TIDMANTO
RNS Number : 6555W
Antofagasta PLC
19 April 2023
NEWS RELEASE, 19 APRIL 2023
Q1 2023 PRODUCTION REPORT
PRODUCTION AND COSTS IN LINE WITH FULL YEAR GUIDANCE
Antofagasta plc CEO, Iván Arriagada said: "Antofagasta's
production and cost performance in the first quarter was as
expected with copper production at 145,900 tonnes and net cash
costs at $1.54/lb with production affected by reduced water
availability at Los Pelambres and lower grades at Centinela. With
the completion of the desalination plant and the concentrator plant
expansion at Los Pelambres production will increase during the year
to meet production and cash cost guidance of 670-710,000 tonnes of
copper at $1.65/lb.
"Controlling our costs in this inflationary environment and
mitigating the impact of a stronger Chilean peso continue to be our
focus, together with the safety and health of our employees and
contractors.
"The copper market has been strong throughout the quarter, and
we expect this to continue as structural supply and demand dynamics
support a tight physical market."
HIGHLIGHTS
PRODUCTION
-- Copper production in Q1 2023 at 145,900 tonnes was in line
with guidance , 5.1% higher than in the same quarter in 2022 and
25.4% lower than in Q4 2022. The decrease from the previous quarter
reflects the expected temporary reduction in throughput at Los
Pelambres on lower water availability, and expected lower grades
and scheduled maintenance at Centinela. Production is expected to
increase through the rest of the year
-- Gold production was 42,200 ounces in Q1 2023 , 9.9% higher
than in the same period in 2022 due to higher grades and 24.8%
lower than in Q4 2022, mainly due the scheduled maintenance and
expected lower grades at Centinela
-- Molybdenum production in the quarter was 2,500 tonnes , 500
tonnes higher than in the same period in 2022 on higher grades at
Los Pelambres and Centinela and 19.4% lower than in Q4 2022 mainly
due to lower throughput at Los Pelambres
CASH COSTS
-- Cash costs before by-product credits in Q1 2023 were $2.49/lb
, 6.4% higher than in the same quarter in 2022 due to general
inflation and higher input prices during the period, particularly
for energy and sulphuric acid. Compared to the previous quarter,
cash costs increased by 24.5% on lower copper production and the
stronger Chilean peso
-- By-products credits in Q1 2023 were 95c/lb reflecting higher
realised prices, particularly for molybdenum
-- Net cash costs in Q1 2023 were $1.54/lb , 21c/lb lower than
in Q1 2022 mainly due to higher by-products credits. Compared to Q4
2022 net cash costs were 27c/lb higher reflecting the higher cash
costs before by-products credits, partly offset by higher realised
by-product prices
GROWTH PROJECTS UPDATE
-- At the end of Q1 2023, the Los Pelambres Desalination Plant
and Concentrator Expansion projects, including design, procurement,
construction and commissioning, were 96.2% complete
-- At the desalination plant project, water has successfully
been pumped through the entire water system although adverse sea
conditions have resulted in some resequencing to finalise the
marine works. The desalination plant is expected to come into
production by the end of the second quarter of 2023
-- Commissioning of the concentrator plant expansion will begin in the second quarter of 2023
-- Progress continues on the engineering and pre-investment
studies for the Centinela Second Concentrator project with a final
decision expected by the end of the year
2023 GUIDANCE
-- Guidance for the year is unchanged. Group copper production
for the full year is expected to be 670-710,000 tonnes, increasing
through the year
-- Cash cost guidance before and after by-product credits is
also unchanged at $2.20/lb and $1.65/lb respectively
-- Capital expenditure guidance is also unchanged at $1.9 billion
SUSTAINABILITY
-- In Q1 2023, the Group achieved improvements in all safety
indicators, including the Lost Time Injury Frequency Rate at 0.35
down by 60% compared to Q1 2022
-- The 2022 Sustainability Report was published in March and is
available on the company's website. The report sets out our
sustainability strategy, priorities and performance regarding the
main material sustainability issues that affected our business and
our stakeholders in 2022, a year in which we achieved a record
safety performance and reduced our CO(2) emissions intensity by
37%
OTHER
-- The Government presented a revised draft mining royalty bill
to Congress in October which was approved by the Senate Mining and
Energy Committee in January, and it is now being discussed in the
Senate Treasury Committee. The bill will then be debated in the
Senate before being passed to the lower house for its
consideration
-- A first draft of the new Chilean constitution is being
drafted by an appointed Committee of Experts and on 7 May 2023 the
members of the Constitutional Council will be elected by direct
vote. The Council will work with the Committee to finalise the
draft, supported by a committee of technical advisers. The new
constitution will then be put to a vote in a national referendum in
December 2023
-- Due to the continuing drought in the Choapa Valley, the DGA
(Chile's water administration department) recently reviewed the
water distribution arrangements in the Valley. Under the current
water rights, Los Pelambres has a net positive impact on water
availability in the Choapa Valley. Following the review, Los
Pelambres and other stakeholders in the Valley have continued to
engage in discussions with the relevant authorities
-- Zaldívar submitted an Environmental Impact Assessment (EIA)
in 2018 which included an application to extend its water
extraction and mining permits to 2029 (with decreasing activity
levels in 2030-2031). Currently, Zaldívar is permitted to extract
water and mine into 2025 and 2024, respectively. Zaldívar continues
to work diligently with the authorities and consult with the local
indigenous community.
To ensure the continuity of the operation, in March 2023
Zaldívar submitted a DIA (Declaration of Environmental Impact), a
more limited scope and simplified procedure than an EIA, requesting
that the mining permit be extended from 2024 to 2025 so as to
expire at the same date as the current water permit. At the same
time Zaldívar withdrew the 2018 EIA application. It is expected
that an alternative and updated EIA application to extend the water
and mining permits beyond 2025 will be submitted which will also
include a plan for a transition from the current continental water
source on completion of the extended water permit, to either
procuring water from a third party or using raw sea water.
GROUP PRODUCTION AND CASH COSTS Year to Date Q1 Q4
----------------------- ------ ------
2023 2022 % 2023 2022 %
------------------------------------- ------ ------ ------- ------ ------ -------
Copper production kt 145.9 138.8 5.1 145.9 195.7 (25.4)
Copper sales kt 149.0 115.9 28.6 149.0 201.5 (26.1)
Gold production koz 42.2 38.4 9.9 42.2 56.1 (24.8)
Molybdenum production kt 2.5 2.0 25.0 2.5 3.1 (19.4)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Cash costs before by-product
credits (1) $/lb 2.49 2.34 6.4 2.49 2.00 24.5
Net cash costs (1) $/lb 1.54 1.75 (12.0) 1.54 1.27 21.3
------------------------------ ------ ------ ------ ------- ------ ------ -------
(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 Media - London
- London
Andrew Lindsay alindsay@antofagasta.co.uk Carole Cable antofagasta@brunswickgroup.com
Telephone +44 20 7808 0988
Rosario Orchard rorchard@antofagasta.co.uk Telephone +44 20 7404 5959
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
As expected, Los Pelambres produced 59,300 tonnes of copper in
Q1 2023, 9.6% higher than in the same quarter last year mainly due
to higher throughput. It was 33.2% lower than in the previous
quarter, mainly driven by the reduced throughput, which was down
34.6% due to water restrictions arising from the drought.
Molybdenum production in Q1 2023 increased to 1,800 tonnes from
1,400 in Q1 2022, due to higher throughput and molybdenum grades.
Compared to the previous quarter the production was 25.0% lower due
to lower throughput as a result of the water restrictions.
Gold production for the quarter was 9,900 ounces, 1,300 ounces
higher than in the same period last year and 3,900 ounces lower
than Q4 2022 due to lower throughput.
Cash costs before by-product credits in Q1 2023 at $2.17/lb were
9.6% higher than in the same quarter in 2022 due to general
inflation and higher input prices, mainly energy and diesel.
Compared to the previous quarter, cash costs increased by 25.4%,
due to the decrease in production, the stronger Chilean peso and
higher input prices.
Net cash costs in Q1 2023 were $0.84/lb, 43c/lb lower than in Q1
2022 reflecting the increase in by-products credits on increased
production and higher realised prices, particularly molybdenum.
Compared to the previous quarter net cash costs were 7.7%
higher, reflecting the higher cash costs before by-products
credits, partly offset by higher realised prices.
The Los Pelambres Expansion project was 96.2% complete
(engineering, procurement and construction) as at the end of the
quarter. The desalination plant is due to come into production in
the second quarter of 2023. Commissioning of the concentrator plant
expansion is expected to begin in the second quarter of 2023.
LOS PELAMBRES Year to Date Q1 Q4
----------------------- ------ ------
2023 2022 % 2023 2022 %
------------------------------------- ------ ------ ------- ------ ------ -------
Daily ore throughput kt 115.5 98.8 16.9 115.5 176.7 (34.6)
Copper grade % 0.66 0.68 (2.9) 0.66 0.64 3.1
Copper recovery % 89.2 92.3 (3.4) 89.2 88.3 1.0
Copper production kt 59.3 54.1 9.6 59.3 88.8 (33.2)
Copper sales kt 56.8 41.9 35.6 56.8 94.6 (40.0)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Molybdenum grade % 0.019 0.016 18.8 0.019 0.017 11.8
Molybdenum recovery % 87.3 86.5 0.9 87.3 87.1 0.2
Molybdenum production kt 1.8 1.4 28.6 1.8 2.4 (25.0)
Molybdenum sales kt 1.8 1.2 50.0 1.8 2.2 (18.2)
Gold grade g/t 0.046 0.044 4.5 0.046 0.042 9.5
Gold recovery % 70.0 73.5 (4.8) 70.0 69.0 1.4
Gold production koz 9.9 8.6 15.1 9.9 13.8 (28.3)
Gold sales koz 9.8 6.4 53.1 9.8 14.3 (31.5)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Cash costs before by-product
credits (1) $/lb 2.17 1.98 9.6 2.17 1.73 25.4
Net cash costs (1) $/lb 0.84 1.27 (33.9) 0.84 0.78 7.7
------------------------------ ------ ------ ------ ------- ------ ------ -------
(1) Includes tolling charges of $0.21/lb in Q1 2023, $0.21/lb in
Q4 2022, and $0.16/lb Q1 2022
Centinela
Total copper production in Q1 2023 at Centinela was 57,700
tonnes, 3.4% higher than in the same quarter in 2022. Compared to
the previous quarter, copper production decreased by 21.7% on
expected lower grades and scheduled major maintenance at Centinela
Concentrates.
Copper in concentrates production was 38,200 tonnes in Q1 2023,
16.1% higher than in Q1 2022, mainly due to higher grades and 16.0%
lower than in the previous quarter due to expected lower copper
grades of 0.51% compared to 0.54% and expected lower daily ore
throughput of 103.2kt compared to 115.9kt in Q4 2022 due to
scheduled maintenance.
Production of copper cathodes was 14.8% lower than in the same
quarter in 2022 and 30.9% lower than Q4 2022. This was primarily
due to expected lower grades and throughput, partially offset by
higher recoveries.
Gold production was 32,300 ounces in Q1 2023, 8.4% higher than
in the same period last year. Compared to the previous quarter,
gold production decreased by 23.6% as grades, which are correlated
to copper grades, and recoveries decreased.
Cash costs before by-product credits in Q1 2023 were $2.66/lb,
1.5% lower than in Q1 2022 primarily due to higher production,
partly offset by general inflation and higher input costs. Compared
to the previous quarter costs increased by 30.4% mainly due to
lower production and the stronger Chilean peso.
Net cash costs in Q1 2023 were $1.60/lb, 33c/lb lower than in
the same quarter last year due to higher by-product credits related
to increased molybdenum and gold production and higher realised
prices. Compared to the previous quarter net cash costs increased
by 29.0% reflecting the increase in cash costs before by-product
credits and lower gold production, partly offset by higher realised
prices.
CENTINELA Year to Date Q1 Q4
----------------------- ------ ------
2023 2022 % 2023 2022 %
------------------------------------- ------ ------ ------- ------ ------ -------
CONCENTRATES
Daily ore throughput kt 103.2 104.0 (0.8) 103.2 115.9 (11.0)
Copper grade % 0.51 0.44 15.9 0.51 0.54 (5.6)
Copper recovery % 83.3 81.4 2.3 83.3 81.7 2.0
Copper production kt 38.2 32.9 16.1 38.2 45.5 (16.0)
Copper sales kt 41.0 22.5 82.2 41.0 45.1 (9.1)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Molybdenum grade % 0.016 0.013 23.1 0.016 0.014 14.3
Molybdenum recovery % 71.0 59.7 18.9 71.0 49.3 44.0
Molybdenum production kt 0.8 0.6 33.3 0.8 0.7 14.3
Molybdenum sales kt 0.8 0.4 100.0 0.8 0.6 33.3
Gold grade g/t 0.17 0.15 13.3 0.17 0.19 (10.5)
Gold recovery % 65.1 66.7 (2.4) 65.1 65.5 (0.6)
Gold production koz 32.3 29.8 8.4 32.3 42.3 (23.6)
Gold sales koz 33.5 22.2 50.9 33.5 39.9 (16.0)
------ ------ ------- ------ ------ -------
CATHODES
Daily ore throughput kt 49.4 55.4 (10.8) 49.4 52.5 (5.9)
Copper grade % 0.56 0.65 (13.8) 0.56 0.76 (26.3)
Copper recovery % 69.2 67.8 2.1 69.2 68.5 1.0
Copper production - heap
leach kt 18.2 22.1 (17.6) 18.2 27.0 (32.6)
Copper production - total
(1) kt 19.5 22.9 (14.8) 19.5 28.2 (30.9)
Copper sales kt 21.5 22.6 (4.9) 21.5 28.2 (23.8)
------------------------------ ------ ------ ------ ------- ------ ------ -------
Total copper production kt 57.7 55.8 3.4 57.7 73.7 (21.7)
Cash costs before by-product
credits (2) $/lb 2.66 2.70 (1.5) 2.66 2.04 30.4
Net cash costs (2) $/lb 1.60 1.93 (17.1) 1.60 1.24 29.0
------------------------------ ------ ------ ------ ------- ------ ------ -------
(1) Includes production from ROM material
(2) Includes tolling charges of $0.17/lb in Q1 2023, $0.15/lb in
Q4 2022, and $0.14/lb Q1 2022
Antucoya
Antucoya produced 18,800 tonnes of copper in Q1 2023, 8.0%
higher than in the same quarter last year on expected higher grades
and throughput, partially offset by lower recoveries. Production
decreased by 13.8% compared to Q4 2022 on lower grades and
throughput, due to lower plant run time related to maintenance.
During the quarter, the cash costs were $2.80/lb, a 16.7%
increase compared to the $2.40/lb in Q1 2022. This was mainly due
to increased input costs, particularly for energy, sulphuric acid
and diesel. This was partially offset by higher production.
Cash costs for the first three months of the year were 8.5%
higher than the previous quarter, mainly due to lower production
and the stronger Chilean peso.
Major maintenance scheduled in Q2 2023 has been postponed to Q3
2023.
ANTUCOYA Year to Date Q1 Q4
-------------------- ----- -----
2023 2022 % 2023 2022 %
----------------------------- ----- ----- ------ ----- ----- -------
Daily ore throughput kt 84.8 82.2 3.2 84.8 93.4 (9.2)
Copper grade % 0.33 0.31 6.5 0.33 0.35 (5.7)
Copper recovery % 66.8 69.4 (3.7) 66.8 68.7 (2.8)
Copper production kt 18.8 17.4 8.0 18.8 21.8 (13.8)
Copper sales kt 19.1 17.4 9.8 19.1 22.6 (15.5)
---------------------- ------ ----- ----- ------ ----- ----- -------
Cash costs $/lb 2.80 2.40 16.7 2.80 2.58 8.5
---------------------- ------ ----- ----- ------ ----- ----- -------
Zaldívar
Copper production at Zaldívar was 10,000 tonnes in Q1 2023, a
13.0% decrease compared with the same period last year and 11.5%
lower than Q4 2022 due to scheduled maintenance and lower grades,
partially offset by higher recoveries.
Cash costs in Q1 2023 were $2.89/lb, a 37.6% increase compared
with the same quarter last year and 5.1% increase compared to Q4
2022 primarily due to lower production and scheduled maintenance
during Q1 2023.
ZALDÍVAR Year to Date Q1 Q4
--------------------- ----- -----
2023 2022 % 2023 2022 %
---------------------------------- ----- ----- ------- ----- ----- -------
Daily ore throughput kt 33.6 39.5 (14.9) 33.6 38.6 (13.0)
Copper grade % 0.70 0.84 (16.7) 0.70 0.76 (7.9)
Copper recovery (1) % 60.6 53.2 13.9 60.6 59.6 1.7
Copper production - heap
leach (2) kt 7.0 8.2 (14.6) 7.0 8.3 (15.7)
Copper production - total
(2,3) kt 10.0 11.5 (13.0) 10.0 11.3 (11.5)
Copper sales (2) kt 10.6 11.6 (8.6) 10.6 10.9 (2.8)
Cash costs $/lb 2.89 2.10 37.6 2.89 2.75 5.1
----- ----- ----- -----
(1) Metallurgical recoveries during the period. Prior periods
have been restated
(2) Group's 50% share
(3) Includes production from secondary leaching
Transport Division
Total transport volumes in Q1 2023 were 1.8 million tonnes, 1.8%
higher than in the same quarter last year mainly due to customers'
higher production and a new road transport contract that was in
place for the full quarter. Total transport volumes decreased by
3.3% compared to Q4 2022 mainly due to customers' lower production
and poor weather conditions.
TRANSPORT Year to Date Q1 Q4
---------------------- ------ ------
2023 2022 % 2023 2022 %
-------------------------------- ------ ------ ------ ------ ------ ------
Rail kt 1,309 1,310 (0.1) 1,309 1,350 (3.0)
Road kt 442 410 7.8 442 461 (4.1)
Total tonnage transported kt 1,751 1,720 1.8 1,751 1,811 (3.3)
------ ------ ------ ------
Commodity prices and exchange rates
Year to Date Q1 Q4
----------------------- ------ ------
2023 2022 % 2023 2022 %
------ ------ ------- ------ ------
Copper
Market price $/lb 4.05 4.53 (10.6) 4.05 3.63 11.6
Realised price $/lb 4.48 5.05 (11.3) 4.48 3.97 12.8
---------------- ------ ------ ------ ------- ------ ------ -------
Gold
Market price $/oz 1,890 1,877 0.7 1,890 1,728 9.4
Realised price $/oz 2,029 2,021 0.4 2,029 1,813 11.9
---------------- ------ ------ ------ ------- ------ ------ -------
Molybdenum
Market price $/lb 32.8 19.1 71.7 32.8 21.4 53.3
Realised price $/lb 37.0 19.9 85.9 37.0 28.9 28.0
---------------- ------ ------ ------ ------- ------ ------ -------
Exchange rates
per
Chilean peso $ 810 808 0.2 810 913 (11.3)
---------------- ------ ------ ------ ------- ------ ------ -------
Spot commodity prices for copper, gold and molybdenum as at 31
March 2023 were $4.05/lb, $1,979/oz and $24.0/lb respectively,
compared with $3.80/lb, $1,824/oz and $31.8/lb as at 31 December
2022 and $4.69/lb, $1,933/oz and $19.3/lb as at 31 March 2022.
The provisional pricing adjustments for copper, gold and
molybdenum for the quarter were positive $134.6 million, $5.4
million and $21.6 million respectively.
_____________________________________________________________________________________________
Cautionary Statement
This announcement contains certain forward-looking statements.
All statements other than historical facts are forward-looking
statements. Examples of forward-looking statements include, without
limitation, those regarding the Group's strategy, plans, objectives
or future operating or financial performance, reserve and resource
estimates, commodity demand and trends in commodity prices, growth
opportunities, and any assumptions underlying or relating to any of
the foregoing. Words such as "intend", "aim", "project",
"anticipate", "estimate", "plan", "believe", "expect", "may",
"should", "will", "continue" and similar expressions identify
forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties, assumptions and other factors that are beyond the
Group's control. Given these risks, uncertainties and assumptions,
actual results, performance or achievements could differ materially
from any future results, performance or achievements expressed or
implied by these forward-looking statements, which apply only as at
the date of this report. These forward-looking statements are based
on numerous assumptions regarding the Group's present and future
business strategies and the environment in which the Group will
operate in the future. Important factors that could cause actual
results, performance or achievements to differ from those in the
forward-looking statements include, but are not limited to: natural
events, global economic and financial conditions (which may affect
our business, results of operations or financial condition);
various political, economic, legal, regulatory, social and other
risks and uncertainties across jurisdictions in which the Group
operates; changes to mining concessions or the imposition of new
mining royalties, or changes to existing mining royalties in the
jurisdictions in which the Group operates; the Group's ability to
comply with the extensive body of regulations governing the mining
industry, as well as the need to manage relationships with local
communities; the ongoing effects of the global COVID-19 pandemic;
demand, supply and prices for copper and other long-term commodity
price assumptions (as they materially affect the timing and
feasibility of future projects and developments); trends in the
copper mining industry and conditions of the international copper
markets; the effect of currency exchange rates on commodity prices
and operating costs; the availability and costs associated with
mining inputs and labour; operating or technical difficulties in
connection with mining or development activities; risks, hazards
and/or events and conditions inherent to the mining industry, which
may affect our operations or facilities; employee relations;
climate change as well as the effects of extreme weather
conditions; the outcome of any litigation arbitration, regulatory
or administrative proceedings to which the Group is and may be
subject in the future; and actions and activities of governmental
authorities, including changes to laws, regulations or
taxation.
Except as required by applicable law, rule or regulation, the
Group does not undertake any obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Past performance cannot be
relied on as a guide to future performance.
No statement in this announcement is intended as a profit
forecast or estimate for any period. No statement in this
announcement should be interpreted to indicate a particular level
of profit and, as a consequence, it should not be possible to
derive a profit figure for any future period from this report.
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