40% QUARTER ON QUARTER PRODUCTION INCREASE

Antofagasta plc CEO, Iván Arriagada said: “As we guided last quarter, production has significantly improved in the third quarter of the year due to greater water availability at Los Pelambres increasing throughput, the movement of the concentrates that were temporarily stockpiled in June, and the higher grades at Centinela Concentrates. Across the Group, copper production increased by 40%.

“In the first nine months of 2022 we produced 450,600 tonnes of copper at a net cash cost of $1.76/lb and we remain on track to achieve the lower end of our full year production guidance of 640-660,000 tonnes.

“Following the lifting of the suspension of the marine construction works at the Los Pelambres desalination plant project, its completion is now expected in H1 2023 and Group copper production in 2023 is estimated at between 670,000 and 710,000 tonnes.”

HIGHLIGHTS

PRODUCTION

• Group copper production in Q3 2022 was 181,900 tonnes, 40.1% higher than in the previous quarter with production nearly doubling at Los Pelambres, on improved water availability, and higher grades at Centinela
• Group copper production for the first nine months of the year was 450,600 tonnes, 17.0% lower than in the same period last year mainly due to the temporary reduction in throughput (-23.8%) at Los Pelambres as a result of the drought and the reduced concentrate pipeline availability in June, and expected lower grades (-21.7%) at Centinela Concentrates
• Gold production for the quarter was 46,900 ounces, 32.5% higher than in the previous quarter mainly due to higher throughput at Los Pelambres and higher grades at Centinela. The year-to-date production decreased by 35.6% to 120,700 ounces as a result of the expected lower grades at Centinela
• Molybdenum production in the quarter was 2,600 tonnes, 30.0% higher than the previous quarter on increased throughput at Los Pelambres. For the year-to-date, production was 6,600 tonnes, 1,800 tonnes lower than in the same period last year due to lower throughput and grades at Los Pelambres

CASH COSTS

• Cash costs before by-product credits in Q3 2022 were $2.12/lb, 28c/lb lower than in the second quarter reflecting the improved production during the period
• Cash costs before by-product credits in the first nine months of the year were $2.27/lb, 29.7% higher than in the same period last year mainly due to the temporary decrease in production in H1 and higher input prices during the period, particularly for diesel and sulphuric acid. Other inflationary pressures were largely offset by the weaker Chilean peso
• Net cash costs were $1.66/lb in Q3 2022 and $1.76/lb for the year-to-date, a 12.6% decrease compared with the previous quarter and 53.0% higher than the same period last year, respectively. This increase reflects the increase in cash costs before by-product credits and lower by-product credits due to lower by-product production

GROWTH PROJECTS UPDATE

• As at the end of Q3 the Los Pelambres Desalination Plant and Expansion projects, including design, procurement and construction, were 88% complete
• As previously reported, on 15 August unusually high sea swells overturned a construction platform working on the marine works of the desalination plant project and work was temporarily halted pending recovery of lost equipment and materials. This suspension was lifted on 3 October and as a result of this and adjusted working conditions for assumed continuing swells, it is now expected that completion of the desalination plant will be in H1 2023
• Expected completion of the Los Pelambres concentrator plant expansion in Q1 2023 remains unchanged, as is the estimated total capital cost of the Los Pelambres Expansion project
• Progress continues on the engineering and remaining project studies for the Centinela Second Concentrator project. In line with our disciplined approach to capital allocation, the decision on when to submit the project to the Board for approval during 2023 will consider the completion date of the Los Pelambres Expansion project as well as ongoing discussions on the tax reform and mining royalty bills

GUIDANCE

• Copper production guidance for 2022 is unchanged at the lower end of the 640-660,000 tonnes range
• The Cost and Competitiveness Programme is on track to achieve the targeted savings of over $50 million during the year
• In 2023 copper production is expected to be between 670,000 and 710,000 tonnes, with completion of the Los Pelambres desalination and concentrator plants, and lower production at Centinela Cathodes
• Sustaining and mine development capital expenditure are expected to average approximately $1 billion per year for the coming years with some larger projects being advanced such as the expansion of the Los Pelambres desalination plant and the replacement of its concentrate pipeline. Development expenditure in 2023 will include the residual expenditure on the Los Pelambres Expansion project and any expenditure of the Second Concentrator at Centinela if it is approved during the year. Capital expenditure guidance will be given in January 2023

SUSTAINABILITY

• As previously announced, Antucoya has obtained the Copper Mark, for compliance with this independently verified responsible production standard, joining Centinela and Zaldívar who received it in 2021. In turn, Los Pelambres is in the final phase of verification following successfully completion of the site review

OTHER

• Zaldívar submitted an Environmental Impact Assessment (EIA) in 2018 which included an application to extend its water extraction permit from 2025 to 2029 (with decreasing extraction levels in 2030-2031) together with the extension of the permit to mine, which expires in 2024. This application is still pending approval. During the period, the company (as well as other named defendants) submitted a response contradicting the allegations made by the Consejo de Defensa del Estado (CDE), an independent governmental agency tasked with the defence of the interests of the State of Chile before the courts, who previously filed a claim against Minera Escondida, Albemarle and Zaldívar, alleging that their extraction of water from the Monturaqui-Negrillar-Tilopozo aquifer over the years has impacted the underground water level. Since the EIA remains unresolved and the litigation by the CDE is outstanding the company has been in discussions with the local environmental authority and is planning to submit a DIA⁽¹⁾, a limited scope and less detailed procedure than an EIA, requesting that the permit to mine be extended to 2025 in line with current water permit to achieve continuity while the water extraction permit is under review
• On 4 September the proposed new Chilean constitution was rejected in a national referendum. Congress is now considering how to proceed, but is expected to propose an alternative plan for drafting a new constitution for the country
• The Government presented a draft mining royalty bill to Congress in July. Following representations from the mining industry, academics, trade unions and other interested parties, the bill is expected to be simplified.  The bill will then be debated in the Senate before being passed to the lower house for its consideration, which is expected to be before the end of the year
• Labour agreements were successfully concluded during the period with the supervisors’ union at Zaldívar, and in October with the supervisors’ union at Los Pelambres and the workers’ union at Antucoya. Together with the earlier agreement with the supervisors’ union at Antucoya, this completes the labour negotiations scheduled for 2022

_{(1) Declaración de Impacto Ambiental (Environmental Impact Declaration)}

_{(2) Cash cost is a non-GAAP measure used by the mining industry to express the cost of production in US dollars per pound of copper produced.}

There will be a Q&A video conference call today at 1:00pm BST hosted by Iván Arriagada - Chief Executive Officer and Mauricio Ortiz - Chief Financial Officer. Participants can join the conference call here.

Investors – London

Andrew Lindsay alindsay@antofagasta.co.uk 

Rosario Orchard rorchard@antofagasta.co.uk 

Telephone +44 20 7808 0988   

Media – London

Carole Cable antofagasta@brunswickgroup.com

Telephone +44 20 7404 5959

Media – Santiago

Pablo Orozco porozco@aminerals.cl 

Carolina Pica cpica@aminerals.cl

Telephone +56 2 2798 7000

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