Antofagasta plc On-track for another record-setting year

Antofagasta plc (LON:ANTO), today announced Q1 2019 production update.

Antofagasta plc CEO, Iván Arriagada said: “The Company has started 2019 as planned, delivering copper production in Q1 2019 of 188,600 tonnes, 22.6% higher than in the same period last year but 14.3% lower than the previous quarter, reflecting last year’s unusual production profile of quarter-on-quarter increases.

“Net cash costs for the quarter were $1.24/lb, some 5c/lb lower than the full 2018 year and below our guidance for this year of $1.30/lb.

“The high level of operating performance achieved in the second half of last year continues and we are on-track for another record-setting year with full year production expected to increase by up to 9% to 750-790,000 tonnes.

“Our priorities for the year ahead remain our safety performance, maintaining our operating reliability and efficiency, and progressing the construction of the Los Pelambres expansion, which began during the quarter.”

HIGHLIGHTS

PRODUCTION

· Copper production in Q1 2019 was 188,600 tonnes, in line with expectations and an increase of 22.6% compared with the same quarter in 2018, mainly due to higher throughput and the anticipated higher grades, particularly at Centinela

· Scheduled maintenance at Los Pelambres and Centinela, combined with lower grades led to production being 14.3% lower than the record performance in the previous quarter. Underlying operating performance remains strong

· Gold production was 62,200 ounces in Q1 2019, 92.6% higher than in Q1 2018 on higher grades at Centinela

· Molybdenum production increased by 12.9% compared to the same period in 2018 due to higher throughput and recoveries at Los Pelambres and production for the first time at Centinela in the first quarter

CASH COSTS

· Cash costs before by-product credits in the quarter decreased to $1.70/lb from $2.00/lb in the same period last year primarily because of higher production and weaker Chilean Peso. Costs increased by 25.3% compared to the previous period on lower grades and throughput

· Net cash costs were $1.24/lb in Q1 2019, compared to $1.54/lb in Q1 2018 and $0.99/lb in the previous quarter, reflecting the changes in cash costs before by-product credits

2019 GUIDANCE

· Guidance for the year is unchanged. Group copper production for the full year is expected to be 750-790,000 tonnes, on higher grades at Centinela Concentrates, particularly in Q2 and Q3

· Cash cost guidance before and after by-product credits is also unchanged at $1.70/lb and $1.30/lb respectively

OTHER

· As announced on 4 April, Los Pelambres successfully completed the debt financing of its $1.3 billion expansion project on favourable terms

· Execution of the Los Pelambres expansion project is progressing according to plan and was 14% complete (design, engineering, procurement and construction) by the end of the first quarter with 500 people mobilised to site.

(1) Cash cost is a non-GAAP measure used by the mining industry to express the cost of production in US dollars per pound of copper produced.