* Mine's commercial operation to start 2022
* Mineral deposit estimates revised higher
* Partners can take up to 40% equity share
(Adds details on equity sharing, project financing, quote in
paragraphs 3,7,8 and 9)
MANILA, Aug 1 (Reuters) - Philippines' copper and gold
producer Philex Mining Corp PX.PS said on Thursday it is
seeking possible strategic partners for a long-delayed $1.1
billion mine project in the south of the country that it hopes
to fully develop by 2022.
The Silangan project, originally slated to begin production
by 2018, was hit by a ban on new open-pit mining introduced in
2017 as the government in one of the world's top copper, gold
and nickel producers stepped up environmental protection.
Philex, which has a market capitalisation of about $330
million, didn't identify potential partners by name but said it
is looking at 60% to 40% equity-sharing arrangement.
The mine is scheduled to be Philex's biggest source of
revenue after the closure of its 61-year-old Padcal mine in the
north. Located in Surigao del Norte province in Mindanao, Silangan
is a large-scale project composed of three ore prospects,
Boyongan, Bayugo and Kalayaan. Based on latest estimates by
Philex, it has 571 million tonnes of mineral resources, up 43%
compared to the previously declared levels of 398 million
tonnes.
Philex said on Thursday it would earmark around $750 million
for the development of the Boyongan ore body, and has appointed
J.P. Morgan for equity investment and Japan's Mizuho Financial
Group Inc for project financing.
The equity portion could be as much as $300 million to $350
million, while $400 million would account for debt financing,
Philex Chairman Manuel Pangilinan said in a media briefing.
"Nothing's been fixed yet," he said, when asked about the
identity of a potential partner. "I think some time in Q2 next
year the financing for the project will close."
Philex has so far spent 18 billion Philippine pesos ($352
million) for pre-development works, Pangilinan said.
The miner said it was working closely with regulators for
the issuance of final operating permits for underground mining.
"Silangan is expected to yield high-grade mineable ore
grades of 0.63% for copper and 1.20 grams per tonne for gold,"
it said, adding that the Boyongan deposit has an initial
estimated mine life of 22 years.
The second phase, which will involve the Bayugo deposit, is
scheduled to undergo a preliminary feasibility study for
underground sub-level cave mining this year, the company said.
"Bayugo is expected to be mine-ready as early as the fifth
year from the start of Boyongan's commercial operations," it
said.
($1 = 51.13 Philippine pesos)