MMG Limited today reports its second quarter production result and update on its commissioning and ramp up at Las Bambas in Peru.
Following successful construction, commissioning and ramp up, Las Bambas produced 87,142 tonnes of copper in copper concentrate in the second quarter 2016.
Chief Executive Officer Andrew Michelmore reiterated that the commissioning and ramp up of the plant had been completed on schedule and commercial production reached by July 01, in line with guidance to the market.
“This achievement is a testament to the skills and dedication of our team and the ability to deliver on our promises,” he said.
Las Bambas has produced 118,612* tonnes of copper in copper concentrate in the first half and MMG maintains its guidance of 250,000-300,000 tonnes for 2016.
Following the achievement of commercial production on 1 July 2016, optimisation of the plant and processes will continue through the second half 2016. As a result, MMG expects C1 costs to be within the range of US$1.00-1.10/lb for the second half 2016, and US$0.80-$0.90/lb once the plant is at steady state in future.
Once in full production Las Bambas will have an annual nameplate capacity throughput of 51 million tonnes and will rank as one of the world’s top copper mines.
MMG will provide an update on project capital expenditure in its Interim Results on 16 August 2016.
Second Quarter Production
MMG’s second quarter production results reflect a shift in 2016 production from zinc to copper with the end of mining and processing at Century and the commissioning of Las Bambas in the first half.
At Kinsevere, production was up 3% on the previous quarter to 20,293 tonnes of copper cathode. At Sepon, production was down 25% on the corresponding 2015 quarter impacted by a planned shutdown and transition to lower grade and more complex ore types.
The planned reduction in throughput at Golden Grove resulted in lower production compared to prior periods.
MMG maintained its 2016 guidance to produce 415,000-477,000 tonnes of copper and 120,000-135,000 tonnes of zinc.
Prices for most base and precious metals ended the quarter up and have continued to strengthen in July. Zinc continued to be the best performer on the London Metals Exchange (LME) this year, with the price now up over 30% since the end of 2015. The market for refined copper and copper concentrate continued to be soft.
The Company was also pleased to confirm final funding arrangements and cost savings for the Dugald River project which is expected to add an estimated 170,000 tonnes per annum of zinc from first half 2018.
The expected remaining cost of the project to first shipment of concentrate has been reduced by up to US$150 million – from US$750 million to US$600-620 million plus interest costs. This is the result of an improved development plan and savings secured through strategic sourcing during the mining construction downturn.
Since receiving conditional approval of the updated development plan in July 2015, MMG has further improved project value. As a result, the optimised mine plan will support a 1.7 Mtpa nameplate plant with annual production of around 170,000 tonnes of zinc in zinc concentrate, plus by-products.
“Following the end of processing at our own Century mine in Queensland earlier this year, Dugald River will provide additional tonnes to the market at a time of shrinking supply,” said Mr Michelmore.
* Includes production from commissioning and start up activities in December 2015.
Download a full copy of the 2016 June Quarterly Production Report.