OZ Minerals (ASX:OZL) share price in focus after production forecast hike

Wednesday sees another bump in production guidance for this mining company.

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The OZ Minerals Limited (ASX: OZL) share price is on watch this morning as the gold and copper miner released its third-quarter results.

OZ Minerals shares finished in the red yesterday, around 0.7% down from the previous close at $25.99. That’s a shade off their 52-week closing high of about $27.

Read on for more details.

OZ Minerals hikes gold production forecasts

In its Q3 report, OZ explained that full-year group copper production is tracking in line to meet previously outlined guidance.

The company also detailed a number of progress points achieved throughout the quarter. The updates covered each of its Prominent Hill, West Musgrave province, Carrapateena and Brazil sites.

For instance, the company commenced a shaft mine expansion at Prominent Hill. And drilling has now started at West Musgrave’s Succoth Copper Deposit.

Aside from this, OZ Minerals left the quarter with a cash balance of $188 million. This is up from $134 million at the start of the period.

This was helped by a strong base of gold production in Q3. It produced 65,932 ounces on an all-in-sustaining cost (AISC) of US$1.067 per pound.

This appears to be backed by performance enhancements at each of its production facilities. This “continues to improve with production rates of 5.3Mtpa achieved during September.”

As a result of this uptick in capacity and strength in the underlying commodity markets, OZ Minerals has subsequently increased its full-year gold and copper production guidance.

The company now sees full-year gold production in a range of 220,000–243,000 ounces, up from 205,000 to 228,000.

Copper production guidance for the full year remains unchanged at 120,000 to 145,000 tonnes, underscored by production of 33,794 tonnes in Q3.

Importantly, OZ also forecasts its new guidance on a lower AISC base of US$1.25-US$1.40 per pound. This is around a 3%–5% decrease from previous modelling.

The OZ Minerals share price will be on watch this morning from the opening of trade as the market digests its production guidance upgrade.

OZ Minerals share price snapshot

The OZ Minerals share price has been a net winner on the ASX in 2021, having posted a return of 38% this year to date.

This extends its return over the last 12 months to 76%, well ahead of the S&P/ASX 200 Index‘s (ASX: XJO) return of ~19% in the same time.

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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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