Highlights
Copper production up 8.4% to 364,100 tonnes and gold production increased 19.7% to 162,900 ounces, mainly due to higher plant throughput at Esperanza.
Revenue 12.1% lower, at US$2,777.4 million, following the average LME market price of copper falling by 6.8% and realised copper prices falling by 15.5% as prices trended downwards during the period.
Group cash costs (before by-product credits) were US$1.76/lb, 9.3% higher than the previous half primarily due to expected higher energy costs at Los Pelambres.
Group net cash costs were US$1.26/lb, up 27.3% additionally reflecting lower molybdenum volumes and lower molybdenum and gold prices.
EBITDA fell 31.2% to US$1,275.5 million, with increased production offset by the decrease in realised copper prices and the increase in net cash costs mainly due to higher pre-credit costs and lower by-product credits.
EBITDA margin remains strong at 45.9%, though down on H1 2012 margin of 58.6%.
Group remains on track to achieve full year production target of 700,000 tonnes of copper.
Strong operating cash flow generation of US$1,373.5 million in the period, despite reduced margins.
Interim ordinary dividend of 8.9 cents per share, representing a 4.7% increase on 2012, payable on 10 October 2013.
Projects Update
Optimisation of Esperanza on track with average throughput of 86,700 tonnes per day achieved and expected to reach 105,000 tonnes per day in 2015. Esperanza has also recently satisfied the completion test under the project financing agreements and the debt is now non-recourse to the Company.
Acquisition of 40% interest in the Alto Maipo hydroelectric project in July, which will provide power to Los Pelambres at competitive prices.
Antucoya project progressing on schedule and completion of approximately US$650 million project financing expected by the end of the year.
Various development options being considered for the Centinela Mining District, with a feasibility study focused on the expansion of Esperanza and the development of Encuentro Oxides due to be completed next year.
Pre-feasibility study for the phased expansion of Los Pelambres nearing completion.
Twin Metals pre-feasibility study progressing well. Expected to be completed in 2014.
Diego Hernandez, Chief Executive Officer of Antofagasta Minerals S.A. commented:
"Antofagasta has delivered a good start to 2013 with stronger production levels than during the same period last year and we remain on track to meet full year guidance of 700,000 copper tonnes. Market conditions remain challenging with lower prices and higher costs impacting our revenues and profitability. However, cash generation by the business was strong and the interim dividend has been increased by 4.7% to 8.9 cents.
"We will continue to concentrate on controlling unit costs in a rising cost environment while also seeking to optimise production from our existing operations.
"We have made encouraging progress in the period set against our strategy to drive future growth. Our focus remains on the brownfield opportunities we have around our existing mines. At Esperanza our work to increase production by installing additional crushing capacity is progressing well with throughput now expected to be above previous estimates from 2015 at 105,000 tonnes per day. At Los Pelambres a pre-feasibility study is underway to expand throughput to 205,000 tonnes per day and our recent Alto Maipo transaction will provide a new source of energy for the mine. In the Centinela Mining District the Environmental Impact Assessment was approved for the Encuentro Oxides project to maintain El Tesoro's annual output at 100,000 tonnes, which would otherwise have declined over time due to lower grades.
"With new copper supply coming online during the remainder of this year and demand growth largely dependent on the economies of China and the United States, the pricing environment for copper is expected to remain challenging. Against this backdrop we remain focused on cost control, advancing our current projects and maintaining a strong balance sheet while being alert to opportunities that may arise."
