REG - Antofagasta PLC - Q4 2023 PRODUCTION REPORT
17/01/2024 07:00
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RNS Number : 9163Z Antofagasta PLC 17 January 2024
Q4 2023 PRODUCTION REPORT
delivering increased production in 2023, entering a new phase of growth
Antofagasta plc CEO, Iván Arriagada said: "2023 was a year of significant
progress, and we are pleased to be moving forward into the next phase of
development and growth for our Company. In 2023, we recorded another strong
year of safety performance, with no fatalities and a reduction in lost time
injury rates. We have delivered a year of robust operational performance in
2023, with production increasing by 2% and net cash costs in line
year-on-year, with our strong cost discipline and increased output of
by-products offsetting industry-wide cost inflation. Production in 2024 is
expected to increase to 670-710,000 tonnes of copper, as previously announced,
with guidance for net cash costs set at $1.60/lb.
"On growth, we are finalising the delivery of the Phase 1 Expansion Project at
Los Pelambres, which will help to maintain this asset's future production.
Underpinning our future growth, we recently announced the approval of the
Centinela Second Concentrator Project, which will provide an additional
170,000 copper-equivalent tonnes of production into an increasingly
constrained global market for copper. 1
"In line with our strategy of prioritising exploration and investment in the
Americas, in December we disclosed our investment in Buenaventura 2 ,
reflecting the potential we see in Buenaventura's asset portfolio and the
highly prospective geology of Peru.
"With the delivery of projects and announcement of a new phase of investment
in growth, our Company is well-positioned for the future. Copper prices
continued to show stability in 2023 and we believe in copper's fundamental
role in the energy transition and electrification, which will support
long-term pricing."
HIGHLIGHTS
PRODUCTION
· Group copper production in Q4 2023 was 191,500 tonnes, 10% higher
than Q3 2023, primarily related to production increases at both Los Pelambres
and Centinela.
· Group copper production for the full year was 660,600 tonnes, 2%
higher than the previous year, with an increasing contribution from Los
Pelambres, as the Phase 1 Expansion Project ramps up.
· Gold production for the full year 2023 was 209,100 ounces, 18% higher
than 2022 due to higher gold grades at Centinela. Gold production of 65,500 in
Q4 represents a 14% increase compared to the previous quarter, with this
increase driven by higher gold grades at Centinela.
· Molybdenum production for the full year 2023 was 11,000 tonnes,
representing a 13% increase year-on-year due to higher throughput rates at Los
Pelambres and higher recoveries at Centinela. Molybdenum production in Q4 2023
fell by 9% to 2,900 tonnes, primarily due to lower recoveries at Centinela.
CASH COSTS
· Cash costs before by-product credits in Q4 2023 were $2.07/lb, 9%
lower than the previous quarter due to higher production across the Group and
lower costs in Q4 at all our operations.
· Cash costs before by-product credits in full year 2023 were $2.31/lb,
5% higher than the prior year, primarily due to local inflation, appreciation
of the Chilean peso and the conclusion of a number of 3-year labour
agreements.
· Net cash costs in Q4 2023 were $1.50/lb, 2% higher than in the previous
quarter, with lower cash costs before by-products offset by lower by-product
credits, related to lower molybdenum production and pricing.
· Net cash costs for the full year 2023 were $1.61/lb, in line with
2022 and ahead of guidance for the year, reflecting a balance of higher
underlying cash costs before by-products, alongside higher production and
pricing for by-products.
GROWTH PROJECTS UPDATE
· The Company announced the approval of the Centinela Second
Concentrator in late December 2023, which is a growth project that is expected
to add 170,000 tonnes of copper-equivalent production 3 to the Company's
portfolio. The project is expected to deliver a reduction in Centinela's
overall net cash costs, moving it towards the first quartile on the global
cost curve, due to a greater emphasis on modern technologies and by-products,
and economies of scale. The capital cost estimate for this project is $4.4
billion, which will be financed by a combination of project finance (c.60%)
and direct funding (c.40%) from Centinela's shareholders (Antofagasta plc and
Marubeni Corporation). Critical path works began immediately after
announcement, with full construction expected to commence after definitive
project finance documents have been executed during Q1 2024. In parallel, the
Company is reviewing a potential outsourcing of Centinela's water supply, the
impact of which is not included in capital cost estimate referenced above. For
further details, please see the press release and presentation provided on the
Company's website (www.antofagasta.co.uk/ (http://www.antofagasta.co.uk/) ).
· Following the commissioning of the Phase 1 desalination plant for Los
Pelambres, the successful ramp up towards this facility's instantaneous design
capacity of 400 litres per second is nearing completion, with an average
output of approximately 307 litres per second during December 2023 (Q3 2023:
248 litres per second).
· The fourth concentrator line at Los Pelambres is successfully
completing its commissioning phase, with an additional two million tonnes of
ore processed as of the end of the year.
· In November 2023, the Environmental Impact Assessment (EIA) was
approved for the project to double the size of the Los Pelambres' desalination
plant to an instantaneous design capacity of 800 litres per second, as well as
replacing the concentrate pipeline and the construction of certain planned
enclosures at the El Mauro tailings storage facility. This work represents one
part of the Los Pelambres Phase 2 Expansion Project, approval of which will be
considered by the Board of Directors during Q1 2024.
· The Company continues to progress test work on its patented
Cuprochlor-T technology for the leaching of primary sulphides, which has now
achieved recovery rates of more than 70% after 220 days. The Company is now
evaluating the feasibility of advancing this technology across other mining
operations, including third parties.
· In December 2023, the Company announced an investment to acquire
beneficial ownership of approximately 19% of the outstanding shares of
Compañía de Minas Buenaventura S.A.A. ("Buenaventura"). Buenaventura is
Peru's largest, publicly traded precious and base metals company and a major
holder of mining rights in Peru, with the Company's investment in line with
its strategy of prioritising exploration and investment in the Americas.
2024 GUIDANCE
· As previously announced, Group production in 2024 is expected to be
670-710,000 tonnes of copper. Output of by-products is expected to be
195-215,000 ounces of gold and 11.0-12.5 tonnes of molybdenum. The expected
increase in copper production in 2024 principally reflects the addition of the
Los Pelambres Phase 1 Expansion Project in 2023, with increased water
availability and ore processing capacity expected in 2024.
· Group cash costs in 2024 before by-product credits are expected to be
$2.25/lb, in line with 2023, with the positive impact of higher production
balanced by a short-term reduction in ore grades at Los Pelambres.
· Group net cash costs in 2024 are expected to be $1.60/lb, with
by-product credits expected to remain in line year-on-year.
· In 2024, consolidated Group capital expenditure, which excludes
Zaldívar, is expected to be $2.7 billion, with sustaining and mine
development expenditure broadly in line year-on-year, and as development
expenditure commences on the Centinela Second Concentrator (not including any
potential reduction in capital expenditures as a result of the process to
outsource Centinela's water supply) and other growth projects at Los Pelambres
and Centinela.
SAFETY AND SUSTAINABILITY
· The Group continues to prioritise the safety of its workforce, achieving
a strong performance in safety metrics during 2023, with no fatalities during
the year (2022: zero) and the Group's lost time injury frequency rate (LTIFR)
of 0.62 representing a 26% reduction year-on-year. Recent safety highlights
within the Group include the completion of more than 39 million hours worked
to date on the Los Pelambres Phase 1 Expansion Project with a LTIFR of less
than 1.0, and our Transport Division reducing its incidence rate for lost time
injuries by more than 50% in 2023, resulting in a LTIFR of 0.9 (2022: 2.2).
· In June 2023, Zaldívar submitted an EIA application to extend its
mining and water environmental permits through to 2051. This includes a
proposal to develop the primary sulphide ore deposit and extend the current
life of mine at an estimated investment over the mine life of $1.2 billion. It
also includes a plan to change the mine's water source from the local aquifer
to either seawater or water provided by third parties. This will follow a
transition period during which the current continental water extraction permit
is extended from 2025 to 2028. In parallel, the Company has submitted a
Declaration of Environmental Impact ("DIA") to align the expiry date of
Zaldivar's current mining permit (2024) to the current water permit (2025).
· Considering the continuing drought in central Chile and the recent
changes in the Water Code, discussions have continued during the quarter with
stakeholders in the Choapa Valley about water distribution arrangements in the
area, following an agreement being reached with local communities in 2023. The
relevant water authority has continued in the process of reviewing this
proposal. This ongoing process involves no material change to the availability
of continental water at Los Pelambres.
LEGISLATIVE
· In December 2023, Chileans voted to reject a proposed constitution,
and as a result the country will now continue with the existing constitution,
which has been in place for several decades.
OTHER
· During Q4 2023, the Company concluded three-year labour agreements
with two workers unions at Centinela.
· In 2024, the Company has one labour agreement scheduled to expire
during the year, which is an agreement with a worker's union at Centinela (due
to expire in November 2024).
· In November 2023, Twin Metals Minnesota (TMM) appealed the September
2023 order issued by a District Court in the United States, which dismissed
the claims filed by TMM that challenged the administrative actions that
resulted in the rejection of its preference right lease applications, the
cancellation of its federal leases 1352 and 1353 and the rejection of its Mine
Plan of Operations for the Maturi Deposit in Minnesota. This action is
pending.
GROUP PRODUCTION AND CASH COSTS Year to Date Q4 Q3
2023 2022 % 2023 2023 %
Copper production kt 660.6 646.2 2.2 191.5 173.6 10.3
Copper sales kt 667.2 642.5 3.8 213.4 158.4 34.7
Gold production koz 209.1 176.8 18.3 65.5 57.4 14.1
Molybdenum production kt 11.0 9.7 13.4 2.9 3.2 (9.4)
Cash costs before by-product credits ((1)) $/lb 2.31 2.19 5.5 2.07 2.27 (8.8)
Net cash costs ((1)) $/lb 1.61 1.61 - 1.50 1.47 2.0
(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
Rosario Orchard Carole Cable antofagasta@brunswickgroup.com
rorchard@antofagasta.co.uk (mailto:rorchard@antofagasta.co.uk) (mailto:antofagasta@brunswickgroup.com)
Robert Simmons Telephone +44 20 7404 5959
rsimmons@antofagasta.co.uk (mailto:rsimmons@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 at the following address:
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MINING OPERATIONS
Los Pelambres
Copper production at Los Pelambres during Q4 2023 was 90,700 tonnes, 12%
higher than in the previous quarter due to higher throughput rates, in line
with the ramp up of the Phase 1 Expansion Project. Copper sales in Q4 2023
benefitted from adverse weather conditions at the Company's port, which pushed
shipments from September to October 2023.
For the full year 2023, copper production was 300,300 tonnes, 9% higher than
the prior year. This increase was driven by increased throughput rates in
2023, which resulted from increasing availability of water from the Company's
desalination plant as it successfully completes its ramp up, and additional
ore processing capacity provided by the fourth concentrator line that is
nearing the end of its commissioning phase. Molybdenum production in Q4 2023
was 2,300 tonnes, representing a 4% reduction on the previous quarter due to
lower grades. Full year molybdenum production was 8,100 tonnes, representing a
13% increase year-on-year, which was the result of higher throughput rates.
Cash costs before by-product credits in Q4 were $1.79/lb, 5% lower than in the
previous quarter. For the full year cash costs before by-product credits were
$1.92/lb, 4% higher than in 2022. The key drivers behind this increase in 2023
are appreciation of the Chilean peso, local inflation, and the conclusion of
3-year labour agreements, partially offset by higher production and lower
input costs. Net cash costs for the quarter were $1.27/lb, 34% higher than in
Q3 2023, with this increase driven primarily by reduced by-product credits,
for the reasons outlined above. For the full year, net cash costs were
$1.14/lb, 4% higher than in 2022, reflecting a similar increase in the
underlying cash costs and higher production and pricing for molybdenum.
Following the commissioning of the Phase 1 desalination plant for Los
Pelambres, the ramp up towards this facility's instantaneous design capacity
of 400 litres per second continues, with an average output of approximately
307 litres per second during December 2023 (Q3 2023: 248 litres per second).
The fourth concentrator line at Los Pelambres is nearing the successful
completion of its commissioning phase, with an additional two million tonnes
of ore processed as of the end of the year.
Major maintenance is scheduled in Q1 and Q4 2024, which is factored into full
year guidance.
LOS PELAMBRES Year to Date Q4 Q3
2023 2022 % 2023 2023 %
Daily ore throughput kt 152.4 136.9 11.3 185.5 164.1 13.0
Copper grade % 0.62 0.64 (3.1) 0.61 0.61 -
Copper recovery % 89.3 89.3 - 89.7 89.2 0.6
Copper production kt 300.3 275.0 9.2 90.7 81.1 11.8
Copper sales kt 299.0 271.2 10.3 100.8 69.1 45.9
Molybdenum grade % 0.017 0.017 - 0.016 0.017 (5.9)
Molybdenum recovery % 85.5 85.6 (0.1) 85.0 84.6 0.5
Molybdenum production kt 8.1 7.2 12.5 2.3 2.4 (4.2)
Molybdenum sales kt 8.1 6.8 19.1 2.3 2.1 9.5
Gold grade g/t 0.038 0.042 (9.5) 0.030 0.041 (26.8)
Gold recovery % 69.0 70.0 (1.4) 76.4 63.7 19.9
Gold production koz 43.3 43.1 0.5 11.8 11.9 (0.8)
Gold sales koz 42.1 42.3 (0.5) 12.4 9.3 33.3
Cash costs before by-product credits ((1)) $/lb 1.92 1.84 4.3 1.79 1.88 (4.8)
Net cash costs ((1)) $/lb 1.14 1.10 3.6 1.27 0.95 33.7
(1) Includes tolling charges of $0.25/lb in Q4 2023, $0.24/lb in Q3 2023,
$0.23/lb in FY 2023 and $0.18/lb FY 2022.
Centinela
During Q4 2023, total copper production was 68,900 tonnes, 8% higher than the
previous quarter, with production of both cathodes and copper concentrates
contributing higher production volumes. Sales of copper in concentrate in Q4
2023 benefitted from adverse weather conditions at the Company's port, which
pushed shipments from September to October 2023. Total copper production for
the full year was 242,000 tonnes, 2% lower than last year but in line with the
Company's original guidance given for 2023. This reduction in output reflects
lower ore grades at Centinela Cathodes, which was partially offset by higher
ore grades at Centinela Concentrates.
Concentrate production for the quarter was 45,700 tonnes, 7% higher than in
Q3, due to elevated processing throughput rates, copper grades and recoveries.
For the full year, copper in concentrate production was 162,700 tonnes, 9%
higher than in 2022, reflecting a combination of higher ore grades and copper
recoveries, with the concentrator operating in line with its design capacity.
Cathode production during the quarter was 23,200 tonnes, 10% higher than the
previous quarter, primarily as a result of higher copper grades and
recoveries. Full year copper cathode production was 79,300 tonnes, 19% lower
than in 2022 due to lower copper grades, offset by higher throughput rates.
Gold production for the quarter was 53,600 ounces, 18% higher than the
previous quarter on higher gold grades. For the full year, gold production was
165,800 ounces, 24% higher than in 2022 due to higher gold grades (which are
positively correlated to copper grades). Molybdenum production fell by 25% in
Q4 2023, reflecting lower molybdenum recoveries. Full year production of
molybdenum reached 2,900 tonnes - a record for Centinela, with this
year-on-year increase of 21% reflecting higher molybdenum recoveries during
the year.
Cash costs before by-product credits in Q4 2023 were $2.19/lb, 14% lower than
in the previous quarter, reflecting higher production volumes of both
concentrates and cathodes during the quarter, in addition to lower input costs
during the period. Cash costs before by-product credits for the full year were
$2.57/lb, 5% higher than in 2022 due to lower copper production, the
conclusion of 3-year labour agreements and higher contractor costs related to
mining.
In Q4 by-product credits decreased by 10c/lb compared with Q3, which relates
to lower molybdenum production and pricing, which was partially offset by
higher gold output and pricing. For the full year, by-product credits were
$0.94/lb, 25c/lb higher than in 2022 due to higher production and pricing of
both gold and molybdenum.
Net cash costs in Q4 were $1.30/lb, 16% lower than in the previous quarter due
to higher copper production and the reasons stated above related to lower cash
costs before by-products. During the full year net cash costs were $1.63/lb,
12c/lb lower than 2022 due to higher by-product credits.
In 2024, the labour agreement with a worker's union expires in November.
In line with previous years, major maintenance is scheduled in Q1 and Q3 2024,
which is factored into full year guidance.
CENTINELA Year to Date Q4 Q3
2023 2022 % 2023 2023 %
CONCENTRATES
Daily ore throughput kt 107.4 108.9 (1.4) 111.7 109.5 2.0
Copper grade % 0.52 0.49 6.1 0.55 0.53 3.8
Copper recovery % 83.2 80.5 3.4 84.1 82.8 1.6
Copper production kt 162.7 149.3 9.0 45.7 42.8 6.8
Copper sales kt 166.9 148.6 12.3 52.3 43.1 21.3
Molybdenum grade % 0.013 0.013 - 0.011 0.011 -
Molybdenum recovery % 66.7 56.9 17.2 58.4 67.8 (13.9)
Molybdenum production kt 2.9 2.4 20.8 0.6 0.8 (25.0)
Molybdenum sales kt 3.0 2.4 25.0 0.6 0.9 (33.3)
Gold grade g/t 0.21 0.17 23.5 0.26 0.22 18.2
Gold recovery % 66.6 65.0 2.5 66.8 67.2 (0.6)
Gold production koz 165.8 133.7 24.0 53.6 45.5 17.8
Gold sales koz 162.8 132.3 23.1 59.0 45.4 30.0
CATHODES
Daily ore throughput kt 58.3 55.0 6.0 64.3 65.6 (2.0)
Copper grade % 0.53 0.69 (23.2) 0.56 0.51 9.8
Copper recovery % 67.0 66.2 1.2 71.0 64.0 10.9
Copper production - heap leach kt 75.6 94.2 (19.7) 22.5 20.2 11.4
Copper production - total ((1)) kt 79.3 98.2 (19.2) 23.2 21.1 10.0
Copper sales kt 81.0 97.5 (16.9) 23.1 20.9 10.5
Total copper production kt 242.0 247.5 (2.2) 68.9 63.8 8.0
Cash costs before by-product credits ((2)) $/lb 2.57 2.44 5.3 2.19 2.54 (13.8)
Net cash costs ((2)) $/lb 1.63 1.75 (6.9) 1.30 1.55 (16.1)
(1) Includes production from ROM material
(2) Includes tolling charges of $0.17/lb in Q4 2023, $0.18/lb in Q3 2023,
$0.17/lb in FY 2023 and $0.14/lb FY 2022.
Antucoya
During Q4 production was 21,600 tonnes, 18% higher than the previous quarter,
which was largely due to throughput increasing to a new record of 93,500
tonnes per day. Copper sales in Q4 2023 benefitted from adverse weather
conditions at the Company's port, which pushed shipments from September to
October 2023. Production for the full year was 77,800 tonnes, 1.8% lower than
last year due to a combination of marginally lower ore grades and recoveries.
The plant continues to operate in line with its design throughput.
Costs during the full year were 5% higher at $2.63/lb, reflecting local
inflation, appreciation of the Chilean peso, higher consumption rates of
sulphuric acid in line with expectations, with lower input costs serving to
partially offset these effects. During the quarter, cash costs were $2.44/lb,
compared to $2.65/lb in Q3, with this reduction due to the increase in copper
production during the quarter, lower sulphuric acid consumption rates and
depreciation of the Chilean peso, offset by higher unit prices for sulphuric
acid.
Major maintenance scheduled to take place in Q1 and Q2 2024, with this
factored into full year guidance.
ANTUCOYA Year to Date Q4 Q3
2023 2022 % 2023 2023 %
Daily ore throughput kt 88.6 89.4 (0.9) 93.5 81.5 14.7
Copper grade % 0.33 0.34 (2.9) 0.34 0.34 -
Copper recovery % 67.9 69.0 (1.6) 68.9 67.8 1.6
Copper production kt 77.8 79.2 (1.8) 21.6 18.3 18.0
Copper sales kt 78.4 80.8 (3.1) 25.3 15.7 61.1
Cash costs $/lb 2.63 2.50 5.2 2.44 2.65 (7.9)
Zaldívar
During the quarter attributable production at Zaldívar was 10,300 tonnes of
copper, broadly in line with the previous quarter, which was the result of a
balance between lower recoveries and higher ore processing rates. Attributable
copper production for the year was 40,500 tonnes, 9% lower than in 2022 mainly
due to lower ore processing rates, which were partially mitigated by improved
recoveries during the year.
Cash costs for the full year were $2.95/lb, 23% higher than the previous
year's costs due to lower production, local inflation, increased costs for
maintenance and utilisation of stocks from the prior period. During the
quarter, cash costs were $2.91/lb compared to $2.98/lb in Q3, with costs
reflecting a balance of a reduction of inventory during the quarter, higher
sulphuric acid consumption rates and higher input costs, with the prior period
including costs associated with the conclusion of a 3-year labour agreement.
Major maintenance scheduled in Q1 and Q3 2024 is included in full year
guidance.
ZALDÍVAR Year to Date Q4 Q3
2023 2022 % 2023 2023 %
Daily ore throughput kt 35.0 40.4 (13.4) 38.1 36.5 4.4
Copper grade % 0.79 0.79 - 0.82 0.82 -
Copper recovery % 57.6 54.0 6.7 52.1 57.7 (9.7)
Copper production - heap leach ((1)) kt 28.5 31.9 (10.7) 7.5 7.2 4.2
Copper production - total ((1,2)) kt 40.5 44.5 (9.0) 10.3 10.4 (1.0)
Copper sales ((1)) kt 41.9 44.4 (5.6) 11.9 9.7 22.7
Cash costs $/lb 2.95 2.39 23.4 2.91 2.98 (2.3)
(1) Group's 50% share
(2) Includes production from secondary leaching
Transport Division
Total transport volumes in 2023 were in line with 2022, maintaining the record
volume set of 7.1 million tonnes in both years. In Q4 2023, transport volumes
were 1.7 million tonnes, 5% lower than the previous quarter due to adverse
weather conditions at the port and lower demand due to maintenance at a
client´s operation.
Within the Transport Division, the Company concluded on a total of seven
3-year labour agreements during the year, with no further negotiations until
2026.
TRANSPORT Year to Date Q4 Q3
2023 2022 % 2023 2023 %
Rail kt 5,381 5,368 0.2 1,333 1,374 (3.0)
Road kt 1,729 1,741 (0.7) 398 453 (12.1)
Total tonnage transported kt 7,110 7,109 0.0 1,731 1,828 (5.3)
Commodity prices, exchange rates and other
Year to Date Q4 Q3
2023 2022 % 2023 2023 %
Copper
Market price $/lb 3.85 4.00 (3.8) 3.70 3.79 (2.4)
Realised price $/lb 3.89 3.84 1.3 3.84 3.77 1.9
Gold
Market price $/oz 1,942 1,800 7.9 1,974 1,929 2.3
Realised price $/oz 1,990 1,801 10.5 2,060 1,898 8.5
Molybdenum
Market price $/lb 24.2 18.7 29.4 18.6 23.7 (21.5)
Realised price $/lb 22.0 20.8 5.8 13.1 25.3 (48.2)
Exchange rates
Chilean peso per $ 839 872 (3.8) 896 853 5.0
Spot commodity prices for copper, gold and molybdenum as at 31 December 2023
were $3.84/lb, $2,062/oz and $20.0/lb respectively, compared with $3.73/lb,
$1,871/oz and $22.5/lb as at 30 September 2023 and $3.80/lb, $1,824/oz and
$31.8/lb as at 31 December 2022.
The provisional pricing adjustments for copper, gold and molybdenum for the
quarter were positive $58.3 million, positive $5.3 million and negative $46.8
million respectively.
The provisional pricing adjustments for copper, gold and molybdenum for the
year to date were positive $81.3 million, positive $9.2 million and negative
$77.2 million respectively.
Depreciation, amortisation and loss on disposals
For the full year 2023, depreciation, amortisation and loss on disposals will
be approximately $1.25 billion.
Tax
The full year effective tax rate in 2023 is expected to be approximately 35%.
2024 Guidance
Los Pelambres Centinela Antucoya Zaldívar Group
Production
Copper kt 335 - 350 225 - 240 75 - 80 35 - 40 670 - 710
Gold koz 45 - 55 150 - 160 195 - 215
Molybdenum kt 8.5 - 9.5 2.5 - 3.0 11.0 - 12.5
Grade
Copper % 0.56 0.54 0.34 0.66 -
Cash costs
Cash costs before $/lb 2.05 2.30 2.50 2.95 2.25
by-product credits((1))
Net cash costs ((1, 2)) $/lb 1.35 1.45 2.50 2.95 1.60
(1) Assumed CLP/USD exchange rate of 850.
(2) Includes by-product credits at a gold price of $1,900/oz and a molybdenum
price of $18/lb.
As previously announced, Group production in 2024 is expected to be
670-710,000 tonnes of copper. Output of by-products is expected to be
195-215,000 ounces of gold and 11.0-12.5 tonnes of molybdenum. The expected
increase in copper production in 2024 principally reflects the addition of the
Los Pelambres Phase 1 Expansion Project in 2023, with increased water
availability and ore processing capacity expected in 2024.
Group cash costs in 2024 before by-product credits are expected to be
$2.25/lb, in line with 2023, with the positive impact of higher production
balanced by a short-term reduction in ore grades at Los Pelambres.
Group net cash costs in 2024 are expected to be $1.60/lb, with by-product
credits expected to remain in line year-on-year.
In 2024, consolidated Group capital expenditure, which excludes Zaldívar, is
expected to be $2.7 billion, as sustaining and mine development expenditure
broadly in line year-on-year, and as development expenditure commences on the
Centinela Second Concentrator (not including any potential reduction in
capital expenditures as a result of the process to outsource Centinela's water
supply) and other growth projects at Los Pelambres and Centinela.
_____________________________________________________________________________________________
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.
1 Production average over an initial 10-year period.
2 Compañía de Minas Buenaventura S.A.A.
3 Production average over an initial 10-year period.
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