Yaman ng Bayan
It has been said that mining can be a most effective driver for economic growth and national development if allowed to flourish. A quick perusal of countries that soared in their economic and quality-of-life index readily proves this point.
The new administration of President Ferdinand Marcos Jr. believes in the same. The President himself has mentioned, even as a top contender for the position before the elections, that he was open to allowing sustainable mining to operate in the country.
Government itself now eyes the mining industry to be one of the major contributors to the country’s economic development. I believe that these pronouncements are now setting the stage for an investor-friendly environment for mineral resource development.
Philex Mining Corp. (PX), one of the oldest and largest copper and gold producers in Southeast Asia, recently finished its stock rights offering (SRO) with the listing of 842 million fully subscribed common shares at the Philippine Stock Exchange (PSE), earning for the company a total of P2.652 billion for investment in its Silangan project.
The SRO offer price was pegged at P3.15 per share and was offered to existing shareholders entitled to one offer share for every 5.8674 common shares owned.
According to Philex president and CEO Euls Austin Jr. in his message delivered during the company’s SRO listing ceremony early this month, the net proceeds of the SRO will be used by the company for investment in the Silangan Mindanao Mining Co. Inc. (“SMMCI”) through Silangan Mindanao Exploration Co. Inc. (“SMECI”) for the initial capital expenditures and development cost of the Silangan Project.
“The company is set to begin the development of the first phase of the Silangan project this year, which will process around 2,000 tonnes of ore per day,” Euls said. “This will be ramped up to 12,000 tonnes per day or four million tonnes a year by the 12th year of operations.”
The Silangan mine is targeted to commence commercial operations in the first quarter of 2025.
Euls added that there are already pre-development works being done on site, mostly involving earthmoving activities.
“All this would not be done if the conditions for engaging into a new mining project were not favorable,” Euls remarked. “We thank the government, particularly the Department of Environment and Natural Resources, and the Mines and Geosciences Bureau, for the support they have given Philex, and the mining industry in general, in creating that favorable climate.”
He thanked President Marcos and Finance Secretary Benjamin Diokno for the support and for recent pronouncements that mining will be accelerated under this administration. He likewise gave the assurance that Philex, together with the industry, will be “an able partner to government as a viable driver for economic recovery and national development.”
In his message at the SRO listing ceremony, Diokno congratulated Philex on its SRO, saying that this move signifies confidence in the country’s economic growth prospects. He mentioned that this listing also sends a strong signal to the mining industry that our capital markets are viable instruments for fast-tracking the development of large mining projects.
“Mobilizing mining investments will help quicken our economy’s recovery and expansion,” according to Diokno. “The mining industry holds the greatest potential to be a key driver in our recovery and long-term growth.”
He also added, “Under the Marcos administration, the government commits to create an enabling environment for mining to flourish in the country.”
For his part, PSE chief operating officer Roel Refran said that it has been a long time coming since Philex Mining tapped the equities market for its capital requirements and that they were very pleased in the company’s return as an issuer.
He likewise shared that among the important regulatory initiatives of the PSE for the mining industry was the upgrade of the Philippine Mineral Reporting Code for publicly listed companies, or PLCs.
Also at the listing ceremony was PSE chairman Dr. Jose “Titoy” Pardo, whom I have had the honor and pleasure of working with in the administration of President Joseph Estrada, when he held two of the most important Cabinet positions in government, that of Secretary of Finance and Secretary of Trade and Industry.
Asked about what further funding plans the company had, Philex senior vice president and chief finance officer Bing Bachoco, following directions from chairman Manuel V. Pangilinan, or MVP, said that the next phase of the fundraising, as part of the company’s funding plan, will be their debt syndication, which will be launched also in August 2022 with BDO Capital as lead financial advisor and lead arranger.
Bing also added that to complete the funding requirement for the initial CapEx requirement of SMMCI, Philex will use its cash reserves to infuse additional capital to the project company through SMECI.
The Silangan Copper and Gold Project is touted as one of the three large-scale projects that has the potential to make the country a major copper producer in the world. Situated in Surigao del Norte, the project consists of the Boyongan, Bayugo-Silangan and Bayugo-Kalayaan deposits.
The Definitive Feasibility Study (DFS) for the Boyongan ore body was completed in July 2019. In January 2022, a PMRC-compliant DFS was completed for its in-phase mining plan for the Boyongan ore body with the first phase of the project having a mineable ore reserve of 81 million tonnes, which will be mined for 28 years at a rate of 2,000 tonnes per day, ramping up to 12,000 tonnes per day using the underground sub-level cave mining method.
SMMCI is registered with the Board of investments (BOI) and has been granted a six-year income tax holiday on copper cathode revenues. It has likewise secured ISO 14001:2004 EMS certification, which was successfully transitioned to ISO 14001:2015 EMS in 2018, and all necessary government permits and processes necessary to commence operations.
Once this project goes into high gear, trust that it will augur very well, not just for the industry, but also for the nation. Our hopes and prayers rest on that.
As MVP aptly said, “Mining is not the enemy; poverty is.”
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