PERTH (miningweekly.com) – ASX- and TSX-listed copper producer Equinox Minerals on Friday reported that its second-quarter production had increased by 44%, compared with the first quarter, and by 80% compared with the previous corresponding period.

The company, which owns the Lumwana mine, increased its copper in concentrate production to 43 835 t in the quarter, as production performance at the Zambia mine continued to improve.

Production for the first half of the financial year was 74 306 t.

Equinox reported an 11% increase in operating profit to $91,9-million and posted an after tax profit of $73,4-million in the June quarter. It achieved its lowest quarterly operating cost to date, at $1,19/lb.

The company reported that mine and process plant operations continued to ramp up at Lumwana, with the mine achieving design throughput during the second quarter. The process plant would achieve design throughput in the second half of the year.

The mine was expected to produce 135 000 t of copper metal in concentrate for the full 2010 year, with costs averaging at $1,35/lb.

The Lumwana processing plant has a capacity to process 20-million tons a year, and Equinox said that it believes that it could be increased to 45-million tons a year, over 18 months.

However, the company noted that, given the very large resource and long mine life of the Lumwana operation, there was a potential to increase mine output further to 35-million tons a year.

Such an increase would require an expansion of the processing plant, and possibly the mining fleet.

Equinox said on Friday that it had started a two-phase feasibility study to investigate the expansion to 35-million tons a year in the quarter under review, with results expected before the end of March next year.

MARKET OUTLOOK

Meanwhile, Equinox reported that copper prices had experienced volatility during the second quarter of the year, with an average price of around $3,18/lb, which was 8,2% lower than the first quarter average.

This volatility reflected the uncertainty about the impacts of sovereign debt risk on the European Union, and the strength of the recovery in the US and China.

However, Equinox noted that copper prices were supported by confidence in the outlook for the medium- to long-term copper market.

Equinox reported that physical copper stockpiles monitored by the London Metals Exchange and the Sydney Futures Exchange continued to decline through out the second quarter, indicating that the market for copper remains tight.

Despite the short-term volatility in global markets, demand for copper from China and, to a lesser extent, Europe and the US, was expected to continue to support the positive outlook for copper markets over the medium to long term.

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