OZ Minerals Ltd, which has struck a deal with China Minmetals Non-Ferrous Metals Co Ltd that will give it funds to pay down debt, has reported mixed production results from its Golden Grove mine in WA.
OZ Minerals Ltd, which has struck a deal with China Minmetals Non-Ferrous Metals Co Ltd that will give it funds to pay down debt, has reported mixed production results from its Golden Grove mine in WA.
During the three months to the end of March, OZ reported a higher than planned zinc production of 20,586 tonnes while copper production reached 7,012t.
OZ said while copper production had increased, it was lower than expected due to an unplanned shut down of the mill.
The company is shifting towards copper production at Golden Grove due to a sharper fall in the price of zinc.
Total cash costs at Golden Grove were higher at US22 cents per pound due to a higher proportion of copper produced.
Meantime, production at the Century mine was lower at 101,961t due to the impact of wet weather during the period, which was the heaviest in the history of the Mount Isa based mine.
OZ Minerals said its production guidance for the year remained unchanged at 495,00 tonnes of zinc concentrate.
At the Sepon project on Laos, copper production was 17,217 tonnes and gold output was 26,422 tonnes.
OZ Minerals said it guidance for calendar 2009 copper production at Sepon was unchanged.
OZ Minerals recently recommended a revised offer from Minmetals that will deliver it $1.75 billion in cash.
Minmetals hopes to acquire all of the companies metals mining assets, including Century, Sepon, Golden Grove, Rosebury, Avebury and Dugald River.
The deal excludes the Prominent Hill project in South Australia and selected assets in Cambodia and Thailand, which OZ Minerals will retain.
Minmetals had originally wanted to acquire Prominent Hill, however Treasurer Wayne Swan ruled it out on national security interests.
The operation is in a weapons testing area.
OZ Minerals also said that it continued to working with its bank lenders to secure an extension to an upcoming debt maturity.
In late February, OZ Minerals got approval to extend the terms of its debt arrangements to March 31.
Its bankers then granted a further extension to April 30.
"The company continues to work with its lenders to secure a further extension to its facilities to 30 June 2009 to facilitate completion of the Minmetals transaction," OZ Minerals said.
The proposed transaction with Minmetals has been approved by the federal government and is awaiting Chinese government approvals.
Shareholders will vote on the deal at the company's annual general meeting in June.
