Philex targets to finalize list of Silangan investors by yearend
PHILEX Mining Corp. hopes to finalize its list of possible investors for its Silangan mine by December, from whom it will source 40% of its initial investment for the site.
“We are targeting that early December, more or less, we have an idea who are the prospective investors…. That’s why March or April, there would be finalization of contracts,” Philex Mining President and Chief Executive Officer Eulalio B. Austin, Jr. said in an ambush interview.
“The $750 million is our initial capex (capital expenditure). Therefore to raise that, we are looking for partners to get 40% of that $750 million,” he explained.
Philex Mining has completed its definitive feasibility study for the first phase of the mine site in Surigao del Norte. The study showed significantly higher mineral resource estimates of 571 million tons for the Boyongan, Bayugo and Kalayaan ore deposits of the Silangan mine, 43% higher than the previously declared level of 398 million tons in 2011.
The company appointed JPMorgan for equity investment and Japan’s Mizuho for project financing. Mr. Austin said some companies have expressed interest but did not give any details.
The $750-million capex is for the development of the first phase of the project, which is the Boyongan deposit, which has an estimated mine life of 22 years. Target date for commercial operations is July 2022.
“The mine is designed for four million tons per year… We start lower, then on the second year, that is 2023, it will be a full four million tons per year,” he explained.
Moreover, the Boyongan site will be operated through underground sub-level cave mining, which is more beneficial for the company.
“We have been doing tunnelling for the last 60 years. We have an experience in terms of doing an underground mining… that is why we don’t find problems,” Mr. Austin said.
“The capex of sub-level is higher compared to open pit, but you could not compare apple to apple because the underground is 22 years, the open pit is 10 years,” he said.
Sub-level cave mining is a mining method that starts at the top of the orebody and develops downward. Ore is mined from sub-levels with regular intervals. On the other hand, open-pit mining is a surface mining technique of extracting rocks by their removal from a pit.
The company’s attributable income in the first semester dropped 29% to P391.39 million. It recorded a core net loss of P19.035 million during the first six months versus a core net income of P646.31 million a year ago.
Philex Mining is one of the three local units of Hong Kong-based First Pacific Co. Ltd., the two other being PLDT, Inc. and Metro Pacific Investments Corp. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — has an interest in BusinessWorld through the Philippine Star Group, which it controls.