May 03, 2012 ST. GALLEN, Switzerland (Dow Jones)--Chilean miner Antofagasta PLC (ANTO.LN) said Thursday that first quarter copper production rose on year thanks to the ramp-up of its Esperanza mine, but fell on quarter after the mine suffered a glitch which will make it hard for miner to top the mine's previously-guided production range.
The U.K.-listed miner also raised the capital expenditure estimate for its Antucoya project to $1.7 billion from $1.3 billion after having previously flagged the fact that a tight labor market is making contract work more expensive. The 80,000 ton-a-year copper cathode project is still slated to start production in the second half of 2014.
Antofagasta is among the few copper miners that have managed to increase copper production at a time when maturing deposits and declining ore grades have made it difficult for copper producers to expand output in line with growing demand. But the miner has suffered production setbacks at its roughly one-year old Esperanza mine as well as at its Los Pelambres mine, which prompted the company's board to seek a new chief executive to shepherd the company through its next growth phase.
The company is currently being run by major shareholder and chairman Jean-Paul Luksic until a new CEO has been selected.
The FTSE-100 miner said copper output rose 25.5% on year but fell 12.9% on quarter to 162,900 metric tons, mainly due to planned maintenance and expected lower grades at its Los Pelambres mine and lower ore throughput at Esperanza in February and March due to damage to the feed conveyor which was repaired by the end of March.
Antofagasta said Esperanza will still produce within the previously-guided range of 160,000 to 175,000 tons of copper and 240,000 to 260,000 ounces of gold for 2012, "albeit at the lower end of these ranges."
Expected production levels at the other three mines remains in line with its previous forecast, it added.
Antofagasta said in March that it was targeting 700,000 tons of total copper production and 280,000 ounces of gold output in 2012.
First quarter gold output nearly trebled on the year thanks to the ramp-up of Esperanza, but fell nearly 12% on the quarter to 63,500 ounces due to the production glitch at the mine.
Meanwhile the company's molybdenum output, which is produced at Los Pelambres, rose nearly a fifth on year to 3,100 tons.
The company said it would book a positive provisional adjustment of $181.1 million and $0.3 million in the first quarter for copper and gold sales respectively. The adjustment reflects price movements from the time that the product is shipped to the time that it's delivered to its final customer.
Cash costs excluding credits from the sale of gold and molybdenum rose 8% on quarter to $1.636 a pound in the first quarter, in line with its previous full-year guidance.
On the exploration front, Antofagasta said it's exploring opportunities in Finland, Zambia and in Queensland, Australia with three separate companies.