Philex To Initially Spend $224M For The Development Of Silangan Copper-Gold Mine Project
Philex Mining Corp.,(“Philex’) the largest publicly-held copper and gold producer in the Philippines, will start the development next year of the Silangan mine in Mindanao, a project that will be the biggest investment in the local mining industry in the last six years.
Philex expects to initially spend US$224 million for a starter mine under the In Phase Development Plan for the Silangan Copper-Gold Project (“Silangan Project”) that will initially mine and process 2,000 tons of ore a day. Silangan Mindanao Mining Co., the wholly-owned subsidiary of Philex that will operate the mine, will gradually develop the project until it reaches 12,000 tons a day, or 4 million tons a year.
The Phase 1 of the Silangan Copper-Gold covers primarily the Boyongan deposit, which has an estimated 81 million tons of mineable ore containing 0.67% copper and 1.13 grams of gold per ton. Annual production could increase to 6.5 million tons once the Bayugo deposit is mined, as Phase 2.
“The copper and gold grades in Silangan are twice as high than the current grades of Padcal, which for decades has been the life blood of Philex but is now approaching the end of its mine life,” said Eulalio B. Austin, President and Chief Executive Officer of Philex and President of Philex’s wholly-owned Silangan Mindanao Mining Co.
Silangan has estimated mineral resources of 571 million tons, with 0.52% copper and 0.64% gold. These numbers are higher compared than the other upcoming mining projects.
“We have secured all the necessary clearances and permits from relevant government units to pursue the Silangan project that we have started more than 15 years ago,” Mr. Austin added.
The Phase 1 has a long mine life of 28 years and will take two-and-a-half years to develop beginning second quarter of 2022. It is programmed to start commercial operation in 2025. It is expected to produce 2.8 million ounces of gold and 993 million pounds of copper during its mine life.
Global spot gold price currently ranges from $1,770 to $1,790 an ounce while copper spot prices ranges from $4.20-$4.40 per pound.
“Silangan will be a major exporter of metallic minerals for the Philippines, generating in the future, much needed foreign exchange receipts of the country that will augment and increase the country’s foreign currency reserves that can improved the country’s ability to settle foreign currency requirements for economic recovery post COVID-19 pandemic,” said Mike Toledo, chief operating officer of Silangan Mining.
He said Silangan mine will also create thousands of direct and indirect employment, particular in various towns of Surigao del Norte.
Mr. Romeo B Bachoco, Chief Finance Officer and Treasurer of Philex, said that the Silangan Project will be financed by a combination of fresh capital infusion from parent company, Philex, equity via stock rights offer, and possibly debt.
Philex has already filed with the Securities and Exchange Commission and Philippine Stock Exchange an application to raise as much as PhpP3.15 billion through a stock rights offer of up to 842 million common shares. BDO Capital and Investment Corporation has been tapped as Issue Manager and Lead Underwriter.