Jefferies stays at 'buy' on Antofagasta

Analysts at Jefferies took a fresh look at mining group Antofagasta on Thursday after the group's fourth-quarter production and costs met its most recently revised guidance.

Jefferies noted that Antofagasta's copper production was up from 181,900 tonnes in Q3 to 195.7kt in Q4, while sales increased 13% quarter-on-quarter to 201,500, and unit net cash costs for the quarter averaged $1.27 per pound, down from $1.61 for 2022 as a whole.

Anto also reiterated its 2023 copper production guidance of 670,000-710,000 at a net cash cost of $1.65 per pound as "inflation in copper mining rages on".

Jefferies highlighted that its NPV-based price target of 2,050.0p per share assumed that the company can deliver on its operational targets.

"Despite the risk of a near-term pullback following the recent massive rally, our call is to continue to buy Anto shares for the long term for leverage to a rising copper price," said the analysts, who stood by their 'buy' rating on the stock. "On our updated estimates, Anto trades at a 2024E attributable EV/EBITDA of 7.1x, and a FCF yield of 3.7%."

Reporting by Iain Gilbert at Sharecast.com