LOGIN
FREE REPORT
REQUEST WALKTHROUGH
search
times
New call-to-action

Tags

See all

Articles

OZL

OZ Minerals Ltd – Solid September Quarter 2021 Report

Timothy Anderson

Timothy Anderson is a contributor with the Australian Stock Report and is currently in his final year of studying a Bachelor of Applied Economics and a Bachelor of International Relations and Politics at the University of Canberra. Tim has a genuine passion for economics, specifically in macroeconomic analysis including how certain macroeconomic policies and indicators affect financial markets and the economy, as well as how these factors affect personal investment strategies. Tim currently holds RG146 Tier 1 Generic Knowledge qualifications.

OZ Minerals (ASX: OZL) is a copper and gold producer based in South Australia. OZ Minerals operations include South Australia (Prominent Hill and Carrapateena), Brazil (Antas, CentroGold. Pedra Branca) and Western Australia (West Musgrave). Oz Minerals has a market capitalisation of A$8.7 billion.

 

asx.ozl

 

What are the key features of the September quarter result for FY21?

OZ Minerals produced 33,794 tonnes of copper in the September quarter of 2021. This is in line with FY21 guidance for copper production of 120,000 to 145,000 tonnes.

OZ Minerals also produced 65,932 ounces of gold in the September quester of 2021. Production was higher than expected due to higher grades from ore sourced from the Carrapateena mine. As a result, OZ Minerals increased their FY21 gold production up by 15,000 ounces, from 205,000-228,000 to 220,000-243,000 ounces. In addition, OZ Minerals lowered its All-in Sustaining Cost guidance for FY21 (from US$1.30-1.45 per pound of copper to US$1.25-1.40 per pound of copper) reflecting higher gold credits.

As of 30 September 2021, OZ Minerals had a $188 million cash balance as well as an undrawn debt facility. This provides OZ Minerals capacity to fund new projects.

 

What is the outlook for OZ Minerals?

In general, the outlook for copper is very promising. This is partly due to increased demand from electrification (such as motor vehicles) in response to moving towards net-zero emissions in 2050 and partly due to supply constraints with copper grades in aggregate from existing mines worldwide declining over time and the lack of large new projects worldwide.

OZ Minerals continues to further develop its copper producing mines at Prominent Hill and Carrapateena by undertaking exploration and development projects. OZ Minerals is also undertaking a feasibility study to develop the nickel/copper resource at West Musgrave. Importantly, a drilling program has commenced at the Succoth copper deposit. This deposit has an Inferred Mineral Resource totalling 156 million tonnes at 0.60% copper, which was not factored into the West Musgrave Pre-Feasibility Study. This deposit can potentially add upside in mine life or production rate at the proposed West Musgrave mine. Finally, OZ Minerals has the potential to expand copper production in Brazil.

 

What is the market reaction to the September 2021 result?

OZ Minerals September quarter result was a little ahead of market expectations. OZ Minerals share price is around $26.40 (20 October 2021), up around 1.5 per cent. OZ Minerals trades on a forward P/E ratio in the high teens and dividend yield of around 1% (fully franked).


Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)
(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).
This article is provided for informational purposes only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law, we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceedings. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.
ASR has no position in any of the stocks mentioned.

New call-to-action
New call-to-action

Company Articles

Looking for more Stock Recommendations?

Fill in your details to receive our special report: Top 3 Income Stock Recommendations for 2020.