This news release contains non-GAAP measures and forward-looking information about expected future events and financial and operating performance of the Company. Please refer to the Historical Non-GAAP Measure Comparatives section and the risks and assumptions set out in our Cautionary Statement on Forward-Looking Information section of this press release. All dollar amounts are expressed in
2022 Production Highlights
- Guidance was substantially achieved on a consolidated basis for copper, nickel, and gold. Nickel and gold production achieved the top end of the guidance ranges.
- 2022 consolidated copper production was approximately 250,000 t, and total copper-equivalent consolidated production was over 390,000 t.1
- Candelaria copper production of 152,042 t was modestly below guidance, while gold production of 86,000 oz achieved the top end of the guidance range.
- Chapada copper production of 45,739 t achieved guidance and gold production of 68,000 oz exceeded the top end of the guidance range.
- Eagle nickel production of 17,475 t and copper production of 15,895 t both achieved guidance.
Summary of 2022 Production
Q4 2022 Production | Full Year 2022 Production | 2022 Production Guidance2 | |||||||||||||||
Copper (t) | |||||||||||||||||
Candelaria (100% basis) | 34,398 | 152,042 | 155,000 | - | 165,000 | ||||||||||||
Chapada | 11,306 | 45,739 | 45,000 | - | 50,000 | ||||||||||||
Eagle | 3,081 | 15,895 | 15,000 | - | 18,000 | ||||||||||||
Neves-Corvo | 7,160 | 31,906 | 33,000 | - | 38,000 | ||||||||||||
Zinkgruvan | 607 | 4,077 | 2,000 | - | 3,000 | ||||||||||||
Total Copper | 56,552 | 249,659 | 250,000 | - | 274,000 | ||||||||||||
Q4 2022 | Full Year 2022 | 2022 Production | |||||||||||||||
Production | Production | Guidance3 | |||||||||||||||
Zinc (t) | |||||||||||||||||
Neves-Corvo | 24,523 | 82,435 | 90,000 | - | 100,000 | ||||||||||||
Zinkgruvan | 19,785 | 76,503 | 78,000 | - | 83,000 | ||||||||||||
Total Zinc | 44,308 | 158,938 | 168,000 | - | 183,000 | ||||||||||||
Gold (oz) | |||||||||||||||||
Candelaria (100% basis) | 20,000 | 86,000 | 83,000 | - | 88,000 | ||||||||||||
Chapada | 16,000 | 68,000 | 62,000 | - | 67,000 | ||||||||||||
Total Gold | 36,000 | 154,000 | 145,000 | - | 155,000 | ||||||||||||
Nickel (t) | |||||||||||||||||
Eagle | 4,096 | 17,475 | 15,000 | - | 18,000 | ||||||||||||
Total Nickel | 4,096 | 17,475 | 15,000 | - | 18,000 | ||||||||||||
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1 Calculated based on the ratios of 2022 average metal prices of Cu: | |
2 Guidance as most recently disclosed in the Company's Management Discussion and Analysis for the three and six months ended |
Three-Year Production Outlook
- Copper production is forecast to be 236,000-260,000 t on a consolidated basis in 2023. Higher consolidated copper production of 256,000-280,000 t is forecast for 2024 due mainly to mine sequencing and the planned copper grade profile at Candelaria.
- Zinc production is forecast to increase to 180,000-195,000 t on a consolidated basis in 2023, increasing further over the three-year period to reach 225,000-240,000 t in 2025. The increasing zinc production profile is primarily due to the ramp up of the
Neves-Corvo Zinc Expansion Project ("ZEP"), which is expected to consistently achieve nameplate capacity during 2024. - Consolidated gold production is forecast to be 140,000-150,000 oz in 2023 and to be relatively constant through the three-year outlook period.
- Nickel production is to be 13,000-16,000 t in 2023 and to moderate over the three-year period driven by the planned mine sequencing and nickel grade as the Eagle East and Upper Keel orebodies at Eagle are mined.
Production Outlook4
2023 | 2024 | 2025 | ||||||||||
Copper (t) | ||||||||||||
Candelaria (100% basis) | 145,000 | - | 155,000 | 165,000 | - | 175,000 | 150,000 | - | 160,000 | |||
Chapada | 43,000 | - | 48,000 | 43,000 | - | 48,000 | 45,000 | - | 50,000 | |||
Eagle | 12,000 | - | 15,000 | 9,000 | - | 12,000 | 5,000 | - | 8,000 | |||
Neves-Corvo | 33,000 | - | 38,000 | 35,000 | - | 40,000 | 35,000 | - | 40,000 | |||
Zinkgruvan | 3,000 | - | 4,000 | 4,000 | - | 5,000 | 3,000 | - | 4,000 | |||
Total Copper | 236,000 | - | 260,000 | 256,000 | - | 280,000 | 238,000 | - | 262,000 | |||
Zinc (t) | ||||||||||||
Neves-Corvo | 100,000 | - | 110,000 | 130,000 | - | 140,000 | 140,000 | - | 150,000 | |||
Zinkgruvan | 80,000 | - | 85,000 | 85,000 | - | 90,000 | 85,000 | - | 90,000 | |||
Total Zinc | 180,000 | - | 195,000 | 215,000 | - | 230,000 | 225,000 | - | 240,000 | |||
2023 | 2024 | 2025 | ||||||||||
Gold (oz) | ||||||||||||
Candelaria (100% basis) [5] | 85,000 | - | 90,000 | 95,000 | - | 100,000 | 85,000 | - | 90,000 | |||
Chapada | 55,000 | - | 60,000 | 55,000 | - | 60,000 | 45,000 | - | 55,000 | |||
Total Gold | 140,000 | - | 150,000 | 150,000 | - | 160,000 | 130,000 | - | 145,000 | |||
Nickel (t) | ||||||||||||
Eagle | 13,000 | - | 16,000 | 10,000 | - | 13,000 | 5,000 | - | 8,000 | |||
Total Nickel | 13,000 | - | 16,000 | 10,000 | - | 13,000 | 5,000 | - | 8,000 |
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3 Guidance as most recently disclosed in the Company's Management Discussion and Analysis for the three and six months ended | |
4 Production guidance is based on certain estimates and assumptions, including but not limited to Mineral Resources and Mineral Reserves, geological formations, grade and continuity of deposits and metallurgical characteristics. |
- Candelaria: Annual fluctuations in copper and gold production forecasts for the next three years are mainly due to sequencing of the Candelaria open pit. Ore mining from the open pit is to be primarily from the upper benches of Phase 11 in 2023, mining towards lower benches in 2024. Mining of Phase 10 is to complete and initial ore from Phase 12 is to commence in 2024.
- Over the guidance period, total mill throughput is forecast to range between 27-29 million tonnes per annum ("Mtpa"). Debottlenecking initiatives of the Candelaria plant pebble crushing circuit are planned to begin increasing mill capacity starting late 2023. Based on the planned mill feed blend and the ore hardness throughput model, annual throughput is expected to approximate 29 Mtpa commencing in 2025.
- Candelaria's 2023 copper and gold production are forecast to be modestly weighted to the first half of the year, primarily owing to mine sequencing and the resultant grade profiles.
- Chapada: Production guidance is based on the current throughput capacity of approximately 23.5 Mtpa over the three-year period with annual fluctuations primarily due to mine sequencing and the forecast copper and gold grade profiles.
Ore mining is planned from the Chapada South, Southwest, Central and North pits through 2023, followed by mining of the Baru and Chapada Northeast orebodies commencing in 2024, and the North Buriti orebody commencing in 2025.
Chapada's 2023 copper and gold production are forecast to be weighted to the second half of the year due to the forecast grade profiles and seasonal operating considerations. All of Chapada's gold production remains unencumbered and is to receive full market pricing. - Eagle: Guidance incorporates mining of the Upper Keel zone in production plans, with first ore anticipated in 2024 following development in 2023. Ore mining is to continue from the Eagle and
Eagle East orebodies in 2023 with priority on increasing ore fromEagle East during the second half of the year. Eagle's 2023 nickel and copper production are forecast to be modestly weighted to the first half of the year, primarily owing to mine sequencing and the resultant grade profiles. - Neves-Corvo: Copper production guidance for the three-year period is consistent with prior expectations. The zinc production guidance reflects the slower than anticipated ramp-up to date of ZEP. Several projects are underway to enable ZEP to consistently achieve the nameplate processing capacity of 2.5 Mtpa. These include mine development, additions to increase mine ventilation capacity, and installation of a redundant SAG feeder, amongst other initiatives. Full ZEP mining and processing rates are expected to be achieved during 2024
Neves-Corvo's 2023 copper production is forecast to be equally weighted throughout the year. Zinc production is forecast to increase over the course of the year as initiatives to enable ZEP to consistently achieve nameplate capacity are executed and expected to result in improved overall throughput and metal recovery rates. - Zinkgruvan: Zinc production is forecast to increase over the three-year period with refinement of operating plans. Zinc head grades are expected to increase over the period on mine sequencing, and metal recovery rates and concentrate grades are anticipated to improve with completion of the sequential flotation project in mid-2023. Zinkgruvan's 2023 zinc and copper production are forecast to be modestly weighted to the second half of the year, primarily owing to mine sequencing and the resultant grade profiles.
_________________________________________ | |
5 68% of Candelaria's total gold and silver production are subject to a streaming agreement. |
2023 Cash Cost6 Guidance
- Candelaria: cash cost is forecast to be
$1.80 /lb –$1.95 /lb of copper, after by-product credits. The cash cost is expected to benefit from an approximately 50% reduction in electricity rates as a new Power Purchase Agreement (PPA) commenced at the beginning of the year. The PPA also ensures a minimum of 80% renewables in the energy mix, prioritizing wind and solar. By-product credits have been adjusted for the terms of the streaming agreement. - Chapada: cash cost is forecast to be
$2.55 /lb –$2.75 /lb of copper in 2023, after unencumbered gold by-product credits. The forecast increase in Chapada's cash costs compared to 2022 reflects mainly higher consumable costs and lower production volumes. Effects of copper stream agreements are reflected in the realized copper revenue. - Eagle: cash cost is forecast to be
$1.50 /lb –$1.65 /lb of nickel in 2023, after by-product copper credits. The forecast increase compared to 2022 is primarily a reflection of planned lower production volumes. - Neves-Corvo: cash cost is forecast to be
$2.10 /lb –$2.30 /lb of copper in 2023, after zinc and lead by-product credits. The cash cost is expected to continue to improve as zinc and lead production volumes increase. - Zinkgruvan: cash cost is forecast to be
$0.60 /lb –$0.65 /lb of zinc, after copper and lead by-product credits, consistent with 2022 levels.
Cash Cost | 20237 | |||||||||
Copper | ||||||||||
Candelaria8 | - | |||||||||
Chapada | - | |||||||||
Neves-Corvo | - | |||||||||
Zinc | ||||||||||
Zinkgruvan | - | |||||||||
Nickel | ||||||||||
Eagle | - | |||||||||
2023 Capital Expenditure Guidance
- Capital expenditures are forecast to total
$1,100 million on a 100% basis, including expansionary capital expenditures[9] on theJosemaria Project . The majority of sustaining capital expenditures are for open pit waste stripping, underground mine development, tailings storage facility ("TSF") and water management works.
______________________________________________ |
6 This is a non-GAAP measure. For equivalent historical non-GAAP financial measure comparatives see the Historical Non-GAAP Measure Comparatives section of this press release. Please also see the Management's Discussion and Analysis for the year ended |
7 2023 cash costs are based on various assumptions and estimates, including, but not limited to: production volumes, commodity prices (2023 - Cu: |
8 68% of Candelaria's total gold and silver production are subject to a streaming agreement and as such cash costs are calculated based on receipt of |
Capital Expenditures ($ millions) | 202310 | |
Sustaining Capital | ||
Candelaria (100% basis) | 400 | |
Chapada | 70 | |
Eagle | 20 | |
Neves-Corvo | 130 | |
Zinkgruvan | 70 | |
Other | 10 | |
700 | ||
400 | ||
Total Capital Expenditures | 1,100 |
- Candelaria: Capital expenditures at Candelaria in 2023 are forecast to total
$400 million . Of this, capitalized waste stripping is forecast to be$185 million , and underground mine development, including ramp works, to be approximately$55 million . Capital expenditure for mobile and mine equipment is forecast to be$55 million , and$55 million is estimated for the continued building of the Los Diques TSF. Pebble crushing debottlenecking capital expenditures are forecast to be approximately$8 million in 2023 and completed during the year. - Chapada: Capital expenditures at Chapada in 2023 are forecast to total
$70 million . This includes approximately$25 million for capitalized waste stripping,$15 million for TSF and water management systems, and$5 million for mine and mobile equipment. - Eagle: Capital expenditures at Eagle in 2023 are forecast to total
$20 million in 2023, composed of underground mine development, of which approximately$8 million is for development of the Upper Keel zone, and for mine and mill sustaining initiatives. - Neves-Corvo: Capital expenditures at Neves-Corvo in 2023 are estimated to total
$130 million in 2023. Approximately$50 million is forecast for underground mine development, including infill drilling,$60 million for projects to enable ZEP to consistently achieve nameplate capacity, and$10 million for mine and mobile equipment. Projects to enable ZEP to consistently achieve its 2.5 Mtpa processing capacity include raise and chiller additions to increase capacity of the ventilation system, installation of a redundant SAG feeder, expansion of the TSF, and process water treatment plant works. - Zinkgruvan: Capital expenditures at Zinkgruvan are forecast to total
$70 million in 2023, of which approximately$35 million is for underground development, including development of the Dalby orebody. Expenditure on the sequential flotation project, to improve concentrate grades and metal recovery rates, is forecast to be$8 million . The remainder of the sustaining capital expenditure is primarily for TSF works, reduced emissions and energy saving programs and other improvement initiatives. Josemaria Project : Capital expenditures are estimated to be approximately$400 million in 2023 in support of advancing the project prior to a potential construction decision. An updated initial capital cost estimate and project schedule review are progressing well with the updated Technical Report on-track for publication in the second half of 2023. Capital expenditures primarily include continuation of detail engineering, procurement of long-lead equipment, and preconstruction activities such as road upgrades and geotechnical work.
______________________________________ | |
9 Expansionary capital expenditure is a non-GAAP measure. For historical comparatives see the Historical Non-GAAP Measure Comparatives section of this press release. Please also see the Management's Discussion and Analysis for the year ended | |
10 Capital expenditures are based on various assumptions and estimates, including, but not limited to foreign currency exchange rates (2023- €/USD:1.00, USD/SEK:10.50, CLP/USD:850, USD/BRL:5.00). |
Exploration expenditures are planned to be
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About
The information in this release is subject to the disclosure requirements of
The Technical Information in this press release has been prepared in accordance with NI 43-101 and has been reviewed and approved by
Cash Cost and Sustaining and Expansionary Expenditures are non-GAAP financial measures and are not standardized financial measures under generally accepted accounting principles under IFRS and, therefore, amounts presented may not be comparable to similar data presented by other mining companies.
Cash Cost – Year Ended
Operations | Candelaria | Chapada | Eagle | Neves-Corvo | Zinkgruvan | |||||||||||||||
($ thousands, unless otherwise noted) | (Cu) | (Cu) | (Ni) | (Cu) | (Zn) | Total | ||||||||||||||
Sales volumes (Payable metal contained metal in concentrate): | ||||||||||||||||||||
Tonnes | 148,213 | 47,123 | 15,012 | 36,618 | 64,056 | |||||||||||||||
Pounds (000s) | 326,753 | 103,888 | 33,096 | 80,729 | 141,219 | |||||||||||||||
Production costs | 1,436,278 | |||||||||||||||||||
Less: Royalties and other | (57,887) | |||||||||||||||||||
Ore stockpile inventory write-down | (65,025) | |||||||||||||||||||
1,313,366 | ||||||||||||||||||||
Deduct: By-product credits | (646,950) | |||||||||||||||||||
Add: Treatment and refining charges | 122,330 | |||||||||||||||||||
Cash cost | 494,213 | 108,782 | (40,883) | 152,416 | 74,218 | 788,746 | ||||||||||||||
Cash cost per pound ($/lb) | 1.51 | 1.05 | (1.24) | 1.89 | 0.53 | |||||||||||||||
Cash cost is a non-GAAP measure. See the Management's Discussion and Analysis for the year ended |
Capital Expenditures – Year Ended
($ thousands) | Sustaining | Expansionary | Capitalized Interest | Total | |
Candelaria | 312,388 | - | - | 312,388 | |
Chapada | 52,275 | - | - | 52,275 | |
Eagle | 16,279 | - | - | 16,279 | |
Neves-Corvo | 52,552 | 56,388 | 336 | 109,276 | |
Zinkgruvan | 41,325 | - | - | 41,325 | |
Other | 554 | - | - | 554 | |
475,373 | 56,388 | 336 | 532,097 |
Capital expenditures are reported on a cash basis, as presented in the consolidated statement of cash flows. Expansionary capital expenditures are non-GAAP measures. See the Management's Discussion and Analysis for the year ended |
Certain of the statements made and information contained herein is "forward-looking information" within the meaning of applicable Canadian securities laws. All statements other than statements of historical facts included in this document constitute forward-looking information, including but not limited to statements regarding the Company's plans, prospects and business strategies; the Company's guidance on the timing and amount of future production and its expectations regarding the results of operations; expected costs; permitting requirements and timelines; timing and possible outcome of pending litigation; the results of any Preliminary Economic Assessment, Feasibility Study, or Mineral Resource and Mineral Reserve estimations, life of mine estimates, and mine and mine closure plans; anticipated market prices of metals, currency exchange rates, and interest rates; the development and implementation of the Company's Responsible Mining Management System; the Company's ability to comply with contractual and permitting or other regulatory requirements; anticipated exploration and development activities at the Company's projects; the Company's integration of acquisitions and any anticipated benefits thereof; and expectations for other economic, business, and/or competitive factors. Words such as "believe", "expect", "anticipate", "contemplate", "target", "plan", "goal", "aim", "intend", "continue", "budget", "estimate", "may", "will", "can", "could", "should", "schedule" and similar expressions identify forward-looking statements.
Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the expectations and beliefs of management, including that the Company can access financing, appropriate equipment and sufficient labor; assumed and future price of copper, nickel, zinc, gold and other metals; anticipated costs; ability to achieve goals; the prompt and effective integration of acquisitions; that the political environment in which the Company operates will continue to support the development and operation of mining projects; and assumptions related to the factors set forth below. While these factors and assumptions are considered reasonable by
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