Oz shares tumble after resource and production outlook update
JOHANNESBURG (miningweekly.com) – The share price of ASX-listed metals miner Oz Minerals dropped by as much as 75c a share on Wednesday as shareholders expressed their discontent over the lower-than-expected 2014 production forecast and the company’s failure to add to the resource base.
Oz Minerals has told shareholders that 2014’s copper production would be between 75 000 t and 80 000 t, compared with the estimated 2013 production of between 70 000 t and 75 000 t.
Gold production, however, was expected to increase to between 130 000 oz and 140 000 oz, from the 120 000 oz to 130 000 oz expected this year.
The relatively unchanged production guidance came despite shareholders expecting an increased output during that time.
Instead, Oz stated that copper production would decline to 95 000 t/y between 2015 and 2018, while gold production would also only be about 95 000 oz/y during the same period.
Based on the current life-of-mine plan, mining in the Malu openpit was expected to continue until 2018, while stockpiles would be processed after this period. Mining from the Ankata underground mine would continue until 2022.
Meanwhile, Oz reported that the mineral resource at the Prominent Hill mine was currently estimated at 155-million tonnes, grading 1.3% copper and 0.5 g/t gold, as well as 2.9 g/t silver.
The overall copper/gold mineral resource at the mine decreased by some 55-million tonnes on the June 2012 resource estimate, while contained copper metal decreased by 565 000 t from the 2012 estimate.
The change resulted from an increase in the resource cutoff grade, updated geological interpretation for Malu and, to a lesser extent, mining depletion.
The company was trading at a low of A$2.11 a share on Wednesday, down from an opening price of A$2.85 apiece.
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