Philex Mining Corp. said the feasibility study on its Silangan copper-gold mine project in Surigao del Norte shows $7 billion deposits could be mined over 28 years in the Boyongan deposit alone.
The Boyongan deposit has an estimated 81 million tons of mineable reserve that is estimated to yield 992.8 million pounds of copper and 2.81 million ounces of gold. The estimated mineable reserve is based on Philex’s in-phase mine plan for Silangan.
Philex said the project will start its development this year with an initial cost of $224 million.
The starter mine that will initially produce 2,000 tons of ore per day will begin commercial operation in early 2025 and reach 12,000 tons a day by the 12th year of operation.
“The numbers for the Silangan project are very compelling, pushing us to pursue the mine development even without a strategic partner or major investors as we originally envisioned,” said Romeo Bachoco, Philex chief finance officer.
The feasibility study assumed a price of $3.20 per pound of copper and $1,342 an ounce for gold – both below current prices of copper of over $4 per pound and of gold that is over $1,800 an ounce, Bachoco said.
“Using those assumed prices, the combined revenues from copper and gold totaled to $6.91 billion over the 28 years life of the soon-to-be-developed mine,” he said.
Bachoco earlier said the breakeven cost of producing a pound of copper in Silangan is between $2 and $2.30 per pound and between $850 and $900 for every ounce of gold.
Aside from the $224 million needed to develop the starter mine, Philex earlier said total sustaining capex investment over the mine life of Silangan will reach around $1.5 billion, which will be mostly funded from Silangan’s internal cash generated from commercial operations.
Philex plans to finance the spending through a combination of proceeds from the stock rights offer and a fresh capital infusion from surplus cash of Philex out of its current Padcal mine operation that will be infused to wholly-owned subsidiary Silangan Mindanao Mining Co. , the company that will operate the mine, and possibly debt.
Philex eyes to raise P3.15 billion from its stock rights offer in February, still under regulatory consideration. It has tapped BDO Capital and Investment Corp. as its issue manager and lead underwriter.
