Philex Mining Corp., the country’s largest gold producer, is securing another environmental permit for its $2-B Silangan Mine project as it hurries to get the project on board before its mine in Padcal, Benguet gets fully depleted.
Philex’s Padcal mine is moving closer towards the end of its mine life. It is the longest operating mine in the country and currently serves as the listed company’s primary source of revenues.
The company has been operating Padcal mine for the last 61 years, employing the underground block-cave method. With Padcal mine now almost depleted, the company is now fast-tracking developments at its Silangan Mine in Surigao del Norte.
Philex Mining President and Chief Executive Officer Eulalio Austin Jr. said in an interview with reporters that the company decided to employ sub-level caving method in Silangan Mine, a move that requires a different Environmental Compliance Certificate (ECC) from the Department of Environment and Natural Resources (DENR).
“It makes more sense to do sub-level caving method rather than block caving for Silangan,” Austin said. “We’re now working on getting the ECC permit for this method”.
The DENR’s Environmental Management Bureau (EMB) is currently reviewing the application. The permit should be obtained by the company in two to three months.
Silangan’s tenements consist of three deposit areas – Boyongan, Bayugo and Kalayaan, with the latter representing a joint venture with Manila Mining Corporation. The company’s focus is on Boyongan.
Austin said that Philex already spent around P16 billion to P17 billion gearing up for the Silangan mine project since it started exploration. All in all, the company requires an initial capital expenditure of $800 million or about P42 billion to commence the operations of Silangan mine by 2022.
The company is now in the process of securing foreign financial advisers as it scouts for foreign investors for the project.
“It’s a challenging task to have this on board before closing Padcal,” Austin further said, adding that the company targets to complete the definitive feasibility study for the project by July this year.
Once approved, Philex Mining, through Padcal mine, will be the first company since the passage of Philippine Mining Act in 1995 to formally implement Final Mine Rehabilitation and Decommissioning Plan (FMRDP).
“The closure of Padcal mine will be opportunity for us to showcase that the end of mine life in the Philippines can be done with dignity,” Austin said.
For the entire 2018, Philex Mining saw its net income falling by 63 percent to P608 million from P1.7 billion in 2017 pulled down by its two-year losing streak in its gold and copper production.
“Overall profitability was significantly weighed down by the impact of lower tonnage and head grade that was partially cushioned by lower smelting charges, lower cash costs and better foreign exchange on revenues,” the company earlier told the stock exchange.
The company’s gross revenues also went down to P8.3 billion in 2018 from P9.9 billion in 2017. This, as its gold production from Padcal mine went down to 61,977 ounces in 2018 from 84,638 ounces in 2017 and 103,304 ounces in 2016.
Austin said that with Padcal mine soon closing down, Philex Mining is not seeing any improvement in its gold output for the entire year.
By Madelaine B. Miraflor