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Las Bambas delivers, Dugald River build on track

MMG Limited today reports its third quarter 2016 production result including the first full quarter of production at Las Bambas, following the achievement of commercial production on 1 July 2016.

Las Bambas

Las Bambas produced 106,123 tonnes of copper in copper concentrate during the third quarter.  The operation is regularly achieving production nameplate capacity throughput of 51 million tonnes per annum, ranking it as one of the world’s top copper mines.

Chief Executive Officer Andrew Michelmore said he was pleased with the result as well as the operation’s progress towards steady state production.

“Las Bambas’ performance during the quarter demonstrates the quality of this operation and the successful ramp up throughout 2016.”

“Optimisation of the plant and processes will continue into the final quarter of the year, as we move closer to steady state.”

“We continue to invest in regional development and focus on building strong relations with the surrounding communities of Cotabambas and Grau.  We are committed to delivering progress and being a valued partner in this region,” he said.
MMG maintains its guidance of 250,000-300,000*  tonnes of copper in copper concentrate at Las Bambas for 2016.

Recent Developments

Following conflict between Police and members of the Pumamarca community, 20 Kilometres from the Las Bambas site on 14 October, a community member was fatally wounded and approximately 20 police suffered injuries. Resulting roadblocks have temporarily halted site access and concentrate logistics transport from Las Bambas.  There are no alternate routes currently available for trucking.  MMG is working with the authorities at national, provincial and local levels, and continuing to engage with the community to reach a resolution.

Third Quarter 2016 Highlights

During the third quarter MMG continued to shift its production profile from zinc to copper following the end of mining and processing at Century and the commissioning of Las Bambas in the first half.

Kinsevere maintained its consistently strong performance producing 59,843 tonnes of copper cathode in the nine months to 30 September 2016 which is above nameplate capacity and in line with the comparable period in 2015. The operation achieved record daily average production during September and maintains its focus on gaining further efficiencies.

At Sepon, production was down 17% on the corresponding period in 2015 as the site progresses through the second year of its transition to lower grade and more complex ores.  Mr Michelmore said that while market conditions remain challenging MMG is focused on improving productivity through asset utilisation and seeking further efficiency gains across all operations. Cost improvement initiatives continue across all sites, group and support functions.

“And while the Company’s attention remained on optimising its current portfolio, the completion of construction at Dugald River is MMG’s next major milestone,” said Mr Michelmore.

“Dugald River will provide MMG with additional exposure to zinc amid shrinking global supply. The project is progressing to schedule and we are on track to meet our target of first concentrate during the first half of 2018,” he said.

During the quarter MMG progressed with active portfolio management as the expression of interest process for the Golden Grove operation continued with significant interest. An outcome is expected by the end of 2016.  The expression of interest process for the Century mine assets also progressed as MMG seeks economic opportunities for the significant infrastructure remaining at the Lawn Hill site, pipeline and the port facility at Karumba. Following the successful delivery of Las Bambas and good progress with Dugald River construction, MMG continues to actively search for the next growth opportunity.

Full year 2016 guidance of 415,000-477,000 tonnes of copper and 120,000-135,000 tonnes of zinc remains unchanged.

Please download a full copy of the MMG Third Quarter 2016 Production Report.

* 2016 copper in copper concentrate produced at Las Bambas includes production from commissioning and start up activities in December 2015.