Philex Mining Corporation posted a core net income of Php163 million for 3Q2023, reporting a 9M2023 core net income of Php864 million. Core net income for 3Q2022 was at Php210 million while core net income for 9M2022 was at Php1.543 billion.
EBITDA of Php337 million for 3Q2023 is lower compared to the Php611 million EBITDA for 3Q2022 while the 9M2023 EBITDA of Php1.525 billion was lower compared to Php2.964 billion of 9M2022.
Gold and copper prices remained within similar levels as those of 2Q2023 at USD1,927 per ounce and USD3.73 per pound, respectively, but higher at 13% and 3%, respectively, compared with 3Q2022 prices of USD1,701 per ounce for gold and USD3.61 per pound for copper.
PRODUCTION
The Company milled a total of 1.693 million tonnes during 3Q2023, lower than the 1.873 million tonnes milled in 3Q2022 and the 1.825 million tonnes milled in 2Q2023. Total tonnage milled for 9M2023 was at 5.225 million tonnes, slightly lower than the 5.554 million tonnes in the same period last year. Ore grades for gold and copper for 3Q2023 are opportunistically almost the same when compared with the same period in 3Q2022, as well as with 2Q2023 and even 1Q2023. Gold output for 3Q2023 dipped to 8,775 ounces, lower than the 10,300 ounces of 2Q2023 and the 12,144 ounces of 3Q2022.
Copper output for 3Q2023 at 5.223 million pounds was also lower than the 5.642 million pounds of 2Q2023 and the 6.382 million pounds in 3Q2022.
Total gold output for 9M2023 stood at 29,136 ounces while copper output was at 16.396 million pounds, lower by 22% and 14%, respectively when compared with the same period in 2022.
OPERATING EXPENSES
Operating costs and expenses for 3Q2023 at Php1.634 billion were lower than the same period in 3Q2022 at Php1.800 billion and the Php1.701 billion in 2Q2023. This was due to the lower tonnage milled and continued implementation of efficiency measures in operations which mitigated the increases in the purchase costs of the materials and supplies, as well as equipment parts and repairs. Power costs however continued to raise operating expenses despite lower production level.
Total operating costs and expenses for 9M2023 at Php4.972 billion was lower, as expected, than the Php5.118 billion for the same period in 2022.
SILANGAN PROJECT
Development works continue on the Silangan Copper and Gold Project (“Silangan”) in Surigao del Norte with the ongoing tunneling works, breaching more than 35% of the distance towards the ore body. Clearing works and access road to the tailings storage facility (“TSF”) area are nearing completion with the issuance of the permit by the Municipality of Sison, Surigao del Norte for the construction of the TSF. Management is set to award the general contract works for the tailings storage facility as well as the process plant EPCM or EPC contractor this November 2023. Likewise, the project footprint area had been secured.
On community and Government relations, Silangan has never been more involved with its host and neighboring communities. Close partnerships with local government units started decades ago and will continue to be nurtured.
The Company is set to sign this month the syndicated debt facility that will complete the funding requirements of Silangan. The debt syndication is led by BDO Capital and Investment Corporation and aims to raise a minimum of US$100 million. This new credit facility completes the full funding of Silangan after last year’s stock rights offering (SRO) and the capital infusion from the Company out of its cash reserves.
OUTLOOK
Despite the challenges faced in the first nine months of the year, our outlook still remains positive, given the new mining opportunities ahead of the Company.
Philex President and CEO Eulalio B. Austin Jr. said that, aside from exploring the vicinity of Padcal Mine, the Company is also studying the viability of exhausting reserves in the Padcal under the current drain tunnel, which could again extend Padcal’s mine life beyond 2027. The drain tunnel services all the water from the mine towards the TSF.
“If the study yields positive results, this could further extend Padcal’s mine life beyond 2027. Hopefully, we can have the initial results by the end of the year,” Austin said. “Meanwhile at Silangan, we are progressing with the driving of the decline to access the ore body which we expect to reach by the second half of 2024.”
According to Philex Chairman Manuel V. Pangilinan, the Company is also looking at expanding into nickel mining to meet the increasing demand of the mineral by the electric vehicle industry. “We are prospecting for nickel resources to develop in this country because the future for electric vehicles is bright, so we have to be in well-positioned for this opportunity.” Pangilinan said.
Pangilinan also emphasized that “in many respects, sustainability rests on green technology – and by extension, reliance on mining would continue.”
Article courtesy of the Philippine Stock Exchange
