OZ Minerals lifts its gold output guidance
OZ Minerals’s gold guidance lift comes as prices remain high, while copper is also expected to add to a strong finish for the year.
OZ Minerals has lifted its gold output guidance as the price of the precious metal stays high, with the company poised for a strong finish for the year as copper prices also lift.
And the company said its new Carrapateena mine was tracking ahead of expectations, with the company expecting the deep underground operation to reach a steady state of production by the end of the year.
The Australian copper miner released its September quarter production report on Thursday, adding an extra 10,000 to 15,000 ounces to the expected gold output from its Prominent Hill mine in South Australia as the company takes advantage of elevated copper prices.
Gold is still hovering just above $2700 an ounce, in Australian dollar terms, and copper prices lifted above $US7000 a tonne on the London Metals Exchange, hitting two year highs in Wednesday trading.
OZ Minerals lifted gold production from Prominent Hill on steadily rising prices this year, processing gold-rich stockpiles at the mine to take advantage of the price and to run down gold hedging contracts.
The company lifted 2020 group gold output guidance to 242,000 to 259,000 ounces on Thursday, from 227,000 to 249,000 previously. Expected group copper output remained unchanged at 88,000 to 105,000 tonnes.
OZ Minerals said its operations in Australia and Brazil produced 23,873 tonnes of copper in the September period, down slightly from the 24,577 tonnes in the June period. With gold production of 66,746oz also down slightly from the previous quarter.
“The third quarter saw a solid production performance from our assets and progress milestones achieved on our growth projects. Annual gold production guidance has been increased as a result of continued strong grade performance and recoveries at Prominent Hill and annual cost guidance has been further reduced on the back of continuing strong gold prices and maintained cost performance,” said OZ Minerals Managing director Andrew Cole in a statement to the market.
“The ramp up at Carrapateena has continued to deliver to revised ramp-up targets with underground ore movement exceeding 4.25Mtpa rate for 22 days during the quarter providing further confidence in achieving steady state operations by the end of the year, some six months earlier than originally anticipated.”
Carrapateena produced 7,063 tonnes of copper in the September quarter, down from 7,170 in the June period, along with 13,760 ounces of gold.
OZ Minerals finished September with net cash of $18m, up from $15m at the end of June, after the company paid a deferred $69m milestone payment to the vendors of the project along with an 8c a share half-year dividend.
Shares in the company closed at $15.17 on Wednesday.