OZ Minerals (OZL) reported June Q production results of 27.1kt Cu and 28.1kt Au below Argonaut’s forecast of 30kt Cu and 38kt Au. During the period, Prominent Hill made the transition from open pit mining to stockpile reclamation resulting in a significant decrease in AISC from US$1.36/lb to US$1.17/lb. OZL’s balance sheet remains strong with $454m cash (vs $646m at March 30) after $78m investment into Carrapateena development, $201m cash payment for the Avanco Resources (AVB) acquisition and a $100m tax expense. The AVB takeover is all-but complete with OZL controlling 97.7% of outstanding shares at June 30. BUY recommendation maintained.
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