Philex Mining Corporation, one of the oldest and largest gold and copper producers in Southeast Asia, and a leader in right and principled mining, increased its Core Net Income from Php 865 million for the nine months ended September 30, 2020, to Php 1.162 billion for the full year 2020, which is 645% higher than the core net income of Php 156 million in 2019.
Sustained increasing trend of prices of Gold and Copper continue to drive the revenues of the Company. Realized Gold prices was at its highest level in 3Q2020 reaching $1,915 per ounce, while Copper reached $3.43 per pound in December 2020. With favorable metal prices coupled with higher metal output, total operating revenues, net of smelting charges, reached Php7.834 billion, a 15% jump from 2019 operating revenues of Php6.790 billion.
PRODUCTION
Tonnage milled from 1Q2020 to 3Q2020 averaged at 1.985 million tonnes per quarter while 4Q2020 tonnage slightly declined to 1.881 million tonnes, or a 5% decline from 3Q2020 tonnage of 1.985 million tonnes attributable to the 3-day temporary suspension of underground operations.
The shutdown was necessary to undertake Covid mass testing of miners and contain the local transmission of the virus. Gold and copper production was on an upward trend from 1Q2020 to 3Q2020, but also slightly declined in 4Q2020 as a result of lower tonnage milled. Despite the Covid19 related temporary shutdown, the Company produced a total of 56,000 ounces of Gold and 26.379 million pounds of Copper, higher than full year 2019 production of 53,064 ounces of Gold and 25.737 million pounds of Copper.
OPERATING COSTS AND EXPENSES
The continued implementation of efficient operating practices and prudent cost management contributed to the overall positive results for 2020. The Company’s full year operating cost and expenses declined by 9% from Php6.917 billion in 2019 to Php6.298 billion in 2020.
The Company continues to generate positive cash flow from its operations and implemented a debt reduction program to lower its short term debts to $31 million as of December 31, 2020, from $46 million as of December 31, 2019.
With a very good performance in 2020, the Board also declared a cash dividend of 5.9 centavos per share to shareholders on record as of February 24, 2021, which will be paid on March 26, 2021, representing 25% of 2020 core net income.
OUTLOOK
The Company finished strong in 2020 despite the challenges brought about by the Covid19 pandemic. As an export oriented business, the Company was one of the several export oriented companies that was given full support by both the local and national government agencies that allowed its operations to continue.
The favorable and continuing positive trend of the prices of Gold and Copper provide the backdrop for the Company to take advantage of this favorable business environment, operate profitably and pursue its mission for the benefit of its stakeholders.
The Philex Management will continue to focus on its strategy of optimizing the Padcal Mine while aggressively pursuing and working with its financial advisor to identify and sign up a strategic business partner to put its Silangan project into stream.
According to Eulalio B. Austin Jr., Philex President and CEO, “The Pandemic has slowed down the global business climate and M&A transactions. The various interested investors to our Silangan project is no exception. However, the recent positive trend in prices, and long term outlook for gold and copper have significantly increased the interest of the global investors in our Silangan project amid pandemic. We are closely working with our financial advisor to bring Silangan into operation in the soonest possible time and at the same time optimizing the Padcal Mine.”
“Covid-19 has painfully reminded us that businesses operate in a Darwinian landscape,” according to Manuel V. Pangilinan, Philex Chairman. “It will not be the biggest or smartest who will survive – but those who best adapt to change. Thankfully enough, Philex as an export-oriented company was permitted to operate by government despite the community quarantine, providing revenues to allow us to concentrate on our three most important constituents: the health and financial well-being of our employees; maintaining service excellence to our customers; and assistance to the government in caring for those most affected.”
Pangilinan emphasized that in spite of the challenges brought by the pandemic, Philex shall continue to provide value to its shareholders. “Mining shall and always will be a key economic driver towards inclusive national growth. Mining has the potential to provide much-needed revenue for the government’s response against the pandemic, particularly in the purchase of vaccines, if it is allowed to flourish.”
