Copper and gold producer OZ Minerals has posted record production for 2015, even as global peers freeze expansions amid a commodities slump.
The miner hauled in 32,636 tonnes of copper in the December quarter, helping it exceed a target to produce 130,305 tonnes in 2015.
Total gold production for 2015 was 113,028 ounces, much better than the 100,000-110,000 ounces it had forecast.
The company said its Prominent Hill mine in South Australia was generating significant cash flows and the group’s recent focus on driving costs down had put it in a strong position.
“We’ve had a record year of production and even with the current state of commodity prices, Prominent Hill is generating very significant cash flows with healthy margins,” managing director Andrew Cole said.
“This sets us up for another strong year in 2016.”
Shares in the company jumped on the strong performance, with the stock trading nearly 9.0 per cent higher at $3.80, by 1400 AEDT, before fading slightly to close 6.6 per cent higher at $3.73.
Copper miners have been hurt by a slump in prices to multi-year lows, although a weaker Australian dollar has cushioned the impact for local miners.
OZ Minerals’ 2015 copper output was nearly 40 per cent higher than the previous year, with the company saying its processing plant had been operating up to 25 per cent above its official capacity.
Its cost of production also came in at the bottom end of its US 70 to 80 cents-per pound guidance.
“They have been very impressive in reigning in costs. They have also been able to hit the higher grades of copper and gold at the mine,” optionXpress market analyst Ben LeBrun said.
He said investors are keenly awaiting the company’s next big decision, as it considers developing its Carrapateena copper deposit in South Australia.
Last October, private equity firm KKR & Co bought a 10 per cent stake in OZ Minerals, saying the company was undervalued.