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MMG finishes 2018 strongly

Leading Chinese-controlled base metal miner MMG had its best quarter for 2018 in the period to the end of December.
MMG finishes 2018 strongly MMG finishes 2018 strongly MMG finishes 2018 strongly MMG finishes 2018 strongly MMG finishes 2018 strongly

Las Bambas in Peru

Kristie Batten

A strong final quarter of the year saw 2018 group production come in at 466,475 tonnes of copper and 223,041t of zinc, within guidance of 455,000-475,000t of copper and 210,000-230,000t of zinc.

The flagship Las Bambas mine in Peru produced 111,685t of copper in concentrate during the December quarter, a 29% increase over the September quarter.

"The strong performance at Las Bambas and Dugald River during the December quarter enabled us to deliver the best quarterly operational performance of 2018," MMG CEO Geoffrey Gao said.

"Las Bambas is well-placed to produce in excess of two million tonnes of copper over its first five years and we continue to aggressively pursue a series of work programs to maintain this production profile into the future."

The new Dugald River zinc mine in Queensland produced 41,641t of zinc, up 9%.

Gao said mining and milling rates were consistently above design capacity.

Last week, MMG issued a profit warning, saying it was expecting to post a net profit after tax of US$135-140 million for 2018, down from $348.4 million for 2017.

Gao said nothing had structurally impaired the business' ability to generate cash, pointing to net operating cashflow of over $1.7 billion for 2018.

The company reduced gross debt by more than $1 billion during the year.

"Since the start of commercial production at Las Bambas on 1 July 2016, we have reduced net debt by approximately $2.7 billion due to our consistent focus on maximising cash generation, a key part of our commitment to creating shareholder value," Gao said.

"Across all operations we are looking to deliver further efficiencies while also securing a strong future for our assets through near mine exploration to extend mine life."

Gao said MMG was positive heading into 2019 given the company's world-class assets in the "right commodities".

"I am confident in our outlook for 2019 where we expect to produce between 462,500 to 485,000 tonnes of copper and between 250,000 and 270,000 tonnes of zinc," he said.

MMG shares were up 0.4% in Hong Kong to HK$2.77, and untraded in Australia at A$5.