14th Jun 2005 11:54
Antofagasta PLC14 June 2005 5 Princes Gate Telephone: + 44 20 7808 0988London Fax + 44 20 7808 0986SW7 1QJ [email protected] Kingdom ANTOFAGASTA PLC COMMENTS MADE BY MR. JEAN-PAUL LUKSIC, CHAIRMAN AT THE ANNUAL GENERAL MEETING London: 14 June 2005:- Copper production overall was slightly up on forecastsfor the first five months at 194,800 tonnes of payable copper and we should meetthe 2005 forecast of 470,000 tonnes. Los Pelambres saw an increase compared to the same period last year from 129,000tonnes of payable copper to 132,500 tonnes in the first five months. I shouldalso mention that your Board has, as anticipated, now formally ratified thePelambres board decision for the expansion of ore throughput from 125,000 tonnesper day to 140,000 tonnes per day. The cost of this expansion is estimated atUS$180 million and is expected to be completed by mid-2007. This first step inour latest expansion plans further enhances the economics of the Los Pelambresoperation and allows further incremental expansions which are currently in theplanning stage. Work on the US$457 million Mauro tailings dam project is alsonow under way and the project is on time although these are early days. You willrecall that provision for this sum has already been made from cash-flow. El Tesoro continues to do better than expected and crushing plant expansion willaverage 10.5 million tonnes per year. Increased plant capacity will grow asmentioned after a marginal $7 million investment. The Michilla mine is facing some difficulties with lower production due todeclining grades and a tunnel landslide: however, this should not have any majorimpact on Group results overall. In addition we are widening the explorationprogramme at Michilla to expand the mine life beyond 2011. We take safety matters very seriously indeed and can report one of the highestsafety indices in the industry. Regrettably, however, I have to report onefatal accident at Michilla which was obviously of great concern to us. TheGroup has always been very conscious of its social and environmentalresponsibilities. It continues and will continue to exert great effort in thisdirection and this has been recognised by the Chilean authorities (who set highstandards on this) and other institutions in various awards. A few words on new projects might be appropriate. We have started work onEsperanza, which is near to El Tesoro, and the exploration tunnel is well underway. This will allow us to complete the pre-feasibility study by the end of2006. We continue to look for growth opportunities both inside and outsideChile. The Group has benefited from strong commodity prices and the considerable andvaluable commitment of its management and personnel. Both the transport and water companies continue to do well. Mining sector growthin the area to date has been of benefit to both our railway and the watercompanies with, in addition, some new mining projects in the offing. Overall the Group's prospects for 2005 are good based on copper and molybdenumprices. We believe that copper market conditions will continue firm due tocritically low stock levels; however, the copper price should ease slightlytowards the end of the year when the smelter maintenance shutdowns finish. Themolybdenum market has also benefited from high steel consumption in China andthe growing demand for catalyst fabrications worldwide. Before concluding, I should mention the matter of the proposed royalty chargesspecific to the mining industry in Chile. Congress approved in May theimposition of a 5% mining tax on operational profits. Whilst regrettable, weestimate the overall impact on the Group as adding 3% on the effective tax rate. Nevertheless, the impact has been capped considering that mining propertyrights have not been affected and that companies may enter into a contract withthe Chilean State that cannot be modified by a future law and which guaranteesthat there will be no further specific taxes for mining for a period of 12years. As you will recall, 2004 was an excellent year for Antofagasta, and based oncommodity prices and performance to date, 2005 should be another good year. Ourfinancial position remains solid and we have now initiated a key project for thefuture development of the Group. We will continue to focus on developing ourpromising opportunities for growth. - Ends - For further enquiries: Desmond O'Conor, Antofagasta plc Keith Irons,Bankside Consultants +44 20 7808 0988 +44 20 7367 8873 [email protected] [email protected] This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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