Cobre achieves positive cashflow from newly owned Sierra Atacama project
ASX-listed copper producer Cobre has achieved positive operating cashflow at the Sierra Atacama project, in Chile, within two months of assuming control of the operation.
The company reported a cashflow of $644 000, or A$900000, in April, and $601000, or A$860000, in May.
Cobre expects to remain profitable through June and beyond with performance continuing to strengthen as the year progresses.
Since assuming operational control of the project at the end of March, Cobre has been executing a structured turnaround programme across the existing underground mine and processing operation, including to address the fundamental drivers of cathode output, product quality and unit cost.
Cobre says the results have been immediate and measurable, with improvements having been achieved across mined head grade, leach recovery, cathode quality, production stability and operating costs.
"The Sierra Atacama turnaround programme underpins our broader six-part value-rerate programme for the project," says Cobre CEO Adam Wooldridge. He adds that two consecutive months of positive operating cash flow from the project mark a meaningful financial turning point for Sierra Atacama.
While the copper price has been supportive, Cobre notes the continuing impact of geopolitical tensions in key cost inputs, including sulphuric acid and diesel.
Cobre says it is working closely with key suppliers to manage these costs and improve operating resilience.
Meanwhile, Cobre is implementing a structured ramp-up to 700 t a month of copper cathode with strategic investments being made into the mine fleet, ventilation, fortification, and plant and crusher maintenance.
Wooldridge confirms the company's focus in the coming months will be on increasing underground development to ensure sustained access to higher-grade material and support a more consistent production profile.
Cobre aims to achieve a 96% increase in quarterly copper cathode output over four quarters this year. The January to March quarter had 764 t of copper cathode output, which grew to 879 t in the April to June quarter, with further increases to 1200 t and 1500 t, respectively, planned for the next two quarters.
The company targets 400 t a month of copper cathode output in its stabilisation phase, before ramping up to between 500 and 700 t a month over the next 12 months.
Should Cobre introduce openpit mining successfully, production can be expanded to the plant's nameplate capacity of 20000 t/y of copper cathode, producing 1500 t a month, which will generate between $8-million and $10-million, or A$10-million and $14-million, a month in operating cashflows.
