Philex, Nickel Asia post higher profits

MANILA, Philippines - Listed miners Nickel Asia and Philex Mining yesterday reported lower year-on-year profits for the first nine months of the year despite higher shipment volumes on low metal prices.

Nickel Asia reported a net income of P1.75 billion for the period ending in September, down from P2.24 billion reported in the same period last year.

The company shipped 10.32 million wet metric tons (WMT) of nickel ore from its four operating mines, up eight percent from 9.56 million WMT sold last year.

Lower average realized London Metal Exchange (LME) nickel prices during the period dragged the company’s total revenues to P8.20 billion in the first three quarters from P9.61 billion in 2012.

The realized LME nickel price applicable to 3.52 million WMT of ore shipped during the period was placed at $7.11 per pound of payable nickel versus $8.27 per pound of payable nickel in the comparative period.

As of November 4, LME spot nickel price stood at $6.47 per pound.

The balance of shipments, which were mostly low and medium grade ore sold to Chinese customers, were sold on a negotiated  price of $19.34 per WMT against $24.75 per WMT last year.

Of the total shipment volume for the first nine months of the year, 2.77 million WMT was saprolite ore and 7.55 million WMT was limonite ore.

Nickel Asia said its operating cost and expenses fell 12 percent to P4.51 billion during the period from P5.11 billion last year because of increased efficiency.

Expenses fell to $10.28 per WMT of ore this year from $12.61 per WMT last year.

Commercial production of the $1.6-billion Taganito HPAL plant commenced in October. At full capacity, the plant will require over 4.5 million WMT of limonite ore per year which would be supplied by the company’s Taganito mine.

Philex, meanwhile, reported a lower net income of P1.45 billion in the first nine months of the year from P2.04 billion in the same period last year.

The company’s total revenues during the period fell to P7.26 billion from P8.68 billion last year.

Operating expenses also fell to P4.94 billion from P5.1 billion last year.

The company’s Padcal copper-gold mine in Benguet milled a total of 5, 455, 448 tons of ore, producing 23, 783, 383 pounds of copper and 72, 905 ounces of gold, up seven percent and two percent year-on-year, respectively.

Gold prices during the first nine months of the year were lower 18 percent year-on-year at $1, 340 per ounce. Copper prices, on the other hand, were down 19 percent to 43. 26 per pound.

The Padcal mine operated for only seven months in the first three quarters of the year, the same number of months in 2012 when the mine was shut down in August 2012 after its talings storage facility suffered a leak.

Philex said the mine is “on its way to recovery” amid rehablitation efforts.

The company is continuing pre-development work in its Silangan copper-gold project in Surigao del Norte through its wholly-owned subsidiary Silangan Mindanao Mining Co. Inc.

“Exploration and development work continues,” said the company.