Philex output from Padcal mine up 37%

MANILA, Philippines – Leading gold producer Philex Mining Corp. reported a 37 percent growth in the value of ore produced at its Padcal mine in the first nine months of the year, as metal prices continued to soar.

In its disclosure to the Philippine Stock Exchange yesterday, Philex said the estimated value of production rose to P12.19 billion from P8.91 billion while tonnage was up 2.6 percent at 7.04 million dry metric tons from P6.87 million DMT in the first three quarters of 2010.

For September 2011, Philex president Jose Ernesto C. Villaluna Jr. said the Padcal mine delivered 773,490 DMT of ore resulting in 5,510 DMT of concentrates. The concentrates contain 59.28 grams of gold per DMT, 25.18 percent copper and 54.46 grams per DMT of silver. This is equivalent to a content of about 10,504 ounces of gold, 3.06 million pounds of copper and 9,650 ounces of silver.

Based on provisional metal prices of $1,624.50 per ounce of gold, $3.23 per pound of copper, $30.45 per ounce of silver and an exchange rate of P43.72 to the dollar, Philex stands to earn P746 million from gold, P433 million from copper and P13 million from silver.

Based on evaluation of the Padcal mine’s reserves as of June 30, 2011 of 85.6 million tons, the life of the mine is extended from September 2017 to December 2020, nine more years or three more from its previously declared mine life.

Philex is currently active in exploring the areas surrounding the Padcal mine as part of its drive to prolong the mine’s life to the optimum extent possible. It has more than 15,000 hectares of open ground in which several areas have been targeted for drilling or are now being drilled.

The company is also regularly on the lookout for new gold and copper mines to acquire. It has recently acquired a five percent stake in Lepanto Consolidated Mining Co. which would provide Philex with an avenue to participate in the Far Southeast Gold project of Lepanto as an investment opportunity for growth and enhancement of shareholder value.

The firm also signed an agreement with Lepanto’s affiliate Manila Mining Corp. wherein Philex acquired an initial five percent for an eventual 60 per cent equity in Kalayaan Copper Gold Resources Inc.

A joint venture with Manila Mining over the Kalayaan project could bring additional resource to the 393 million tons resource of the Silangan project, which by itself already contains metals in the ground having a theoretical value of more than $33.5 billion.