OZ Minerals is on track to at least meet its production guidance for the full-year, maintaining the strong momentum in the March quarter from the closing months of last year.
That saw the miner produce copper and gold at record levels last year – and the company was one of the few to report an improvement in earnings in what was a tough 12 months for the sector.
Releasing the company’s quarterly results, OZ Minerals CEO Andrew Cole said Prominent Hill had led the strong quarter.
“Prominent Hill delivered a strong start to the year,” he said.“These results give us confidence that we will meet or exceed guidance for 2016.” While ore production was down in the first quarter “due to sequencing constraints”, the company expects an increase through the remainder of 2016. “This bodes well for Prominent Hill’s evolution into an underground-only operation,” Mr Cole said in yesterday’s statement.
OZ produced 31,018 tonnes of copper in the first quarter, down slightly on the fourth quarter’s 32,636 tonnes but a positive step toward at least meeting its guidance of 115,000 to 125,000 tonnes for the full-year.
OZ said it made shipments of Prominent Hill concentrate totalling 23,260 tonnes of copper, 23,027 ounces of gold and 156,579 ounces of silver for the quarter. Cash costs came in at US75.3c per pound, within the company’s US70c to US80c target range.
OZ Minerals also announced gold output of 27,563 ounces, as it looks to reach guidance of 125,000 to 135,000 ounces for the 12 months to December 31. The firm also maintained confidence in the potential for the Carrapateena project to serve as its growth avenue in coming years as Prominent Hill progresses to an underground-only operation.
An update on plans for a pre-feasibility study at Carrapateena will be offered in late May.
“We made significant progress on our Carrapateena project, cost reduction program and Prominent Hill infill drilling,” Mr Cole said.
“The accelerated exploration at the Eloise project, following the definition of two compelling exploration targets, also provides another avenue for growth.”
OZ said it had cash on hand at the end of March of $A533 million in cash (unaudited) following $43 million dividend and early April shipment valued at around $A$40 million.
The company also revealed that the standby credit facility of $US200m has been renegotiated to a three year committed facility of $A100m with an uncommitted accordion provision for an additional $A300m. "This provision allows OZ Minerals to request an additional A$300 million to fund investment opportunities as required, with lower commitment fees saving $2.1million a year,” OZ said in yesterday’s statement. OZ shares rose 0.7% to $5.62.
