TIDMANTO
RNS Number : 0813N
Antofagasta PLC
27 January 2016
NEWS RELEASE, 27 JANUARY 2016
Q4 2015 PRODUCTION REPORT
STRONGEST QUARTER OF 2015
Antofagasta plc CEO, Diego Hernández said:
"We have finished the year strongly with our best quarter of the
year. Copper and molybdenum production were up against Q3 and gold
production was 22% higher. Our production benefited from an
improved performance at Los Pelambres and Centinela, and the
addition of new production from Antucoya and Zaldívar. As
production rose we kept a tight grip on our costs, with net cash
costs for the quarter falling to $1.38/lb, down 2.8% against
Q3.
"Whilst we have finished the year on a good note, 2015 has been
undeniably difficult. The continued deterioration of the
macro-environment and associated falling commodity prices combined
with several operational set-backs resulted in copper production
declining 11% year-on-year and cash costs before by-product credits
declining by 1% to $1.81/lb. Although we achieved significant
savings during the year and benefited from the weaker Chilean Peso
and falling energy and diesel prices, this was outweighed by our
lower production.
"Looking to 2016, we are focused on operational excellence and
improving productivity across all our mines in order to continue to
maintain a tight control on costs. We will benefit from growth at
Antucoya and Centinela Concentrates and we will have a full year of
production from our share of Zaldívar. With this focus on our
operations, we expect the Group's total copper production for 2016
to be in the range of 710,000 and 740,000 tonnes at a net cash cost
of $1.35/lb."
HIGHLIGHTS
PRODUCTION
-- Copper production in Q4 2015 was 169,900 tonnes, 8.2% higher
than Q3 2015. This increase was primarily driven by higher
production at Los Pelambres and Centinela Concentrates and the
contribution from Antucoya and Zaldívar.
-- Group copper production for the full year of 630,300 tonnes
was 10.6% lower than in 2014, primarily due to lower production at
Los Pelambres and Centinela.
-- Gold production was 55,700 ounces in Q4 2015, a 21.8%
increase on Q3 2015 as grades increased at Centinela.
-- Gold production for the year was 213,900 ounces compared to
270,900 in 2014, mainly reflecting lower grades at Centinela in the
second half of the year.
-- Molybdenum production at Los Pelambres was 10,100 tonnes in
2015, compared to 7,900 tonnes in 2014, as a new, higher grade
phase of the pit was mined.
CASH COSTS
-- Cash costs before by-product credits in Q4 2015 were $1.65/lb, 1.2% less than in Q3 2015.
-- Cash costs before by-product credits for the year were
$1.81/lb, 1.1% lower than last year as the benefit of the weaker
Chilean Peso and lower input prices were offset by lower
throughputs.
-- Net cash costs were $1.38/lb in Q4 2015, a 2.8% decrease
compared with the previous quarter primarily due to higher gold and
molybdenum production offset by lower realised prices.
-- Net cash costs for 2015 were $1.50/lb, 4.9% higher than the
same period last year as lower realised by-product prices and lower
gold production outweighed the lower cash costs before by-product
credits.
2016 GUIDANCE
-- Group production in 2016 is expected in the range of
710-740,000 tonnes of copper, 245-275,000 ounces of gold and
8-9,000 tonnes of molybdenum.
-- Group cash cost before by-product credits in 2016 are
expected to reduce by nearly 9% compared to 2015 to $1.65/lb and
net cash cost to fall by 10% to $1.35/lb as production increases
and further savings are achieved.
OTHER
-- As previously announced, on 1 December 2015 the Group
completed the acquisition of a 50% controlling interest in the
Zaldívar copper mine in Chile from Barrick Gold Corporation.
GROUP PRODUCTION AND CASH COSTS Q4 Q3 Full Year
-------------------------------------- ------ ------ ------ -----------------------
2015 2015 % 2015 2014 %
------------------------------ ------ ------ ------ ------ ------ ------ -------
Copper production (1) kt 169.9 157.0 8.2 630.3 704.8 (10.6)
Gold production koz 55.7 45.7 21.9 213.9 270.9 (21.0)
Molybdenum production kt 2.8 2.6 7.7 10.1 7.9 27.8
------------------------------ ------ ------ ------ ------ ------ ------ -------
Cash costs before by-product
credits $/lb 1.65 1.67 (1.2) 1.81 1.83 (1.1)
Net cash costs $/lb 1.38 1.42 (2.8) 1.50 1.43 4.9
------------------------------ ------ ------ ------ ------ ------ ------ -------
(1) Copper production tonnage includes pre-commercial production
at Antucoya of 10,000 tonnes in Q4 2015 and 2,200 tonnes in Q3
2015, which are not included in unit costs, and 4,400 tonnes of
attributable production from Zaldívar.
MINING OPERATIONS
Los Pelambres
Los Pelambres produced 97,600 tonnes of copper in Q4 2015
compared with 96,200 tonnes in the previous quarter. This increase
is mainly due to slightly higher throughput rates. In the full year
2015, copper production decreased by 7.2% compared with last year.
This decrease was primarily due to lower throughput in the first
quarter as a result of the community protests as well as the higher
proportion of harder ore being processed during 2015 which also
affected recoveries.
Molybdenum production was 2,800 tonnes in Q4 2015 compared to
2,600 tonnes in Q3 2015. This increase was due to a slightly higher
grade and processing of inventory during the quarter, offset by
lower recoveries. Production for the year of 10,100 tonnes was the
highest since 2012 and a 27.8% increase on 2014 as a new, higher
grade area of the pit was mined.
Cash costs before by-product credits in Q4 2015 were $1.40/lb,
compared with $1.32/lb in the previous quarter. This increase was
principally due to increased maintenance and services costs in the
quarter and greater mine movements. For the full year, cash costs
before by-product credits at $1.50/lb were 3.8% lower than in 2014,
primarily due to lower input prices such as energy and diesel. For
the full year energy costs were $116/MWh (including transmission
and other costs), compared with $149/MWh in 2014.
Net cash costs in Q4 2015 at $1.15/lb were 6.5% higher than in
the previous quarter, again reflecting higher maintenance and
services costs in the quarter partly offset by increased copper,
gold and molybdenum production.
Net cash costs for the full year 2015 were $1.23/lb compared
with $1.18/lb in 2014. This increase is mainly due to lower gold
production and lower realised molybdenum prices, which almost
halved.
LOS PELAMBRES Q4 Q3 Full Year
2015 2015 % 2015 2014 %
------------------------------ ------ ------ ------ ------- ------ ------ -------
Daily ore throughput kt 170.2 169.7 0.3 168.2 176.3 (4.6)
Copper grade % 0.72 0.72 0.0 0.70 0.70 0.0
Copper recovery % 89.3 89.2 0.1 87.9 89.4 (1.7)
Copper production kt 97.6 96.2 1.5 363.2 391.3 (7.2)
Copper sales kt 103.8 98.9 5.0 366.0 386.0 (5.2)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Molybdenum grade % 0.022 0.022 0.0 0.021 0.015 40.0
Molybdenum recovery % 76.6 83.8 (8.6) 80.4 83.8 (4.1)
Molybdenum production kt 2.8 2.6 7.7 10.1 7.9 27.8
Molybdenum sales kt 2.8 2.6 7.7 9.9 8.2 20.7
Gold production koz 15.9 13.2 20.5 51.4 66.5 (22.7)
Gold sales koz 17.3 13.6 27.2 53.4 63.8 (16.3)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Cash costs before by-product
credits(1) $/lb 1.40 1.32 6.1 1.50 1.56 (3.8)
Net cash costs(1) $/lb 1.15 1.08 6.5 1.23 1.18 4.2
------------------------------ ------ ------ ------ ------- ------ ------ -------
(1) Includes tolling charges of $0.26/lb in Q4 2015, $0.28/lb in
Q3 2015, $0.27/lb in FY 2015 and $0.21/lb in FY 2014
Centinela
Total Q4 2015 copper production at Centinela was 52,100 tonnes,
2.8% higher than in the previous quarter due to higher production
of copper in concentrate, partly offset by lower cathode
production. Total production for the full year 2015 was 17.1% lower
than in 2014 primarily as a result of lower grades and
recoveries.
Production of copper in concentrate was 34,900 tonnes in Q4
2015, compared with 31,900 tonnes in the previous quarter primarily
due to significantly higher throughput offset by lower grades and
recoveries. The new secondary and tertiary crushers operated for
periods at full capacity during the quarter having been delayed by
the heavy rainfall earlier in the year.
Copper in concentrate production for the full year was 16.0%
lower year-on-year mainly reflecting grades falling from 0.65% to
0.58% as expected, lower recoveries and, to a lesser extent, lower
throughput.
Cathode production in Q4 2015 was 17,200 tonnes, an 8.0%
decrease on the 18,700 tonnes produced in Q3 2015 largely as a
result of lower grades and slightly lower recoveries. Compared with
the same period last year, cathode production during 2015 was 19.1%
lower as grades declined as expected. Mining activity moved to the
lower grade zones of the Tesoro Central and Tesoro Noreste (TNE)
pits before stopping at TNE in November.
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Production is focused on copper and therefore gold production,
as a by-product, can vary. In Q4 2015 gold production was 22.5%
higher than in the previous quarter primarily due to higher grade
and throughput. However, for the full year 2015 gold production at
162,500 ounces was 20.5% lower than in 2014 mainly due to lower
grades and recoveries.
Cash costs before by-product credits were $2.47/lb in Q4 2015
compared with $2.36/lb in the previous quarter. This increase was
due to increased activity and lower inventory variations partially
offset by lower input prices. Cash costs before by-product credits
for 2015 were 7.1% higher than in 2014 as copper production fell by
17.1%. This was offset by lower input prices, a weaker Chilean Peso
and a reduction in fixed costs.
Net cash costs in Q4 2015 at $2.08/lb were 3.0% higher than in
the previous quarter, as the lower realised prices countered the
higher gold production. Net cash costs for 2015 were $1.85/lb
compared with $1.63/lb in 2014. This increase is due to the higher
cash costs before by-product credits and lower gold production and
realised gold prices.
CENTINELA Q4 Q3 Full Year
2015 2015 % 2015 2014 %
------------------------------- ------ ----- ----- ------- ------ ------ -------
CONCENTRATES
------ ----- ----- ------- ------
Daily ore throughput kt 93.3 85.9 8.6 84.2 85.8 (1.9)
Copper grade % 0.50 0.51 (2.0) 0.58 0.65 (10.8)
Copper recovery % 83.0 84.2 (1.4) 85.5 88.2 (3.1)
Copper production kt 34.9 31.9 9.4 145.2 172.8 (16.0)
Copper sales kt 35.4 39.7 (10.8) 145.6 178.8 (18.6)
------------------------------- ------ ----- ----- ------- ------ ------ -------
Gold grade g/t 0.22 0.19 15.8 0.24 0.28 (14.3)
Gold recovery % 68.0 69.8 (2.6) 72.3 74.7 (3.2)
Gold production koz 39.8 32.5 22.5 162.5 204.4 (20.5)
Gold sales koz 40.6 41.7 (2.6) 165.8 203.6 (18.6)
------------------------------- ------ ----- ----- ------- ------ ------ -------
CATHODES
------------------------------- ------ ----- ----- ------- ------ ------ -------
Daily ore throughput kt 25.0 25.0 0.0 25.4 25.2 0.8
Copper grade % 0.85 0.97 (12.4) 0.98 1.31 (25.2)
Copper recovery % 69.6 71.1 (2.1) 68.9 70.5 (2.3)
Copper production - heap
leach kt 14.3 15.7 (8.9) 64.4 83.6 (23.0)
Copper production - total((1) kt 17.2 18.7 (8.0) 75.9 93.8 (19.1)
Copper sales kt 19.8 19.0 4.2 78.8 92.1 (14.4)
Total copper production kt 52.1 50.7 2.8 221.1 266.6 (17.1)
------------------------------- ------ ----- ----- ------- ------ ------ -------
Cash costs before by-product
credits (2) $/lb 2.47 2.36 4.7 2.27 2.12 7.1
------------------------------- ------ ----- ----- ------- ------ ------ -------
Net cash costs (2) $/lb 2.08 2.02 3.0 1.85 1.63 13.5
------------------------------- ------ ----- ----- ------- ------ ------ -------
(1) Includes production from ROM material
(2) Includes tolling charges for copper in concentrate of
$0.30/lb in Q4 2015, $0.31/lb in Q3 2015, $0.30/lb in FY 2015 and
$0.24/lb FY 2014
Michilla
Copper production at Michilla was 5,800 tonnes in Q4 2015, 27.5%
lower than in the previous quarter as mining stopped in the first
half of the year and production ceased completely in December as
part of the mine closure plan. Production for the full year fell
37.4% to 29,400 tonnes compared to 2014. The programme for reducing
the number of onsite employees and contractors continued in the
fourth quarter as per the mine closure plan.
Cash costs decreased slightly to $1.97/lb in Q4 2015 compared
with $2.06/lb in the previous quarter primarily due to lower
activity at the mine. Cash costs for 2015 were $2.14/lb compared
with $2.38/lb in 2014. This decrease was primarily due to lower
onsite costs as a result of lower activity at the site.
MICHILLA Q4 Q3 Full Year
2015 2015 % 2015 2014 %
------------------------------ ------ ----- ----- ------- ----- ----- -------
Daily ore throughput kt 2.9 6.8 (57.4) 5.9 12.2 (51.6)
Copper grade % 1.35 1.43 (5.6) 1.28 1.13 13.3
Copper recovery % 74.0 78.9 (6.2) 78.2 79.5 (1.6)
Copper production - heap
leach kt 4.4 6.1 (27.9) 22.1 40.1 (44.9)
Copper production - total(1) kt 5.8 8.0 (27.5) 29.4 47.0 (37.4)
Copper sales kt 6.7 8.0 (16.3) 30.8 46.1 (33.2)
------------------------------ ------ ----- ----- ------- ----- ----- -------
Cash costs $/lb 1.97 2.06 (4.4) 2.14 2.38 (10.1)
------------------------------ ------ ----- ----- ------- ----- ----- -------
(1) Includes production from secondary leaching
Antucoya
During Q4 2015 Antucoya produced 10,000 tonnes of copper as
commissioning advanced in line with the ramp-up schedule. The
project is expected to reach full capacity of 85,000 tonnes per
annum in mid-2016.
By the end of December, approximately 7 million tonnes of
crushed material were stacked on the leach-pads and full production
for the year was 12,200 tonnes of copper cathodes.
Production at Antucoya will be reported as part of total Group
production and costs will be reported in unit costs once commercial
production is achieved, which is expected to be in the first half
of 2016.
Zaldívar
The Group completed the acquisition of a 50% interest in the
Zaldívar copper mine from Barrick Gold Corporation on 1 December
and became the operator of the mine.
Zaldívar produced 4,400 tonnes of attributable copper during
December at a cash cost of $1.73/lb.
The Group's share of Zaldívar's production and costs have been
included in the Group's 2015 production from the beginning of
December.
Transport
Total volumes transported by the division were 1.7 million
tonnes in Q4 2015, 17.5% higher than in the previous quarter, and
6.8 million tonnes for the year, 6.8% lower than in the same period
last year. These changes reflected increased shipments for the
Sierra Gorda copper mine and higher utilisation of rolling stock
during 4Q 2015. However, shipments for the year were lower than had
originally been expected with the delay in the ramp-up of the
Sierra Gorda mine, and the heavy rains in northern Chile during Q2
2015.
Q4 Q3 Full Year
2015 2015 % 2015 2014 %
--------------------------- ---- ------ ------ ----- ------ ------ ------
Total tonnage transported kt 1,742 1,482 17.5 6,805 7,302 (6.8)
--------------------------- ---- ------ ------ ----- ------ ------ ------
Commodity prices and exchange rates
Q4 Q3 Full Year
2015 2015 % 2015 2014 %
---------------- ------ ------ ------ ------- ------ ------ -------
Copper
--------------------------------------------------------------------------
Market price $/lb 2.22 2.38 (6.9) 2.50 3.11 (19.8)
Realised price $/lb 2.00 2.12 (5.8) 2.28 3.00 (23.9)
---------------- ------ ------ ------ ------- ------ ------ -------
Gold
--------------------------------------------------------------------------
Market price $/oz 1,105 1,124 (1.8) 1,160 1,266 (8.4)
Realised price $/oz 1,077 1,107 (2.7) 1,155 1,261 (8.4)
---------------- ------ ------ ------ ------- ------ ------ -------
Molybdenum
--------------------------------------------------------------------------
Market price $/lb 4.8 5.8 (17.1) 6.7 11.4 (41.2)
Realised price $/lb 4.3 4.8 (10.1) 5.7 11.0 (48.6)
---------------- ------ ------ ------ ------- ------ ------ -------
Exchange rates
--------------------------------------------------------------------------
per
Chilean peso $ 698 676 3.2 654 570 14.7
---------------- ------ ------ ------ ------- ------ ------ -------
The spot commodity prices for copper, gold and molybdenum as at
31 December 2015 were $2.13/lb, $1,061/oz and $5.15/lb respectively
compared with $2.35/lb, $1,114/oz and $5.30/lb as at 30 September
2015 and $2.88/lb, $1,206/oz and $9.0/lb as at 31 December
2014.
The provisional pricing adjustments for copper, gold and
molybdenum for the year were negative $295.5 million, negative
$10.5 million and negative $23.9 million respectively.
Tax
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