Mining for gold in the Philippines is not an easy endeavor. Even so, the country is home to many producers and exploration companies.
Mining gold in the Philippines can be difficult. The country’s mining sector remains largely untapped, and much of that has to do with political turmoil and controversy.
As a result, the Philippines is far from the heaviest player in the gold space — read about the top gold-producing countries here — but it’s clear that the nation does play a role in producing gold. The Philippines was ranked 20th in terms of global gold production in 2017, producing 40.4 tonnes with an additional 196.34 tonnes in reserve.
Here’s a look at some of the challenges of mining gold in the Philippines, as well as an overview of the publicly traded companies that are currently mining and exploring for gold there.
Gold in the Philippines: Political challenges
As mentioned, mining for gold in the Philippines is not an easy task. While vast mineral reserves and potential exist, the country holds to strict mining laws, citing environmental impact and worker welfare as key reasons for these rules.
This emphasis on environmental impact has been championed by the current president, Rodrigo Duterte. He has said that mining companies must “shape up” as they are causing harm to land and water systems. In 2017, he even accused Canadian mining companies of a destabilization plot.
Support for environmental goals was also seen when Regina Lopez was appointed secretary of the Department of Environment and Natural Resources in 2016. Lopez is an environmentalist, and set up severe mining bans and stricter regulations, causing a stir in the country.
The mining community, including the Philippines’ Chamber of Mines, said the closures and permit denials would cause harm to 1.2 million workers in the industry. Miners also said that they were being treated unfairly because of a lack of due process in these bans.
The situation took a drastic turn when Lopez was ousted by the Congress of the Philippines. Last May, Duterte instead gave her post to Roy Cimatu, formerly of the armed forces. Miners were surprised by the decision, but are more hopeful as Cimatu is expected to take a more balanced approach between the environment and mining industry.
Speaking during a radio interview, Cimatu said he believes “we can allow mining [as long as] it’s responsible, it does not destroy our environment, as long as it is properly handled.” That said, with over a year in office Cimatu hasn’t lifted Lopez’s regulations. Plus, he has stated that a ban on new open-pit mines could continue into 2019 if miners do not comply with mandated tree planting. Miners have been given six months to restore vegetation and have effectively been told to shape up or ship out.
Gold in the Philippines: Economics
Mining accounted for US$4.25 billion in exports for the country in 2017. It also provided over 200,000 jobs and 25.54 billion Philippine pesos in taxes. While mining does not make up a huge portion of the Philippines’ economy, the effects and benefits are felt strongly in certain parts of the country. Regions like Mimaropa and Caraga disproportionately rely on the value and opportunities produced by mining.
When considering why mining hasn’t yet taken a firm hold in the Philippines, Forbes explains that access to the sector has been “mired since the 1980s in klutzy laws, environmental battles and land rights issues.” The Wall Street Journal corroborates that statement, noting that most indigenous people in the country are not in favor of mining, and have special rights that make gaining their approval essential.
Gold in the Philippines: Mining companies
While the political climate of the Philippines has drawn back the confidence of the mining industry, there are still many gold operations investors should know about. Read on to learn more about them.
If we missed a publicly traded company that’s mining or exploring for gold in the Philippines, let us know in the comments. All companies included had market caps above $10 million at the time of publication.
Apex Mining (PSE:APX)
Apex Mining’s main project is the Maco mine (formerly known as Masara), located on the island of Mindanao. Apex has been operating for 40 years and saw its mining income increase by 21 percent year-on-year in 2018. It attributes its success to improved operations at Maco — it produced 32,334 ounces of gold in the first half of 2018, up from 29,419 ounces over the same period the previous year.
Established in 1903, Benguet is the first and oldest mining company in the Philippines. Its extensive gold and nickel operations include the Acupan gold project, which began operating in 1927. Acupan consists of 223 mineral claims in the province of Benguet. As of 1992, it had produced 5.54 million ounces of gold. The project has a remaining resource potential of 113 million tonnes averaging 2.41 g/t gold.
In Q1 2018, the company reported revenue of 319.4 million Philippine pesos. Benguet has put environmental and social development programs in place in the Philippines.
Medusa Mining (ASX:MML)
Medusa Mining operates in the Philippines through its subsidiary Philsaga Mining. The company’s Co-O project is situated on the southern island of Mindanao and produced 95,705 ounces of gold in the 2018 Australian fiscal year; that’s a 19-percent increase over the previous year. The company also reported revenues of US$124.6 million for the period, representing a 24-percent rise compared with 2017.
Metals Exploration (LSE:MTL)
Metals Exploration’s main asset is the Runruno gold-moly project on the island of Luzon. The company acquired the project in 2005, and has since increased its ownership to 100 percent. Runruno has a defined mineral resource of 1.39 million ounces of gold and 25.6 million pounds of moly; 1,050,000 ounces of gold are designated as measured and indicated, while 900,000 ounces of gold are listed as proven and probable reserves.
For the quarter ended June 30, 2018, the company reported output of 21,113 ounces of gold, up from 18,251 ounces in the previous period.
OceanaGold owns and operates the high-grade gold-copper Didipio mine, also located on Luzon. The company achieved commercial production at Didipio in 2013, and over its 16-year life the mine’s nominal production should be 100,000 ounces of gold and 14,000 tonnes of copper.
OceanaGold announced record Q2 2018 gold production of 268,597 ounces. The company’s annual guidance across all its assets is set at between 500,000 and 540,000 ounces of gold.
Philex Mining (PSE:PX)
Philex Mining was incorporated in the Philippines in 1955, and its subsidiaries fall under either Philex Mining (metals) or Philex Petroleum (energy). Philex Mining operates the Padcal mine, which is its largest revenue source. Padcal has been operating since 1958 and is expected to end its life in 2020.
Philex also owns the Silangan copper-gold mine, which encompasses the feasibility-stage Boyongan and Bayugo deposits. The company produced a total of 84,600 ounces of gold in 2017, down from 103,300 ounces in 2016.
St. Augustine Gold & Copper (TSX:SAU)
St. Augustine Gold & Copper is currently developing the King-king project, which it bills as one of the largest undeveloped copper-gold deposits in the world. Mineral reserves at King-king come to 617.9 million tonnes at 0.3 percent total copper and 0.395 g/t gold.
The project is expected to put out 3.16 billion pounds of copper and 5.43 million troy ounces of gold over a 25-year mine life. The company expressed concern over the possibility of open-pit mines being banned by government in its recent management’s discussion and analysis report.
RTG Mining (ASX:RTG)
RTG Mining is an Australian mining and exploration company that is focusing on gold in the Philippines. The company’s key project is the Mabilo gold-copper site, which has an indicated mineral resource of 227,000 tonnes of copper and 762,400 ounces of gold. It’s also exploring its Bunawan project, where high-grade mineralization of gold has been found, including 7 meters at 4.18 g/t of gold, and its Nalesbitan project, which is in the early exploration stage.
Are you interested in gold in the Philippines? What do you think will happen next there?
This is an updated version of an article originally published by the Investing News Network in 2015.
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Securities Disclosure: I, Amanda Kay, hold no direct investment interest in any company mentioned in this article.