REG - Antofagasta PLC - Q1 2023 PRODUCTION REPORT
19/04/2023 07:00
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RNS Number : 6555W Antofagasta PLC 19 April 2023
NEWS RELEASE, 19 APRIL 2023
Q1 2023 PRODUCTION REPORT
PRODUCTION AND COSTS IN LINE WITH FULL YEAR GUIDANCE
Antofagasta plc CEO, Iván Arriagada said: "Antofagasta´s production and cost
performance in the first quarter was as expected with copper production at
145,900 tonnes and net cash costs at $1.54/lb with production affected by
reduced water availability at Los Pelambres and lower grades at Centinela.
With the completion of the desalination plant and the concentrator plant
expansion at Los Pelambres production will increase during the year to meet
production and cash cost guidance of 670-710,000 tonnes of copper at $1.65/lb.
"Controlling our costs in this inflationary environment and mitigating the
impact of a stronger Chilean peso continue to be our focus, together with the
safety and health of our employees and contractors.
"The copper market has been strong throughout the quarter, and we expect this
to continue as structural supply and demand dynamics support a tight physical
market."
HIGHLIGHTS
PRODUCTION
· Copper production in Q1 2023 at 145,900 tonnes was in line with
guidance, 5.1% higher than in the same quarter in 2022 and 25.4% lower than in
Q4 2022. The decrease from the previous quarter reflects the expected
temporary reduction in throughput at Los Pelambres on lower water
availability, and expected lower grades and scheduled maintenance at
Centinela. Production is expected to increase through the rest of the year
· Gold production was 42,200 ounces in Q1 2023, 9.9% higher than in the
same period in 2022 due to higher grades and 24.8% lower than in Q4 2022,
mainly due the scheduled maintenance and expected lower grades at Centinela
· Molybdenum production in the quarter was 2,500 tonnes, 500 tonnes
higher than in the same period in 2022 on higher grades at Los Pelambres and
Centinela and 19.4% lower than in Q4 2022 mainly due to lower throughput at
Los Pelambres
CASH COSTS
· Cash costs before by-product credits in Q1 2023 were $2.49/lb, 6.4%
higher than in the same quarter in 2022 due to general inflation and higher
input prices during the period, particularly for energy and sulphuric acid.
Compared to the previous quarter, cash costs increased by 24.5% on lower
copper production and the stronger Chilean peso
· By-products credits in Q1 2023 were 95c/lb reflecting higher realised
prices, particularly for molybdenum
· Net cash costs in Q1 2023 were $1.54/lb, 21c/lb lower than in Q1 2022
mainly due to higher by-products credits. Compared to Q4 2022 net cash costs
were 27c/lb higher reflecting the higher cash costs before by-products
credits, partly offset by higher realised by-product prices
GROWTH PROJECTS UPDATE
· At the end of Q1 2023, the Los Pelambres Desalination Plant and
Concentrator Expansion projects, including design, procurement, construction
and commissioning, were 96.2% complete
· At the desalination plant project, water has successfully been pumped
through the entire water system although adverse sea conditions have resulted
in some resequencing to finalise the marine works. The desalination plant is
expected to come into production by the end of the second quarter of 2023
· Commissioning of the concentrator plant expansion will begin in the
second quarter of 2023
· Progress continues on the engineering and pre-investment studies for
the Centinela Second Concentrator project with a final decision expected by
the end of the year
2023 GUIDANCE
· Guidance for the year is unchanged. Group copper production for the
full year is expected to be 670-710,000 tonnes, increasing through the year
· Cash cost guidance before and after by-product credits is also
unchanged at $2.20/lb and $1.65/lb respectively
· Capital expenditure guidance is also unchanged at $1.9 billion
SUSTAINABILITY
· In Q1 2023, the Group achieved improvements in all safety indicators,
including the Lost Time Injury Frequency Rate at 0.35 down by 60% compared to
Q1 2022
· The 2022 Sustainability Report was published in March and is
available on the company's website. The report sets out our sustainability
strategy, priorities and performance regarding the main material
sustainability issues that affected our business and our stakeholders in 2022,
a year in which we achieved a record safety performance and reduced our CO(2)
emissions intensity by 37%
OTHER
· The Government presented a revised draft mining royalty bill to
Congress in October which was approved by the Senate Mining and Energy
Committee in January, and it is now being discussed in the Senate Treasury
Committee. The bill will then be debated in the Senate before being passed to
the lower house for its consideration
· A first draft of the new Chilean constitution is being drafted by an
appointed Committee of Experts and on 7 May 2023 the members of the
Constitutional Council will be elected by direct vote. The Council will work
with the Committee to finalise the draft, supported by a committee of
technical advisers. The new constitution will then be put to a vote in a
national referendum in December 2023
· Due to the continuing drought in the Choapa Valley, the DGA (Chile's
water administration department) recently reviewed the water distribution
arrangements in the Valley. Under the current water rights, Los Pelambres has
a net positive impact on water availability in the Choapa Valley. Following
the review, Los Pelambres and other stakeholders in the Valley have continued
to engage in discussions with the relevant authorities
· Zaldívar submitted an Environmental Impact Assessment (EIA) in 2018
which included an application to extend its water extraction and mining
permits to 2029 (with decreasing activity levels in 2030-2031). Currently,
Zaldívar is permitted to extract water and mine into 2025 and 2024,
respectively. Zaldívar continues to work diligently with the authorities and
consult with the local indigenous community.
To ensure the continuity of the operation, in March 2023 Zaldívar submitted a
DIA (Declaration of Environmental Impact), a more limited scope and simplified
procedure than an EIA, requesting that the mining permit be extended from 2024
to 2025 so as to expire at the same date as the current water permit. At the
same time Zaldívar withdrew the 2018 EIA application. It is expected that an
alternative and updated EIA application to extend the water and mining permits
beyond 2025 will be submitted which will also include a plan for a transition
from the current continental water source on completion of the extended water
permit, to either procuring water from a third party or using raw sea water.
GROUP PRODUCTION AND CASH COSTS Year to Date Q1 Q4
2023 2022 % 2023 2022 %
Copper production kt 145.9 138.8 5.1 145.9 195.7 (25.4)
Copper sales kt 149.0 115.9 28.6 149.0 201.5 (26.1)
Gold production koz 42.2 38.4 9.9 42.2 56.1 (24.8)
Molybdenum production kt 2.5 2.0 25.0 2.5 3.1 (19.4)
Cash costs before by-product credits ((1)) $/lb 2.49 2.34 6.4 2.49 2.00 24.5
Net cash costs ((1)) $/lb 1.54 1.75 (12.0) 1.54 1.27 21.3
(1) Cash cost is a non-GAAP measure used by the mining industry to express the
cost of production in US dollars per pound of copper produced.
Investors - London Media - London
Andrew Lindsay alindsay@antofagasta.co.uk (mailto:alindsay@antofagasta.co.uk) Carole Cable antofagasta@brunswickgroup.com (mailto:antofagasta@brunswickgroup.com)
Telephone +44 20 7808 0988 Telephone +44 20 7404 5959
Rosario Orchard rorchard@antofagasta.co.uk (mailto:rorchard@antofagasta.co.uk)
Telephone +44 20 7808 0988
Media - Santiago
Pablo Orozco porozco@aminerals.cl (mailto:porozco@aminerals.cl)
Carolina Pica cpica@aminerals.cl (mailto:cpica@aminerals.cl)
Telephone +56 2 2798 7000
Register on our website to receive our email alerts
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MINING OPERATIONS
Los Pelambres
As expected, Los Pelambres produced 59,300 tonnes of copper in Q1 2023, 9.6%
higher than in the same quarter last year mainly due to higher throughput. It
was 33.2% lower than in the previous quarter, mainly driven by the reduced
throughput, which was down 34.6% due to water restrictions arising from the
drought.
Molybdenum production in Q1 2023 increased to 1,800 tonnes from 1,400 in Q1
2022, due to higher throughput and molybdenum grades. Compared to the previous
quarter the production was 25.0% lower due to lower throughput as a result of
the water restrictions.
Gold production for the quarter was 9,900 ounces, 1,300 ounces higher than in
the same period last year and 3,900 ounces lower than Q4 2022 due to lower
throughput.
Cash costs before by-product credits in Q1 2023 at $2.17/lb were 9.6% higher
than in the same quarter in 2022 due to general inflation and higher input
prices, mainly energy and diesel. Compared to the previous quarter, cash costs
increased by 25.4%, due to the decrease in production, the stronger Chilean
peso and higher input prices.
Net cash costs in Q1 2023 were $0.84/lb, 43c/lb lower than in Q1 2022
reflecting the increase in by-products credits on increased production and
higher realised prices, particularly molybdenum.
Compared to the previous quarter net cash costs were 7.7% higher, reflecting
the higher cash costs before by-products credits, partly offset by higher
realised prices.
The Los Pelambres Expansion project was 96.2% complete (engineering,
procurement and construction) as at the end of the quarter. The desalination
plant is due to come into production in the second quarter of 2023.
Commissioning of the concentrator plant expansion is expected to begin in the
second quarter of 2023.
LOS PELAMBRES Year to Date Q1 Q4
2023 2022 % 2023 2022 %
Daily ore throughput kt 115.5 98.8 16.9 115.5 176.7 (34.6)
Copper grade % 0.66 0.68 (2.9) 0.66 0.64 3.1
Copper recovery % 89.2 92.3 (3.4) 89.2 88.3 1.0
Copper production kt 59.3 54.1 9.6 59.3 88.8 (33.2)
Copper sales kt 56.8 41.9 35.6 56.8 94.6 (40.0)
Molybdenum grade % 0.019 0.016 18.8 0.019 0.017 11.8
Molybdenum recovery % 87.3 86.5 0.9 87.3 87.1 0.2
Molybdenum production kt 1.8 1.4 28.6 1.8 2.4 (25.0)
Molybdenum sales kt 1.8 1.2 50.0 1.8 2.2 (18.2)
Gold grade g/t 0.046 0.044 4.5 0.046 0.042 9.5
Gold recovery % 70.0 73.5 (4.8) 70.0 69.0 1.4
Gold production koz 9.9 8.6 15.1 9.9 13.8 (28.3)
Gold sales koz 9.8 6.4 53.1 9.8 14.3 (31.5)
Cash costs before by-product credits ((1)) $/lb 2.17 1.98 9.6 2.17 1.73 25.4
Net cash costs ((1)) $/lb 0.84 1.27 (33.9) 0.84 0.78 7.7
(1) Includes tolling charges of $0.21/lb in Q1 2023, $0.21/lb in Q4 2022, and
$0.16/lb Q1 2022
Centinela
Total copper production in Q1 2023 at Centinela was 57,700 tonnes, 3.4% higher
than in the same quarter in 2022. Compared to the previous quarter, copper
production decreased by 21.7% on expected lower grades and scheduled major
maintenance at Centinela Concentrates.
Copper in concentrates production was 38,200 tonnes in Q1 2023, 16.1% higher
than in Q1 2022, mainly due to higher grades and 16.0% lower than in the
previous quarter due to expected lower copper grades of 0.51% compared to
0.54% and expected lower daily ore throughput of 103.2kt compared to 115.9kt
in Q4 2022 due to scheduled maintenance.
Production of copper cathodes was 14.8% lower than in the same quarter in 2022
and 30.9% lower than Q4 2022. This was primarily due to expected lower grades
and throughput, partially offset by higher recoveries.
Gold production was 32,300 ounces in Q1 2023, 8.4% higher than in the same
period last year. Compared to the previous quarter, gold production decreased
by 23.6% as grades, which are correlated to copper grades, and recoveries
decreased.
Cash costs before by-product credits in Q1 2023 were $2.66/lb, 1.5% lower than
in Q1 2022 primarily due to higher production, partly offset by general
inflation and higher input costs. Compared to the previous quarter costs
increased by 30.4% mainly due to lower production and the stronger Chilean
peso.
Net cash costs in Q1 2023 were $1.60/lb, 33c/lb lower than in the same quarter
last year due to higher by-product credits related to increased molybdenum and
gold production and higher realised prices. Compared to the previous quarter
net cash costs increased by 29.0% reflecting the increase in cash costs before
by-product credits and lower gold production, partly offset by higher realised
prices.
CENTINELA Year to Date Q1 Q4
2023 2022 % 2023 2022 %
CONCENTRATES
Daily ore throughput kt 103.2 104.0 (0.8) 103.2 115.9 (11.0)
Copper grade % 0.51 0.44 15.9 0.51 0.54 (5.6)
Copper recovery % 83.3 81.4 2.3 83.3 81.7 2.0
Copper production kt 38.2 32.9 16.1 38.2 45.5 (16.0)
Copper sales kt 41.0 22.5 82.2 41.0 45.1 (9.1)
Molybdenum grade % 0.016 0.013 23.1 0.016 0.014 14.3
Molybdenum recovery % 71.0 59.7 18.9 71.0 49.3 44.0
Molybdenum production kt 0.8 0.6 33.3 0.8 0.7 14.3
Molybdenum sales kt 0.8 0.4 100.0 0.8 0.6 33.3
Gold grade g/t 0.17 0.15 13.3 0.17 0.19 (10.5)
Gold recovery % 65.1 66.7 (2.4) 65.1 65.5 (0.6)
Gold production koz 32.3 29.8 8.4 32.3 42.3 (23.6)
Gold sales koz 33.5 22.2 50.9 33.5 39.9 (16.0)
CATHODES
Daily ore throughput kt 49.4 55.4 (10.8) 49.4 52.5 (5.9)
Copper grade % 0.56 0.65 (13.8) 0.56 0.76 (26.3)
Copper recovery % 69.2 67.8 2.1 69.2 68.5 1.0
Copper production - heap leach kt 18.2 22.1 (17.6) 18.2 27.0 (32.6)
Copper production - total ((1)) kt 19.5 22.9 (14.8) 19.5 28.2 (30.9)
Copper sales kt 21.5 22.6 (4.9) 21.5 28.2 (23.8)
Total copper production kt 57.7 55.8 3.4 57.7 73.7 (21.7)
Cash costs before by-product credits ((2)) $/lb 2.66 2.70 (1.5) 2.66 2.04 30.4
Net cash costs ((2)) $/lb 1.60 1.93 (17.1) 1.60 1.24 29.0
(1) Includes production from ROM material
(2) Includes tolling charges of $0.17/lb in Q1 2023, $0.15/lb in Q4 2022, and
$0.14/lb Q1 2022
Antucoya
Antucoya produced 18,800 tonnes of copper in Q1 2023, 8.0% higher than in the
same quarter last year on expected higher grades and throughput, partially
offset by lower recoveries. Production decreased by 13.8% compared to Q4 2022
on lower grades and throughput, due to lower plant run time related to
maintenance.
During the quarter, the cash costs were $2.80/lb, a 16.7% increase compared to
the $2.40/lb in Q1 2022. This was mainly due to increased input costs,
particularly for energy, sulphuric acid and diesel. This was partially offset
by higher production.
Cash costs for the first three months of the year were 8.5% higher than the
previous quarter, mainly due to lower production and the stronger Chilean
peso.
Major maintenance scheduled in Q2 2023 has been postponed to Q3 2023.
ANTUCOYA Year to Date Q1 Q4
2023 2022 % 2023 2022 %
Daily ore throughput kt 84.8 82.2 3.2 84.8 93.4 (9.2)
Copper grade % 0.33 0.31 6.5 0.33 0.35 (5.7)
Copper recovery % 66.8 69.4 (3.7) 66.8 68.7 (2.8)
Copper production kt 18.8 17.4 8.0 18.8 21.8 (13.8)
Copper sales kt 19.1 17.4 9.8 19.1 22.6 (15.5)
Cash costs $/lb 2.80 2.40 16.7 2.80 2.58 8.5
Zaldívar
Copper production at Zaldívar was 10,000 tonnes in Q1 2023, a 13.0% decrease
compared with the same period last year and 11.5% lower than Q4 2022 due to
scheduled maintenance and lower grades, partially offset by higher recoveries.
Cash costs in Q1 2023 were $2.89/lb, a 37.6% increase compared with the same
quarter last year and 5.1% increase compared to Q4 2022 primarily due to lower
production and scheduled maintenance during Q1 2023.
ZALDÍVAR Year to Date Q1 Q4
2023 2022 % 2023 2022 %
Daily ore throughput kt 33.6 39.5 (14.9) 33.6 38.6 (13.0)
Copper grade % 0.70 0.84 (16.7) 0.70 0.76 (7.9)
Copper recovery ((1)) % 60.6 53.2 13.9 60.6 59.6 1.7
Copper production - heap leach ((2)) kt 7.0 8.2 (14.6) 7.0 8.3 (15.7)
Copper production - total ((2,3)) kt 10.0 11.5 (13.0) 10.0 11.3 (11.5)
Copper sales ((2)) kt 10.6 11.6 (8.6) 10.6 10.9 (2.8)
Cash costs $/lb 2.89 2.10 37.6 2.89 2.75 5.1
(1) Metallurgical recoveries during the period. Prior periods have been
restated
(2) Group's 50% share
(3) Includes production from secondary leaching
Transport Division
Total transport volumes in Q1 2023 were 1.8 million tonnes, 1.8% higher than
in the same quarter last year mainly due to customers' higher production and a
new road transport contract that was in place for the full quarter. Total
transport volumes decreased by 3.3% compared to Q4 2022 mainly due to
customers' lower production and poor weather conditions.
TRANSPORT Year to Date Q1 Q4
2023 2022 % 2023 2022 %
Rail kt 1,309 1,310 (0.1) 1,309 1,350 (3.0)
Road kt 442 410 7.8 442 461 (4.1)
Total tonnage transported kt 1,751 1,720 1.8 1,751 1,811 (3.3)
Commodity prices and exchange rates
Year to Date Q1 Q4
2023 2022 % 2023 2022 %
Copper
Market price $/lb 4.05 4.53 (10.6) 4.05 3.63 11.6
Realised price $/lb 4.48 5.05 (11.3) 4.48 3.97 12.8
Gold
Market price $/oz 1,890 1,877 0.7 1,890 1,728 9.4
Realised price $/oz 2,029 2,021 0.4 2,029 1,813 11.9
Molybdenum
Market price $/lb 32.8 19.1 71.7 32.8 21.4 53.3
Realised price $/lb 37.0 19.9 85.9 37.0 28.9 28.0
Exchange rates
Chilean peso per $ 810 808 0.2 810 913 (11.3)
Spot commodity prices for copper, gold and molybdenum as at 31 March 2023 were
$4.05/lb, $1,979/oz and $24.0/lb respectively, compared with $3.80/lb,
$1,824/oz and $31.8/lb as at 31 December 2022 and $4.69/lb, $1,933/oz and
$19.3/lb as at 31 March 2022.
The provisional pricing adjustments for copper, gold and molybdenum for the
quarter were positive $134.6 million, $5.4 million and $21.6 million
respectively.
_____________________________________________________________________________________________
Cautionary Statement
This announcement contains certain forward-looking statements. All statements
other than historical facts are forward-looking statements. Examples of
forward-looking statements include, without limitation, those regarding the
Group's strategy, plans, objectives or future operating or financial
performance, reserve and resource estimates, commodity demand and trends in
commodity prices, growth opportunities, and any assumptions underlying or
relating to any of the foregoing. Words such as "intend", "aim", "project",
"anticipate", "estimate", "plan", "believe", "expect", "may", "should",
"will", "continue" and similar expressions identify forward-looking
statements.
Forward-looking statements involve known and unknown risks, uncertainties,
assumptions and other factors that are beyond the Group's control. Given these
risks, uncertainties and assumptions, actual results, performance or
achievements could differ materially from any future results, performance or
achievements expressed or implied by these forward-looking statements, which
apply only as at the date of this report. These forward-looking statements are
based on numerous assumptions regarding the Group's present and future
business strategies and the environment in which the Group will operate in the
future. Important factors that could cause actual results, performance or
achievements to differ from those in the forward-looking statements include,
but are not limited to: natural events, global economic and financial
conditions (which may affect our business, results of operations or financial
condition); various political, economic, legal, regulatory, social and other
risks and uncertainties across jurisdictions in which the Group operates;
changes to mining concessions or the imposition of new mining royalties, or
changes to existing mining royalties in the jurisdictions in which the Group
operates; the Group's ability to comply with the extensive body of regulations
governing the mining industry, as well as the need to manage relationships
with local communities; the ongoing effects of the global COVID-19 pandemic;
demand, supply and prices for copper and other long-term commodity price
assumptions (as they materially affect the timing and feasibility of future
projects and developments); trends in the copper mining industry and
conditions of the international copper markets; the effect of currency
exchange rates on commodity prices and operating costs; the availability and
costs associated with mining inputs and labour; operating or technical
difficulties in connection with mining or development activities; risks,
hazards and/or events and conditions inherent to the mining industry, which
may affect our operations or facilities; employee relations; climate change as
well as the effects of extreme weather conditions; the outcome of any
litigation arbitration, regulatory or administrative proceedings to which the
Group is and may be subject in the future; and actions and activities of
governmental authorities, including changes to laws, regulations or taxation.
Except as required by applicable law, rule or regulation, the Group does not
undertake any obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. Past performance cannot be relied on as a guide to future
performance.
No statement in this announcement is intended as a profit forecast or estimate
for any period. No statement in this announcement should be interpreted to
indicate a particular level of profit and, as a consequence, it should not be
possible to derive a profit figure for any future period from this report.
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