Antofagasta doubles cash return

Despite the uncertain market outlook, Antofagasta still trumped its earlier guidance by driving up annual production by 11 per cent to 709,600 tonnes, thanks largely to a 46 per cent hike in daily ore throughput at the Esperanza mine following last year's ramp-up. Daily throughput reached 89,000 tonnes during the final quarter of 2012, but this figure is expected to increase towards the mine's original design capacity of 97,000 tonnes by the early part of 2014.

Though realised prices for copper fell by 2 per cent to $3.66 (£2.46) a pound, the rise in group revenues reflected a 10 per cent rise in copper sales volumes to 703,200 tonnes, together with record gold/molybdenum by-product credits. These factors were also responsible for a modest 1.1 per cent rise in net cash costs to $1.03 a pound, set against a rise of 4.9 per cent when by-product credits are included. It's worth noting that the impact of these credits will be held in check in 2013 primarily due to a 13 per cent fall in forecast gold production, while bullion prices have also faltered in the early part of this year.

All told, Antofagasta managed to more than double net cash, while increasing cash profits by 4.6 per cent to $3.83bn. But the group was forced to book a $350m impairment charge on the carrying value of Antucoya. Steadily rising capital expenditure estimates have brought the economics of the project into question, and a decision to resume development is unlikely before 2015.

Investec predicts adjusted 2013 EPS of 130¢ (from 140¢ in 2012).