Oz Minerals Sees 2023 Output Broadly in Line With Last Year - Commodity Comment

Published: January 29, 2023 at 5:40 pm ET

Oz Minerals Ltd. said Monday that it was meeting revised 2022 copper production and cost guidance, and that full-year gold production was within the company’s original forecast.

The Adelaide-based miner, which has rejected a takeover bid from BHP Group Ltd. recommended, said it expects to produce 120,000-143,000 metric tons of copper this year, compared to the 124,065 tons it produced in 2022. 213,000 troy ounces, compared to 211,147 ounces last year.

Ugh…

Oz Minerals Ltd. said Monday that it was meeting revised 2022 copper production and cost guidance, and that full-year gold production was within the company’s original forecast.

Oz Minerals also forecasts so-called all-in maintenance costs for 2023 of between US$1.87-US$2.07 per pound, compared to US$1,897 per pound in 2022.

Here are some notes from the company’s fourth quarter production report.

On 2023 production expectations:

“We have … given guidance for 2023 which will see group production broadly in line with 2022, with improved production at Carrapateena and the Carajás East offset by lower production at Prominent Hill due to the processing of lower grade inventory compared to 2022.

“Prominent Hill’s lower production is mainly due to the processing of lower grade stock material and lower stock volumes that need to be processed to maximize value rather than tonnes. With stock being processed at a lower rate, it is now expected to be largely depleted be in 2025 (previously 2024).”

Over 2023 cost predictions:

“Group all-in sustaining costs are expected to remain elevated compared to 2022, primarily driven by the full-year effect of cost inflation, a weaker US dollar assumption, higher electricity cost assumptions at our Australian assets that have recently come out of long-term contracts and is now operating below a market rate offer and subject to potential electricity price volatility, and increased underground volumes at Prominent Hill. Production rates are expected to increase over the course of the year.”

On 2022 copper output:

“A strong final quarter saw a 21% rise in copper production, quarter-over-quarter, resulting in group production and cost guidance (revised mid-year) being met and creating positive momentum into 2023. Prominent Hill maintained its original reached copper guidance for the eighth consecutive year, confirming its reputation as a consistently reliable operation. Pedra Branca mine ramped up to full production ahead of schedule.”

On Prominent Hill extension:

“At Prominent Hill, we progressed construction of the Wira Shaft mine extension with the shaft pre-sinking completed in December. Resources were redirected to production over development during the year to offset the impact of the challenging first half, which is now ramping up production from the shaft moves from the first half of 2025 to the second half of 2025. The expansion project will further extend Prominent Hill’s life of mine and during the year project optimization work resulted in the shaft’s capacity being increased by 6Mtpa [million tons per annum] up to 6.5 Mtpa. The increased capacity will give us the option to increase annual production rates.”

Write to Rhiannon Hoyle at [email protected]