Last year was a bitter one for
The Toronto-based company lost US$68.2 million on revenue of US$21.1 million, compared with a loss of US$11.8 million on US$39.7 million in 1997.
Most of loss in each period is due to writedowns. In 1998, the devaluation arose chiefly from low gold prices.
Cash flow between 1997 and 1998 fell from US$3.8 million to US$1.4 million.
Philex pulls nearly all of its gold from the Bulawan mine on Negros Island, Philippines, where 60,477 oz. gold-equivalent were produced in 1998 at a cash cost of US$285 per oz., compared with 1997 production of 115,687 oz.
gold-equivalent at US$184 per oz. The higher costs are primarily a function of the lower output, which in turn is attributed to operating difficulties at the South block.
Philex’s other operation, the Sibutad open-pit operation on Mindanao, yielded 8,015 oz. in 1998, which is slightly less than in the previous year.
Sibutad continues to run at non-commercial rates, so revenue from the mine is credited against project costs.
For the three months ended Dec. 31, 1998, Philex lost US$4 million on revenue of US$5.4 million, compared with a loss of US$16.35 million on US$7.55 million in the year-ago period. This marks the fifth consecutive period in which the company has incurred a loss, with a strengthened Philippine peso contributing to the recent quarterly troubles.
Bulawan cranked out 16,710 oz. in the recent fourth quarter at a cash cost of US$247 per oz. The mine treated 329,085 tonnes of ore, which is 27% more than the previous period. Head grades and recovery rates remained unchanged, at 1.76 grams and 86%, respectively.
Reserves at the troublesome South block are nearing depletion, and at the Central Block they are being replaced. Reserves at the latter are pegged at 4.4 million tonnes grading 2.8 grams gold per tonne.
Sibutad produced 1,821 oz. in the quarter. Mining has been temporarily suspended as a result of heavy rains, though leaching continues.
Philex has sold forward 16,166 oz. gold at an average of US$310 per oz., and has 19,200 oz. in put options averaged at US$285 per oz., with corresponding call options sold at an average of US$310 per oz.
At year-end, Bulawan and Sibutad hosted combined reserves of 10.9 million tonnes averaging 2.35 grams gold per tonne. To conserve cash, exploration activities on both properties have been reduced.
In related news, Philex has enlisted the aid of a subsidiary of
Minorco Exploration can earn a 40% interest in the property by spending $4 million on exploration over five years. The company can acquire an additional 30% by completing a bankable feasibility study on any deposit discovered.
The deal is still subject to final ratification and governmental approval.
Be the first to comment on "Philex posts more losses"