Philex may extend Padcal mine life

MANILA, Philippines — Philex Mining Corp. is studying the further extension of the lifespan of the Padcal mine in Benguet to potentially overlap with the start of the commercial operations of the Silangan copper gold project in 2025 in a bid to boost its income stream.

In a statement yesterday, Philex president and CEO Eulalio Austin Jr. said studies are ongoing for the extension of the life of the Padcal mine.

“The extension of Padcal’s operation will be dependent on the study of the remaining mineable reserve, favorable price of copper and gold, as well as cost of producing the metals moving forward and obtaining the required government permits,”Austin said.

“If prices hold on to the levels where they are now, which we consider high, then there is a possibility of extension,” he said.

In June last year, Philex announced the extension of the lifespan of the Padcal mine after confirmatory drilling and related technical studies on the mining methodology and tailings storage facility (TSF) no. 3 successfully identified that there are additional mineable reserves in its Padcal mine that are feasible for mining from the end of 2022.

The additional mineable reserves are expected to be mined over two years.

The updated remaining mineable reserves as of end-March were estimated at 30.2 million tons, with average gold and copper grades of 0.23 grams per ton (g/t) and 0.18 percent, respectively.

“This new estimate includes additional reserves of 16.2 million tons from the previously declared estimated mineable reserves as of end 2020 of 17.4 million tons, with an average gold and copper grades of 0.27 g/t and 0.18 percent that was reported in February 2021,” the company said earlier.

The Padcal mine has been in operation since 1958 and is the first underground block cave operation in the Far East. It has been producing copper concentrates, with gold and silver as by-products.

Philex said an overlap of Padcal and Silangan’s operation could further bolster the company’s income stream.The company will begin the development of a starter mine in Silangan this year, which will produce around 2,000 tons of ore per day.

“Production, under the current development plan, will be ramped up to 12,000 tons a day or four million tons a year by the 12th year,” Philex said.

The mine is targeted to commence commercial operations in the first quarter of 2025.

The initial capital cost to develop the starter mine is estimated at $224 million, which will be spent within the 2.5 years development period.

Philex chief finance officer and treasurer Romeo Bachoco earlier said funding for the project would come from a combination of capital infusion from the company, equity via stock rights offer (SRO), and debt.

“Over its 28-year-mine life, Philex estimated total investment, including spending to operate and maintain the mine, will reach $1.5 billion. It is expected to generate thousands of jobs, particularly in Surigao del Norte towns of Placer, Tubod, Tagana-an, and Sison, and contribute billions of pesos in taxes to both the LGUs (local government units) and the national government,”Philex said.

Philex said it secured all regulatory approvals for Silangan, including the nod of the local government units, indigenous people, and the Department of Environment and Natural Resources.