PERTH (miningweekly.com) – Australian copper and gold miner Oz Minerals suffered a 53% profit drop, as litigation and impairment charges weighed down its 2011 financial performance.

After-tax profit declined to A$274.5-million, from the A$586.9-million reported in 2010, owing to an impairment reversal recorded in 2010, as well as a litigation settlement expenditure and an impairment of the company’s investment in fellow listed Toro Energy.

Underlying profit of $322.7-million was 75.5%, or 19%, lower than 2010, which the miner said reflected higher recognition of restricted tax losses in the prior year.

During the year under review, Oz Minerals recorded record prices for its commodities, which contributed to revenue of some A$1.1-billion, operating cash flows of A$647.1-million, and a cash balance of A$886.1-million at the end of the year.

“Despite the uncertainty in the broader economy in 2011, which persists into 2012, the prices for our commodities have remained buoyant,” said Oz Minerals chairperson Neil Hamilton.

“This is demonstrative of the strong demand for copper and the continuing constraints on supply, a scenario we anticipate continuing. With our strong operational performance at Prominent Hill and its good margins, we are able to enjoy the strength of the market and at the same time be prepared for volatility,” he added.

At its Prominent Hill operation, in South Australia, Oz Minerals produced 107 744 t of copper and 160 007 oz of gold during the year under review.

“Prominent Hill continues to demonstrate that it is a high-quality, globally competitive copper operation, and we have seen strong revenues and cash flows result,” said Oz Minerals MD and CEO Terry Burgess.

“We continue to believe we are in the right commodities in copper and gold, and remain committed to discovering more resources through exploration, where we think we can add significant value, and to indentifying more advanced opportunities, in addition to the acquisition of Carrapateena in 2011.”

Oz Minerals acquired the Carrapateena copper project, in South Australia, for some A$253.1-million, with an additional A$50-million payable on first commercial production of either copper, uranium, gold or silver.

The project was currently at an advanced exploration stage, but had the potential to produce at similar levels to the Prominent Hill operation for between 15 years to 20 years. Scoping studies for mining options, mining infrastructure, site power and water supply are currently under way.

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