MANILA — Philex Mining Corporation on Thursday said the definitive feasibility study for the first phase of the Silangan Project is finally complete.
The Silangan mine is a large-scale, high-grade copper-gold development, with a number of greenfield and brownfield components, located in Surigao del Norte, Mindanao.
Its tenements are composed of three deposits — Boyongan, Bayugo and Kalayaan, with the latter being held by the company through a joint-venture with Manila Mining Corporation.
Silangan has been branded as one of three big-ticket mining projects seen to propel the Philippines as a major regional copper producer.
Based on the development timeline, the Silangan Project will be developed in phases. The Boyongan deposit, which is planned as the maiden phase, will be fully developed within 2.5 years and is expected to commence commercial production 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 percent for copper and 1.20 grams per tonne of gold.
The second phase, which will be comprised of the Bayugo deposit, is scheduled to 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.
In terms of methodology, Philex said it will be adopting underground sub-level cave mining for ore extraction which will feature a state-of-the-art milling facility that will utilize modern convention technologies for ore processing.
“We are thrilled with the outcome of the study which reaffirms the immense potential and magnitude of the project.
Over the next few months, we will be focusing our efforts on raising equity and financing for mine development,” said Eulalio B. Austin Jr., President and Chief Executive Officer of Philex Mining Corporation, in a statement.
The mining firm is set to earmark around USD750 million for the development of the Boyongan ore body.
For its fund-raising exercise, Philex has appointed reputable financial institutions J.P. Morgan for equity investment and Mizuho for project financing.
It has also engaged international law firm White & Case and Philippine law firm Sycip Salazar Hernandez & Gatmaitan as legal consultants.
Meanwhile, Philex Board of Directors reported a net income of PHP391 million for the first half of 2019 while core net loss narrowed to PHP19 million or almost break- even.
For the second quarter alone, the company registered a core net income of PHP93 million, marking a sharp rebound after a challenging start.
Total tonnes milled was at 3.805 million from 4.388 million in the first half of 2018. Metal production was slowed down by programmed maintenance and other unscheduled repair works of aging mining equipment as well as uncontrollable power interruptions that resulted in lesser operating days.
Consequently, gold and copper production were at 23,675 ounces and 12.007 million pounds versus previous year’s haul of 34,583 ounces and 14.149 million pounds, respectively.
Gross revenues recorded at PHP3.365 billion from PHP4.646 billion while smelting charges decreased to PHP276 million from PHP377 million for the first half of 2018. Net revenues stood at PHP3.089 billion from PHP4.269 billion for the first half of 2018.
Average realized prices for gold and copper were at USD1,316 per ounce and USD2.75 per pound against USD1,314 per ounce and USD3.11 per pound year-on-year.
Following a core operating loss in the first quarter, Philex has swung back to profitability in the subsequent period after realizing the impact of improved operational efficiencies and cost containment measures that were carried out in the first three months of 2019.
As a result, metal output increased by 8 percent to 1.973 million tonnes for the second quarter of 2019 from 1.832 million tonnes for the first quarter of 2019.
Gold and copper production came in at 13,182 ounces and 6.280 million pounds for the second quarter of 2019 compared to 10,493 ounces and 5.727 million pounds for the first quarter of 2019, respectively.
Philex 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.
On the domestic front, Silangan is envisioned as a key economic and social contributor for the development of Mindanao in particular and for the country in general, through substantial tax payments and the creation of more than 3,000 new jobs in Mindanao, where the project is located, to be supported by an expansive corporate social responsibility agenda. (PNA)