Shares in OZ Minerals Ltd (ASX: OZL) have stumbled at the open on Friday and are now trading 5.23% down at $24.84 apiece.
Investors are selling off OZ Minerals shares following the company’s release of its quarterly update on operations for the three months ending 31 March 2022.
Copper, gold production slides for OZ Minerals
OZ Minerals printed a decrease in total copper and gold production of 6% and 16%, respectively, from its unaudited financial statements.
Meanwhile, the company’s all-in sustaining cost (AISC) on that production increased from US$1.596 per pound to US$1.744 per pound from Q4 2021 to Q1 2022, while cash costs also widened 30% to US$1.1181/pound.
Nonetheless, copper and gold prices have been buoyant these last 12 months, with the bronze metal up 8% in that time while its yellow cousin has spiked more than 9%.
Management commentary
Speaking on the results, OZ Minerals managing director and CEO Andrew Cole said that strong market pricing continued “to support robust operating cash flow during a period of reinvestment back into the business”. He added:
Our financial position remains strong with $210 million cash balance at the end of the quarter and significant liquidity available.
The market outlook remains strong for renewable minerals like copper and nickel, with copper being a commodity with strong fundamentals underpinning economic growth and human development.
Our focus for 2022 remains on safely delivering our operational targets, advancing our current growth projects and adding new growth options to the portfolio while we continue to strengthen and enable our unique company culture where people want to work with us to do the best work of their lives.
What’s next for OZ Minerals?
The company is projecting FY22 guidance of 127,000–149,000 tonnes of copper and 208–230 thousand tonnes of gold.
It also expects AISC to reign in to US$1.35–$1.55 per pound, with C1 cash costs also tipped to narrow sharply by 19–27% by the end of FY22.
“Despite the slower start to the year, group production and costs guidance remain on track for 2022 with a stronger operational performance expected over the balance of the year as COVID diminishes in the community,” Cole said.
The OZ Minerals share price has climbed 3% in the last 12 months but is down more than 11% this year to date.
The post Here’s why the OZ Minerals share price is sliding 5% today appeared first on The Motley Fool Australia.
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