Philex needs $740 M to jumpstart Silangan

Philex Mining Corp. is set to invest $740 million more to jumpstart the Silangan copper and gold project as it shifts to the underground method amid uncertainty about government policies.

Philex chairman Manuel V. Pangilinan said the $740 million is on top of the more than $300 million already spent since the exploration of the area.

“We have an idea already, it’s about $740 million to bring it to operations. That is the preliminary estimate,” Pangilinan told reporters.

“So, it is roughly around $1.2 billion to operate the mine assuming the DFS (definitive feasibility study) confirms the viability of the project,” he said.

Prior to the shift, Philex said it would need around $2 billion to sustain the Silangan mine’s life in the next 25 years. With the shift, the firm is expected to spend some more.

The DFS is currently underway and is expected to be completed next month.

“We are positive about it because Silangan appears to be the future of Philex,” Pangilinan said.

“We have appointed a banker to raise the equity with us and another bank to raise the project financing,” he said.

Pangilinan said Philex is willing to invest more in its Padcal copper-gold mine in Benguet should there be opportunities to extend the mine life.

“In principle, we are willing to invest but we have not found enough resources to justify building a new mill and tailings pond. Our working assumption is Padcal will be replaced by Silangan by 2022,” he said.

Philex plans to launch the Silangan project in four phases with the Boyongan mine set to commence operations by 2022.

Silangan’s tenements consist of three deposit areas - Boyongan, Bayugo and Kalayaan, with the latter representing a joint venture with Manila Mining Corp.

The Silangan mine, situated in Surigao Del Norte, is considered one of three bigticket projects that will make the Philippines a major copper producer.

Since last year, Philex has been studying the viability of the project with the removal of the open pit method as the government has yet to decide on whether or not it will keep the ban.