The Philippine government has cleared the path for Philex Mining Corp to proceed with the development of its $1.2 billion Silangan copper-gold mine in Surigao del Norte province. Approval of the project’s development plan paves the way for production to potentially begin in 2018.
In a disclosure to the Philippine Stock Exchange, Philex said it has been given the green light by the Department of Environment and Natural Resources (DENR), through the Mines and Geosciences Bureau (MGB), to proceed with the development of the Silangan copper-gold project.
The Silangan mine in Mindanao represents Philex’s biggest prospective revenue driver when its Padcal mine in the north closes in about 2020 unless it gets a mine extension. According to initial estimates, Silangan’s resources comprise 5 billion pounds of copper and 9 million ounces of gold.
The Silangan project combines the development of the Boyongan and Bayugo deposits, which comprise gold, copper, and silver.
Philex chairman Manuel Pangilinan said the planned to seek loans later this year to finance as much as 70% (up to US$840 million) of the project cost estimated at between $1 billion and $1.2 billion. “To fund the project, we’re looking at 30% equity and 70% debt financing.
“We should finish the feasibility studies during the third quarter and the prospects are pretty good for Silangan, in terms of both the tonnage of the reserve that we estimate of the yield and the grade of copper and gold are quite good,” he said.
Unlike other big mining projects in the Philippines, Silangan is not affected by a local moratorium on approvals for new production but it would be covered by a new tax regime that Congress may legislate on to increase the government’s share of mining revenue.