Los Pelambres mine propels Antofagasta

Denver — Copper production was up 16% in the first half of the year for Antofagasta (ANFGF-O), though profits were clipped by low prices.

The London-based company produced 193,900 tonnes of the red metal during the period, on the strength of higher output from the Los Pelambres mine in Chile.

Antofagasta, which owns 60% of the mine, pushed processing levels up 15% to 100,500 tonnes per day.

Higher grades helped offset cash costs of US37 per lb. copper, compared with US34 in the first half of 2000. The higher costs reflected increased treatment and refining charges, a higher stripping ratio and unscheduled repairs to grinding lines and conveyors.

However, total costs fell to US57.4 per lb., down from US60.7 a year earlier.

In July, the company started commercial production at the 61%-owned El Tesoro copper mine, also in Chile.

The US$300-million open-pit project started up in April and it had cranked out 9,000 tonnes of copper cathode by the end of June. At full production, El Tesoro should produce 85,000 tonnes of cathode per year over a mine life of 21 years. Cash costs are expected to average US40 per lb. in the first five years of operation.

Copper production declined at the Michilla mine in Chile, where both sulphide and oxide ores are being subjected to solvent extraction-electrowinning. Cash costs at the operation increased to US69.4 per lb. in the first six months of 2001.

In all, Antofagasta reported revenue of US$342.6 million in the first six months, up from US$316.2 million a year earlier. Net profits fell to US$14.1 million (14.4 per share) from $62.1 million (36.4 per share).

Antofagasta expects to continue increasing production and is said to be interested in purchasing two copper mines from Exxon Mobil, namely Los Bronces and El Solado.

Antofagasta’s overall exploration expenditures in the first half amounted to US$3.1 million. Most of this was spent on drilling at the Esperanza deposit, 5 km from the El Tesoro pit. The deposit contains sulphide reserves of 268 million tonnes averaging 0.7% copper and 0.33 gram gold per tonne. Oxide reserves stand at 70 million tonnes grading 0.42% copper.

In Peru, the company has released drill results from the Magistral project, a joint venture with Vancouver’s Inca Pacific Resources (IP-V) (see story, page 3).

The third round of drilling totalled 14,000 metres, and current estimates indicate an inferred resource of 190 million tonnes grading 0.83% copper and 0.06% molybdenum.

Antofagasta is earning a 51% stake in the joint venture through its wholly owned subsidiary, Anaconda Peru. The company can increase its interest to 65% by advancing the project to the feasibility stage within two years.