Philex spending P8B for Silangan project in Surigao for 2013

MAKATI CITY (MindaNews/16 June)— Philex Mining Corp. is spending P5 to 8 billion this year for the exploration and development works at its Silangan project in Surigao del Norte, businessman Manuel V. Pangilinan said on Friday.

Pangilinan told reporters after the annual stockholders’ meeting of the Philippine Long Distance Telephone Co. that the Silangan project is on track for its targeted commercial production in 2017.

“At the moment, we’re building a decline, which is the most important step [for the mining project’s commercial operation],” said Pangilinan, who also chairs Philex.

The mining method we’ll use is block caving, an underground method similar to the Padcal project in Itogon, Benguet and not open-pit method like the Tampakan project in South Cotabato, the businessman said.

The controversial Tampakan project, which straddles the provinces of South Cotabato, Sultan Kudarat and Daval del Sur, is being hounded by the open-pit ban imposed by the South Cotabato provincial government.

Philex has a minor interest at the Tampakan project through the stake of Australian firm Indophil Resources NL. Majority of the controlling equity at the Tampakan project is owned by the merged Glencor Xstrata plc.

Last year, Philex was fined by the government with at least P1 billion after Padcal’s tailings pond leaked.

Pangilinan said the total cost to bring the Silangan project into commercial operation would amount to US$1 billion.

Last year, Philex spent some P10 billion for exploration and development works at the Silangan project, he added.

Pangilinan noted that the ores at the Silangan project will be mined using drilling and explosives to break the rocks into smaller pieces.

The Silangan project combines the development of the Boyongan and Bayugo deposits, which comprise gold, copper and silver.

As of July 2011, the combined measured and indicated mineral resource for Boyongan is 273 million tons of 0.52 percent copper and 0.72 grams per ton (g/t) gold and, for Bayugo, 125 million tons of 0.66 percent copper and 0.66 g/t gold, a company study showed.

In February 2009, Philex consolidated its interest in Silangan project by purchasing the remaining 50 percent equity interest held by Anglo American Exploration BV and Anglo American Exploration (Philippines) Inc. for a consideration of $55 million.

The project is covered by Mineral Production Sharing Agreement 149-99-XIII and Exploration Permit XII-03.

The portal development for the Silangan project started in April 2011 while the first blast was done on Aug. 10, 2011, the company said. (Bong S. Sarmiento/MindaNews)