Philex Mining boosts capital by P3 billion via 25% stock dividend

MANILA, Philippines - Philex Mining Corp., the country’s largest mining company, is raising its capitalization by P3 billion by way of a 25-percent stock dividend.

In a disclosure to the Philippine Stock Exchange, Philex said its board approved a plan to increase the firm’s authorized capital stock to P8 billion and declare a 25-percent stock dividend.

Based on the stock dividend, 32 percent of the increase in capital will be subscribed and fully paid. The number of shares to be issued pursuant to the stock dividend totals 970.4 million shares. 

Philex said adjustments will be made to the number of shares reserved for the company’s stock option plan.

Last week, Philex announced it has taken full control of the Boyongan copper-gold property in Surigao del Norte after buying out its partner, the Anglo American group, for $55 million.

The acquisition was done via a share and asset purchase agreement covering the purchase by Philex of the shares of Anglo in joint venture companies Silangan Mindanao Mining Co. Inc. and Silangan Mindanao Exploration Co. Inc. and the acquisition of various assets, receivables and rights and obligations of Anglo and its local subsidiary in the project.

A pre-feasibility study conducted by Philex showed that the Boyongan copper-gold mine would have a positive net present value of $150 million and a payback of 3 1/2 years, using long-term metal prices of $2.75 per pound for copper and $700/ounce for gold.

Based on the pre-feasibility study, the mine life could extend up to 14 years at a constant millfeed rate of five million metric tons of ore a year.

The study showed that the Boyongan site had a proven mineral reserve of 65.8 million tons at 0.87 percent copper and 1.39 grams/ton gold. The company also said there was the possibility of accessing additional mineralized ground in the northwest portion of the orebody.

With the life of Philex’s mine in Padcal, Benguet set to expire in 2014, the Boyongan mine can ensure that Philex can continue mining operations for another 15 to 20 years. 

Last month, Philex produced P745 million worth of metals equivalent to 752,261 dry metric tons (DMT) of copper and gold ore.

The ore yielded 6,122 DMT of copper concentrates with an average grade of 23.81 percent copper, 61.6 grams per DMT of gold and 60.03 grams per DMT of silver.

These have equivalent metal contents of 1.46 million kilograms copper, 377,400 grams gold and 367,562 grams silver.

In the nine months ending September last year, Philex reported a net profit of P3.29 billion, 18 percent lower than the previous year, due to the decline in copper sales, higher general and administrative expenses and mark-to-market losses.