Philex sees profit soaring to P2B on high metal prices

Banking on the continued rise in metal prices, Philex Mining Corp. expects to make at least P2 billion in net profit this year compared with only P409.14 million in 2005, according to a top company official.

At the sidelines of the company’s stockholders meeting, Philex chairman Walter Brown said he is confident the firm will post a much higher income this year assuming metal prices continue to appreciate.

But world metal prices corrected heavily from recent highs as the market suffered from massive selloff by foreign investors amid threats of interest rate hikes.

"We look at the coming years with optimism. We are of the opinion that while copper prices are at an all-time high and therefore vulnerable to a correction, the prices are not going to collapse. We are also of the opinion that gold will continue to retain an upward trend though there may be volatility along the way," Brown said.

In the first quarter this year, Philex posted a net income of P575 million, up 40 percent from the previous level even if its average selling price was at $561 an ounce for gold and $2.50 per pound for copper.

Brown said the company is actively exploring several areas near the Padcal mine in Benguet and continues to pursue the exploration of Philex Gold Inc.’s landholdings outside of its joint venture with Anglo American.

In the Lascogon prospect in Mindanao, an aggressive drilling program is being pursued in conjunction with FEC Resources of Canada. So far, the company has programmed to drill 6,000 meters up to the end of 2006.

Brown said Philex is also considering reopening the Bulawan gold mine in Negros due to the currently encouraging level of gold prices.

Likewise, the company is also beginning an aggressive review of its landholdings in areas which have good prospects for copper as well as for gold.

For its mineral properties in Sibutad, Zamboanga, Philex is planning to accelerate exploration efforts but with more emphasis on copper than gold.

Brown said while the company is open to joint ventures, Philex is in a position to be more aggressive in its own exploration efforts.

"The high level of prices, hand in hand with the improvement in the company’s operating stability and efficiency, have led to a situation where the company is now no longer totally dependent on its joint venture partners to fund and pursue exploration for new mines," Brown said.