(Alliance News) - Antofagasta PLC on Wednesday left its annual production guidance unchanged as it reported weaker first-quarter copper output, "primarily due to lower grades and increased ore hardness at Centinela".
Shares in Antofagasta were up 0.9% to 2,228.00 pence in London on Wednesday morning. The wider FTSE 100 index was little changed.
Copper production fell 11% on-year to 129,400 tonnes. Antofagasta said the lower grades at the Centinela asset in Chile was "in line with the mine plan". It also noted maintenance and cleaning activities work at Los Pelambres, also in Chile, "delayed moving concentrate to the company's port facilities".
Gold output in the first-quarter was 21% lower, as a result of expected lower gold grades at Centinela and the delay in moving material through the Los Pelambres concentrate pipeline.
But molybdenum production was 8% higher, due to higher molybdenum production at Los Pelambres, with this output unaffected by recent maintenance of the concentrate pipeline since transportation of this product is by road.
Looking ahead, annual copper output of 670,000 to 710,000 tonnes is still expected, as quarterly production increases over the year.
Cash cost guidance, both before and after by-product credits, is also unchanged at USD2.25 per pound and USD1.60, respectively. Capital expenditure guidance is also unchanged at USD2.7 billion.
Chief Executive Ivan Arriagada said: "Production and cost performance at our mine sites over the quarter was in line with our expectations, with lower grades at Centinela during the period, and Los Pelambres product inventories increasing due to the extended concentrate pipeline maintenance and cleaning activities in February. This production, which is the equivalent of 27kt of copper in concentrate, has been rescheduled into future quarters."
The CEO added: "Full-year guidance is unchanged, and the company's production profile is expected to increase quarter-on-quarter throughout the remainder of the year."
Antofagasta said cash costs before by-product credits in the first quarter were USD2.67 per pound, up 7% on a year before, principally related to lower production at Centinela and Los Pelambres during the quarter, offset by lower unit costs for key consumables and depreciation of the Chilean peso.
Net cash costs were USD1.93 per pound, up 25% on year, as a result of lower production volumes and lower credits for by-products.
By Jeremy Cutler, Alliance News reporter
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Antofagasta (ANTO)