ANTO Antofagasta Plc

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   By Alex MacDonald 
 

LONDON--Chilean copper producer Antofagasta PLC (ANTO.LN) has again lowered its target for copper output this year, but kept its goal for cash costs unchanged after reporting stable production in the third quarter compared with the previous three months.

The FTSE-100 miner suffered a series of unexpected setbacks this year ranging from protests at its flagship Los Pelambres mine to unusually heavy rainfall that resulted in lower copper output from its mines in the country's northern Atacama dessert. This, coupled with the delayed ramp up of its Antucoya project due to equipment issues, led the company to cut its original copper output guidance of 710,000 metric tons twice before.

On Wednesday, the company lowered the guidance again to 635,000 tons from 665,000 tons most recently due to a minor pit-wall slide at its Centinela cathode operations and delayed ramp-up at Centinela concentrates operations.

This follows 157,000 metric tons of copper output in the third quarter, on par with the second, as higher output from its Los Pelambres mine and the commissioning of its Antucoya project more than offset lower output from its Michilla and Centinela mines.

The $1.9 billion Antucoya mine in north Chile has produced 2,200 tons of copper cathode since starting production in September but isn't forecast to reach commercial production until the first half of 2016, according to the company.

Meanwhile gold output fell 17% on quarter to 45,700 troy ounces while molybdenum production remained flat on quarter at 2,600 tons in the third quarter.

Antofagasta's shares fell 3.3% to 526.5 pence a share as of 1133 GMT, while the FTSE 350 Mining index was down 1.1%.

The company's third quarter copper, gold and molybdebnum output missed BMO Capital Markets' forecast by 11%, 30% and 28% respectively.

On a positive note, the miner kept its full-year net cash cost at $1.47 a pound. It had a net cash cost of $1.42 a pound in the third quarter, down 11% from the second quarter largely due to higher production at its flagship Los Pelambres mine, lower input prices, particularly energy, and the impact of the weaker Chilean peso against the dollar during the quarter.

The copper target cut "reflects what has been quite a difficult year operationally for the company; however, BMO Research continues to view Antofagasta as a well-run company with high-quality assets," the bank said in a note.

Write to Alex MacDonald at alex.macdonald@wsj.com

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(END) Dow Jones Newswires

October 28, 2015 08:15 ET (12:15 GMT)

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