TIDMANTO
RNS Number : 2812M
Antofagasta PLC
20 January 2021
NEWS RELEASE, 20 JANUARY 2021
Q4 2020 PRODUCTION REPORT
FULL YEAR GUIDANCE ACHIEVED
STRONG FINAL QUARTER
Antofagasta plc CEO, Iván Arriagada said: "Despite a challenging
year that was placed on the world by COVID-19, the resilience and
flexibility of our operations has meant that we have finished the
year strongly, achieving full year production guidance and lower
cash costs than in 2019 .
"Full year copper production was 733,900 tonnes and cash costs
were $1.14/lb, reflecting the resilience and flexibility of the
Company in the face of the year's challenges.
"Our priority during 2020 was to protect the health and safety
of our employees and contractors, and the communities near our
operations, and that will not change as we keep in place all the
health protocols we successfully implemented in 2020. I am also
pleased to report that, for a second year in a row, there were no
fatalities and our safety performance continues to improve at all
our operations.
"We expect another solid performance in 2021 with copper
production of 730-760,000 tonnes at a net cash cost of $1.25/lb as
ore grades increase at Centinela Concentrates and operating
efficiency at our mines remains high."
HIGHLIGHTS
PRODUCTION
-- Copper production for the full year was 733,900 tonnes, in
line with guidance and 4.7% lower than the record production in
2019 mainly on expected lower grades at Centinela Concentrates
-- Copper production in Q4 2020 was 192,600 tonnes, 13.6% higher
than in the previous quarter on higher throughput at all
operations
-- Gold production for the quarter was 54,700 ounces, 42.8%
higher than in the previous quarter as throughput, grades and
recoveries increased at Centinela. Full year production was above
guidance at 204,100 ounces, 27.7% less than in 2019, on expected
lower grades at Centinela
-- Molybdenum production in the quarter was 3,700 tonnes, 8.8%
higher than the previous quarter on higher throughput at Los
Pelambres. For the full year, production was 12,600 tonnes, 8.6%
higher than in 2019 and within guidance
CASH COSTS
-- Cash costs before by-product credits in 2020 were $1.56/lb,
9c/lb lower than last year due the weaker Chilean peso, lower input
costs and continued tight cost control, partially offset by lower
production
-- Cash costs before by-product credits in Q4 2020 were
$1.63/lb, 1.9% higher than in Q3 2020 due to stronger exchange rate
and the impact of the one-off signing bonus payable following the
successful completion of labour negotiations at Centinela
-- Net cash costs for the full year were $1.14/lb, below
guidance and 6.6% lower than in 2019 due to lower cash costs before
by-product credits
-- Net cash costs in Q4 2020 were $1.14/lb, 4.2% lower than in
the previous quarter, reflecting the higher by-products credits,
partially offset by the increase in cash costs before by-products
credits
GUIDANCE 2021
-- Guidance assumes COVID-19 will remain in place for all of
2021, limiting transport to and from site and available camp
accommodation, and requiring the extensive use of remote working
and the implementation of a full set of health controls at our
operations and offices. Considering the unprecedented situation,
further changes may be required during the year
-- Group production in 2021 is expected to be 730-760,000 tonnes
of copper (as previously announced), 240-260,000 ounces of gold and
9,500-11,000 tonnes of molybdenum. The higher copper and gold
production than in 2020 reflects higher grades at Centinela
Concentrates
-- Group cash costs in 2021 before and after by-product credits
are expected to be at $1.65/lb and $1.25/lb respectively
-- Capital expenditure in 2021 is expected to be $1.6 billion,
as the rate of expenditure on our growth projects accelerates
following their temporary suspension in 2020 which deferred some
$200 million into 2021 and higher costs at the Los Pelambres
Expansion project
GROWTH PROJECTS UPDATE
-- The Los Pelambres Expansion project was 45% complete as at the end of the quarter
-- As previously announced, the construction of the Los
Pelambres Expansion project restarted in August and a detailed
review of the project schedule and costs, including those
associated with the realised and continued restrictions due to
COVID-19 and changes to the marine works to enable the future
expansion of the desalination plant, has recently been
completed.
The marine works associated with the inlet and outlet pipes and
the desalination plant will now be sized to allow for an expanded
water flow required for the future plant expansion to 800 litres
per second. Other adjustments including ancillary piping, cabling,
civil works and the expanded future plant footprint have also been
included in the revised project plan where feasible within the
existing permits. The balance of the project remains within the
original scope.
The revised capital cost estimate resulting from the review is
$1.7 billion (up from the original project cost of $1.3 billion)
and completion is now expected in early H2 2022. Of this increase
approximately $235 million is related to the revised marine works,
desalination plant and pipeline, $140 million to COVID-19 costs and
construction schedule extension and the balance reflects other
adjustments including changes in input prices and exchange
rate.
Given the high degree of interactions with the existing
operations and the nearby communities, the very high manpower
requirements during peak construction in the original project
execution plan have been revised down to address the COVID-19 risks
and restrictions. These restrictions are assumed to continue for
the whole of 2021, limiting on-site manpower to approximately 75%
of the original planned levels which results in the requirement to
extend the original construction schedule.
-- As previously announced, the Zaldívar Chloride Leach project
and Esperanza Sur pit are expected to achieve first production in
the first half of 2022. Capital expenditure estimates are
unchanged
GROUP PRODUCTION AND CASH COSTS Year to Date Q4 Q3
----------------------- ------ ------
2020 2019 % 2020 2020 %
------------------------------ ------ ------ ------ ------- ------ ------ ------
Copper production kt 733.9 770.0 (4.7) 192.6 169.6 13.6
Copper sales kt 738.5 772.2 (4.4) 202.2 162.1 24.7
Gold production koz 204.1 282.3 (27.7) 54.7 38.3 42.8
Molybdenum production kt 12.6 11.6 8.6 3.7 3.4 8.8
------------------------------ ------ ------ ------ ------- ------ ------ ------
Cash costs before by-product
credits (1) $/lb 1.56 1.65 (5.5) 1.63 1.60 1.9
Net cash costs (1) $/lb 1.14 1.22 (6.6) 1.14 1.19 (4.2)
------------------------------ ------ ------ ------ ------- ------ ------ ------
(1) Cash cost is a non-GAAP measure used by the mining industry
to express the cost of production in US dollars per pound of copper
produced.
Investors - London Media - London
Andrew Lindsay alindsay@antofagasta.co.uk Carole Cable antofagasta@brunswickgroup.com
Telephone +44 20 7808 0988 Telephone +44 20 7404 5959
Andres Vergara avergara@antofagasta.co.uk
Telephone +44 20 7808 0988 Media - Santiago
Pablo Orozco porozco@aminerals.cl
Carolina Pica cpica@aminerals.cl
Telephone +56 2 2798 7000
Register on our website to receive our email alerts
http://www.antofagasta.co.uk/investors/news/email-alerts/
MINING OPERATIONS
Los Pelambres
Los Pelambres had a strong year with copper production at the
top end of its guidance and costs outperforming guidance despite
restrictions due to the pandemic.
Copper production at Los Pelambres in the quarter was 90,500
tonnes, 5.4% higher than in the previous quarter as higher
throughput, following major maintenance in Q3, was partially offset
by lower ore grades.
For the full year, copper production was 359,600 tonnes, 1.0%
lower than last year primarily due to lower throughput, which was
largely offset by higher recoveries.
Molybdenum production was 3,000 tonnes in Q4 2020, 11.1% higher
than in the previous quarter, and for the full year was 10,900
tonnes, slightly lower than in 2019 as a result of the lower
throughput.
Cash costs before by-product credits in Q4 were $1.36/lb, 2.3%
higher than in previous quarter on higher throughput and lower
grades. For the full year cash costs before by-product credits were
$1.27/lb, 9.3% lower than 2019 due to a more favourable local
exchange rate, lower input costs and savings from the Cost and
Competitiveness Programme.
Net cash costs for the quarter were $0.80/lb, and for the full
year were $0.81/lb, 11.0% lower than in 2019 despite lower
by-product credits.
Labour negotiations with the workers' unions at the mine and the
plant are underway and are expected to be concluded by the end of
Q1 2021.
Major maintenance in 2021 is scheduled in Q2 and Q4.
LOS PELAMBRES Year to Date Q4 Q3
----------------------- ------ ------
2020 2019 % 2020 2020 %
------------------------------ ------ ------ ------ ------- ------ ------ ------
Daily ore throughput kt 161.9 167.8 (3.5) 167.8 155.4 8.0
Copper grade % 0.70 0.70 0.0 0.67 0.70 (4.3)
Copper recovery % 90.0 87.8 2.5 90.3 89.9 0.4
Copper production kt 359.6 363.4 (1.0) 90.5 85.9 5.4
Copper sales kt 366.0 356.1 2.8 97.1 82.1 18.3
------------------------------ ------ ------ ------ ------- ------ ------ ------
Molybdenum grade % 0.021 0.021 0.0 0.023 0.023 0.0
Molybdenum recovery % 85.6 85.0 0.7 85.1 86.4 (1.5)
Molybdenum production kt 10.9 11.2 (2.7) 3.0 2.7 11.1
Molybdenum sales kt 10.8 11.8 (8.5) 3.3 2.9 13.8
Gold grade g/t 0.05 0.05 0.6 0.05 0.05 (2.5)
Gold recovery % 73.0 70.5 3.5 74.5 73.3 1.6
Gold production koz 60.3 59.7 1.0 16.6 14.6 13.7
Gold sales koz 58.4 52.6 11.0 16.7 14.0 19.3
------------------------------ ------ ------ ------ ------- ------ ------ ------
Cash costs before by-product
credits (1) $/lb 1.27 1.40 (9.3) 1.36 1.33 2.3
Net cash costs (1) $/lb 0.81 0.91 (11.0) 0.80 0.86 (7.0)
------------------------------ ------ ------ ------ ------- ------ ------ ------
(1) Includes tolling charges of $0.15/lb in Q4 2020, $0.17/lb in
Q3 2020, $0.18/lb in FY 2020 and $0.23/lb in FY 2019
Centinela
Centinela had a solid year in 2020 despite expected lower copper
and gold grades, as throughput increased at both the concentrate
and cathodes lines and cash costs outperformed guidance.
Centinela produced 70,000 tonnes of copper during the quarter,
26.8% higher than in the previous quarter on higher throughput and
grades at both Centinela Concentrates and Centinela Cathodes.
Production for 2020 was 246,800 tonnes, 10.8% lower than in 2019,
due to the expected lower grades at Centinela Concentrates,
partially offset by the higher production at Centinela Cathodes due
to increased plant throughput during the year.
Production of copper in concentrate was 46,600 tonnes in Q4
2020, 45.2% higher than in the previous quarter on higher grades
and recoveries, and throughput was at its highest level since 2018.
For the full year, copper in concentrate production was 153,500
tonnes, 21.5% lower than in 2019 as copper grades decreased to an
average of 0.53%.
Copper cathode production during the quarter was 23,400 tonnes,
1.3% higher than Q3 2020. For the full year, copper cathode
production was 93,300 tonnes, 15.0% higher than in 2019 primarily
due to higher throughput and grades.
Gold production was 38,000 ounces in the quarter, 60.3% higher
than Q3 on higher throughput, grades and recoveries. For the full
year 2020, gold production was 143,700 ounces, 35.4% lower than
2019, due to expected lower grades.
Cash costs before by-product credits were $1.80/lb in Q4 2020,
6.7% lower than in the previous quarter due to higher production,
partially offset by the impact of a one-off signing bonus following
the completion of labour negotiations. Cash costs before by-product
credits for the full year were $1.85/lb, 1.1% higher than in 2019
as a result of the lower copper production offset by tight cost
control, a weaker Chilean Peso and lower input costs.
By-product credits increased in Q4 to $0.62/lb as gold
production increased. For the full year, by-product credits were
$0.58/lb, $0.01/lb higher than in 2019 as lower gold production was
offset by a higher realised gold price.
Net cash costs in Q4 2020 were $1.18/lb, 15.7% lower than in the
previous quarter. During the full year net cash costs were
$1.27/lb, 0.8% higher than 2019.
Labour negotiations with two workers' unions were successfully
concluded during the quarter, and with another two labour
negotiations having been completed earlier during the year. The
next negotiation at Centinela are scheduled for 2023.
Major maintenance in 2021 is scheduled in Q1 and Q3.
CENTINELA Year to Date Q4 Q3
----------------------- ------ ------
2020 2019 % 2020 2020 %
------------------------------ ------ ------ ------ ------- ------ ------ -------
CONCENTRATES
Daily ore throughput kt 97.0 92.9 4.4 108.0 92.5 16.8
Copper grade % 0.53 0.69 (23.2) 0.59 0.49 20.4
Copper recovery % 84.5 85.8 (1.5) 82.9 82.3 0.7
Copper production kt 153.5 195.5 (21.5) 46.6 32.1 45.2
Copper sales kt 152.7 205.3 (25.6) 45.1 35.7 26.3
------------------------------ ------ ------ ------ ------- ------ ------ -------
Molybdenum grade % 0.012 0.008 50.0 0.015 0.014 7.1
Molybdenum recovery % 38.6 78.2 (50.6) 44.6 50.1 (11.0)
Molybdenum production kt 1.7 0.4 325.0 0.7 0.7 0.0
Molybdenum sales kt 1.7 0.3 466.7 0.9 0.7 28.6
Gold grade g/t 0.19 0.30 (36.7) 0.18 0.14 28.6
Gold recovery % 70.6 70.0 0.9 68.9 65.7 4.9
Gold production koz 143.7 222.6 (35.4) 38.0 23.7 60.3
Gold sales koz 141.2 236.3 (40.2) 34.9 25.6 36.3
------ ------ ------- ------ ------ -------
CATHODES
Daily ore throughput kt 56.9 48.4 17.6 58.0 57.8 0.3
Copper grade % 0.64 0.59 8.5 0.64 0.63 1.6
Copper recovery % 67.6 70.0 (3.4) 65.1 66.9 (2.7)
Copper production - heap
leach kt 89.0 75.4 18.0 22.3 22.4 (0.4)
Copper production - total
(1) kt 93.3 81.1 15.0 23.4 23.1 1.3
Copper sales kt 95.0 82.6 15.0 26.1 21.3 22.5
------------------------------ ------ ------ ------ ------- ------ ------ -------
Total copper production kt 246.8 276.6 (10.8) 70.0 55.2 26.8
Cash costs before by-product
credits (2) $/lb 1.85 1.83 1.1 1.80 1.93 (6.7)
Net cash costs (2) $/lb 1.27 1.26 0.8 1.18 1.40 (15.7)
------------------------------ ------ ------ ------ ------- ------ ------ -------
(1) Includes production from ROM material
(2) Includes tolling charges of $0.14/lb in Q4 2020, $0.15/lb in
Q3 2020, $0.14/lb in FY 2020 and $0.17/lb in FY 2019
Antucoya
Copper production at Antucoya during the quarter was 21,600
tonnes, 24.9% higher than the previous quarter as throughput,
grades and recoveries increased. Production for the full year was
79,300 tonnes, 10.3% higher than the previous year on higher
throughput, partially offset by lower grades and recoveries.
During the quarter, cash costs were $1.87/lb compared to
$1.95/lb in Q3 as production increased. For the full year cash
costs were $1.82/lb, 16.1% lower than in 2019 due to tight cost
control, higher production, the weaker Chilean peso and lower input
prices.
Major maintenance in 2021 is scheduled in Q1 and Q3.
ANTUCOYA Year to Date Q4 Q3
--------------------- ----- -----
2020 2019 % 2020 2020 %
---------------------- ------ ----- ----- ------- ----- ----- ------
Daily ore throughput Kt 76.0 66.5 14.3 79.5 68.5 16.1
Copper grade % 0.38 0.39 (2.6) 0.39 0.35 11.4
Copper recovery % 73.7 74.6 (1.2) 75.3 72.4 4.0
Copper production Kt 79.3 71.9 10.3 21.6 17.3 24.9
Copper sales Kt 76.5 71.6 6.8 22.8 13.2 72.7
---------------------- ------ ----- ----- ------- ----- ----- ------
Cash costs $/lb 1.82 2.17 (16.1) 1.87 1.95 (4.1)
---------------------- ------ ----- ----- ------- ----- ----- ------
Zaldívar
Zaldívar produced 10,600 tonnes of copper in the quarter, 4.5%
lower than in the previous quarter on lower grades and recoveries,
partially offset by higher throughput. Production for the year was
48,200 tonnes, 17.0% lower than in 2019 mainly on lower recoveries
as the proportion of secondary sulphides, relative to oxides,
increased.
Cash costs during the quarter were $2.25/lb and for the full
year were $1.80/lb, 2.9% higher than in 2019, as lower production
was offset by the weaker exchange rate and lower input prices.
Major maintenance in 2021 is scheduled in Q2.
ZALDÍVAR Year to Date Q4 Q3
--------------------- ----- -----
2020 2019 % 2020 2020 %
--------------------------- ------ ----- ----- ------- ----- ----- -------
Daily ore throughput kt 39.3 39.6 (0.8) 34.8 33.4 4.2
Copper grade % 1.02 1.04 (1.9) 0.99 1.19 (16.8)
Copper recovery (1) % 50.1 63.6 (21.2) 50.1 53.7 (6.7)
Copper production - heap
leach (2) kt 36.6 45.3 (19.1) 8.0 8.2 (2.5)
Copper production - total
(2,3) kt 48.2 58.1 (17.0) 10.6 11.1 (4.5)
Copper sales (2) kt 48.3 56.7 (14.8) 11.1 9.8 13.3
Cash costs $/lb 1.80 1.75 2.9 2.25 1.55 45.2
----- ----- ----- -----
(1) Restated from average over full leach cycle to 12-month
rolling recoveries
(2) Group's 50% share
(3) Includes production from secondary leaching
Transport Division
The Division transported 1.6 million tonnes in Q4 2020, 4.0%
higher than in the previous quarter. For the full year, transport
volumes decreased by 1.4% to 6.4 million tonnes impacted by the
pandemic.
TRANSPORT Year to Date Q4 Q3
---------------------- ------ ------
2020 2019 % 2020 2020 %
--------------------------- ---- ------ ------ ------ ------ ------ ------
Rail kt 4,847 4,983 (2.7) 1,255 1,185 5.9
Road kt 1,597 1,551 3.0 390 396 (1.5)
Total tonnage transported kt 6,444 6,533 (1.4) 1,645 1,581 4.0
------ ------ ------ ------
Commodity prices and exchange rates
Year to Date Q4 Q3
----------------------- ------ ------
2020 2019 % 2020 2020 %
------ ------ ------- ------ ------
Copper
Market price $/lb 2.80 2.72 2.9 3.25 2.96 9.8
Realised price $/lb 2.98 2.75 8.4 3.67 3.28 11.9
---------------- ------ ------ ------ ------- ------ ------ ------
Gold
Market price $/oz 1,770 1,393 27.1 1,875 1,912 (1.9)
Realised price $/oz 1,797 1,416 26.9 1,901 1,982 (4.1)
---------------- ------ ------ ------ ------- ------ ------ ------
Molybdenum
Market price $/lb 8.7 11.4 (23.7) 9.0 7.7 16.9
Realised price $/lb 8.8 10.8 (18.5) 9.8 7.8 25.6
---------------- ------ ------ ------ ------- ------ ------ ------
Exchange rates
per
Chilean peso $ 792 703 12.7 762 781 (2.4)
---------------- ------ ------ ------ ------- ------ ------ ------
Spot commodity prices for copper, gold and molybdenum as at 31
December 2020 were $3.51/lb, $1,891/oz and $10.0/lb respectively,
compared with $3.00/lb, $1,885/oz and $8.2/lb as at 30 September
2020 and $2.79/lb, $1,523/oz and $9.2/lb as at 31 December
2019.
The provisional pricing adjustments for copper, gold and
molybdenum for the quarter were positive $179.9 million, negative
$1.1 million and positive $7.5 million, respectively.
The provisional pricing adjustments for copper, gold and
molybdenum for the full year were positive $258.4 million, positive
$3.1 million and positive $5.6 million, respectively.
Depreciation and amortisation
Depreciation and amortisation (including loss on disposals) for
2020 is expected to be approximately $1,050 million. This increase
is mainly due to higher amortisation of capitalised stripping costs
under IFRIC 20 Stripping Costs in the Production Phase of a Surface
Mine, particularly at Centinela.
Effective tax rate
The effective tax rate for 2020 is approximately 37%.
Share of profit from associates and JVs
As previously announced, following the agreement to dispose of
the Company's 40% interest in the Hornitos power station in March
the Company has recognised an exceptional post-tax impairment of
$61.1 million, of which $40.2 million is attributable to the equity
owners of the Company.
2021 Guidance
Los Pelambres Centinela Antucoya Zaldívar Group
-------------- ---------- ---------
Production
Copper kt 340 - 350 270 - 280 75 - 80 45 - 50 730 - 760
Gold koz 50 - 60 190 - 200 240 - 260
Molybdenum kt 8.0 - 9.0 1.5 - 2.0 9.5 - 11.0
------------------------ ------ -------------- ---------- --------- -------------- -----------
Grade
Copper % 0.64% 0.60% 0.35% 0.70% -
------------------------ ------ -------------- ---------- --------- -------------- -----------
Cash costs
Cash costs before
by-product credits(1) $/lb 1.45 1.75 1.80 1.75 1.65
Net cash costs (1,
2) $/lb 1.05 1.15 1.80 1.75 1.25
------------------------ ------ -------------- ---------- --------- -------------- -----------
(1) Assumed CLP/USD exchange rate of 780
(2) Includes by-product credits at a gold price of $1,700/oz and
a molybdenum price of $8.5/lb
As previously announced, Group copper production for 2021 is
expected to be 730-760,000 tonnes as grades increase at Centinela
Concentrates, offset by lower grades at the other operations.
Group gold production for 2021 is expected to be 240-260,000
ounces, as grades increase at Centinela Concentrates.
Molybdenum production is expected to be 9,500-11,000 tonnes,
lower than in 2020 on lower grades at Los Pelambres.
Group cash costs in 2021 before and after by-product credits are
expected to increase to be $1.65/lb and $1.25/lb, respectively.
Consolidated Group capital expenditure (i.e. excluding Zaldívar)
is expected to increase to $1.6 billion with some $200 million
carried over from 2020 and increased costs at the Los Pelambres
Expansion project.
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