Antofagasta plc Sets Records For Copper Production In 2013

Leap in share price for Antofagasta plc (LON: ANTO) as copper operations excel.

Mark Stones

Mark Stones (TMFMumbojumbones) joined The Motley Fool in 2014 and initially worked as a writer for Fool.co.uk, before joining the Fool’s analyst programme. Mark earned a BA in English from Loughborough University. Although he spends more time reading annual reports than Russian literature these days, he still appreciates a novelist’s antipathy toward the accepted view, which is a useful attitude when trying to sniff out hidden gems on the stock market. His approach to investing has been largely influenced by the principles of Warren Buffett and Peter Lynch. He also takes a special interest in the work of healthcare companies. Outside of investing, Mark plays guitar, enjoys good writing and has a guilty passion for combat sports.

Published 29 January, 2014 10:01 am GMT

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The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The shares of Antofagasta (LSE: ANTO) added 64p to 887p — an 8% increase — during early trade this morning after the mining company revealed a record year for copper production.

The FTSE 100 member produced 721,000 tonnes of copper throughout 2013, compared with 710,000 tonnes in 2012, beating expectations. However, production is expected to see a slight drop off in the year to come.

For the three months ended 31 December, copper production rose 4.9% on the previous quarter. This was attributed to strong performance and efficiency across all operations.

During that same final quarter gold production decreased by 6.4% as a result of production slowing at Esperanza — a large mine located in the north of Chile.

Diego Hernandez, Antofagasta’s chief executive, had the following to say:

“I’m pleased to announce a record year of copper production supported by strong production performance in Q4 which helped ensure that we achieved our production and cash cost guidance for the year. 2013 has been a challenging year in which we experienced an increase in costs across a number of our operations as well as weaker commodity prices. This year we remain focused on controlling our cost base whilst achieving the most from our operations.”

Prior to today City experts were predicting Antofagasta’s upcoming annual results to show earnings of 48p per share.

Following this morning’s price movement the shares may therefore trade on a P/E of 18 and offer a possible income of 2%.

Of course, whether that multiple, today’s results guidance as well as the wider prospects for the mining sector combine to make Antofagasta a ‘buy’ right now is something only you can decide.