Antofagasta reports record year for copper, guides to lower output in 2014

29th Jan 2014 06:55

- Record year of copper output- 2013 production of gold and molybdenum falls- 2014 guidance points to lower production- Strong production report, Westhouse saysChilean miner Antofagasta reported a record year of copper production for 2013, supported by a strong output performance in the fourth quarter.However, guidance for 2014 for all the company's asset classes - copper, gold and molybdenum - shows that production is expected to ease slightly, although ahead of at least some analysts' forecasts. Copper production in the last three months of the year rose 4.9% from the third quarter to 182,900 tonnes, with all major projects contributing to growth.That pushed full-year copper output to 721,200 tonnes, compared with company guidance of 700,000 tonnes, representing an all-time high and 1.6% ahead of 2012.Gold production fell by 6.4% over the quarter to 63,300 ounces due to lower output at Esperanza. Annual gold production also beat guidance of 280,000 ounces, totalling 293,800 ounces in 2013, but was down 2% year-on-year.Meanwhile, molybdenum production rose 12.9% in the final quarter to 2,300 tonnes but was down 26.3% for the year as a whole at 9,000 tonnes due to tough grade comparatives the previous year. Nevertheless, this still came in ahead of the 8,000 tonnes guidance.As for this year, production across the group in 2014 is forecast to slip to 700,000 tonnes of copper, 270,000 ounces of gold and 7,500 tonnes of molybdenum. Net cash costs were flat quarter-on-quarter at $1.47 a pound, but were 32.2% higher for 2013 as a whole at $1.36 a pound. This was due to higher mine movement costs at the Esperanza project and higher energy prices at Los Pelambres, along with lower production and prices of molybdenum and gold.The company is guiding to cash costs net of credits of $1.45 a pound in 2014 and 180 cents per pound before-by-product credits, below what some analysts had been expecting. "A strong production report," said analysts at Westhouse Securities, highlighting that guidance on gold from the company, at 270,000 ounces, came in well ahead of what they were expecting - 248,000 ounces. Guidance for copper production was a fraction above the 702,000 tonnes they were expecting."So in all likelihood this calls for upgrades to both 2013 and 2014 estimates, but we shall review the detail first. So, well done Antofagasta, good production results."BC