TIDMANTO
RNS Number : 0814W
Antofagasta PLC
21 April 2021
NEWS RELEASE, 21 APRIL 2021
Q1 2021 PRODUCTION REPORT
PRODUCTION AND COSTS IN LINE WITH GUIDANCE
Antofagasta plc CEO, Iván Arriagada said: "Antofagasta's
production and cost performance in the first quarter was in line
with guidance with copper production at 183,000 tonnes and net cash
costs at $1.16/lb.
"Labour negotiations were successfully concluded at Los
Pelambres and no further negotiations are scheduled at our mining
operations until next year.
"In March, Chile entered a second wave of COVID-19 infections as
the number of cases in Chile accelerated, reaching record daily
cases since the outbreak of the pandemic. As a result, countrywide
lockdowns have been reinstated with the availability of critical
hospital infrastructure under significant pressure. In addition to
the health measures we introduced last year we have further reduced
our on-site workforce and these actions have allowed us to continue
to operate our mines and projects under these challenging
conditions. Additional testing has been introduced throughout the
Group while the full benefit of the country's successful
vaccination programme is expected to be realised later in the year.
We also remain committed to supporting our local communities and
suppliers, and contributing to the social and economic recovery of
Chile.
"The copper market continues to perform strongly, and we expect
this to continue as structural supply and demand dynamics support a
tight physical market. In the meantime, we maintain our focus on
cost control and disciplined capital allocation.
"Production, cost and capital expenditure guidance for the full
year is unchanged, assuming no additional nationwide restrictions
are imposed due the pandemic."
HIGHLIGHTS
PRODUCTION
-- Copper production in Q1 2021 was in line with guidance at
183,000 tonnes, 5.7% lower than in the same quarter in 2020 and
5.0% lower than in Q4 2020 mainly due to expected reduced grades at
Los Pelambres
-- Gold production was 59,100 ounces in Q1 2021, 9.2% lower than
in the same period in 2020 and 8.0% higher than in 4Q 2020, mainly
due to changes in grade at Centinela
-- Molybdenum production in the quarter was 3,000 tonnes, an
increase of 600 tonnes compared to the same period in 2020 due to
higher recoveries at Centinela, and 700 tonnes lower than in Q4
2020
CASH COSTS
-- Cash costs before by-product credits in Q1 2021 were
$1.68/lb, 17c/lb higher than the same period last year due to the
decrease in production, the stronger Chilean peso and the impact of
the payment of a one-off signing bonus following the completion of
labour negotiations at Los Pelambres
-- Net cash costs were $1.16/lb in Q1 2021, compared to $1.10/lb
in Q1 2020 and $1.14/lb in the previous quarter, reflecting the
increase in cash costs before by-product credits, partially offset
by the higher by-product credits
GUIDANCE 2021
-- Full year guidance assumes COVID-19 restrictions will remain
in place for all of 2021. However, because of the new wave of
COVID-19 cases and the nationwide lockdown imposed in late March,
major maintenance at Los Pelambres originally planned for Q2 and
which requires a large number of additional workers on-site is
under review so that some of the non-critical activities can be
rescheduled to later in 2021
-- With the drought in central Chile now in its 12(th) year, Los
Pelambres has implemented several operational changes during Q1
aimed at preserving water availability in anticipation of what
could be a delayed start to the winter rainfall. While rainfall in
2020 was slightly higher than 2019, which itself was one of the
worst years on record, the water balance in 2021 will reflect the
cumulative impact of another year of drought. Los Pelambres will
continue to regularly review projected water availability for the
year under different scenarios and a sustained focus on optimising
water usage will remain key, and in the second half 2022 we will
complete the desalination plant
-- In Q1, the growth projects at Los Pelambres, Centinela and
Zaldívar progressed according to their revised plans with the
COVID-19 health protocols fully integrated into their execution
plans. Given the more extensive lockdown imposed since late March a
further reduction in the number of on-site workers at Los Pelambres
has been implemented in April and, at this stage, this is not
expected to have an impact on the projects' schedules or costs
-- Despite the above, and the stronger than expected Chilean
peso, full year guidance is unchanged at 730-760,000 tonnes of
copper at a net cash cost of $1.25/lb and capital expenditure of
$1.6 billion
-- Production in the second half of the year is expected to be
slightly stronger than in the first half
-- Earlier this month Los Pelambres submitted the EIA for the
expansion of the desalination plant to 800 l/s, and for various
sustaining capital expenditure projects, including the replacement
of the concentrate pipeline and other infrastructure
GROUP PRODUCTION AND CASH COSTS Year to Date Q1 Q4
---------------------- ------ ------
2021 2020 % 2021 2020 %
------------------------------ ------ ------ ------ ------ ------ ------ -------
Copper production kt 183.0 194.0 (5.7) 183.0 192.6 (5.0)
Copper sales kt 182.8 195.3 (6.4) 182.8 202.2 (9.6)
Gold production koz 59.1 65.1 (9.2) 59.1 54.7 8.0
Molybdenum production kt 3.0 2.4 25.0 3.0 3.7 (18.9)
------------------------------ ------ ------ ------ ------ ------ ------ -------
Cash costs before by-product
credits (1) $/lb 1.68 1.51 11.3 1.68 1.63 3.1
Net cash costs (1) $/lb 1.16 1.10 5.5 1.16 1.14 1.8
------------------------------ ------ ------ ------ ------ ------ ------ -------
(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.
Investors - London Media - 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
Los Pelambres produced 84,900 tonnes of copper in Q1 2021, 9.0%
lower than in the same quarter last year and 6.2% lower than the
previous quarter, mainly driven by lower grades.
Molybdenum production in Q1 2021 increased to 2,600 tonnes from
2,400 in Q1 2020, due to higher molybdenum grades.
Gold production for the quarter was 14,300 ounces, 3.4% lower
than the same period last year.
Cash costs before by-product credits at $1.46/lb in Q1 2021 were
18.7% higher than in the same quarter in 2020 due to the decrease
in production, the stronger Chilean peso, and the payment of a
one-off signing bonus following the successful completion of labour
negotiations which increased costs by approximately 2c/lb for the
full year. Compared to the previous quarter, costs increased by
7.4%, again on the decrease in production and the impact of a
one-off signing bonus.
Net cash costs in Q1 2021 increased by 2c/lb compared to Q1 2020
to $0.84/lb reflecting higher cash costs before by-product credits
partially offset by by-product credits increasing from 41c/lb to
62c/lb on higher molybdenum production and higher realised prices.
Compared to the previous quarter net cash costs increased by
5.0%.
The Los Pelambres Expansion project was 47.9% complete
(engineering, procurement and construction) as at the end of the
quarter.
LOS PELAMBRES Year to Date Q1 Q4
----------------------- ------ ------
2021 2020 % 2021 2020 %
------------------------------ ------ ------ ------ ------- ------ ------ -------
Daily ore throughput kt 164.5 163.9 0.4 164.5 167.8 (2.0)
Copper grade % 0.67 0.72 (6.9) 0.67 0.67 0.0
Copper recovery % 89.1 90.0 (1.0) 89.1 90.3 (1.3)
Copper production kt 84.9 93.3 (9.0) 84.9 90.5 (6.2)
Copper sales kt 80.7 98.2 (17.8) 80.7 97.1 (16.9)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Molybdenum grade % 0.021 0.017 23.5 0.021 0.023 (8.7)
Molybdenum recovery % 85.3 84.4 1.1 85.3 85.1 0.2
Molybdenum production kt 2.6 2.4 8.3 2.6 3.0 (13.3)
Molybdenum sales kt 2.6 2.1 23.8 2.6 3.3 (21.2)
Gold grade g/t 0.048 0.045 7.2 0.048 0.049 (1.1)
Gold recovery % 68.1 75.7 (10.0) 68.1 74.5 (8.6)
Gold production koz 14.3 14.8 (3.4) 14.3 16.6 (13.9)
Gold sales koz 12.9 13.3 (3.0) 12.9 16.7 (22.8)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Cash costs before by-product
credits (1) $/lb 1.46 1.23 18.7 1.46 1.36 7.4
Net cash costs (1) $/lb 0.84 0.82 2.4 0.84 0.80 5.0
------------------------------ ------ ------ ------ ------- ------ ------ -------
(1) Includes tolling charges of $0.14/lb in Q1 2021, $0.15/lb in
Q4 2020, and $0.20/lb Q1 2020
Centinela
Total copper production in Q1 2021 at Centinela was 66,800
tonnes, 0.5% higher than in the same quarter in 2020. Compared to
the previous quarter, copper production decreased by 4.6% on lower
throughput at both Centinela Concentrates and Centinela
Cathodes.
Copper in concentrates production was 45,300 tonnes in Q1 2021,
3.9% higher than in Q1 2020 as the concentrate plant operated at
above design capacity for the second consecutive quarter, which was
partially offset by lower grades and recoveries. Compared to the
previous quarter, copper in concentrate decreased by 2.8% on
slightly lower throughput.
Production of copper in cathodes fell 6.1% compared to Q1 2020.
This was primarily due to expected lower grades and recoveries,
despite higher throughput.
Gold production was 44,900 ounces in Q1 2021, 10.7% lower than
in the same period last year due to lower gold grades and
recoveries, partially offset by higher throughput, and 18.2% higher
than in Q4 2020 as grades and recoveries increased.
Cash costs before by-product credits in Q1 2021 were $1.78/lb,
the same as in Q1 2020. Compared to the previous quarter costs
decreased by 1.1% primarily on the impact of a one-off signing
bonus in Q4 2020 partially offset by lower production.
Net cash costs in Q1 2021 were $1.12/lb, some 5c/lb lower than
in the same quarter last year due to by-product credits increasing
from 61c/lb to 66c/lb on higher molybdenum production and realised
prices. Compared to the previous quarter net cash costs decreased
by 5.1%, or 6c/lb reflecting the lower cash costs before by-product
credits and higher by-product credits.
CENTINELA Year to Date Q1 Q4
----------------------- ------ ------
2021 2020 % 2021 2020 %
------------------------------ ------ ------ ------ ------- ------ ------ -------
CONCENTRATES
Daily ore throughput kt 106.4 91.1 16.8 106.4 108.0 (1.5)
Copper grade % 0.60 0.64 (6.3) 0.60 0.59 1.7
Copper recovery % 84.2 89.3 (5.7) 84.2 82.9 1.6
Copper production kt 45.3 43.6 3.9 45.3 46.6 (2.8)
Copper sales kt 45.1 43.0 4.9 45.1 45.1 0.0
------------------------------ ------ ------ ------ ------- ------ ------ -------
Molybdenum grade % 0.010 0.007 42.9 0.010 0.015 (33.3)
Molybdenum recovery % 39.5 11.1 255.9 39.5 44.6 (11.4)
Molybdenum production kt 0.4 0.1 300.0 0.4 0.7 (42.9)
Molybdenum sales kt 0.4 0.1 300.0 0.4 0.9 (55.6)
Gold grade g/t 0.22 0.27 (18.5) 0.22 0.18 22.2
Gold recovery % 71.9 75.7 (5.0) 71.9 68.9 4.4
Gold production koz 44.9 50.3 (10.7) 44.9 38.0 18.2
Gold sales koz 42.6 50.4 (15.5) 42.6 34.9 22.1
------ ------ ------- ------ ------ -------
Daily ore throughput kt 56.9 53.6 6.2 56.9 58.0 (1.9)
Copper grade % 0.59 0.64 (7.8) 0.59 0.64 (7.8)
Copper recovery % 66.4 69.7 (4.7) 66.4 65.1 2.0
Copper production - heap
leach kt 20.4 21.5 (5.1) 20.4 22.3 (8.5)
Copper production - total
(1) kt 21.5 22.9 (6.1) 21.5 23.4 (8.1)
Copper sales kt 21.8 22.2 (1.8) 21.8 26.1 (16.5)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Total copper production kt 66.8 66.5 0.5 66.8 70.0 (4.6)
Cash costs before by-product
credits (2) $/lb 1.78 1.78 0.0 1.78 1.80 (1.1)
Net cash costs (2) $/lb 1.12 1.17 (4.3) 1.12 1.18 (5.1)
------------------------------ ------ ------ ------ ------- ------ ------ -------
(1) Includes production from ROM material
(2) Includes tolling charges of $0.19/lb in Q1 2021, $0.14/lb in
Q4 2020, and $0.13/lb Q1 2020
Antucoya
Antucoya produced 20,200 tonnes of copper in Q1 2021, equal to
the same quarter last year as a 9.7% increase in throughput was
offset by lower grades and consequentially lower recoveries.
Production decreased by 6.5% compared to Q4 2020 on lower grades
and recoveries.
During the quarter, the cash costs were $1.96/lb, a 4.8%
increase compared to the previous quarter. This was mainly due to
lower grades.
ANTUCOYA Year to Date Q1 Q4
--------------------- ----- -----
2021 2020 % 2021 2020 %
---------------------- ------ ----- ----- ------- ----- ----- -------
Daily ore throughput Kt 80.6 73.5 9.7 80.6 79.5 1.4
Copper grade % 0.35 0.41 (14.6) 0.35 0.39 (10.3)
Copper recovery % 69.1 75.9 (9.0) 69.1 75.3 (8.2)
Copper production Kt 20.2 20.2 0.0 20.2 21.6 (6.5)
Copper sales Kt 22.9 18.3 25.1 22.9 22.8 0.4
---------------------- ------ ----- ----- ------- ----- ----- -------
Cash costs $/lb 1.96 1.78 10.1 1.96 1.87 4.8
---------------------- ------ ----- ----- ------- ----- ----- -------
Zaldívar
Copper production at Zaldívar was 11,100 tonnes in Q1 2021, a
20.7% decrease compared with the same period last year on lower
grades and recoveries. Production increased by 4.7% compared to Q4
2020 as throughput returned to levels achieved earlier in 2020.
Cash costs at $2.30/lb in Q1 2021 rose by 2.2% compared to the
previous quarter primarily due to lower grades. Compared to Q1 2020
costs increased by 64c/lb on lower grades and lower recoveries.
ZALDÍVAR Year to Date Q1 Q4
--------------------- ----- -----
2021 2020 % 2021 2020 %
--------------------------- ------ ----- ----- ------- ----- ----- -------
Daily ore throughput kt 42.2 42.2 0.0 42.2 34.8 21.3
Copper grade % 0.88 0.99 (11.1) 0.88 0.99 (11.1)
Copper recovery (1) % 48.8 61.3 (20.4) 48.8 50.1 (2.6)
Copper production - heap
leach (2) kt 9.0 11.0 (18.2) 9.0 8.0 12.5
Copper production - total
(2,3) kt 11.1 14.0 (20.7) 11.1 10.6 4.7
Copper sales (2) kt 12.4 13.5 (8.1) 12.4 11.1 11.7
Cash costs $/lb 2.30 1.66 38.6 2.30 2.25 2.2
----- ----- ----- -----
(1) Restated from average over full leach cycle to 12-month
rolling recoveries
(2) Group's 50% share
(3) Includes production from secondary leaching
Transport Division
Total transport volumes in Q1 2021 were 1.5 million tonnes, 6.2%
lower than in the same quarter last year and 7.2% lower than in Q4
2020 mainly due to the impact of sea swells affecting port access
and customers' lower copper production and sulphuric acid
consumption.
TRANSPORT Year to Date Q1 Q4
----------------------- ------ ------
2021 2020 % 2021 2020 %
--------------------------- ---- ------ ------ ------- ------ ------ -------
Rail kt 1,216 1,221 (0.4) 1,216 1,255 (3.1)
Road kt 309 405 (23.7) 309 390 (20.7)
Total tonnage transported kt 1,526 1,626 (6.2) 1,526 1,645 (7.2)
------ ------ ------ ------
Commodity prices and exchange rates
Year to Date Q1 Q4
----------------------- ------ ------
2021 2020 % 2021 2020 %
------ ------ ------- ------ ------
Copper
Market price $/lb 3.85 2.56 50.4 3.85 3.25 18.5
Realised price $/lb 4.26 2.02 110.9 4.26 3.67 16.1
---------------- ------ ------ ------ ------- ------ ------ -------
Gold
Market price $/oz 1,800 1,584 13.6 1,800 1,875 (4.0)
Realised price $/oz 1,708 1,605 6.4 1,708 1,901 (10.2)
---------------- ------ ------ ------ ------- ------ ------ -------
Molybdenum
Market price $/lb 11.3 9.7 16.5 11.3 9.0 25.6
Realised price $/lb 13.3 9.8 35.7 13.3 9.8 35.7
---------------- ------ ------ ------ ------- ------ ------ -------
Exchange rates
per
Chilean peso $ 724 804 (10.0) 724 762 (5.0)
---------------- ------ ------ ------ ------- ------ ------ -------
Spot commodity prices for copper, gold and molybdenum as at 31
March 2021 were $4.01/lb, $1,688/oz and $11.1/lb respectively,
compared with $3.51/lb, $1,891/oz and $10.0/lb as at 31 December
2020 and $2.18/lb, $1,607/oz and $8.4/lb as at 31 March 2020.
The provisional pricing adjustments for copper, gold and
molybdenum for the quarter were positive $169.0 million, negative
$7.1 million and positive $12.8 million respectively.
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