Philex net income soars in 2021

MANILA, Philippines — Pangilinan-led Philex Mining Corp. reported a 118 percent surge in its core net income last year to P2.53 billion, driven by higher metal prices.

“Favorable and sustained higher levels of realized prices for gold and copper resulted in higher operating revenues in 2021, registering a healthy 25 percent increase over the year 2020,”Philex said.

Realized gold prices were at their highest level in the fourth quarter of 2021 reaching $1,783 per ounce, while copper reached $4.44 per pound in October.

Operating revenues amounted to P9.8 billion, higher than the P7.84 billion the year before.

“No doubt, 2021 was a blessing for us considering the high metal prices for copper and gold that even with the marginal grades of ore that we are mining, we continue working on our business continuity plans,” Philex president and CEO Eulalio Austin Jr. said.

“Furthermore, we were also able to successfully deal with the deadly COVID-19 virus because of our strict and constant adherence to health protocols and our mass vaccination program. Consequently, we have had no disruption in our operation for the year,” he said.

Philex said tonnage milled grew 1.4 percent to 7.95 million tons.

“Ore grades continue to hold at the same level as in 2020, leading to minimal impact on gold and copper output in 2021 compared with 2020,”Philex said.

Gold production totaled to 55,149 ounces, 1.6 percent lower than the year before.

Similarly, copper output also declined by 1.4 percent to 26.2 million pounds last year.

Operating costs and expenses rose  by 4.8 percent due to the increase in the cost of materials and supplies, including logistics expenses, higher excise taxes and royalties on account of higher operating revenues, partly offset by lower power costs and lower non-cash charges as a result of the extension of the life of mine.

In June last year, Philex announced the extension of the lifespan of the Padcal mine until 2024 after confirmatory drilling and related technical studies on the mining methodology and tailings storage facility (TSF) no. 3 successfully identified that there are additional mineable reserves in its Padcal mine that are feasible for mining from the end of 2022.

Earlier this year, Philex said it was studying the further extension of the lifespan of the Padcal mine in Benguet to potentially overlap with the start of the commercial operations of the Silangan copper gold project in 2025 in a bid to boost its income stream.

Studies are underway to explore and determine the feasibility of the mineable resources and/or reserves surrounding the Padcal mine, while gold and copper prices are at their current high levels.

“The sustained prices of gold and copper in the global market are providing Philex a continuing window of opportunity to optimize the mineable reserves and metal output. Profitability and liquidity since 2020 have been on a positive trend and have materially enhanced the company’s profitability and financial condition, allowing the company to expedite the development of the Silangan project under its In phase mine plan,” Philex said.

Philex has been working diligently with all stakeholders on implementing afund raising plan which will pave the way for the timely development and start of commercial operations of the Silangan project by early 2025.

it would need an initial capital of $224 million for the Silangan project, which will be funded by proceeds from a stock rights offer, cash reserves and possibly some debt.

“Silangan will be an exciting project for us in 2022— it could ensure that our business continues for a long time to come. We look forward this year with a fair degree optimism, given the buoyant prices of commodities in general, and of metal prices in particular, driven by global geopolitical and supply factors,” Philex chairman Manuel V. Pangilinan said.

“We will continue our relentless drive to improve our operations, and are now looking at new investment opportunities. The job security and welfare of our employees and their dependents are still our primordial concern,” he said.