Philex gets $200-million loan from shareholder

PHILEX Mining Corp., the country’s biggest mining company, said that its major shareholder First Pacific Co.Ltd. has agreed to provide a $200-million aggregate facility to finance its current operations.

In a disclosure to the Philippine Stock Exchange, Philex said that First Pacific, through an indirect wholly owned subsidiary, has granted a $200-million loan that will fund the company’s current operations, the preparatory activities prior to the resumption of operations, and the remediation and clean-up programs at the Padcal mine in Benguet province.

Philex also said that a substantial portion of the proceeds of the facility would be applied to partially fund the requirements of its Silangan mine in Surigao del Norte to ensure its continued implementation, in accordance with the company’s commitment to the Philippine government.

“The total and unwavering commitment of the Philex stakeholders, management and personnel will ensure the successful resumption of our operations and the implementation of our broadbased and comprehensive remediation and cleanup programs,” said Eulalio Austin Jr., Philex president and chief operating officer.

Austin noted that Philex is rehabilitating and strengthening the existing tailings pond and has commenced the construction of an open spillway, which will replace the existing penstock system for water management.

He said that they completed the plugging of penstock A, which drains water to tunnel A, as well as the sealing of the said tunnel at the Padcal mine.

With this, the company will proceed with the construction of an open spillway at the Tailings Pond No. 3 ( TP3), rehabilitation of the said pond, building of a new tailings pond and remediation activity in polluted areas.

Austin said that the company’s consultant, Golder Associates Pty Ltd., is studying the possibility of building a cofferdam to strengthen the main dam at TP3.

He added that Philex plans to resume its regular mining and production operations by the end of the second quarter of 2013, subject to appropriate approvals from the relevant government agencies.

In an interview, Leo Jasareno, Mines and Geoscience Bureau (MGB) director, said that they have yet to receive a final cleanup and rehabilitation plan from Philex— more than three months after its tailings pond broke down.

He said that the company have requested the MGB for an extension of the submission, noting that they expect the final cleanup plan by November 22.

“Philex is a big mining company, and having no immediate rehabilitation or cleanup plan after three months, for me, is not a good thing,” Jasareno added.

But despite delays in the submission of the clean up plan, the MGB chief said that they will ask Philex to implement it immediately once it was found “satisfactory.”