Record copper production of just under 710,000 tonnes, ahead of the original forecast for the year and 11% higher than 2011, mainly reflecting the further increase in production at Esperanza. Gold and molybdenum production were also at record levels.
· Significant production growth at Esperanza, reflecting the on-going optimisation of the operation. Plant throughput levels reached over 89,000 tonnes per day in Q4 2012, compared with 70,000 tonnes per day in the first quarter of the year. Work is continuing to achieve the original design capacity of 97,000 tonnes per day.
· Record revenues, up 10.9% year on year to US$6,740.1 million despite lower market commodity prices, as a result of the increased production volumes. EBITDA increased to US$3,829.3 million, a 4.6% increase on the $3,660.5 million generated in 2011.
· Significant final dividend, including special dividend, of 90 cents per share. This results in a total dividend for the year of 98.5 cents per share, more than double the 2011 level, and reflecting a payout ratio of 70% of net earnings (before exceptional items). The total dividend comprises a special dividend of 77.5 cents per share and ordinary dividend of 21.0 cents per share (final - 12.5 cents, interim - 8.5 cents). The combined interim and final dividend equates to a total distribution to shareholders of US$971.1 million. The 2012 dividend represents a one-off distribution, reflecting a periodic review of the Group's balance sheet position performed this year. Future distributions are considered by the Board on a year-by-year basis, but at present the Board anticipates a return to a 35% payout level from 2013 onwards.
· Balance sheet position remains strong. The Group had cash (including liquid investments) of US$4.3 billion and net cash of US$2.4 billion at 31 December 2012. This has enabled us to continue with our track record of significant capital returns to our shareholders, while maintaining a robust balance sheet to support our growth opportunities.
· Review of the Antucoya project continues. A decision as to whether to resume development of the project will be taken when the review is complete. Given the inherent uncertainties while a review such as this is being undertaken, the Group has performed what it considers to be a conservative assessment of the project's assets and accordingly has recognised an impairment of US$500 million in respect of those assets, of which the Group's attributable share based on its 70% economic interest in the project is US$350 million.
· Continued progress with evaluation of organic growth pipeline in Chile. The Esperanza Sur deposit could enhance the existing Esperanza mine plan, as well as having the potential to support an incremental expansion of the Esperanza plant. There is also potential for a further incremental plant expansion at Los Pelambres. The Encuentro oxides deposit provides the opportunity to continue to maximise the use of the existing SX-EW plant at El Tesoro. There is therefore potential for incremental expansions to generate additional production. In the
longer-term, there are several very large scale growth opportunities, including potential for stand-alone plants at the Esperanza Sur and Encuentro sulphides deposits, and major expansion of Los Pelambres.
· Twin Metals project pre-feasibility study continues to progress well, with completion of a geological model and a mineral resource estimate for this large, poly-metallic deposit.
Diego Hernandez, CEO of Antofagasta Minerals, commented:
"2012 was an important year for the Group, in which we consolidated the performance of our existing operations, and strengthened our organisation for the future opportunities we face.
The Group produced just under 710,000 tonnes of copper, which was ahead of our original forecast for the year of approximately 700,000 tonnes. This level of production was a record for the Group, and 10% higher than 2011, mainly reflecting the further increase in production at Esperanza. We also produced record amounts of gold and molybdenum. This translated into another strong financial performance, with earnings per share (before exceptional items) of 140.2 cents, compared with 139.7 cents in the prior year. After taking account of exceptional items, underlying earnings per share was 104.7 cents (2011 - 125.4 cents).
I have now been with Antofagasta for just over seven months, and during that time I have been able to get a clear view of the Group's key strengths and opportunities. Firstly the quality of the Group's existing assets and its people provides an extremely strong base for our future development. Secondly, we have very significant and high quality growth opportunities - both in terms of optimising and expanding our existing operations, and also our potential for further green field development.
My first few months with the Group have also confirmed my initial view that many of my own areas of focus correspond closely with the Group's existing strengths and culture. For example - a concentration on day to day operational excellence as the bedrock which underpins everything else we want to achieve; and a focus on efficiency and value in everything we do.
I am looking forward to playing a part in the next stage of the Group's development, and I am sure that the next few years will be an exciting and significant period for the Group."
