Mining firm Antofagasta Holdings (LON:ANTO) have announced a downgrade in their full-year output guidance for copper, following an on-year production and grade dip in copper and gold.
Despite a 15.4% quarterly jump in copper production and a 21.2% jump for gold from the second to third quarter, and predictions of “particularly strong” production in the final quarter for copper, the firm have downgraded their full year guidance following a 4% dip in copper production in the first nine months, and a dip of 30.1% for gold.
While much of this year’s bad news has come as a result of lower grades of gold at their Centinela site, the same site has been responsible for a boom in molybdenum, as it began production of the mineral during the last quarter. Similarly, higher grades and recoveries at the Los Pelambres site helped the firm’s molydenum output to spike 57.1% – to 4,400 tonnes – in Q3.
The firm’s production cost for molybdenum dropped 15.3%, to $1.27 a pound, between the second and third quarters. As a result, the firm are expected to finish well within their $1 billion expenditure forecast for the year.
While pointing out that it expected to share the fortune of its competitors, with an improved year for copper in 2019, Antofagasta have stated on its latest results,
“As expected, copper production increased 15% quarter-on-quarter, reaching 188,300 tonnes in Q3. Production volumes will continue to grow, with the fourth quarter expected to be particularly strong,’ said CEO Iván Arriagada.
“While we benefited from higher production in the quarter, our disciplined approach to costs has allowed us to combat inflationary pressures during the year which, combined with the strong molybdenum market, has contributed to a 15% fall in our net cash costs to $1.27/lb and for the full year guidance remains unchanged at $1.35/lb.”
The company’s share price has dipped 3.2p or 0.42% to 753.4p. Analysts from RBC Capital Markets have upgraded their stance on Antofagasta stock to ‘Outperform’, while UBS analysts were unchanged in their ‘Sell’ stance, stating that the firm offer inferior dividends to its peers.