Antofagasta share price: FY targets unchanged despite Q3 output decline

on Oct 29, 2014
Updated: Oct 21, 2019
Listen, Wednesday, October 29: Antofagasta LON:ANTO) remains on track to hit its production targets for the full year, despite reporting reduced gold and copper production during the third quarter.

The Chilean copper miner said in a regulatory statement today that it had produced 169,200 tonnes of copper in the third quarter, five percent down from 178,800 in the previous three-month period.
Antofagasta, controlled by Chile’s Luksic family, said that the fall was mainly due to a suspension of mining activities following a fatal accident at its Los Pelambres mine and a maintenance shutdown at its Centinela plant. It was also down to harder ore recovery at Los Pelambres. Harder ore generally takes longer to process.

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Gold production during the quarter fell 3.4 percent to 64,700 ounces compared to 67,000 ounces of gold produced in the previous quarter, also caused by lower throughput of concentrates at Centinela due to planned maintenance work.
Molybdenum production during the quarter had risen 44 percent to 2,300 tonnes compared to 1,600 tonnes in the second quarter, driven by higher grades, the London-listed miner said.

Despite the subdued interim production, Antofagasta remained on track to hit its full-year targets of 700,000 tonnes of copper, 270,000 ounces of gold and 7,500 tonnes of molybdenum, it added.
Antofagasta further revealed that cash costs before by-product credits fell 2.6 percent quarter on quarter to $1.85 per pound. The decrease was mainly due to lower energy costs at Los Pelambres, which is now getting 20 percent of its energy from a wind farm commissioned in July.

CEO Diego Hernandez said in an interview last week the company would aim for flat or lower average production costs next year.
**Analysts on Antofagasta**
Commenting on Antofagasta’s latest production report, City broker Investec called it a ‘vanilla quarter’ for Anto, with no major issues and guidance intact. RBC’s Timothy Huff, however, said quarterly copper output fell short of his 180,000 tonne forecast.

Sanlam’s Charlie Long, meanwhile, took a broader view of the Anto business and claimed it is “nothing to get excited about”.
and the copper outlook is soft, at least in the short to medium term,” Long said, as quoted by Proactive Investors. “Antofagasta’s best mines are ageing and will find it increasingly difficult to grow production in the future,” the analyst added.
Antofagasta’s share price dipped at the opening bell this morning, but by 09:35 GMT, it had gained 1.43 percent to 710.50p.
According to the Financial Times, as of 25 October 2014, the consensus forecast amongst 65 polled investment analysts covering Antofagasta has it that investors should hold their position in the company.
**As of 09:23 GMT, buy Antofagasta shares at 709.50p.**
**As of 09:23 GMT, sell Antofagasta shares at 709.00p.**


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