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Third quarter production result for the period ended 30 September 2020

MMG Limited (MMG) today released its third quarter 2020 production result, producing 102,469 tonnes of copper and 61,606 tonnes of zinc in the three months to 30 September.

“I am pleased to report third quarter production of copper and zinc up 33% and 2% respectively, on the previous quarter. The significant improvement in copper production was largely driven by increased workforce stability in Peru as we continue to contend with the ongoing impact of the COVID-19 pandemic in the region,” said MMG CEO Geoffrey Gao.

“Across our operations we have maintained our focus on managing the COVID-19 impact and working closely with local and national leadership to ensure the health and safety of our people and communities. Pleasingly to date, there have been no COVID-19 cases at any of our operating sites,” Mr Gao added.

Las Bambas achieved production of 84,086 tonnes of copper in copper concentrate during the quarter which represents a 44% improvement on the June 2020 quarter, however the result is below the comparative period in 2019 due to impact of pandemic-induced restrictions. During the quarter, site-base workforce levels have averaged between 65% and 80% enabling mining volumes to increase by 64% and mill throughout to increase by 29% compared to the second quarter.

Transport of Las Bambas concentrate was suspended from late July until early August due to community distruptions along the Southern Road Corridor with protests unrelated to Las Bambas. By early September trucking volumes had returned to normal levels and remained at full capacity.

Dugald River produced 46,081 tonnes of zinc in zinc concentrate during the period which represents a 6% increase on the June 2020 quarter. The operation achieved record mining volumes during July and August and has demonstrated sustained improvements in recovery.

Rosebery increased its mining and milling volumes compared to the June 2020 quarter after access was restored to areas impacted by seismic activity in 2019. The operation produced 15,525 tonnes of zinc in zinc concentrate for the period, with increased mine flexibility and processing volumes assisting to mitigate the longer term impact of declining zinc ore grades compared to the prior year, as the mine moves into deeper areas. MMG continues to pursue its investigation of options to extend the life of the mine, together with studies into sustainable longer-term tailings management options.

Kinsevere produced 18,022 tonnes of copper cathode during the September quarter, with the result largely consistent with both the second quarter of 2020 and the comparative period in 2019. The site has temporarily suspended mining activity ahead of the upcoming wet season enabling the operation to draw down its ore stockpiles and complete optimisation and planning works ahead of the potential transition to the mining and processing of sulphide ores. Mining at Kinsevere is expected to resume in the first quarter of 2021.

Following the withdrawal of the original cost and production guidance for Las Bambas in April, MMG now expects to produce between 305,000 and 315,000 tonnes of copper in concentrate for the full 2020 reporting year. C1 cost guidance is expected to be in the range of US$0.95-1.00/lb. MMG maintains its existing full year production guidance for Kinsevere, Dugald River and Rosebery. C1 cost guidance is maintained for Kinsevere and Dugald River. Reflecting the strong contribution of precious metal by-product credits, full year C1 cost guidance for Rosebery has been revised down to US$0.05-0.10/lb.