Chilean miner Antofagasta cranked up its production of copper and gold in the third quarter, while reducing the cost of digging the stuff out of the ground.
Group copper production totalled 165,000 tonnes, a 4.0% increase compared with the previous quarter. This increase was mainly due to higher production at Esperanza as the ramp-up process continued and also from Los Pelambres as a result of higher ore grades.
Copper production was 453,500 tonnes in the first nine months of 2011 compared with 393,600 tonnes in the first nine months of 2010, reflecting the production from Esperanza.
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As previously announced, current estimates for 2011 group copper production are for between 620,000 and 640,000 tonnes.
Molybdenum production at Los Pelambres in the third quarter was 2,400 tonnes. The 7.7% decrease in production from the previous quarter is mainly due to lower ore grades.
Gold production in the three month period rose to 54,300 ounces from 48,600 ounces in the previous quarter, mainly due to the continued ramp-up of Esperanza.
Group cash costs (net of by-product credits) in the July-September quarter eased to 100.5 cents per pound compared to 103.8 cents per pound in the previous quarter. This decrease was mainly due to reduced costs at Esperanza reflecting the progress of the ramp-up and lower costs at El Tesoro, partly offset by increases at Los Pelambres (due to lower by-product credits) and Michilla.
The group has approved the initiation of a $109m feasibility study for the potential expansion of copper production in its Sierra Gorda district. The study will look into the construction of new facilities to process sulphide ores from each of the Telgrafo and Caracoles deposits.
In total, this could potentially increase sulphide processing capacity in the Sierra Gorda district from 97,000 tonnes of ore per day when the Esperanza mine reaches design capacity to a total of around 300,000 tonnes of ore per day by mid to late 2016. Additionally, both Telgrafo and Caracoles have oxide ores which could be processed at the El Tesoro SX-EW plant maintaining cathode production at near plant capacity until about 2020. The feasibility study is expected to be completed in early 2013.
The company added that transport division had a solid operational performance in the third quarter with total volumes transported of 2.1m tonnes, the same as in the previous quarter.
As for the water business, volumes of 11.8 million cubic metres in the third quarter were marginally higher than the 11.7 million cubic metres of the previous quarter.
The share price rose 25p to 1,139p on the production update.
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