Philex earnings jump 25% in Q1

MANILA, Philippines — Panglinan-led Philex Mining Corp. reported a 25 percent increase in its core net income in the first quarter   to P676 million, driven by stable production and higher metal prices.

“The first quarter of the year bore much promise that the mining industry, like the economy, was well on its way to full recovery with the tapering off of the global threat of COVID-19 and the relaxation of stringent quarantine and lockdown guidelines,” Philex president and CEO Eulalio Austin Jr. said.

“The country, it seemed, was back in business and Philex continued to ride on the strength of sustained production and revenue levels, and took full advantage of the wave of increase in global metal prices,” he said.

Philex said blended realized gold and copper prices peaked in March at $1,887 per ounce and $4.59 per pound respectively.

Tonnage milled in the first quarter was 10 percent lower at 1.822 million tons from 2.025 million tons in the same period last year mainly due to unscheduled breakdown of mill equipment.

“Ore grades for gold continue to be at the same level as in 1Q 2021 while ore grades for copper showed improvement over the same period in 1Q 2021, mitigating the impact of lower tonnage in copper production,”Philex said.

Gold output for the period was 9.8 percent lower at 12,097 ounces versus 13,413 ounces in the same quarter last year.

Similarly, copper output was also 8.7 percent lower at 6.18 million pounds versus 6.77 million pounds the first quarter of last year.

Operating revenues in the first quarter increased by 7.5 percent to P2.720 billion, while operating costs were almost the same level as the same period last year at P1.655 billion.

“The increases in the purchase costs of materials and supplies as well as equipment parts were offset by the continued implementation of work programs in operations, leading to efficiencies in the usage of power and supplies,” Philex said.

Despite the positive first quarter performance, Austin said the company will cautiously tread toward the remaining months of the year due to the current situation in Ukraine and its impact on the global supply chain and commodity markets.

“We are still hopeful that the conflict in Europe will end soon enough. We move with caution and continue to assess and reassess our plans and our strategies,” he said.

For his part, Philex chairman Manuel V. Pangilinan said the company views the current global situation with guarded optimism.

“Though there are gains to be realized with the spike in the prices of gold, copper, and even nickel, the current tension that is unfolding in Ukraine might impact the country’s and the industry’s pursuit of recovery post-pandemic. If the conflict pushes inflation upward, it could affect the country’s economic growth,” Pangilinan said.

Philex said the current global commodity outlook points to sustained prices of gold and copper in the near to medium term.

“These sustained metal prices provide the company with the ability to implement exploration and studies geared towards funding additional mineral resources/reserves within the current ore body and vicinity of the Padcal Mine,” Philex said.

The company said it continues to work with its financial advisors for the completion of the fund raising exercise to start the Silangan Copper-Gold project in Surigao del Norte,   subject to approval of relevant government and /or capital market regulators.

“The successful and timely conclusion of the funding exercise will pave the way for the timely development and start of commercial operations of the Silangan project by early 2025,” Philex said.

“The company is set to actively commence the development of Silangan as soon as the funding sources would have been finalized and completed, which will be in the form of a rights offer, possibly debt and fresh capital infusion out of the cash reserves of the company,” it added.

Earlier this month, Philex announced that it has pushed back the timetable of its P3.15-billion stocks rights offering (SRO)  amid the volatility in the financial markets.

In January, the SEC approved Philex Mining’s application for an SRO covering up to 842 million common shares, subject to certain remaining requirements.

Based on an earlier timetable submitted by the company, the SRO was intended to run from Feb. 28 to March 10 in time for the listing of the offer shares at the Philippine Stock Exchange on March 21.

Philex chief finance officer and treasurer Romeo Bachoco earlier said part of the $224-million funding needed for the starter mine of the Silangan project would come from the SRO.