Broker snap: Sell Antofagasta after production update, says Investec

31st Oct 2013 11:53

Investec stuck to its 'sell' rating on Antofagasta's shares after the mining group's quarterly production report. Antofagasta reported a drop in gold and copper production in its third quarter reflecting lower grades at its mining operations.It revealed that gold output fell 11.7% to 67,700 ounces while copper production fell 3.4% to 174,200 tonnes.The Chilean-based copper miner indicated it was on track for full-year production of 700,000 tonnes of copper, 280,000 ounces of gold and 8,000 tonnes of molybdenum. Investec analyst Marc Elliott said: "The quarter has seen mixed results and we believe this highlights some of the structural issues faced by the company as grades decline."The asset base remains strong, backed by a healthy cash balance but we see the company as overvalued. We maintain our target price of 737p and sell recommendation."Shares in Antofagata were down 3.51% at 866p at 11:49 on Thursday. TB