During the fourth quarter, OZ’s Prominent Hill operations produced 36,497 tonnes of copper and 30,526 ounces of gold, up 29% and 44% respectively on the previous quarter.

The results boosted full-year production to 96,310t of copper and 75,535oz of gold, well above the upper end of its 2009 production guidance of 85,000-90,000t copper and 60,000-70,000oz gold.

OZ said the production performance was due to increased milling rates, good recoveries and high plant utilisation.

Quarterly cash costs came in at US63.5c per pound while cash costs for the year were 70.7c/lb which was at the low end of 2009 cash cost guidance of 70-75c/lb.

“We were very pleased with the results at Prominent Hill over the quarter and for the year,” OZ managing director and chief executive officer Terry Burgess told journalists during today’s teleconference.

“These results exceeded our expectations.

“We made nameplate capacity in the December quarter and for 2010 we are now targeting 10 per cent above nameplate so it really is some good news out of the Prominent Hill operation.”

The company said performance of the processing plant during the quarter showed throughput of 8.8Mtpa, which is above nameplate capacity of 8Mpta, could be regularly achieved.

OZ expects production of 100,000-110,000 tonnes per annum of copper and 80,000- 90,000oz of gold for the 2010-12 period with cash costs forecast at 85-95c/lb for 2010.

During the quarter, volumes of ore mined increased to 2.9Mt after access was blocked from a series of misfires in the pit during the previous quarter.

Meanwhile, OZ continued work on feasibility studies into underground mining at Prominent Hill during the quarter.

“We have done a fair amount of work on the underground study,” Burgess said.

“This is progressing and we are optimistic about the Western Copper Zone in particular but we find we need to do more work on various options for the main underground deposit.

“Therefore we are now indicating that we will be getting information out to the market in the second quarter of this year on the underground study as we go through the various scenarios that we want to consider.”

He said that in addition to exploration aimed at extending the known Prominent Hill deposit, regional exploration in the surrounding tenement package was its highest priority.

“We are doing a lot of work there with geophysics,” Burgess said.

“It is helping us pinpoint where we should be drilling and where we should be targeting.

“We have got quite a lot of detail on that which we gave in a strategy conference in November and to achieve all the work that we need to do both in our area and in the adjacent area through the joint venture with IMX.”

OZ expects to spend around $20 million on exploration for the year. A drilling program testing some of the targets in the regional tenement package at Prominent Hill continued during the quarter.

Burgess also said the miner was on track to announce the resource statement for its Cambodian gold assets in the coming months.

OZ also repeated its intention to pursue copper assets that have the potential to produce 50,000tpa to 150,000tpa of copper.

“However, it is a competitive market and, most importantly, we want to see value before we proceed with anything,” Burgess said.

“The cash balance at the end of the year remains very favourable with more than $1 billion in our coffers.

“We are only going to spend that money if we find a project that justifies the expenditure and adds return to shareholders.”

Shares in OZ were up 3c to $1.18 in early afternoon trade.