Philex To Raise P12.3 Billion From Common Stock Rights Offering

Philex Mining Corporation is planning to raise about P12.3 billion from a stock rights offering of common shares to its existing stockholders to repay loans and fund its capital expenditures.

In a disclosure to the Philippine Stock Exchange, the firm said its board of directors has approved the proposed rights offering but the terms and conditions including the final issue size, rights entitlement and offer price will be determined later.

The net proceeds from the stock offer will be used by the company for the repayment of loans from the First Pacific Group, capital expenditures and exploration costs related to existing projects, primarily the Silangan project and the Kalayaan project, and general corporate purposes.

Philex Mining borrowed P2.1 billion from controlling shareholder First Pacific Company Limited last November to fund the capital expenditures of its Padcal mine and Silangan project and for general working capital purposes.

The firm executed a term loan facility agreement with an indirect wholly-owned subsidiary of First Pacific. The interest bearing loan is unsecured, may be drawn in tranches and is repayable within one year.

Philex Mining earlier said it was on-track for the commencement of production in its Silangan Project by 2017. The project covers the Boyongan and Bayugo deposits, which are currently under prefeasibility stage.

In the meantime, the exploration drilling in its Kalayaan Project, also in Surigao del Norte, which is adjoining the Bayugo deposit of the Silangan Project, is proceeding on schedule.

Philex said the additional resources of Kalayaan will increase the total resources of the Silangan Project. Philex said it will make the disclosure of the Kalayaan resources at the appropriate time.

"To date, the studies for the Silangan Project have not revealed any obstacles to the commencement of production by 2017 or any reduction in resource estimates of its potential," Philex Mining stressed.

The Silangan project aims to produce 35,000 to 60,000 tons per day the firm's other Greenfield projects are seen to produce about another 15,000 tons per day once they start operations.

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