PERTH (miningweekly.com) – Copper/gold miner Oz Minerals has reported a 150% increase in aftertax net profit for the year ended December, on the back of higher copper prices and increased production.

Net profit for the 2021 financial year increased to A$530.7-million, up from A$212.6-million reported in the 2020 financial year, while net revenue increased from A$1.3-billion to A$2-billion in the same period.

Earnings before interest, taxes, depreciation and amortisation increased from A$606.3-million to A$1.1-billion, with earnings a share increasing from 65.2c to 159.6c.

“Higher production volumes, with Carrapateena now fully contributing and gold stockpiles complementing Prominent Hill production, combined with effective cost control, allowed us to take full advantage of robust copper prices during the year,” said Oz Minerals CEO Andrew Cole.

“These results were delivered notwithstanding a more difficult final quarter impacted by Covid-related absenteeism which has continued into 2022. When combined with an extreme rain event that affected our South Australian logistics, we are likely to see a slower start to 2022 production, building back in line with full-year guidance as the year progresses.”

Contained copper and gold sold during the year were higher than the comparative period by circa 30 000 t and 12 000 oz respectively. Increased production from Carrapateena, consistent operating performance from Prominent Hill, and the progressive development of the Carajás East Hub contributed to the strong revenue increase.

Oz Minerals reported that total production costs of concentrate sold were A$283.6-million higher than the comparative period. Increased volume was the main driver at Carrapateena with a 58% increase in the amount of ore processed, leading to an increase of A$139-million in absolute costs compared to the previous year.

At Prominent Hill, a lower net realisable value credit of A$18-million was recognised during the year compared with A$66-million in the previous year with all low-grade gold ore stockpiles now held at cost.

The company reported that 250 000 t more of underground ore at Prominent Hill was mined and processed during the year under review, which also contributed to higher production costs.

Production costs at the Carajás East Hub were higher than the previous year by A$24-million, commensurate with the increase in underground ore from the newly commissioned Pedra Branca mine, which commenced production from stopes in August.

A significant increase in sea freight rates during the year was experienced, driven by a number of factors including ship availability and scheduling disruptions caused by the Covid-19 pandemic.

“In 2021 we continued to invest in our growth projects with expansions at Carrapateena and Prominent Hill approved and now underway. The West Musgrave Project study advanced as we progressively derisk the project towards a final investment decision in the second half of 2022 and our new Pedra Branca mine in Carajás began producing production ore,” said Cole.

“On the basis of confidence in the company’s outlook, it’s financial performance and focus on maintaining capital discipline during a period of significant investment in organic growth, the board has determined to pay a fully franked final dividend of 18c a share, consistent with its sustainable dividend approach. The full year dividend complements the 8 cents per share fully franked special dividend and a fully franked interim dividend of 8c a share paid in September 2021 bringing total dividends for the year to 34c a share, an increase of 9 cents per share over the prior year,” said Cole.