Philex secures P2.1-B loan for Padcal,Silangan projects

MANILA, Philippines - Philex Mining Corp. has secured a P2.1-billion loan for the capital expenditures of its Padcal mine in Benguet and its Silangan project.

In a disclosure to the Philippine Stock Exchange, Philex president and chief operating officer Eulalio Austin said the company has signed P2.1-billion term loan facility agreement with an indirect subsidiary of First Pacific Co. Ltd.

The loan is payable within one year from the date of the agreement.

“The proceeds of the loan will be used by Philex principally for capital expenditures of its Padcal mine and Silangan project and for general working purposes,” Austin said.

Philex intends to resume the operations of its copper-gold mine in Padcal in the middle part of 2013 as it begins the construction of a spillway for its broken tailings pond No. 3, which would cost around P400 million.

Operations of the mine have been suspended since Aug. 1 because of a tailings spill accident and would remain so until it is lifted by the Department of Environment and Natural Resources (DENR).  

Company officials said they intend to settle within the year all obligations to the government for the tailings spill.

In the meantime, cleanup operations in the tenement are ongoing.

Philex faces several fines for the spill including a P1.034-billion fine imposed by the Mines and Geosciences Bureau (MGB) of the DENR for violation of the Mining Act, the P50,000 penalty imposed by the Environmental Management Bureau (EMB) for violation of the environmental compliance certificate contract as well as the P50,000 – P200,000 per day penalty imposed for violation of the Clean Water Act.

Philex officials earlier said exploration activities are still ongoing in the mining tenement of the Padcal mine. With the completion of the spillway, the remaining estimated ore reserve of around 80 million tons can still be utilized.

Officials also said that amid the remediation measures being conducted in the Padcal mine, preparations for the commissioning of its copper-gold projecs in Surigao are on track.

The mine feasibility study for the Silangan project is expected to be completed by February 2013.

The Boyongan and Bayugo ore deposits, together known as the Silangan project, contain an estimated gold and copper reserve worth at least $22 billion.

Philex reported a 53 percent drop in net income for the first nine months of the year to P2.03 billion from P4.35 billion recorded in the same period last year because of lower metal production in the third quarter, following the suspension of the operations of the Padcal mine.  

The company’s performance from January to September was still brighter than the earlier forecast made by its chairman Manuel V. Pangilinan that net income for the whole of 2012 would reach only between P1.5 billion to P1.7 billion.