CHAIRMAN’S & PRESIDENT’S MESSAGE
THE CHAIRMAN’S MESSAGE
Gold finally made an annual price gain in 2023 after three years, with the turnaround owed mainly to the response of investors to anticipations of interest rate cuts in 2024. The average realized gold price by the end of the first half settled at $1,953 per oz. which was higher than the $1,901 per oz. in 2022.
In a move targeted to bring down inflation, the US Federal Reserve increased the federal funds rate to 5.50% in July 2023. This proved to be beneficial as it caused inflation to scale down to a wieldy level of 3.14% by yearend. Given this scenario, plus the foreseen effect of political turmoil due to upcoming elections in many countries in 2024, investors veered away from bonds and other fixed income assets and opted for a safer investment, pushing the average realized price of gold up to $1,962 per oz. by the end of 2023, higher than the previous year’s average price of $1,797 per oz.
Despite the challenges faced by your Company at the start of 2023, the higher average price of gold as well as the favorable exchange rate between the Philippine Peso and the US Dollar helped boost yearend revenues. But more importantly, our resilience and ability to quickly adapt to varying situations that impact our operations carried us through another tough year. Our Maco Mine and ISRI milled higher ore tonnages of 823,427 tonnes and 138,361 tonnes, respectively, in 2023. And once again, we were able to produce more than 100,000 oz. — a level which we will work hard to maintain in the years to come.
Backed by our established operational efficiencies and our conscious efforts to control our costs, our production team delivered yet another milestone performance this year. Pat on the back to our dynamic crew for setting the bar high each year and relentlessly working towards achieving our targets. As we continuously aim to further expand our mining operations, we are set to maximize the potential of our new strategic investments and other opportunities such as the ongoing exploration in our other tenements and our acquisition of the Asia Alliance Mining Resources Corp. (AAMRC) which assures your Company of future gold resources and an area for the expansion of the Maco Mine’s current TSF. Our President will discuss in detail these and other valuable projects that will ensure the success of Apex Mining now and in the near future.
I thank our shareholders for your unwavering support to Apex Mining. Kudos to our board members, too, for their guidance and support as your Company navigated the ins and outs, and ups and downs of 2023. And of course, my heartfelt appreciation goes out to our hardworking High Performance Team — our miners, support staff and service providers — for their efforts to help the Company reach our goals this year. Without their help, commitment and dedication, it would be impossible for us to achieve the success that we are enjoying at the moment. And with God’s continuous guidance and with you by our side, the future looks golden for Apex Mining.
Jose Eduardo J. Alarilla
Chairman
THE PRESIDENT’S MESSAGE
Dear Shareholders,
What a year 2023 has been – with shaky start but a formidable finish.
THE EARTHQUAKE SWARM IN Q1
Not even into the second month of the first quarter, a prolonged series of earthquakes and aftershocks occurred in Davao de Oro, affecting the power supplied to our operations. Ever conscious of safety, we had to do a series of inspections to ensure that none of our infrastructure and facilities were compromised. Heavy and long periods of rainfall in the same period also caused landslides in the province.
OPERATIONS
While these force majeure events resulted to several days of work disruptions, your Company’s final results are stellar: the consolidated net income of the Apex Mining group (which includes Apex Mining and our subsidiaries*) reached Php3.4 billion — one percent higher than the Php 3.3 billion recorded in 2022. Our consolidated revenues totaled Php 12.1 billion, up Php 1.8 billion (or 18 percent) from last year’s Php10.3 billion. This record revenue was driven by the high realized metal prices (averaging USD 1,962 per ounce for gold and USD 23.51 per ounce for silver).
Our Maco Mine milled higher ore tonnages at 823,427 tonnes (averaging at 2,402 tonnes per day), ultimately generating a net income of Php 3.5 billion. Its gold recovery was at 87.15% while silver was at 70.16%.
Our fully owned subsidiary, Itogon-Suyoc Resources, Inc. (ISRI), milled a total of 138,361 tonnes at 3.32 gold grade per tonne and 85.72% gold recovery during the year (slightly higher than 2022’s 131,481 tonnes milled at 2.81 gold grade per tonne and 84.10% recovery).
SECURING THE FUTURE
In 2023, we ramped up our initiatives to future-proof your Company.
Our take-over of Asia Alliance Mining Resources (AAMRC) was completed in February 2023. This secures the site of a new tailings storage facility (TSF) when our existing TSF reaches full capacity in three years.
As we firmed up our future prospects through assets acquisition, we ramped up on preparing our High Performance Team for the challenges of ushering in Apex Mining 4.0. All throughout 2023, we had engineers and other technical staff, both seasoned and emerging talents, travel abroad for glocalization —that is, having our employees apply what they learn in these foreign trips to their jobs at the mine site.
We also embarked on collaborations to help make our mining practices more sustainable. We launched the Apex Mining Professorial Chairs in Mining Engineering and Metallurgical Engineering, together with the UP Engineering Research and Development Foundation, Inc. (UPERDFI), to help improve mining and mineral processing technologies and practices thru research. We also formalized a collaboration with the Caraga State University to level up our data gathering activities through robotics, augmented reality (AR) and virtual reality (VR), giving our business decisions greater strategic leverage. Alongside our efforts for more evidence-based strategies and activities, we inked a partnership with the Technical Education and Skills Development Authority XI (TESDA RXI) to rollout courses on driving and heavy equipment operation to help us bring opportunities of gainful employment beyond Apex Mining and our impact barangays.
A CORPORATE CITIZEN FOR OTHERS
We spent Php 82.2 million under our Social Development and Management Program (SDMP) to fund a wide array of projects under three major areas: development of host and neighboring communities (DHNC), information, education and communication (IEC) campaigns, and development of mining technologies and geosciences (DMTG). Our track record in 2023 includes
providing 6,450 students with mandatory school obligations, treating 2,462 patients for various illnesses, and assisting 11,213 barangay residents on a wide array of concerns.
In 2023, we revealed another facet of our unique brand of malasakit through a program we loosely call Go for the Gold. As the name implies, we support exemplary individuals achieve their dreams. And so it came to pass that PMSg Miguel Carranza (CIDG Abra PFU) carried not just the Philippines’ colors but Apex Mining’s and ISRI’s as well, winning gold and bronze medals at the World Police and Fire Games 2023 held in Winnipeg, Canada.
GRATITUDE
We ended the year on an exciting note by winning the 2023 Outstanding Labor Management Cooperation (LMC) for Industrial Peace Award and being cited as the Special Awardee of the 2023 Outstanding Grievance Machinery for Industrial Peace given by the National Conciliation and Mediation Board. With no less than DOLE Secretary Beinvenido Laguesma presenting the award, we take pride in these twin recognitions because not only was the search nationwide in scope, it cut across different industries, too. Having a top winner from a controversial sector such as mining is a credible validation of our responsible practices.
Clearly, our success in 2023 is because of the firm commitment of our High Performance Team to the highest standards of excellence. Thanks to our teamwork, we have surpassed our targets amidst challenges, both expected and unexpected.
We are grateful to our Board of Directors for their support and guidance.
Finally, thank you, dear shareholders, for believing in Apex Mining. You can count on us to zealously guard and grow the gains your Company will continue to generate on your behalf.
Thank you.