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OPERATIONS
-------------------------------------Kansanshi Copper and Gold Operation Q1 2013 Q4 2012 Q1 2012--------------------------------------------------------------------------Sulphide ore tonnes milled (000's) 2,521 2,679 1,433Sulphide ore grade processed (%) 0.7 1.0 1.0Sulphide copper recovery (%) 91 92 95Mixed ore tonnes milled (000's) 1,928 1,951 2,562Mixed ore grade processed (%) 1.1 1.1 1.1Mixed copper recovery (%) 75 74 64Oxide ore tonnes milled (000's) 1,594 1,738 1,424Oxide ore grade processed (%) 2.2 2.0 2.0Oxide copper recovery (%) 86 90 85Copper production (tonnes) 63,123 70,431 56,611Copper sales (tonnes) 71,522 61,758 58,545Gold production (ounces) 36,866 45,410 27,158Gold sales (ounces) 37,518 38,179 30,308Cash costs (C1) (per lb)(1) $1.55 $1.45 $1.54Total costs (C3) (per lb)(1) $2.02 $1.90 $1.82--------------------------------------------------------------------------Sales revenues 562.9 494.3 490.5Gross profit 246.9 238.0 236.4EBITDA(1) 275.4 251.1 258.1--------------------------------------------------------------------------(1) C1 and C3 costs and EBITDA are not recognized under IFRS. See"Regulatory Disclosures" for further information.
Copper production increased by 12% from Q1 2012 mainly due to increased throughput rates as the benefits of the plant expansions are being realized. Targeted throughput rates were met during the wet season.
The increase in sulphide production compared to Q1 2012 is a result of the increased throughput, partially offset by lower grade and lower recoveries. The lower sulphide grade in the quarter reflects higher volumes processed from the main pit, which is a lower grade area. The lower recoveries compared to Q1 2012 reflects the lower feed grade.
Mixed ore production benefited from increased recoveries which increased by 11% over Q1 2012 reflecting the quality of the ore processed from the mine in the quarter. The mixed circuit maintained high average milling rates of 21,400 tonnes per day, but decreased compared to Q1 2012 when a temporary circuit reconfiguration increased the capacity of the mixed circuit.
Oxide throughput has increased by 12% from Q1 2012 as a result of the completion of the oxide expansion to 7.2 Mtpa capacity in Q3 2012. This increase in throughput combined with increases in grade and recoveries meant a 20% increase in oxide production.
Gold production was 36% higher than Q1 2012 as a result of gold circuit enhancements.
Q1 2013 C1 costs increased by $0.01 per lb from Q1 2012. C1 costs benefited from lower processing costs and lower treatment and refining charges. This benefit was slightly outweighed by increased mining costs of $0.02 per lb and a lower gold credit.
Sales revenues and gross profit increased by 15% and 4% respectively in Q1 2013 compared to Q1 2012. The increase in sales revenues reflects an increase in both copper and gold sales volumes, partially offset by lower realized prices. Gross profit was negatively impacted by lower realized copper and gold prices, higher royalty rates and higher depreciation. The Zambian copper royalty rate was increased from 3% to 6%, effective April 2012, resulting in an increase of $17.2 million in the royalty expense in Q1 2013 compared to Q1 2012.
