APEX MINING COMPANY

INCORPORATED

Group 1
Bascos, Ariadne
Calupas, Eleazar
Limuaco, Andrea
Mariano, Monicah
Ocampo, Mariela
Soriano, Lorraine
Yusop, Bai Thalia
1.) Briefly summarize the nature of the listed firm’s business, plus a profile of its industry (See
Template for Industry Survey Part 1, Part 2)

1. Identification / Definition of the Industry

Since President Rodrigo Duterte appointed Gina Lopez secretary of the Department of
Environment and Natural Resources, mining has become one of the most talked about issues in
the country. During their term, the Dutertes banned mining in Davao City. Meanwhile, Lopez, a
known anti-mining advocate, has been involved in spats with big mining companies because of
her strong statements against mining.

Mining in the Philippines is being developed at a speed and scale. Section B which is the
Mining and Quarrying is its category in the 2009 Philippine Standard Industrial Classification. The
mining sector will be an important source of economic growth for the Philippines along with
tourism, according to world renowned economist, Nouriel Roubini.

The purposes of the mining industry includes the business of mining, milling,
concentrating, converting, smelting, treating, preparing for market, manufacturing, buying, selling,
exchanging and otherwise producing and dealing in gold, silver, copper, lead, zinc, brass, iron,
steel and all kinds of ores, metals and minerals and the products and by-products thereof of every
kind.

Mining is an indispensable fact of modern life; Without it, we go back to the Stone Age;
Modern mining now incorporates rehabilitation as part of the process; In fact, according to Atty.
Ronald S. Recidoro, the Vice-President, legal & Policy of the Chamber of Mines of the Philippines,
the Philippines is 3rd in Gold production, 4th in Copper and 5th in Nickel. Philippines is blessed to
have a rich diversity in both metallic and non-metallic minerals. Mining does not stop when all the
minerals are extracted. Under Philippine law, mines are not "closed" until rehabilitation and
reclamation is complete.

The mining industry sector is a major backbone of the Philippine economy. The long
history of the industry has been much affected by the vicissitudes of the international market, as
well as other domestic factors. With the adoption of the 1986 Constitution, the concept of awarding
mineral rights has been, temporarily unsettled the industry. The preponderance of small-scale
mining, the growing public awareness on the environment, increasing labor and energy costs are
concerns which should be addressed. Amidst all these, and in the framework of very stiff
competition in the region for investments, new thrusts and directions, without compromising
general stability, are drastically changed from leasehold to a system of contracts for various modes
of production. Such changes have, as expected urgently required for the overall development not
only of the industry but for the whole country.

According to the List of Producing Mines by the Department of Environment and Natural
Resources: Mines and Geosciences Bureau, there are 44 contractors/ companies listed in the
Philippine Metallic Mines and 39 under Philippine Non-Metallic Mines. Companies that
belong to the Mining Industry specifically gold are : Lepanto Consolidated Mining Company,
Apex Mining Company, Inc., Philsaga Mining Co., Filimera / CGA Co., Benguet Corporation
Nickel Mines, Inc. Johnson Gold Mining Co., for copper: Philex Mining Co., Carmen Copper
Co., for polymetallic mine: Rapu-Rapu Mine, for chromite mine: Krominko, Inc.

Competitors in a Mining industry belong in an oligopoly where there are only a few sellers
offering similar or identical products. Firms in an oligopoly individually choose production to
maximize profits, they produce a quantity of output that is greater than the level produced by
monopoly and less than the level produced by perfectly competitive firms. The oligopoly price is
less than the monopoly price but greater than the competitive price (which equals marginal cost).

2. Origin of the Industry

The year 1965 marked the beginning of modern day mining in the Philippines when the first
porphyry copper deposit was opened by the Atlas Mining Company in Cebu (Rovillos et al. 2003).
By the late 1960s, the country was already a significant producer of gold and copper which today
remain as its two most important metallic products. During the 1960s, the Philippines was also a
producer of iron although the discovery of high-grade iron deposits in Australia and the exhaustion
of high grade local lump iron ores eventually led to the demise of this sub-sector (Cabalda et al.
2002).

Nickel became an important metallic mineral product of the Philippines in the 1970s with the
opening of two nickel mines – the Nonoc mine and its nickel refinery in Surigao del Norte and the
Rio-tuba nickel mine in Palawan which exports beneficiated nickel ore to Japan. The 1970s was
considered as the heyday of the mining in the country with old dormant gold mines being reopened,
new gold projects developed, existing copper mines expanded and new copper projects undertaken
(Rovillos et al. 2003, Cabalda et al 2002).

In the 1980s, the mining sector started to decline when several mining companies closed due
to the financial crisis and the occurrence of several mining accidents. This downtrend continued
in the early 1990s and by 1993, out of the 39 mining companies in the 1980s only 16 remained
active. A saving grace for mining during this period was the increase in gold production from gold
rush areas notably in Mt. Diwata, also known as Diwalwal, in Eastern Mindanao. Since the mid-
1990s up to the present, the production of gold in the Diwalwal area alone has accounted for about
50 percent of the total gold production of the country (Rovillos et al. 2003).

To help arrest the continuing declining state of the mining sector in the 1980s and early 1990s,
the Philippine Congress enacted in March 1995 Republic Act (R.A.) No. 7942 or the Philippine
Mining Act. After its enactment, the legality of this mining law was vigorously contested by
several mining stakeholders and major elements of the Catholic Church. In January 2004, the
Supreme Court declared that certain provisions of the law and its implementing rules and
regulations (IRR) were null and void. However, in December of the same year, the Supreme Court
reversed itself and ruled with finality that the mining law is legal including its provisions on
Financial or Technical Assistance Agreements (FTAAs).

In addition to the Philippine Mining Act of 1995, the overarching legal basis of public
management of the mining sector is the 1987 Philippines Constitution. In 3 Section 2 of Article
XII, the constitution provides the basis for the state’s main policy framework on the exploration,
development and utilization of the mineral resources of the land.
 3. Location of the Industry

Figure A.1 Figure A.2

In Figure A.1, we can see that the production of gold mines is merely located in Benguet,
Camarines Norte, Masbate and Agusan Del Sur.

In Figure A.2 however, the production of Copper with Iron, Gold, Silver and Zinc Mines
is located in Albay and Leyte.
Initial locations of the mining industry are located in higher upland places or near mountainous
places. It is important for the mining industry to be close to their inputs so as to somehow lower
the operation costs. Mining industries are not located in urban areas but their mailing addresses
are mostly in cities. Target markets of these mining industries are not the ordinary people because
their products are costly. Prospected buyers will have an overview of the finished product in a
warehouse.

For one, the industry provides employment opportunities to a significant portion of the
population, directly and indirectly within the operating location. The launching of a mining project
spurs local and regional economic development as mining firms invest in road infrastructure,
utilities, and other facilities within the mine site. Mining, likewise, contributes to the country's
foreign-exchange earnings through exports. Furthermore, the industry provides additional
revenues for the government through taxes and fees paid on mining and other related activities.
The mining activities involve operations that have significant impact on the environment. In most
facets of the mining activities, there is always the potential for environmental and ecological
problems -- from the construction of mining facilities, the extraction of ore, to the processing of
minerals.

4. Globalization Trends

Foreign-Owned Mining Company in the Philippines

The State is permitted to enter into agreements with foreign-owned corporations involving
either technical or financial assistance for large scale exploration, development, and utilization of
minerals, petroleum, and other mineral oils according to the general terms and conditions provided
by Philippine law.

The terms and conditions of the financial or technical assistance agreements are contained in
The Philippine Mining Act. Under this law, only “qualified persons” may engage in the
exploration, utilization, and development of mineral resources in the Philippines. These are:

 Any citizen of the Philippines with capacity to contract and

 Corporations, Partnerships, Associations, or Cooperatives organized or authorized for the
purpose of engaging in mining, with technical and financial capability to undertake mineral
resources development and duly registered in accordance with law at least sixty per centum
(60%) of the capital of which is owned by citizens of the Philippines.
A legally organized foreign-owned corporation may be deemed a qualified person for purposes
of granting an exploration permit, financial or technical assistance agreement, or mineral
processing permit. A financial or technical assistance agreement means a contract involving
financial or technical assistance for large-scale exploration, development, and utilization of
mineral resources

Registration with the Department of Environment and Natural Resources (DENR)

If the company is involved in exploration, development, or utilization of mineral resources,

you may need to do business in the Philippines through a 60-40 Philippine-owned corporation.
Branches and companies without the required foreign equity may enter into a financial or technical
assistance agreement under the terms and conditions of the Philippine Mining Act.

5. Regulatory Factors
Department of Environment and Natural Resources
Philippine Mining Act of 1995 RA 7492

The core principle of the Mining Act is its strict adherence to sustainable development. The
declared policy of the law is to promote the rational exploration, development, utilization and
conservation of mineral resources through combined efforts of government and the private sector
in order to enhance national growth in a way that effectively safeguards the environment and
protect the rights of affected communities.

Economic aspect

According to Section 5 of the Mining Act, the government shall get a ten percent (10%)
share in all royalties and revenues to be derived by the government from the development and
utilization of the mineral resources within mineral reservations which shall accrue to the MGB to
be allotted for special projects and other administrative expenses related to the exploration and
development of other mineral reservations.

Under the Local Government Code, local government units (“LGUs”) were given authority
to impose taxes on sand, gravel and other quarry resources under Section 138 thereof. In addition,
the Mining Act provides that LGUs have a share of forty percent (40%) of the gross collection
derived by the National Government from mining taxes, royalties and other such taxes, fees or
charges from mining operations in addition to the occupational fees (30% to the Province and 70%
to the Municipalities concerned) in consonance with the Local Government Code.

Environmental aspect

In ensuring that the government protects the right of the people to a balanced and healthful
ecology, the Mining Act has provided limitations on how the mineral resources of the country can
be utilized.
 It established area limitations, maximum years for mining operations, assignment of
mining rights, compliance with rules and regulations promulgated by the DENR concerning the
sanitary upkeep of mining operations.

To further ensure the protection of our environment, an environment clearance certificate

is required based on an environmental impact assessment pursuant to Section 70 of the Mining
Act. Details of environmental protection have been outlined in Chapter XVI of Administrative
Order No. 2010-21 or the implementing rules and regulations promulgated of the Mining Act.
Under Section 167-A of the Administrative Order, a Certificate of Environmental Management
and Community Relations Record (CEMCRR) is required in the approval of Mineral Agreements,
FTAA, Quarry or Commercial/Industrial Sand and Gravel Permit and Mineral Processing Permits.

The Mining Act and its Implementing Rules and Regulations also gave premium to
environmental protection. Measures were put in place to ensure that mining contractors/operators
comply with internationally accepted standards of environment management.

Mining contractors/operators are mandated to allocate approximately ten percent (10%) of

the initial capital expenditures of the mining project for environment-related activities. A
mandatory annual allocation of three to five percent (3%-5%) of the direct mining and milling
costs to implement an Annual Environment Protection and Enhancement Program (“EPEP”).

There is also a mandatory establishment of a Mine Rehabilitation Fund (“MRF”) to be

composed of the following:

a. a Monitoring Trust Fund of Php50,000.00 which is replenishable; and

b. a Rehabilitation Cash Fund of Php 5,000,000.00 or ten percent (10%) of the EPEP cost,
whichever is lower.

Such funds are to be deposited as a trust account in a government depository bank to be

managed by the MRF Committee composed of the MGB Regional Director, DENR Regional
Executive Director, representatives from the LGU and an NGO, and the contractor.
 As an incentive to mining companies, the Mining Act mandates the institutionalization of an
incentive mechanism to mining companies utilizing engineered and well-maintained mine waste
and tailings disposal systems with zero-discharge of materials/effluents and/or with wastewater
treatments plants.

To ensure compliance with the mining laws, a Multipartite Monitoring Team composed of
representatives from the MGB, DENR Regional Office, affected communities, Indigenous
Cultural Communities, an environmental NGO, and the Contract/Permit Holder shall undertake
the monitoring of mining operations. On the other hand, the Mine Environmental and Protection
and Enhancement Office in each mining/contract area will set the level of priorities and marshal
the resources needed to implement environmental management system.

The MGB Regional Director shall also have the power to summarily suspend mining/quarrying
operations in case of imminent danger to human safety or the environment.

With the coming of the new administration of President Duterte, newly-installed Environment
Secretary Gina Lopez yesterday issued her first memorandum order which covers the extensive
audit of all mines as well as the moratorium on new mining projects.

Based on memorandum 2016-01, all operating and suspended mines will be subject to an audit
to determine the adequacy and efficiency of the environmental protection measures, identify gaps
in protection measures and determine appropriate penalties in case of violations.

The moratorium, on the other hand, shall cover the acceptance, processing and approval of
applications and projects for all metallic and non-metallic minerals.

The new administration remains firm in their stand to suspend mining firms that fail to secure
international certification on safety standards in a bid to put an end to irresponsible mining in the
Philippines.

The audit will be undertaken in accordance with the Philippine Mining Act of 1995 and
Department Administrative Order 2015-07 on securing the International Organization for
Standardization (ISO) 14001 certification.
 PLAYERS IN THE INDUSTRY

1. Size of firms in the industry

LISTED TOP MINING COMPANIES IN THE PHILIPPINES

TOTAL ASSETS AND GROSS REVENUES for the period ended June 30, 2016

Atlas Consolidated Semirara Mining Lepanto Consolidated Apex Mining Co.,

Mining and and Power Mining Company Inc.
Development Corporation
Corporation
TOTAL 71, 812, 210, 673.83 60, 527, 365, 16, 949, 010, 000.00 10, 969, 028,
ASSETS 349.00 304.00

GROSS 3, 351, 075, 372.41 9, 944, 998, 811.00 347, 654, 000.00 881, 986, 600.00
REVENUE
(3 months)
Table 1. Top Listed Mining Companies

The asset bases of the firms in the mining and quarrying industry differs according to the
scale of each firm. Presented above is the table of the top listed mining companies in the
Philippines for the period ended June 30, 2016 according to the Philippine Stock Exchange Edge
website. Among the twenty (20) companies listed, Atlas Consolidated Mining and Development
Corporation garnered the highest record in its total assets of Php 71, 812, 210, 673. 83. Apex
Mining Company, Incorporated placed fourth with total assets of Php 10, 696, 028, 304.00. On the
other hand, Semirara Mining and Power Corporation has the highest gross revenue for the 3 months
in the current year with the amount of Php 9, 944, 998, 811.00 and again, Apex Mining Company,
Incorporated placed fourth with a gross revenue of Php 881, 986, 600.00.

2. Organizational Structures
 Figure B. Publicly Listed Philippine Mining Companies according to PSE

Most of the mining and quarrying industries in the Philippines are privately owned
companies. According to the Philippine Stock Exchange which has records of the business entities
whose ownership is dispersed among the public, there are only twenty (20) mining companies.

3. Industry Restructuring
Among the most daunting constraints mining has been facing is that it is a generally
extractive activity the way it has been traditionally practiced. This makes the country a mere
exporter of raw materials to industrialized countries and unable to benefit from value-addition. To
help address this problem, the national government has pronounced a long-term strategy of
national industrialization in the mining sector (Ramos 2010). Among others, this strategy is
intended to enable the sector to expand into processing and other downstream activities and
transform low-value outputs of raw materials into processed products with higher value-added.

National industrialization in mining in the Philippines was actually attempted in the past
already. Immediately after the Second World War, the government announced its plan to
industrialize the country (Lopez 1992, Cabalda et al. 2002). However, it was only in the 1960s and
1970s that concrete measures were undertaken. In 1978, the government through its mining bureau
came up with a five– year and ten–year year integrated resources development plans as well as a
‘perspective’ plan for the succeeding years up to year 2000. These plans called for the
industrialization of the mining industry through the vertical integration of mining extraction
activities with the processing requirements of the metal-based manufacturing industries.
 This previous industrialization program of the government was expected to eventually
result to the establishment of ore processing plants and manufacturing plants around the country
that will produce products needed in various industries. Grounded on the local abundance of ore
reserves and technical labor, the industrialization was envisioned as a generator of jobs, foreign
exchange, and ancillary firms for the economy. It was also designed not only to favor the
industrialists and government but also the miners and manufacturing workers who will derive
trickle down benefits from the increased profits accruing from processed mining and
manufacturing products.

4. Interfirm Arrangements

There are several mining companies who partnered with other mining companies. N
example of this is the Apex Mining Company, Corporation who has been operating for 40 years
but its management was taken over in late 2005 by a partnership between crew Gold Corporation
and Mapula Creek Gold Corporation, Inc., a Philippine-owned mining company.

Another example would be the Lepanto Consolidated Mining Company which has a 60%
interest in far Southeast Gold Resources, Inc., which owns the Far Southeast Project, a world-
class, high-grade gold and copper porphyry deposit. Lepanto is looking to develop the Far
Southeast Project through a partnership with Gold Fields Limited of South Africa, one of the
biggest gold miners in the world, with whom Lepanto executed an Option and Shareholders’
Agreement in September 2010.
5. Substitute Industry

The Company’s mine produces bullion containing gold and silver. Apex was incorporated
primarily to carry on the business of mining, milling, concentrating, converting, smelting, treating,
preparing for market, manufacturing, buying, selling, exchanging and otherwise producing and
dealing not just gold and silver but also copper, lead, zinc brass, iron, steel and all kinds of ores,
metals and minerals.

6. Complementors
 Precious metal industry and jewelry industry both complement each other. Gold is the most
popular precious metal for investors. As you may know, gold is a commodity, and, as such, the
price for gold fluctuates on a daily basis in the commodity markets.

OTHER INDUSTRY CHARACTERISTICS

1. Value creation methods and costs

The mining method is basically an underground mechanized cut and fill. Milling is the
process of breaking down the rocks gathered from mining into smaller pieces in order to separate
the precious material from the non-precious material in the rocks, so they need cone crashers, leach
tanks, detox tanks, smelting super-heat, etc. to increase their productivity. The modifying factors
that were applied are the dilution factor assigned per type of mining method (Long Hole, Cut &
Fill, Shrinkage, Sub-Level Caving).
2. Inputs/suppliers
The Company’s mine produces bullion containing gold and silver. All of the mine’s
production is smelted in Metalor refinery in Switzerland.

The Company’s ore production comes primarily from the Company’s mineral properties
in Maco

Equipment and maintenance parts and operating supplies are provided by a number of
suppliers both domestic and foreign on competitive basis.

Energy is primarily sourced from the Power Sector Assets and Liabilities Management
Corporation under a long-term contract for the supply of electricity.

3. Markets
Products, which consist of gold and silver bullions, metal in-circuit, ore stockpile, and
materials and supplies used in the Group’s operations, are physically measured or estimated and
valued at the lower cost and NRV. NRV is the estimated future sales price of the product that the
entity expects to realize when the product is processed and sold, less estimated cost to complete
production and bring the product to sale. Where the time value of money is material, these future
prices and costs to complete are discounted.
4. Human resources
Employees use knowledge of standards, criteria, equipment to resolve if there is tragedy
will happen in the mining location.

One of Apex priorities is to employ as many members of the local population as possible.
Almost 60% of the mine’s labor force comes from the four impact barangays, with 9% being
Indigenous Peoples and 13% residents of Maco municipality.

The effectiveness of training employees must meet the standards like knowing how to
prevent injuries and how to properly use personal protective equipment.

While the relatives of each employee and those people live in that environment will benefit
in different programs like Health programs, sustainable livelihood, education etc.

5. R&D and innovation

The mining industry is highly interested in developing the best technologies, energising
the firm already selling into the sector and potentially attracting firms from other markets that
believe their products or services could fulfill a requirement in the mining sector.
6. Finance
Apex company need to allocate capital in their equipments such as: cone crashers, leach
tanks, detox tanks, smelting super-heat, etc. and also to their relationship to the
environment and community. It is called “returning the favor”, the community has helped
the business more profitable therefore, it is only fitting that the company return the favor
through: reforestation and forest rehabilitation projects, solid waste management, water
resources, Beneficiary school, medical mission and etc.

FUTURE INDUSTRY TRENDS

The mine has a remaining gold reserves estimated to last for sixteen (16) years based on
the present measured and inferred resources. The life of the mine can be upgraded
 positively as exploration and mining development proceeds. As a result, the life of the mine
can be extended more if the lower levels would prove positive for additional resource
through diamond drilling exploration combined with other underground exploration and
development methods and diamond is another key trend

2. Research on the stock’s price for the last three months and look up the PSEi (i.e. market) for
the same period. Write comments about how they are related as to whether the stock’s price
moves up/down with or against it, and whether it moves more or less vigorously than the market.

APEX MINING CO. INC’S STOCK PRICE FOR THE LAST THREE MONTHS (MAY 16-AUGUST 16)

PHILIPPINE STOCK PRICE FOR THE LAST THREE MONTHS (MAY 16-AUGUST 16)

The stock market is very volatile. From the last three months of APEX Mining Co. Inc.,
the stock price was changing. Php 3.01 was the lowest price it had; Php 3.29 was the highest. As
of August 12, 2016, 3:14 pm, the price was Php 3.26. It actually increased by Php .05 (1.56%)
compared to the previous close price.
 Philippines PSEi Index decreased 25.5 points or 0.32% to Php 7955.90 on August 12 from
Php 7981.40 in the previous trading session. Philippines PSEi Index changed -0.18% during the
last week, +0.15% during the last month.

The stock price of Apex Mining Co increased by 1.56%, while the stock price of Philippine
stock price decreased by 0.32%. I think this increase was really significant to the business because
it can affect the investors. I also think that the decrease of 0.32% is not small; rather it is large
because the business scale is very large. If they are willing to take risks, they will look at how the
stock price changes by time to time.

3. How large is the company in terms of annual sales and total assets?

The higher Asset turnover the better the company is performing because net sales is higher
than or equal the average total asset, but in case of Apex Mining Co. Inc. the company is not
efficient in terms of generating more sales. As shown in the first table the company got lower
2013 2014 2015
NET SALES 1,735,840,754 1,730,741,567 2,430,097,329
AVERAGE TOTAL ASSET 4,446,866,626 6,679,010,444 9,337,571,027
TOTAL ASSETS
TURNOVER 0.39 0.26 0.26

2013 2014 2015

NET INCOME -858,565,562 -580,505,224 -56,889,680
NET SALES 1,735,840,754 1,730,741,567 2,430,097,329
RETURN ON SALES -49.46% -33.54% -2.34%

turnover ratio (less than 1) it means that the company is not efficient enough or not using its asset
optimally and most likely has management or production problems. The table also tells that the
company is not using its asset optimally. The ratio is insignificant compared to other Mining
Corporations in the industry. In computing the return on sales the profitability of a company is
determined. It is a tool that analyzes single company's performance against its past performance,
and also to compare similar companies' performances against another company. In table 2, the
return on sales in the year 2013 and 2014 is negative due to the increase in expenses that results to
net loss. But by next year (2015) Apex Mining Co. Inc. recovered a little but still a net loss. The
negative return on sales is a signal of looming financial troubles.

4. How profitable has it been recently? Answer this by stating net income as a percent of sales.
What is the trend of sales and profit over the last 3 years?

2012

Net Income (Loss) P56,817,880

Sales P1,817,321,564

Net Income as a percent of Sales 3.13%

2013

Net Income (Loss) (P841,462,220)

Sales P1,735,840,754

Net Income as a percent of Sales -48.48%

2014

Net Income (Loss) (P689,323,203)

Sales P1,730,741,567

Net Income as a percent of Sales -39.83%

2015

Net Income (Loss) P71,390,719

Sales P2,430,097,329

Net Income as a percent of Sales 2.94%

In the last four years, APEX Mining Co.,Inc. has been in a .....

In 2012, their Cost of Sales was at least 66% of their Sales that is why they have a Gross
Profit almost the same amount of their expenses. This led to a low Net Income as a percent of
Sales. But compared to last year’s Statement of Comprehensive Income that shows a net loss of
P39,786,453, this year’s performance is way better.

In 2013, they had a Cost of Sales almost the same as their Sales, and their Expenses
exceeded their Gross Profit which led them to a Net Loss.

In 2014, their Statement of Comprehensive Income still shows a Net Loss. It is because
they had a high Cost of Production which led to a much lower Gross Profit.
 1n 2015, they produced a higher Sales than the last three years which also led them to a
high Cost of Sales. But their Expenses had gone way lower than in the last three years which led
them to have a Net Income at most 2.94% of their Sales.

5.) What are the professional analysts saying about investing in the stock? (Cite the source of
analysis)

5.1) Background

“An investment in knowledge pays the best interest” – Benjamin Franklin

The statement quoted above is a fact that when it comes to investing, nothing will pay off more
than educating yourself. Do the necessary research, study and analysis before making any
investment decisions because investing without an education and research can ultimately lead to
regrettable investment decisions.

Analysts plays a vital role in the investment world specifically in the stock markets in which
shares of publicly held companies are issued and traded. They do research and recommendations
for their clients and employers. They do this by reviewing the financial statements, analysing the
economic fundamentals of the company and all other available information about the company.
This quantitative analysis looks at factors like a company’s revenues, expenses, assets and
liabilities to predict how a company will perform in the future. Thus, they determine whether a
stock is worthy of a “buy” recommendation.
Analysts usually summarize their research reports with a brief recommendation. Every firm uses
its own rating system. As you can see, comparing these rating scales is not easy. The same term
might mean one thing for one firm and something else for another firm:

For example, as you can see above, Firm A rates its most positive recommendations as "Buy,"
but Firm B does not. When Firm B uses a "Buy," it means that Firm B likes the stock, but not as
much as the stocks that it rates "Strong Buy."

That is why before you act on a recommendation, you should keep the following in mind:

 Is it right for you?

A "Buy" rating does not mean that every investor should acquire the stock. Nor does a
"Sell" rating mean that every investor should immediately sell it. What really matter is
your own financial situation and investment.
 Never rely on a rating alone.
When considering an analyst recommendation, look at the full research report, not just
the one-word rating. Research the company’s reports yourself. Learn about the company
by consulting independent news reports, commercial databases, and other references.
 Analysts differ in quality.

5.2) Investing in Apex Mining Company

1. Apex Mining Company (APX): Be happy at 4 or trade all the way till 4.75? (by Jaycee De
Guzman)

Apex Mining Company (APX) is one of the newly-added stocks in the Trade Alerts table for my
clients. From the initial target selling price of 3.60 to 4.00, some of my clients bagged 20-46%
worth of gains in one day. We set our three trailing stop-loss points. The bullish momentum was
so high that we hit our target selling price points quickly.

We don’t trade any stock in the Stock Signals without the data that can support our trade setup.
That’s why I’d like to write an end-of-day review for APX. This is not a recommendation but an
end-of-day review only.

Daily Chart
The next resistance after 4.00 is 4.75. There’s an 18.75% upside from APX’s current price to
4.75. If a massive profit-taking will happen tomorrow, watch out for the support at 3.60. I’d say
that 4.00 is a strong resistance. APX hit an intraday high of 4.25 but it pulled back to the
resistance level of 4.00 in the last 10 minutes of trading.

Volatility
APX’s volatility puts this stock in the high-risk category.

Conclusion
Be very attentive to the price fluctuations of APX, especially in the first 15 to 30 minutes of
trading, if you’d like to trade this stock above 4-apiece. Learn how to set a stop-loss or a trailing
stop-loss. Between the two, I prefer the latter because it adjusts as the stock registers a higher
price. Calculate your reward-to-risk ratio. That is a big help in deciding which stocks suit your
risk tolerance. As I’ve mentioned above, APX is a high-risk speculative stock. If you’re new in
trading, don’t test the depth of the river with both feet. Check out the global mental indices
before trading starts. Just a friendly-reminder, not because global metal indices are up, it does not
automatically mean our local mining stocks would skyrocket right away. Just check it out so you
can anticipate the market sentiment in the first few minutes of trading.

2. Apex Mining swings to net profit in 2015 (by Iris Gonzales)

MANILA, Philippines – Apex Mining Co., Inc. reported a net income of P71 million last year, a
turnaround from the P389.9 million loss incurred in 2014.

In a disclosure to the Philippine Stock Exchange (PSE), Apex Mining said the strong
performance was due to the 40 percent jump in revenues to P2.4 billion as a result of the record
output from the Maco mine in Compostela Valley.

The Maco mine produced 43,048 ounces of gold and 224,479 ounces of silver last year,
significantly higher than the 28,802 ounces of gold and 158,754 ounces of silver produced a year
earlier.

The output marked the highest level in Apex Mining’s operating history.

Apex Mining president and CEO Walter Brown said the company generated higher revenues in
spite of the lower average metal prices that prevailed this year.

Gold price was at $1,158 per ounce while silver was at $16 per ounce in 2015, down by eight
percent and 16 percent. Business ( Article MRec ), pagematch: 1, sectionmatch: 1

“We are indeed fortunate that even with all of the issues that confronted the company during the
year, it managed to come out with net earnings to break the chain of net losses in previous
years,” Brown said.

In June 2015, Apex Mining acquired Itogon-Suyoc Resources Inc. (ISRI), which capped the
parent firm’s capital expenditures for the year at P2.6 billion.
ISRI has mining claims in both Itogon and Suyoc, Benguet, with existing mill and production
facilities in Sangilo.

The target is to declare regular operation of the Sangilo mine by 2017, Brown said.

3. APX Monthly Chart - Formed a Possible Higher Low at the 1.00 Level (by Miko S. Sayo)

One of the exceptional performers in the market recently aside from MER is Apex Mining
Company, Inc. (APX). I guess the insiders of this one got a reason to push the stock to
unimaginable levels when the price of Gold climbed to the roof the last few days. Let's see how
the technicals look like.

On the monthly chart, you can see that the stock has bounced off a major support line as
highlighted by the blue solid diagonal trendline in the chart above. This certainly is a bullish sign
and could indicate that, on the bigger picture, the stock has already formed a base for a new high.
The only problem on this picture is that volume did not increase significantly on the rebound,
which may indicate that the upswing may not be standing on solid footing. The weekly chart of
the stock is showing the same behavior - a strong upswing but on low volume. You can also see
in the weekly chart above that the stock is currently testing its resistance at current levels. In my
opinion, this resistance area, which is around the 4.00 to 4.70 levels, is a formidable resistance to
break. For these levels to break, volume would now be a requirement so that it could absorb all
the sellers who would be selling at those levels. On the weekly chart, the stock still formed a
white candle, which indicates a continuation of the current trend, however, the daily chart is
already showing a contrasting picture.

On the short-term, or, in the stock's daily chart, you can see that prices appear to have formed a
bearish reversal already by way of an Evening Star pattern. The heavy volume on the stock when
it peaked at 4.30 last Thursday, may indicate distribution. While the stock is still definitely
trending up, this current correction is already due as the stock has already doubled in price since
its trough at 2.08 just last Feb 4, 2009. Major support of the stock in this time-frame is at the 2.50
level but I really doubt whether prices can easily drop back down to that level. Above 2.50, next
support levels are the psychological 3.00 level as well as the 3.50 level.

In summary, the stock is slightly bullish on the long-term as prices appears to have formed a
higher low already, it is bearish on the medium-term as prices appears to have hit a brick wall at
the 4.30 level, and is also bearish on the short-term as prices appear to have already reversed its
trend from up to down.

I sure hope Tsupiteros were already able to take profits in this stock either last Thursday or last
Friday. If you haven't, I would suggest that you try and take profits as close to 4.00 as possible. I
would not recommend buying this stock yet at this point, but I am expecting prices to form a
short-term trough somewhere between 3.00 and 3.50. After this big run-up in the last few days, I
wouldn't expect any new highs anytime soon. Rather, I would expect prices to probably
consolidate within a range as those who missed the move from 2.08 to 4.30 are looking to buy on
this current correction, while those who have positions and have missed the peak at 4.30, will be
looking to take profits as close to that level as possible.

Position-traders, on the other hand, may just want to buy as close to 2.50 or 3.00 as possible. Just
remember, if this current uptrend of the stock really has something in it, prices should no longer
break below that major support at 2.50.

References:
http://www.investopedia.com/financial-edge/0511/the-top-17-investing-quotes-of-all-time.aspx
http://www.investopedia.com/terms/s/stockmarket.asp
https://www.quora.com/How-do-professional-stock-market-analysts-analyse-stocks
http://www.finra.org/investors/understanding-securities-analyst-recommendations
http://www.jayceedeguzman.com/apex-mining-company-apx-be-happy-at-4-or-trade-all-the-way-till-4-
75/
http://www.tsupitero.com/cotw-APX-02232009.htm

8.) In addition, the group must be able to identify the prominent generic strategy the chosen
company adopts. Provide support for your answer.

 Differentiation Focus

Based on our observation APEX Mining Co, Inc. is a Differentiation Focused

through providing the market the better refined gold, silver and other mining
products. Focused because Apex Mining Company also provide customized or
specialized needs of the market. And also focusing on how the price of their product
can recover the cost of their production. It is not a Focused-low cost because as
we’ve seen in their Financial Statements, they have constant high expenses.