Philex Mining Corp is allocating the majority of its capital expenditure budget this year to development of the Silangan Copper-Gold Project in Surigao del Norte. The company has allocated P3.2 billion to Silangan with a further P600-800 million for the Padcal operations in Benguet and other exploration expenses.
Chairman Manuel V Pangilinan said the budget for Padcal can be financed through operational cashflows, but funding for Silangan may require other sources. “Silangan mine is a big number for Philex, so we may have to borrow.”
Philex is pre-developing the Silangan project through wholly-owned subsidiary Silangan Mindanao Mining. It is expected to go into commercial production by 2018. A pre-feasibility study is expected to begin shortly which will determine if Philex will need a partner for the project, and if open-pit mining is better than underground mining. Open-pit mining would entail huge savings compared to underground mining.
Philex, the Philippines’ top gold and copper producer, believes that open pit mining could reduce the cost of the project by as much as two-thirds.
At Padcal Philex is studying the possibility of extending mine life beyond 2020. “Survey efforts are being done to determine additional resources. I believe there's a good chance we can discover more resources there,” Manuel Pangilinan said.
His comments about Padcal follow the recent Formal Lifting Order on the suspension of Padcal Mine operations from the Pollution Adjudication Board of the Department of Environment and Natural Resources. The order was issued after Philex settled its environmental obligations with the government under the Clean Water Act of 2004 on June 6 after rehabilitating waterways affected by a tailings spill.
Philex recently paid a P188.6 million penalty for violating the Clean Water Act of 2004, which is on top of the P1.034 billion the company settled with the Mines and Geosciences Bureau in February 2013 for violating the 1995 Mining Act. In August 2012 a tailings pond at Padcal caved in at the height of historically unprecedented rainfall brought about by two successive typhoons and released more than 20 million tonnes of mine waste that polluted Agno River and Balog Creek. www.philexmining.com.ph