PERTH (miningweekly.com) - Production at ASX-listed Oz Minerals’ Prominent Hill operation, in South Australia, dropped slightly during the three months to December, causing the miner to report a full-year production at the lower end of the guidance.

During the December quarter, the Prominent Hill operation delivered 23 296 t of copper and 32 273 oz of gold, compared with the 25 738 t of copper and 35 111 oz of gold delivered in the previous three months.

Full-year production reached 101 737 t of copper and 140 746 oz of gold, which was at the lower end of the 100 000 t to 110 000 t of copper and 130 000 oz to 150 000 oz of gold guidance for the year.

The lower copper production was primarily the result of the lower mined grade from the openpit and the Ankata underground mine, the company said on Thursday, adding that it expected the trend to continue into the first half of 2013.

However, during 2013, Oz Minerals would significant invest in future production capacity at the Malu openpit operation, with some 90-million tons expected to be mined in waste and ore during 2013, primarily from Stage 3 of the pit.

Thereafter, this rate of waste mining would decline significantly.

MD and CEO Terry Burgess said that during the quarter under review, development of Phase 1 of the Malu underground mine was completed, with further resource delineation drilling now being undertaken beneath the Malu openpit.

The drill programme would be accelerated during 2013, with the objective to produce first stoping ore from the Malu underground mine by 2014.

The expected development costs, including resource delineation drilling, were expected to be around $60-million to $70-million during 2013, and Burgess noted that as this expenditure was directly related to the development of the Malu underground operation, these costs would be capitalized to the balance sheet.

Looking ahead to the full year, Oz Minerals said that it expected to produce between 90 000 t and 95 000 t of copper, and between 130 000 oz and 150 000 oz of gold.