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Philex to push through with stock-rights offer

AFTER months of delay, Philex Mining Corp. is pushing through with its planned P13.81 billion stock-rights offering of common shares to its present stockholders after a notice was issued by the Securities and Exchange Commission (SEC).

The SEC has released the notice of the filing of Philex’s registration statement that will pave the way for the rights offering to shareholders of record as of October 16, 2013.

The notice, issued on September 11, was signed by Justina Callangan, acting director of the SEC’s Corporation Finance Department.

Philex had to shelve the rights offering since the operation of its Padcal mine was still suspended owing to a tailings dam spill.

The registration statement was filed on March 18, when government regulators allowed Padcal mines to temporarily resume operations. The temporary lifting of the suspension of operations was then extended after its July deadline.

The net proceeds from the stock-rights offer will be used to repay the company’s loans from the First Pacific Group, capital expenditures and exploration costs related to existing projects, primarily the Silangan project and the Kalayaan project and other general corporate purposes.

Philex, a company being chaired by Manuel V. Pangilinan, borrowed P2.1 billion from controlling shareholder First Pacific Co. Ltd. in November last year to fund the capital expenditures of its Padcal mine and Silangan project, among others.

The company executed a term loan-facility agreement with an indirect wholly owned subsidiary of First Pacific. The interest bearing loan is unsecured, may be drawn in tranches and is repayable within one year.

Philex Mining earlier said it was on track for the start of production in its Silangan Project in Surigao del Norte by 2017. The project covers the Boyongan and Bayugo deposits, which are currently under pre-feasibility study stage.

In the meantime, the exploration drilling in its Kalayaan Project, also in Surigao del Norte, which adjoins the Bayugo deposit of the Silangan Project, is proceeding on schedule.

The Silangan project aims to produce 35,000 tons to 60,000 tons of mineral deposits per day and the company’s other Greenfield projects are seen to produce about another 15,000 tons per day once they start operations.

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