Philex Mining Corporation (“PMC” or the “Company”) and its subsidiaries are organized into two main business groupings: the mining business, which is directly under PMC, Philex Gold Philippines, Inc. (PGPI) and Silangan Mindanao Mining Co., Inc. (SMMCI), and the energy and hydrocarbon business under PXP Energy Corporation (PXP), formerly Philex Petroleum Corporation, but not until July 15, 2016, when PXP and its subsidiaries ceased to be subsidiaries of PMC as a result of loss on control through property dividend declaration. Thus, as of December 31, 2016, the Group’s mining business remains as its only business segment.
The Company was incorporated in the Philippines in 1955 and has been listed in the Philippine Stock Exchange since November 23, 1956. PMC, PGPI (a wholly-owned subsidiary incorporated in the Philippines) and Silangan Mindanao Exploration Co., Inc. (SMECI, a wholly-owned subsidiary incorporated in the Philippines) and its subsidiary, SMMCI, are primarily engaged in large-scale exploration, development and utilization of mineral resources.
PMC has been operating the Padcal Mine in Benguet for the past 59 years using the underground block-cave method. It is one of the oldest operating mines in the country and provides PMC its biggest source of revenue. In October 2015, an additional 20 million tonnes of ore reserves were declared within the current ore body, which will extend the mine’s life by two (2) more years, from 2020 to 2022.
In February 2016, the Company disclosed the results of ongoing exploration near the surface of Bumolo Project, which area is within Mineral Production Sharing Agreement (MPSA) 156-2000-CAR, with an estimated 21.7 million tonnes of inferred resources at 0.21% copper and 0.30 grams per tonne gold, at a cut-off of 0.312% CuEq. PGPI, on the other hand, operated the Bulawan mine in Negros Occidental until the second quarter of 2002, which has remaining resources of 23.9 million tonnes, including that of the Vista Alegre area. Exploration projects in the Vista Alegre area include the Nagtalay and the Laburan/Skid 9 Projects, which have completed the geological modeling and preliminary resource estimation.
SMECI, through SMMCI, owns the Silangan Project covering the Boyongan and Bayugo deposits in Surigao. SMMCI completed the pre-feasibility study of Boyongan deposit in late 2014, and is currently finalizing the definitive or bankable feasibility study, which is expected to be completed in 2017. The Boyongan copper-gold porphyry deposit in
Surigao del Norte was discovered in August 2000 under SMMCI, a joint venture with Anglo American Exploration Plc (Anglo). On February 6, 2009, the Company acquired Anglo’s 50% interest in the Silangan Project under SMMCI for a cash consideration of US$55 million, thereby owning 100% of the Silangan Project. Adjacent to the Silangan Project is the Kalayaan Project, the exploration of which is being undertaken by the Company by virtue of a Farm-in Agreement with Kalayaan Gold & Copper Resources, Inc., a subsidiary of Manila Mining Corporation.
On February 29, 2016, the Company’s Board of Directors approved a property dividend consisting of shares of stock of PXP at the ratio of seventeen PXP shares for every one hundred shares of PMC, which was approved by the Securities and Exchange Commission on June 22, 2016.
The transaction reduced PMC’s shareholdings in PXP, effective July 15, 2016, from 64.7% to approximately 19.8%, allowing PMC to leverage on its key strengths and focus its resources on its core business of metals mining, particularly with respect to the extension of Padcal’s life of mine, commercial operations of the Silangan project and development of other Company mining tenements.