Release date- 01022013 – Commenting on the Company’s results, Mr. German Larrea, Chairman of the Board, said ‘Once again the Company’s strong financial position and market preference was evidenced by the excellent terms obtained for our new debt offering.
Y2012 was another successful year for our Company. This was achieved despite a 10% lower copper price and lower prices for our three major by-products. The Buenavista mine, which benefited from a productive work environment, reached a new production record of 200,070 tons. In Y2012, we invested $1,051.9 million in capital programs. I believe our commitment to growth will continue to benefit the Company, investors, neighboring communities and the countries in which we operate.’
Capital Expenditures
Capital expenditures were a record of $1,051.9 million for Y2012, 71.6% higher than Y2011. The increase reflects our strong commitment to the Company expansion programs at Buenavista and other properties. In Y2012 $615.6 million was invested in our Buenavista projects. In 2013 we will continue our investment program to increase copper production capacity by approximately 84% by 2017, from 640,000 tons to 1,175,000 tons.
Buenavista Projects. – We continue the development of our $2.8 billion investment program at this unit which will allow us to increase its copper production capacity by approximately 170% from 180,000 tons to 488,000 tons by 2015.
The new concentrator with molybdenum circuit project includes a new concentrator with an estimated annual production capacity of 188,000 tons of copper and a 1,850 tons capacity molybdenum plant. The project will also produce annually 2.3 million ounces of silver and 21,000 ounces of gold. The total capital budget of the project is $1,383.6 million.
Regarding mine equipment, through December 31, 2012, we have received 2 of 8 shovels, 37 of 56 trucks and the 7 of 8 drills and all received units are currently in operation. The total capital budget of the project is $504.8 million. The SXEW III Project is moving forward. Plant equipment from Tia Maria has been installed in Mexico and will allow us to increase the annual plant capacity from 88,000 tons to 120,000 tons. The total capital budget of the project is $444.0 million.
The final testing of the Quebalix III project concluded in January 2013, and the project will start operations in February. This project consists of a crushing, conveying and spreading system that improves the SXEW copper production by increasing recovery and reducing hauling cost and the required time to extract copper from mineral. The total capital budget of the project is $75.6 million.
Regarding the construction of a new molybdenum plant for the current concentrator, the final testing of the plant will start by the end of the 1Q13. The plant is expected to have an average annual production of 2,000 tons of molybdenum. The total capital budget of the project is $38.2 million.
Angangueo – The project is moving forward as scheduled to develop this underground polymetallic deposit in Michoacan, Mexico. After a recent evaluation of Angangueo’s resources, we are increasing the milling capacity of the project from 1,200 tons per day to 2,000 tons per day. Therefore, our Board of Directors approved a total budget increase of $43.7 million, from $131 million to $174.7 million.
The revised production plan indicates that Angangueo will have an average annual metal content production of 10,400 tons of copper and 7,000 tons of zinc in the first seven years of production. The project is scheduled to begin production in the first half of 2015.
Toquepala Projects – Through December 31, 2012, we have spent $231.8 million. These expenditures include the initial construction work to build a new crusher and a conveyor belt system to replace current rail haulage and other operating cost, which will allow for future savings.
Cuajone Projects – Through December 31, 2012, we have spent $136.6 million on two projects to increase productivity for this unit production: the Variable Cut-off Ore Grade project and the HPGR project. Current production is showing the initial benefits of the variable cut-off project. We expect that both projects will be at full capacity by the 2H13.
Tantahuatay – This mine, in which we hold a 44.2% interest, is located in Cajamarca, in northern Peru. In Y2012, we have recognized $48.7 million in earnings for our share of the net income of the mine.
Conference Call
The Company’s fourth quarter earnings conference call will be held on Friday, February 1, 2013, beginning at 11:30 A.M. – EST (11:30 A.M. Lima and 10:30 A.M. Mexico City).
To participate:
Dial-in number: 888-424-8151 in the U.S.
847-585-4422 outside the U.S.
Raul Jacob, Chief Financial Officer – Peruvian Operations and Investor Relations
Conference ID: 9063874 and ‘Southern Copper Fourth Quarter Earnings Results’
Company Profile
Southern Copper Corporation is one of the largest integrated copper producers in the world and we believe we currently have the largest copper reserves in the industry. The Company is a NYSE and Lima Stock Exchange listed company that is 81.3% owned by Grupo Mexico, a Mexican company listed on the Mexican stock exchange.
The remaining 18.7% ownership interest is held by the international investment community. The Company operates mining units and metallurgical facilities in Mexico and Peru and conducts exploration activities in Argentina, Chile, Ecuador, Mexico and Peru.
SCC Corporate Address
USA
1440 E Missouri Ave, Suite 160
Phoenix, AZ 85014, U. S. A.
Phone: (602) 264-1375
Fax: (602) 264-1397
Mexico
Campos Eliseos N-degree 400
Colonia Lomas de Chapultepec
Delegacion Miguel Hidalgo
C.P. 11000 – MEXICO
Phone: (5255) 1103-5000
Fax: (5255) 1103-5567
Peru
Av. Caminos del Inca 171
Urb. Chacarilla del Estanque
Santiago de Surco
Lima 33 – PERU
Phone: (511) 512-0440
Fax: (511) 512-0492
This news release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In addition to the risks and uncertainties noted in this news release, there are certain factors that could cause results to differ materially from those anticipated by some of the statements made.
These factors include those listed in the Company’s most recently filed quarterly reports on Form 10-Q and annual report on Form 10-K. The Company expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.
Investor Contact:
Raul Jacob
Tel: (602) 264-1375
Email: [email protected]
www.southerncoppercorp.com
