Antofagasta's earnings have golden hue

published 17 May 2012

Higher gold prices and improved production volumes of copper and gold gave Antofagasta a boost in the first quarter of 2012.

Group turnover rose 38.9% to $1,762m in the three months ended March 31st from $1,269m the year before, feeding through to group[ earnings before interest, tax, depreciation and amortisation (EBITDA), which rose 35.4% to $1,099m from $812m the year before.

The volume of copper produced in the period was 162,900 tonnes, a 25.5% increase on the 129,800 tonnes produced in the corresponding period of 2011. This was mainly due to the impact of the Esperanza mine, which had been commencing production in the comparative period, but also increased production at El Tesoro due to processing material from the higher grade Mirador pit.

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Nevertheless, there was a 12.9% decrease in copper production compared with the final quarter of 2011, mainly due to planned maintenance and expected lower grades at Los Pelambres and lower throughput at Esperanza in February and March as a result of damage to the feed conveyor which has since been repaired.

Sales volumes of copper were 158,700 tonnes, up from 120,800 tonnes a year earlier. The realised copper price in the period was 429.6 cents per pound, broadly in line with the realised price of 427.7 cents in the first quarter of 2011 (Q1 2011).

Gold production volumes in the reporting period were 63,500 ounces and sales volumes were 63,400 ounces (Q1, 2011: 22,100 ounces and 9,800 ounces respectively), reflecting the increased production as a result of the start-up of Esperanza.

Market gold prices averaged $1,690.9 per ounce in the three month period, an increase from the average price of $1,386.5 the year before. The realised gold price of $1,703.5 for the first three months of 2012 was marginally above the market price for the quarter, reflecting the increase in price over the period and the resulting settlement and mark-to-market adjustments relating to the provisional pricing of gold sales.

As at March 31st 2012 the group had cash, cash equivalents and liquid investments of $3,545.8m, up from $3,280.0m at the end of 2011.

Total group borrowings at the end of March were $2,058.0m, versus $2,140.3m at the end of 2011.