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Philex mining to implement stock-rights offering in July

Philex Mining Corp. is set to implement its stock-rights offering in July, the proceeds of which would be used to repay its loans to  its controlling shareholder First Pacific Group.

“The stock-rights offer will be contingent on the permanent lifting of the mining suspension,” Manuel V. Pangilinan, Philex chairman and chief executive officer, told reporters.

The company’s Padcal mine in Benguet had no operations in the first two months of the year because of the suspension order. A temporary lifting of the suspension was granted in March this year by the Mines and Geosciences Bureau.

Philex’s operations at the Padcal copper-gold mine was suspended on August 1 after strong rains damaged the mine’s tailings pond. The company has allocated some P1 billion to rehabilitate affected areas.

Philex earlier said it expects to raise some P12.3 billion from the stock-rights offering of common shares to its existing stockholders  to repay to repay loans and fund its capital expenditures, mainly on Padcal mine and Silangan and Kalayaan projects.

It borrowed P2.1 billion worth of one-year term loan from its controlling shareholder First Pacific in November last year.

Philex said it would start production in its Silangan project in Surigao del Norte by 2017. The project covers the Boyongan and Bayugo deposits.

Its exploration drilling in its Kalayaan project, also in Surigao del Norte, that adjoins the Bayugo deposit of the Silangan project, is on schedule, the company said.

Philex added that the additional resources of Kalayaan will increase the total resources of the Silangan project.

For the first quarter of the year, the company said its net income reached P403.3 million, a steep drop from the previous year’s P1.26 billion.

The income, however, came mainly from the $25-million settlement of the company’s claim from its pollution liability insurance resulting from the Padcal incident.

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