OZ Minerals has reported a drop in quarterly copper production for the three months to September, compared to the same period a year earlier, but says it is on track to meet full year guidance.
The company said in its September quarter production report yesterday that the Prominent Hill mine in South Australia produced 26,841 tonnes of copper, down 5.2% from the same period in 2009.
But gold output, which is more of a byproduct, jumped sharply to 51,451 ounces.
"Copper production for the quarter of 26,841 tonnes brings the total production for the year to date to 86,986 tonnes with production on track to meet the guidance range of 100,000 tonnes to 110,000 tonnes for 2010," OZ Minerals said yesterday.
Production costs are expected to be lower than expected, at 43 USc per pound, mainly due to the higher gold production and price.
OZ Minerals lifted full year gold (calendar) production guidance by 10% to more than 185,000 ounces.
During the quarter there were also three plant shutdowns, only one of which was planned, OZ Minerals said.
But the plant performed for extended periods at 20% above design capacity and despite falling copper head grade, recoveries of the metal increased to average 89.2%.
Copper prices have risen almost 40% and the gold price has soared, but so has the value of the Australian dollar.
OZ said that construction of the new Prominent Hill underground mine – the newly named Ankata mine – is now underway.
"The mine will produce an average of 25,000 tonnes of copper and 12,000oz of gold annually during the life of the mine augmenting production from the open pit," OZ said.
"Work on the Stage 3A cutback is now nearing completion and the establishment of the portal and development of the decline is scheduled for November, when mining operations commence. The project remains on schedule to access ore in the final quarter of 2011."
And it had had "encouraging near mine exploration results including 35m at 1.4% Cu from 1,222 metres in the recently discovered Kalaya zone", and "aggressive exploration drilling program now underway with 10 drill rigs planned to be on site by year end".
OZ shares peaked at $1.645 in early trading, but lost that to end down half a cent at $1.59 as the market was sold off in the afternoon.
