Antofagasta Regulatory News (ANTO)

31 Jul 2007 10:00

Antofagasta PLC31 July 2007 Antofagasta plc 31 July 2007 Quarterly Production Report - Q2 2007 Highlights • Group copper production in Q2 was 106,100 tonnes, marginally above Q1. • Molybdenum production at Los Pelambres in Q2 was 2,800 tonnes compared with 2,100 tonnes in Q1. • Group cash costs in Q2 were 24.8 cents per pound compared with 35.8 cents per pound in Q1, due to improved by-product credits which offset higher on-site costs and tolling charges. Group Total Q1 Q2 Q3 Q4 Acc Acc Full Year 2007 2007 2007 2007 2007 2006 2006 Total production of 105.9 106.1 212.1 207.9 465.5payable copper ('000 tonnes)Total production of 2.1 2.8 4.9 4.1 9.8payable moly ('000 tonnes)Weighted average 35.8 24.8 30.3 46.9 40.2cash costs (cents per pound) Los Pelambres Los Pelambres produced 71,100 tonnes of payable copper in Q2 and 141,800 tonnesin the first six months of 2007, marginally above the first six months of lastyear. The increase was mainly due to higher plant throughput as a result of theincreased plant capacity completed in the previous year and higher recoveries,partly offset by the expected lower ore grade. Molybdenum production was 2,800 tonnes in Q2, and 4,900 tonnes in the first sixmonths of 2007, 19.5% above the first half of 2006. The increase was mainly dueto the higher grade and to a lesser extent the higher plant throughput, offsetby lower recoveries. Cash costs in Q2 were negative 21.3 cents per pound compared to 4.2 cents perpound in Q1, a decrease of 25.5 cents per pound, mainly due to improvedby-product credits. Cash costs during the first half of 2007 were negative 8.6cents per pound compared with 24.4 cents per pound for the same period lastyear. This decrease in costs was mainly due to higher by-product credits andlower tolling charges, partly offset by higher on-site costs. The improvedby-product credits reflect higher molybdenum production and market prices (whichaveraged US$28.4 per pound in 2007 H1 compared with US$23.7 per pound in 2006H1). Tolling charges were lower this half year mainly due to reduced priceparticipation. The increase in on-site and shipping costs during the first halfof the year compared with the same period last year was partly due to lower oregrades and increased energy, fuel, lubricants and machinery hire costs. Inaddition, costs were also higher due to a significant level of programmed plantmaintenance in Q2 and the costs of the one-off bonus payment on the earlyconclusion of the labour negotiation with the mine-port union in May. El Tesoro Cathode production at El Tesoro was 23,200 tonnes in Q2 and 46,800 tonnes duringthe first half of the year, which represents a 10% increase compared with 2006H1. This increase reflected better ore grades and higher metallurgicalrecoveries, partly offset by a lower level of ore treated. Cash costs in Q2 were 106.5 cents per pound, an increase of 19.1 cents per poundover the previous quarter, mainly due to higher energy costs following there-negotiation of the power supply contract (including one-off backsettlements). Cash costs during the first half of the year were 96.9 cents perpound, higher than the same period last year but below budget. The increasecompared with 2006 H1 is mainly explained by the higher waste-to-ore ratio, aswell as higher energy costs and acid consumption and prices. Michilla Michilla produced 11,800 tonnes of copper cathodes in the second quarter of theyear making a total of 23,400 tonnes during the first half, marginally below thefirst six months of 2006. The higher ore throughput and the higher metallurgicalrecovery in 2007 H1 compensated for the decline in grades. Cash costs were 141.4 cents per pound in Q2 and 132.3 cents per pound in thefirst half of the year. The costs for 2007 H1 were below budget but higher thanthe first six months of 2006, reflecting the one-off costs of the labournegotiation completed during Q2, as well as higher costs of energy, fuel andthird party services. Exploration - Colombia and Ecuador During July, the Group decided not to continue with the exploration agreementswith Ascendent Copper Corporation in respect of the Chaucha deposit in Ecuadorand with AngloGold Ashanti in the area of interest in southern Colombia,following a review of drilling results achieved to date. The Group neverthelessremains committed to its disciplined strategy of growth and will continue toseek opportunities in mining both in Latin America and worldwide. Transport The transport division had a strong first half. Combined rail and road volumestransported during the first half of 2007 were 11.6% higher than the same periodof 2006. The increase was mainly attributable to the impact of the Spenceproject (which commenced shipments in the second half of 2006), along withincreased volumes from other clients. Water The water business continued to perform well. Volumes sold during the first halfincreased to 19.8 million cubic metres, a 6.7% increase compared with 2006 H1,mainly due to improved sales to industrial customers. Los Pelambres Q1 Q2 Q3 Q4 Acc Acc Full Year 2007 2007 2007 2007 2007 2006 2006Production statistics Daily average ore treated 125.0 126.0 125.5 120.2 127.4('000 tonnes)Average ore grade 0.71 0.70 0.71 0.82 0.81(%)Average recovery 92.5 91.9 92.2 88.1 88.7(%)Concentrate produced 186.5 202.6 389.0 395.0 842.6('000 tonnes)Average concentrate grade 39.6 36.5 38.0 39.8 39.9(%)Fine copper in 73.1 73.6 146.7 146.4 335.2concentrate ('000 tonnes)Payable copper in 70.7 71.1 141.8 141.6 324.2concentrate ('000 tonnes)Average moly ore grade 0.033 0.030 0.031 0.026 0.028(%)Average moly recovery 66.7 75.6 71.0 75.2 76.1(%)Payable moly 2.1 2.8 4.9 4.1 9.8('000 tonnes) Cash costs statistics On-site and shipping 64.7 82.0 73.4 55.6 56.4costs (cents per pound)Tolling charges for 25.7 31.9 28.8 39.8 39.7concentrates(cents per pound)By - product credits (86.3) (135.2) (110.8) (71.0) (79.7)(cents per pound) *Cash costs 4.2 (21.3) (8.6) 24.4 16.4(cents per pound) (*) Note: By-products credits do not include any costs attributable to theproduction of molybdenum concentrate. By-product calculations also do not takeinto account unrealised mark-to-market gains at the beginning or end of eachperiod. El Tesoro Q1 Q2 Q3 Q4 Acc Acc Full Year 2007 2007 2007 2007 2007 2006 2006 Daily average ore 27.8 26.3 27.1 29.1 28.7treated ('000 tonnes)Average ore grade 1.21 1.25 1.23 1.08 1.16(%)Average recovery 77.4 77.3 77.4 75.7 78.1(%)Copper cathodes 23.6 23.2 46.8 42.5 94.0('000 tonnes)Cash costs 87.4 106.5 96.9 79.7 78.6(cents per pound) Michilla Q1 Q2 Q3 Q4 Acc Acc Full Year 2007 2007 2007 2007 2007 2006 2006 Daily average ore 15.2 15.4 15.3 15.0 15.2treated ('000 tonnes)Average ore grade 1.04 1.04 1.04 1.10 1.05(%)Average recovery 81.2 78.3 79.7 76.3 78.2(%)Copper cathodes 11.6 11.8 23.4 23.8 47.3('000 tonnes)Cash costs 123.1 141.4 132.3 122.0 126.4(cents per pound) Transport Q1 Q2 Q3 Q4 Acc Acc Full Year 2007 2007 2007 2007 2007 2006 2006 Rail tonnage 1,253 1,301 2,554 2,133 4,486transported ('000 tons)Road tonnage 321 342 663 750 1,456transported ('000 tons) Water Q1 Q2 Q3 Q4 Acc Acc Full Year 2007 2007 2007 2007 2007 2006 2006 Water volume sold - 10,069 9,740 19,809 18,536 37,798potable and untreated('000 m3) ** (**) Note: Water volumes include water transportation of 300,000 m3 in Q1 and266,000 in Q2 (270,000 m3 in Q1 2006 and 740,000 m3 in Q2 2006). Enquiries - investor relations: Alejandro Riveraarivera@aminerals.cl Santiago: (56-2) 377 5145 Desmond O'Conordoconor@antofagasta.co.uk London:(44) 20 7808 0988 Hussein Barmahbarma@antofagasta.co.uk London:(44) 20 7808 0988 Enquiries - media: Keith Irons, Bankside Consultants 44) 20 7367 8873keith@bankside.com Oliver Winters, Bankside Consultants (44) 20 7367 8874oliver.winters@bankside.com This information is provided by RNS The company news service from the London Stock Exchange