powerpoint presentation€¦ · 11 challenges first underground mining project in the philippines...
TRANSCRIPT
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Investor Briefing March 2014
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Presentation Outline
Company Background
Strategy
Operations
Philex Petroleum
Financial Performance
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COMPANY BACKGROUND
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Business Structure
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• Incorporated in 1955
• Listed in the Philippine Stock
Exchange under code name PX
• Shares issued : 4,936,966,068
• Market Cap.: ~US$1 billion
PHILEX MINING CORPORATION
Shareholders
• First Pacific 31.2%
• Social Security System 20.5%
• Two Rivers 15.0%
• Philippine (others) 26.0%
• Foreign (other s) 7.3%
Padcal Mine
100% owned • Above 773ML
• Below 773ML
Silangan Project
100% owned • Boyongan
• Bayugo
Other Projects
• Nagtalay /
Bulawan
• Sibutad
Philex
Petroleum
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PADCAL MINE Tuba, Benguet
SILANGAN Surigao del Norte
NAGTALAY/ BULAWAN/LABURAN
Negros Oriental
SIBUTAD Zamboanga
del Norte
Existing and Prospective Mines
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STRATEGY
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• Enhance and maintain high safety standards
• Increase metal production at Padcal
• Declare additional resources at Padcal (both within the existing mine and nearby vicinity)
• Declare additional reserves at Padcal to extend the mine’s life
• Complete
pre-feasibility study for Silangan Project
• Declare mineral reserves for Nagtalay /Bulawan and Sibutad
• Explore strategic partnerships and pursue value-adding acquisitions
7
Strategy
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OPERATIONS
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PRODUCTION:
>100,000 oz of Gold / year
35 million pounds of Copper / year
OPERATING COST: Gold $840 per oz
Copper $2 per pound
MAJOR INITIATIVES
Ongoing program to enhance safety
performance and awareness
Improve operational processes and systems
Implement performance management system
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Padcal Outlook
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Padcal Outlook
CHALLENGES
Permanent lifting of the suspension order
Extending the mine life, which involves
addressing a number of complex issues:
• Regulatory
• Mining engineering
• Geological
OPPORTUNITIES
Exploration work todate indicates rich presence of
additional resources, within the mine site and
nearby vicinity, that can be declared in the future
10
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CHALLENGES
First underground mining project in the Philippines
with high degree of metallurgic complexity
Requires significant resources in financing, manpower
and technical expertise
Estimated project capex of ~US$1.2 billion
OPPORTUNITIES Low cost of production
• US$2.00/lb of copper
• US$900/oz for gold
Annual output of 60Mt/year (~60 years of mine life)
Conclusion of JV with Manila Mining to add 200Mt of ore
MAJOR INITIATIVES
• Declaration of Mine filed with the Philippine mining
authorities in February 2013
• Pre-Feasibility Studies to be completed by mid 2014
Silangan Outlook
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Other Gold Mining Projects
Nagtalay/Bulawan/
Laburan (Negros Occidental)
• Declared resource: 24Mt
• Contained gold: 1.5M ozs
Sibutad (Zamboanga del Norte)
• Declared resource: 17Mt
• Contained gold: 460K ozs
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PHILEX PETROLEUM
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Business Structure
• Incorporated in 2007
• Listed in the Philippine Stock
Exchange under code name PXP
• Shares issued : 1,700,000,000
• Market Cap.: US$300 million
PHILEX PETROLEUM CORPORATION
ENERGY &
HYDROCARBON
Forum
Energy 48.8% owned
Pitkin
Petroleum 50.3% owned
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Philex Petroleum Major Assets
SC 72 • 70% operating interest in SC72 is held
by London listed subsidiary, Forum
Energy
• Current work has been deferred until
2015 due to maritime dispute between
the Chinese and Philippine governments
• A CP report stated a contingent gas
resources of 2.6 tcf and prospective gas
resources of 8.7 tcf
SC 74 (PERC 4 - Area 5)
• 70% operating interest in SC 74
consortium is held by subsidiary Pitkin
Petroleum plc.
• The property is located in Northwest
Palawan
• Awarded by the Philippine government
in February 2013 during the 4th PECR
held in July 2012
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Philex Petroleum Major Assets
SC 75 (PERC 4 - Area 4)
• 50% operating interest in SC 75
consortium is held by Philex Petroleum
• The property is located in Northwest
Palawan basin
• Awarded by the Philippine government
last in January 2014 during the 4th PECR
held in July 2012
Peru Block Z – 38 • 25% participating interest is held by UK
subsidiary, Pitkin Petroleum plc.
• Property located in north west Peru
• 16 prospects and leads identified with
current Net unrisked mean prospective
resources totalling 1.92 billion
barrels of oil
• Expected spud date of 2-well program
on Sept. 2014
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FINANCIAL PERFORMANCE
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GROSS REVENUE, CORE AND
REPORTED NET INCOME (Pbn)
9.1
13.4
16.1
9.1 10.5
1.8 4.2
5.6
1.7 1.5
2.7 3.9 5.8
(0.3) 0.3
2009 2010 2011 2012* 2013**
RevenueCore Net IncomeReported Net Income
Revenue, EBITDA and Pricing
4.2
6.6
8.9
4.0 3.9
46%
49%
55%
44%
35%
30%
35%
40%
45%
50%
55%
60%
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2009 2010 2011 2012* 2013**
EBITDA
EBITDA Margin
EBITDA & EBITDA MARGINS
18
*operated for 7 months
**operated for 10 months
REALIZED PRICES
946
1,217
1,536 1,638
1,297
2.2 3.6 3.7
4.0
3.3
-
1.0
2.0
3.0
4.0
5.0
6.0
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2009 2010 2011 2012 2013
Gold $/oz
Copper $/lb
Revenue and EBITDA
performance driven
by metal prices
Core net income
remains positive
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INCOME STATEMENT HIGHLIGHTS (million pesos)
2013 2012 Inc /
(dec)
Amount
(Pm)
Gross Revenue 10,462 9,137 15% 1,325
Marketing Charges 660 440 50% 220
Cost & Expenses 7,480 5,269 42% 2,211
Income from
Operations 2,322 3,428 (32%) (1,106)
Provision for Tax (763) (548) (39%) (215)
Net Income 312 (311) - 623
Core Net Income 1,508 1,689 (11%) (181)
Reported EPS (Php) 0.069 0.042 64% -
Core EPS (Php) 0.305 0.342 (11%) -
Income Statement
Increase in
production partially
offset by the fall in
metal prices
Core income slightly
below FY2012
FY2013 net income a
turn around from
FY2012 net loss
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Production Cost* Breakdown
37%
31%
21%
5% 6%
Materials and Supplies
Power
Labor
Purchase Contracts
Other expenses
2013
36%
30%
22%
10%
2%
Materials and Supplies
Power
Labor
Purchase Contracts
Other expenses
2012
20
*excludes excise taxes, royalties and HQ expenses
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PRICE AND COST PER UNIT
2013 2012 Inc /
(dec) Amount
Realized Prices
Gold ($/oz) 1,297 1,638 (21%) (341)
Copper ($/lb) 3.27 3.99 (18%) (1)
Production Cost (P/tonne) 714 647 10% 67
Operating Cost (P/tonne) 869 809 7% 60
Break-even
Gold ($/oz) 858 817 5% 41
Copper ($/lb) 2.16 1.99 9% 0.17
Average exchange rate 43.14 42.58 1% 0.56
Prices and Costs
21
*Soure: BusinessWorld 02 January 2014
**31 Dec 2013 vs 31 Dec 2012
Gold spot prices*
in the world market
fell 32%** in 2013
after 12-year bull run
Higher costs related
to remediation and
rehabilitation
expenses
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THANK YOU
End of Presentation