Philex Mining Corporation, one of the oldest and largest gold and copper producers in Southeast Asia, announced the completion of its financial results for FY2023.
The Company added Php98 million core net income in 4Q2023 to the Php865 million core net income for the first nine months ended September 30, 2023, which registered the full year core net income at Php963 million. Tonnage milled for 4Q2023 declined by 4% from its 3Q2023 levels resulted to lower core net income contribution of 4Q2023. Sustained realized Gold prices in 4Q2023 cushioned the negative impact to core net income of the lower tonnage milled as foreign exchange rate depreciated by about 2% from its 3Q2023 levels.
Operating revenues decreased to Php7.726 billion in 2023 from Php9.262 billion in 2022. Operating revenues in 4Q2023 at Php1.768 billion was lower compared to Php2.203 billion in 4Q2022, but this was offset by the higher operating revenues in the first nine months of FY2023. Total tonnage milled for 2023 declined by 7.8% resulting to lower operating revenues for the year.
Realized Gold prices were also at their highest levels in FY2023 reaching $1,964 per ounce in the fourth quarter, while Copper peaked at $4.00 per pound in the first quarter before it settled at an average $3.76 per pound for the remainder of the year.
PRODUCTION
Tonnage milled for 4Q2023 was at 1.628 million tonnes, slightly lower than the 1.693 million tonnes in 3Q2023, but much lower than the 1.878 million tonnes of 4Q2022. The total tonnage milled in 2023 reached 6.853 million tonnes, lower than the 7.432 million tonnes for 2022. Gold ore grades declined by 9% and Copper ore grades declined by 6%. Gold output in 4Q2023 reached 8,647 ounces adding to the 29,137 ounces for the three quarters ended September 2023, ending the year with 37,784 ounces, lower by 22% than the 48,567 ounces’ gold output for 2022. Copper output for 4Q2023 was 4.903 million pounds adding to the 16.396 million pounds produced for the first three quarters of 2023 and ending the full year Copper output at 21.298 million pounds, lower than the 25.086 million pounds 2022 output.
OPERATING COSTS AND EXPENSES AND EBITDA
Operating cost and expenses decreased by 6% at Php6.673 billion for 2023 compared to the Php7.120 billion for 2022. This is mainly on account of the 7.8% decline in tonnage milled, offset by the impact of the elevated cost of materials and supplies. 4Q2023 operating costs and expenses were at Php1.701 billion compared to Php2.002 billion of the same period in 2022.
The EBITDA level for 2023 was at Php1.784 billion compared to Php3.524 billion in 2022.
The performance in 2023 allowed the Board to declare a cash dividend of 2 centavos (Php0.02) per common share aggregating to Php116 million, to shareholders on record as of March 15, 2024, which will be paid on March 27, 2024.
SILANGAN PROJECT DEVELOPMENT
The Silangan Mindanao Mining Co. Inc. (“SMMCI”, a wholly owned subsidiary) and the Company recently signed the Deed of Accession for additional US$70 million with the additional member banks who syndicated the credit facility to complete the total loan facility of US$170 million needed to bring the Silangan Project into commercial operation by first quarter of 2025.
The underground tunneling works has reached the 354 meters out of the 552 meters where the production levels of the Boyongan ore body will be located. The initial works at the tailings storage facilities has started while the tendering process for the various packages of the process plant is on-going with the packages for the long lead items needed for the process plant already awarded to various global suppliers.
OUTLOOK
For 2024, the Company will continue to strongly support mining as one of the country’s economic growth catalysts. It has, thus, set out to “leave no stone unturned” at the Padcal mine while accelerating the development of the Silangan Project as well as pursuing business activities related to the trending green metals technology. The Company would also continue to enhance ESG practices and the unceasing promotion of its brand of right and principled mining, as well as drum up awareness and interest in Silangan.
“Our Padcal mine still has the potential,” says Eulalio B. Austin, Jr., Philex president and CEO. “Thus, for this year, we will pursue our re-fleeting of critical equipment, continue optimizing the current ore body, as well as engage in relentless power optimization improvements and aggressive training of our employees. These are aside from further exploring the vicinity of Padcal Mine.”
According to Austin Jr., “For Silangan, since our initial capex funding is already in place, we will complete the main decline to the ore body as well as start the driving of production lines that would serve as sources for initial ore production. The construction of the processing plant and tailings storage facility, as well as other surface infrastructures, will commence this year.”
“Silangan will be the next big thing in the mining industry,” according to Philex Chairman Manuel V. Pangilinan. “There is excitement both in the public and private sector as to its much anticipated opening, but we will continue to build up awareness and interest on this project to attract new investors and lenders so we can accelerate its ramp-up. The conditions for this right now are favorable and we hope that this can be sustained throughout the year.”
“Moreover,” Pangilinan adds,” we shall continue pursuing our other business development activities to ride on the current trend towards green metals technology. We hope to complete the evaluation of our nickel tenement in Zambales, and pursue other possible M&A prospects.”
Aritcle courtesy of the Philippine Stock Exchange
