The shares of Antofagasta (LSE: ANTO) added 64p to 887p — an 8% increase — during early trade this morning after the mining company revealed a record year for copper production.
The FTSE 100 member produced 721,000 tonnes of copper throughout 2013, compared with 710,000 tonnes in 2012, beating expectations. However, production is expected to see a slight drop off in the year to come.
For the three months ended 31 December, copper production rose 4.9% on the previous quarter. This was attributed to strong performance and efficiency across all operations.
During that same final quarter gold production decreased by 6.4% as a result of production slowing at Esperanza — a large mine located in the north of Chile.
Diego Hernandez, Antofagasta’s chief executive, had the following to say:
“I’m pleased to announce a record year of copper production supported by strong production performance in Q4 which helped ensure that we achieved our production and cash cost guidance for the year. 2013 has been a challenging year in which we experienced an increase in costs across a number of our operations as well as weaker commodity prices. This year we remain focused on controlling our cost base whilst achieving the most from our operations.”
Prior to today City experts were predicting Antofagasta’s upcoming annual results to show earnings of 48p per share.
Following this morning’s price movement the shares may therefore trade on a P/E of 18 and offer a possible income of 2%.
Of course, whether that multiple, today’s results guidance as well as the wider prospects for the mining sector combine to make Antofagasta a ‘buy’ right now is something only you can decide.
