Solid December Quarter Production and First Copper from Las Bambas

Las Bambas

First copper concentrate was produced at Las Bambas in late December with 9,121_⁽¹⁾ tonnes of copper in copper concentrate achieved in the December quarter as part of commissioning activities. Concentrate has been successfully transported to the Port of Matarani using truck and rail.

The first shipment of approximately 10,000 tonnes of copper concentrate departed the Port of Matarani for China on 15 January 2016. A further shipment will be dispatched to customers in January 2016.

“We have been working toward this milestone since we acquired the world class Las Bambas project in August 2014,” said MMG Chief Executive Officer Andrew Michelmore. “First production, transport and shipment are a tribute to the operations and project teams who have worked so hard to build and commission the project.

“Once in full production Las Bambas will have an annual nameplate capacity throughput of 51.1 million tonnes and will rank as one of the top three copper producing mines in the world. Work to ramp up to daily nameplate capacity throughput of 140,000 tonnes will continue over the coming months.

“This result could not have been achieved without the support of our major shareholder China Minmetals, our joint venture partners CITIC and Guoxin, our communities, suppliers and the people of Peru.”

MMG expects to produce 250,000–300,000_⁽²⁾ tonnes of copper in copper concentrate at Las Bambas in 2016 as commissioning progresses and production ramps up. At this stage, it is expected that commercial production will be achieved during the second half 2016. Production costs (C1) are expected to be within the range of US$0.80–US$0.90/lb⁽³⁾ once at a steady state of production, and within the first quartile of the cost curve.

2015 Production Highlights

Amongst difficult market conditions that have forced widespread production cuts and closures across the industry, MMG’s assets all exceeded production guidance.

“Our ongoing focus on asset utilisation and operational excellence delivered outstanding results at all operations in 2015,” said Mr Michelmore.

Record copper production of 207,528 tonnes was achieved for the group, up 16,221 tonnes or 8% on the same period last year. Strong zinc production of 539,902 tonnes was also recorded despite ramp down at Century mine in Australia.

Final ore was extracted from the Century open-pit during August 2015, with final processing of Century sourced ore occurring in November 2015. Final sales of Century zinc and lead concentrates occurred in January 2016.

Processing of 450,000 tonnes of Dugald River ore is now complete and final sales of Dugald River zinc and lead concentrates are expected to be completed in February 2016.

Copper cathode production of 80,169 tonnes at Kinsevere in the DRC was another annual record, significantly above nameplate capacity with limited capital investment. In addition, the Sepon mine in Laos sustained strong performance to deliver 89,253 tonnes despite the transition to processing more difficult Type II ore with lower feed grades and recoveries.

“These results demonstrate the capability and skill of the MMG team,” said Mr Michelmore. “We expect to bring the same operating success and capital and cost discipline to Las Bambas as we commission and ramp up during 2016.”

MMG expects to produce 415,000-477,000_⁽²⁾ tonnes of copper and 120,000-135,000 tonnes of zinc in 2016.

_{1 Includes production from commissioning and start up activities in December 2015.}

_{2 Production volumes include expected pre and post-commercial production volumes at Las Bambas. The exact split will be determined prior to Las Bambas declaring commencement of commercial operations.}

_{3 C1 cost forecast range once at steady state of production, not indicative for 2016 given commissioning and ramp up activities.}

Download the 2015 December Quarterly Production Report