Antofagasta plc (LSE: ANTO) announced robust production numbers from its Chilean mining operations on Wednesday, but rising costs and a dip in its share price looked set to temper celebrations.
The company, which focuses on copper and by-products gold and molybdenum, saw its stock fall 2.8% to 1,576.50p despite strong performances from its Los Pelambres and Centinela mines.
Gold production rose 18% year-on-year to 209,000 ounces in 2023, thanks to higher grades at Centinela. Meanwhile, copper output grew 2.2% to 660,600 tonnes, with Antofagasta praising Los Pelambres’ “increasing contribution” as its expansion project continues to ramp up. However, net cash costs increased 5.5% to $2.31 per pound in 2023, driven by local inflation and a stronger Chilean peso.
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The company expects further production gains in 2024, forecasting copper output of 670,000-710,000 tonnes. But with costs already on an upward trajectory, investors seemed cautious on the outlook. As CEO Ivan Arriagada noted, Antofagasta has delivered a “robust operational performance”, but balancing this against rising expenses will be key to improving market sentiment.
The Antofagasta stock is down 9.4% over the past 12 months.
