Shares in Antofagasta PLC (LSE:ANTO) jumped more than 10% to a new all-time high above 4,080p as though the Chilean miner posted a mixed fourth-quarter production update but benefited from a sharp rally in copper prices.
Futures on the metal rose 7% to $6.34/lb, taking the year-on-year gain to nearly 48% as supply constraints and electrification-driven demand continue to support sentiment.
Antofagasta’s copper output for the fourth quarter came in at 177,000 tonnes, in line with forecasts, but sales volumes beat consensus by 8% due to favourable shipment timing.
That, combined with higher realised prices for gold and molybdenum, is expected to deliver over 10% upside to 2025 earnings estimates, according to UBS, which said it was placing its 'buy' rating and 3,500p price target under review.
Despite production for the year of 654,000 tonnes coming in just below guidance, the miner achieved a five-year low in net cash costs at $1.19 per lb, helped by strong byproduct revenues, though some analysts said they were higher than expected.
Costs are expected to remain near these levels in 2026, with production guided between 650,000-700,000 tonnes.
The group said its two major growth projects – Centinela and Los Pelambres – remain on track and on budget. When completed in 2027, they are expected to lift copper output by 30%.
Market analysts at IG said the FTSE 100 miner was "able to bask in the glow of surging metal prices", which have propelled the share price to new highs in under a year.
"Even a miss on copper output has not dented the rally – everyone can see the madness in metals prices, but there seems no sign of it slowing down.
"Investors can be forgiven for hoping that the vast profits set to be reaped by miners will translate into better dividend payments in the near future."
Broker Peel Hunt was a voice of caution, flagging that while total 2025 production was in line with its estimates, unit cash costs were looking higher than expected
"Despite the significant step-up in production in 4Q on 3Q (177kt on 162kt), unit cash costs were almost unchanged, suggesting that absolute cash costs (in USD terms) also took a large step-up," the broker said.
With guidance for 2026 cash costs at 230-250 cents per lb is "well above" its estimate, "something we take as further evidence that absolute USDm site cash costs took a notable step upwards in 4Q, and a step that is expected to persist through 2026 and hence longer term.
"Given the cost pressures emerging, we continue to believe that the Antofagasta share price is pricing in much higher margin expectations than looks to be realistic given this cost guidance."