Miner OZ Minerals says it has lifted its annual gold production guidance after higher than expected production in the June quarter.
The copper and gold producer also said in its June quarter production report on Friday its copper production was strong during the quarter and on schedule to meet full year guidance.
In the three months to June OZ Minerals produced 28,236 tonnes of copper and 49,249 ounces of gold.
OZ Minerals has the newly built Prominent Hill mine in South Australia as its only producing asset after selling its other assets to China Minmetals last year to lower debt and escape collapse.
"Gold production was particularly strong," the miner said. And "This sees an increase from the previously announced guidance of 110,000 ounces to 120,000 ounces, to a range of 140,000 ounces to 150,000 ounces for 2010," the miner said.
OZ Minerals said production costs had also fallen due to gold by-product credits associated with higher gold grade, recovery and prices.
It revised down its guidance on cash costs from between 80 and 90 USc, to 70 to 80 USc per pound.
Copper grades processed during the quarter were lower than previous quarters, but throughput was higher and recoveries were better than expected.
"Gold production was in excess of expectations due to gold representing a higher proportion of the total ore feed, ore grades higher than the average reserve grade and improved gold recovery," the company said.
Sales were higher during the June quarter than in the previous quarter, which was hit by transport delays, OZ Minerals said.
"By the end of the quarter the majority of concentrates produced and stockpiled had been shipped through the Ports of Darwin and Adelaide," the company said.
"Stocks have now returned to normal levels."
On Thursday OZ Minerals said it had approved an underground mine at Prominent Hill to complement its existing open pit mine.
"Mining of the decline is scheduled to commence in October, with first ore accessed in the final quarter of 2011, allowing production from the second half of 2012," OZ said on Friday.
"The underground is expected to add an average of 25,000 tonnes of copper and 12,000 ounces of gold per annum to the open pit production allowing the operation to maintain levels of production close to those currently being achieved over the life of the mine.
"The expected pre-production expenditure for the project is $135 million."
OZ shares rose 1.5c on Friday to end the day at $1.13.
If the ASX and ASIC hadn’t figured it out by now, then they never will.
Nufarm, the profit-challenged agricultural chemicals group, is a serial offender when it comes to the timely disclosure (and realisation) of sales and profit problems.
The ASX’s latest query of Nufarm is the third for the company in less than a year, with the previous two also coming after shock profit downgrades.
In fact Nufarm offended on two occasions last week: the timeliness of the profit downgrade and then the revelation of the breach of a key banking covenant.
On the latter, Nufarm blamed an ”oversight” for the failure to disclose the breach of the banking covenant in the first announcement last week.
The group did not mention it would breach its interest cover ratio covenant in the ASX announcement on Wednesday, issuing a ”clarification” the next morning.
The combination of both announcements saw the shares plunge more than 28% on Thursday. They fell a further 9.3% on Friday to end a nasty week at $3.40, the lowest for more than seven years.
Nufarm maintained it was first aware it would miss its annual earnings guidance on Tuesday evening, and that the earlier profit guidance was based on assuming "average climatic conditions” in key markets.
"As noted in the Trading Update, the climatic conditions in key markets were unfavourable, which had a dramatic flow-on impact.
"The extent of the impact of these unfavourable conditions was not, and could not be, fully appreciated by the Company until preliminary indicative financial data for June was received from Regional Managers and analysed by Senior Management," Nufarm said.
"As soon as the Company became aware of the Reduced Earnings, it requested that its securities be placed into Trading Halt. lmmediately after the preliminary indicative financial data and other information was received from Nufarm’s Regional Managers and analysed by Senior Management, the Company released the Trading Update.
"That disclosure was made as soon as that information was available,” Nufarm told the ASX.
Nufarm’s head of corporate affairs, Robert Reis, said the company realised the ”oversight” just before a media and analyst conference call on Wednesday, but did not explain why managing director, Doug Rathbone, only revealed the breach after fielding a media question on the subject.
"The Trading Update released by the Company at approximately 4pm on July 14 did not include any acknowledgement that the Company’s revised earnings guidance would result in a breach of one of the Company’s banking covenants as at July 31, 2010.
"This was an oversight.
