Higher gold, copper prices lift Philex's earnings in Q1

MANILA, Philippines — Rallying gold and copper prices significantly pushed up the earnings of Philex Mining Corp. in the first quarter, with the company turning bullish on the mining industry after the government lifted a 9-year-old ban on new mining investments.

Net income of the Pangilinan-led firm stood at P559.6 million in the first three months of the year, over five times bigger than its bottomline a year ago, the company told the stock exchange on Friday.

Investors welcomed the news, sending Philex shares up 5.83% as of 10:55 a.m. on the last trading day of the week. Despite disruptions from the coronavirus pandemic, the company said it owed its stellar financial performance to “higher operating revenues arising from higher prices of gold and copper.”

“The higher prices of gold and copper helped the Company maintain its uninterrupted operations despite the challenges brought about by the pandemic,” Eulalio Austin Jr., company president and chief executive, said in a statement.

“God willing, the favorable gold and copper prices will continue up to the end of the year, as the pandemic is still with us and many more challenges may lie ahead,” Austin added.

Based on Philex’s tracking, realized gold prices rallied at an annualized 11% to $1,781 per ounce on average from January to March while realized copper prices hovered at an average of $3.95 per pound during the quarter, up 68% year-on-year.

In turn, total operating revenues, net of smelting charges, jumped 38% year-on-year to P2.3 billion last quarter. During those three months, Philex said it produced 13,413 ounces of gold and 6.770 million pounds of copper.

Expenditures, meanwhile, stayed manageable. From January to March, the company reported that operating cost and expenses picked up 6% on-year to P1.6 billion “on account of higher tonnage milled.”

Moving forward, Philex said President Rodrigo Duterte’s executive order that ended his predecessor’s ban on new mining agreements will “undoubtedly create a favorable climate for the mining industry.” The company hopes that the move to open up the mining industry would boost its Silangan mine, a large-scale high grade copper-gold development in Surigao del Norte that had problems attracting investors because of the pandemic.

“We are here not just to survive, but to thrive,” Manuel Pangilinan, company chairman, said.