Prioritising gold production has given Adelaide miner OZ Minerals a boost
Bringing forward the processing of gold-rich ore has delivered a rich vein of revenue for copper and gold miner OZ Minerals.
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OZ Minerals shares have hit highs not seen in more than nine years, and have added more than 140 per cent since March, on the back of another strong set of profits.
The Adelaide-based multi-asset copper and gold miner said prioritising the processing of gold-rich ore stockpiles from the Prominent Hill mine in South Australia helped it book a net profit of $79.8m for the six months to the end of June, up 82 per cent from $43.9m in the first half of 2019.
Managing director Andrew Cole said Prominent Hill was now one of the lowest-cost copper producers in the world, with the gold credits a big factor, as well as a ramp up in the underground mining rate to an annualised level of 4.5 million tonnes per year recently, up from just two million tonnes about two years ago.
A study into further increasing this to six million tonnes per year was progressing well, OZ Minerals said, and an update on the expansion plan was expected late this year.
The Carrapateena mine, also in SA, had a “strong start’’ the company said, and would achieve rates of 4.25 million tonnes per year of ore by the end of the year, “which will further strengthen cash flows’’.
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“It’s been a real success story the construction and start-up of Carrapateena,’’ Mr Cole said.
“It’s on track, we’ve had several shipments go to customers and the plant’s going well, despite the really challenging environment that people are working in.’’
Mr Cole said the company had seen gains in productivity and morale from the COVID-necessitated shift to remote working, which also had benefits from a cost perspective.
“We’ve absolutely made flexible and remote working part of the way we work, and that’s permanent, and the vast majority of people love it.
“I don’t look at this as a cost initiative, I look at this from a mental health and a company productivity perspective.’’
The company lifted its output guidance when delivering its June quarter production report last month, saying it now expects to produce 88,000-105,000 tonnes of copper this year, up about 5 per cent from prior guidance. It also expects to produce 227,000-249,000 ounces of gold, up from 207,000-234,000.
OZ will pay an 8c per share fully-franked final dividend and has reinstated its dividend reinvestment plan.
The company’s shares closed at $14.65, up from a low of $5.99 in March and the best level since early 2011.
