Listed Miner Apex Mining Co., Inc. will have to generate some $12 million on its own to increase the capacity of its gold mine in eastern Mindanao, company officials said late last week.

British miner Crew Gold Corp., the parent company of Apex Mining, was hit by the economic slowdown and is having trouble sourcing funds for the upgrade of the Maco gold mine in Compostela Valley, Apex Mining President and Chief Executive Deogracias G. Contreras, Jr. told reporters.

“We are looking for strategic partner in that because right now we are self-funding. Starting January 2009 we are on our own … our parent company told us to look for a strategic partner to buy into Apex,” he said.

Apex Mining needs at least $12.243 million — $3.735 million for the 1,000-metric-ton per day concentrating plant, $5.474 million for the grinding and crushing plant, and $3.38 million for the zinc and copper concentrator — to bring its Maco mine to full capacity of 1,000 metric tons per day.

Raul B. Cezar, Apex Mining chief mining engineer, said copper and zinc would add to gold production. “If you only want to extract gold but the ores have copper and zinc, it will need much cyanide. That is costly and you cannot recover the copper and zinc,” he said.

In January, the miner increased its mining rate to 700 metric tons of ore per day from 500 metric tons per day, as it projects mining 6.389 million metric tons of ore with an average gold grade 4.87% from the 1558.5-hectare mine until 2027.

“Apex is listed so most probably [funds will be collected] through [the local and foreign stock exchanges],” Mr. Cezar told reporters. The upgrade will be pushed back if there are no funds given that “what we earn right now is what we use to operate,” Mr. Contreras said.

In the first quarter, the miner produced 4,040 ounces of gold and 9,943 oz. of silver, estimated to be worth P178.8 million.

Early this year, Apex Mining laid off workers to minimize costs, reducing its work force to 1,040 from 1,293 late last year.

The miner wants to increase gold production to 34,513 oz. next year, 41,227 oz. in 2011, and 42,440 oz. in 2012.

“Gold buyers are not the problem. The problem is how we produce the gold,” Mr. Contreras said.

At full capacity, the miner will need 45 kilowatt hours of electricity per metric ton of ore. It will tap electricity from the National Power Corp.

A flash flood in mid-January disrupted operations and increased production cost to $1,198 per ounce of gold in January and $1,723 per ounce in February, before going down to $718 per ounce in March and $671 per ounce in April.

Last week, gold prices ranged at $960 to $980 per ounce in the New York Mercantile Exchange.

On Friday, Apex Mining closed at P3.30 apiece, higher than Thursday’s P3.25.

Crew Gold, which owns 72.9% of Apex Mining, also operates the Nalunaq gold mine and the Nugget Pond processing facility in Greenland and the Lefa Corridor gold project in Guinea. The miner is also exploring the Glover Island in Canada and the Wa property in Ghana for gold resources.

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