Copper strong in MMG first quarter

MMG Limited (MMG) (1208.HK) delivered record copper performance in the first quarter 2014, led by a strong performance from Kinsevere.

“Kinsevere was a standout performer in the first quarter,” said MMG Chief Executive Officer Mr Andrew Michelmore. “Not only did Kinsevere report a record quarter of production, processing and sales, it also cut its reliance on diesel with cheaper electricity available from the power grid.”

MMG reported that reliance on diesel dropped from an average of 57% for 2013 to approximately 37% for the first quarter.

“While we are very pleased to report a reduction in the reliance of high cost diesel for Kinsevere, there are still many factors that may influence grid power availability in the short term,” said Mr Michelmore. “We are not changing our cost guidance for Kinsevere at this stage.”

MMG’s Golden Grove operation reported a 28% increase in copper concentrate production during the first quarter due to the mine plan’s focus on copper, predominantly from the open pit.

Sepon also demonstrated a solid performance in the first quarter producing 22,787 tonnes of copper cathode, 2% lower than the previous record quarter.

Total zinc production for the first quarter of 133,929 tonnes of contained metal in concentrate was lower than the previous period due to reduced mine plan optionality at Century.

Century first quarter production was impacted by persistent seasonal wet weather and lower availability of higher grade ore due to wall instability above Stage 8.

“MMG will continue to closely monitor these movements as mining is completed at Stage 8,” said Mr Michelmore. “Based on the current mine plan assuming full accessibility, mining of Stage 8 will be completed in the fourth quarter of 2014 before focusing entirely on Stage 10 mining leading up to closure of the open pit.”

Queensland Operations will focus on maximising value in the lead-up to the closure of Century’s open pit next year – working in parallel with the trial stoping program currently underway at Dugald River.

“The trial stoping program will involve ore extraction from 27 various transverse and longitudinal stopes at a maximum width of 30 metres,” said Mr Michelmore. “This trial will help us determine the optimal stope size for the underground mine given the complexities identified at Dugald River and provide practical mining experience and valuable input towards the future of Queensland Operations,” he said.

MMG’s annual production and cost guidance is unchanged with MMG on track to deliver 173,000–186,000 tonnes of copper and 600,000–625,000 tonnes of zinc this year.

“MMG’s first quarter performance continues to demonstrate our strong operational focus,” said Mr Michelmore. “We look forward with great confidence to completing our recently agreed acquisition of Las Bambas and bringing this exciting copper asset into our operating portfolio.“

MMG announced on 14 April 2014 that, together with joint venture partners CITIC Metal Co., Ltd. and Guoxin International Investment Corporation Limited, it had entered into a Share Purchase Agreement with GlencoreXstrata to acquire the Las Bambas project in Peru for US$5.85 billion.

PRODUCTION RESULTS FOR THE THREE MONTHS ENDED 31 MARCH 2014

For further information download the full MMG First Quarter Production Report 2014 (PDF, 835 KB).