Philex core profits fall on lower output

Philex Mining Corporation, the gold and copper producer controlled by tycoon Manuel V. Pangilinan through First Pacific Company, reported a 44.4 percent drop in core net income to P963 million last year from P1.73 billion in 2022 due to lower output from its Padcal mine.

Philex Mining Corporation's Padcal mine

In a disclosure to the Philippine Stock Exchange (PSE), the firm said sustained realized gold prices cushioned the negative impact to core net income of the lower tonnage milled as foreign exchange rate depreciated.

Operating revenues decreased 16.6 percent to P7.73 billion in 2023 from P9.26 billion in 2022. Total tonnage milled for 2023 declined by 7.8 percent resulting in lower operating revenues for the year.

Realized Gold prices were also at their highest levels in 2023 reaching $1,964 per ounce in the fourth quarter, while Copper peaked at $4.00 per pound in the first quarter before it settled at an average $3.76 per pound for the remainder of the year.

The total tonnage milled in 2023 reached 6.85 million tons, lower than the 7.43 million tons for 2022. Gold ore grades declined by nine percent and Copper ore grades declined by six percent. 

Gold output in 2023 amounted to 37,784 ounces, lower by 22 percent than the 48,567 ounces’ gold output for 2022. Copper output was at 21.3 million pounds, lower than the 25.09 million pounds 2022 output.

Operating cost and expenses decreased by six percent at P6.67 billion for 2023 compared to the P7.12 billion for 2022 mainly on account of the 7.8 percent decline in tonnage milled, offset by the impact of the elevated cost of materials and supplies. 

The EBITDA level for 2023 was at P1.78 billion compared to P3.52 billion in 2022.

For 2024, Philex said it will continue to strongly support mining as one of the country’s economic growth catalysts. It has, thus, set out to “leave no stone unturned” at the Padcal mine while accelerating the development of the Silangan Project as well as pursuing business activities related to the trending green metals technology.

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Philex President and CEO Eulalio B. Austin, Jr. 

“Our Padcal mine still has the potential. Thus, for this year, we will pursue our re-fleeting of critical equipment, continue optimizing the current ore body, as well as engage in relentless power optimization improvements and aggressive training of our employees. These are aside from further exploring the vicinity of Padcal Mine,” said Philex President and CEO Eulalio B. Austin, Jr. 

He added that “for Silangan, since our initial capex funding is already in place, we will complete the main decline to the ore body as well as start the driving of production lines that would serve as sources for initial ore production. 

“The construction of the processing plant and tailings storage facility, as well as other surface infrastructures, will commence this year.”

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Philex Chairman Manuel V. Pangilinan 

Philex Chairman Manuel V. Pangilinan said, “Silangan will be the next big thing in the mining industry. There is excitement both in the public and private sector as to its much-anticipated opening, but we will continue to build up awareness and interest on this project to attract new investors and lenders so we can accelerate its ramp-up." 

“The conditions for this right now are favorable and we hope that this can be sustained throughout the year,” he added.

He also said that “we shall continue pursuing our other business development activities to ride on the current trend towards green metals technology. We hope to complete the evaluation of our nickel tenement in Zambales, and pursue other possible M&A prospects.”