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Antofagasta: Credit Suisse reduces target price from 1300p to 1150p and downgrades to underperform. Deutsche Bank cuts target price from 1335p to 1260p, while leaving its hold recommendation unaltered.
Antofagasta: Bank of America reduces target price from 1500p to 1400p and downgrades to neutral.
Antofagasta: Goldman Sachs ups target price from 1100p to 1120p and still recommends to sell.
Antofagasta: Nomura reduces target price from 1450p to 1400p and downgrades from buy to neutral.
Antofagasta: Alphavalue downgrades to reduce, while keeping the target price at 1371p.
Positive Points: Antofagasta, which operates four copper mines in Chile and also has transport and water divisions, aims to produce 700,000 metric tons of copper in 2012. Group debt declined to $1.31 billion at the end of September from $1.46 billion at the end of December 2011. Antofagasta is one of the most important conglomerates in Chile with equity participation in Antofagasta Minerals, the railroad from Antofagasta to Bolivia, and other investments worldwide. Antofagasta benefits from a strong balance sheet which is seen as attractive to some investors.
Negative Points: The group has exposure to volatile copper prices. With approximately 80% of total group revenue related to copper, any change in copper prices has a significant impact on the performance of the miner. The copper price remains something of a barometer for the health of the global economy. Chile lies along a major earthquake fault line. The company’s share price could suffer if global demand for commodities slows. Generic Chilean mining concerns include declining grades, water availability, labour instability and cost inflation.
Financial Highlights: Earnings before interest, tax, depreciation and amortization, or Ebitda, advanced to $2.83 billion from $2.51 billion a year earlier. Revenues rose by 16% to $4.85 billion. As at 30 September, cash balances stood at $3.51 billion , compared with $3.04 billion at the end of last year.
HL Comment (15 November 2012) Third quarter results: Higher copper and gold production helped Antofagasta lift profits by 13% over the first nine months of 2012. The Chilean based mining company said copper volumes rose by 13.7% to 515,800 tonnes as throughput steadily increased through its Esperanza mine. Gold production surged, 70% higher at 213,500 ounces, boosted by improvements at Esperanza. The realised copper price in the period declined to 374.1 cents per pound from 378 cents in the same period last year. London Metal Exchange copper prices averaged 361.2 cents per pound, compared to 419.8 cents per pound a year ago. In its last production report on 31 October, Antofagasta had confirmed its full-year 2012 copper production target to be around 700,000 tonnes. For the third quarter, group copper production was 179,800 tonnes, up 3.8% from the previous quarter. Quarterly gold production was 77,400 ounces, compared with 72,600 ounces in the preceding second quarter.
Company overview The Group's key activities are the operation of 4 major copper mines, (Los Pelambres, Esperanza, El Tesoro and Michilla) the transportation of copper cathodes down from the mines and sulphuric acid back up to the mines by rail and road freight and a concession allowing the distribution of water within the Antofagasta region in Chile. The Group has operations in the United Kingdom, Chile, Peru and Bolivia. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.
Cash and Borrowings At 30 September 2012 the Group had cash, cash equivalents and liquid investments of US$3,876.8 million (31 December 2011 - US$3,280.0 million). Excluding the minority share in each partly-owned operation, the Group's attributable share of total cash and cash equivalents was US$3,508.9 million (31 December 2011 - US$3,041.1 million). Total Group borrowings at 30 September 2012 were US$1,911.8 million (31 December 2011 - US$2,140.3 million). Of this, US$1,306.2 million (31 December 2011 - US$1,456.3 million) is proportionally attributable to the Group after excluding the minority shareholdings in partly-owned operations.
EBITDA Group EBITDA in the nine months ended 30 September 2012 was US$2,832.3 million, compared with US$2,505.5 million in the nine three months of 2011. The increased revenues discussed above were partly offset by increased operating costs. Excluding by-product credits (which are reported as part of revenue) and tolling charges for concentrates (which are deducted from revenue), weighted average cash costs for the Group (comprising on-site and shipping costs in the case of Los Pelambres and Esperanza, and cash costs in the case of the other two operations) increased slightly from 142.5 cents per pound in the nine months ended 30 September 2011 to 146.4 cents per pound in the first nine months of 2012. Net cash costs including by-product credits (which are reported as part of revenue) were 99.0 cents per pound, compared with 103.7 cents per pound in the first nine months of 2011, with the higher gold sales volumes offsetting the increased operating costs. Further details of the cash costs of each mine are given in the Group's third quarter production report released on 31 October 2012.
Copper giant Antofagasta (ANTO) posted a 16.3% increase in group revenues to $4.852 billion dollars (3.061 billion pounds) for the nine months ended 30th September. The increase was largely driven by increased copper, gold and molybdenum volumes, but partly offset by a fall in the average realised copper and molybdenum prices. The reported 13% increase in EBITDA to $2.832 billion dollars (1.787 billion pounds) over the period was squeezed by an increase in the weighted cash costs per pound, which were up from 142.5 cents (90p) to 146.4 cents (92p). Shares in the company dropped by 14p to 1,229p.
Antofagasta: UBS ups target from 1,080p to 1,100p, sell rating kept.
Quarterly Production Report Q3 2012 Highlights · Group copper production was 179,800 tonnes in Q3 2012 and 515,800 tonnes in the first nine months of 2012, a 3.8% increase compared with the previous quarter and an 11.5% increase compared with the first nine months of 2011. This was mainly due to higher production at Esperanza as a result of steadily increasing throughput levels following the start of operations in 2011. · Copper production for the 2012 full year is still expected to be approximately 700,000 tonnes. · Gold production was 77,400 ounces in Q2 2012 and 213,500 ounces in the first nine months of 2012 compared with 72,600 ounces in the previous quarter and 125,000 ounces in the first nine months of 2011 also reflecting the higher throughput at Esperanza. · Molybdenum production at Los Pelambres was 3,000 tonnes in Q3 2012 and 9,500 tonnes in the first nine months of 2012. The 30.1% increase in production in the first nine months of 2012 compared to 2011 reflects the particularly high molybdenum grades in the current year. · Group cash costs (net of by-product credits) in Q3 were 99.3 cents per pound, in line with the previous quarter's costs. Cash costs excluding by-product credits decreased slightly to 157.1 cents per pound in Q3 2012 compared with 158.2 cents in the previous quarter. · Group cash costs (net of by-product credits) in the first nine months of 2012 were 99.0 cents per pound, a 4.7 cent decrease compared with 103.7 cents per pound in the first nine months of 2011. This decrease mainly reflected an increase in by-product credits as a result of the higher gold production at Esperanza as well as to a lesser extent increased molybdenum production at Los Pelambres.
http://www.investegate.co.uk/Article.aspx?id=201210310700079004P
Analysts at Credit Suisse have issued a short term trading sell on miner Antofagasta, on which they are broadly neutral, with a target price of 1,250p (up from 1,150p in fact). The Swiss bank sees three short term drivers of underperformance. Firstly, consensus production estimates look too high by up to 10% over the period 2013-16. Secondly, the shares have outperformed peers and the copper price and valuation is at the top end of its ten year range. Third, copper price may underperform other commodities in the near term (given the resilient performance year-to-date and improving mine supply in the second half of 2012).
All. Just giving this a once over ... Looks to be in a hell of 3-year wedge and near the top of that at the mo - closing down to a proper breakout up/down in mid 2013? Shorter term looks like either about to take a dip or be sniffing 1400 again pretty soon? I've not done anything on copper before though I know she pulls some gold too (how can you lose? lol). Copper primarily sensitive to housing and the dollar (general industrial down/upturn too obviously) is my understanding and I'm wondering whether this is worth a long hard look post election with the Dollar tanking and maybe some big housing initiatives kicking off in the US??
Jefferies now prefers Antofagasta over copper peer Kazakhmys and has downgraded its rating for the latter from 'buy' to 'hold'. "Our preference this year for shares of Kazakhmys over shares of Antofagasta has been based entirely on relative valuations (Kaz is much cheaper). However, after reviewing 1H12 operating results, we conclude that Anto's valuation premium relative to Kaz is fully justified, and we are downgrading shares of Kazakhmys," Jefferies said on Thursday. The broker has reduced its target price for Kazakhmys from 900p to 650p. As for Antofagasta, its target price has been hiked from 1,050p to 1,200p, though a 'hold' recommendation has been maintained.
The development of the Antucoya project continues with all of the main engineering, procurement and construction (EPC) contracts having now been executed. "ANTO is a stock to hold for the long term with a high quality asset base, strong balance sheet and cash generation and longer term growth options," said analysts at Credit Suisse on Tuesday. "We expect the mid-size Antucoya project to take group volumes from c.700 kt in 2012 to c.800 kt by 2015 and longer term projects could take volumes beyond 1 mtpa by the end of the decade. Antofagasta raised its interim dividend by 6.3% from 8.0 cents to 8.5 cents. Chief Executive Officer Diego Hernandez, who joined the board on August 1st, said: "I am delighted to have taken on the role of Chief Executive Officer of Antofagasta Minerals S.A. [...]. I am looking forward to helping the group to realise the great potential from its current operations and strong pipeline of growth projects."