Total copper production rose by 7% to 20,600 tonnes compared with the first quarter of 2012, primarily as a result of increased mill throughput and higher ore grades.
Operating costs rose with increased production levels and were US$85 million in the first quarter compared with US$80 million last year before US$10 million of one-time labour settlement charges. Capitalized deferred stripping costs in both periods were minimal.
Duck Pond (100%)
Duck Pond's gross profit before depreciation and amortization was $10 million in the first quarter, the same as the first quarter of 2012. Copper and zinc production in the first quarter was 3,300 tonnes and 3,500 tonnes, respectively, compared with 3,700 tonnes and 5,200 tonnes, respectively, last year. Copper and zinc sales in the first quarter were 1,800 tonnes and 4,300 tonnes, respectively, compared with 3,600 tonnes and 4,100 tonnes, respectively, last year.
The development plan for the Boundary Pit was approved in the quarter and it is anticipated that production will transition to mining a combination of both open pit and underground ores towards the end of the second quarter.
Copper Development Projects
Quebrada Blanca Phase 2
During the first quarter detailed design and the procurement of long-lead equipment for the Quebrada Blanca Phase 2 project continued. The estimated capital cost for the development of the project is US$5.6 billion on a 100% basis (in January 2012 dollars, not including working capital or interest during construction), of which our funding share would be US$4.8 billion. The project contemplates the construction of a 135,000 tonne per day concentrator and related facilities connected to a new port facility by 165 kilometre concentrate and desalinated water pipelines. Quebrada Blanca has entered into purchase arrangements in order to secure the supply of power to the project.
We had planned to file the updated social environmental impact assessment ("SEIA") for the Quebrada Blanca Phase 2 project by the end of the second quarter of 2013. During the quarter we have identified issues linked to permitting for existing facilities which need to be reviewed in connection with the resubmission of the SEIA. We are in discussions with regulators concerning these matters and are working towards resolution. While the timing for resubmission will depend in part on the outcome of these discussions, our current expectation is that the SEIA will not be resubmitted before the fourth quarter of 2013. We are reviewing our engineering and procurement activities on the project in light of this extended timetable for resubmission of the SEIA.
Discussions continue with the other shareholders of Quebrada Blanca concerning financing options for the project, which may include limited recourse project financing and, possibly, bringing in a new funding partner.
The feasibility study for Relincho is progressing and it is expected to be complete at the end of the fourth quarter of 2013. Permitting delays have affected the progress of third-party port and power supply facilities that we expected to use for Relincho, which delayed the completion of the feasibility study. Exploration and geotechnical drilling are ongoing and a new resource and reserve estimate is expected at the completion of the feasibility study. Based on the prefeasibility design, production would average 180,000 tonnes per year of copper and 6,000 tonnes per year of molybdenum over a 22-year mine life, with higher production in the first five years.
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