SMM8, 15 March: Chilean copper miner Antofagasta, through its subsidiary, will acquire a 70 per cent stake in the Chunibas copper and silver project, which is wholly owned by San Marco Resources in the Mexican state of Sonora. Under the revenue agreement, Antofagasta would have to spend $8 million on project costs. The company was also asked to pay San Marco a total of $200000 over a four-year period. The full consideration included a confirmed commitment of $700000 for exploration expenditures. San Marco will be the operator of the project. Once the return option is obtained, the two parties will form a joint venture according to the proportion of their respective interests in the project.

Antofagasta shares fell 5.1 per cent today as mining costs jumped to their highest level since 2015. The company had previously said operating costs rose in the first half of 2018 as production fell, input prices rose and the Chilean peso strengthened.

The group's net cash cost rose to $1.52a pound, up nearly 23 per cent from a year earlier, Antofagasta said in a statement. This is the highest level since 2015. Rising costs put pressure on operating margins, resulting in a 32 per cent drop in pre-tax profits from continuing operations. Antofagasta still produces between 705000 and 740000 metric tons of copper in the current quarter.

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