FIRST PACIFIC COMPANY LIMITED 第一太平有限公司
(Incorporated with limited liability under the laws of Bermuda)
Press Release
Wednesday, 28 October 2015
The attached press release was released today in Manila by Philex Mining Corporation ('Philex') (PSE: PX), in which First Pacific Group holds an economic interest of approximately 31.2%*.
Philex is a Philippine-listed company engaged in the exploration and mining of mineral resources and, through a listed subsidiary Philex Petroleum Corporation (PSE: PXP), in oil and gas exploration.
Further information on Philex can be found at www.philexmining.com.ph
* Two Rivers Pacific Holdings Corporation, a Philippine affiliate of First Pacific, holds an additional 15.0% economic and voting interests in Philex.
* * *
For further information, please contact:
John Ryan Tel: +852 2842 4355
Head of Investor Relations Mobile: +852 6336 1411 Executive Vice President
Group Corporate Communications
Sara Cheung Tel: +852 2842 4336 Vice President
Group Corporate Communications
PRESS RELEASE
HIGHLIGHTS
3Q2015 PRODUCTION HIGHEST YEAR-TO-DATE
9M2015 CORE NET INCOME AT P811 MILLION (9M2014: P901 MILLION)
AVERAGE GOLD AND COPPER PRICES AT FIVE-YEAR LOWS DURING THE PERIOD; 9M2015 GOLD PRICES DOWN BY 10% AND COPPER BY 19% FROM LAST YEAR
9M2015 PARENT COMPANY DEBT REPAYMENT TOTALLED US$21.8 MILLION
ADDITIONAL 20 MILLION TONNES OF RESERVES TO EXTEND PADCAL LIFE OF MINE TO CY2022
SILANGAN'S DEFINITIVE FEASIBILITY STUDY TO BE COMPLETED IN 1Q2016
Manila, Philippines - The Board of Directors of Philex Mining Corporation (PSE:PX) (the 'Company' or 'PX') today announced that operations in the first nine (9) months of 2015 yielded a Core Net Income of P811 million (9M2014: P901 million) due to depressed metal prices.
Similarly, Reported Net Income came in at P756 million (9M2014: P951 million) while Net Income Attributable to Equity Holders of the Parent Company amounted to P851 million (9M2014: P1.205 billion) as last year's figures were boosted by the gain on the sale of the Pasig property in July 2014.
Production
The third quarter of 2015 recorded the highest metal production statistics for the year. For reference, the average quarterly metal output for 9M2015 was 8.57 million pounds for copper and 27,199 ounces for gold. In the third quarter alone, copper production rose by 2 percent to
8.82 million pounds (3Q2014: 8.64 million pounds) while gold output rose 5 percent to 27,910 ounces (3Q2014: 26,458 ounces). Operational enhancements and equipment upgrades resulted in improved metal recovery rates.
Meanwhile, Padcal mine operated for 269 days in the first nine months of 2015, the same number of days as last year, and milled 6.89 million tonnes of ore (9M2014: 7.16 million tonnes). The tonnage translated to 25.7 million pounds of copper produced (9M2014: 26.8 million pounds) as copper grades were lower at 0.205% (9M2014: 0.215%). Meanwhile, gold production reached 81,599 ounces (9M2014: 78,744 ounces) with gold grades slightly improving to 0.440 grams/tonne (g/t) (9M2014: 0.438 g/t).
Revenues
Revenues for the first nine months of 2015 were P4.366 billion from gold (9M2014: P4.493 billion) and P2.752 billion from copper (9M2014: P3.549 billion) as average realized prices for gold went down by 10 percent to US$1,171 per ounce (9M2014: US$1,299 per ounce) while average copper prices fell by 19 percent to US$2.45 per pound (9M2014: US$3.03 per pound),
offsetting the reported higher production. These price levels were the lowest recorded in the last five years and touched their lowest points in August 2015.
Revenues from petroleum and other sources were mainly affected by lower output from Galoc Phase II and the 45 percent drop in average crude prices to US$58.7/barrel from US$105.8/barrel last year, resulting in the decline in petroleum revenues to P118.8 million (9M2014: P275.5 million). Meanwhile, revenues from silver amounted to P55.4 million (9M2014: P60.5 million).
Total consolidated revenues for the period amounted to P7.292 billion (9M2014: P8.378 billion).
Costs and Expenses
The Company is relentless in its pursuit of managing costs and reducing expenses to cushion the impact of depressed metal prices in the world market. As a result, consolidated operating cost and expenses in the first nine months of 2015 were 13 percent lower year-on-year at P5.612 billion (9M2014: P6.430 billion). Specifically, cash production costs declined by 12 percent to P3.525 billion (9M2014: P3.989 billion) while general and administrative expenses decreased by 28 percent to P533.2 million (9M2014: P737.6 million).
During the nine month period, the Parent company repaid a total of US$21.8 million in debt. This brought total debt to US$74.5 million (P3.482 billion) as of end-September 2015 from US$96.3 million (P4.308 billion) as of end-December 2014.
Outlook
Meanwhile, an engineering study conducted on the mineral resource estimates from the 800-600 meter level (ML), based on our March 2015 disclosure, identified an additional 20 million tonnes of ore reserves that will extend Padcal's life of mine by two more years from 2020 to 2022.
'The validation of additional reserves in the 800-600ML is indeed a very welcome development for the Company. Aside from extending Padcal's life-of-mine, the incremental reserves also enhance the Company's value and provide us with more flexibility before the Silangan project comes on stream,' Philex President and CEO Eulalio B. Austin, Jr. said.
With respect to the Silangan project, 'We are currently evaluating several techniques on waste materials handling and refining our mine design that will enable us to develop the Silangan project into an efficient and environment-friendly mine operation. These initiatives will extend the completion of the project's definitive feasibility study (DFS) to the first quarter of 2016 from our original projection this year,' said Yulo E. Perez, President of Silangan Mindanao and Mining Co., Inc. (SMMCI).
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For further information, please contact: Danny Y. Yu
Chief Financial Officer
Telephone: 631-1381 loc 289 Email: dyyu@philexmining.com.ph
Rolli S. Bondoy Investor Relations
Telephone: 631-1381 loc 533
Email: rsbondoy@philexmining.com.ph
PHILEX MINING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION(Amounts in Peso Thousands, except Par Value Per Share)
September 30 | December 31 | |
2015 | 2014 | |
ASSETS | (UNAUDITED) | (AUDITED) |
Current Assets | ||
Cash and cash equivalents | 2,542,731 | 5,231,892 |
Accounts receivable | 405,299 | 1,055,864 |
Inventories | 1,657,965 | 1,858,220 |
Derivative assets | - | 7,766 |
Other current assets | 1,474,833 | 1,376,741 |
Total Current Assets | 6,080,828 | 9,530,483 |
Property, Plant and Equipment - net | 7,085,513 | 7,138,912 |
Available-for-sale (AFS) financial assets | 490,727 | 906,681 |
Goodwill | 1,238,583 | 1,238,583 |
Deferred income tax assets | 8,502 | 8,224 |
Deferred exploration costs and other noncurrent assets | 28,613,420 | 25,817,465 |
Total Noncurrent Assets | 37,436,745 | 35,109,865 |
TOTAL ASSETS | 43,517,573 | 44,640,348 |
Loans payable - current | 3,481,590 | 4,307,720 |
Accounts payable and accrued liabilities | 1,502,445 | 1,795,755 |
Income Tax Payable | 129,920 | 47,423 |
Dividends payable | 480,395 | 488,818 |
Provisions and subscriptions payables | 477,525 | 883,102 |
Total Current Liabilities | 6,071,875 | 7,522,818 |
Deferred income tax liabilities - net | 3,951,689 | 3,859,141 |
Bonds payable | 6,168,345 | 5,947,366 |
Pension obligation | 27,529 | 43,585 |
Provision for losses and mine rehabilitation costs | 356,521 | 225,618 |
Total Noncurrent Liabilities | 10,504,084 | 10,075,710 |
Total Liabilities | 16,575,959 | 17,598,528 |
Capital Stock - P1 par value | 4,940,399 | 4,940,399 |
Additional paid-in capital | 1,141,201 | 1,117,627 |
Retained Earnings Unappropriated | 5,462,506 | 4,712,032 |
Appropriated | 10,000,000 | 10,000,000 |
Net unrealized loss on AFS financial assets | (289,590) | (64,010) |
Equity conversion option | 1,225,518 | 1,225,518 |
Cumulative translation adjustments | 99,570 | 37,370 |
Net revaluation surplus | 1,611,397 | 1,611,397 |
Effect of transactions with non-controlling interests | 23,957 | 19,084 |
24,214,958 | 23,599,417 | |
Non-controlling Interests | 2,726,656 | 3,442,403 |
Total equity | 26,941,614 | 27,041,820 |
TOTAL LIABILITIES & EQUITY | 43,517,573 | 44,640,348 |
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