Antofagasta Regulatory News (ANTO)

31 Jan 2007 10:00

Antofagasta PLC31 January 2007 31 January 2007 Antofagasta plc Quarterly Production Report - Q4 2006 Highlights • Group annual copper production for 2006 reached 465,500 tonnes (2005 - 467,300 tonnes), above the original forecast for the year of 441,500 tonnes. • Molybdenum production at Los Pelambres increased by 13% to 9,800 tonnes (2005 - 8,700 tonnes). • Group cash costs for 2006 increased by 26.3 cents per pound to 40.2 cents per pound. This was due to a combination of higher on-site costs as expected, increased tolling charges due to price participation, and reduced by-product credits from lower molybdenum prices. Group Total Q1 Q2 Q3 Q4 Full Year Full Year 2006 2006 2006 2006 2006 2005 Total production of payable 107.0 100.9 126.4 131.2 465.5 467.3copper ('000 tonnes)Total production of payable 2.0 2.1 2.9 2.8 9.8 8.7moly ('000 tonnes)Weighted average cash costs 49.7 43.9 31.4 38.0 40.2 13.9(cents per pound) Los Pelambres Production of payable copper at Los Pelambres was 93,800 tonnes in Q4, anincrease of 5.6% over the previous quarter. This was due to higher plantthroughput as the 140,000 tonnes per day expansion project continued to impactprocessing levels ahead of schedule, together with improved ore grades. Annualcopper production for 2006 was 324,200 tonnes, marginally ahead of 2005. Thiswas also above the original forecast for 2006 of 308,000 tonnes due to thebetter than expected grades and the early implementation of the plant expansion.Shipments in the year amounted to 324,800 tonnes. For 2007, production isexpected to be approximately 321,000 tonnes. Molybdenum production in Q4 was 2,800 tonnes, slightly below the previousquarter, but total production for 2006 reached 9,800 tonnes, an increase of 13%over the previous year, mainly due to higher molybdenum grades. Shipments in theyear were 9,900 tonnes. Molybdenum production is expected to be approximately11,000 tonnes in 2007. Cash costs in Q4 were 14.6 cents per pound compared with 5.7 cents per pound inQ3, mainly due to lower by-product credits. Cash costs for the 2006 full yearwere 16.4 cents per pound, compared with negative 17.1 cents per pound in 2005.The annual increase was due to a combination of lower by-product credits, highertolling charges and increased on-site and shipping costs. By-product creditsdecreased by 12.1 cents mainly due to lower molybdenum market prices, whichaveraged US$24.8 per pound in 2006 compared with US$32.0 per pound in 2005.Tolling charges were 12.1 cents higher mainly through price participation withsmelters as the LME copper price averaged 305.3 cents per pound in 2006 comparedwith 167.1 cents the previous year. On-site and shipping costs averaged 56.4cents per pound in 2006, in line with expectations but 9.3 cents per pound above2005 mainly as a result of cost pressures including oil, plant and machineryhire and freight. El Tesoro Cathode production at El Tesoro in Q4 was 25,600 tonnes, marginally below theprevious quarter. Production for the full year was 94,000 tonnes whichrepresented a 4.2% decrease from the previous year, as lower expected ore gradesand recoveries offset the increase in ore throughput following the plantexpansion carried out during 2005. Production was nevertheless ahead of theoriginal forecast for 2006 of 91,600 tonnes. For 2007, production is expected tobe approximately 89,000 tonnes. Cash costs were 79.1 cents per pound in Q4 and averaged 78.6 cents per pound inthe 2006 full year. Full year costs remained in line with forecast, butincreased compared with 66.1 cents in 2005. The expected increase resulted froma combination of input cost pressures (including exchange rates and inflation)and operational factors (including a higher waste-to-ore ratio, higher acidconsumption due to an increased level of carbonates and the effect of the lowerore grade on production). Michilla Michilla produced 11,900 tonnes of copper cathodes in Q4, marginally above theQ3 production level. Total production in 2006 was 47,300 tonnes. Thisrepresented an increase of 1.9% over the previous year, as a result of increasedthroughput and higher recoveries, partly offset by the lower ore grade.Production was also ahead of the original forecast for 2006 of 41,900 tonnes.Production is expected to be approximately 43,000 tonnes in 2007. Cash costs in Q4 were 133.9 cents per pound, an increase of 4.8% over theprevious quarter due to the higher volume of ore treated to compensate for lowergrades and recoveries. Cash costs for the full year were 126.4 cent per pound,marginally lower than forecast but 7.6 cents per pound higher than 2005. Theincrease was mainly due to the higher cost of processing third party materialsand, to a lesser extent, higher input costs. Transport The transport division had a successful year, with combined rail and roadtonnages reaching 1.6 million tons in Q4. Full year rail tonnages in 2006increased by 3.5% compared with the previous year due to increases in the secondhalf from various mines including the start-up of the Spence copper project. Water The water division continued to perform strongly, with Q4 water volumesincreasing to 9.9 million cubic metres, the highest of the year. The volume ofwater sold in 2006 increased by 14.3% over the previous year to 37.8 millioncubic metres, as a result both of higher domestic consumption and higher salesto industrial customers including Spence which started its operations during thesecond half of this year. Los Pelambres Q1 Q2 Q3 Q4 Full Year Full Year 2006 2006 2006 2006 2006 2005Production statistics Daily average ore treated 120.9 119.5 130.0 139.1 127.4 128.1('000 tonnes)Average ore grade 0.81 0.84 0.78 0.83 0.81 0.80(%)Average recovery 88.1 88.2 89.3 89.2 88.7 89.2(%)Concentrate produced 194.8 200.2 207.4 240.3 842.6 865.1('000 tonnes)Average concentrate grade 39.6 40.0 40.2 39.6 39.9 38.5(%)Fine copper in concentrate 76.6 69.8 91.8 97.0 335.2 333.8('000 tonnes)Payable copper in concentrate 74.1 67.5 88.8 93.8 324.2 322.8('000 tonnes) Average moly ore grade 0.026 0.027 0.028 0.029 0.028 0.022(%)Average moly recovery 74.4 76.0 77.8 75.8 76.1 79.9(%)Payable moly 2.0 2.1 2.9 2.8 9.8 8.7('000 tonnes) Cash costs statistics On-site and shipping costs 54.5 56.8 56.5 57.7 56.4 47.1(cents per pound)Tolling charges for 34.8 45.4 41.9 37.3 39.7 27.6concentrates (cents per pound) By - product credits (59.5) (83.7) (92.7) (80.4) (79.7) (91.8)(cents per pound) *Cash costs 29.8 18.5 5.7 14.6 16.4 (17.1)(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 Full Year Full Year 2006 2006 2006 2006 2006 2005 Daily average ore treated 29.7 28.6 27.9 28.7 28.7 27.2('000 tonnes)Average ore grade 0.99 1.18 1.25 1.21 1.16 1.23(%)Average recovery 77.9 73.9 80.4 80.0 78.1 80.2(%)Copper cathodes 20.8 21.8 25.9 25.6 94.0 98.1('000 tonnes)Cash costs 79.6 79.8 76.1 79.1 78.6 66.1(cents per pound) Michilla Q1 Q2 Q3 Q4 Full Year Full Year 2006 2006 2006 2006 2006 2005 Daily average ore treated 14.6 15.4 15.0 15.8 15.2 14.9('000 tonnes)Average ore grade 1.13 1.07 1.03 0.99 1.05 1.10(%)Average recovery 76.2 76.4 80.9 79.4 78.2 75.4(%)Copper cathodes 12.1 11.6 11.7 11.9 47.3 46.4('000 tonnes)Cash costs 120.2 123.9 127.8 133.9 126.4 118.8(cents per pound) Transport Q1 Q2 Q3 Q4 Full Year Full Year 2006 2006 2006 2006 2006 2005 Rail tonnage transported 1,122 1,011 1,104 1,249 4,486 4,336('000 tons)Road tonnage transported 383 367 361 345 1,456 1,522('000 tons) Water Q1 Q2 Q3 Q4 Full Year Full Year 2006 2006 2006 2006 2006 2005 Water volume sold - potable 9,304 9,231 9,328 9,935 37,798 33,074and untreated ('000 m3)** (**) Note: Water volumes include water transportation of 270,000 m3 in Q1,740,000 m3 in Q2, 254,000 m3 in Q3, 340,000 m3 in Q4 and total for 2006 of1,604,000 m3 (compared to 1,047,000 m3 in 2005). For further enquiries: Alejandro Riveraarivera@aminerals.cl Santiago: (56-2) 377 5145 Desmond O'Conordoconor@antofagasta.co.uk London: (44) 20 7808 0988 Hussein Barma London: (44) 20 7808 0988hbarma@antofagasta.co.uk Issued by: Keith Irons, Bankside Consultants London: (44) 20 7367 8873keith@bankside.com Oliver Winters, Bankside Consultants London: (44) 20 7367 8874oliver.winters@bankside.com This information is provided by RNS The company news service from the London Stock Exchange