Peru's Milpo 2015 profit drops on metals price slump
Votorantim Metais unit Milpo's profit for full-year 2015 plunged 65% as falling metals prices offset higher lead and silver output and lower costs, while six other local zinc miners posted losses.
Net income fell to US$36.2mn in 2015 from US$104mn a year earlier, Milpo said in a corporate filing to securities regulator SMV. Sales dropped 17% to US$626mn last year from US$758mn a year earlier.
The company trimmed cash costs to US$33.30/t from US$35.50/t after Milpo last year installed a third ball mill at its Cerro Lindo mine to boost treatment capacity to 18,000t/d.
The company, which closed its high-cost Chapi and Iván copper mines in 2013, allocated US$107mn to capex in 2015, down 11%. Milpo said it is working on studies for 10,000t/ plants at its Pukaqaqa and Magistral copper projects, in addition to an ongoing feasibility study for a 5,000t/d mine at the Aripuanã zinc project in Brazil.
Milpo is also working on study for a 3,000t/d operation at its Shalipayco zinc project, a road to its Bongará property and is waiting for the government to reply to a proposal to develop the Michiquillay copper project, all in Peru.
Zinc concentrates production was little changed at 268,957t in 2015, while copper fell 3% to 40,375t on account of falling ore grades at Milpo's El Porvenir mine. Lead output gained 8% to 45,169t and silver production rose 13% to 7.64Moz.
Zinc sales slid 1% to 269,634t, while copper dropped 3% to 40,195t and lead rose 8% to 45,005t, Milpo said. Milpo mainly sells its production to Votorantim's Cajamarquilla zinc refinery, and traders Glencore, Trafigura Beheer and Louis Dreyfus.
Zinc prices fell 28% to US$1,611/t in the fourth quarter from a year earlier, while lead dropped 15.9% to US$1,681/t, the company said. Copper prices fell 26% to US$4,887/t and silver declined 10.3% to US$14.80/oz.
"The strengthening of the US dollar and the increase in the US reference rate at the end of 2015 merely continued to pressure industrial metals prices without expectations for a short term recovery," Milpo said in the statement. "This was despite forecasts of a supply-demand imbalance, especially for zinc and lead, whose effect on prices will probably be delayed by a few more quarters."
Milpo-controlled zinc producer Atacocha posted a US$22.5mn loss in 2015 compared with a US$2.24mn loss a year earlier, while sales fell to US$73.8mn from US$98.7mn a year earlier, the company said in a separate filing.
PERU ZINC MINERS
The Brescia Group's zinc producer Minera Raura trimmed its annual loss to US$1.99mn from a US$12.3mn loss a year earlier as sales rose to US$89.6mn from US$83.3mn the previous year.
Mitsui Mining unit Minera Santa Luisa posted a 13.5mn-sol (US$3.9mn) loss compared with a 2.62mn-sol profit the previous year, while sales fell to 129mn soles from 171mn soles a year earlier.
Glencore zinc-lead unit Perubar posted a US$2.6mn loss compared with a US$584,000 loss a year earlier as sales declined to US$23.9mn from US$25.8mn a year earlier
Sierra Metals unit Minera Corona's profit fell to US$7.5mn from US$29.8mn a year ago as sales fell by nearly half to US$80.1mn from US$119mn, according to a statement.
San Ignacio de Morococha (Simsa) pared its losses to 28.3mn soles from a 44.3mn-sol loss a year earlier, as sales rose to 88.5mn soles from 45.8mn soles.
Zinc-lead-copper miner Castrovirreyna reduced its annual losses to US$2.8mn compared with a US$8.4mn loss a year earlier while reporting zero sales after shutting its San Genaro mine in January 2014 because of high operating costs.
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