Shareholders approve P12.3-B Philex Mining stock rights offering

(Updated 7 p.m.) Shareholders of Philex Mining Corp. on Tuesday approved a P12.3 billion stock rights offer, the proceeds of which will be largely alloted to the Silangan platinum project in Surigao Del Norte and the construction of a new tailings pond in Padcal gold and copper mine in Benguet. "We spend about P5 billion a year for Silangan. So the bulk of it... roughly about 60 percent... will go to Silangan project up to middle of 2015," chairman Manuel V. Pangilinan told reporters at the sidelines of a special stockholders' meeting in Ortigas Center. Pangilnan noted the "proceeds will be applied mainly to the continued development of Silangan project in Surigao del Norte and for the development of a new tailings pond in Padcal in Benguet where, if we continue to operate up to 2020, it needs additional tailings pond." In a statement, president and CEO Eulalio B. Austin Jr. said the Padcal tailings pond spillway will be completed while June while "clean up of the Balog Creek is now 98 percent completed." In August 2012, one of the tailings ponds in Padcal broke at the height of enhanced monsoon rains forcing the company shut down the mining operations, and the government fined Philex P1.034 billion for 20.6 million metric tons of mine waste that escaped into the environment. The company settled the fine last Feb. 18. For the 2013 stocks rights offering Philex Mining HSBC as sole arranger. No date has yet been set for the stock rights offer which will happen this year, Pangilinan noted. "We have to finalize with bank, udergo process with PSE, SEC and the board to review circular... but hopefully within the year," he said. On Tuesday, the Philex Mining board of directors board also approved the first quarter earnings report. The miner posted a core net income of P132 million and a net income of P403 million in the first three months of the year. "The results reflect only 23 to 24 days of operations of Padcal because we were allowed to operate March 8. For January and February, there were no operations," Pangilinan said. The net income included proceeds from Padcal mine's insurance settlement. "The P1.017 billion proceeds from the settlement of the company’s pollution liability insurance claim relative to the tailings pond incident at the Tailings Storage Facility 3 of the Padcal mine substantially covered the losses in the first two non-operational months," the company noted in a statement. After resuming temporary operations at Padcal, revenues reached P889 million. Also, P159 million in operating income was included in the consolidated net profit of P403 million. "The results reflect only 23 to 24 days of operations of Padcal because we were allowed to operate March 8. For January and February, there were no operations," Pangilinan said. As for the full operations of Padcal, Pangilinan noted "it is up to government... and the mine is on temporary operations until sometime towards the end of June." In the first quarter of 2012, core net income amounted to P1.330 billion while reported net income amounted to P1.268 billion. A total of 611,801 tons were milled from the resumption of operations to the end of the first quarter of 2013, producing 7,610 ounces of gold and 2.434 million pounds of copper, the miner said — VS, GMA News