Minerals exploration
Minerals exploration expenditure for the 2019 financial year was US$188 million, of which US$128 million was expensed. Greenfield minerals
exploration is predominantly focused on advancing copper targets within Chile, Ecuador, Peru, Canada, South Australia and the South-West United States.
During the June 2019 quarter, the second phase of the drilling program at Oak Dam was progressed, with 12,425 metres in 10 holes. The program tested lateral
continuity, thicknesses and orientation of the central part of the mineralised system, with the drill results currently being evaluated and interpreted.
Consistent with our exploration focus on copper, in April 2019, BHP secured a five per cent interest in Midland Exploration Inc., which has copper exploration
tenements in Canada.
In May 2019, BHP entered into a
two-year,
US$2 million Exploration Financing Agreement
with Riverside Resources to fund exploration in Mexicos north-eastern Sonora region. The exploration program will focus on the central part of the Laramide Copper Belt.
In July 2019, BHP entered into a binding
earn-in
and joint venture agreement with Luminex for its Tarqui and Tarqui 2
mining concessions in Ecuador. BHP will act as manager and operator of the joint venture company, and is preparing to continue exploration activities on the sites.
Variance analysis relates to the relative performance of BHP and/or its operations during the 2019 financial year compared with the 2018 financial year, unless
otherwise noted. Production volumes, sales volumes and capital and exploration expenditure from subsidiaries are reported on a 100 per cent basis; production and sales volumes from equity accounted investments and other operations are reported
on a proportionate consolidation basis. Numbers presented may not add up precisely to the totals provided due to rounding. Copper equivalent production based on 2019 financial year average realised prices.
The following footnotes apply to this Operational Review:
(1)
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Excludes production from Onshore US.
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(2)
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2019 financial year unit cost guidance: Petroleum <US$11/boe, Escondida <US$1.15/lb, WAIO <US$15/t,
Queensland Coal
US$68-72/t
and NSWEC ~US$51/t; based on exchange rates of AUD/USD 0.75 and USD/CLP 663.
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(3)
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Underlying EBIT and Underlying EBITDA are used to reflect the underlying performance of BHP. Underlying EBIT is
earnings before net finance costs, taxation and any exceptional items. Underlying EBITDA is Underlying EBIT before depreciation, amortisation and impairment.
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(4)
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Based on
business-as-usual
development; excludes project development.
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The following abbreviations may have been used throughout this report: barrels (bbl);
billion cubic feet (bcf); cost and freight (CFR); cost, insurance and freight (CIF); dry metric tonne unit (dmtu); free on board (FOB); grams per tonne (g/t); kilograms per tonne (kg/t); kilometre (km); metre (m); million barrels of oil equivalent
(MMboe); million cubic feet per day (MMcf/d); million tonnes (Mt); million tonnes per annum (Mtpa); ounces (oz); pounds (lb); thousand barrels of oil equivalent (Mboe); thousand barrels of oil equivalent per day (Mboe/d); thousand ounces (koz);
thousand standard cubic feet (Mscf); thousand tonnes (kt); thousand tonnes per annum (ktpa); thousand tonnes per day (ktpd); tonnes (t); and wet metric tonnes (wmt).
In this release, the terms BHP, Group, BHP Group, we, us, our and ourselves are
used to refer to BHP Group Limited, BHP Group plc and, except where the context otherwise requires, their respective subsidiaries as defined in note 27 Subsidiaries in section 5.1 of BHPs 30 June 2018 Annual Report and Form
20-F,
unless stated otherwise. Notwithstanding that this release may include production, financial and other information from
non-operated
assets,
non-operated
assets are not included in the BHP Group and, as a result, statements regarding our operations, assets and values apply only to our operated assets unless stated otherwise.
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BHP Operational Review for the year ended 30 June 2019
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10
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