Philex extends Padcal mine life

Posted at 08/12/2009 8:55 AM | Updated as of 08/12/2009 8:55 AM

MANILA - Philex Mining Corp. reported that the projected operating life of its Padcal mine in Benguet province has been extended by another 3 years, from the previously declared 2014 to 2017, based on the proved reserves of the mine as of June 30, 2009.

In a disclosure to the Philippine Stock Exchange, Philex said its Padcal mine has reserves of 74 million tons, at assumed metal prices of $800 per ounce of gold and $2.00 per pound of copper and at copper equivalent cut-off of 0.36%.

Philex has doubled its net income guidance for 2009 to P3 billion from P1.5 billion on the back of stronger gold and copper prices. The company earned P2.8 billion in 2008.

It explained that this year's higher projection is based on the currently prevailing level of metal prices at $950 per ounce gold and $2.50 per pound copper.

“Please note that none of the above projections take into account any of the company's oil and gas projects, especially the recently announced offshore oil discovery in Vietnam of Pitkin Petroleum in which the company is a 21.1% shareholder, and the Sampaguita natural gas discovery in the northwest coast of Palawan under GSEC 101 which is pending conversion into a service contract for further exploration,” Philex said.

Philex added that these oil and gas properties have substantial value, the magnitude of which could justify taking them into a separate initiative from the company’s mining ventures which historically have been its core business.

Philex is studying the possible structures or business options that could enable it to further enhance the strategic value of its oil and gas assets to the full advantage and its stockholders.

Meanwhile, Philex reported a net income of P1.1 billion for the first half of 2009, down 49% from last year's P2.2 billion. It blamed the decline mainly on lower volumes and the expiration of the Padcal operations’ income tax holiday.

Net operating revenue dropped to P4.1 billion from P5.9 billion as copper revenue decreased by 51% to P1.7 billion from P3.6 billion, brought about by the decline in copper metal price per pound and lower metal production.

The company said its provision for income tax in 2009 increased to P492.1 million from P258.9 million in 2008 after the full statutory income tax rate became applicable beginning January 1, 2009 with the expiration of the company’s income tax holiday on its Padcal operations.