Philex Mining mulls P12-B share sale in H2

MANILA, Philippines - Philex Mining Corp., the country’s largest miner, is looking to raise P12 billion through a share sale to existing stockholders early in the second half.

Proceeds of the planned stock rights offering will allow the company to pay existing debts and support exploration projects, its top executive said.

Philex Mining chairman Manuel V. Pangilinan said the equity offering will likely be conducted in July.

“It is contingent to the permanent lifting of the [mining] suspension,” Pangilinan said.

Last  February, the Mines and Geosciences Bureau allowed Philex Mining to re-open a portion of the Padcal gold and copper mine in Benguet. Philex Mining has until June to conduct remediation measures for Tailings Facility Storage No. 3.

Early this month, Philex resumed operations of its copper-gold mine in Padcal following a six-month closure to rehabilitate the tailings pond and prevent its possible collapse.

Operations of the Padcal mine was suspended in August after its tailings pond collapsed.

Philex Mining already paid the P1.034 billion penalty imposed by the Department of Environment and Natural Resources for the tailings spill that affected Balog Creek and the Agno River.

Pangilinan said the stock rights offering will push through with the expected re-opening of the Padcal mine.

In April, shareholders approved the P12.3-billion stock rights offering that will support the repayment of loans from Hong Kong-based parent First Pacific.

The copper and gold miner will also use proceeds of the fundraising for the construction of a new tailings pond in Benguet and the exploration program of the Silangan and Kalayaan projects.

Philex Mining targets to start commercial operations of the Silangan copper-gold mine in Surigao del Norte in 2017. The Boyongan and Bayugo ore deposits, together known as the Silangan project, contain an estimated gold and copper reserve worth at least $22 billion.

The miner is also conducting exploration activities in its Kalayaan project, also in Surigao del Norte, which adjoins the Bayugo deposit of the Silangan project.

In the first quarter, Philex Mining’s profits sank to P403 million from P1.268 billion a year ago due to the suspension of operations in its copper-gold mine in Padcal.