Antofagasta (ANTO LN) has released robust Q1 2016 production results. Although YoY copper production was up 7.3% to 157kt due to the contribution of Zaldivar and Antucoya, this was offset by maintenance at Los Pelambres, grade weakness at Centinela and the closure of Michela which meant that on a quarterly basis production was down 7.5%. Gold production of 57koz was down 1% YoY although up 2% QoQ. Meanwhile, molybdenum production was down 19% YoY and 39% QoQ to 1.7kt.
Net cash cost performance was robust at US$1.37/lb, down 4.2% YoY and 0.7% QoQ. Although production was lower QoQ this was offset by a stronger contribution from gold by-product credits. With Los Pelambres due to come back online full year guidance for production and cash costs remains unchanged at 710-740kt and US$1.37/lb respectively.
Given our positive outlook on copper prices, ANTO remains our preferred large cap exposure globally.