Antofagasta beats cost guidance in first quarter
By Josh White
Date: Wednesday 24 Apr 2019
(Sharecast News) - Antofagasta reported a 22.6% year-on-year improvement in copper production in it first quarter on Wednesday, to 188,600 tonnes, which was in line with expectations.
The FTSE 100 Chilean mining conglomerate said that was primarily due to a higher throughput and the anticipated higher grades, particularly at Centinela.
It said scheduled maintenance at Los Pelambres and Centinela, combined with lower grades, led to production being 14.3% lower than the record performance in the previous quarter, although the board claimed underlying operating performance remained "strong".
Gold production was 62,200 ounces in the three months ended 31 March, which was 92.6% higher than in the first quarter of 2018, thanks to higher grades at Centinela.
Molybdenum production rose 12.9% compared to the same period in 2018, which Antofagasta put down to higher throughput and recoveries at Los Pelambres and production for the first time at Centinela in the period.
Cash costs before by-product credits in the quarter decreased to $1.70 per pound from $2.00 per pound in the same period last year, which was primarily because of higher production and a weaker Chilean peso.
Costs increased by 25.3% compared to the previous period on lower grades and throughput.
Net cash costs were $1.24 per pound in the first quarter of 2019, compared to $1.54 per pound in the first quarter of 2018 and $0.99 per pound in the previous quarter, which Antofagasta said reflected the changes in cash costs before by-product credits.
The company's guidance for the year remained unchanged, with group copper production for the full year expected to be between 750,000 and 790,000 tonnes, on higher grades at Centinela Concentrates, particularly in the second and and third quarters.
Cash cost guidance before and after by-product credits was also unchanged at $1.70 per pound and $1.30 per pound, respectively.
As the firm had announced on 4 April, it confirmed Los Pelambres had successfully completed the debt financing of its $1.3bn expansion project on favourable terms.
Execution of the Los Pelambres expansion project was progressing according to plan and was 14% complete by the end of the first quarter, with 500 people now mobilised to the site.
"The company has started 2019 as planned, delivering copper production in the first quarter of 2019 of 188,600 tonnes, 22.6% higher than in the same period last year but 14.3% lower than the previous quarter, reflecting last year's unusual production profile of quarter-on-quarter increases," said Antofagasta chief executive officer Iván Arriagada.
"Net cash costs for the quarter were $1.24 per pound, some five cents per pound lower than the full 2018 year and below our guidance for this year of $1.30 per pound."
Arriagada said the "high level" of operating performance achieved in the second half of last year had continued, with the company on-track for another record-setting year with full year production expected to increase by up to 9%.
"Our priorities for the year ahead remain our safety performance, maintaining our operating reliability and efficiency, and progressing the construction of the Los Pelambres expansion, which began during the quarter."
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN