Philex Mining Corp., the country’s largest gold producer, has decided to finally proceed with the development of the Silangan Mine project in Surigao del Norte within the first half of 2022, but at a slower pace and smaller scale sans the strategic investments that the listed firm has long been seeking.

In a briefing, Eulalio Austin Jr., president of Silangan Mindanao Mining Company and chief executive officer of Philex Mining, told reporters that the company is ready to start the development of Silangan mine, which is three of the biggest pending mining projects in the Philippines, next to the King-King Copper Gold Project of the Villar Group and the infamous Tampakan Copper-Gold Project in South Cotabato.

This is, he said, despite the company’s inability to secure strategic foreign investors to help Philex Mining finance the project, which earlier required as much as $2 billion worth of investments.

“We could hardly get investors outside [amid a lot of regulatory concerns] but because of some [government] pronouncements, saying mining could be a partner if allowed to flourish, we went into an in-phase development because we could more or less finance a small mine and slowly ramp up,” Austin said.

“We received no good news from foreign investors. In the past, we needed $760 million to start the project but we could not get investors and because we are running out of time [as Padcal reaches the end of its mine life], we need to start even at a small capacity,” he further said.

Since 1953, Philex Mining has largely relied on its Padcal copper-gold project in Benguet, the longest operating mine in the country. Earlier this year, the company made a decision to extend the life of Padcal mines until 2024, while Silangan has remained pending.

Romeo Bachoco, chief financial officer of Silangan Mindanao Mining, said the company’s decision to do a so-called in-phased development approach for the SIlangan mine resulted in a smaller initial investment requirement of $224 million for the company, or just a little over P11 billion, which will be raised by Philex Mining through a planned stock rights offer, loans, and cash infusion.

The rest of the investment requirement needed, or about $1.5 billion, will be taken into account by the company as part of the annual sustaining capital expenditure of the project’s mine life.

Bachoco explained that taking an in-phased development approach means that Philex Mining will have to conduct staged expansion until Silangan mine reaches full capacity after 10 years of operations, which is seen to start either at the latter part of 2024 or early 2025.

Silangan’s tenements consist of two ore deposit areas, which are Boyongan and Bayugo. The project has a mine life of 28 years and has a determined mineral reserve of 81 million metric tons (MT) just for the first phase alone.

Throughout the mine life of the Silangan project, Philex Mining estimated that the project would contribute as much as $843 million or P4 billion to the Philippine government in the form of income tax, excise tax, and local business text.

So far, Philex Mining has already spent nearly P20 billion from exploration to pre-development stage.

Moving forward, Bachoco added that the company is not closing its doors to foreign investors.