PHILEX CORE NET INCOME CLIMBED 25% TO Php 676 MILLION FOR 1Q2022 VS. 1Q2021
by Philippine Resources - May 02, 2022
Photo credit: Bilyonaryo - Philex Mining Corporation
Philex Mining Corporation (the “Company” or “Philex”), one of the oldest and largest gold and copper producers in Southeast Asia, and a leader in right and principled mining, generated Php676 million Core Net Income and EBITDA of Php1.182 billion for 1Q2022 due to higher operating revenues on account of higher sustaining Gold and Copper realized prices, stable production and managed operating cost and expenses.
Production level in 1Q2022 was within plan and, coupled with higher realized prices for Gold and Copper, lifted operating revenues to Php2.720 billion, higher by 7.5% versus the same period in 2021. Blended realized Gold and Copper prices peaked in March at $1,887 per ounce and $4.59 per pound respectively, driving operating revenues in March to Php1.075 billion, the highest since January. Operating costs were almost the same level as in 1Q2021 at Php1.655 billion.
Tonnage milled for 1Q2021 was 10% lower at 1.822 million tonnes from 2.025 million tonnes in 1Q2021 mainly attributed to unscheduled breakdown of mill equipment. Ore grades for Gold continue to be at the same level as in 1Q2021 while ore grades for Copper showed improvement over the same period in 1Q2021, mitigating the impact of lower tonnage in Copper production. Gold output for 1Q2022 was 9.8% lower at 12,097 ounces versus 13,413 ounces in 1Q2021. On the other hand, Copper output for 1Q2022 was 8.7% lower at 6.18 million pounds versus 6.77 million pounds in 1Q2021.
Operating expenses and ebitda
Total operating costs and expenses for 1Q2022 at Php1.655 billion were almost at the same level for the same period in 1Q2021 at Php1.647 billion. The increases in the purchase costs of materials and supplies as well as equipment parts were offset by the continued implementation of work programs in operations, leading to efficiencies in the usage of power and supplies.
EBITDA generated for 1Q2022 at Php1.182 billion was 17% higher than the Php1.011 billion in 1Q2021. The Company continue to accumulate cash surplus at a level programmed to partly finance the development of Silangan project by way of additional and fresh cash equity infusion into its wholly owned subsidiary, Silangan Mindanao Mining Co. Inc.
The current global commodity outlook points to sustained prices of Gold and Copper in the near to medium term. These sustained metal prices provide the Company with the ability to implement exploration and studies geared towards funding additional mineral resources/reserves within the current ore body and vicinity of the Padcal Mine.
The Company continues to work with its financial advisors for the completion of the fund raising exercise to start the Silangan Project, subject to approval of relevant government and /or capital market regulators. The successful and timely conclusion of the funding exercise will pave the way for the timely development and start of commercial operations of the Silangan project by early 2025. The Company is set to actively commence the development of Silangan as soon as the funding sources would have been finalized and completed, which will be in the form of a rights offer, possibly debt and fresh capital infusion out of the cash reserves of the Company.
“The first quarter of the year bore much promise that the mining industry, like the economy, was well on its way to full recovery with the tapering off of the global threat of COVID-19 and the relaxation of stringent quarantine and lockdown guidelines,” according to Philex president and CEO Eulalio B. Austin Jr. “The country, it seemed, was back in business and Philex continued to ride on the strength of sustained production and revenue levels, and took full advantage of the wave of increase in global metal prices. However, the current situation in Ukraine and its impact on the global supply chain and commodity markets makes us tread cautiously towards the remaining months of the year. We are still hopeful that the conflict in Europe will end soon enough. We move with caution and continue to assess and re-assess our plans and our strategies.”
“We view the current global situation with guarded optimism,” according to Philex Chairman Manuel V. Pangilinan. “Though there are gains to be realized with the spike in the prices of gold, copper, and even nickel, the current tension that is unfolding in Ukraine might impact the country’s and the industry’s pursuit of recovery post-pandemic. If the conflict pushes inflation upward, it could affect the country’s economic growth.”
Article courtesy of the Philippine Stock Exchange
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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
Philippine Resources - October 31, 2021
Philex core net income jumps 116% to Php1.865 billion in three quarters
Despite the challenges posed by the Covid-19 pandemic, production and favorable metal prices for gold and copper have been sustained since 1Q2021. As a result, the Management and the Board of Directors of Philex Mining Corporation recently announced that the Company generated another quarter of positive results. Philex recorded a Core Net Income of Php716 million for the quarter, higher by 55% than the same period in 3Q2020, mainly due to higher copper prices, favorable foreign exchange rates and managed operating expenses. The 3Q2021 Core Net Income of Php716 million rides on the positive and upward profit trend from the Php540 million achieved in 1Q2021 and the Php610 million posted in 2Q2021. This brings the 9M2021 core net income to Php1.865 billion, higher by 116% over the same period of 9M2020, attributable to favorable metal prices, sustained metal output and efficient deployment of operating costs and expenses. On the other hand, 3Q2021 EBITDA at Php1.168 billion continue to maintain the positive trend during the first two quarters EBITDA of Php2.027 billion, to top up 9M2021 EBITDA to Php3.194 billion, a 57% rise from the same period 9M2020. Reported net income for 3Q2021 is Php721 million, a 46% increase over the same period 3Q2020, while 9M2021 Reported net income reached Php1.880 billion, a 105% increase from 9M2020. Production and Revenues The Company generated higher tonnage in the third quarter of the year. For 3Q2021, total tonnage milled was at 2.006 million tonnes slightly higher compared to 1.985 million tonnes in 3Q2020 and 1.943 million tonnes of 2Q2021. Philex produced slightly lower gold output at 14,270 ounces in 3Q2021 when compared to 3Q2020 due to lower gold grades while the slightly higher copper grades produced higher copper output at 6.54 million pounds, which mitigated the impact to the total revenues. The Company was able to maintain a positive trend in metal output since 1Q2021 for both gold and copper mainly due to the resilient execution of the mining plan that resulted to better blended metal grades and sustained level of metal output. The favorable prices for both gold and copper attributed to the higher revenues for 3Q2021 at Php2.656 billion, a 13% increase over the revenues of the same period of 3Q2020 at Php2.350 billion. The favorable foreign exchange rate contributed to higher revenues in 3Q2021. For the 9M2021 period, revenues at Php7.742 billion was higher by 22% from revenues of 9M2020 at Php6.332 billion. This is attributable to the significant increase in the realized price of copper since 3Q2020 resulting into a higher contribution of revenues from copper at 52% of total revenues for 9M2021 from 40% of total revenues for 9M2020. On the other hand, revenues contribution from gold declined from 59% in 9M2020 to 47% in 9M2021 mainly due to the slightly lower gold output, from 43,136 ounces in 9M2020 to 41,295 ounces in 9M2021. Operating Costs and Expenses The Company’s operating cost and expenses for 3Q2021 stood at Php1.603 billion, higher than 3Q2020 of Php1.582 billion. The slight increase is consistent with the slightly higher tonnage milled in 3Q2021 versus 3Q2020. Materials and supplies usage at Php454 million accounting for 28% of operating cost remained almost the same level. Power costs, accounting for 18% of operating cost, was higher at Php290 million, an of 7% when compared to 3Q2020. Overall, the Company continue to manage operating cost efficiently. For the 9M2021, operating cost inched up by 3% to Php4.843 billion from Php4.686 billion in 9M2020 as a result of higher power and labor costs from higher tonnage milled, and higher excise taxes attributed to the higher total revenues. For the nine months period ended September 30,2021, the Company recorded its share in the net losses of its associates amounting to Php510 million, inclusive of the Company’s share in the PXP Energy Corporation provision for impairment of assets and goodwill related to Peru block Z-38, net of proceeds from the settlement agreement with third party. As a result of the extension of the Padcal mine life from December 31,2022 to December 31,2024, the Company recognized a net reversal of the previously recorded impairment provision in its mining assets amounting to Php374 million. Positive outlook and extension of Padcal life of mine By itself, 3Q2021 ushered in a more stable and continuing positive outlook for the mining industry, brought about by significant developments in the previous quarter. In April 14, President Rodrigo Roa Duterte issued Executive Order No. 130 which amended Section 4 of Executive Order No. 79 and lifted the moratorium on mineral agreements that had been existing for the past 9 years. This will pave the way for the development of stalled mining projects, leading to renewed investor’s interest in our Silangan Project. The Company is currently exploring options on viable financial packages that would bankroll a phased development approach (In Phase Development) of Silangan. The extended Life of Mine from December, 2022 to December, 2024 will ensure the continuous employment of 1,831 Padcal employees and support the social development of the Host Local Government Units (LGU) and neighboring communities especially in this time of COVID- 19 Pandemic. It will also give more time for the Company to bring the Silangan Project to development and commissioning stages. “In response to this global trend of strong demand and strong metal prices, as well as responding to the Government challenge for the revitalization of the mining industry, Philex will keep improving on how we do things and undertake innovative initiatives related to the promotion of right and principled mining,” according to Eulalio B. Austin Jr., President and CEO. “The pursuit for excellence is a continuous journey and we have to keep raising the bar.” “With higher metal prices and a better economic outlook for the mining industry moving forward, we can maintain the momentum of last year’s exemplary performance into this year, notwithstanding the pandemic and the challenges we have faced in our operations,” concluded M.V. Pangilinan, Chairman. “Time and again, the women and men of Philex have proven their resilience during tough times. With the extension of Padcal mine life for another two years, the prospect of a viable financial package for our Silangan project, and the rollout of our vaccination program for our employees and their dependents, it looks like the full year 2021 will produce excellent results for your Company.” Article courtesy of the Philippine Stock Exchange
Philippine Resources - June 30, 2021
Philex Mining Extend Padcal Mine Life to 2024
Philex Mining Corporation, one of the oldest and largest gold and copper producers in Southeast Asia, has, after the completion of confirmatory drilling and related technical studies on the mining methodology and Tailings Storage Facility (TSF) No. 3, successfully identified from the end of 2022 additional mineable reserves in its Padcal Mine that are feasible for mining. The updated remaining mineable reserves as of end March 2021 are estimated at 30.2 Million tonnes with average gold and copper grades of 0.23 grams per tonne (g/t) and 0.18%, respectively. This new estimate includes additional reserves of 16.2 Million tonnes from the previously declared estimated mineable reserves as at end 2020 of 17.4 Million tonnes with an average gold and copper grades of 0.27 g/t and 0.18% that was reported in February 2021. The additional mineable reserves are expected to be mined over two years, extending the life of Padcal Mine until December 31, 2024. The latest mineable reserves estimate was undertaken by Engineer Ricardo S. Dolipas II, an accredited Competent Person by the Philippine Society of Mining Engineers (PSEM) under the Philippine Mineral Reporting Code (PMRC) Guidelines. More importantly, the extended Life of Mine will ensure the continuous employment of 1,831 Padcal employees and support the social development of the Host Local Government Units (LGU) and neighboring communities especially in this time of COVID 19 Pandemic. It will also give more time for the Company to bring the Silangan Project to development and commissioning stages. The Company is currently processing all required permits and other regulatory requirements in connection with this impending Life of Mine extension.
Philippine Resources - May 26, 2022
Legal framework needed for gov’t to invest in nuclear power plant
Department of Energy (DOE) Undersecretary Gerardo Erguiza Jr. said there is a need to amend the Electric Power Industry Reform Act (EPIRA) to enable the government to invest in nuclear power plants. This, as the incoming administration has expressed its support in considering a nuclear power plant to be part of the country’s energy mix. “As of now, the government does not have the ability to put up conventional nuclear power plant because the National Power Corp. does not have mandate on this,” Erguiza said in Filipino during the Laging Handa public briefing Wednesday. With the privatization of the power sector under the EPIRA, the government could not enter into power generation. “But we can align together, with the drafting or putting up of the regulatory framework, we can amend our laws to include the government among those that can fund a nuclear power plant,” he added. Erguiza said that based on studies of the Korean Hydro Nuclear Power Company of South Korea and ROSATOM of Russia, they have found out that the Bataan Nuclear Power Plant (BNPP) can still be rehabilitated. According to ROSATOM, an investment of around USD3 billion to USD4 billion is needed to revive the BNPP. Presumptive President Ferdinand “Bongbong” Marcos Jr. earlier mentioned that part of his energy agenda is to revive the BNPP to become an additional source of clean and cheap power. On the other hand, Erguiza said the government can invest in power generation using small modular reactors, the latest nuclear energy technology, in missionary areas that are not connected to the grid.
Philippine Resources - May 26, 2022
Dutch gov’t backs SMC, Boskalis in P740 billion Bulacan Airport project
Photo credit: Palafox Dutch gov’t backs SMC, Boskalis in P740 billion Bulacan Airport project San Miguel Corporation (SMC) received its strongest support yet for its game-changing P740-billion New Manila International Airport (NMIA) project in Bulacan following the approval of the Dutch government of an export credit insurance (ECI) for the project’s land development phase. The approval comes after over a year of rigorous review of the project’s long-term environmental and social impact mitigation measures to ensure that the multi-billion project is done with sustainability in mind and aligned with the country’s climate ambitions. The Dutch government, represented by Atradius Dutch State Business (DSB), extended the ECI to Royal Boskalis Westminster N.V., to cover its EUR 1.5 billion contract for land development works at the airport project site in Bulakan, Bulacan. The NMIA project is the largest in Boskalis’ over 100-year history, and is also the largest export credit agency (ECA) insurance policy granted in the 90-year history of Atradius. SMC President and Chief Executive Officer Ramon S. Ang thanked the Dutch government for its support to NMIA, a project seen to catalyze sustainable economic growth for the Philippines, especially post-pandemic. It is seen to deliver over a million jobs to Filipinos. “This is a significant milestone not only for San Miguel and the NMIA project, but for the entire country. With this, we are closer to our dream of having a world-class, future-ready, and sustainably-built international gateway, proudly built by Filipinos for the Philippines. This also validates our work with Boskalis to ensure that this project is done right, and will provide long-term economic, environmental, and social benefits to our host communities and Bulacan province,” Ang said. In a statement posted on Boskalis’ international website, its CEO Peter Berdowski, said: “I am very pleased that all the hard work with a large team of experts has been successfully completed (today). For more than a year, we have worked intensively with Atradius DSB to ensure that the construction of the new airport will take place in a socially responsible manner.” He added: “In collaboration with Atradius DSB, the Dutch embassy, we succeeded in developing a broadly supported plan with an eye for the local community and the preservation of biodiversity. I would like to thank all those involved for their contribution to the positive decision of the State.” In the same statement, Atradius DSB Managing Director Bert Bruning said: “This project is unique on so many levels. Firstly, of course, as a very important contract for our client Boskalis, but also for us, as the largest ECA policy in our 90-year history,” he said. “In addition, I am proud of the fact that together with Boskalis and San Miguel, by keeping up the dialogue, we were able to ensure that the project is to meet international standards in the field of environmental and social conditions. In doing so, we have not only contributed to making this wonderful contract possible built also really made a difference together for the local communities and nature.” As part of the ECI process, a large group of experts from San Miguel, together with Boskalis and four renowned consultancy firms, conducted an extensive environmental and social impact assessment in accordance with the highest international standards. This process also included the conduct of impact analyses and compensation packages for adverse effects of the project. “This shows that the airport project and our environmental and social mitigation plans are not only sound, but robust and strong, given they can pass not only international standards but the exacting requirements of the Dutch government. It is another testament to the ability of Filipinos to be world-class,” Ang said. “We will continue to work with Atradius, the banks, experts, national and local government, and all stakeholders to ensure we will build this project in a sustainable manner and in compliance with the highest international environment and social standards,” Ang reaffirmed. added. The airport project will feature four parallel runways, a world-class terminal, and a modern and interlinked infrastructure network that includes expressways and railways. Article courtesy of San Miguel Corp
Philippine Resources - May 25, 2022
CTPCMC Allocates 7.7M for COVID-19 Initiatives
Article by: Roniel R. Arguillas - CTPCMC ICE Officer BAYANIHAN AMIDST THE COVID-19 BATTLE In order to protect and improve the lives of the people within the host and neighboring communities pursuant to Republic Act (RA) No. 11469 or the “Bayanihan to Heal as One Act”, CTP Construction and Mining Corporation or CTPCMC allocated 7.7 million pesos intended for the implementation of projects, programs, and activities (PPAs) on COVID-19 prevention. Through its Social Development and Management Program (SDMP) under Adlay Mining Project (AMP) and Dahican Nickel Project (DNP) the company implemented essential PPAs in the year 2021. The beneficiaries of PPAs were from the Host and Neighboring communities specifically Barangay Adlay, Barangay Dahican and Municipality of Carrascal. With an allocated budget of P2,060,803.78, a Covid-19 Assistance Center was put up to be the second line of support to the host communities if their existing Isolation Rooms have been fully occupied. The company’s employees and their dependents are to be prioritized in the center. The center is offering services which include free isolation room for those who are identified and confirmed as covid-19 patients, free vitamins, and over-the-counter drugs, 24/7 monitoring by health personnel and stand-by oxygen concentrators. Another PPA was the provision of 59 medical equipment and kits to Barangay Adlay. The provision included pulse oximeter, thermal scanner, LCD full digital ultrasound machine, hospital bed and refrigerator as vaccine storage. The turnover was done on December 14, 2021, held at Barangay Hall of Adlay. It was attended by Engr. Charlo R. Basadre CTPCMC Resident Mine Manager, Charid O. Cuadrillero ComRel Manager, Hon. Norberto O. Rubi Jr. Barangay Captain, and Raquel Bungcaras assigned nurse. “These are very essential and a huge help to the key front liners and to the people within the community.” Hon. Rubi said during the turnover. The company also provided two SDMP Emergency Response Vehicles for health-related emergencies.