PHILEX Mining Corp. is looking for partners for the long-delayed Silangan mine project, which it hopes to begin operations by mid-2022.

In a disclosure to the stock exchange, Philex said it has completed the definitive feasibility study for the first phase of the mine site in Surigao del Norte.

The company said the study showed significantly higher mineral resource estimates of 571 million tons for the Boyongan, Bayugo and Kalayaan ore deposits of the Silangan mine, 43% higher than the previously declared level of 398 million tons in 2011.

Philex said it is allocating $750 million for the development of the Boyongan deposit, which is the first phase of the project. To raise funds for the project, it has appointed JPMorgan for equity investment and Japan’s Mizuho for project financing.

The Silangan project was originally set to begin production in 2018, but was affected by the government’s ban on new open-pit mining in 2017.

“I think sometime in second quarter next year, financing for the project will be closed. However, the board decided that the preliminary works, the design of the plant, certain pre-construction work, the board authorized that starting this month, capex of up to $14 million to get the project construction started. Actual construction work will start sometime middle of next year,” Philex Mining Chairman Manuel V. Pangilinan said during a briefing on Thursday.

The development of Boyongan is expected to take two and a half years, with commercial production to begin by the second half of 2022.

“The first phase of the Boyongan deposit has an initial estimated mine life of 22 years. For this initial stage, Silangan is expected to yield high grade mineable ore grades of 0.63% for copper and 1.20 grams per tonne for gold,” Philex said, adding it will adopt underground sub-level cave mining for ore extraction.

For the second phase, which involves the Bayugo deposit, will undergo preliminary feasibility study for underground sub-level cave mining within the year.

“Bayugo is expected to be mine-ready as early as the fifth year from the start of Boyongan’s commercial operations. The remaining substantial mineral resource and inventory including Kalayaan and the remnants of Boyongan will be subjected to future studies,” Philex said.

For the first half, Philex’s attributable income dropped by 29% to P391.39 million, from P551.66 million a year ago. It recorded a core net loss of P19.035 million during the first six months of 2019, versus a core net income of P646.31 million a year ago.

Philex reported its attributable net income stood at P184.89 million during the second quarter, but did not provide comparable figures.

“The Company is optimistic that global interest for mineral products will stay robust in the long-term with consistent growth from Asia particularly from China, led by its power and infrastructure sectors. Also, notable advancements in electric vehicle technology and renewable energy will also serve as demand catalysts to drive usage for copper materials,” Philex said.

Philex Mining is one of the three local units of Hong Kong-based First Pacific Co. Ltd., the two other being PLDT, Inc. and Metro Pacific Investments Corp. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains interest in BusinessWorld through the Philippine Star Group, which it controls. — V.M.P.Galang

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