Miners on track with FY output targets

Resources Corner

With falling commodity prices and weak demand plaguing the resources sector in recent months it is encouraging to see a string of miners either maintain or increase their full year production guidance. Also galvanising the sector is a rebound in Chinese steel output and China’s quarterly growth figures meeting expectations.
 
Resources News
 
Chinese growth meets expectations
China has grown in line with expectations in the September quarter despite slowing from the previous quarter. China’s GDP came in at an annualised rate of 7.4 per cent in the three months to the end of September, down 7.6 per cent from the prior quarter and the slowest rate of growth since 2009.
 
Chinese steel output grows
Chinese steel output has lifted with average daily crude steel output rebounding to 1.916 million tonnes in the first 10 days of October, up 4 per cent from the last ten days of September, according to data from the China Iron & Steel Association. Average daily steel production has been below 1.9 million tonnes since mid-August as weak demand pushed steel mills to curb output.
 
BHP says iron ore growth to slow
BHP Billiton Limited (ASX:BHP) chief Marius Kloppers expects global iron ore growth to slow from 800 million to 650 million tonnes this decade. Mr Kloppers believes that although China’s growth in the past decade has been underpinned by the building of cities, roads, housing and infrastructure, its economy will move from an investment to a consumption led economy.
 
Milestones
 
Santos reaches shale gas landmark
Santos Limited (ASX:STO) has hit a landmark for Australia’s natural gas industry through launching the country’s first commercial shale gas production. The oil and gas producer says its Moomba-191 shale well in the Cooper Basin of South Australia has been connected to the eastern states' gas grid. Santos has a 67 per cent stake in the South Australian Cooper Basin Joint Venture with Beach Energy Limited (ASX:BPT) and Origin Energy Limited (ASX:ORG) also holding an interest.
 
Takeovers
 
Sundance takeover advances
Sundance Resources Limited’s (ASX:SDL) Chinese suitor Hanlong Mining has officially secured two financier commitment letters. The step is a vital condition for Hanlong to complete its takeover of its $1.4 billion West Africa focussed iron ore explorer. The letters include confirmation from China’s Development Bank for the provision of a debt facility of up to $1.02 billion.
 
Discoverysuitors push ahead with bid          
Discovery Metals Limited’s (ASX:DML)Chinese suitors are pushing ahead with their $830 million takeover bid. The Africa-focussed copper explorer and producer received and rejected an indicative and non-binding proposal of $1.70 per share earlier this month. Though Discovery Metals board continue to insist the offer undervalues the company the suitors have now stated their intention to make an off-market bid.
 
Quarterly production reports
 
Woodside boosts FY target range
Woodside Petroleum Limited (ASX:WPL) has achieved record third quarter production and sales revenue. The oil and gas company recorded a 32 per cent increase in production from the previous quarter, alongside sales revenue of $US1.8 million. Woodside attributed its performance to the continued high reliability of its Pluto LNG project and has increased its full year target production range.
 
Newcrest maintains FY guidance
Newcrest Mining Limited (ASX:NCM) has maintained its full year guidance for output and capital expenditure despite posting a fall in first quarter production. The miners gold output dropped 22 per cent in the September quarter while copper output fell 3.3 per cent from the year before. Despite the production dips Newcrest expects gold production is to progressively increase throughout the remainder of the financial year. 
 
Panoramic production targets on track
Panoramic Resources Limited (ASX:PAN) remains on track for full year nickel production of between 18,000 and 19,000 tonnes, after achieving just under 5,000 tonnes in the September quarter. The miner generated $5 million in cash flow from its operations in the quarter, and currently holds $69 million in liquid assets.
 
OZ Minerals keeps FY targets
OZ Minerals Limited (ASX:OZL) has assured shareholders it is on track to meet full year production guidance despite recording a fall in the September quarter. Quarterly copper and gold output dropped 5.7 and 2.6 per cent respectively on the previous corresponding period. Oz Minerals maintains full year guidance for its flagship Prominent Hill project in South Australia, expecting to produce up to 110,000 tonnes of copper and 150,000 tonnes of gold.
 
St. Barbaramaintains FY guidance
St. Barbara Limited (ASX:SBM) has maintained its guidance for the current financial year despite not meeting production expectations at its Gold Ridge project in the Solomon Islands. The miner says intensive work is underway to boost operating performance at the site after poor mining performance and unit costs impacted its quarterly output. St. Barbara sold over 76, 000 ounces of gold in the September quarter for an average price of $1,587 an ounce.
 
Oil Search confirms FY guidance goals
Oil Search Limited (ASX:OSH) has maintained its full year production guidance despite output plunging 26 per cent in the September quarter compared to the previous quarter. The oil and gas producer attributed the fall to a minor oil spill as well as the temporary shutdown of a loading facility. Oil Search reaped $US108 million in operating revenue for the quarter. 

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