Shares in Chilean miner Antofagasta Plc. dove Wednesday after the company reported marked drops copper and gold production during the first quarter of the year, due mostly to lower quality ore. The miner said copper output fell by 10.5% to 153,800 tonnes compared with the same quarter a year ago. But it said the situation was expected and since it knew it would move to higher quality ores later in the year, it kept full-year output guidance unchanged at between 705,000 and 740,000 tonnes.
While the company is confident that it can catch up with planned production over the next months, shortfalls in throughput at operations other than Pelambres and Centinela, may be more difficult to overcome, BMO analyst Edward Sterck, said in a note to investors Wednesday. Gold production fell 39.4% to 32,300 ounces in the first quarter of the year due to lower grades at its Centinela mine. Copper miners in mature markets, particularly in Chile, which is the worlds top producer of the red metal, have seen production costs rise as they need to dig deeper and process larger amounts of rock to obtain the same amount of copper they used to a decade ago.