REG - Antofagasta PLCBarrick Gold Corp - Half Yearly Financial Report <Origin Href="QuoteRef">ANTO.L</Origin> - Part 5
25/08/2015 07:00
- Part 5: For the preceding part double click ID:nRSY9494Wd
are
continuing: Tethyan prevailed on the preliminary issues before the ICC Tribunal, which will now proceed to consider the
merits of the parties' respective claims, while a decision from the ICSID Tribunal on jurisdiction and liability is
anticipated during 2015.
20. Post balance sheet events
On 30 July 2015 the Group has entered into a definitive agreement with Barrick Gold Corporation ("Barrick") under which
Antofagasta will acquire a 50% interest in Compañia Minera Zaldívar Limitada ("Zaldivar"), and will become the operator of
the Zaldivar copper mine.
Total consideration for the transaction is US$1,005 million in cash, which consists of US$980 million upon closing, subject
to customary adjustments, and five annual payments of US$5 million per year, starting in 2016. Zaldivar is an open-pit,
heap-leach copper mine located in Northern Chile with over 20 years of operating history. In 2014, Zaldivar produced
approximately 100,000 tonnes of copper at a net cash cost of US$1.79/lb, and generated US$244 million of income before
income tax.
The transaction is subject to customary regulatory approvals, and is expected to close in the fourth quarter of 2015.
21. Related party transactions
a) Joint ventures
The Group has a 50% interest in Tethyan Copper Company Limited ("Tethyan"), which is a joint venture with Barrick Gold
Corporation over Tethyan's mineral interests in Pakistan. During the six months ended 30 June 2015 the Group contributed
$2.1 million (Six months ended 30 June 2014 - $2.5 million; year ended 31 December 2014 - $8.5 million) to Tethyan.
The Group has a 50.1% interest in Energía Andina, which is a joint venture with Origin Energy Geothermal Chile Limitada for
the evaluation and development of potential sources of geothermal and solar energy. The balance due from Energía Andina
S.A. to the Group at during the six months ended 30 June 2015 was nil (Six months ended 30 June 2014 - nil; year ended 31
December 2014 was less than $0.1 million).
During the six months ended 30 June 2015 the Group contributed $0.6 million to Energia Andina. (Six months ended 30 June
2014 -$5.0 million; year ended 31 December 2014 - $7.7 million).
b) Associates
The Group has a 40% interest in Inversiones Hornitos S.A. During the six months ended 30 June 2015 The Group paid $62.5
million (Six months ended 30 June 2014 -$68.6 million; 2014 - $175.3 million) to Inversiones Hornitos in relation to the
energy supply contract at Centinela. During the six months ended 30 June 2015 the Group has received dividends from
Inversiones Hornitos S.A. for $6.6 million (Six months ended 30 June 2014 - $20 million; year ended 31 December 2014 - $20
million).
The Group has a 30% interest in Parque Eólico El Arrayán S.A. ("El Arrayán"). During the six months ended 30 June 2015 The
Group paid $21.9 million (Six months ended 30 June 2014 - nil; year ended 31 December 2014 - $12 million) to El Arrayan in
relation to the energy supply at Los Pelambres. During the six months ended 30 June 2015 The Group has contributed was nil
to El Arrayán (Six months ended 30 June 2014 - nil; year ended 31 December 2014 - $2.6 million).
The Group has a 40% interest in Alto Maipo SpA ("Alto Maipo"). During the six months ended 30 June 2015 The Group has made
capital contributions to Alto Maipo (Six months ended 30 June 2014 - nil; 2014 - nil). The balance due from Alto Maipo to
the Group at six months ended 30 June 2015 was $164.4 million (Six months ended 30 June 2014 - $124.4 million; year ended
31 December 2014 -$152.4 million) representing loan financing with an interest rate of LIBOR six-months plus 4.25%.
As explained in Note 14, the Group completed its acquisition of Duluth Metals Limited ("Duluth") in January 2015. As a
result of the acquisition the Group now has 100% interest in Twin Metals Minnesota Limited ("Twin Metals") and therefore it
has been consolidated as subsidiary of the Group. During the period between July 2014 and December 2014, The Group had 40%
interest in Twin Metals which was accounted as an associate and during this period the Group contributed $2.8 million to
Twin Metals. Before July 2014 Twin Metals was controlled by the Group and accounted for as a subsidiary, and therefore
all contributions from the Group to Twin Metals were between consolidated Group subsidiaries.
c) Other related parties
The ultimate parent company of the Group is Metalinvest Establishment, which is controlled by the E. Abaroa Foundation, in
which members of the Luksic family are interested. The Company's subsidiaries, in the ordinary course of business, enter
into various sale and purchase transactions with companies also controlled by members of the Luksic family, including Banco
de Chile S.A., Madeco S.A. and Compañía Cervecerías Unidas S.A., which are subsidiaries of Quiñenco S.A., a Chilean
industrial and financial conglomerate the shares of which are traded on the Santiago Stock Exchange. These transactions,
all of which were on normal commercial terms, are in total not considered to be material.
The Group holds a 51% interest in Antomin 2 Limited ("Antomin 2") and Antomin Investors Limited ("Antomin Investors"),
which own a number of copper exploration properties. The Group originally acquired its 51% interest in these properties for
a nominal consideration from Mineralinvest Establishment, a company controlled by the Luksic family, which continues to
hold the remaining 49% of Antomin 2 and Antomin Investors. The Group is responsible for any exploration costs relating to
the properties held by these entities. During the six months ended 30 June 2015 The Group incurred $2.3 million (Six months
ended 30 June 2014 - $13.9 million; year ended 31 December 2014 - $17.0 million) of exploration work at these properties.
In March 2014 the Group acquired an additional 25.7% interest in Michilla for $30.9 million, increasing the Group's
interest from 74.2% to 99.9%. This included the acquisition of the 7.973% stake held by Minera Cerro Centinela S.A., an
entity ultimately controlled by the Luksic family, for $9.6 million. Prior to this transaction, Michilla paid dividends of
$1.6 million to Minera Cerro Centinela S.A.
RESPONSIBILITY STATEMENT
We confirm to the best of our knowledge:
a) the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial
Reporting;
b) the half yearly financial report includes a fair review of the information required by DTR 4.2.7R (being an
indication of important events that have occurred during the first six months of the financial year, and their impact on
the half yearly financial report and a description of the principal risks and uncertainties for the remaining six months of
the financial year); and
c) the half yearly financial report includes a fair review of the information required by DTR 4.2.8R (being
disclosure of related party transactions that have taken place in the first six months of the financial year and that have
materially affected the financial position or the performance of the Group during that period and any changes in the
related party transactions described in the last annual report that could have a material effect on the financial position
or performance of the Group in the first six months of the current financial year).
By order of the Board
J-P Luksic WM Hayes
Chairman Director
24 August 2015
Independent review report to Antofagasta PLC
Report on the condensed consolidated interim financial statements
Our Conclusion
We have reviewed the consolidated interim financial information, defined below, in the interim financial statements of
Antofagasta PLC for the six months ended 30 June 2015. Based on our review, nothing has come to our attention that causes
us to believe that the condensed consolidated interim financial information is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency
Rules of the United Kingdom's Financial Conduct Authority.
This conclusion is to be read in the context of what we say in the remainder of this report.
What we have reviewed
The condensed consolidated interim financial information, which are prepared by Antofagasta PLC, comprise:
•the Consolidated balance sheet as at 30 June 2015;
•the Consolidated income statement and statement of comprehensive income for the period then ended;
•the Consolidated statement of cash flows for the period then ended;
•the consolidated statement of changes in equity for the period then ended; and
•the explanatory notes to the condensed consolidated interim financial information.
As disclosed in note 2, the financial reporting framework that has been applied in the preparation of the full annual
financial statements of the Group is applicable law and International Financial Reporting Standards (IFRS's) as adopted by
the European Union.
The condensed consolidated interim financial information included in the half-yearly financial report have been prepared in
accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and
the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
What a review of condensed consolidated financial information involves
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board
for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK
and Ireland) and, consequently, does not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the half-yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the information in the condensed consolidated interim financial
information.
Responsibilities for the condensed consolidated interim financial information and the review
Our responsibilities and those of the directors
The half-yearly financial report, including the condensed consolidated interim financial information, is the responsibility
of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Our responsibility is to express to the company a conclusion on the condensed consolidated interim financial information in
the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only
for the company for the purpose of complying with the Disclosure and Transparency Rules of the Financial Conduct Authority
and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to
any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior
consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
24 August 2015
London
Notes:
1.The maintenance and integrity of the Antofagasta PLC website is the responsibility of the directors; the work carried out
by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for
any changes that may have occurred to the financial information since they were initially presented on the website.
22. 2.Legislation in the United Kingdom governing the preparation and dissemination of financial information may differ
from legislation in other jurisdictions.
Production and Sales Statistics (not subject to audit or review)
(See notes following Note 22(b).)
a) Production and sales volumes for copper, gold and molybdenum
Production Sales
Six months Six months Year ended 31 December 2014 Six months Six months Year ended 31 December 2014
ended ended ended ended
30 June 2015 30 June 2014 30 June 2015 30 June 2014
000 tonnes 000 tonnes 000 tonnes 000 tonnes 000 tonnes 000 tonnes
Copper
Los Pelambres 169.4 196.6 391.3 163.4 190.0 386.0
Centinela 118.4 128.4 266.5 110.5 131.1 270.9
Michilla 15.6 23.2 47.0 16.2 22.2 46.1
Group total 303.4 348.2 704.8 290.1 343.3 703.0
Gold 000 ounces 000 ounces 000 ounces 000 ounces 000 ounces 000 ounces
Los Pelambres 22.3 33.6 66.5 22.5 31.3 63.8
Centinela 90.1 90.3 204.4 83.5 93.9 203.6
Group total 112.5 123.8 270.9 106.0 125.2 267.4
Molybdenum 000 tonnes 000 tonnes
Los Pelambres 4.7 3.3 7.9 4.4 3.2 8.2
Silver 000 ounces 000 ounces 000 ounces 000 ounces 000 ounces 000 ounces
Los Pelambres 1,035.0 1,343.7 3,002.6 899.9 1,343.7 2,793.8
Centinela 592.6 611.1 1,354.9 537.3 611.1 1,320.9
Group total 1,627.6 1,954.8 4,357.5 1,437.2 1,954.8 4,114.7
b) Cash costs per pound of copper produced and realised prices per pound of copper and molybdenum sold
Cash costs Realised prices
Six months Six months Year ended 31 December 2014 Six months Six months Year ended 31 December 2014
ended ended ended ended
30 June 2015 30 June 2014 30 June 2015 30 June 2014
$/lb $/lb $/lb $/lb $/lb $/lb
Copper
Los Pelambres 1.36 1.21 1.18 2.51 3.04 2.95
Centinela 1.67 1.67 1.63 2.56 3.06 2.97
Michilla 2.25 2.38 2.38 2.67 3.34 3.30
Group weighted average (net of by-products) 1.53 1.46 1.43 2.54 3.08 3.00
Group weighted average (before deducting by-products) 1.88 1.87 1.83
Group weighted average (before deducting by-products and excluding tolling charges from concentrate) 1.66 1.69 1.65
Cash costs at Los Pelambres comprise:
On-site and shipping costs 1.40 1.41 1.35
Tolling charges for concentrates 0.27 0.21 0.21
Cash costs before deducting by-product credits 1.67 1.62 1.56
By-product credits (principally molybdenum) (0.31) (0.41) (0.38)
Cash costs (net of by-product credits) 1.36 1.21 1.18
Cash costs at Centinela comprise:
On-site and shipping costs 1.94 2.00 1.96
Tolling charges for concentrates 0.20 0.16 0.16
Cash costs before deducting by-product credits 2.13 2.16 2.12
By-product credits (principally gold) (0.46) (0.48) (0.48)
Cash costs (net of by-product credits) 1.67 1.67 1.63
LME average 2.69 3.14 3.11
$ $ $
Gold
Los Pelambres 1,203 1,291 1,265
Centinela 1,227 1,377 1,261
Group weighted average 1,222 1,355 1,262
Market average price 1,206 1,291 1,266
Molybdenum
Los Pelambres 7.0 14.8 11.0
Market average price 8.0 11.8 11.4
Silver
Los Pelambres 16.4 19.9 19.1
Centinela 16.4 19.6 18.4
Group weighted average 16.5 19.8 18.7
Market average price 15.9 20.1 19.1
Notes to the production and sales statistics
(i) The production and sales figures represent the actual amounts produced and sold, not the Group's share of
each mine. The Group owns 60% of Los Pelambres, 70% of Centinela concentrates, 70% of Centinela cathodes and 99.9% of
Michilla (74.2% prior to March 2014).
(ii) Los Pelambres produces copper and molybdenum concentrates and Centinela concentrates produces copper
concentrate. The figures for Los Pelambres and Centinela concentrates are expressed in terms of payable metal contained in
concentrate. Los Pelambres and Centinela concentrates are also credited for the gold and silver contained in the copper
concentrate sold. Centinela cathodes and Michilla produce cathodes with no by-products.
(iii) Cash costs are a measure of the cost of operational production expressed in terms of cents per pound of
payable copper produced. Cash costs are stated net of by-product credits and include tolling charges for concentrates at
Los Pelambres and Centinela concentrates. Cash costs exclude depreciation, financial income and expenses, hedging gains
and losses, exchange gains and losses and corporation tax for all four operations.
(iv) Realised copper prices are determined by comparing revenue from copper sales (grossing up for tolling charges
for concentrates) with sales volumes for each mine in the period. Realised molybdenum and gold prices are calculated on a
similar basis. Realised prices reflect gains and losses on commodity derivatives, which are included within revenue.
(v) The totals in the tables above may include some small apparent differences as the specific individual figures
have not been rounded.
(vi) The production information in Note 22(a) and the cash cost information in Note 22(b) is derived from the
Group's production report for the second quarter of 2015, published on 29 July 2015.
This information is provided by RNS
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