Philex posts P865-million core net income for the first nine months of 2020

The Board of Directors of Philex Mining Corp. announced that the company registered a new high quarterly Core Net Income, and ended the first nine months of the year on an encouraging note.

The company posted Core Net Income of P865 million for 9M2020, after generating Core Net Income of P462 million for 3Q2020, significantly higher than the P58 million for the same period last year. The Core Net Income on a year-to-date September basis was significantly above 9M2019’s P39 million. This was due to the increasing operating revenues brought about by favorable gold and copper prices despite the COVID-19 pandemic, and higher gold output mainly from higher ore grades. Core Net Income of P462 million for 3Q2020 rose ahead of the first quarter’s P103 million and the second quarter’s P300 million.

Third-quarter net income figures were also significantly higher compared with the first two quarters of the year. The Q32020 Reported Net Income of P495 million was higher than the P102 million of the first quarter and the P322 million in the second quarter of 2020. Reported net income for 3Q2020 of P495 million was also higher than the P48 million of 3Q2019. This brought 9M2020’s Reported Net Income to P920 million, higher compared with the P439 million for 9M2019.

Production and revenues

Gold output for 3Q2020 at 14,804 ounces was slightly higher by 2% than 3Q2019’s 14,450 ounces. This was mainly due to higher ore grades despite the lower tonnage, while copper production for 3Q2020 of 6.699 million pounds was lower than 3Q2019’s 6.851 million pounds, also due to lower tonnage.

The actual tonnage for 3Q2020 of 1.985 million tons was 7% lower than last year’s 2.134 million tons for the same quarter. Actual blended metal grades for gold of 0.292 g/t and copper of 0.189% were higher than 0.272 g/t for gold and 0.179% for copper for 3Q2019, respectively. Unrelenting efforts are continuously exerted to sustain higher tonnage on a year-to-date basis, and to execute the mining plan and mill operations to achieve better blended metal grades. The actual tons milled for 3Q2020 was at 1.985 million, slightly higher than the first quarter’s 1.969 million tons but lower than the second quarter’s 2.002 million tons.

This was mainly attributed to power outages due to adverse weather condition.

Production results for 9M2020 of 43,136 ounces for gold and 20.240 million pounds for copper were higher by 13% than 9M2019’s gold output of 38,125 ounces and by 7% than copper output of 18.859 million pounds, again mainly due to higher ore grades and higher tonnage. The tonnage for 9M2020 of 5.956 million tons was slightly higher than 5.939 million tons produced for 9M2019.

The third quarter also saw an increase in operating revenues, net of smelting charges, by 22% at P2.174 billion compared to last year’s P1.777 billion, mainly due to the 33% and 11% increase in gold and copper prices, respectively, and 2% higher gold output.

The favorable prices of gold and copper significantly accounted for the company’s higher revenues, bringing the year-to-date operating revenues, net of smelting charges, to P5.854 billion, 20% higher than last year’s P4.866 billion. The increase of 13% and 7% in gold and copper output, respectively, also contributed to higher revenues.

Operating costs and expenses

Operating costs and expenses for 3Q2020 stood at P1.582 billion, 6% lower than the P1.677 billion of the third quarter of 2019. 9M2020 operating costs and expenses were pegged at P4.686 billion, down from the previous year’s P4.809 billion. This reduction was due to the continuous effort of the company to minimize operating costs and rationalize expenses, and manage the global impact of the pandemic on costs of commodities and products.

Outlook

The global demand for mineral products in this age of the pandemic will continue to grow, thus creating favorable momentum for metal prices to maintain healthy levels.

This positive outlook is further bolstered by recent Government pronouncements “encouraging the revival of the mining industry” as one means to recover from the economic effect of this pandemic.

“The favorable outlook both at the global and national levels will benefit the continued operations of the Padcal mine and will likely attract interest of investors in the Silangan Project: As for the full year outlook, we expect 2020 to show substantially higher profits versus 2019,” according to Eulalio B. Austin, Jr, president and CEO.