Antofagasta expects FY copper production to meet lower end of guidance

Copper production in the third quarter increased 8.7% to 180,600 tonnes, compared to the second quarter, as the Antucoya mine reached full production in August.

For the year to date copper production rose 9.4% to 503,900 tonnes, compared to last year, due to new production from the Zaldívar and Antucoya mines which offset the closure of the Michilla mine at the end of 2015.

Gold production climbed 33.1% to 70,300 ounces in the quarter, due to higher gold grades at the Centinela mine, while molybdenum production at Los Pelambres was up 18.75% to 1,900 tonnes.

Cash costs before by-product credits were 1.9% lower than the second quarter to $1.54 per pound due to the increase in production and further cost savings through the cost and competitiveness programme.

Year-to-date cash costs before by-product credits were down 13.2% to $1.58 per pound also due to increased production and cost savings from the programme.

Net cash costs decreased 5.6% to $1.18 per pound due to lower cash costs before by-product credits and increased gold production and price.

Year-to date-net cash costs fell 18% to $1.23 per pound, compared to the same period last year and 2.4% lower than in the first half of this year.

Guidance for the year is expected to be close to the lower end of the 710,000 to 740,000 tonnes range from the beginning of the year, while production for 2017 is expected to be in the range of 685,000 to 720,000 tonnes. This reflects the completion of the Centinela concentrates expansion and the first full year of production at the Antucoya mine, which will offset a decline in grade at Centinela and lower throughput at Los Pelambres as it processes a higher proportion of hard ore.

Net cash costs guidance for the year is lowered from $1.30 per pound to $1.25 per pound.

Capital expenditure for the current year and 2017 is expected to be below $900m.

Chief executive Iván Arriagada said: "Since becoming CEO I have continued to focus our efforts on reducing costs and improving operational efficiencies, and here again we are making good progress.

"As part of these efficiency programmes we have also reviewed our mine plans and wider operational activities to improve decision making and the accuracy of forecasting. This has involved a rigorous assessment of our plans with a focus on profitable tonnes and a higher level of certainty without compromising safety or operational standards. Following this review, production in 2017 is expected to be in the range of 685,000 to 720,000 tonnes."

Shares in Antofagasta were down 5.92% to 508.50 at 0806 BST.