TIDMANTO
RNS Number : 5864P
Antofagasta PLC
20 October 2021
NEWS RELEASE, 20 OCTOBER 2021
Q3 2021 PRODUCTION REPORT
STEADY QUARTER AND LOWER COST GUIDANCE
Antofagasta plc CEO, Iván Arriagada said: "Our copper production
and cost performance during the quarter was in line with our
expectations despite external pressures such as the ongoing drought
in Chile, the global supply chain challenges, the energy crisis and
higher input costs.
"Year-to-date production and net cash costs were very similar to
last year at 542,600 tonnes at $1.15/lb and we remain on track to
deliver on our previously stated production guidance of 710-740,000
tonnes for the full year and, despite input cost pressures, our net
cash costs are now expected to be lower than our original guidance
of $1.25/lb.
"Since we last reported, there has been no material rainfall at
our operations and as we head into the summer months, we do not
expect any rain until the next rainy season, which begins in June
next year. The construction of the desalination plant at Los
Pelambres is on track for completion in H2 2022 and we now
anticipate Group production in 2022 to be between 660,000 and
690,000 tonnes reflecting the previously advised production tonnes
at risk at Los Pelambres due to the weather, and lower grades at
Centinela Concentrates.
"The COVID-19 situation in Chile continues to improve but the
measures we implemented last year will stay in place as we continue
to prioritise the health and safety of our employees and
surrounding communities. While we expect the extraordinary global
supply chain events and energy crisis to ease over time, we remain
focused on controlling costs while progressing our current and
future growth projects."
HIGHLIGHTS
PRODUCTION
-- Group copper production in Q3 2021 was 181,100 tonnes, 1.5%
higher than in the previous quarter on higher production at
Centinela, partly offset by lower throughput at Los Pelambres
-- Group copper production for the first nine months of the year
was 542,600 tonnes, 0.2% higher than in the same period last year
mainly on expected higher grades at Centinela Concentrates, offset
by expected lower grades at Los Pelambres
-- Gold production for the quarter was 66,800 ounces, 8.8%
higher than in the previous quarter, and for the year-to-date
production rose by 25.4% to 187,300 ounces, both increases as a
result of higher grades at Centinela
-- Molybdenum production in the quarter was 2,600 tonnes, 7.1%
lower than the previous quarter on lower grades and recoveries at
Centinela. For the year-to-date, production was 8,400 tonnes, 500
tonnes lower than in the same period last year
CASH COSTS
-- Cash costs before by-product credits in Q3 2021 were
$1.79/lb, 2c/lb higher than in the second quarter. The global
energy and supply chain crisis over Q3 resulted in higher commodity
and therefore input prices, such as energy and diesel. However,
evidence of wage inflation has been limited to temporary hires
mostly for projects while the labour market has yet to recover to
pre COVID-19 employment levels. The weaker Chilean peso in Q3 has
offset the higher input costs.
-- Cash costs before by-product credits for the first nine
months of the year were $1.75/lb, 13.6% higher than in the same
period last year primarily because of the stronger Chilean peso
(8%) and higher energy and diesel prices
-- Net cash costs were $1.16/lb in Q3 2021 and $1.15/lb for the
year-to-date, a 2.7% increase compared with the previous quarter
and 0.9% higher than the same period last year. This was primarily
due to higher cash costs before by-product credits, mainly offset
by higher by-product credits on higher realised prices
GUIDANCE
-- Copper production guidance for the full year of 710-740,000
tonnes is unchanged from the update provided in August. Net cash
costs are expected to be below the originally guided $1.25/lb
-- Accelerated mine development at Centinela and sustaining
capex at Los Pelambres have increased expected capital expenditure
for the year to between $1.6 and $ 1.8 billion. This level is
similar to current estimates for 2022 as sustaining and mine
development expenditure increase, and development expenditure
continues
-- In 2022 copper production is expected to be 660-690,000
tonnes, as grades decrease at Centinela Concentrates and assuming
there is no precipitation until the next rainy season and the
desalination plant comes into operation in H2 2022
SUSTAINABILITY
-- In line with the UN Sustainable Development Goals and after a
voluntary and independent evaluation process, Centinela and
Zaldívar obtained the Copper Mark, the global standard for the
copper industry that demonstrates responsible and sustainable
production. The Copper Mark is among the first group of standards
LME brands can indicate to demonstrate their sustainability
credentials
-- The Company released a progress report on its implementation
of the recommendations of the Task Force on Climate-Related
Financial Disclosures (TCFD). The report provides an overview of
the Company's TCFD-related work to date and its climate resilience
response
OTHER
-- As at the end of Q3 the Los Pelambres Expansion project was
59% complete (design, procurement and construction). Completion of
the desalination plant is expected in H2 2022 and of the
concentrator plant expansion by the end of 2022
-- At Zaldívar construction of the Chloride Leach project at the
end of Q3 was 90% complete and is expected to be completed on
schedule and according to plan in H1 2022
-- During the quarter, the first autonomous trucks were delivered to the Esperanza Sur pit
-- Some shipments were delayed by adverse weather over the
period end and were shipped in early October
GROUP PRODUCTION AND CASH COSTS Year to Date Q3 Q2
---------------------- ------ ------
2021 2020 % 2021 2021 %
------------------------------ ------ ------ ------ ------ ------ ------ ------
Copper production kt 542.6 541.3 0.2 181.1 178.4 1.5
Copper sales kt 528.4 536.1 (1.4) 182.3 163.4 11.6
Gold production koz 187.3 149.4 25.4 66.8 61.4 8.8
Molybdenum production kt 8.4 8.9 (5.6) 2.6 2.8 (7.1)
------------------------------ ------ ------ ------ ------ ------ ------ ------
Cash costs before by-product
credits (1) $/lb 1.75 1.54 13.6 1.79 1.77 1.1
Net cash costs (1) $/lb 1.15 1.14 0.9 1.16 1.13 2.7
------------------------------ ------ ------ ------ ------ ------ ------ ------
(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.
There will be a Q&A video conference call at 1:00pm BST
hosted by Iván Arriagada - Chief Executive Officer, Mauricio Ortiz
- Chief Financial Officer and René Aguilar, Vice President -
Corporate Affairs and Sustainability. Participants can join the
conference call here .
Investors - Media - London
London
Andrew Lindsay alindsay@antofagasta.co.uk Carole Cable antofagasta@brunswickgroup.com
Telephone +44 20 7808 0988 Telephone +44 20 7404 5959
Rosario Orchard rorchard@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
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MINING OPERATIONS
Los Pelambres
Copper production at Los Pelambres during the quarter was 81,100
tonnes, 3.9% lower than in the previous quarter as throughput
reduced by 3.2%. This was primarily due to decreased plant run-time
because of an unscheduled stoppage at one of the SAG mills and
operational measures taken to optimise the use of water.
In the first nine months of 2021, copper production was 250,400
tonnes, 6.9% lower than in the same period last year. This decrease
was primarily due to the expected lower copper grade, partially
offset by higher throughput driven by improved plant
performance.
Molybdenum production was 2,400 tonnes in Q3 2021, the same as
the previous quarter, and for the year-to-date was 7,500 tonnes,
400 tonnes lower than the same period last year as a result of
lower grades and recoveries.
Cash costs before by-product credits in Q3 were $1.60/lb, 2.6%
higher than in previous quarter and for the first nine months of
2021 were $1.54/lb, 23.2% higher than the same period last year.
This was due to the decrease in production, the stronger Chilean
peso, higher input prices and the payment of a one-off signing
bonus in Q1 following the successful completion of labour
negotiations.
Net cash costs were unchanged from Q2 at $0.81/lb, and for the
year-to-date were $0.82/lb, in line with the same period last year.
The higher cash costs before by-product credits were fully offset
by by-product credits increasing from 43c/lb to 72c/lb on the
significantly higher realised molybdenum price.
As previously announced, the major maintenance delayed by
COVID-19 from Q2 will now take place in Q4.
As at the end of Q3 the Los Pelambres Expansion project was
58.8% complete, and completion of the desalination plant is
expected in H2 2022 and of the concentrator plant expansion by the
end of 2022.
LOS PELAMBRES Year to Date Q3 Q2
----------------------- ------ ------
2021 2020 % 2021 2021 %
------------------------------ ------ ------ ------ ------- ------ ------ -------
Daily ore throughput kt 161.9 159.9 1.3 158.0 163.3 (3.2)
Copper grade % 0.65 0.71 (8.5) 0.64 0.65 (1.5)
Copper recovery % 89.9 89.9 0.0 90.3 90.2 0.1
Copper production kt 250.4 269.1 (6.9) 81.1 84.4 (3.9)
Copper sales kt 234.7 268.9 (12.7) 69.1 84.9 (18.6)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Molybdenum grade % 0.020 0.020 0.0 0.018 0.021 (14.3)
Molybdenum recovery % 84.4 85.9 (1.7) 83.9 83.9 0.0
Molybdenum production kt 7.5 7.9 (5.1) 2.4 2.4 0.0
Molybdenum sales kt 7.0 7.5 (6.7) 2.1 2.3 (8.7)
Gold grade g/t 0.045 0.047 (4.3) 0.037 0.048 (22.9)
Gold recovery % 71.0 72.5 (2.1) 83.0 64.9 27.9
Gold production koz 41.4 43.7 (5.3) 13.4 13.8 (2.9)
Gold sales koz 36.9 41.7 (11.5) 11.1 12.9 (14.0)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Cash costs before by-product
credits (1) $/lb 1.54 1.25 23.2 1.60 1.56 2.6
Net cash costs (1) $/lb 0.82 0.82 0.0 0.81 0.81 0.0
------------------------------ ------ ------ ------ ------- ------ ------ -------
(1) Includes tolling charges of $0.17/lb in Q3 2021, $0.17/lb in
Q2 2021, $0.16/lb YTD 2021 and $0.18/lb YTD 2020
Centinela
Centinela produced 70,700 tonnes of copper during the quarter,
8.4% higher than in the previous quarter on higher copper grades at
Centinela Concentrates and higher throughput at Centinela Cathodes.
Production for the year-to-date was 202,800 tonnes, 14.7% higher
than in the same period last year, due to higher ore grades and
throughput at Centinela Concentrates.
Production of copper in concentrate was 47,600 tonnes in Q3
2021, 5.5% higher than in the previous quarter. For the first nine
months of the year, copper in concentrate production was 138,000
tonnes, compared with 106,900 tonnes in the same period last year,
reflecting higher ore grades and throughput.
Copper cathode production during the quarter was 23,200 tonnes,
14.9% higher than Q2 2021 primarily as throughput increased by
9.0%. For the year-to-date, copper cathode production was 64,800
tonnes, 7.4% lower than in the same period last year mainly due to
expected lower grades and recoveries, despite higher
throughput.
Gold production was 53,400 ounces in the quarter, 12.2% higher
than the previous quarter on higher grades, and for the first nine
months was 145,900 ounces, 38.0% higher than the same period last
year, due to higher throughput and grades.
Cash costs before by-product credits were $1.86/lb, 2.2% higher
than in the previous quarter. Cash costs before by-product credits
for the first nine months of the year were $1.82/lb, 2.2% lower
than the same period in 2020 as a result of higher copper
production, partially offset by a stronger Chilean peso and higher
input costs.
By-product credits in Q3 were $0.72/lb compared with $0.78/lb in
Q2. For the first nine months of 2021, by-product credits increased
from $0.55/lb in 2020 to $0.72/lb in 2021 due to higher gold
production and the improved realised molybdenum price.
Net cash costs in Q3 2021 were $1.14/lb, 9.6% higher than the
previous quarter on lower by-product credits. During the first nine
months of the year net cash costs were $1.10/lb, 16.0% lower than
same period last year due to lower cash costs before by-product
credits and higher by-products credits.
During the quarter, the first autonomous trucks were delivered
which will be used at the Esperanza Sur pit from the first half of
2022.
CENTINELA Year to Date Q3 Q2
----------------------- ------ ------
2021 2020 % 2021 2021 %
------------------------------ ------ ------ ------ ------- ------ ------ -------
CONCENTRATES
Daily ore throughput kt 103.2 93.3 10.6 100.3 102.9 (2.5)
Copper grade % 0.60 0.51 17.6 0.62 0.59 5.1
Copper recovery % 84.8 85.3 (0.6) 84.9 85.2 (0.4)
Copper production kt 138.0 106.9 29.1 47.6 45.1 5.5
Copper sales kt 137.1 107.6 27.4 56.3 35.7 57.7
------------------------------ ------ ------ ------ ------- ------ ------ -------
Molybdenum grade % 0.009 0.010 (10.0) 0.008 0.009 (11.1)
Molybdenum recovery % 48.5 35.2 37.8 43.8 53.8 (18.6)
Molybdenum production kt 0.9 1.0 (10.0) 0.2 0.3 (33.3)
Molybdenum sales kt 0.9 0.8 12.5 0.2 0.3 (33.3)
Gold grade g/t 0.24 0.19 26.3 0.26 0.23 13.0
Gold recovery % 71.2 71.2 0.0 69.1 72.8 (5.1)
Gold production koz 145.9 105.7 38.0 53.4 47.6 12.2
Gold sales koz 139.4 106.3 31.1 61.4 35.4 73.4
------ ------ ------- ------ ------ -------
CATHODES
Daily ore throughput kt 57.8 56.5 2.3 60.7 55.7 9.0
Copper grade % 0.61 0.64 (4.7) 0.61 0.62 (1.6)
Copper recovery % 65.0 68.4 (5.0) 64.9 63.7 1.9
Copper production - heap
leach kt 62.0 66.8 (7.2) 22.2 19.3 15.0
Copper production - total
(1) kt 64.8 70.0 (7.4) 23.2 20.2 14.9
Copper sales kt 63.6 68.9 (7.7) 25.0 16.8 48.8
------------------------------ ------ ------ ------ ------- ------ ------ -------
Total copper production kt 202.8 176.8 14.7 70.7 65.2 8.4
Cash costs before by-product
credits (2) $/lb 1.82 1.86 (2.2) 1.86 1.82 2.2
Net cash costs (2) $/lb 1.10 1.31 (16.0) 1.14 1.04 9.6
------------------------------ ------ ------ ------ ------- ------ ------ -------
(1) Includes production from ROM material
(2) Includes tolling charges of $0.10/lb in Q3 2021, $0.11/lb in
Q2 2021, $0.11/lb YTD 2021 and $0.14/lb YTD 2020
Antucoya
Total copper production at Antucoya during the quarter was
18,300 tonnes, 4.7% lower than the previous quarter as grades
decreased as expected and throughput fell 5.0%. Production in the
first nine months of 2021 was 57,700 tonnes, unchanged from the
same period last year with higher throughput offset by expected
lower grades and resulting lower recoveries.
During the quarter, cash costs were $2.06/lb compared to
$2.12/lb in Q2. For the year-to-date, cash costs were $2.05/lb,
13.9% higher than the same period last year due to a stronger
Chilean peso, and higher input costs and maintenance
expenditure.
ANTUCOYA Year to Date Q3 Q2
--------------------- ----- -----
2021 2020 % 2021 2021 %
---------------------- ------ ----- ----- ------- ----- ----- ------
Daily ore throughput kt 83.6 74.8 11.8 82.9 87.3 (5.0)
Copper grade % 0.34 0.38 (10.5) 0.33 0.34 (2.9)
Copper recovery % 68.3 73.2 (6.7) 67.9 67.9 0.0
Copper production kt 57.7 57.7 0.0 18.3 19.2 (4.7)
Copper sales kt 60.5 53.8 12.5 20.3 17.2 18.0
---------------------- ------ ----- ----- ------- ----- ----- ------
Cash costs $/lb 2.05 1.80 13.9 2.06 2.12 (2.8)
---------------------- ------ ----- ----- ------- ----- ----- ------
Zaldívar
Copper production for the quarter was 11,000 tonnes, 14.6%
higher than in the previous quarter on significantly improved
throughput and higher recoveries, partially offset by lower grades.
Production for the year-to-date was 31,600 tonnes, 16.2% lower than
the same period last year due to expected lower grades and
recoveries, partially offset by higher throughput.
Cash costs during the quarter were $2.34/lb, $0.31/lb lower than
Q2 2021 as there were higher maintenance costs during Q2 and a
weaker Chilean peso. Cash costs for the first nine months of the
year were $2.42/lb, compared with $1.67/lb in the same period in
2020, mainly due to lower grades, higher maintenance costs and the
stronger Chilean peso.
ZALDÍVAR Year to Date Q3 Q2
--------------------- ----- -----
2021 2020 % 2021 2021 %
--------------------------- ------ ----- ----- ------- ----- ----- -------
Daily ore throughput kt 42.9 40.9 4.9 48.0 38.6 24.4
Copper grade % 0.73 1.03 (29.1) 0.65 0.66 (1.5)
Copper recovery (1) % 52.9 53.7 (1.5) 52.9 50.3 5.2
Copper production - heap
leach (2) kt 23.0 28.6 (19.6) 7.7 6.2 24.2
Copper production - total
(2,3) kt 31.6 37.7 (16.2) 11.0 9.6 14.6
Copper sales (2) kt 32.7 37.1 (11.9) 11.6 8.7 33.3
Cash costs $/lb 2.42 1.67 44.9 2.34 2.65 (11.7)
----- ----- ----- -----
(1) 12-month rolling recoveries
(2) Group's 50% share
(3) Includes production from secondary leaching
Transport Division
Total transport volumes in Q3 2021 were 1.8 million tonnes, 5.1%
higher than the previous quarter, due to the ramp-up of a new
transport contract and increased sulphuric acid shipments.
For the first nine months of the year, transport volumes
increased by 3.0% compared to the same period in 2020 as the new
transport contract took effect, partially offset by customers' road
transport disruptions.
TRANSPORT Year to Date Q3 Q2
----------------------- ------ ------
2021 2020 % 2021 2021 %
--------------------------- ---- ------ ------ ------- ------ ------ ----
Rail kt 3,883 3,592 8.1 1,370 1,297 5.6
Road kt 1,059 1,207 (12.3) 381 369 3.3
Total tonnage transported kt 4,942 4,799 3.0 1,751 1,666 5.1
------ ------ ------ ------
Commodity prices and exchange rates
Year to Date Q3 Q2
---------------------- ------ ------
2021 2020 % 2021 2021 %
------ ------ ------ ------ ------
Copper
Market price $/lb 4.17 2.65 57.4 4.25 4.40 (3.4)
Realised price $/lb 4.27 2.71 57.6 3.99 4.59 (13.1)
---------------- ------ ------ ------ ------ ------ ------ -------
Gold
Market price $/oz 1,801 1,735 3.8 1,790 1,815 (1.4)
Realised price $/oz 1,778 1,761 1.0 1,781 1,855 (4.0)
---------------- ------ ------ ------ ------ ------ ------ -------
Molybdenum
Market price $/lb 14.9 8.6 73.3 19.0 14.2 33.8
Realised price $/lb 17.2 8.3 107.2 20.2 19.2 5.2
---------------- ------ ------ ------ ------ ------ ------ -------
Exchange rates
per
Chilean peso $ 738 802 (8.0) 773 716 8.0
---------------- ------ ------ ------ ------ ------ ------ -------
Spot commodity prices for copper, gold and molybdenum as at 30
September 2021 were $4.10/lb, $1,737/oz and $18.5/lb respectively,
compared with $4.26/lb, $1,760/oz and $19.0/lb as at 30 June 2021
and $3.00/lb, $1,885/oz and $8.2/lb as at 30 September 2020.
The provisional pricing adjustments for copper, gold and
molybdenum for the quarter were negative $80.5 million, negative
$2.3 million and positive $3.4 million respectively.
The provisional pricing adjustments for copper, gold and
molybdenum for the year-to-date were positive $201.6 million,
negative $10.3 million and positive $47.1 million respectively.
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