TIDMANTO
RNS Number : 7814Q
Antofagasta PLC
23 October 2019
NEWS RELEASE, 23 OCTOBER 2019
Q3 2019 PRODUCTION REPORT
CONTINUED STRONG COPPER PRODUCTION AND LOWER COSTS
Antofagasta plc CEO, Iván Arriagada said: "We delivered another
quarter of strong production underpinned by a consistent operating
performance, which together with higher grades at some of our
operations, contributed to year to date copper volumes of 584,200
tonnes which are 16% higher than the same period in 2018.
"Costs continued to decrease over the quarter with net cash
costs falling to $1.12/lb and $1.17/lb for the year to date. For
the full year we expect to deliver production growth in line with
our annual guidance."
HIGHLIGHTS
PRODUCTION
-- Group copper production in Q3 2019 was 197,000 tonnes, 0.8% lower than the previous quarter
-- Group copper production for the first nine months of the year
was 584,200 tonnes, 15.6% higher than in the same period last year
on continued higher throughput and grades
-- Gold production for the year to date was 226,600 ounces,
88.7% higher than in the same period last year on higher grades and
for the quarter was 77,600 ounces, 10.7% lower than the previous
quarter as grades declined at Centinela
-- Molybdenum production in the quarter was 2,900 tonnes, some
100 tonnes lower than the previous quarter. For the year to date,
production was 9,300 tonnes, 1,000 tonnes lower than in the same
period last year on lower grades
CASH COSTS
-- Cash costs before by-product credits in Q3 2019 were $1.60/lb
and for the first nine months of the year were $1.64/lb, 1.2% lower
than in Q2 2019 and 11.4% lower than in the year to date last year.
This improvement in unit costs during the year is due to the
increased production, costs savings arising from the Cost and
Competitiveness Programme and a weaker Chilean Peso
-- Net cash costs were $1.12/lb in Q3 2019 and $1.17/lb for the
year to date, a 1.8% decrease compared with the previous quarter
and 17.6% lower than the same period last year, primarily due to
lower cash costs before by-product credits and higher by-product
credits
GUIDANCE
-- Guidance for 2019 is maintained at 750-790,000 tonnes of
copper with costs expected to be below $1.25/lb
-- In 2020 production is expected to be to 725-755,000 tonnes of
copper as grades decline at Centinela Concentrates before rising
again in 2021
OTHER
-- Progress on the Los Pelambres expansion project reached 24%
as at the end of the quarter and the rate of expenditure is
accelerating as expected
-- Recent civil unrest in Chile could potentially disrupt the
delivery of supplies and the transport of employees and contractors
to our operations, with the impact on production expected to be
approximately 5,000 tonnes
-- Labour negotiations were successfully concluded with the
supervisors at Zaldívar during the quarter and with the supervisors
at Los Pelambres this month. At Antucoya the workers declared a
strike on 15 October and negotiations are continuing
-- Labour negotiations with a new supervisors union at Antucoya
have recently commenced and are expected to be concluded by the end
of the year
GROUP PRODUCTION AND CASH COSTS Year to Date Q3 Q2
----------------------- ------ ------
2019 2018 % 2019 2019 %
------------------------------ ------ ------ ------ ------- ------ ------ -------
Copper production kt 584.2 505.5 15.6 197.0 198.6 (0.8)
Copper sales kt 578.6 499.3 15.9 197.3 202.5 (2.6)
Gold production koz 226.6 120.1 88.7 77.6 86.9 (10.7)
Molybdenum production kt 9.3 10.3 (9.7) 2.9 3.0 (3.3)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Cash costs before by-product
credits (1) $/lb 1.64 1.85 (11.4) 1.60 1.62 (1.2)
Net cash costs (1) $/lb 1.17 1.42 (17.6) 1.12 1.14 (1.8)
------------------------------ ------ ------ ------ ------- ------ ------ -------
(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 Will Medvei antofagasta@brunswickgroup.com
Telephone +44 20 7808 0988 Telephone
+44 20 7404 5959
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/email-alerts/
MINING OPERATIONS
Los Pelambres
Production at Los Pelambres was 90,600 tonnes of copper in Q3
2019, 0.7% lower than in the previous quarter as higher throughput
and recoveries were partially offset by expected lower ore
grades.
In the first nine months of 2019, copper production was 271,000
tonnes, 5.1% higher than in the same period last year primarily due
to higher throughput and grades.
Molybdenum production was 2,800 tonnes in Q3 2019, slightly down
from the previous quarter and for the year to date was 9,000
tonnes, 10.0% lower than the same period last year as a result of
lower molybdenum grades.
Cash costs before by-product credits in Q3 were $1.38/lb, 4.2%
lower than in previous quarter and for the first nine months of the
year were $1.42/lb, 11.3% lower than same period last year. Higher
throughput and ore grades, productivity improvements and the
weakening of the Chilean Peso have all contributed to reducing unit
costs which are lower than the $1.50/lb expected for the full
year.
Net cash costs for the quarter were $0.86/lb, and for the year
to date were $0.88/lb, 8.3% lower than the same period last year
despite by-product credits being 10c/lb less than last year.
Shortly after the end of the period labour negotiations with the
supervisors union were successfully concluded for a period of three
years.
LOS PELAMBRES Year to Date Q3 Q2
----------------------- ------ ------
2019 2018 % 2019 2019 %
------------------------------ ------ ------ ------ ------- ------ ------ ------
Daily ore throughput kt 169.6 165.3 2.6 171.6 165.1 3.9
Copper grade % 0.69 0.67 3.0 0.67 0.72 (6.9)
Copper recovery % 87.7 88.2 (0.6) 88.7 87.6 1.3
Copper production kt 271.0 257.8 5.1 90.6 91.2 (0.7)
Copper sales kt 259.4 255.2 1.6 88.5 96.0 (7.8)
------------------------------ ------ ------ ------ ------- ------ ------ ------
Molybdenum grade % 0.021 0.027 (22.2) 0.022 0.022 0.0
Molybdenum recovery % 85.5 84.0 1.8 86.3 86.0 0.3
Molybdenum production kt 9.0 10.0 (10.0) 2.8 2.9 (3.4)
Molybdenum sales kt 9.5 9.6 (1.0) 3.1 3.1 0.0
Gold production koz 44.8 46.0 (2.6) 15.0 14.2 5.6
Gold sales koz 38.0 45.8 (17.0) 13.1 14.3 (8.4)
------------------------------ ------ ------ ------ ------- ------ ------ ------
Cash costs before by-product
credits (1) $/lb 1.42 1.60 (11.3) 1.38 1.44 (4.2)
Net cash costs (1) $/lb 0.88 0.96 (8.3) 0.86 0.93 (7.5)
------------------------------ ------ ------ ------ ------- ------ ------ ------
(1) Includes tolling charges of $0.21lb in Q3 2019, $0.23/lb in
Q2 2019, $0.23/lb YTD 2019 and $0.25/lb YTD 2018
Centinela
Total copper production at Centinela during the quarter was
73,200 tonnes, 0.1% lower in than in the previous quarter as grades
declined. Production for the year to date was 215,200 tonnes, 33.2%
higher than in the same period last year, primarily as a result of
higher grades at Centinela Concentrates but also with higher
throughput at both the concentrate and oxide plants.
Production of copper in concentrate was 56,700 tonnes in Q3
2019, 2.2% higher than in the previous quarter. For the first nine
months of the year, copper in concentrate production was 156,800
tonnes, compared with 95,300 tonnes in the same period last year,
reflecting higher throughput, grades and recoveries.
Major maintenance of the SAG mill at the concentrate plant is
expected to be completed during October.
Copper cathode production during the quarter was 16,500 tonnes,
6.3% lower than Q2 2019 as throughput reduced by 6.6%. For the year
to date, copper cathode production was 58,400 tonnes, 12.0% lower
than in the same period last year primarily due to lower grades and
recoveries.
Gold production was 62,600 ounces in the quarter, 13.9% lower
than the previous quarter on lower grades, and for the first nine
months was 181,900 ounces, 146% higher than same period last year,
due to higher throughput, grades and recoveries.
Cash costs before by-product credits were $1.72/lb, 4.2% higher
than in the previous quarter. Cash costs before by-product credits
for the first nine months of 2019 were $1.74/lb, 18.7% lower than
the same period in 2018 as a result of higher copper production and
a weaker Chilean Peso.
By-product credits decreased from $0.67/lb in Q2 to $0.64/lb in
Q3 due to lower gold production. For the first nine months of 2019,
by-product credits were $0.60/lb, $0.30/lb higher than in the same
period last year due to increased gold production and a higher
realised gold price.
Net cash costs in Q3 2019 were $1.08/lb, 10.0% higher than the
previous quarter.
During the first nine months of the year net cash costs were
$1.14/lb, 38.0% lower than in same period in 2018 due to lower cash
costs before by-product credits and higher by-product credits.
CENTINELA Year to Date Q3 Q2
----------------------- ------ ------
2019 2018 % 2019 2019 %
------------------------------ ------ ------ ------ ------- ------ ------ -------
CONCENTRATES
Daily ore throughput kt 95.3 91.9 3.7 92.3 92.2 0.1
Copper grade % 0.73 0.50 46.0 0.78 0.81 (3.7)
Copper recovery % 85.6 81.1 5.5 87.7 86.5 1.4
Copper production kt 156.8 95.3 64.5 56.7 55.5 2.2
Copper sales kt 161.9 97.8 65.5 60.1 52.2 15.1
------------------------------ ------ ------ ------ ------- ------ ------ -------
Molybdenum grade (1) % 0.007 0.011 (36.4) 0.007 0.004 75.0
Molybdenum recovery (1) % 76.1 82.4 (7.6) 78.7 66.1 19.1
Molybdenum production (1) kt 0.3 0.3 0.0 0.1 0.1 0.0
Molybdenum sales (1) kt 0.3 0.3 0.0 0.1 0.1 0.0
Gold grade g/t 0.32 0.16 100.0 0.33 0.39 (15.4)
Gold recovery % 69.7 62.9 10.8 69.5 72.4 (4.0)
Gold production koz 181.9 74.1 145.5 62.6 72.7 (13.9)
Gold sales koz 190.4 74.6 155.2 67.0 72.4 (7.5)
------ ------ ------- ------ ------ -------
Daily ore throughput kt 46.1 43.7 5.5 42.8 45.8 (6.6)
Copper grade % 0.58 0.71 (18.3) 0.57 0.55 3.6
Copper recovery % 70.0 72.7 (3.7) 68.8 67.0 2.7
Copper production - heap
leach kt 54.0 61.6 (12.3) 15.3 16.1 (5.0)
Copper production - total
(2) kt 58.4 66.4 (12.0) 16.5 17.6 (6.3)
Copper sales kt 63.5 66.5 (4.5) 18.1 20.6 (12.1)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Total copper production kt 215.2 161.6 33.2 73.2 73.1 0.1
Cash costs before by-product
credits (3) $/lb 1.74 2.14 (18.7) 1.72 1.65 4.2
Net cash costs (3) $/lb 1.14 1.84 (38.0) 1.08 0.98 10.2
------------------------------ ------ ------ ------ ------- ------ ------ -------
(1) Molybdenum production started in Q3 2018
(2) Includes production from ROM material
(3) Includes tolling charges of $0.18/lb in Q3 2019, $0.18/lb in
Q2 2019, $0.18/lb YTD 2019 and $0.16/lb YTD 2018
Antucoya
Copper production at Antucoya was 18,700 tonnes in Q3 2019, 4.1%
lower than in the previous quarter due to lower throughput,
partially offset by higher recoveries with work being completed
during the quarter to reduce the dust being produced at the
secondary and tertiary crushers. Production in the first nine
months of 2019 was 56,100 tonnes, 7.7% higher than the same period
last year on higher copper grades and recoveries.
During the quarter, cash costs were $2.08/lb compared to
$2.29/lb in Q2 2019. For the first nine months, cash costs were
$2.20/lb, 5.3% higher than same period last year mainly due to
higher acid prices and higher maintenance costs, partially offset
by lower energy prices and a weaker Chilean Peso.
On 15 October the workers union declared a strike having
rejected the company's last offer on salary increases, bonuses and
other benefits. Only essential operations will be conducted at the
mine while the strike continues.
ANTUCOYA Year to Date Q3 Q2
-------------------- ----- -----
2019 2018 % 2019 2019 %
---------------------- ------ ----- ----- ------ ----- ----- ------
Daily ore throughput kt 72.2 75.3 (4.1) 67.6 73.3 (7.8)
Copper grade % 0.39 0.36 8.3 0.41 0.40 2.5
Copper recovery % 73.7 70.0 5.3 78.7 71.2 10.5
Copper production kt 56.1 52.1 7.7 18.7 19.5 (4.1)
Copper sales kt 55.4 47.0 17.9 19.0 19.4 (2.1)
---------------------- ------ ----- ----- ------ ----- ----- ------
Cash costs $/lb 2.20 2.09 5.3 2.08 2.29 (9.2)
---------------------- ------ ----- ----- ------ ----- ----- ------
Zaldívar
Copper production at Zaldívar was 14,500 tonnes, 2.0% lower than
previous quarter on lower throughput, grades and recoveries
partially offset by increased production from secondary
leaching.
Production for the year to date was 41,900 tonnes, 23.2% higher
compared with the same period last year due to significantly
improved ore grades and higher throughput, partially offset by
lower recoveries.
Cash costs during the quarter were $1.77/lb, 4.7% higher than in
Q2 2019, and cash costs for the first nine months of the year were
$1.78/lb, 9.2% lower compared with $1.96/lb in the same period in
2018, primarily due to higher production. Higher acid prices have
been partially offset by weaker local currency.
Labour negotiations with the supervisors were successfully
concluded during the quarter.
ZALDÍVAR Year to Date Q3 Q2
-------------------- ----- -----
2019 2018 % 2019 2019 %
--------------------------- ------ ----- ----- ------ ----- ----- -------
Daily ore throughput kt 38.4 36.5 5.2 40.4 45.4 (11.0)
Copper grade % 1.15 0.78 47.4 1.00 1.21 (17.4)
Copper recovery (1) % 61.7 66.7 (7.5) 61.3 62.6 (2.1)
Copper production - heap
leach ((2) kt 34.5 26.4 30.7 11.4 13.7 (16.8)
Copper production - total
(2,3) kt 41.9 34.0 23.2 14.5 14.8 (2.0)
Copper sales ((2) kt 38.4 32.8 17.1 11.6 14.3 (18.9)
Cash costs $/lb 1.78 1.96 (9.2) 1.77 1.69 4.7
----- ----- ----- -----
(1) Average over full leach cycle
(2) Group's 50% share
(3) Includes production from secondary leaching
Transport Division
Total transport volumes in Q3 2019 were 1.8 million tonnes, 4.7%
higher than in the previous quarter and for the first nine months
of the year, transport volumes increased by 9.6% to 4.9 million
tonnes, as a new transport contracts that came into effect during
the period as well as higher tonnages from existing customers.
In addition to the seven new locomotives that were brought into
operation during 2018, seven new locomotives have arrived in 2019
and are currently operating and five more are expecting to be
delivered by the end of the year. These purchases are part of the
Division's programme to replace older rolling stock and increase
the fleet's haulage capacity with a more efficient fleet to meet
growing demand and complete new contracts.
TRANSPORT DIVISION Year to Date Q3 Q2
---------------------- ------ ------
2019 2018 % 2019 2018 %
--------------------------- ---- ------ ------ ------ ------ ------ -----
Rail kt 3,770 3,654 3.2% 1,346 1,279 5.2%
Road kt 1,156 839 37.8% 430 418 3.0%
Total tonnage transported kt 4,926 4,493 9.6% 1,776 1,697 4.7%
------ ------ ------ ------
Commodity prices and exchange rates
Year to Date Q3 Q2
---------------------- ------ ------
2019 2018 % 2019 2019 %
------ ------ ------ ------ ------
Copper
Market price $/lb 2.74 3.01 (9.0) 2.63 2.77 (5.2)
Realised price $/lb 2.71 2.87 (5.7) 2.51 2.61 (4.0)
---------------- ------ ------ ------ ------ ------ ------ ------
Gold
Market price $/oz 1,364 1,283 6.3 1,474 1,310 12.6
Realised price $/oz 1,388 1,258 10.3 1,501 1,338 12.2
---------------- ------ ------ ------ ------ ------ ------ ------
Molybdenum
Market price $/lb 11.9 11.9 0.3 11.8 12.2 (2.9)
Realised price $/lb 11.9 12.5 (5.0) 11.4 12.1 (5.6)
---------------- ------ ------ ------ ------ ------ ------ ------
Exchange rates
per
Chilean peso $ 685 628 9.1 707 684 3.4
---------------- ------ ------ ------ ------ ------ ------ ------
Spot commodity prices for copper, gold and molybdenum as at 30
September 2019 were $2.60/lb, $1,473/oz and $11.8/lb respectively,
compared with $2.72/lb, $1,410/oz and $11.9/lb as at 30 June 2019
and $2.70/lb, $1,282/oz and $11.3/lb as at 31 December 2018.
The provisional pricing adjustments for copper, gold and
molybdenum for the quarter were negative $56.8 million, positive
$2.4 million and negative $3.0 million respectively.
The provisional pricing adjustments for copper, gold and
molybdenum for the first nine months of the year were negative
$51.3 million, positive $4.4 million and negative $1.2 million
respectively.
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END
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