The OZ Minerals Limited (ASX: OZL) share price has been a very strong performer on Tuesday morning.
At the time of writing, the copper producer’s shares are up a sizeable 10% to $24.19.
Why is the OZ Minerals share price jumping?
Investors have been driving the OZ Minerals share price higher today following the release of its second quarter update.
According to the release, the company achieved copper production of 32,681 tonnes and gold production of 57,875 ounces during the three months.
This means OZ Minerals is on course to achieve its copper production guidance of 120,000 to 145,000 in FY 2021. And positively, its gold production has been stronger than expected, leading to management increasing its guidance to 205,000 to 228,000 ounces in FY 2021. This compares to its previous guidance of 190,000 to 215,000 ounces.
This ultimately led to the company reporting first half net revenue of $986 million. This leaves OZ Minerals with an unaudited closing cash balance of $134 million and zero debt.
Better costs
Another positive boosting the OZ Minerals share price today was its cash costs. The company reported C1 cash costs of US$60.70 per pound for the quarter. This better than expected performance has led to management reducing its FY 2021 C1 cash costs guidance by US$5 per pound to US$65 to US$75 per pound.
OZ Minerals’ Managing Director and CEO, Andrew Cole, commented: “A strong second quarter from our major South Australian operations and favourable copper prices saw us finish the half in a robust financial position with a cash balance of $134 million and our corporate debt facility fully repaid from operating cashflow.”
“Full year group copper production guidance remains on track notwithstanding a lowering of annual guidance in the Carajás, Brazil, which has been impacted by direct and flow-on effects of COVID-19. Group C1 cash costs guidance has been lowered for the year, primarily due to higher by-product credits associated with expected higher gold production at Prominent Hill,” he added.
The post Why the OZ Minerals (ASX:OZL) share price is jumping 10% on Tuesday appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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