TIDMANTO
RNS Number : 2938D
Antofagasta PLC
28 January 2015
NEWS RELEASE, 28 JANUARY, 2015
Q4 2014 PRODUCTION REPORT
STRONG Q4. FULL YEAR IN LINE WITH GUIDANCE
Antofagasta plc CEO, Diego Hernández, said: "I'm pleased to
announce yet another year where we have achieved our production and
net cash cost guidance. We continue to focus on controlling our
cost base in 2015 whilst growing our production. We look forward to
inaugurating Chile's only new copper mine in 2015, Antucoya, and
remain optimistic about the copper market in the medium to long
term."
HIGHLIGHTS
PRODUCTION
-- Copper production in Q4 2014 was 187,500 tonnes, a 10.8%
increase compared with the previous quarter, with all of the
Group's operations achieving higher throughput
-- Copper production for the full year of 704,800 tonnes was
2.3% lower than last year primarily due to lower grades at Los
Pelambres
-- Gold production was 82,300 ounces in Q4 2014, a 27.2%
increase on Q3 2014 due largely to higher throughput and stronger
recoveries in the final quarter at Centinela
-- Gold production was 270,900 ounces for 2014 compared with
293,800 ounces in 2013, mainly reflecting lower grades and
recoveries at Centinela
-- Molybdenum production at Los Pelambres was 7,900 tonnes in
2014, compared with 9,000 tonnes in the 2013, principally due to
lower grades
-- Full year copper, gold and molybdenum production and net cash costs all beat guidance
CASH COSTS
-- Cash costs before by-product credits in Q4 2014 were
$1.75/lb, a 5.4% decrease compared with Q3 2014. This decrease
mainly related to improved performance at Centinela and
Michilla
-- Net cash costs were $1.39/lb in Q4 2014, a 2.1% decrease
compared with the previous quarter supported by the increased
production and improved by-product credits from Centinela
-- Cash costs before by-product credits for the year were
$1.83/lb, 2.2% higher than in 2013 primarily due to the one-off
signing bonuses paid following the conclusion of labour
negotiations at all of the Group's mining operations, partially
offset by the weaker peso and lower input costs
-- Net cash costs for the full year 2014 were $1.43/lb, 5.1%
higher than 2013 primarily due to the higher cash costs before
by-product credits and lower gold production and realised gold
prices at Centinela
2015 GUIDANCE
-- Group production in 2015 is expected to be approximately
710,000 tonnes of copper, 250,000 ounces of gold and 8,000 tonnes
of molybdenum
-- Group cash costs before by-product credits in 2015 are
expected to be similar to 2014 at $1.85/lb and net cash costs
slightly higher at $1.50/lb as Antucoya commences its ramp-up in Q2
2015
OTHER
-- During the quarter, the Encuentro Oxides project feasibility
study was completed and now awaits final approval. Early works,
including pre-stripping, continue
-- In January, the Group completed the acquisition of Duluth
Metals Limited and consolidated ownership of the Twin Metals
Minnesota project
GROUP PRODUCTION AND CASH COSTS Q4 Q3 FY
-------------------------------------- ------ ------ ------ -------------- -------
2014 2014 % 2014 2013 %
------------------------------ ------ ------ ------ ------ ------ ------ -------
Copper production kt 187.5 169.2 10.8 704.8 721.2 (2.3)
Gold production koz 82.3 64.7 27.2 270.9 293.8 (7.8)
Molybdenum production kt 2.4 2.3 4.3 7.9 9.0 (12.2)
------------------------------ ------ ------ ------ ------ ------ ------ -------
Cash costs before by-product
credits $/lb 1.75 1.85 (5.4) 1.83 1.79 2.2
Net cash costs $/lb 1.39 1.42 (2.1) 1.43 1.36 5.1
------------------------------ ------ ------ ------ ------ ------ ------ -------
MINING OPERATIONS
Los Pelambres
Los Pelambres produced 99,700 tonnes of copper in Q4 2014
compared with 94,900 tonnes in the previous quarter mainly due to
higher grades. For the year, copper production was 391,300 tonnes
compared with 405,300 tonnes in 2013 primarily due to lower grades
and recoveries.
Molybdenum production increased to 2,400 tonnes in Q4 2014, from
2,300 tonnes in the previous quarter, primarily due to improved
recoveries partially offset by lower grades. Production at 7,900
tonnes in 2014 was 12.2% lower compared with last year due
primarily to lower grades and lower inventory consumption in 2014,
slightly offset by improved recoveries.
Cash costs before by-product credits in Q4 2014 were $1.52/lb,
in line with the previous quarter. Net cash costs in Q4 2014 were
$0.19/lb higher than in the previous quarter at $1.25/lb primarily
reflecting lower by-product credits as the realised molybdenum
price fell significantly during the quarter.
Cash costs before by-product credits and net cash costs for 2014
were in line with 2013 at $1.56/lb and $1.18/lb respectively.
LOS PELAMBRES Q4 Q3 FY
2014 2014 % 2014 2013 %
------------------------------ ------ ------ ------ ------ ------ ------ -------
Daily ore throughput kt 175.8 175.7 0.1 176.3 177.2 (0.5)
Copper grade % 0.72 0.69 4.3 0.70 0.72 (2.8)
Copper recovery % 87.8 88.6 (0.9) 89.4 90.0 (0.7)
Copper production kt 99.7 94.9 5.1 391.3 405.3 (3.5)
Copper sales kt 106.1 89.9 18.0 386.0 414.0 (6.8)
------------------------------ ------ ------ ------ ------ ------ ------ -------
Molybdenum grade % 0.017 0.018 (5.6) 0.015 0.016 (6.3)
Molybdenum recovery % 86.0 81.1 6.0 83.8 82.8 1.2
Molybdenum production kt 2.4 2.3 4.3 7.9 9.0 (12.2)
Molybdenum sales kt 2.4 2.5 (4.0) 8.2 8.8 (6.8)
Gold production koz 15.9 17.0 (6.5) 66.5 56.7 17.3
Gold sales koz 17.0 15.4 10.4 63.8 56.7 12.5
------------------------------ ------ ------ ------ ------ ------ ------ -------
Cash costs before by-product
credits* $/lb 1.52 1.51 0.7 1.56 1.52 2.6
Net cash costs $/lb 1.25 1.06 17.9 1.18 1.16 1.7
------------------------------ ------ ------ ------ ------ ------ ------ -------
* Includes tolling charges of $0.21/lb in Q4 2014, $0.22/lb in
Q3 2014, $0.21/lb in FY 2014 and $0.17/lb in FY 2013
Centinela
Total copper production at Centinela was 74,800 tonnes in Q4
2014, 11,400 tonnes higher than in the previous quarter. For the
full year, production was 266,600 tonnes, 3.9% lower than in
2013.
Production of copper in concentrates was 49,100 tonnes in Q4
2014, compared with 41,400 tonnes in the previous quarter,
primarily due to better grades and higher throughput. Copper
concentrate production in the full year 2014 was 172,800 tonnes
compared with 174,900 tonnes in 2013 reflecting lower throughput
partially offset by higher grades and recoveries.
Cathode production in Q4 2014 was 25,700 tonnes, a 16.8%
increase on the 22,000 tonnes produced in Q3 largely as a result of
higher throughput and grades. Cathode production in the full year
2014 was 8.6% lower than in 2013 at 93,800 tonnes as grades and
recoveries declined following the completion of mining activities
at the higher grade Mirador pit in Q4 2013. This was partially
offset by higher throughput.
Gold production was 66,300 ounces in Q4 2014, 18,600 ounces
higher than in the prior quarter primarily due to higher grades,
better recoveries and higher throughput. Gold production for the
full year was 204,400 ounces compared with 237,100 ounces in 2013
due to lower grades and recoveries and slightly decreased
throughput.
Cash costs before by-product credits for copper in concentrates
were $2.06/lb in Q4 2014 compared with $2.44/lb in the previous
quarter. This reduction in costs was due to the increase in copper
concentrate production as explained above. Net cash costs were
significantly lower than in the previous quarter at $1.27/lb in Q4
2014 due to higher gold by-product credits following increased
production and higher realised prices.
Cash costs before by-product credits for copper in concentrates
in 2014 fell to $2.29/lb compared with $2.36/lb in 2013. This
decrease was due to the weakening of the peso and lower input
costs, partially offset by the one-off signing bonus paid during
the year following the successful completion of a new four-year
agreement with the union in the second quarter of 2014. Net cash
costs for the full year 2014 were $1.54/lb compared with $1.43/lb
in 2013. This was primarily due to a decrease in gold production
and lower realised gold prices.
Cash costs for cathodes production decreased by 7.0% to $1.73/lb
in Q4 2014 compared with the previous quarter primarily due to
increased production. This was offset by the payment of a one-off
signing bonus to employees following the successful completion of a
new four-year agreement with the union in November 2014 which led
to a one-off increase in cash costs during the quarter of $0.31/lb.
Cash costs for copper cathodes in 2014 were $1.79/lb compared with
$1.36/lb last year primarily reflecting lower production, the lower
cost of production from processing the higher grade Mirador ore in
2013 and the one-off bonus payment, all of which were partially
offset by the weakening of the peso and lower input costs.
CENTINELA Q4 Q3 FY
2014 2014 % 2014 2013 %
------------------------------ ------ ----- ----- ------- ------ ------ -------
CONCENTRATES
Daily ore throughput kt 88.0 84.6 4.0 85.8 87.2 (1.6)
Copper grade % 0.71 0.65 9.2 0.65 0.64 1.6
Copper recovery % 88.4 88.5 (0.1) 88.2 87.3 1.0
Copper production kt 49.1 41.4 18.6 172.8 174.9 (1.2)
Copper sales kt 54.6 38.4 42.2 178.8 168.2 6.3
------------------------------ ------ ----- ----- ------- ------ ------ -------
Gold grade g/t 0.32 0.27 18.5 0.28 0.30 (6.7)
Gold recovery % 80.0 74.9 6.8 74.7 78.1 (4.4)
Gold production koz 66.3 47.7 39.0 204.4 237.1 (13.8)
Gold sales koz 68.5 41.2 66.3 203.6 226.0 (9.9)
------------------------------ ------ ----- ----- ------- ------ ------ -------
Cash costs before by-product
credits (1) $/lb 2.06 2.44 (15.6) 2.29 2.36 (3.0)
Net cash costs $/lb 1.27 1.76 (27.8) 1.54 1.43 7.7
------------------------------ ------ ----- ----- ------- ------ ------ -------
CATHODES
------------------------------ ------ ----- ----- ------- ------ ------ -------
Daily ore throughput kt 26.6 23.1 15.2 25.2 21.3 18.3
Copper grade % 1.41 1.34 5.2 1.31 1.52 (13.8)
Copper recovery % 67.6 68.4 (1.2) 70.5 78.2 (9.8)
Copper production - heap
leach kt 23.1 19.6 17.9 83.6 94.0 (11.1)
Copper production - total
(2) kt 25.7 22.0 16.8 93.8 102.6 (8.6)
Copper sales kt 25.5 21.4 19.2 92.1 101.6 (9.4)
Cash costs $/lb 1.73 1.86 (7.0) 1.79 1.36 31.6
------------------------------ ------ ----- ----- ------- ------ ------ -------
Total copper production kt 74.8 63.4 18.0 266.6 277.5 (3.9)
------------------------------ ------ ----- ----- ------- ------ ------ -------
(1) Includes tolling charges of $0.24/lb in Q4 2014, $0.25/lb in
Q3 2014, $0.24/lb in FY 2014 and $0.20/lb in FY 2013
(2) Includes production from ROM material
Michilla
Copper production at Michilla was 12,900 tonnes in Q4 2014,
18.3% higher than in the previous quarter largely as a result of
higher throughput and grades. Production in the full year 2014 was
47,000 tonnes, 22.7% higher than in 2013 as a result of mining
higher grade areas of the Lince pit.
Cash costs decreased to $2.31/lb in Q4 compared with $2.47/lb in
the previous quarter primarily due to increased production and the
weakening of the peso. Cash costs for 2014 were $2.38/lb compared
with $3.22/lb in 2013. This decrease was primarily due to much
lower stripping costs following the completion of the stripping
programme at Lince in 2013 and the weaker peso.
MICHILLA Q4 Q3 FY
2014 2014 % 2014 2013 %
--------------------------- ------ ----- ----- ------ ----- ----- -------
Daily ore throughput kt 12.9 11.0 17.3 12.2 12.0 1.7
Copper grade % 1.19 1.12 6.2 1.13 0.92 22.8
Copper recovery % 78.5 80.5 (2.5) 79.5 77.9 2.1
Copper production - heap
leach kt 10.9 9.0 21.1 40.1 31.8 26.1
Copper production - total kt 12.9 10.9 18.3 47.0 38.3 22.7
Copper sales kt 12.9 11.0 17.3 46.1 38.4 20.1
--------------------------- ------ ----- ----- ------ ----- ----- -------
Cash costs $/lb 2.31 2.47 (6.5) 2.38 3.22 (26.1)
--------------------------- ------ ----- ----- ------ ----- ----- -------
Antucoya
The construction of Antucoya remains on time and on budget with
99.1% total progress (including design, engineering, procurement
and construction) and 98.3% construction progress as at 31 December
2014. Production is expected to start in Q2 2015 with full
production expected from the beginning of 2016.
Encuentro Oxides project
The feasibility study for the Encuentro Oxides project has been
completed. The decision to proceed with the project is subject to
final approval but early works, including pre-stripping, continue.
Further information on the project will be released in the Group's
preliminary results announcement in March 2015.
Twin Metals Minnesota project
In November 2014, the Group entered into an agreement to acquire
100% of Duluth Metals Limited, its partner in the Twin Metals
Minnesota project, a copper, nickel and platinum group metals
underground-mining project located in north-eastern Minnesota.
Following the completion of the acquisition in January, the Group's
ownership of the Twin Metals Minnesota project has increased from
40% to 100%.
Transport and water
Total volumes transported by the transport division were 1.9
million tonnes in Q4 2014, 0.9% higher than in the previous
quarter, and 7.3 million tonnes in 2014 full year, a 1.5% decrease
versus 2013.
The water division sold 13.1 million cubic metres in Q4 2014,
7.4% more than in the previous quarter, and 50.9 million cubic
metres in 2014 full year, slightly below 2013.
Q4 Q3 FY
2014 2014 % 2014 2013 %
--------------------------- ------- ------ ------ ---- ------ ------ ------
Total tonnage transported kt 1,871 1,853 0.9 7,302 7,413 (1.5)
mil
Water volumes sold m(3) 13.1 12.2 7.4 50.9 51.3 (0.8)
--------------------------- ------- ------ ------ ---- ------ ------ ------
2015 Guidance
Los Pelambres Centinela Michilla Antucoya(1) Group
------------------------------ ------ -------------- ---------- --------- ------------ ------
Production
------------------------------ ------ -------------- ---------- --------- ------------ ------
Copper kt 385 255 30 40 710.0
Gold koz 55 195 - - 250.0
Molybdenum kt 8.0 - - - 8.0
------------------------------ ------ -------------- ---------- --------- ------------ ------
Grade
------------------------------ ------ -------------- ---------- --------- ------------ ------
Copper % 0.70 0.73 1.20 0.35 -
------------------------------ ------ -------------- ---------- --------- ------------ ------
Cash costs
------------------------------ ------ -------------- ---------- --------- ------------ ------
Cash costs before by-product
credits $/lb 1.55 2.20 2.35 2.15 1.85
Net cash costs (2) $/lb 1.25 1.70 2.35 2.15 1.50
------------------------------ ------ -------------- ---------- --------- ------------ ------
(1) Ramp-up starting in Q2 2015
(2) Includes by-product credits at an average gold price of
$1,300/oz and a molybdenum price of $9.5/lb
Group production for 2015 is expected to be slightly higher than
in 2014 at 710,000 tonnes of copper and 8,000 tonnes of molybdenum,
with a slight decline in gold production to 250,000 ounces.
Group cash costs before by-product credits are expected to
remain stable at $1.85/lb in 2015 compared with $1.83/lb in 2014.
This takes into account the ramp-up of Antucoya during the
year.
Commodity prices and exchange rates
Q4 Q3 FY
2014 2014 % 2014 2013 %
---------------- ------ ------ ------ ------- ------ ------ -------
Copper
--------------------------------------------------------------------------
Market price $/lb 3.00 3.17 (5.4) 3.11 3.32 (6.3)
Realised price $/lb 2.85 3.02 (5.6) 3.00 3.28 (8.5)
---------------- ------ ------ ------ ------- ------ ------ -------
Gold
--------------------------------------------------------------------------
Market price $/oz 1,200 1,283 (6.5) 1,266 1,410 (10.2)
Realised price $/oz 1,198 1,149 4.3 1,261 1,358 (7.1)
---------------- ------ ------ ------ ------- ------ ------ -------
Molybdenum
--------------------------------------------------------------------------
Market price $/lb 9.3 12.7 (26.8) 11.4 10.3 10.7
Realised price $/lb 5.9 11.1 (46.8) 11.0 10.0 10.0
---------------- ------ ------ ------ ------- ------ ------ -------
Exchange rates
--------------------------------------------------------------------------
per
Chilean peso $ 599 577 3.8 570 495 15.2
---------------- ------ ------ ------ ------- ------ ------ -------
The spot commodity prices for copper, gold and molybdenum as at
31 December 2014 were $2.88/lb, $1,206/oz and $9.0/lb respectively
compared with $3.06/lb, $1,212/oz and $10.6/lb as at 30 September
2014 and $3.35/lb, $1,202/oz and $9.7/lb as at 31 December
2013.
The provisional pricing adjustments and hedging effects for 2014
full year for copper, gold and molybdenum were negative $184.4
million, negative $11.0 million and negative $15.8 million
respectively.
Investors - London Media (Brunswick)
Andrew Lindsay alindsay@antofagasta.co.uk Carole Cable antofagasta@brunswickgroup.com
Paresh Bhanderi pbhanderi@antofagasta.co.uk Robin Wrench antofagasta@brunswickgroup.com
Telephone +44 20 7808 0988 Telephone +44 20 7404 5959
Investors - Santiago
Alejandro Rivera arivera@aminerals.cl
Telephone +56 2 2798 7000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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