Months after the lifting of a nine-year moratorium on new mineral agreements between the government and the private sector, Philex Mining Corp. announced it will start the development next year of the Silangan mine in Mindanao.
Philex Mining said the gold and copper project is set to be the biggest investment in the mining industry in the last six years.
An initial investment of $224 million (P1.7 billion) will be spent to start Silangan’s phased development.
Romeo Bachoco, Philex Mining chief finance officer and treasurer, said in an online briefing yesterday the Silangan project will be financed by a combination of fresh capital infusion from the company, equity via stock rights offer and possibly debt.
Bachoco said Philex Mining has filed with the Securities and Exchange Commission and Philippine Stock Exchange an application to raise as much as P3.15 billion through a stock rights offer of up to 842 million common shares.
BDO Capital and Investment Corp. has been tapped as issue manager and lead underwriter.
The first phase of the Silangan project will have a mine life of 28 years and will start development by the second quarter next year.
Commercial operations are to start by fourth quarter of 2024.
Bachoco said after the initial $224 million, the Silangan mine will require a sustaining capital expenditure of $1.5 billion for the entire mine life of the project.
The first phase of the mine is expected to produce 2.8 million ounces of gold and 993 million pounds of copper during its entire mine life. The entire mine area has estimated mineral resources of 571 million tons, with 0.52 percent copper and 0.64 percent gold.
“The copper and gold grades in Silangan are twice as high than the current grades of Padcal, which for decades had been the life blood of Philex but is now approaching the end of its mine life,” said Eulalio Austin, Philex Mining president and chief executive officer, during the briefing.
“We have secured all the necessary clearances and permits from relevant government units to pursue the Silangan project that we have started more than 15 years ago,” Austin added.
Initially, the first phase of the Silangan project will mine and process 2,000 tons of ore a day, to be further developed every two years after 2028 until production reaches 12,000 tons a day, or 4 million tons a year.
Austin expressed optimism the project will not face issues in the future especially with the still existing ban on open pit mining.
Philex Mining will employ sublevel caving, a form of underground mining.
Mike Toledo, chief operating officer of Silangan Mining, said the project is expected to be a major exporter of metallic minerals, generating foreign exchange receipts to augment the country’s foreign currency reserves.
Toledo said Silangan mine will create thousands of direct and indirect employment, particularly in Surigao del Norte; 1,317 site in-house team members, 31 headquarters team members; and over 2,100 construction workers.
