PERTH (miningweekly.com) – Copper/gold miner Oz Minerals has reported an 82% increase in net profits after tax for the half-year ended June, driven by higher gold volumes and the stronger gold price.

Net profit after tax for the first half of 2020 reached A$79.8-million, up from the A$43.9-million reported in the previous corresponding period, while net revenue increased from A$419.2-million to A$575.7-million.

Underlying earnings before interest, taxes, depreciation and amortisation increased from A$162.5-million to A$251.2-million during the same period.

“Our strong financial performance for the first half of the year has been driven by a solid operational performance at all our sites and has benefitted from higher gold production and favourable gold pricing throughout the period,” said Oz Minerals CEO Andrew Cole.

The Prominent Hill mine, in South Australia, delivered 30 645 t of copper and 101 774 oz of gold during the six months under review, while Carrapateena added 9 665 t of copper and 19 464 oz of gold.

The Carajas hub, in Brazil, produced an additional 4 498 t of copper and 3 108 oz of gold during the interim period.

Gold sales in the six months under review were 53 800 oz higher than the previous corresponding period, while the Australian gold price also saw a 36% increase.

“This strong first-half enabled us to increase our 2020 guidance last month for both copper and gold production, with significant reduction in expected C1 and all-in sustaining costs. With this improved outlook and ample liquidity available to both execute the company’s growth strategy and reward shareholders, the board has declared a fully franked interim dividend of 8c,” Cole said.

He told shareholders on Wednesday that the ramp-up of the Carrapateena operation during the half-year exceeded expectations, with strong performance from the underground materials handling system, production system and plant, allowing an increase to production guidance.

The block cave expansion prefeasibility study also demonstrated a significant increase to the ore reserve and potential increases to value and mine life, with studies progressing to feasibility during June.

“The Prominent Hill underground is performing well and we have seen annualised ore mining rates of some 4.5-million tonnes achieved through July. With sustainable annualised rates at or above 4-million tonnes in recent months, we have brought forward future decline development spend to further consolidate underground ore movement and increase mining rates to between 4-million and 5-million tonnes a year from 2022, prior to any additional tonnage from a potential underground expansion,” said Cole.

“Bringing forward the decline is also an enabler for the potential expansion and will allow for extended resource drilling from depth. A study update is expected towards the end of the year on the expansion which is contemplating a shaft haulage system.”

New growth funding of between A$6-million and A$9-million has been allocated at Prominent Hill for 2020 to accelerate underground decline development, to start mining the western side of the Malu orebody.

Looking ahead at the full year, Oz Minerals has set a production target of between 88 000 t and 105 000 t of copper, and between 227 000 oz and 249 000 oz of gold.