Company has three business divisions: Mining, Transport and Water, being the first of them the most important. Antofagasta plc is one of the largest international copper producing companies in the industry. Its activities are mainly concentrated in Chile where it owns and operates three copper mines, Los Pelambres, El Tesoro and Michilla, with a total production of 498 thousand tonnes in 2004, at an average cash cost of 24.4 c/lb. The Groups mining division, Antofagasta Minerals, is also actively involved in exploration particularly in Chile and Peru. The transport division operates an extensive rail network servicing the important mining region of northern Chile, which is centred on the port of Antofagasta. The water division operates a concession for the distribution of water in this region.

SALES PER ACTIVITY (Data as of 31/12/2005)

Copper mining: 94%
Rail transport:   4%
Water:             2%

ah! i like them a lot and have held them for a good while now - and of course showing a healthy profit

"rekirkham - 19 Sep 2013 10:31 - 43 of 48, How kind RK... I accept -):

Wish I could float a suggestion Cynic as I used to like this sector, but have cooled on it over the last 6 months. I still look at Ved. though mainly because they seem to be quite diversified.

i too have avoided the sector because when everything was in the doldrums, base commodities suffered badly ....... however, we're fast emerging from those gloomy days and this will be a prime sector to benefit

one should probably watch the price of nickel too as that is a key and expensive component of stainless

Thanks, worth knowing, I seem to remember VED has a smelter but not sure about the nickel. I must revisit the sector for the reasons you give.

just looked at Kitco nickel charts ..... some very conflicting info there :-(

Have my chart set on gold at Kitco, but christ knows where that's going!

Anyone know the divi details? I have 1.92 to 7.08%.

Ex-divi 23rd April 2014 (8.61¢)

And some!

Well spotted! Amazing how an errant decimal point can make all the difference!
Divi is 86.1¢

METALS-Copper hits 11-wk high on tight supply
SYDNEY, May 19 (Reuters) - London copper hit its highest in 11 weeks on Monday as China pledged to quicken the pace of financial reform, supporting growth in demand for commodities as global exchange supplies of the metal dry up.
"It's been an impressive rally from the March lows with a very strong seasonal backdrop to copper ... total inventories are also declining very quickly at the moment," said analyst Mark Keenan at Societe Generale in Singapore.

Specs cut bullish bets in gold, raise copper, silver longs -CFTC
May 16 (Reuters) - Hedge funds and money managers cut their bullish bets in gold futures and options, reversing the previous week's gain due to profit-taking, according to data from the Commodity Futures Trading Commission on Friday.
The group, also known as managed money, however, raised its net longs in silver and copper on a better economic outlook as U.S. equities measured by the S&P 500 index rose in the week to May 13, according to the CFTC's latest Commitments of Traders report.

Average price of copper I am advised is about $ 3.21 per pound.
It was recently down to about $3.29 - so now easing up again
Should be good for Antofagasta and khazikhyms, if you can buy on dips ?

Any comments

Sorry my copper prices are wrong -
was down to about $2.9 per pound some months ago

"Things are looking down for Chile-focused miner Antofagasta, Investec says, due mainly to the strength in sterling, an expected increase in the tax rate and the uncertain near-term outlook for the price of copper.

The effective tax rate is seen rising to 35% from fiscal year 2017 in comparison to 29% beforehand. In particular, the full 35% rate is expected to be applied to overseas cash returns.

As a result the broker has cut its price target for the stock to 690p (from 715p).

In parallel, the investment in capacity of recent years will probably see moderate oversupply over the next year or two, which may further undermine prices. To that one must add the near-term uncertainty about Chinese demand.

Hence Investec´s decision to maintain its 'sell' recommendation."

StockMarketWire.com
Antofagasta's revenues fell to $5,290.4m in the year to the end of December - 11.4% down on 2013 as realised copper prices dropped by 8.5% accompanied by a small decline in sales volumes.

Earnings before interest, tax, depreciation and amortisation fell 17.8% to $2,221.6bn, as a result of lower revenue and an increase in cash costs offset by lower exploration and evaluation costs.

Antofagasta said the EBITDA margin remained strong at 42.0%, although this was down on 45.3% in 2013.

Net earnings fell 8.7% to $602.0 million, excluding the $142.2m deferred tax provision resulting from the changes in the Chilean tax law during 2014 (decrease of 30.3% to $459.8 million including this deferred tax provision). The decrease is primarily due to the decrease in EBITDA and a $88.3m increase in depreciation, principally at Centinela and Michilla.

Earnings per share for the year were 61.0 cents, excluding the deferred tax provision resulting from the changes in the Chilean tax law (46.6 cents including this provision).

Operating cash flow generation was $2,507.8 million in the period, $151.4 million lower than in 2013.

Chief executive Diego Hernández said: "I am pleased to report that Antofagasta's operating performance in a year of falling copper prices continued to be solid and steady.

"With our focus on managing costs across our operations, helped by consolidating the Centinela district among other innovative initiatives, the impact of lower revenue to operating cash flow was reduced.

"This reflects the underlying health of the business as does the strong EBITDA margins of 42% which are among the highest of our peers. Our strong balance sheet means that we can continue to invest throughout the cycle and we have a portfolio of high quality organic growth projects in the pipeline to secure our future.

"Although we remain cautious on the macro environment for 2015, we are pleased to announce a final dividend of 9.8 cents per share, which is in line with our stated dividend policy. Our strategy for Antofagasta remains unchanged: we are focussed on engaging with all our stakeholders to find solutions to long term issues reinforcing our licence to operate, and we concentrate on doing what we know best - producing copper, reducing costs and building a platform for long term growth across the cycles."

StockMarketWire.com
Antofagasta's copper, gold and molybdenum production fell in the first quarter compared with the previous three months. And the group has warned that full-year copper output will be below forecasts.

Copper production was 146,400 tonnes - 13.6% down on a year ago and 21.9% lower than he previous quarter, reflecting primarily the impact of disruptions at Los Pelambres during the quarter that resulted in lower throughput.

Gold production totalled 57,400 ounces - a 30.3% decrease the previous three months due to lower throughput at Los Pelambres and Centinela and similar to Q1 2014.

Molybdenum production at Los Pelambres was 2,100 tonnes in Q1 2015, compared with 2,400 tonnes in Q4 2014 principally due to lower throughput but 23.5% up a year ago as higher grade material was mined.

Chief executive Diego Hernández said: "As we have previously announced, the first quarter of this year has been affected by water issues of very different kinds at both Los Pelambres and at Centinela.

"At Los Pelambres protests by members of the local community concerned about the shortage of water in the region blocked access to the mine impacting production; while in the north of Chile our operations were disrupted by unprecedented heavy rains.

"After reaching agreement with the local community at Los Pelambres, normal operations resumed, as have operations at Centinela following the end of the rain storms.

"Although we expect to recover some of the lost production resulting from these disruptions, production for the year will be some 15,000 tonnes of copper lower than we originally forecast. However, we still expect our net cash costs for the year to be around $1.40/lb.

"Despite the disruption we have seen in this first quarter, we remain confident that our existing strategy of reducing costs, engaging with stakeholders to find solutions to long-term issues and investing through the cycle will continue to strengthen the group."

Citigroup stays sell on Antofagasta, target raised to 650p from 630p.

StockMarketWire.com
Antofagasta's first half copper and gold output fell in the first half although the group saw production recover in the second quarter.

Copper production in Q2 2015 was 157,000 tonnes, a 7.2% increase compared with the previous quarter, reflecting primarily the impact of the protests at Los Pelambres and the heavy rains at Centinela Concentrates in Q1

Group copper production in H1 2015 at 303,400 tonnes was 12.9% lower than in the same period last year primarily due to expected lower grades and lower throughput and recoveries at Los Pelambres.

Copper sales for the half year were 290,100 tonnes as bad weather delayed shipments over the period end which have normalised in July.

Gold production was 112,500 ounces in H1 2015, a 9.1% decrease on H1 2014 due to lower production at Los Pelambres.

Molybdenum production was 23.8% higher at 2,600 tonnes in Q2 2015 compared with Q1 2015 and 42.4% higher in H1 2015 compared with the previous year, principally due to a higher molybdenum-grade zone being mined during Q2 2015.

Chief executive Diego Hernández said: "Following the difficulties with protesters encountered at Los Pelambres and heavy rains at Centinela in the first quarter, we are pleased to report that production has been stronger in the second quarter.

"Whilst we have seen a positive recovery from these disruptions, overall performance during the first half of the year has not been as good as originally expected.

"Construction of Antucoya was completed on budget but we have experienced some commissioning issues on the crusher circuit which means we now expect first production to be delayed until the end of Q3, reducing full year guidance to 665,000 tonnes.

"We are confident that a recovery in existing mine performance combined with new volumes from Antucoya will lead to a marked improvement in production during the second half of the year.

"Despite the current weaker copper market environment, we have a strong competitive position as a low-cost producer and we remain confident in the strength of the copper market fundamentals in the medium to long term. We will continue with our longer-term strategy of reducing costs and investing through the cycle to strengthen the Group."

Credit Suisse note:
■ Event: ANTO has purchased a 50% interest in the Zaldivar copper mine from Barrick Gold and will become the operator with Barrick retaining a 50% stake. Total consideration is US$1,005m in cash ($980 upon closing, rest spread over five years). The transaction will be funded with cash and is expected by the company to be immediately earnings and cash flow accretive. The deal is expected to complete in Q415.
■ View: It is no surprise that ANTO has done a deal given previous CEO comments around growth by acquisition, the company's strong balance sheet and recent project delays. The valuation appears full and will likely rule out a special dividend for the foreseeable future. The company has said there is potential to expand both the mine's production base and mine life and also see synergy potential from 2016 but would not give precise detail at this stage.
■ Premium valuation: Our Barrick analyst valued 100% of the asset at $1.2bn using a WACC of 8% therefore on this basis the purchase price is at a 67% premium to NPV. Based on available data the transaction multiple equates to a PE of c11x on 2014, 16x under our 2015 base case (c280c copper) or c30x at spot (240c) copper prices. Although these assets are higher cost than ANTO's existing asset base, the deal is likely to be earnings accretive at spot prices or higher due to ANTO's net cash balance and low interest rates.
■ Zaldivar details: open pit heap-leach copper mine in Northern Chile. In 2014, it produced 100 kt copper, at a net cash cost of 179c/lb and PBT of $244m. It has 2.5mt of contained copper reserves and a LOM of 14 years.

StockMarketWire.com
Antofagasta's revenue fell to $1,785.9m in the six months to the end of June, 31.4% down on a year ago.

This was due to significant declines in copper and by-product prices and lower sales volumes due to delayed shipments from bad weather.

Earnings before interest, tax, depreciation and amortisation was $561.6m, a 48.6% decline reflecting the lower revenue which was partly offset by a 18.9% decrease in operating costs.

Total operating costs were $1,224.3 million, $284.0 million lower than in H1 2014 of which $198 million was due to a reduction in costs and the balance was due to lower volumes.

Net earnings from continuing operations, were $86.3 million, in line with the decrease in EBITDA with improved net finance expenses and lower taxes.

Operating cash flow was $807.7 million compared with $1,170.0 million in the H1 2014

CitiBank note today:
"Time to Buy
We resume coverage on Antofagasta, following a restriction period, and upgrade from Sell to Buy with a £4.40/share price target (having been sellers since 2012). The stock has lost ~75% of its value over the past three years and has relative scarcity within the mining sector given its strong balance sheet, ability to self-fund at spot prices, and pure exposure to a structurally deficit commodity. We see ANTO as a “trough cycle survivor” which should appeal to investors despite the risk of a further copper price decline. Spot 2017F attributable EV/EBITDA at 7.2x, while not cheap, is still significantly below the likes of SCCO and BHP.
Trough Cycle Survivor
We calculate 1.3x 2017F Net Debt/EBITDA at spot copper. The company is FCF neutral at current copper prices in 2017+ (negative 2016 due to Encuentro capex). Volume growth is limited until Los Pelambres expansion or second Centinela concentrator; but we see value at current levels, even ex-growth.
Copper Structurally Good, Technically Challenged
Citi’s global commodity team maintains a positive outlook for copper, viewing 2Q16 as the trough in the price (averaging $4,300/t). Structural deficits are expected to emerge in 2020+, exacerbated by the current downturn and lack of investment. Yet, short-term we do acknowledge the downside price risks.
Zaldivar Incorporated and Other Key Changes in Our Model
Earnings uplift from Zaldivar is more than offset by a significantly lower copper price forecast, resulting in greater than 50% EPS downgrades for 2015-17F. NPV has dropped to £5.0/sh from £6.8/sh. Price target based on NPV and multiples based valuation methods is cut to £4.40/sh from £6.0/sh due to lower NPV and earnings.
4Q 2015 Production Report on 27th January and 2016 Roadmap
We expect 731kt copper guidance @$1.48/lb C1 for 2016. Key 2016 events include ramp-up of Antucoya, Encuentro oxides first production, integration and potential revised mine plan at Zaldivar, EIA submission for Los Pelambres (LP) expansion, Centinela Moly plant construction, and progress/resolution of LP lawsuit."