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Philex ups capital to P8B

Stockholders of Philex Mining Corp. have approved the plan to increase the company’s authorized capital to P8 billion from P5 billion as it prepares to develop its high-grade copper and gold mine in Surigao del Norte.

Based on company estimates, it needs as much as $500 million to develop the Boyongan copper-gold project in Surigao del Norte.

Philex president Walter Brown said the company was able to get the votes needed to push through with the planned increase in capital stock only after “great difficulty.”

“[In the end], there was a meeting of the minds. All stockholders agreed that it’s in the best interest of the company to vote for it,” said Brown, who earlier noted “unusual difficulty” in getting proxies for the special stockholders’ meeting.

“We’re going to be developing our Surigao property so we may need additional money. We don’t know how buoyant the market will be. If the prices go up, we may be able to fund it on our own. But if we need additional investment, then we’ll be able to issue new shares,” Brown said.

Philex assumed full control of the 5,184-hectare mine after acquiring 50-percent equity from Anglo American Exploration.

“We want to be able to do it if we need to. We really don’t need to at the moment, but we need flexibility,” he said.

Brown also said that if Philex would issue new shares, the shares would be issued proportionately to all shareholders.

In the past, the company had asked for a waiver of preemptive rights from existing stockholders but this was opposed by the state-owned Social Security System.

As such, if the group of Manuel V. Pangilinan wanted to buy additional shares, he said he could do that by buying from the open market.

“We won’t issue shares unless we need the cash,” he said.

To date, he said Philex was still sitting on a lot of cash. The cash hoard is estimated at about P10 billion as of end-2008.

Philex to date has 3.88 billion in outstanding shares and a market capitalization of P22.9 billion based on yesterday’s closing price of P5.80 a share. (inquirer.net)

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