Prominent Hill Comes Up With The Goods |
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| By FP |
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| Oz minerals delivered a robust december quarter production report last week, marking the introductory full year of production from prominent hill. Full year to december copper production of 96,310 tonnes came in in front of former guidance for amidst 85,000 and 90,000 tonnes. Fat prophets gained magnification to oz minerals thru our purchase in oxiana at $3. 13 thru a midweek alert in may 2007. Our last review of this stock was in december (fat452). Turning to the charts, oz minerals is consolidating within the upper boundaries of a bullish harmoniously triangle. This continuance pattern is looking to favour an upside breakout. Should oz minerals break above the mid october 2009 high of $1. 325, this would instigate the get started of another move higher. Although oz minerals is greatly a copper producer, prominent hill is a copper-gold deposit. This provides an attractive further and added component to production, exceptionally given our bullish view on gold. Gold production similarly exceeded guidance. The mine developed 75,535 ounce of gold, exceeding the upper end of management’s former forecast by 5,535 ounces. Driving the better than expected production was the impressive performance of the site’s milling facility. Quarterly mill throughput of 2. 285 million tonnes of ore equates to an annual equal of numerous 9. 14 million tonnes. This is 14% more outstanding than nameplate ability of 8 million tonnes. We would suppose management to accomplish their forecast of 10% above nameplate ability in the year in front. It was similarly good news on the cost front. The higher production and gold’s price force served to offset the negative affect of a more inviolable aussie dollar. This saw oz minerals’ money pricing of copper production hit the lower end of guidance at us70. 7 cents/lb. Management expects a more inviolable aussie dollar and lower ore grades to increment 2010 costs to amidst us85 and us95 cents/lb. Oz minerals remainder sheet is naturally a really dissimilar beast than was the case for the duration of the dark days of 2008/2009. The miner kept money of $1. 08 billion at the end of the year and management is searching for appropriate investment chances. An acquisition is on the cards at some point in time in the months in front. Although prospective targets are unknown, management’s focus is on copper pluses. This is a positive in our view. Oz minerals’ former desire to turn into australia’s next major diversified miner is a conceptually attractive idea. In exercise altho, the risks related to the stock reduce substantially whether or not the constitution remains within its area of competence. Oz minerals is similarly likely to pull capitalist aid as australia’s only substantial fundamentally pure-play copper magnification. . |
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