Oz Minerals has outlined a half-year profit of AU $43.9 million in the lead up to first concentrate production from its Carrapateena mine in South Australia.
The Adelaide-based copper-gold miner’s half-year result was well down on last year’s H1 net profit after tax of $127.8 million. This followed a fall in revenue from $530.3 in the first half of 2018 to $419.2 million this year and a 3 per cent fall in the copper price.
In a statement today, Oz Minerals Chief Executive, Andrew Cole, explained that profit was impacted by lower revenue given shipment timing aligned to first-half market dynamics and additional growth investment.
“Pleasingly, we have already seen revenue rebound strongly in the second half and all 2019 production tonnes are committed,” he said.
Oz Minerals operates the Prominent Hill copper-gold-silver mine in northern South Australia and the Antas copper-gold mine in northern Brazil. The Carrapateena copper-gold project, also in northern South Australia, is expected to commence concentrate production in November ahead of an 18-month ramp-up to full production.
Mr Cole said their cash balance combined with a solid operating performance from Prominent Hill enabled them to implement a growth strategy and transition to multiple operations whilst consistently rewarding shareholders.
“Significant progress was made at Carrapateena with above-ground construction nearing completion and over 100,000 tonnes of development ore stockpile,” he added.
“The project is expected to deliver first saleable concentrate in November for a capital cost of A$920-950 million, with 2019 Growth Capital Expenditure of A$540-570 million continuing to track to guidance.”
Last month, the company completed a review of its Brazilian assets, including updated Mineral Resource and Ore Reserve statements, with a low risk, modest capital processing hub strategy developed to realise value in the Carajás and Gurupi provinces.
Oz Minerals’ pre-feasibility study of its West Musgrave copper-nickel project in central Australia reportedly progressed, with a number of work packages completed and further value-add opportunities identified for assessment over the next six months. The study is expected to be completed with a maiden Ore Reserve in early 2020.
“Exploration is an important element of our growth strategy and our pipeline grew with earn-in agreements established in the Carrapateena province and Sweden, as well as a dedicated joint venture established to progress the Jericho project in Queensland,” Mr Cole said.
Moreover, consistent with Oz Minerals’ capital management strategy, cash resources have been applied to the development of Carrapateena and capital requirements at Prominent Hill.
“We allocate capital carefully to our growth pipeline and see opportunities for bespoke funding approaches, together with operating cashflows, and are comfortable taking on a level of debt when it makes sense to do so within our stated risk profile,” he concluded.