While “cautious optimism” is the resounding phrase for the business community nowadays, Apex Mining Inc., controlled by Norwegian-British Crew Gold Corp., is welcoming the new year with a bang as it begins commercial operations effective Jan. 1, 2009.
In an interview, Apex Mining president and chief executive officer Deogracias Contreras Jr. said the company will restart commercial operations one year ahead of its earlier forecast of 2010.
Contreras said the mine prospect in Maco, Compostela Valley is expected to produce an average of 500 tons of gold bullion per day by the end of the year and will increase to 700 tons by end-2009 once it begins formal operations. Production is expected to increase further to 1,000 tons per day in 2010.
The plant, which was shut down in 2000, is covered by a mineral production sharing agreement with the government.
With the opening of the mining plant, the company is seen to improve its financial position.
As of end-September this year, the company had a negative stockholders’ equity of P373.88 million, lower than the previous level of P482.06 million.
Contreras said Apex is expected to reverse its negative stockholders’ equity and losses in 2010 with a projected positive equity of P195.33 million. The mining firm has also forecast a net income of $7.14 million over a period of seven years.
To ensure uninterrupted operations, the company is considering taking in investors or undertake a secondary offering of shares to fund its capital requirements.
Contreras said a foreign company has signified interest to invest in Apex but nothing has been finalized yet. “One foreign group is looking at us. They’re doing due diligence,” he said.
“In the future or when market conditions improve, we also intend to do a follow-on offering,” Contreras added.
He said the company is also counting on export sales to improve its cash flow. It has raised an estimated P178 million from the export of gold to Switzerland.
Apex has been operating for over 35 years but its management has only recently been taken over by a partnership of Crew Gold and Filipino-owned Mapula Creek Gold Corp.
An extensive drilling program in early 2007 indicated resources at Maco were estimated at 1.462 million tons at 6.5g/t gold.