Gold and copper producer Philex Mining Corp. is looking for joint venture partners to develop the $1.1-billion Silangan project in Surigao del Norte province.
Philex chairman Manuel Pangilinan said the board earmarked $758 million for capital expenditures to develop the Boyongan ore body, or the phase one of the Silangan project.
The mining firm tapped J.P. Morgan to facilitate equity investments and Japan’s Mizuho to handle debt financing.
Pangilinan said the company was looking at raising $300 million to $350 million in equity investments and about $400 million in debt financing.
Philex said the completed definitive feasibility study for the first phase of the Silangan project showed that Boyongan ore body had 81 million tons of mineable reserves, which could be mined for a period of 22 years at 4 million tons a year.
“At certain price of gold of $1,342 per ounce and copper price of $2.60 per pound, this will translate into revenues of $7 billion based on the mine life of 22 years. All output is for export,” Pangilinan said.
He said that while the project financing was expected to close by the second quarter of 2020, the board of Philex decided that preliminary works, including design of the plants and pre-construction works should start this month.
Actual construction is set to begin by the middle of the year while commercial production is expected to commence by the second half of 2022.
The second phase of the Silangan project, which will be comprised of the Bayugo deposit, is scheduled to undergo preliminary feasibility study for underground sub-level cave mining this year.
Bayugo is expected to be mine-ready as early as the fifth year from the start of Boyongan’s commercial operations.
The remaining substantial mineral resource and inventory including Kalayaan and the remnants of Boyongan will be subjected to future studies.
Philex reported a net income of P391 million in the first half of 2019 while core net loss narrowed to P19 million representing a close breakeven.
Total tons milled declined to 3.805 million in the first half from 4.388 million a year ago as metal production was slowed down by programmed maintenance and other unscheduled repair works of aging mining equipment and uncontrollable power interruptions that resulted in lesser operating days.
Gold and copper production also went down to 23,675 ounces and 12.007 million pounds this year from previous year’s haul of 34,583 ounces and 14.149 million pounds, respectively.
Gross revenues declined to P3.365 billion from P4.646 billion while smelting charges decreased to P276 million from P377 million in the first half of 2018.
Net revenues dropped to P3.089 billion from P4.269 billion a year earlier.
