Philex’s Silangan mine faces headwinds as COVID hits

MANILA, Philippines — One of the biggest mining projects in the country is facing headwinds as the coronavirus disease pandemic has stalled the entry of potential investors.

Pangilinan-led Philex Mining Corp. said the mining industry  has not been spared from the adverse impact of the coronavirus crisis.

During its annual stakeholders’ meeting Wednesday late afternoon, Philex president and chief executive officer Eulalio Austin said the $750-million Silangan copper and gold project is facing challenges in terms of attracting potential investors.

“Many companies around the world are in survival mode in assessing their business models, operations and capital deployment strategies. This impacted our ability to attract potential inventors to our Silangan project envisioned to start before Padcal ceases operations by end-2022,” Austin said.

Philex started the groundwork last year, having shifted to underground sub-level cave mining method.  It had already secured all the necessary government approvals for the project.

“We are still in the midst of our search for our potential investor and strategic partners to develop the project, but due to the pandemic, the search for partners has become more challenging,” he said.

Philex earlier said it would need at least $350 million by the first half this year to get the project going.

“We will pursue other options and strategies to get the Silangan project started. As we continue our search for strategic investors, we will continue to study the extension of Padcal’s mine life,” Austin said.

The ore body deposit of Padcal in Benguet is projected to be financially feasible up to December 2022 at assumed metal prices and operating cost.

Austin said Philex is already exploring other mining assets of the company within its tenements in Padcal as possible alternatives to extend the life of the mine.

Meanwhile, Austin said the rising prices of gold in the past months had offered a glimmer of hope for the mining industry.

“This creates an opportunity for investors to take advantage of potential mergers and acquisition deals. In a very certain economic environment, investors in the mining industry tend to prefer large companies that have demonstrated grit and resilience over the years,” Austin said.

“This places Philex on a good footing as it has built a solid track record in  operating Padcal for the last 62 years and counting,” he said.

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. It is one of three big-ticket mining projects seen to propel the Philippines as a major regional copper producer.

Silangan will be developed in phases with the Boyongan deposit to be fully developed within two and a half 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 the initial stage, Silangan is expected to yield high grade mineable ore grades of 0.63 percent for copper and 1.2 grams per MT for gold.

The second phase, which will consist of the Bayugo deposit, is scheduled to undergo preliminary feasibility study for underground sub-level cave mining within the year.