Philex raises P2.65 billion from SRO

MANILA, Philippines — Pangilinan-led Philex Mining Corp.raised P2.65 billion from a  stock rights offer (SRO).

The company offered up to 842 million common shares at P3.15 per share—selling 367.025 million in the first round and 278.54 million in the second round.

Of the total offer shares, 8.354 million were taken up by qualified institutional and retail buyers, and 188.079 million taken  up by the issue manager and lead underwriter.

During the listing ceremony, Philex president and CEO Eulalio Austin Jr. said net proceeds of the SRO would be used to invest in Silangan Mindanao Mining Co. Inc. through Silangan Mindanao Exploration Co.  for the initial capital expenditure and development cost of the project.

The company  said it would  initially spend $224 million for the first phase of the Silangan copper-gold mine in Surigao del Norte.

“Philex Mining is targeting to start the first phase of the Silangan project this year, which will produce around 2,000 tons of ore per day and this will be gradually ramped up to 12,000 tons a day or four million tons a year by the 12th year of operations. The mine is targeted to commence commercial operations in  2025,” he said.

Pre-development works are  ongoing, which include earthmoving activities and the excavation of the portal site for underground mining.

Phase 1 of the Silangan project, which covers the Boyongan deposit, has a long mine life of 28 years and will take two and a half years to develop.

“While the targeted tonnages are low compared to our current operating mine at Padcal, the copper and gold grades are way, way higher, hence the copper and gold productions will be much higher,” Austin said.

Philex said it decided to pursue the new mining project due to the favorable climate support of government, particularly the Department of Environment and Natural Resources (DENR) and the Mines and Geoscience Bureau (MGB) towards the mining industry.

“The continuing COVID-19 pandemic, coupled with the disruption in supply chain brought about by the Russian invasion of Ukraine are tough challenges to consider. We are hopeful in the recent pronouncements of the government of President Marcos, through Finance Secretary Benjamin Diokno, that mining will be accelerated under this administration,” Austin said.

In the same event, Diokno said the government would  create an enabling environment for mining to flourish in the country.

“We recognize that apart from boosting local development, mining is a strong magnet for investments that can propel our economy to a higher trajectory. In turn, we expect the mining industry to strictly adhere to responsible and sustainable practices. This is a non-negotiable condition so we can guarantee the sustainability of the industry and the strong economic growth of its host communities,” he said.

Diokno  said the company’s SRO signifies confidence in the country’s promising economic growth prospects and also sends a strong signal to the mining industry that the capital markets are viable instruments in fast tracking the development of large mining projects.

“Mobilizing mining investments will help quicken our economy’s recovery and expansion. The mining industry holds the greatest potential to be a key driver in our recovery and long-term growth, especially now that gold metal prices are high. The Philippines, after all, is one of the world’s most richly endowed countries in terms of mineral resources,” Diokno said.