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Philex Mining doubles income projections for this year

August 11, 2009 10:57pm
Philex Mining Corp., one of the country’s largest miners, has doubled its annual income projections for this year as it expects higher gold and copper prices.

Instead of the previous forecast of P1.5 billion, the company is expecting to earn P3 billion this year, still higher than profits of P2.8 billion in 2008.

Its higher projection is based on the currently prevailing level of metal prices at $950 per ounce gold and $2.50 per pound copper, Philex said in a disclosure to the Philippine Stock Exchange (PSE).

However, Philex disclosed a net income of P1.1 billion for the first half of 2009, 49-percent lower than the P2.2 billion net income for the same period last year, mainly due to lower volumes and the expiration of the Padcal operations’ income tax holiday.

Net operating revenue declined to P4.1 billion from P5.9 billion in 2008 as copper revenue decreased by 51 percent to P1.7 billion this semester from P3.6 billion last year. This was brought about by the decline in copper metal price per pound to $2.18 from $3.60 and lower metal production at 17.6 million pounds from 21.3 million pounds.

The second quarter of 2009 generated 22-percent lower net operating revenue of P2.2 billion compared to P2.9 billion last year, similarly as a result of the 43-percent decrease in copper operating revenue from lower price per pound copper at $2.05 from $3.63 and lower production volume at 8.5 million pounds from 10.4 million pounds for the same quarter last year.

Gold revenue though was 11-percent higher as gold price per ounce improved to $910 against $840 last year, even as production volume decreased to 31,497 ounces from 34,970 ounces.

Lower marketing charges by 11 percent partly reduced the impact of lower net operating revenue. This quarter’s net income from operations was lower at P762.2 million from P1.5 billion last year.

Philex has also disclosed the extension of its Padcal mine's projected operating life from 2014, as previously declared, to 2017, based on the proved reserves of the mine as of June 30, 2009 of 74 million tons, at assumed metal prices of $800 per ounce gold and $2.00 per pound copper and at copper equivalent cut-off of 0.36 percent.

“Please note that none of the above projections take into account any of the company's oil and gas projects, especially the recently announced offshore oil discovery in Vietnam of Pitkin Petroleum in which the company is a 21.1-percent shareholder, and the Sampaguita natural gas discovery in the northwest coast of Palawan under GSEC 101 which is pending conversion into a service contract for further exploration," the company added.

“It is the company’s view that these oil and gas properties have substantial value the magnitude of which could justify taking them into a separate initiative from the Company’s mining ventures which historically have been its core business," it added.

Philex is also studying the possible structures or business options that could enable it to further enhance the value of its oil and gas assets to the full advantage and its stockholders. - GMANews.TV
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