Oz Minerals sees earnings fall
PERTH (miningweekly.com) – Copper and gold miner Oz Minerals has reported a 127.4% fall in underlying earnings before interest, tax, depreciation and amortization (Ebitda) for the first half ending June, while net profits after tax declined by 83.9%, compared with the previous corresponding period.
Oz on Wednesday told shareholders that the interim results were affected by shipments being moved to the third quarter of the year, to accommodate customer preference, resulting in net revenue declining by 111.1% to A$419.2-million.
Underlying Ebitda decreased from the A$289.9-million in the first half of 2018 to A$162.5-million, while net profits after tax declined from A$127.8-million to A$43.9-million in the same period.
Oz Minerals CEO Andrew Cole noted the financial results were also impacted by additional growth investment.
“Our cash balance combined with a solid operating performance from Prominent Hill has allowed us to implement our growth strategy and transition to multiple operations while consistently rewarding shareholders.
“With strong ongoing cash generation expected and materially higher sales scheduled in the second half of the year, the board has declared a fully franked interim dividend of 8c a share.”
Cole noted that significant progress was made at the Carrapateena project, with the above ground construction nearing completion and over 100 000 t of development ore stockpiled.
“The project is expected to deliver first saleable concentrate in November for a capital cost of A$920-million to A$950-million, with 2019 growth capital expenditure of A$540-million to A$570-million continuing to track to guidance.”
Oz Minerals also completed a review of its Brazilian assets during the last month, with a low risk, modest capital processing hub strategy developed to realise value in the Carajas and Gurupi provinces.
Furthermore, a prefeasibility study (PFS) on the West Musgrave project also advanced with a number of work packages completed and further value-add opportunities identified for assessment over the next six months.
The PFS is assessing a ten-million tonne a year scenario, and is aimed at increasing the mine life from the initial eight years to 15 years.
The PFS is targeted for completion in early 2020, with an updated mineral resource and maiden ore reserve also expected during that time.
Looking ahead, Cole noted that the outlook for revenue was positive, with 2019 production tonnes committed for the remainder of the year, and smelter demand rebounding strongly in the second half.
Copper production for the full year is expected to reach between 103 000 t and 115 500 t, while gold production is expected at between 122 200 oz and 135 600 oz for the full 2019, while C1 cash costs targeted at $77/lb to $88/lb.
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