Lower production halves Philex Mining net income

Manuel Pangilinan-led Philex Mining Corp. reported a net income of P704.14 million in the first semester of the year, down by more than 50 percent from P1.4 billion in the same period the year prior on account of lower revenues and production.

In a disclosure on Thursday, Philex Mining said consolidated revenues fell to P4.16 billion from P5.01 billion year-on-year.

Philex Mining said tonnage milled dropped by 4 percent to 3.531 million tonnes as it continues to address the “unscheduled breakdowns” of its mill plant because of the aging equipment.

As a result, gold output declined by 19 percent to 20,361 ounces while that of copper decreased by 12 percent to 11.173 million pounds.

Gold prices averaged $1,924 per ounce and $3.91 per pound, respectively.

Higher costs

However, costs and expenses slightly inched up to P3.34 billion from P3.32 billion.

READ: Lower output, higher expenses hit Philex in Q1

“The continued implementation of efficiency measures in operations offset the increases in the purchase costs of the materials and supplies as well as equipment parts and repairs,” it said.

“Higher power costs, however, continued to increase operating costs and expenses despite lower production level,” it added.

Philex Mining said it is “all geared up” to seize mining opportunities amid the lukewarm financial performance in the first half.

“Cautious optimism is still the name of the game,” Philex Mining president and CEO Eulalio Austin Jr. said.

“The first half of the year was challenging, no doubt, but we are still confident that, with the Silangan project and other prospects in the pipeline, the situation would improve,” he added.

For the Silangan copper-gold project in Surigao del Norte, Philex Mining had completed the construction of the east decline portal and the tunneling equipment such as low-profile loaders, jumbo drill and accessories had arrived.

Philex Mining is now in its second month of conducting tunneling works while undertaking preparatory works including permitting works for the tailings storage facility.

Further, tender documents for the construction of the process plant had been issued to potential contractors.

Philex Mining is in the final stage of negotiation and documentation of the syndicated debt facility to complete the funding requirement for the Silangan project.

BDO Capital and Investment Corp. is leading the debt syndication which is targeting to raise at least $100 million.

This new credit facility would complete the Silangan project’s funding requirement after the stock rights offering last year and the capital infusion from Philex Mining’s cash reserves.