Antofagasta Regulatory News (ANTO)

31 Jan 2008 10:00

Antofagasta PLC31 January 2008 Antofagasta plc 31 January, 2008 Quarterly Production Report - Q4 2007 Highlights • Group copper production for 2007 was 428,100 tonnes compared to 465,500 tonnes in 2006, mainly due to the expected lower ore grades at Los Pelambres. • Molybdenum production at Los Pelambres increased to a record 10,200 tonnes for the year (2006 - 9,800 tonnes). • Group cash costs for 2007 were 31.6 cents per pound compared with 40.2 cents per pound in 2006 due to improved by-product credits and reduced tolling charges, partly offset by increased on-site costs. Group Total Q1 Q2 Q3 Q4 Full Year Full Year 2007 2007 2007 2007 2007 2006 Total production ofpayable copper ('000 tonnes) 105.9 106.1 100.6 115.4 428.1 465.5 Total production ofpayable moly ('000 tonnes) 2.1 2.8 2.5 2.7 10.2 9.8Weighted average cashcosts (cents per pound) 35.8 24.8 30.1 35.5 31.6 40.2 Los Pelambres Los Pelambres produced 81,600 tonnes of payable copper in Q4, 22.5% above Q3production. This was due to both increased plant throughput and improved oregrades. The increased plant throughput was achieved by improvements in thecrushing process, thereby mitigating the impact of the continued higherproportion of harder primary ore. Annual production in 2007 was 289,900 tonnes,slightly ahead of the most recent forecast, but 10.6% below the 2006 productionof 324,200 tonnes, mainly due to the lower ore grades this year. For 2008production is expected to be approximately 330,000 tonnes, due to better oregrades and higher throughput. Molybdenum production was 2,700 tonnes in Q4, 8.0% above the previous quarter.The increase was due to improved molybdenum grades and the increased plantthroughput. Annual production for 2007 was 10,200 tonnes, a 4.1% increasecompared with 2006, mainly due to improved grades. Molybdenum production isexpected to be approximately 6,800 tonnes in 2008. The forecast decrease inproduction is mainly due to lower molybdenum grades in those areas of the minedue to be worked under the 2008 plan. Cash costs in Q4 were negative 7.5 cents per pound compared to negative 19.6cents per pound in Q3, an increase of 12.1 cents per pound, mainly due to lowerby-product credits per pound of copper produced. Cash costs for the 2007 full year were negative 10.8 cents per pound comparedwith 16.4 cents per pound for 2006, a decrease of 27.2 cents per pound. This wasmainly due to higher by-product credits (reflecting the higher averagemolybdenum price compared with 2006 and the increase in molybdenum production)and lower tolling charges. These factors were partly offset by higher on-sitecosts, as a result of increased machinery hire, maintenance, fuel, oil andlabour costs. The higher labour costs were due to the one-off bonus payments onthe early conclusion of the mine-port union negotiation in Q2 as well as theplant union negotiation (originally due in mid-2008) which was concluded in Q4. El Tesoro Cathode production at El Tesoro in Q4 was 23,700 tonnes, a 5.3% increasecompared with Q3, due to improved throughput levels. Production for the fullyear was 93,000 tonnes, which was ahead of the original forecast for the yearand just 1.1% below 2006 production. The lower plant throughput compared with2006, due to high moisture levels in the ore processed, was largely offset bythe higher ore grades. The difficulties experienced with high moisture levelswere successfully resolved through modifications to the production process inQ4. For 2008, production is expected to be approximately 90,000 tonnes. Cash costs in Q4 were 128.6 cents per pound, an increase of 11.7 cents per poundfrom the previous quarter. Full year costs averaged 109.8 cents per pound,compared with 78.6 cents per pound in 2006. The main reasons for these increaseswere higher energy costs and, to a lesser extent, increased sulphuric acid costs(due to higher prices and consumption levels). Michilla Michilla produced 10,200 tonnes of copper cathodes in Q4, 1,200 tonnes below theprevious quarter. The earthquake which occurred in northern Chile on 14 Novemberresulted in some disruption during the quarter, which reduced throughput and thegrade of ore processed. Nevertheless, total annual production in 2007 was 45,100tonnes of copper cathodes, only slightly below the original forecast for theyear. Production is expected to be approximately 43,000 tonnes in 2008. Cash costs in Q4 were 163.4 cents per pound, an increase of 14.6 cents per poundover the previous quarter. The increase was mainly due to the impact of thelower Q4 production volumes on the unit costs. Cash costs for the full year were143.5 cents per pound, compared to the original forecast for the year of 136cents per pound, and compared to 126.4 cents per pound in 2006. The increasecompared to the previous year was mainly due to increased energy costs, theimpact of the bonus payment following the early conclusion of the labournegotiation during Q2, and higher costs of third party services. Transport The transport division had a successful operational performance during 2007 withcombined rail and road tonnages of over 6.3 million tons, 6.4% above 2006. Railtonnages transported in 2007 increased by 11.6% over 2006 due to increases fromvarious mines. The most significant of these was the Spence mine where thecombined volumes of sulphuric acid and copper cathodes contributed an additional0.3 million tons. Water The water division continued to perform strongly, with Q4 water volumesincreasing to 10.4 million cubic metres, 7.1% above the previous quarter. Thiswas mainly due to higher domestic consumption in the period. The volume of watersold in 2007 increased by 5.5% over the previous year as a result of highervolumes to industrial customers, mainly due to the full-year impact of Spencewhich started its operations during the second half of 2006. Los Pelambres Q1 Q2 Q3 Q4 Full Year Full Year 2007 2007 2007 2007 2007 2006 Production statistics Daily average oretreated ('000 tonnes) 125.0 126.0 120.9 133.3 126.3 127.4 Average ore grade (%) 0.71 0.70 0.68 0.73 0.71 0.81 Average recovery (%) 92.5 91.9 91.1 93.6 92.3 88.7 Concentrate produced('000 tonnes) 186.5 202.6 208.8 274.3 872.1 842.6 Averageconcentrate grade(%) 39.6 36.5 32.9 30.7 34.5 39.9 Fine copper inconcentrate ('000 tonnes) 73.1 73.6 68.9 84.5 300.1 335.2 Payable copper inconcentrate ('000 tonnes) 70.7 71.1 66.6 81.6 289.9 324.2 Average moly oregrade (%) 0.033 0.030 0.027 0.030 0.030 0.028 Average molyrecovery (%) 66.7 75.6 78.7 76.8 74.2 76.1 Payable moly ('000 tonnes) 2.1 2.8 2.5 2.7 10.2 9.8 Cash costs statistics On-site andshipping costs(cents per pound) 64.7 82.0 77.3 80.6 76.3 56.4 Tolling chargesfor concentrates(cents per pound) 25.7 31.9 33.8 27.3 29.6 39.7 By - product credits(cents per pound)*(86.3) (135.2) (130.8) (115.4) (116.7) (79.7) Cash costs (cents per pound) 4.2 (21.3) (19.6) (7.5) (10.8) 16.4 (*) 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 Full Year Full Year 2007 2007 2007 2007 2007 2006 Daily average ore treated ('000 tonnes) 27.8 26.3 24.7 28.5 26.8 28.7 Average ore grade (%) 1.21 1.25 1.27 1.19 1.23 1.16 Average recovery (%) 77.4 77.3 79.4 77.0 77.8 78.1 Copper cathodes ('000 tonnes) 23.6 23.2 22.5 23.7 93.0 94.0 Cash costs (cents per pound) 87.4 106.5 116.9 128.6 109.8 78.6 Michilla Q1 Q2 Q3 Q4 Full Year Full Year 2007 2007 2007 2007 2007 2006 Daily average ore treated ('000 tonnes) 15.2 15.4 15.1 13.7 14.8 15.2 Average ore grade (%) 1.04 1.04 1.04 1.00 1.03 1.05 Average recovery (%) 81.2 78.3 78.3 78.5 79.1 78.2 Copper cathodes ('000 tonnes) 11.6 11.8 11.4 10.2 45.1 47.3 Cash costs (cents per pound) 123.1 141.4 148.8 163.4 143.5 126.4 Transport Q1 Q2 Q3 Q4 Full Year Full Year 2007 2007 2007 2007 2007 2006 Rail tonnage transported ('000 tons) 1,253 1,301 1,195 1,259 5,008 4,486 Road tonnage transported ('000 tons) 321 342 340 309 1,313 1,456 Water Q1 Q2 Q3 Q4 Full Year Full Year 2007 2007 2007 2007 2007 2006 Water volume sold-potable and untreated('000 m3) ** 10,069 9,740 9,679 10,369 39,858 37,798 (**) Note: Water volumes include water transportation of 300,000 m3 in Q1,266,000 m3 in Q2, 348,000 m3 in Q3 and 343,000 m3 in Q4 and total for 2007 of1,258,000 m3 (compared to 1,604,000 m3 in 2006). The Q4 2007 water volumes include 77,000 m3 of water supplied during the firstnine months of 2007 but not originally recorded within those periods. Enquiries - investor relations: Alejandro Rivera arivera@aminerals.cl Santiago: (56-2) 798 7145 Desmond O'Conor doconor@antofagasta.co.uk London: (44) 20 7808 0988 Hussein Barma London: (44) 20 7808 0988 hbarma@antofagasta.co.uk Enquiries - media: Keith Irons, Bankside Consultants London: (44) 20 7367 8873 keith@bankside.com Oliver Winters, Bankside Consultants London: (44) 20 7367 8874 oliver.winters@bankside.com This information is provided by RNS The company news service from the London Stock Exchange EN