Philex eyes long-term loans for Silangan project

PHILEX Mining Corp. is set to lock in long-term financing for the Silangan copper-gold venture in Mindanao after completing the project’s feasibility study.

Company chair Manuel V. Pangilinan said about 70 percent of the $1-billion to $1.2-billion required investment in the venture in Surigao del Norte would likely be borrowed from banks under long-term arrangements.

Asked on the preferred tenor of the long-term financing, he said 10 years was possible.

“The longer, the better,” he said of the payment terms, citing the current estimate on Silangan’s mine life of about 30 years.

Financing arrangements will be finalized after the feasibility study on Silangan is completed.

“We should finish the feasibility study by the middle of this year to the third quarter,” Pangilinan said.

“The prospects are pretty good in terms of both the tonnage of the reserves and the yield. The grade of copper and gold are quite good based on indications.”

This means financing will be locked in toward the fourth quarter, Pangilinan said.

“We’re looking at 30 percent equity, 70 percent financing,” he said. “We should start talking to the banks soon after the completion of the feasibility study.”

The total investment requirement will cover the development of a mill to process the ore mined at Silangan into concentrates which will be shipped to smelters abroad.

Silangan’s development may be completed in late 2017 to early 2018, Pangilinan said.

Philex may take on a partner for the development of the Silangan mine, which the mining firm is banking on as flagship mine Padcal copper-gold project in Benguet matures around 2020.

The original end-of-mine life for Padcal is September 2017 and this was extended to December 2020. Pangilinan said Padcal can keep operating beyond 2020 if new resources are found.

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