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(Kitco News) - Chile-focused miner Antofagasta (LSE: ANTO), one of the world's senior copper producers, announced on Wednesday that its Q1 2023 copper production of 145,900 tonnes was in line with guidance, 5.1% higher than in the same quarter in 2022 and 25.4% lower than in Q4 2022.
The company said that the decrease from the previous quarter reflects the expected temporary reduction in throughput at Los Pelambres on lower water availability, and expected lower grades and scheduled maintenance at Centinela. Production is expected to increase through the rest of the year.
The company’s gold production was 42,200 ounces in Q1 2023, 9.9% higher than in the same period in 2022 due to higher grades and 24.8% lower than in Q4 2022, mainly due the scheduled maintenance and expected lower grades at Centinela.
Molybdenum production in the quarter was 2,500 tonnes, 500 tonnes higher than in the same period in 2022 on higher grades at Los Pelambres and Centinela and 19.4% lower than in Q4 2022 mainly due to lower throughput at Los Pelambres.
Antofagasta added that cash costs before by-product credits in Q1 2023 were $2.49/lb, 6.4% higher than in the same quarter in 2022 due to general inflation and higher input prices during the period, particularly for energy and sulphuric acid. Compared to the previous quarter, cash costs increased by 24.5% on lower copper production and the stronger Chilean peso.
Net cash costs in Q1 2023 were $1.54/lb, 21c/lb lower than in Q1 2022 mainly due to higher by-products credits. Compared to Q4 2022, net cash costs were 27c/lb higher reflecting the higher cash costs before by-products credits, partly offset by higher realized by-product prices.
Group production in 2023 is expected to be 670-710,000 tonnes of copper (increasing through the year), 220-240,000 ounces of gold and 10-11,500 tonnes of molybdenum. Cash cost guidance before and after by-product credits is also unchanged at $2.20/lb and $1.65/lb respectively.
CEO Iván Arriagada commented, “Antofagasta´s production and cost performance in the first quarter was as expected with copper production at 145,900 tonnes and net cash costs at $1.54/lb with production affected by reduced water availability at Los Pelambres and lower grades at Centinela. With the completion of the desalination plant and the concentrator plant expansion at Los Pelambres production will increase during the year to meet production and cash cost guidance of 670-710,000 tonnes of copper at $1.65/lb.
“Controlling our costs in this inflationary environment and mitigating the impact of a stronger Chilean peso continue to be our focus, together with the safety and health of our employees and contractors.”
According to a press release, the copper market has been “strong” throughout the quarter, and the company expects this to continue as “structural supply and demand dynamics support a tight physical market.”
Antofagasta operates four mines in Chile: Los Pelambres, Centinela, Antucoya and Zaldívar. All of the company's mines are open pit operations.
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