Philex Mining Corporation has signed an $8.5 million loan agreement with a syndicate of banks principally to finance the underground development of its Padcal mine.

The firm said in a disclosure to the Philippine Stock Exchange (PSE) yesterday that the Bank of Commerce, Philippine National

Philex had earlier obtained a $15 million term loan from a Japanese mining firm, Pan Pacific Copper Company Limited, also to finance underground development at its Padcal mine in Benguet province.

The Padcal mine is the countryas only remaining copper-gold operation and has been in continuous production for 46 years.

The development of the next mining level at this underground operation will extend the Padcal mine life up to at least 2011, Migrino said.

Higher ore grades, particularly gold, are expected once the initial ore at the new mining level is extracted towards the latter part of 2005 following an approximately two-year development period.

Throughout its long operating history, the mine has generated $2.6 billion in exports and P8.9 billion in tax revenues to the government, said Migrino.

Pan Pacific Copper is a joint venture company of Nippon Mining and Metals Company Limited and Mitsui Mining and Smelting Company Limited of Japan.

Nippon Mining operates the largest copper smelter in Japan and has been purchasing Philex copper concentrate since the inception of the Padcal mine.

The financing transaction includes a concentrates off-take agreement throughout the remaining life of the mine.(JAL)