Broker snap: Antofagasta guidance beats forecasts, says Westhouse

29th Jan 2014 09:09

Westhouse Securities has maintained its 'buy' rating and 1,000p target price for Chilean mining group Antofagasta after production guidance for 2014 came in ahead of forecasts.Full-year copper output in 2013 totalled a record 721,200 tonnes, 1.6% higher than the 2012 and ahead of company guidance of 700,000 tonnes. Westhouse was expecting 709,000 tonnes.Gold production fell 2% year-on-year to 293,800 ounces but still managed to beat guidance (280,000 ounces), though it came in below the broker's forecast (303,500 ounces).Molybdenum production rose was down 26.3% for the year at 9,000 tonnes due to tough grade comparatives the previous year. Nevertheless, this still came in ahead of the 8,000 tonnes guidance and Westhouse's target (8,200 tonnes).As for this year, production across the group in 2014 is forecast to be 700,000 tonnes of copper, 270,000 ounces of gold and 7,500 tonnes of molybdenum. "For 2014, guidance for copper is a fraction above our estimate (of 702,000t) and gold guidance at 270,000oz is well above our 248,000oz estimate, so in all likelihood this calls for upgrades to both 2013 and 2014 estimates, but we shall review the detail first," said Westhouse analysts Nick Hatch and Rob Broke."So, well done Antofagasta, good production results," they said.Meanwhile, net cash costs during 2013 were better than forecasts, coming in below company guidance at 136 cents per pound. Antofagasta expects costs to rise to 145 cents per pound in 2014 but Westhouse was estimating a bigger increase to 159 cents per pound.The stock was up 6.92% at 879.4p by 09:57.BC