Philex secures $15-M loan for dev’t of gold-copper mine in Benguet

Philex Mining Corp., one of the most diversified mining companies in the country, has signed a letter of intent with Pan Pacific Copper Co. Ltd. for a $15-million term loan to finance the underground development of its gold-copper mine in Padcal, Tuba, Benguet province.

Pan Pacific is a joint venture between Nippon Mining & Metals Co. Ltd. and Mitsui Mining & Smelting Co. Ltd. of Japan. Nippon operates the largest copper smelter in Japan and has been purchasing Philex copper concentrate since the opening of the Padcal mine.

In a disclosure to the Philippine Stock Exchange, Philex said the financing transaction includes a concentrates off-take agreement throughout the remaining life of the Padcal mine.

The Padcal mine, the country’s only remaining copper-gold operation, has been in continuous production for the past 46 years. The development of the next mining level at this underground operation will extend the Padcal mine life up to at least 2011.

Philex said higher ore grades, particularly gold, are expected once the initial ore at the new mining level is extracted towards the latter part of 2005 following an approximately two-year development period.

Throughout its long operating history, the Padcal mine has generated $2.6 billion in exports and P8.9 million in tax revenues to the government.

Philex is engaged principally in mining activities. It produces copper concentrates containing copper, gold and silver and gold bullion. These products are within acceptable quantity and quality standards required by the world market, while the gold bullion has been accepted by the Bangko Sentral ng Pilipinas mint and gold refinery as well as by Johnson Matthey of England.

The copper concentrates are either exported to Nippon Mining Co. Ltd. and smelted in the Saganoseki Smelter in Kyushu Island, Japan or shipped to the smelter of the Philippine Associated Smelter and Refinery (Pasar) in Isabel, Leyte.