BASE METALS

Medium to long-term metals outlook positive-Southern Copper Chair

Southern Copper reported copper, moly, silver and zinc production all increased during the first six months of this year.

RENO (MINEWEB) - 

Recently commenting on Southern Copper Corporation's first six month results, Chairman German Larrea said, "Looking beyond the current volatile markets, the medium to long-term outlook remains positive for metals, as strong demand growth from China and the emerging economies is poised to continue."

SCC reported copper mine production increased 16% in the first half of this year to 270,435 tons compared to 270,435 tons mined during the same period of last year. The increase was attributed to better ore grades and recovery of the Buenavista, La Caridad and Cuajone production.

Molybdenum, silver and zinc production also increased by 6%, 14%, and 8%, respectively, during the first six months of the year. Moly production rose from 8,775 tons mined during the first half of last year to 9,310 tons, while silver production increased from 6,110,000 ounces in the first half of 2011 to 6,934,000 ounces. Zinc production rose from 41,361 tons in the first six months of last year to 44,910 tons.

In the second quarter of the year, copper mine production increased by 10% to 160,595 tons, compared with 146,240 tons in the second-quarter 2011. "This increase was the result of higher production at the Cuajone, La Caridad and Buenavista mines, which increased production by 31% 18% and 4%, respectively due to higher ore grades and recoveries," said SCC.

Moly production increased by 4% during the second quarter of this year from 4,502 tons in the second quarter of 2011 to 4,687 tons, due to higher production at the Cuajone and La Caridad mines as a result of higher grade and recovery.

Silver mine production was up 10% during the second quarter from 3,197,000 ounces in the second-quarter 2011 to 3,514,000 ounces, "principally as a result of higher production at our Cuajone (+31%), Buenavista (+28) and La Caridad (+12%) mines," said SCC.

Zinc production increased 4% during the second quarter from 21,366 tons in the second-quarter 2011 to 22,227 tons.

FINANCIALS

Net income for the first six months of this year was $1.19 billion or $1.39 per share, up 4.3% from $1.14 billion or $1.32/sh for the same period of last year.

On July 26, the SCC board authorized a cash dividend of 24-cents per share, payable on August 28, 2012.

For the second quarter of 2012 SCC reported a 14.4% decline in net income from $658 million or 77-cents per share for second-quarter 2011 to $564 million or 66-cents per share.

The SCC Board of Directors approved $1.5 billion in capital expenditures for 2012, which is being used for projects in Mexico and Peru, as well as for maintenance and replacement capital.

Larrea noted SCC gas spent $407.7 million on capital projects during the first half of the year "and have additionally committed approximately $300 million for mine equipment to support the Buenavista projects" in Mexico.