MANILA, Philippines–Philex Mining Corp. is gearing up for a new five-year plan meant to further develop the Padcal mine in Benguet and help the company recover from the tailings leak accident two years ago.
Company president Eulalio B. Austin Jr. on Thursday told reporters that the plan, which is set for kickoff in 2015, involves exploration on three target sites that are adjacent to the current mining area.
“We have started exploration even during the time that Padcal operations were suspended,” Austin said. “There are indications of copper and gold mineralization, we just don’t know yet about the ore grade.”
Regulators suspended operations in the Padcal mine following heavy rains that caused a sinkhole in one of its tailings ponds in 2012.
This resulted to nontoxic water and tailings being released into the nearby creek, which converges with the river in Pangasinan.
The Philex Mining chief said the company needs to stabilize its revenues in the wake of the suspension and especially considering that mine is approaching end-life when ore grades are dropping.
He explained that a drop in ore grades could pull down a company’s top line. Thus, Philex is looking into ways to improve operational efficiency.
“We are looking into how we can maximize our current mining tenements, of which we have a lot,” the engineer said.”
“We can also support Silangan so that it could come on stream at the soonest possible time, and as much as possible look into mergers and acquisitions,” he added.
The Silangan project in Surigao del Norte is expected to produce initially a daily rate of 15,000 tons of ore containing gold, silver and copper.
Further, Austin said Philex is extending the mine life of Padcal for another four years to 2020.
He said the Padcal tenement covers 14,000 hectares and current mining operations cover only five percent of that area.
In August, Philex reported that its net income fell 37 percent year on year to settle at P600.5 million in the first semester of 2014.
The gold and copper processor, in a statement, attributed the slump to having processed lower-grade ores.
“Last year’s (first half of 2013) figures were also raised by insurance proceeds related to business interruptions,” Philex said, referring to the tailings incident.
Also, Philex said first-semester output of gold jumped 28 percent to 52,286 ounces, while that of copper revved up by 33 percent to 18,196,913 pounds.
At the same time, consolidated revenues surged 38 percent to reach some P5.8 billion, mainly due to having operated in 178 days compared to 115 days previously.