Vancouver — Despite higher production and increased grades at its Bulawan mine, low gold prices are prompting Philex Gold (PGI-V) to consider closing its sole operation in the Philippines.
The junior reported a loss of US$358,000, or 1 per share, in the second quarter of 2001, compared with a loss of US$3.2 million, or 8 per share, in the corresponding period of last year. Revenues jumped to US$3.3 million from US$2.6 million a year ago.
For the first six months of the year, Philex lost US$2.9 million, or 7 per share, on revenues of US$8.1 million, compared with a loss of US$5.9 million, or 15 per share, on revenues of US$5.9 million in the first half of 2000. Driving the losses was a weak gold price. The junior received an average realized price of US$265 per oz. gold, compared with US$295 in 2000.
Production from the Bulawan operation on the island of Negros hit 12,605 oz. gold in the latest quarter, compared with 9,057 oz. in the second quarter of 2000. For the first six months of the year, the operation yielded 30,670 oz. gold, a significant jump from the 20,612 oz. produced in the corresponding period last year. The rise is attributed to an increase in ore grade to 2 grams gold per tonne from 1.5 grams in the second quarter of 2000.
Due to historically low gold prices, Philex is considering the suspension of operations at the mine. A decision is expected during this quarter.
On the exploration front, the junior’s joint-venture partner Anglo American (AAUK-Q), has four rigs turning on the promising Boyongan copper-gold prospect on the southern island of Mindanao.
The latest results include hole 18, which tallied 856 metres grading 0.49% copper and 1.57 grams gold.
The major can earn 40% of the property by spending US$2.2 million and then 70% by completing a bankable feasibility study.
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