Oz Minerals confident of strong cash flows for several years – CEO

JOHANNESBURG (miningweekly.com) – Copper and gold miner Oz Minerals is confident of strong cash flows for the remainder of 2016 and over the “next several years” from its Prominent Hill mine, in South Australia, said MD and CEO Andrew Cole on Wednesday.

The mine, which produced 58 368 t of copper and 57 662 oz of gold in concentrate in the first half of the 2016 financial year, helped Oz Minerals to increase its revenue to A$398.3-million, from A$390.1-million in the comparative period of 2015.

The company’s underlying net profit after tax increased to A$55-million, from A$51.8-million a year earlier, while net profit after tax decreased to A$29.5-million.

Oz Minerals had A$564.3-million cash at the end of June this year, compared with A$552.3-million a year earlier.

The company declared an interim dividend of 6c a share, which reflects the board’s expectation of strong cash flows. “Prominent Hill is generating significant cash,” said Cole. “Our financial position has enabled the board to declare a dividend of A$18.1-million to provide consistent returns to shareholders while maintaining a strong balance sheet for future investments,” he added.

Cole said Oz Minerals’ strategy to create a lean business had resulted in corporate overheads and Prominent Hill operating costs reducing significantly, to position the group as one of the lowest operating cost copper producers in the world.

C1 unit cost for the half-year was 73.8c/lb, which is in line with Oz Minerals’ guidance of between 70c/lb and 80c/lb of copper.

Meanwhile, Oz Minerals reported that scoping studies to build a new four-million-tonne-a-year mine at Carrapateena and concentrate treatment plant at Whyalla remained on track in the prefeasibility study stage. These studies are expected to be completed before December, after which feasibility studies will start.

The miner said it was continuing with discussions to secure terms to access Arrium’s Whyalla port.