Philippines’ copper and gold producer Philex Mining Corp said on Thursday it is seeking possible strategic partners for a long-delayed $1.1 billion mine project in the south of the country that it hopes to fully develop by 2022.
The Silangan project, originally slated to begin production by 2018, was hit by a ban on new open-pit mining introduced in 2017 as the government in one of the world’s top copper, gold and nickel producers stepped up environmental protection.
Philex, which has a market capitalisation of about $330 million, didn’t identify potential partners by name but said it is looking at 60% to 40% equity-sharing arrangement.
The mine is scheduled to be Philex’s biggest source of revenue after the closure of its 61-year-old Padcal mine in the north.
Located in Surigao del Norte province in Mindanao, Silangan is a large-scale project composed of three ore prospects, Boyongan, Bayugo and Kalayaan. Based on latest estimates by Philex, it has 571 million tonnes of mineral resources, up 43% compared to the previously declared levels of 398 million tonnes.
Philex said on Thursday it would earmark around $750 million for the development of the Boyongan ore body, and has appointed J.P. Morgan for equity investment and Japan’s Mizuho Financial Group Inc for project financing.
The equity portion could be as much as $300 million to $350 million, while $400 million would account for debt financing, Philex Chairman Manuel Pangilinan said in a media briefing.
“Nothing’s been fixed yet,” he said, when asked about the identity of a potential partner. “I think some time in Q2 next year the financing for the project will close.”
Philex has so far spent 18 billion Philippine pesos ($352 million) for pre-development works, Pangilinan said.
The miner said it was working closely with regulators for the issuance of final operating permits for underground mining.
“Silangan is expected to yield high-grade mineable ore grades of 0.63% for copper and 1.20 grams per tonne for gold,” it said, adding that the Boyongan deposit has an initial estimated mine life of 22 years.
The second phase, which will involve the Bayugo deposit, is scheduled to undergo a preliminary feasibility study for underground sub-level cave mining this year, the company said.
“Bayugo is expected to be mine-ready as early as the fifth year from the start of Boyongan’s commercial operations,” it said.