Philex plans to acquire more mining projects

MANILA, Philippines - Philex Mining Corp. plans to acquire more mining projects in pursuit of its goal to produce one million ounces of gold over the next three years.

Philex vice president for business development Denis Lucindo said the marching order from Philex chairman Manuel V. Pangilinan is to “bring the projects” as Philex aims to increase its gold production over the next three years to one million ounces of gold.

At present, Philex’s Padcal mine produces 130,000 ounces per annum, Lucindo said, adding that if Philex revives its Bulawan mine, an additional 100,000 ozs. could be produced.

An additional 200,000 ozs. could also be produced once the Silangan project starts operation, he added.

 This means, Philex needs an additional output of 570,000 ozs. which will be coming from other projects, Lucindo said.

In a talk with mining reporters, Lucindo said Philex continues to receive “soft offers” from Asian and European banks for possible project financing of Philex’s Silangan project.

He said raising financing for the Silangan project would likely be in the second half of next year and would be a combination of 40 percent equity financing and project financing.

Philex has no problem securing the necessary financing for the Silangan project, he added.

Philex acquired earlier this year acquired a five-percent stake in Lepanto Consolidated Mining Corp.

With this, Philex indirectly acquires interest in Lepanto’s Far Southeast Gold project in which South African miner Gold Fields is keen on acquiring a 60 percent stake.

Philex is still negotiating a joint venture operating agreement with Lepanto affiliate, Manila Mining Corp. covering 286 hectares of Manila Mining’s Kalayaan copper gold project in Surigao del Norte which is contiguous with Philex’s Silangan (formerly Boyongan) project.

Philex may spend up to $1 billion to sustain the operation of its Silangan project over the mine’s projected 20-year life period.

Philex, however is still to complete a feasibility study for the project.

It expects to spend an initial $800 million to develop the mine, with commercial operation target either at the end of 2015 or early 2016.

The targeted annual production of the Silangan mine is 107 million pounds of copper and 165 thousand ounces of gold.