Philex Mining Corporation, one of the oldest and largest gold and copper producers in Southeast Asia, reported a 25 percent growth in core net income to P676 million in the first quarter of 2022 from P540 million in the same period last year.
In a disclosure to the Philippine Stock Exchange, the firm said the improvement is due to higher operating revenues on account of higher sustaining gold and copper realized prices, stable production and managed operating cost and expenses.
“The first quarter of the year bore much promise that the mining industry, like the economy, was well on its way to full recovery with the tapering off of the global threat of COVID-19 and the relaxation of stringent quarantine and lockdown guidelines,” said Philex president and CEO Eulalio B. Austin Jr.
He noted that, “The country, it seemed, was back in business and Philex continued to ride on the strength of sustained production and revenue levels, and took full advantage of the wave of increase in global metal prices.”
However, Austin said “the current situation in Ukraine and its impact on the global supply chain and commodity markets makes us tread cautiously towards the remaining months of the year. We are still hopeful that the conflict in Europe will end soon enough. We move with caution and continue to assess and re-assess our plans and our strategies.”
“We view the current global situation with guarded optimism. Though there are gains to be realized with the spike in the prices of gold, copper, and even nickel, the current tension that is unfolding in Ukraine might impact the country’s and the industry’s pursuit of recovery post-pandemic. If the conflict pushes inflation upward, it could affect the country’s economic growth,” said Philex Chairman Manuel V. Pangilinan.
Production level in the first quarter this year was within plan and, coupled with higher realized prices for gold and copper, lifted operating revenues 7.5 percent to P2.72 billion.
Blended realized gold and copper prices peaked in March at $1,887 per ounce and $4.59 per pound respectively, driving operating revenues in March to P1.08 billion, the highest since January.
Tonnage milled for the first quarter of 2022 was 10 percent lower at 1.82 million tons from 2.03 million tons in the same period last year mainly due to unscheduled breakdown of mill equipment.
Ore grades for gold continue to be at the same level as in the first quarter of 2021 while ore grades for copper showed improvement over the same period in last year, mitigating the impact of lower tonnage in copper production.
Gold output for the first quarter 2022 was 9.8 percent lower at 12,097 ounces versus 13,413 ounces in the same period last year. On the other hand, copper output was 8.7 percent lower at 6.18 million pounds versus 6.77 million pounds in the first quarter of 2021.
Philex said “The current global commodity outlook points to sustained prices of gold and copper in the near to medium term. These sustained metal prices provide the Company with the ability to implement exploration and studies geared towards funding additional mineral resources/reserves within the current ore body and vicinity of the Padcal Mine.”
It added that, “The Company continues to work with its financial advisors for the completion of the fund raising exercise to start the Silangan Project, subject to approval of relevant government and /or capital market regulators.”
The successful and timely conclusion of the funding exercise will pave the way for the timely development and start of commercial operations of the Silangan project by early 2025.
Philex is set to actively commence the development of Silangan as soon as the funding sources would have been finalized and completed, which will be in the form of a rights offer, possibly debt and fresh capital infusion out of its cash reserves.