Higher metal prices lift Philex 9-mo earnings by 21%

BusinessWorld

Posted at Oct 28 2010 12:12 AM | Updated as of Oct 28 2010 08:17 AM

MANILA, Philippines - Philex Mining Corp., the country’s largest miner, said yesterday core profits rose by 46% to P2.308 billion from January to September on the back of higher metal prices.

“Greater tonnage of ore milled, higher metal prices and increased revenue from petroleum offset lower ore grades at [the] Padcal gold and copper mine,” Philex Mining said in a statement.

The listed miner said its consolidated net income increased to P2.1 billion from P1.7 billion last year. Third-quarter net income amounted to P1.1 billion, more than first-semester net income of P983.9 million.

Consolidated revenues increased by 27.3% to P8.63 billion from P6.779 billion last year. Copper revenues increased to P3.762 billion from P2.822 billion last year, while gold revenues increased to P4.571 billion from P3.872 billion last year.

Petroleum revenues from subsidiary Forum Energy PLC, meanwhile, jumped to P198.7 million from P24.2 million last year. Wholly owned subsidiary Brixton Energy & Mining Corp. recorded coal revenues of P18.9 million.

“We are gratified that we have now been able to overcome the difficulties encountered in the previous quarters on production, so much so that the third-quarter revenue has posted the highest quarterly level so far in the past five years of the company’s operations, which were actually record years to date in its more than 50 years of operating history,” Manuel V. Pangilinan, chairman of the board and chief executive officer of Philex Mining, was quoted as saying in the statement.

Philex Mining, which is controlled by Hong Kong’s First Pacific Co. Ltd., part owner of the Philippine Long Distance Telephone Co. (PLDT), said core earnings per share increased to P0.4698 in the nine-month period from P0.3248 last year. Reported earnings per share also increased to P0.4329 from P0.3794 last year.

As regards production at the Padcal mine in Benguet province, Philex Mining said ore milled had a lower grade than those milled last year.

The average grade was 0.208% copper and 0.520 grams of gold per metric ton (MT), lower than last year’s 0.234% copper and 0.598 grams of gold per MT.

The lower grade resulted in lower concentrate produced, at 46,920 dry MT from 48,299 dry MT last year, even as ore milled rose to 6.87 million dry MT from 6.10 million dry MT last year.

“Barring unforeseen circumstances, we are confident that we will be able to keep the production level that we have achieved in this quarter up to the end of the year. We may continue to see good if not better ore grades as well,” Jose Ernesto C. Villaluna, Jr., Philex Mining president and chief operating officer, said.

Philex Mining said it benefited from higher metal prices. Despite lower gold production at 90,734 ounces, from 93,963 ounces last year, gold revenues increased to P4.571 billion from P3.872 billion last year.

Copper output was slightly lower at 25.8 million pounds, from 26 million pounds last year. Revenues increased to P3.762 billion from P2.822 billion last year.

“We have been diligent but very rigorous in looking for new properties and other investment opportunities. In the meantime, we are quite focused on getting the Silangan Project closer to the completion of its pre-feasibility study by the first quarter of next year,” Mr. Pangilinan said.

The Silangan copper-gold mine in Surigao del Sur is said to have higher resources than the Padcal mine. The Silangan mine is expected to start commercial operations not later than 2015.

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