A major Chinese mining company expressed interest in teaming up with Philex Mining Corp. to develop the $1-billion Silangan copper and gold project in Surigao del Norte province.
Philex chairman Manuel Pangilinan said several Chinese mining firms expressed interest in becoming a strategic partner of the company for the Silangan mine, including the major Chinese mining company which he did not name.
Pangilinan said he was expecting to get a clearer indication on the partnership next week.
Philex Mining said in 2019 it would earmark around $750 million for the development of the Boyongan ore body of the Silangan mine and appointed J.P. Morgan for equity investment and Japan’s Mizuho Financial Group Inc. for project financing.
Pangilinan said the development of Silangan mine could be funded partially by borrowings and the rest through equity infusion by the new partner.
“Some $700 million is required to bring Silangan mine to fruition. We will raise money from debts and balance will be equity from the new partner,” Pangilinan said.
Philex Mining already spent P17 billion for pre-development works on Siliangan mine.
Located in Surigao del Norte province in Mindanao, Silangan is a large-scale project composed of three ore prospects—Boyongan, Bayugo and Kalayaan.
Based on latest estimates by Philex, the mine has 571 million tons of mineral resources.
Meanwhile, Pangilinan said Philex Mining was also studying the possibility of extending by another two years the Padcal mine in Benguet province.
“Subject to further development of management, the mine life in Padcal could be extended by two more years,” Pangilinan said.
Philex Mining is one of the oldest and largest gold and copper producers in Southeast Asia.
The company reported a net income of P1.22 billion in 2020, a sharp turnaround from the P647-million net loss in 2019 on higher revenues and decline in cost and expenses.
With favorable metal prices coupled with higher metal output, total operating revenues reached P7.83 billion, up 15 percent from 2019 operating revenues of P6.79 billion.
Philex said it produced 56,000 ounces of gold and 26.379 million pounds of copper in 2020, higher than 53,064 ounces of gold and 25.737 million pounds of copper in 2019.
Philex said planned to continue to focus on its strategy of optimizing the Padcal mine while aggressively pursuing and working with financial advisor to identify and sign up a strategic business partner to bring the Silangan project into stream.
Other mining projects of Philex are Bulawan in Negros Occidental and Sibutad in Zamboanga de Norte.
Its subsidiaries include Philex Gold Philippines Inc. Lascogon Mining Corp., Silangan Mindanao Mining Co. Inc. and PXP Energy.