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4
Ownership Structure
First Pacific Company Limited
Local Publicly Owned
Social Security System
Foreign Publicly Owned
Two Rivers Pacific Holdings
Corporation
Padcal mine is a home to more than 2,000
employees and 15,000 people in a community of
diverse ethnic and cultural backgrounds 8 8
Operating Highlights
2016 2015 2014
Tonnes Milled ('000) 9,359 9,199 9,506
Production
Gold – ozs 103,304 107,887 105,008
Copper - lbs ('000) 34,961 34,104 35,391
Ore Grade
Gold - gms/DMT 0.417 0.438 0.438
Copper - % 0.206 0.205 0.212
Prices
Gold (US$/ounce) 1,254 1,147 1,270
Copper (US$/pound) 2.35 2.29 2.98
10
Financial Highlights
(in PHP million) 2016 2015 2014
Gross Revenue 10,272 9,189 10,898
Cost & Expenses 6,900 7,011 8,415
Income from
Operations 2,478 1,341 1,633
Net Income 1,568 776 703
Core Net Income 1,657 905 1,122
EBITDA 3,854 2,779 3,320
Operating margin 24% 15% 15%
EBITDA Margin 38% 30% 30%
11
12
Following the 2012 incident due
to 2 days of incessant rains,
Philex employed the spillway
system in Padcal, which follows
strict international standards
and designed by world-renowned
Australian dam developers
• Consists of embankment
(main and offset dikes)
to contain tailings and
penstock to manage excess
water in containment area
• Embankment is made of
earth backfill while penstock
is a concrete structure
complete with an
underground tunnel
• In August 2012, tailings
discharged in penstock A
overflowed due to heavy
rains
Old Penstock System
• Penstock A was sealed in
September 2012
• Void was filled the fastest
and safest way using tailings
from operations
• Offset dike was reinforced
with monitoring systems
installed
• World-renowned TSF experts
tapped for engineering,
construction, and monitoring
of remedial works Golder Associates
SMEC
Coffey Mining
GHD
2013
2017
TSF3 Reinforcement
• Penstock B was sealed in
May 2014
• Open spillway built to replace
penstocks
Designed to manage
1,500mm of rain in 24 hours
(government only requires
management of 1,000mm
of rain in 24 hours)
Engineered by Golder
and SMEC
Construction supervised
by DMCI
• Currently being raised to
615ML overspill crest to suit
operational requirements 2017
2013
Spillway Construction
• First Tailings Storage Facility (TSF) developed in 1967
Even before the Pollution Control Law in 1976
• Community-Based Reforestation started in the 1960s
as a Livelihood Project
Prior to UNESCO’s Man and Biosphere Program in 1971
• Construction of a Materials Recovery Facility in 1998
Before Enactment of RA 9003: Ecological Solid
Waste Management Act of 2001
• First Metallic Mine to be ISO 14001 Certified
(Environmental Management System) in 2002
Earlier than issuance of DAO 2003-14: Self Regulation
Toward Improved Environmental Performance
18
Pro-active Environmental Management
2002 2004 2006 2008 2010 2012 2014 2016
ISO 14001:1996
Sep 10 2002
ISO 14001:2004
Jun 21 2006
ISO 14001:2004
Sep 6 2008
ISO 14001:2004
May 10 2011
• ISO 14001:2004
• Apr 22, 2015
• BSH OSHAS
18001:2007
• Apr 22, 2015
Integrated
Management
System
DENR DAO 2015-07
April 30, 2015
19
ISO-Certified since 2002
Certifying Body: TUV Rheinland Cert GmbH
Am Grauen Stein – 51105 Koln
ISO 14001:2004
Environmental Management
System
OSHAS 18001:2007
Occupational Health Safety
Management System
20
IMS-Certified in 2015
• Initiated by Philex and
accomplished voluntarily by
Padcal Mine workers
• Clean-up activities include:
Sediment bagging
Construction of:
• containment ripraps
• sediment traps
• access
Spraying of rock face
Comprehensive Water
Clean-Up Activities
• Continuous
community
assistance through:
Public
consultations
Settlement of
claims
Infrastructure
support
Medical and
dental missions
Livelihood
Various Community Development
Programs Initiated
• Provision of 20,000
Elvers and 40,000
Tilapia fingerlings in
Agno River (in partnership
with BFAR and the LGUs of
Barangay Dalupirip and
Itogon municipality)
• Reforestation program
on a 500-hectare area to
prevent further siltation
on Agno river
• Commitment to plant
additional trees as mine
life extends
Sustained Enhancement of Ecosystem
Joint Multi-Partite Monitoring Team (MMT) I. Government Agencies
• MGB (Region I)
• EMB (Region I)
• BFAR (CAR and Region I)
• NIA (Region I)
• CENRO (Urdaneta)
II. Philex MMT
• MGB (CAR)
• EMB (CAR)
• Forestry Management Services (CAR)
• Itogon, Tuba, Ambucao and Camp 3
representatives
• Public Officials
• Indigenous Peoples
III. NPC
IV. SRPC
V. LGU
• Itogon: Municipal Engineer/Municipal
Social Worker
• Barangay Dalupirip
• Representatives from San Manuel/San
Nicolas LGUs
Conduct of Regular Monitoring
Philex MMT
activities: • Establishment of
monitoring
stations
• Monthly water
and sediment
sampling
• Regular fish
sampling
2014-2015 Revenue Sources (ex-IRA)
(million pesos) Municipality of Tuba Municipality of Itogon
Revenue Source Total from Philex Total from Philex
Business Tax 116.3 107.6 154.3 107.1
National Wealth 22.2 22.2 62.4 22.1
Real Property Tax 5.0 1.6 18.4 1.8
Other Fees 18.0 0.1 17.0 0.5
Revenue
other than IRA 161.5 131.6 252.1 131.5
% Contribution of
Philex 81% 52%
IRA 261.8 161.1
34
Significant Contribution to
Local Government Finances
Municipality Income
Class Economy
La Trinidad First Class
Center of Trade, Agro-
industrial, Manufacturing,
Commercial, Tourism,
Education
Itogon First Class Mining (Philex)
Tuba First Class Mining (Philex) Mankayan First Class Mining (Lepanto)
Bakun Third Class Agriculture
Buguias Third Class Agriculture
Atok Fourth Class Agriculture
Bukod Fourth Class Agriculture
Kabayan Fourth Class Agriculture, Tourism
Kibungan Fourth Class Agriculture
Kapangan Fifth Class Agriculture
Sablan Fifth Class Agriculture
Tublay Fifth Class Agriculture
Based on Cities and Municipalities Competitiveness Index 35
Tuba and Itogon are First-Class
Municipalities
Region/Province Poverty Incidence
PHILIPPINES 21.6 Lanao del Sur 71.9
Maguindanao 57.2
Northern Samar 56.2
Saranggani 55.2
Sulu 54.9
Bukidnon 53.6
Siquijor 52.9
Zamboanga del Norte 51.6
Sultan Kudarat 48.0
Agusan del Sur 47.3
Benguet 3.5
NCR 3.9 CAR 19.7
36
Low Poverty Incidence in
Benguet
42
Free housing, water,
and electricity
provided, with safe
and convenient
access around the
community
2016: P447 Million (EPEP)
utilized for:
• Reforestation of 63 hectares
of new land
• Maintenance of 158 hectares
of existing plantations
• Care over 110 hectares of
agro-forestry areas
• Planting of 187,000 new
seedlings of various species 45
Taxes
Fees and
other
charges
EPEP
SDMP
Total of P1.91B or 122% of
2016 Net Income
2016: Total contribution to
national development
47
48
2012-16 contributions vs net income
5-year contribution
of P8.7B almost 3X
the net income of
P3.0B
• Generate 8,000
direct and
indirect
employment
• Raise P60B in
Investments
• Contribute P31B
in Taxes
• Spend P6B for
community
development
Robust Potentials
Consultant Scope Location
Ausenco Lead Consultant Perth, Australia
Mining Plus Mining Perth, Australia
ALS Metallurgical
Testwork/Pilot Plant Perth, Australia
AMC Consultants Mining Perth, Australia
Behre Dolbear Independent Technical
expert Sydney/Melbourne
SMEC Hydrogeology United States
Knight Piesold Tailings Dam Perth, Australia
Lycopodium Mineral Processing Perth, Australia
Pellss Sullivan
Meynink Geotech Perth, Australia
SNC Lavalin Process Pant Brisbane, Australia
Snowden Mineral Resource Brisbane, Australia
Tunnelvirksomhet Tunneling (Grouting) Norway
SRK Hydrogeology Denver, USA
AECOM Environment Manila, Philippines
SMMCI has engaged these consultants to conform to the best
Australian and Canadian mining standards and practices
Conforms with Australian
Mining Standards
51
52
ISO 14001:2004
Environmental
Management
System
First Non-operating Mine (Phils.)
to be ISO-certified