Outlook
Production in 2013 is expected to be between 250,000 and 270,000 tonnes of copper, and 126,000 and 140,000 ounces of gold.
The reduction in mining rates during the wet season will impact on progress in opening up mining areas and hence oxide ore availability. This, in turn, is expected to result in on-going variation in feed quality with respect to copper grade and gangue acid consumption (GAC). Pre-screening of high GAC ore continues to assist in reducing the GAC of ore ahead of processing.
Optimization of the recently commissioned fifth acid plant continues, with full production rates only expected after a water treatment system upgrade, expected to be completed during Q3 2013.
In the medium term, some of Kansanshi's mining areas for oxide ore are characterized as high grade, high acid-consuming ore. The supply of sulphuric acid from smelters remains constrained and acid manufactured at the Company's acid plants requires the import of sulphur at high costs. Some high grade, high acid-consuming ore will be stockpiled until acid is available from the Kansanshi smelter. The capacity of the oxide expansions will, in the interim, be utilized with a view to improving overall recovery at relatively lower throughput rates.
Copper in concentrate inventory levels marginally improved at the end of Q1 2013 compared to the end of Q4 2012. However no significant changes in smelter capacity within Zambia is expected that will enable a further reduction in inventory levels this year.
Sulphide ore processing is expected to remain strong. Refinements to the process control systems across mill and float continue to maintain and further enhance metallurgical performance in the sulphide circuit through increased circuit stability and rapid automated response to mineralogical and process variations. Gains particularly in throughput have been realized and this is expected to continue as long as ore availability remains good.
-------------------------------------Guelb Moghrein Copper and Gold Operation Q1 2013 Q4 2012 Q1 2012--------------------------------------------------------------------------Sulphide ore tonnes milled (000's) 696 825 797Sulphide ore grade processed (%) 1.5 1.4 1.3Sulphide copper recovery (%) 95 93 92Copper production (tonnes) 9,700 11,038 9,258Copper sales (tonnes) 10,988 13,007 9,244Gold production (ounces) 16,190 16,802 15,337Gold sales (ounces) 19,462 20,864 15,311Cash costs (C1) (per lb)(1) $1.43 $1.13 $1.84Total costs (C3) (per lb)(1) $2.05 $1.69 $2.41--------------------------------------------------------------------------Sales revenues 106.8 127.3 90.3Gross profit 36.3 47.5 24.4EBITDA(1) 43.7 54.2 28.5--------------------------------------------------------------------------(1) C1 and C3 costs and EBITDA are not recognized under IFRS. See"Regulatory Disclosures" for further information.
Q1 2013 copper production increased by 5% from Q1 2012, as a result of increased grades and increased recoveries offset by lower throughput rates. Copper recoveries were increased as the gold bullion plant flotation cells are now being used to produce copper and this allows for longer flotation times. Throughput was affected by lower mill availability in the quarter due to maintenance downtime.
