TIDMANTO
RNS Number : 7914R
Antofagasta PLC
31 October 2013
NEWS RELEASE, 31 OCTOBER, 2013
Q3 2013 PRODUCTION REPORT
HIGHLIGHTS
The Group remains on-track to achieve production and net cash
costs for the full year 2013
PRODUCTION
-- Group copper production was in line with expectations at
174,200 tonnes in Q3 2013, a 3.4% decrease versus the previous
quarter primarily due to forecast lower grades across the
operations
-- For the year to date, copper production was 538,300 tonnes, a
4.4% increase versus the same period in 2012 primarily reflecting
the improved operational performance at Esperanza
-- Group gold production was 67,700 ounces in Q3 2013, an 11.7%
decrease on Q2 as a result of lower grades at Esperanza
-- For the year to date, gold production was 230,600 ounces,
8.0% higher than the same period in the previous year
-- Forecast group production for 2013 remains unchanged at
700,000 tonnes of copper, 280,000 ounces of gold and 8,000 tonnes
of molybdenum
CASH COSTS
-- Cash costs before by-product credits were in line with
expectations at $1.84/lb in Q3 2013, 2.2% higher than the previous
quarter, primarily due to higher costs at Esperanza
-- Net cash costs were $1.48/lb in Q3 2013, 8.0% higher than Q2,
mainly reflecting the lower gold production at Esperanza
-- In line with expectations, net cash costs were $1.33/lb in
the first nine months of 2013, a 34.3% increase against the
comparable period of 2012, principally due to lower molybdenum
production, lower by-product commodity prices, an increase in the
energy price at Los Pelambres and increased costs at Esperanza
-- The Group remains on track to achieve cash costs before
by-product credits of approximately $1.85/lb and net cash costs of
approximately $1.40/lb
GROUP PRODUCTION AND CASH 2013 YTD
COSTS
Q3 Q2 % 2013 2012 %
------------------------------ ------ ------ ------ ------- ------ ------ -------
Copper production kt 174.2 180.3 (3.4) 538.3 515.8 4.4
Gold production koz 67.7 76.7 (11.7) 230.6 213.5 8.0
Molybdenum production kt 2.0 2.0 - 6.7 9.5 (29.5)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Cash costs before by-product
credits $/lb 1.84 1.80 2.2 1.79 1.60 11.9
Net cash costs $/lb 1.48 1.37 8.0 1.33 0.99 34.3
------------------------------ ------ ------ ------ ------- ------ ------ -------
MINING OPERATIONS
Los Pelambres
Los Pelambres produced 99,700 tonnes of copper in Q3 2012
compared with 102,500 tonnes in Q2 as plant throughput decreased by
3.2% to 172,700. This decrease was as a result of harder ore, which
reduced throughput, and the expected decrease in ore grades from
0.73% in Q2 to 0.71% in Q3, which was partly offset by higher
recoveries.
Copper production in the first nine months of 2013 was 303,400
tonnes compared with 296,000 tonnes in the comparable period in
2012, primarily due to higher ore grades.
Molybdenum production remained stable between Q3 and Q2 2013 at
2,000 tonnes despite lower plant throughput and grade as recoveries
improved. Molybdenum production decreased by 29.5% to 6,700 tonnes
in the first nine months of 2013 compared with the first nine
months of 2012 mainly reflecting the decrease in grades from 0.023%
to 0.015%, in line with expectations and guidance.
Cash costs before by-product credits decreased by $0.17/lb
between Q3 and Q2 2013, primarily due to a fall in the energy price
as a greater proportion of power was generated in the SIC (the
central grid) by lower cost hydroelectric producers. Net cash costs
were $0.13/lb lower at $1.17/lb in Q3 2013 compared with the
previous quarter. This reduction reflects the decrease in the cash
costs before by-product credits partly offset by a $0.04/lb
decrease in by-product credits due to a lower molybdenum price in
Q3 compared to Q2, despite higher gold production.
Net cash costs for the first nine months of 2013 were $1.18/lb
compared to $0.81/lb in the first nine months of 2012 principally
due to lower molybdenum production, lower molybdenum and gold
prices, and the higher energy costs resulting from the movement to
spot prices following expiry of the long-term energy supply
contract at the end of 2012.
LOS PELAMBRES 2013 YTD
Q3 Q2 % 2013 2012 %
------------------------------ ------ ------ ------ ------- ------ ------ -------
Daily ore throughput kt 172.7 178.4 (3.2) 175.8 177.0 (0.7)
Copper grade % 0.71 0.73 (2.7) 0.73 0.70 4.3
Copper recovery % 91.5 89.7 2.0 89.9 90.5 (0.7)
Copper production kt 99.7 102.5 (2.7) 303.4 296.0 2.5
Copper sales kt 110.7 92.2 20.1 305.7 288.2 6.1
------------------------------ ------ ------ ------ ------- ------ ------ -------
Molybdenum grade % 0.014 0.016 (12.5) 0.015 0.023 (34.8)
Molybdenum recovery % 85.1 79.8 6.6 81.5 82.8 (1.6)
Molybdenum production kt 2.0 2.0 - 6.7 9.5 (29.5)
Molybdenum sales kt 1.9 2.1 (9.5) 6.2 9.8 (36.7)
Gold production and sales koz 16.6 12.5 32.8 40.9 38.8 5.4
------------------------------ ------ ------ ------ ------- ------ ------ -------
Cash costs before by-product
credits* $/lb 1.48 1.65 (10.3) 1.55 1.37 13.1
Net cash costs $/lb 1.17 1.30 (10.0) 1.18 0.81 45.7
------------------------------ ------ ------ ------ ------- ------ ------ -------
* Includes tolling charges of $0.18/lb in Q3 2013 and $0.17/lb
in 2013 YTD
Esperanza
Esperanza produced 41,000 tonnes of copper in Q3 2013, a 2.8%
decrease compared with the previous quarter. This was primarily due
to a 22.9% decrease in the copper grade to 0.54% and a 7.1%
decrease in copper recovery to 83.6%, which was partially offset by
a 7.7% increase in daily throughput. The decrease in copper grade
was mainly due to mining a lower grade phase of the pit throughout
the quarter as well as due to localised geotechnical issues, which
resulted in the temporary processing of lower grade stockpiles. The
decrease in recoveries was primarily a result of this decline in
grade.
Copper production in the first nine months of 2013 was 131,100
tonnes compared with 113,700 tonnes in the comparable period in
2012 reflecting the improved performance of the operation as
throughput increased 11.2% to an average of 87,300 tonnes per
day.
Gold production was 51,000 ounces in Q3, 20.6% lower than in the
previous quarter mainly as a result of lower grades from the
processing of lower grade stockpiles as well as lower recoveries.
The production in the first nine months of 2013 was 189,600 ounces
compared with 174,600 ounces in the comparable period of 2012,
which was principally due to the higher daily throughput,
marginally offset by a decline in grades.
Cash costs before by-product credits were $2.73/lb in Q3
compared with $2.14/lb in the previous quarter. This increase was
primarily due to the lower copper grade and the use of higher cost
stockpiles, partly as a result of the temporary mine issues
outlined above. By-product credits fell by $0.21/lb in the quarter
due to the lower gold production. This resulted in net cash costs
of $1.94/lb in Q3 compared with $1.14/lb in the previous
quarter.
Net cash costs for the first nine months of 2013 were $1.29/lb
compared with $0.54/lb in the comparable period in 2012. This
increase was mainly due to the consumption of higher cost
stockpiles and higher mine movement costs in 2013. The lower gold
grades and price contributed a $0.27/lb increase in the net cash
cost.
ESPERANZA 2013 YTD
Q3 Q2 % 2013 2012 %
------------------------------ ------ ----- ----- ------- ------ ------ ---------
Daily ore throughput kt 88.4 82.1 7.7 87.3 78.5 11.2
Copper grade % 0.54 0.70 (22.9) 0.65 0.66 (1.5)
Copper recovery % 83.6 90.0 (7.1) 87.7 87.1 0.7
Copper production kt 41.0 42.2 (2.8) 131.1 113.7 15.3
Copper sales kt 47.0 37.2 26.3 125.2 104.8 19.5
------------------------------ ------ ----- ----- ------- ------ ------ ---------
Gold grade % 0.26 0.35 (25.7) 0.32 0.36 (11.1)
Gold recovery % 68.9 85.6 (19.5) 80.4 76.1 5.7
Gold production koz 51.0 64.2 (20.6) 189.6 174.6 8.6
Gold sales koz 60.6 53.1 14.1 176.7 163.8 7.9
------------------------------ ------ ----- ----- ------- ------ ------ ---------
Cash costs before by-product
credits* $/lb 2.73 2.14 27.6 2.31 1.83 26.2
Net cash costs $/lb 1.94 1.14 70.2 1.29 0.54 138.9
------------------------------ ------ ----- ----- ------- ------ ------ ---------
* Includes tolling charges of $0.21/lb in Q3 2013 and $0.20/lb
in 2013 YTD
El Tesoro
El Tesoro produced 24,800 tonnes of copper in Q3 compared to
26,400 tonnes in Q2 as a result of a decrease in ore grade, which
was a lower than expected decline as mining stopped at the higher
grade Mirador pit in September, some three months later than had
originally been planned. Production was 76,500 tonnes in the first
nine months of 2013 compared with production of 78,200 tonnes in
the same period of 2012 principally due to the slightly lower grade
this year, marginally offset by higher copper recoveries.
Cash costs increased in Q3 to $1.33/lb compared with $1.26/lb in
Q2 principally reflecting the lower copper grade in the period.
Cash costs for the first nine months of 2013 were $1.28/lb, a 17.4%
decrease on the comparable period primarily reflecting lower
consumption of acid and favourable inventory movements.
EL TESORO 2013 YTD
Q3 Q2 % 2013 2012 %
--------------------------- ------ ----- ----- ------- ----- ----- -------
Daily ore throughput kt 20.4 20.5 (0.5) 19.4 20.1 (3.5)
Copper grade % 1.43 1.63 (12.3) 1.63 1.68 (3.0)
Copper recovery % 80.5 77.2 4.4 78.8 75.0 5.1
Copper production - heap
leach kt 22.6 24.3 (7.0) 70.2 69.9 0.4
Copper production - total
* kt 24.8 26.4 (6.1) 76.5 78.2 (2.2)
Copper sales kt 25.4 29.9 (15.1) 74.8 74.5 (0.4)
--------------------------- ------ ----- ----- ------- ----- ----- -------
Cash costs $/lb 1.33 1.26 5.6 1.28 1.55 (17.4)
--------------------------- ------ ----- ----- ------- ----- ----- -------
* Includes production from ROM material
Michilla
Michilla produced 8,700 tonnes of copper in Q3 compared to 9,300
tonnes in Q2 primarily as a result of lower throughput despite
marginally higher grade and recoveries. Production from the primary
heap leach was 22,600 tonnes in the first nine months of 2013
compared to 24,900 tonnes in the same period of 2012 principally
reflecting the 16.4% decline in the combined grade of the mine's
own operations and third-party ore, marginally offset by higher
throughput and recoveries.
Cash costs were $3.32/lb in Q3 compared with $3.43/lb in the
previous quarter due to fewer waste tonnes being moved at the Lince
pit. Cash costs for the first nine months of 2013 were $3.35/lb, a
6.3% increase on the comparable period primarily reflecting the
additional stripping activities to the mine site that will support
mining activities in 2014.
MICHILLA 2013 YTD
Q3 Q2 % 2013 2012 %
--------------------------- ------ ----- ----- ------- ----- ----- -------
Daily ore throughput kt 11.1 12.1 (8.3) 11.5 11.0 4.5
Copper grade % 0.93 0.91 1.1 0.92 1.10 (16.4)
Copper recovery % 78.5 77.3 1.6 77.3 73.7 4.9
Copper production - heap
leach kt 7.2 7.8 (7.7) 22.6 24.9 (9.2)
Copper production - total
* kt 8.7 9.3 (6.5) 27.3 27.8 (1.8)
Copper sales kt 7.8 11.8 (33.9) 26.3 27.5 (4.4)
--------------------------- ------ ----- ----- ------- ----- ----- -------
Cash costs $/lb 3.32 3.43 (3.2) 3.35 3.15 6.3
--------------------------- ------ ----- ----- ------- ----- ----- -------
* Includes production from secondary leaching
Project update
The construction of Antucoya remains on time and on budget with
44% total progress (design, procurement and physical progress) and
14% construction progress as at 30 September 2013.
Commodity prices and exchange rates
2013 YTD
Q3 Q2 % 2013 2012 %
---------------- ------- ------ ------ ------- ------ ------ -------
Copper
---------------- ------- ------ ------ ------- ------ ------ -------
Market price $/lb 3.21 3.24 (0.9) 3.35 3.50 (7.3)
Realised price $/lb 3.45 2.90 19.0 3.26 3.74 (12.8)
---------------- ------- ------ ------ ------- ------ ------ -------
Gold
---------------- ------- ------ ------ ------- ------ ------ -------
Market price $/oz 1,326 1,415 (6.3) 1,456 11.9 (11.9)
Realised price $/oz 1,319 1,287 2.5 1,402 12.3 (16.0)
---------------- ------- ------ ------ ------- ------ ------ -------
Molybdenum
---------------- ------- ------ ------ ------- ------ ------ -------
Market price $/lb 9.4 10.8 (13.0) 10.5 1,651 (21.1)
Realised price $/lb 8.4 10.6 (20.8) 10.0 1,668 (18.7)
---------------- ------- ------ ------ ------- ------ ------ -------
Exchange rates
---------------- ------- ------ ------ ------- ------ ------ -------
Chilean peso per $ 507 484 4.8 488 490 (0.3)
---------------- ------- ------ ------ ------- ------ ------ -------
The spot commodity price for copper, gold and molybdenum as at
30 September 2013 were $3.31/lb, $1,331/oz and $9.2/lb respectively
compared with $3.06/lb, $1,198/oz and $10.3/lb at the end of the
previous quarter.
The provisional pricing adjustments and hedging effects in the
period for copper, gold and molybdenum were negative $123.5m,
negative $24.1m and negative $14.7m respectively.
Transport and water
Total volumes transported by the transport division were 1.9
million tonnes in Q3 2013, in line with the previous quarter. Total
volumes in the first nine months of 2013 were 5.5 million tonnes, a
3.2% decrease versus the comparable period in 2012.
The water division sold 12.6 million cubic metres in Q3 2013,
marginally less than in the previous quarter. Total volumes in the
first nine months of 2013 were 38.3 million cubic metres, slightly
ahead versus the comparable period of 2012.
2013 YTD
Q3 Q2 % 2013 2012 %
--------------------------- --------- ------ ------ ------ ------ ------ ------
Total tonnage transported kt 1,851 1,875 (1.3) 5,542 5,728 (3.2)
million
Water volumes sold m(3) 12.6 12.7 (0.8) 38.3 38.0 0.8
--------------------------- --------- ------ ------ ------ ------ ------ ------
Interim Management Statement
This report represents the Interim Management Statement for the
purposes of the UK Listing Authority's Disclosure and Transparency
Rules. Other than as set out above, there have been no material
events or transactions, or significant changes to the financial
position and performance of the Group, since 30 June 2013.
Investors - London Media (Brunswick)
Andrew Lindsay alindsay@antofagasta.co.uk Carole Cable
antofagasta@brunswickgroup.com
Clare wood cwood@antofagasta.co.uk Robin Wrench
antofagasta@brunswickgroup.com
Telephone +44 20 7808 0988 Telephone +44 20 7404 5959
Investors - Santiago
Alejandro Rivera arivera@aminerals.cl
Telephone +56 2 2798 7000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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