cleaning supplies, as well as 4,000 units of other medical supplies. Mining firms also provided isolation units for communities, as well as food and logistics support for medical front liners, checkpoints personnel, rescue personnel and volunteers, Indigenous People (IPs), senior citizens, solo parents, and other vulnerable sectors. In the provinces of Nueva Vizcaya and Quirino, for instance, almost 19,000 households received medicines, PPEs and food supplies from OceanaGold Phils., Inc., whose Didipio copper-gold project has not been operating since July 2019 as it awaits the renewal of its contract with the government. Also in Nueva Vizcaya, FCF Minerals Corp. provided food supplies to 10,500 households in the towns of Quezon and Kasibu. Filminera Resources Corp. and PhilGold Processing and Refining Corp., for their part, capped their Covid-19 efforts in their host province of Masbate with a Christmas food distribution drive in nearby Albay for some 400 families – about 100 of them IPs – who were among the hardest hit by Typhoons Rolly and Ulysses. The companies also donated P5 million to help rebuild damaged houses and distribute relief goods following the 6.6 magnitude earthquake in Masbate. In Benguet, Lepanto Consolidated Mining Corp. (LCMC) and Far Southeast Gold Resources, Inc. opened their Casubigan camp to serve as the town’s temporary Covid-19 quarantine facility following the request of town mayor Frenzel Ayong. In addition, the company equipped its Lepanto hospital staff with complete PPEs, isopropyl alcohol, disinfectants, vitamin C, and other medical supplies. With the help of Lepanto weavers, LCMC provided all its 1,600 with face shields and 3-ply face masks. To stem the transmission of the virus, LCMC rolled out mass testing to over a thousand mine employees. Those who were found positive were sent to the company’’s temporary isolation facilities, with free meals for the entire quarantine duration. Also in Benguet, Philex Mining Corp. (PMC) lent support for the purchase of medicines by several barangays and to augment the government’s Social Amelioration Program (SAP). Aside from the SAP, the company gave cash assistance to families in Barangay Camp 3, Tuba. PMC, via its subsidiary Silangan Mindanao Mining Co. Inc. (SMMCI), likewise allowed the use of Silangan’s stockyard in Barangay Macalaya as temporary isolation facility of Placer town in Surigao del Norte. Cagdianao Mining Corp. (CMC) bankrolled the cost of materials and labor for the “Katre-Karpintero” program of Dinagat Islands Governor Arlene “Kaka” Bag-ao who sought to address the need for more beds in the province’s quarantine facilities in the province. “Equipped with sufficient materials,” she said, “150 beds were completed in record time (5 days). Of course this also provided extra income for our (21) carpenters.” The industry likewise supported the establishment of two molecular technology laboratories and a COVID-19 testing center, as well as the procurement of over 17,000 rapid test kits. Taganito HPAL Nickel Corp. (THPAL) partnered with Nickel Asia Corp. and its affiliates CMC and Taganito Mining Corporation (TMC) in donating P18 million to the Philippine National Red Cross that, in turn, will build a P28-million molecular testing lab in Caraga. The lab can help boost pandemic response in the region through faster diagnostic results, rapid identification of infected patients, and faster contact tracing to limit the spread of the virus. TMC donated some 5,000 rapid anti-body test kits (RATs) to Surigao del Norte to help detect possible cases of Covid-19 throughout the province. THPAL, on the other hand, provided the Claver town LGU with RATs, antigen test kits, a multicab and motorcycle, and an iChroma II antigen device, which has a higher accuracy rate in detecting Covid-19 than the standard rapid diagnostic equipment. Moreover, THPAL joined the Army 30th Infantry Battalion in providing relief goods to 489 IP families in Gigaquit town. Lt. Col. Jeffrey Villarosa, 30th IB commander, said the effort will help save the IPs from exploitation by rebel groups. Meanwhile, Platinum Group Metals Corp. (PGMC) provided 6,000 RATs and PPEs to the Caraga Regional Hospital, Surigao del Norte Provincial Hospital, Surigao City Health Office, and Claver Rural Health Unit. TVI Resource Development Phils., Inc. (TVIRD) turned over several boxes of PPEs to the Zamboanga Sibugay Provincial Hospital, while PMC donated PPEs as well to at least 5 hospitals in Baguio and 3 in Benguet. Face masks, face shields, disposable gloves, isolation suits, and goggles were turned over by PMC to Benguet governor Melchor Diclas and Baguio City mayor Benjamin Magalong. The same equipment were also distributed to the municipalities of Tuba, Itogon, Sablan, and Tublay for use by front liners. At the PMC corporate office, face masks were distributed to medical front liners at the Philippine Children’s Medical Center through the Alagang Kapatid Foundation Inc. Drums of alcohol were donated to the Philippine National Police – Cordillera Autonomous Region and wash stands were provided for the Benguet provincial government as well as to Barangay Ampucao in Itogon. Food assistance was also given to Barangays Ampucao and Dalupirip in Itogon. Various cash and rice donations were also given to the municipalities of Tuba, Itogon, and Sablan. While SMMCI’s copper and gold project is currently placed on extended pre-mine care and maintenance status, the company still donated PPEs to medical front liners within its host and neighboring communities. It also distributed surgical PPEs to the Caraga Regional Hospital in Surigao City, the Provincial Hospital in Placer, and the Municipal Health Offices of Placer, Tagana-an, and Mainit. To improve the Cagdianao town’s emergency response and speed up relief operations, CMC provided the LGU here an ambulance unit and a service truck. For its part, Sagittarius Mines, Inc. (SMI), which has not even extracted minerals in Tampakan, South Cotabato since the company’s inception in the 1990s, turned over a four-wheel drive truck to the LGU for its relief efforts in remote mountainous barangays. LCMC also donated a service vehicle to the Mankayan municipality. Local officials who received the donations for their respective towns said the transport equipment would drastically improve their logistics capabilities. PMC, on the other hand, provided funds for diesel fuel used by barangay emergency vehicles in hauling goods and ferrying medical patients and front liners to and from Baguio. Over in Cebu, Carmen Copper Corp. distributed health kits to 175 journalists from different media outlets in recognition of their contributions to the fight against Covid-19. LIVELIHOOD and FOOD SECURITY Mining projects also distributed some 92,000 sacks of rice to communities all over the country. Rio Tuba Nickel Mining Corp. (RTNMC) and Coral Bay Nickel Corp. (CBNC), for instance, donated P30 million worth rice for Palaweños following the call of Palawan Governor Jose Ch. Alvarez for a joint public-private sector effort to address the food security threat posed by the pandemic. PMC, meanwhile distributed sacks of rice to families in Barangays Camp 1, 3, and Ansagan in Tuba, Benguet, as well as in Barangays Ampucao and Dalupirip in Itogon. PGMC allocated P12 million of its P31-million Covid-19 assistance initiatives for the company’s Food Security Project, which aims to provide food on the table and, at the same time, a livelihood source for partner communities. Portions of the workforce that were displaced since the onset of the pandemic compelled the inception of this project, which is jointly funded by PGMC’s SDMP and Annual Environmental Protection and Enhancement Program budgets. Most of the produce from the project’s communal gardening-cum-organic vegetable farming, egg machines, and aquaculture components are bought and consumed within the community; some are bought by PGMC and its employees. The project, implemented in close coordination with the Claver municipal government and the Surigao del Norte Agricultural Office, has been lauded by the Department of Environment and Natural Resources as “one of a kind”. On the other hand, a bangus farming project sponsored by Hinatuan Mining Corp. – another Nickel Asia Corp. subsidiary based in Tagana-an, Surigao del Norte – yielded more than 1700 kilos of bangus in the project’s first harvest ever. Lilibeth G. Becera, President of the 90-strong United Fisherfolk Association of Bagong Silang said the harvest “is a big achievement for us small fisherfolk because the lockdown has limited our movement in the community and the bangus helped many of us during this quarantine.” Agata Mining Ventures, Inc. (AMVI), a subsidiary of TVRD, distributed more than 5,000 relief packs that included over 11,000 kilograms of organic vegetables from AMVI’s Mabakas Farm School – certified by the Technical Education and Skills Development Authority (TESDA) – and some of its 1,300 graduates. The recipients included the company’s employees in the its Agusan del Norte mine site and Mamanwa IPs, many of whom are farmers themselves who would have otherwise faced the risk of spoilage of their produce due to quarantine restrictions on transportation. In Carrascal, Surigao del Sur, meanwhile, Marcventures Mining and Development Corp. distributed vegetable seeds to urge residents to start their home garden and grow their own vegetables amid the ongoing health crisis. Dubbed “Gulayan sa Panimalay,” the program is part of the municipality’s food sufficiency strategy, where residents are encouraged to produce fresh and healthy food from their backyard to their tables, save on food expenses during the pandemic, while enjoying a steady supply of fresh produce from their own backyard. A project of the Department of Agriculture, the program also supports local rice farmers through financial assistance, free hauling services and direct purchase of their rice products at a competitive farm gate price. EDUCATION and SKILLS TRAINING SMI helped procure 642 transistor radios for students of Columbio Central Elementary School in Sultan Kudarat as part of the LGU efforts to promote the Department of Education’s distance learning program during this pandemic. Columbio town mayor Edwin Bermudez said the local radio station that SMI also helped establish is now being utilized for distance learning. Barangay Datalblao chair Bai Naila Mamalinta likewise attested that SMI has been providing support not only in the area of education, but also for the health and socio-economic well-being of her Blaan constituents for many years now. Back in Surigao del Norte, Taganito Mining Corp. recently turned over some 7,172 workbooks worth P2 million to the provincial government for the use of public schools in the province. The workbooks were handed over to provincial governor Francisco Matugas. Looking beyond the pandemic, Rio Tuba Nickel Mining Corp. and Coral Bay Nickel Corp. are poised to provide residents of Bataraza in the southern part of Palawan the opportunity to shape a brighter future when the company’s P42 million state-of-the-art training center opens after Covid-19. Once fully operational, the center will offer training courses, such as driving, scaffolding, welding, bread and pastry production, among others. The new facility will have audio-visual rooms and dedicated areas for various workshops, and will be equipped with conveyor belts, overhead cranes, vertical structure platforms, and electrical simulators for the training sessions. It will host classes for skills education and job-preparatory training based on the courses that TESDA offers. VACCINE In 2021, mining firms have been allowed again by the MGB to realign their SDMP and Safety and Health Program funds to procure Covid-19 vaccines for critical stakeholders. The Chamber of Mines of the Philippines welcomes the MGB decision as this will help support the vaccination of employees and members of host communities. More significantly, this will provide a big boost to the government’s Covid-19 vaccination program and help hasten the nation’s recovery from this pandemic.   Article Courtesy of the Chamber of Mines of the Philippines

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Mining

Philippine Resources - August 03, 2021

OceanaGold Provides Didipio Update and Q2 2021 Financial Results

OceanaGold Corporation reported its financial and operational results for the quarter ended June 30, 2021. Michael Holmes, President and CEO of OceanaGold said, “I am very pleased with the operational and financial performance of the business in the second quarter 2021. Haile delivered a record quarter of gold production and is well on-track to deliver on the full year production guidance. Waihi plant upgrades were completed, and we 2 commenced continuous milling late in the second quarter which is a tremendous outcome as we continue to ramp-up underground operations.” “Based on year-to-date performance we have refined our expectations for the full year. We currently expect consolidated production of 350,000 to 370,000 gold ounces at AISC of $1,200 to $1,250 per gold ounce sold at cash costs of $825 to $875 per ounce sold. Strong first half performance at Haile has put us firmly on track to deliver ahead of 160,000 gold ounces for the full year at moderately higher AISC, largely driven by an increased proportion of mining costs capitalised as pre-strip plus higher than expected mining costs incurred. On the other hand, a softer first half at Macraes is driving production to the lower end of guidance of 155,000 to 165,000 gold ounces for the full year at consequently higher AISC. Waihi is firmly on-track and production guidance remains unchanged but at improved costs. We expect to provide updated consolidated guidance in-line with the staged restart of Didipio over the coming weeks.” “Renewal of the FTAA at Didipio was one of our key priorities this year, and I’m extremely proud to say we delivered. The staged restart of the asset is underway with the current focus on the rehire and training of our skilled Philippine workforce. We expect to restart processing well prior to year-end, initially sourcing mill feed from existing stockpiles at site. Our expectation is to also transport and sell approximately 18,500 gold ounces and 3,500 tonnes of copper in concentrate on site by early fourth quarter. The rehire and retraining of the workforce, as well as the ongoing risks associated with the COVID-19 pandemic, could impact the timeline associated with returning to full underground production of 1.6Mtpa, which could take up to 12 months. Operations In the first half of the year, the Company produced 177,039 ounces of gold, a 27% increase over the same period in 2020 due to record production at Haile in the second quarter, resumption of campaign processing at Waihi, and limited impacts from COVID-19. Second quarter gold production of 93,848 ounces of gold reflects record production at Haile of 57,240 ounces. Consolidated AISC of $1,227 per ounce sold YTD and $1,226 per ounce sold in the second quarter were relatively flat over the prior year and previous quarter. Cash costs for the first half of the year of $734 per gold ounce and $764 per ounce in the second quarter, decreased 22% and 11%, respectively. The improvement in cash costs primarily reflects lower operating costs at Haile from productivity improvements made year-over-year Haile, USA Haile delivered a record second quarter of 57,240 gold ounces resulting in 101,581 gold ounces produced in the first half of the year. AISC and cash costs improved significantly, benefitting from higher gold sales and lower overall cash costs from productivity improvements. AISC and cash costs for the second quarter were $922 and $615 per ounce, a decrease of 7% and 22%, respectively, quarter-on-quarter. YTD AISC and cash costs were $953 per ounce and $684 per ounce, respectively, down approximately 36% over the prior year period. Unit mining and milling cost decreased quarter-on-quarter, and increased 9% and 36%, respectively, YTD over the prior year period. Second quarter decreases reflect lower maintenance activities on the mining fleet and higher mill feed following milling disruptions from the first quarter; YTD increases are attributable to higher maintenance costs and an unplanned mill disruption from blocked crusher chutes in the first quarter that have since been resolved. The decrease in site G&A quarter-on-quarter reflects the increase mill feed and lower costs during the period. Confirmed COVID-19 cases at site increased from 111 at the end of the first quarter to 120 by the end of the second quarter, a decrease in positive cases from 48 in the first quarter to nine in the second quarter. Looking ahead, the Company expects to transition to ore mining of lower grades at Ledbetter Phase 1 and commence stripping of Ledbetter Phase 2, resulting in materially lower production and higher AISC in the second half of this year. The Company has refined its full year production guidance for Haile to 160,000 to 170,000 gold ounces at site AISC of $1,100 to $1,150 per ounce sold, including cash costs of $850 to $900 per ounce sold. The higher AISC and cash costs reflect higher mining costs incurred plus incremental sustaining capital expenditures related to open pit pre-stripping. Waihi, New Zealand Waihi produced 3,939 gold ounces in the second quarter and 8,276 gold ounces YTD. Second quarter activities at Waihi primarily focussed on the development of Martha Underground and replacement of the semi-autogenous grinding (“SAG”) mill. Approximately 2,665 metres of underground development were completed during the second quarter and 5,210 metres YTD. Sustained milling recommenced in late June following the successful replacement of Waihi’s SAG mill. AISC and cash costs for the second quarter were $1,223 and $1,215 per ounce sold, respectively, and increased quarter-on-quarter with higher operating costs associated with limited early production, partly offset by moderately higher gold sales. YTD AISC and cash costs were $1,099 per ounce and $976 per ounce, respectively, increases over the prior year period with the ramp-up of production at Martha Underground as expected. Unit mining costs were relatively unchanged quarter-on-quarter with mining of narrow vein ore at Correnso and early production from Martha Underground in both quarters. YTD mining costs reflect early production from Martha Underground relative to the prior year. Processing cost and site G&A increases in the second quarter reflect the planned shutdown for replacement of the SAG mill and resultant lower mill feed. Lower site G&A YTD over the prior year reflects normal operations relative to 2020 which included impacts from COVID-19-related shutdowns. Full year 2021 production guidance at Waihi remains unchanged while cost guidance has improved. The Company expects to produce 35,000 to 45,000 ounces at lower gold cash cost of $900 to $950 per ounce and site AISC of $1,300 to $1,350 per ounce sold. The Company anticipates ramp-up of production over the course of the second half with the highest quarter of production for the year expected in the fourth quarter. Macraes, New Zealand Macraes produced 32,669 gold ounces in the second quarter and 67,182 gold ounces in the first half of 2021. Lower than expected production in the second quarter reflects geotechnical impacts at the Coronation North open pit that slowed mining rates reducing access to higher grade ore zones, as well as a delayed re-start from the planned shut during the quarter to address out-of-scope maintenance requirements Second quarter AISC and cash costs were $1,524 and $897 per ounces sold, respectively. YTD AISC and cash costs were $1,428 and $857 per ounce sold, respectively. Cash costs increased approximately 10% quarter-onquarter and YTD over the prior year period, reflecting the lower ounces, a net drawdown in inventory and additional contractor costs to fill workforce vacancies. Similar increases in AISC also reflect the higher sustaining capital spend related to increased pre-stripping at Deepdell North and waste movements in the quarter and first half. Unit mining costs were 6% and 28% higher quarter-on-quarter and YTD over the prior year period, respectively, as a result of reduced trucking productivity from inclement weather which saturated haul roads, flooded active open pit mining areas, and rendered the underground inaccessible for a two-week period in the first quarter. Mining efforts were subsequently re-directed to increased waste mining and pre-stripping at Deepdell North open pit through the first half. Processing unit costs also increased over comparable periods, reflecting the one-off mill motor outage in the first quarter and extended mill shutdown during the second quarter. Due to the lower-than-expected production in the first half, the Company expects Macraes full year production to be in the lower end of the guidance range of 155,000 to 165,000 gold ounces at cash costs of $800 to $850 per ounce and increased site AISC to $1,200 to $1,250 per ounce sold over the full year, primarily driven by increased sustaining capital spend related to pre-stripping at Deepdell North and additional underground development. Production is still expected to increase in the third quarter and be higher overall in the fourth quarter of 2021. Didipio, Philippines There was no production from Didipio in the second quarter and first half due to the suspension of operations. The Company expensed $5.5 million in the second quarter and $10.0 million YTD of holding costs as part of consolidated Corporate General and Administration, which relates to maintaining Didipio in a state of operational standby. Subsequent to second quarter end, the Government of the Philippines renewed the Didipio FTAA for a further 25 years. The Company’s primary focus is the safe and responsible start-up of operations, which includes recruitment and training of the workforce and the transport of approximately 15,000 tonnes of copper-gold concentrate produced prior to the shutdown of operations. The Company expects to progressively ramp-up to full underground mining rates of 1.6 Mtpa within the next twelve months, depending on workforce rehiring and recruitment efforts. Ore from the underground will incrementally and steadily offset mill feed from stockpiled ore of which there is currently 19 million tonnes. Since March 2020, 72 positive COVID-19 cases have been managed at Didipio, 63 of which occurred in the second quarter of 2021. The Company experienced a significant increase in COVID-19-positive cases early in the second quarter, consistent with the spread of COVID-19 in the local and surrounding communities. The site continues to follow strict health and safety protocols to prevent the ongoing transmission of the virus at site. Financial In the first half of the year, the Company generated $331.5 million in revenue, a 42% increase from the prior year period due to record production at Haile, improved average gold price and early production at Waihi with the development of Martha Underground. Quarter-on-quarter revenue increased 23% with record production from Haile, partly offset by lower sales from Macraes where production was impacted by geotechnical issues that rendered higher grade ore zones of the open pit inaccessible. First half adjusted EBITDA (excluding Didipio carrying costs) of $161.9 million nearly tripled year-on-year, reflecting improved revenues on higher gold prices and record production at Haile at improved cash costs, as compared to the first half of 2020 which included impacts related to COVID-19 shutdowns. Quarter-on-quarter adjusted EBITDA of $95.4 million increased 43%, benefitting from record production at Haile at improved operating costs, partly offset by lower sales from Macraes. Adjusted net profit was $36.9 million or $0.05 per share on a fully diluted basis in the second quarter and $58.7 million or $0.08 per share on a fully diluted basis YTD. The quarter-on-quarter and year-over-year increases were mainly a function of the higher revenue from increased sales volumes. The increases were partly offset by income tax expense of $15.8 million in the second quarter and $21.5 million YTD due to the operational profits in the USA and New Zealand. Additionally, there were no potential tax benefits recognised associated with the costs incurred to maintain Didipio in a state of operational readiness. Operating cash flows YTD were $83.4 million, a decrease year-over-year given the $79.0 million received from the gold presale in the first quarter of 2020. Excluding working capital adjustments, fully-diluted cash flow per share was $0.22 YTD and $0.13 for the second quarter. First half investing cash flows of $152.8 million were significantly higher than the prior year period, primarily due to higher growth capital expenditures at Haile related to the expansion of waste storage facilities, increased prestripping at Macraes and the ongoing development of Martha Underground at Waihi. As at June 30, 2021, the Company’s cash balance stood at $92.3 million, and net debt increased quarter-onquarter to $224.8 million, mainly reflecting the lower cash balance. The Company’s total debt facilities stood at $250 million of which $50 million remains undrawn as at 30 June 2021.

Mining

Philippine Resources - August 02, 2021

Lawmaker Renews Call for Mining Tax Regime, Trust Fund During National Confab of Mining Stakeholders

Albay Rep. Joey Sarte Salceda has called for the passage of the proposed fiscal regime for the mining industry, saying the industry is a potential job creator in the post-COVID future. Salceda, chairman of the House committee on ways and means, emphasized the natural wealth potential of the Philippines, but observed "key deficiencies in the country’s extractive industry governance framework," some of which can be resolved by a “coherent tax regime.” “The country is the fifth most mineral-rich country in the world for gold, nickel, copper, and chromite. It is also home to the largest copper-gold deposit in the world. Estimates suggest that up to 840 billion dollars of untapped mineral wealth is in Philippine soil,” Salceda said in his keynote speech during the Extractive Industry Transparency Initiative (PH-EITI) National Conference on Thursday. “This is not to mention the 17.1 billion barrels of oil deposits that China’s Ministry of Geology and Mineral Resources estimates to be in the Spratlys, or the 190 trillion cubic feet of natural gas that the US Energy Information Administration believes to be in the area. “These resources, if extracted and managed properly, could make the Philippines one of the richest countries in the world,” Salceda added. Salceda noted that although the issuance of Executive Order 130, amending Section 4 of Executive Order No. 79 s. 2012, lifted the moratorium imposed by the latter on new mining agreements, the Executive Order still has areas for improvement. “First, neither Congress nor the Department of Finance, the country’s fiscal policymakers and fiscal administrators respectively, are given a specific role in this process by the new EO,” Salceda said. Salceda also observed that the EO delegates some powers that are not supported by law, including the power of the Department of Environment and Natural Resources (DENR) to negotiate tax agreements with miners. Salceda also said it is the DOF that has the experience in financial management and should therefore negotiate revenue sharing agreements on the government’s behalf. Salceda, however, emphasized the high potential of the mining sector post-pandemic. “As the world shifts towards electric-powered transport, and as the digital economy continues its ascent, the global economy will require more minerals, especially nickel and copper, which we abound in. Nickel prices are once again in 5-year high levels. So is copper and cobalt, elements needed for e-vehicle batteries,” Salceda said. “Regardless of the grade of minerals we produce, demand is high across the board. It can only mean well for our mining industry’s bottom lines in the medium-term,” Salceda added. Salceda stressed the revenue-generating potential of the industry if a tax regime is enacted. “The tax revenues are also crucial for economic recovery. The proposed regime will generate P7.2 billion in incremental revenues on the first year and P37.9 billion over the next 5 years. These are closed-group estimates. “They are probably conservative, as more mining agreements are made and as mineral prices continue to boom. So, these revenues will play an important role in helping stabilize our fiscal situation,” Salceda said. The industry could create well-paying jobs post-pandemic but stressed the need for a mining trust fund supported by tax revenues from mining as a “rainy day fund” for when mineral prices are low. “Of course, that’s [high prices] not forever. Manufacturers will find ways to reduce metallic content when the metals get too expensive. When that happens, prices will inevitably fall. We must be ready. The tax regime is not everything, but it’s a necessary step we cannot skip,” Salceda said.

Mining

Philippine Resources - August 02, 2021

Philex Delivers PHP1.149B Core Net Income in 1H2021, An Increase of 186% Compared with 1H2020

Photo Credit: Redjie Melvic Cawis Philex Mining Corporation announced that the Company achieved another new high in its revenues and core net income for 2Q2021. Philex recorded a Core Net Income of Php610 million for the 2nd quarter. In addition to the Php540 million core net income it already recorded in 1Q2021, Philex registered a new high core net income for the first half of the year at Php1.149 billion. Satisfactory execution of the mining plan resulted in sustained level of metal output, and optimum operating cost and expenses delivered the higher core net income for the quarter and year-todate ended June 30, 2021. The Company reported a Net Income of Php600 million for 2Q2021 versus the reported Net Income of Php322 million for the same period in 2020, an 86% increase. Production and Revenues The Company milled slightly lower tonnage than the first quarter of 2021 resulting in slightly lower copper output for 2Q2021. Despite the slightly lower copper output, the Company generated higher revenues for 2Q2021 at Php2.377 billion, higher by 21% over the same period in 2020. This brings 1H2021 revenues to Php4.747 billion, ahead by 29% over the same period in 2020, with revenues only at Php3.680 billion. The higher revenues are due mainly to the sustained higher realized metal prices for both Gold and Copper at $1,807 per ounce and $4.21 per pound, respectively. The satisfactory execution of the mining plan and mill operations resulted in the production of 13,612 ounces of Gold and 6.435 million pounds of Copper for 2Q2021, bringing the 1H2021 total metal output at 27,025 ounces of Gold and 13.205 million pounds of Copper. Operating Costs and Expenses Core and Net Income Operating costs and expenses for 2Q2021 at Php1.593 billion are higher than those of 2Q2020 at Php1.552 billion due to slightly higher production expenses and higher excise taxes and royalties attributable to higher revenues. The slight increase was tempered by lower non-cash production costs in 2Q2021 amounting to Php271 million compared with non-cash production costs in 2Q2020 amounting to Php330 million. This brings the 1H2021 operating costs and expenses to P3.240 billion, higher by Php136 million compared with 1H2020. The increase is attributable to increasing production cost brought about by the effects of the pandemic to the supply chain, including logistics and Covid-19 response undertaken by the Company. Reported Net Income for 2Q2021 increased by 86% to Php600 million from Php322 million in 2Q2020 This brings the Company’s 1H2021 reported Net Income to Php1.159 billion from Php425 million of 1H2020. Core Net Income for 2Q2021 reached Php610 million to close the 1H2021 Core Net Income at Php1.149 billion, higher by 186% versus the Core Net Income of Php402 million in 1H2020. The Company generated EBITDA of Php1.016 billion for the 2Q2021 versus Php708 million in 2Q2020, a 44% increase. This brings the 1H2021 EBITDA to Php2.027 billion versus Php1.127 billion in 1H2020, an increase of 80% COVID 2019 Despite our strict implementation of the IATF-DOH mandated health protocols, the Company was not spared by the spread of the Covid19 virus. Several employees and their dependents were infected by the virus but the infection was immediately contained, preventing widespread transmission, and ensuring the continued operation of both the mine and mill plant. The Company adopted and implemented regular surveillance and contact tracing activities to further strengthen its defense against any transmission to its employees and their dependents. Silangan Project The Board of Directors of Philex has approved the In-Phase development of Silangan and the Company will be appointing a financial advisor to assist in the fund raising that will commence as soon as practicable. With the In-Phase development of Silangan, the capital expenditure requirement will be made in stages, and can be funded from a variety of potential resources including internally-generated cash and potentially through equity and debt from investors and creditors. The Company is confident that Silangan development will start by Q22022 with the target of commencing commercial operations in January 2025. “We will be working with our financial advisor to immediately implement the fund raising activity for the InPhase development of Silangan. We believe that the recent government pronouncements related to the mining industry will increase the level of interest and confidence of investors and lenders to mining companies. The launch of Silangan will be very timely.”, emphasized Eulalio B Austin, Jr, Philex President and CEO. “The global outlook for metal prices continue to be positive and Philex is poised to benefit as we emphasize on excellent execution of plans in light of the current volatile environment brought about by this pandemic. In the next couple of months, we set to launch our Silangan Project under an In-Phase Development approach. Silangan will be an exciting project for Philex.”, concluded Manuel V. Pangilinan, Philex Chairman.   Article Courtesy of The Philippine Stock Exchange

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