Philex profit down due to lower output

Philex Mining Corp., the country’s biggest gold producer, posted a 23-percent decrease in net income for the first nine months of the year to P438.97 million from P569.89 million a year ago despite favorable metal prices.

In a disclosure to the stock exchange, Philex said the scheduled maintenance programs and other unexpected repair works at its Padcal mine led to lesser operating days that, in turn, resulted in lower volume of tonnage.

Consequently, gold and copper production for the 9-month period declined to 38,125 ounces and 18.86 million pounds, respectively, from the previous year’s output of 48,929 ounces and 20.51 million pounds.

Gold and copper prices during the period averaged $1,365 an ounce and $2.67 a pound against $1,304 and $3, respectively, a year ago.

Gross revenues for the period went down by 19 percent to P5.31 billion from P6.59 billion a year ago, while smelting charges decreased to P442 million from P531 million.

Lower costs, materials and supplies also led to the decline in the company’s production costs to P3.22 billion from P3.24 billion in the same period last year.

With Padcal mine nearing the end of its life cycle, Philex is banking on the upcoming operation of its Silangan project in Surigao del Norte, which started its early works program prior to full development with the approval of  the Mines and Geosciences Bureau.

Philex president and CEO Eulalio Austin said the Silangan project was designed for four million tons a year, but the company would initially start with a lower output and eventually increase it to full capacity by 2023.

The site is seen to boost the company’s ore production as mineral resource estimates in the area indicate large high-grade gold and copper deposits.