OZ Minerals (OZL) cut its full-year gold production guidance after reporting sharp drops in both gold and copper production during the June quarter, the company revealed in its June quarterly production report issued yesterday.
The report revealed that in the three months to June 30, OZ produced 17,379 tonnes of copper concentrate at its Prominent Hill mine in South Australia, down sharply from the 25,521 tonnes produced in the previous corresponding period.
In the same period, the group produced 31,018 ounces of gold, lower than the 34,475 ounces produced in the June 2012 quarter. The fall in gold production means revenue will be down sharply due also to the plunge in world gold prices in the quarter. Copper prices were also weaker.
OZ Minerals reaffirmed that production in the year would be weighted towards the second half and it was expecting an improvement.
They said that open pit mining unit costs are expected to be lower in second half. Drilling results from Malu underground prospect at Prominent Hill continue to be encouraging and the focus on costs and productivity continues.
As well, work on the Carrapateena deposit pre-feasibility study continued in the quarter, but the access shaft work was delayed to save costs earlier in the quarter. And the company said it was seeing excellent results continue to be returned from newly discovered Khamsin copper prospect near Carrapateena.
But that didn’t stop it from cutting gold output guidance to between 120,000 ounces and 130,000 ounces, compared with the 130,000 to 150,000 ounce estimate forecast at the annual meeting in May.
"Gold production will depend on the ore blend fed to the mill with preference given to copper ore because of its higher revenue contribution," the group said in its report.
Full-year copper production guidance was maintained at a range between 82,000 tonnes and 88,000 tonnes.
The company cut 61 jobs at the Prominent Hill mine last month in a cost-saving move.
The company’s shares fell 7.3%, or 34c to $4.30 and investors gave the report the thumbs down.
OZ releases its half yearly report on August 14.
OZL 1Y – OZ Minerals shares down as outlook uncertain
