The Oz Minerals Limited (ASX: OZL) share price is slipping after the company announced a solid first-quarter update for the 2021 calendar year today.
At the time of writing, the Oz Minerals share price has fallen 1.1%, trading at $24.35.
However, shares in the copper and gold producer are up almost 26% year-to-date thanks to copper surging to an 11-year high of US$4.2/lb.
What's driving the Oz Minerals share price today?
In its update for the three months ending 31 March, the company highlighted strong operational performance and advised it was on track to meet its FY21 production guidance.
The company's first-quarter production came in at 26,842 tonnes of copper and 55,150 ounces of gold, ticking the boxes to meet annual guidance.
Despite well-controlled cost performance over the quarter, the strengthening Australian dollar and weaker gold prices are expected to negatively impact comparative all-in sustaining costs and unit costs over the year. As a result, the company has modified its 2021 cost guidance.
A soaring copper price has helped counter rising costs and support robust operating cash flows. Furthermore, gold prices appear to have hit a short-term bottom in the past few weeks, bouncing from US$1,680/oz in late March to US$1,795/oz this week.
Advancing pipeline projects to drive growth
Oz Minerals continues to advance its growth pipeline projects, demonstrating the quality of organic growth options available. The company highlighted key drilling programs underway at Prominent Hill, West Musgrave and Santa Lucia. These projects are all progressing to support key milestones and decision points later this year.
Broker Macquarie had previously highlighted Oz Minerals as its preferred exposure to copper with several key organic catalysts headlined by its Prominent Hill expansion update later this year.
The broker rated its shares as outperform with a $30.00 target price on 16 March. Oz Minerals expects to complete a shaft expansion study in 3Q21 at Prominent Hill to enable 6Mtpa of production from 2025.
