PRODUCTION GUIDANCE UPDATED. NET CASH COST GUIDANCE UNCHANGED
The desalination plant at Los Pelambres is now producing desalinated water, with commissioning work ongoing. Certain critical construction activities were rescheduled during the quarter, primarily as a result of sea swells that extended the execution of the final phase of marine works, and these are now substantially completed. At the Los Pelambres concentrator expansion, construction work has required additional time and full commissioning is expected to commence in early Q3. With both projects now moving into commissioning, completion for this phase of growth is expected to be achieved in the second half of 2023. However, this additional time in combination with the lack of rainfall at Los Pelambres has impacted production and guidance for the full year has been updated to 640-670,000 tonnes.
Looking ahead, we see resilience in the demand for copper as the global decarbonisation journey continues, with copper essential for the transition, and this underpins our ambition to grow our business to 900,000 tonnes of annual copper production" HIGHLIGHTS PRODUCTION
*Copper production in Q2 2023 of 149,600 tonnes, 2.5% higher quarter-on-quarter (Q1 2023: 145,900 tonnes), primarily due to improving plant throughput at Los Pelambres.
*Copper production in H1 2023 of 295,500 tonnes, 10.0% higher year-on-year (H1 2022: 268,600 tonnes), principally reflecting a 23.9% increase in throughput rates at Los Pelambres.
*Gold production in Q2 2023 was 44,000 ounces, 4.3% ahead of the prior quarter (Q1 2023: 42,200 ounces) due to higher grades and recoveries at Centinela. For the first six months of the year, gold production increased by 16.8% to 86,200 ounces (H1 2022: 73,800 ounces).
*Molybdenum production in Q2 2023 was 2,400 tonnes, 4% lower than the prior quarter (Q1 2023: 2,500 tonnes), due to lower contributing production from both Los Pelambres and Centinela. For the year to date, production was 4,900 tonnes, 22.5% higher than in the same period last year (H1 2022: 4,000 tonnes) mainly due to higher throughput at Los Pelambres.
CASH COSTS
*Cash costs before by-product credits in Q2 2023 were
*By-products credits in Q2 2023 were 51c/lb, compared to95c/lb in Q1 2023, reflecting lower realised prices, particularly for molybdenum. However, by-product credits year to date of 73c/lb were 18c/lb higher than the comparable period last year due to higher realised prices for both gold and molybdenum.
*Net cash costs in Q2 2023 were
GROWTH PROJECTS UPDATE
*The desalination plant for Los Pelambres is nearing the end of its commission phase, with marine works substantially completed during Q2 2023, having previously been delayed due to sea swells. The plant achieved an average production ramp-up of 160 litres per second of desalinated water in
*At the concentrator expansion project at Los Pelambres, pre-operational testing work was initiated during Q2 2023, alongside the commissioning of some ancillary sections of the project and the connection of the main facilities to the national grid. The commissioning phase of this growth project is expected to be completed in H2 2023.
*An updated study into the development of the Centinela Second Concentrator project is expected to be submitted to the
2023 GUIDANCE
*The delay to the completion of the desalination plant and concentrator expansion, and the reduced availability of water in H1 2023, has impacted expected copper production for the full year. Guidance is therefore updated to 640-670,000 tonnes (previously 670-710,000 tonnes), with output increasing quarter-on-quarter in H2 2023.
*The impact of the updated production guidance is partly offset by strong cost control across the Company's operations and, full year cash costs before by-product credits are now expected to be
*Guidance for cash costs after by-products remains unchanged at
*Capital expenditure guidance is also unchanged at
SAFETY AND SUSTAINABILITY
*There were no fatalities in H1 2023 (FY 2022: zero), and safety indicators remain strong, with a year-to-date lost time injury frequency rate ("LTIFR") of 0.58 (FY 2022: 0.84).
*Currently, Zaldívar is permitted to extract water and mine until 2025 and 2024 respectively. To ensure the continuity of this operation, in
*With the continuing drought in central
LEGISLATIVE
*In
*The process to approve a new constitution in
OTHER
*Following confirmation by the Australian Tax Office that the proceeds from the sale of the Group's interest in Reko Diq (amounting to
*The half-year effective tax rate is expected to be approximately 30%, partially reflecting a one-off adjustment of the provision for deferred withholding tax
GROUP PRODUCTION AND CASH COSTSYear to DateQ2Q1 20232022%20232023% Copper production kt 295.5 268.6 10.0 149.6 145.9 2.5 Copper sales kt 295.4 263.0 12.3 146.4 149.0 (1.7) Gold production koz 86.2 73.8 16.8 44.0 42.2 4.3 Molybdenum production kt 4.9 4.0 22.5 2.4 2.5 (4.0) Cash costs before by-product credits (1) $/lb 2.48 2.37 4.6 2.47 2.49 (0.8) Net cash costs (1) $/lb 1.75 1.82 (3.8) 1.96 1.54 27.3
(1) Cash cost is a non-GAAP measure used by the mining industry to express the cost of production in US dollars per pound of copper produced.
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