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OZ Minerals Announces Solid Operating Results for March Quarter

OZ Minerals Announces Solid Operating Results for March Quarter
Shipments of Prominent Hill totalled 23,260 tonnes of copper, 23,027 ounces of gold and 156,579 ounces of silver during the quarter.
Apr 21, 2016 By Kaivalya Kandarpa Tags: OZL

OZ Minerals Limited (ASX:OZL) announced strong operational results for the quarter ended 31 March 2016. Management remains confident that the company is on track to achieve its 2016 guidance of producing 125k to 135k ounces of gold and 115k to 125k tonnes of copper.

Prominent Hill Delivers Strong Results

Total ore extracted from Prominent Hill increased by 14% compared to the previous quarter. Copper production of 31,018 tonnes was in-line with the production guidance. However, gold production of 27,563 failed to meet the targeted level due to a planned plant shutdown, resulting in reduced gold grade in the mill feed.

Shipments of Prominent Hill totalled 23,260 tonnes of copper, 23,027 ounces of gold and 156,579 ounces of silver during the quarter.

Managing Director and CEO of OZ Minerals, Mr. Andrew Cole stated that the quarterly results provided strong impetus for the miner to meet its full year expectations: “Prominent Hill delivered a strong start to the year. These results give us confidence that we will meet or exceed guidance for 2016. The demobilisation of an excavator and associated equipment from the open pit was completed as planned in March, which will see cash costs further reduce through 2016. Additionally, the strip ratio was at 1.3:1 for the quarter and will continue to decline.”

Carrapateena Project Progresses to PFS

During the March quarter, OZ Minerals announced the results of a scoping study on its Carrapateena project. This study estimated a project cost of $770 million after including Hydromet and other study costs. Financial metrics of the study reflected an NPV of over $600 million, along with IRR over 20% and average annual cash flows of $150 million over a 21-year mine life.

Carrapateena’s Pre-Feasibility Study (PFS) along with final scope of project scale is set to be announced in May.

Cash Balance Increased to $533 Million

C1 cash costs of production were US75.3 cents/lb, within the full year guidance range of US70-80 cents/lb. The cash balance increased by $315 million to $533 million during the March quarter as the company remains debt free.

The miner realised $20 million in annualised savings, due to continued focus on supplier contract negotiations and internal productivity.  

OZL has risen 2.3% since the announcement and was last traded at $5.70 as at 10:20am (AEST).

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Kaivalya Kandarpa Author: Kaivalya Kandarpa Apr 21, 2016

Kaivalya is an equity analyst and a client advisor at Wise-owl. She specialises in fundamental and technical analysis for large and mid-cap companies. Having completed her bachelor's degree in Business Administration majoring in Finance, Kaivalya has a comprehensive understanding of international stock market movements. She tracks local and overseas markets and compiles analytical reports for various industries.

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