Philex Mining incurs 28.8% drop in net income in Q3

MANILA, Philippines - Listed Philex Mining Corp. has registered a 28.8 percent drop in net income in the third quarter of the year on lower ore grades sourced from its copper-gold mine in Benguet and weak metal prices.

In a regulatory filing yesterday, the company reported a net income of P350.1 million in the third quarter of the year, down from P491.972 million in the same period last year.

In the first nine months of the year, the company registered a 34 percent drop in net income to P950.582 million from the 1.446 billion registered in the same period last year.

In the third quarter of the year, total revenues fell to P2.518 billion, down from P3.481 billion registered in the comparative period last year as copper and gold prices remained low.

Gold production reached 26, output 458 ounces in the third quarter, up two percent compared to the 25, 844 ounces in the previous quarter ever as gold grades improved to 0.44 gram per ton from 0.434 gram per ton previously recorded in the first half of the year.

The company said the lower production output  was the result of operational adjustments aimed at recovering higher ore grades. The realized prices for gold, however, fell to an average of $1, 219 per ounce from $1, 311 per ounce in the previous quarter.

Copper output, on the other hand, fell to 8.64 million pounds in the third quarter from 8.72 pounds in the second quarter. Realized prices for copper fell to an average of $2.95 per pound in the third quarter from $3.22 per pound in the previous quarter.

Philex Mining chairman Manuel V. Pangilinan said the company expects to finish the fiscal year with revenues of more than P1 billion as it implements measures to curtail the impact of low ore grades and weak metal prices.

 “We are now exploring at least two areas in the Padcal mine which could, as a consequence, extend the life of the mine beyond 2020,” he said in a briefing in Makati yesterday.

Drilling operations are being conducted around three target sites adjacent to the main mine site of its Padcal mine in Benguet to find more copper and gold deposits with higher ore grades. The drilling results from the ongoing exploration is expected to be finalized next year.

Philex is mining just five prevent of its 14,000-hectare mining tenement in Benguet, making it possible that further mineralization with higher ore grades could exist within the contract area.

As the mine ages, lower ore grade are extracted from the production site, prompting Philex to raise the daily production tonnage to 27,000 metric tons (MT) per day from 25,000 MT per day.