Antofagasta posts record copper production

Antofagasta (LON: ANTO) set a new record last year with group copper production of 725,300 tonnes, and the company expects it will produce 750,000-790,000 tonnes of the red metal this year.

Cash costs before by-product credits came in at US$1.72 per lb. in 2018, US12¢ per lb. higher than 2017 due to higher input prices and lower grades at its Centinela mine in Chile. Guidance for cash costs before by-product credits this year is US$1.70 per lb.

Net cash costs — including by-product credits at a gold price of US$1,300 per oz. and a molybdenum price of US$10.5 per lb. — reached US$1.29 per lb. in 2018 and are forecast to come in at US$1.30 per lb. in 2019.

For the fourth quarter of 2018, net cash costs were US99¢ — the lowest since 2012 and just 3% higher than 2017, despite average grades declining and cost pressure from increasing input costs.

As for gold, Antofagasta produced 210,100 ounces of the precious metal last year and forecasts production this year will climb to 240,000-260,000 ounces.

Molybdenum production in 2019 is expected to fall 15%-25% to 11,500-12,500 tonnes, down from 13,600 tonnes in 2018.

Antofagasta forecasts capital expenditure this year will be about US$1.2 billion, which includes the development of the Los Pelambres expansion project. Antofagasta’s 60%-owned Los Pelambras mine produces copper concentrate (containing gold and silver) and a moly concentrate. The sulphide deposit is 240 km northeast of Santiago, in Chile’s Coquimbo region.

The company has four mines in Chile.

Its 70%-owned Centinela mine, 1,350 km north of Santiago, produces copper concentrate (containing gold and silver) through a milling and flotation process, and copper cathodes using a solvent extraction and electrowinning process.

The company has a 50% stake in the  Zaldivar mine, an open-pit, heap leach copper oxide mine about 1,400 km north of Santiago, and owns 70% of the Antucoya mine, which produces copper cathodes, about 125 km northeast of the city of Antofagasta.