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Antofagasta 2011 Profit Rises On Higher Output, Prices

3/13/2012 5:15 AM ET

Antofagasta Plc (ANTO.L) reported Tuesday a higher profit for full-year 2011, reflecting increased production of copper and gold, mainly due to start-up at its Esperanza mine, as well as higher commodity prices. The Chilean miner said market fundamentals remain positive for copper, but prices in the short-term are likely to remain volatile.

Chairman Jean-Paul Luksic stated, "2011 was a solid year for the Group, in terms of both production and profitability, mainly reflecting the impact of the start-up of Esperanza...The ramp-up of Esperanza was the key milestone for the Group in 2011, contributing 90,100 tons in its first year of production."

The company's total dividend for 2011 is sharply down at 44 cents, compared to 116 cents paid in 2010, reflecting a 76 percent drop in proposed special dividend. The special dividend of 100 cents in 2010 reflected "the successful completion of the two key growth projects - the Los Pelambres expansion and the Esperanza mine development - in that year," the company noted.

Announcing its preliminary results for the full year 2011, Antofagasta said its profit before tax increased to $3.08 billion from $2.57 billion in the previous year.

On a per-share basis, earnings were 125.4 US cents, higher than 106.7 cents per share in the prior year. Excluding exceptional items, earnings per share increased to 139.7 cents from 100.6.cents reported a year earlier.

Revenues for the year grew 32.7 percent to $6.08 billion from $4.58 billion in the preceding year.

Group copper production was 640.5 thousand tons, up 22.9 percent from last year. Group gold production surged 460.7 percent to 196.8 thousand ounces and production of molybdenum at Los Pelambres improved 12.5 percent from a year ago.

Average LME copper price increased 16.9 percent to 399.7 cents per pound. Average realized copper price was 373 cents, compared to 359 cents a year ago. Average gold price advanced to $1,572 per ounce from $1,226 a year ago. Molybdenum price averaged $15.5 per pound, down from $15.7 per pound a year earlier.

Looking ahead to the full-year 2012, the company still expects to produce about 700,000 tons of copper, 280,000 ounces of gold and 11,000 tons of molybdenum. The company noted that the increase in copper and gold production reflects the first full-year of operation at Esperanza.

Excluding by-product credits, weighted average gross cash costs are expected to be nearly 165 cents in 2012, compared with 155.2 cents in 2011.

The board recommended a final dividend for 2011 of 36 cents per share, to shareholders of record on May 11, 2012, payable on June 14. The final dividend comprises an ordinary dividend of 12 cents and a special dividend of 24 cents.

ANTO.L is currently trading at 1,236 pence, down 27 pence or 2.14 percent, on a volume of 522 thousand shares on the LSE.

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by RTT Staff Writer

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