Tumbling copper prices impact OZ Minerals

Prominent Hill mine in South Australia. Image: OZ Minerals

OZ Minerals has recorded a decline in revenue in the first half of 2019 due to deferred shipments and lower copper prices.

The company’s revenue fell from $530.3 million in the 2018 first half to $419.2 million this year, generating 84 per cent less profit in the period.

The average copper price realised by the company was three per cent lower than the comparative period.

OZ Minerals chief executive Andrew Cole, however, indicated the company was on track for a stronger second half.

“Pleasingly, we have already seen revenue rebound strongly in the second half and all 2019 production tonnes are committed,” Cole said.

“Our cash balance combined with a solid operating performance from Prominent Hill (in South Australia) has allowed us to implement our growth strategy and transition to multiple operations whilst consistently rewarding shareholders.”

OZ Minerals also remains well positioned to complete development of the Carrapateena site in South Australia on schedule.

Cole said significant progress was made at Carrapateena in the first half, with above ground construction nearing completion and over 100,000 tonnes of development ore stockpiled.

“The project is expected to deliver first saleable concentrate in November (ahead of a circa 18-month ramp up to full production) for a capital cost of $920–$950 million, with 2019 growth capital expenditure of $540–$570 million continuing to track to guidance,” Cole said.

At Prominent Hill, OZ Minerals reported improved underground production rates, with costs expected at the lower end of guidance over the full year.

The company is looking to expand Prominent Hill, with gold ore trials and a haulage feasibility study under way.

OZ Minerals is applying its cash resources to both of its South Australian operations consistent with a capital management strategy. It also continues to advance its Brazilian operations.

The company is continuing a feasibility study at Pedra Branca in the Carajás, and expects to determine the commencement of early works on the project shortly.

OZ Minerals also plans to continue its near-mine exploration at Antas as part of its processing hub strategy.

The company has declared a 2019 copper production guidance of 103,000–115,000 tonnes and a gold production of 122,200–135,600 ounces on the back of its Antas, Prominent Hill and Carrapateena mines.

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