The OZ Minerals Limited (ASX: OZL) share price could be on the move on Tuesday following the release of the copper miner's second quarter update.
How did OZ Minerals perform in the second quarter?
During the second quarter OZ Minerals produced 28,525 tonnes of copper. This was a 3.9% lift on the first quarter thanks to a solid performance from its key Prominent Hill operation.
Year to date, total copper production has reached 55,967 tonnes, putting the company in a good position to achieve its FY 2019 guidance range of 103,000 to 115,500 tonnes.
However, total gold production fell quarter on quarter to 27,072 ounces, bringing its year to date production to 61,720 ounces. This puts it on track to achieve the low end of its full year guidance range of 122,200 to 135,600 ounces.
As expected, OZ Mineral's C1 cash costs returned to more normal levels in the second quarter. The company averaged 78.6 U.S. cents per pound, up from 60.7 U.S. cents per pound in the first quarter. Whilst this is a large increase, it is at the low end of its full year guidance range of 77 to 88 U.S. cents per pound.
The company finished the period with a cash balance of $187 million, following a $177 million investment into its Carrapateena operation.
Managing director and CEO, Andrew Cole, appeared to be pleased with the company's performance in the first half.
He said: "At the midpoint of the year we can mark progress right across the portfolio on delivery of our growth strategy. Both major assets, Prominent Hill and Carrapateena, are on plan. The strategy for realising value in the Carajás and Gurupi provinces in Brazil has been released, West Musgrave study work has advanced, and two new exploration earn-in agreements were established."
Overall, I thought this was a reasonably mixed update. Copper production was strong, but its gold production was a little underwhelming.
And whilst I think OZ Minerals could be a decent option for investors, I still feel that Rio Tinto Limited (ASX: RIO) would be a better way for investors to gain exposure to copper right now.
