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Oz Minerals profit sinks on class action settlement, output lower
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16th August 2011
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PERTH (miningweekly.com) − Copper miner Oz Minerals on Tuesday reported a significant decrease in its half-year profit, owing to accounting changes and the impact of a class action settlement.

Net profit after tax fell to A$113.9-million during the first half ended June 30, compared with the A$405-million reported in the first six months of 2010.

The ASX-listed miner paid A$60-million to settle two class actions in May. Shareholders claimed that they had lost millions of dollars in 2008, after the share price collapsed when debt problems were revealed to the market.

The profit drop was also attributed a net change in impairment of A$125.9-million, the movement from foreign exchange gain of A$40.8-million in 2010 to a loss of A$32.7-million in 2011, and the impairment of A$15.2-million on the investment in fellow listed Toro Energy.

Chairperson Neil Hamilton said on Tuesday that financial and commodity markets remained volatile during the period, adding that while no company was immune to this financial volatility, Oz Minerals was in a strong financial position.

MD and CEO Terry Burgess said that during the first half of the year, Oz Minerals was able to capitalise on a period of strong commodity prices through “sound operations” at its Prominent Hill mine, in South Australia, and its strong cash flows, which had helped to facilitate the Carrapateena project.

“We see the company in a growth phase. We are continuing to invest significantly in exploration around Prominent Hill, are starting an exploration and development programme to bring the Carrapateena project into production, and continue to actively seek new value-adding opportunities in copper,” said Burgess.

Oz Minerals reported lower copper and gold production in the first half of the year, with copper output falling 10.6% to 53 725 t, while gold production slipped 5.2% to 86 129 oz. Silver production reached 276 501 oz.

Despite the weaker production performance, Oz said that its operations were on schedule to meet the yearly production guidance of between 100 000 t and 110 000 t of copper.

Burgess said that the focus for Oz Minerals remained on maximizing copper production levels, as revenue generated from the treatment of copper ore was around four times that generated from the treatment of gold ore, at current commodity prices, and as such, the treatment of copper was given priority in the mill.
 

Edited by: Mariaan Webb

 

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Picture by: Bloomberg