Philex Mining Corp. said Thursday it will infuse additional fresh capital into subsidiaries undertaking the $224-million Silangan mine in Surigao del Norte province to jumpstart the gold and copper mine project.
“This is a significant indication that Philex, as parent company of Silangan Mindanao Exploration Co. Inc. and Silangan Mindanao Mining Corp. Inc., is committed to get this project going,” Philex chief finance officer and treasurer Romeo Bachoco said.
“This would signal to qualified shareholders, and potential investors alike, who will participate in the stock rights offer as well as the lenders who will join the loan syndication that Philex will infuse fresh capital because it strongly believes in the feasibility of the Silangan Project,” he said.
The company did not indicate how much capital it would put in, but it had P4.7 billion as unappropriated retained earnings as of end-2020.
The project will involve the development of a starter mine beginning this year and will go on commercial operation by early 2025. It aims to initially produce 2,000 tons of ore a day or about 700,000 tons a year. The will figure will gradually ramp up to 12,000 tons a year as Philex invests additional capital for the mining operations.
The Silangan project has estimated 81 million tons in mineable reserves that contain around 993 million pounds of copper and 2.8 million ounces of gold.
It will produce, throughout its 28-year life, an annual average of 35 million pounds of copper and 100,000 ounces of gold.
Bachoco said it would require about P11.2 billion or about $224 million to develop phase 1 of Silangan mine.
He said that aside from capital infusion from Philex, the part of the funding requirement for the starter mine would be sourced from a proposed P3.15-billion stock rights offering. The plan is subject to approval by the Securities and Exchange Commission and the Philippine Stock Exchange.
Philex appointed BDO Capital and Investment Corp. to raise the needed capital, possibly debt, in addition to the fresh capital infusion into SMECI and SMMCI.