Higher copper prices and the commissioning of the Los Pelambres mine in Chile have transformed London-based
Los Pelambres, which entered production late last year, enjoyed a cash cost of US36 per lb. during the first six months of 2000. Company-wide cash costs totalled US60.7 per lb.
The 141,200 tonnes of copper from concentrates produced by the mine in the second quarter boosted overall production to 167,700 tonnes. By comparison, production in the second quarter of 1999 was merely 30,500 tonnes.
Revenue between the first half of 1999 and that of 2000 grew from US$70.7 million to US$316.2 million, with profits before taxes increasing from US$18.2 million (or 8 per share) to US$100 million (36 per share).
Construction of the US$1.36-billion Los Pelambres project, north of Santiago, began in November 1997. Concentrate production began in November 1999, ahead of schedule. The first shipments from the new Punta Chungo port facility began in January 2000.
Antofagasta has a 60% interest in the open-pit mine, with the remainder held by a consortium of five Japanese mining and metals companies.
The mine is exceeding planned capacity of 87,500 tonnes per day, and daily throughput levels in July reached 90,000 tonnes. The company intends to boost capacity to 100,000 tonnes per day, which would result in annual copper production of 300,000 tonnes.
The operation has minable reserves of 934 million tonnes grading 0.77% copper and 0.023% molybdenum, enough for more than 30 years of mining.
Meanwhile, construction at the El Tesoro copper project, in northern Chile, is nearly 40% complete. Startup at the heap-leach solvent extraction-electrowinning project is scheduled for May 2001.
At full-production, the US$296-million project should contribute 75,000 tonnes of cathode copper at US40 per lb. per year during the first five years. Antofagasta owns a 61% interest in the project, with the remainder held by Australia’s Equatorial Mining. Reserves stand at 152 million tonnes averaging 0.96% copper.
The company recently completed a new mine plan for the nearby Michilla copper mine, which should extend operations until 2007. The plan calls for an expansion of the existing open pit so that crews can gain access to the 28.3 million tonnes of reserves grading 1.28% copper. The mine expansion and plant-upgrading will require capital expenditures of US$36 million. The operation is switching over to all-leaching, as the concentrator was mothballed in February. Since then, all sulphides, as well as oxides, have been treated on the leach pads.
Cash costs at Michilla increased to US59.4 per lb. in the second quarter, as a result of higher waste removal. Total costs were US78.8 per lb.
Antofagasta has two exploration targets: the Esperanza copper-gold porphyry, near El Tesoro, and the Magistral porphyry project, in Peru.
At Esperanza, the company has outlined mineralization south of the Tesoro-NE deposit; the mineralization is pegged at 10 million tonnes of oxide material grading 0.62% copper, plus another 150 million tonnes of sulphide material averaging 0.81% copper and 0.46 gram gold.
At Magistral, Antofagasta is earning a 65% interest from Vancouver-based
Antofagasta has outlined mineralization over an area measuring 1,200 by 125 metres, and the zone extends to a depth of at least 350 metres.
Drill results are as follows:
Holes 14 and 15 are designed to test lateral extension of mineralization in hole 6; both cut mineralized skarn containing veins of chalcopyrite, molybdenite and pyrite. Hole 14, which bottomed in intrusive, intercepted 186 metres grading 0.71% copper and 0.07% moly, whereas hole 15 hit 214 metres of 1.17% copper and 0.06% moly. Included in the interval were 50 metres of 2.8% copper and 0.05% moly.
Hole 16, drilled 100 metres north of hole 7, hit 53.5 metres of 0.4% copper (similar to weakly mineralized porphyry encountered in hole 7).
Hole 18, which scissored mineralization in hole 13, hit 188 metres of 0.56% copper and 0.09% moly, including 142 metres of 0.63% copper and 0.1% moly.
East of hole 18, hole 21 cut 300 metres of 0.41% copper and 0.09% moly, including 72 metres of 0.69% copper and 0.13% moly.
Hole 23 hit 100 metres of 0.39% and 0.02% moly;
Holes 19, 20 and 22 were collared away from known mineralization and encountered no significant results.
In all, Antofagasta intersected significant mineralization in 17 of the 23 holes drilled in the 6,000-metre program (results are pending on the final four holes).
Antofagasta is a tightly held company, with 65% of its 200 million outstanding shares held by the Luksic family.
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