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Philex slates P13-B rights offer

Philex Mining Corporation is finally pushing through with its planned stock rights offering of common shares to its existing stockholders, raising the size to a maximum of P13.81 billion from the initially planned P12.3 billion.

In a disclosure to the Philippine Stock Exchange, the firm said the Securities and Exchange Commission has already served notice of the filing of Philex’s registration statement which will pave the way for the rights offering to shareholders of record as of October 16, 2013.

The rights offering will be priced on or before October 9 while the offer period will be from October 21 to November 4, 2013. The shares will be listed on November 12, 2013.

Philex has tapped the Hongkong and Shanghai Banking Corporation as sole global coordinator and joint lead underwriter and BDO Capital & Investment Corporation as domestic issue manager and joint lead underwriter. BPI Capital Corporation is also joint lead underwriter.

The firm had to shelve the rights offering since operations at its Padcal mine was still suspended due to a tailings dam spill.

The registration statement was filed last March when government regulators allowed it to temporarily resume operations so it can shore up its tailings dam. The temporary lifting has been extended after its July deadline.

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.

Broken down, it will allot P5.56 billion for payment of loans to FPC’s Kirtman Limited and Asia Link B. V., P350 million to Bank of the Philippine Islands (P250 million) and BDO Unibank (P100 million), and P7.64 billion for capital expenditures.

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.

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.