Antofagasta spend bucking the cycle

While the group's figures obviously suffer year-on-year from significantly lower prices - for both copper and key by-product molybdenum - the company has mitigated some of this impact with a rigorous cost-cutting exercise. Excluding by-product credits, average cash cost per produced lb of copper was 116¢ as opposed to 130.6¢ for the first half of 2008. Nevertheless, full-year cash cost on the same basis is now forecast to be 117¢ per lb as opposed to the originally forecast 110¢, as the company has not benefited as much as it had hoped from lower energy costs and a weakening Chilean peso. Unfortunately the cash cost including by-product credits actually rose from 72.2¢ to 97.5¢ - reflecting the plunge in the price for stainless steel additive molybdenum, which averaged $33.10 per lb in 2008's first half, but just $9.10 per lb through the first half this year.

Work on two key ongoing projects in Chile, an expansion at the core Los Pelambres mine and the development of the new Esperanza mine, remains well on track to deliver the planned jump in copper production to almost 700,000 tonnes for 2011. And Antofagasta is also moving ahead with other opportunities - proving up prospects across its Sierra Gorda licences elsewhere in Chile, as well as moving the very promising Reko Diq copper-gold joint venture with Barrick in Pakistan to the pre-feasibility stage. Tellingly, Antofagasta actually spent more on exploration and evaluation this half than it did a year previously, $31.3m as opposed to $22.4m - not something many other miners can say right now, and testament to the flexibility that its strong balance sheet brings.

Evolution anticipates adjusted full-year EPS of 50¢ (2008: 70¢).