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OZ adds fuel to the fire on Northparkes

OZ Minerals boss Terry Burgess was unusually tight-lipped this morning about merger and acquisiti...

Kristie Batten
OZ adds fuel to the fire on Northparkes

It was more about what Burgess did not say than what he actually did during OZ’s June-quarter teleconference for media this morning.

Burgess is usually fairly open about what the company is eyeing at any given time.

But after three questions from different journalists about Northparkes this morning, Burgess refused to comment.

By the third try by the Australian Financial Review, Burgess laughed it off.

“I don’t know,” he said.

“You work for the AFR. I’ve seen lots of stuff in the AFR.”

Burgess said the company’s strategy of assets producing 50,000-100,000 tonnes of copper per annum in mining-friendly jurisdictions was unchanged.

“It’s out there what we might or might not look for,” he said.

However, he did apologise to the media for his lack of comment on the rumours.

“I guess you really didn’t think I was going to address them, anyway,” Burgess said.

Analysts and media have speculated for weeks over OZ’s potential bid for Northparkes, which heated up after OZ delayed its Carrapateena decline.

It has been reported that OZ is one of the front-runners in the auction for the New South Wales mine, with other rumoured contenders being Glencore Xstrata, MMG and the Carlyle Group.

“The consensus view seems to be that OZ is likely to be successful in purchasing Northparkes, as other parties have pulled out of the process,” Foster Stockbroking said this morning.

Meanwhile, tough and disruptive were the words Burgess used to describe the company’s June quarter production.

Production from the Prominent Hill mine was 17,379 tonnes of copper and 31,018 ounces of gold, compared to 20,474t copper and 31,790oz gold in the March quarter.

The company maintained 2013 copper guidance of 82,000-88,000t copper, but gold guidance was lowered to 120,000-130,000oz from 130,000-150,000oz.

Burgess said the company would focus on copper for the rest of the year, with 2013 production expected to be weighted towards the current half.

“The fourth quarter in particular should be the best quarter of the year,” he said.

Burgess said the quarter had been impacted by the south wall overburden slip, though remediation of the area had been completed ahead of schedule, allowing full access to the Malu pit.

Quarterly C1 cash costs rose to $US1.947 per pound of payable copper from $1.85/lb in the previous quarter.

Despite this, C1 cost guidance of $1.65-1.80/lb was left unchanged due to the lower Australian dollar.

In an effort to reduce costs, 61 positions were made redundant during the quarter, mainly from non-production areas like exploration, services and office staff.

OZ shares slumped 5.6% this morning to $A4.38 after hitting an intraday low of $4.33.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

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