Sierra Gorda: first shipment of copper concentrate and CAPEX at completion

Wednesday, 01 October, 2014
Current report no. 27/2014

The Management Board of KGHM Polska Miedź S.A. announces that the first shipment with approximately 6000 tonnes of copper concentrate from the Sierra Gorda mine is expected to arrive at the Toyo Smelter and Refinery in November 2014.

Moreover, the Management Board announces that CAPEX at completion, reflecting savings achieved, including the mining equipment leasing program, amounted to USD 4.2 billion, compared with the March 2013 estimate of USD 3.9 billion. The majority of the cost increase was due to external market factors, such as price inflation in the raw materials used for construction as well as increased labor costs and higher civil engineering standards required for mine infrastructure. Internal factors include a higher amount of materials used, a higher number of work hours at the site and Management actions taken to achieve the highest level of safety on the construction site and at targeted operations.

Due to an increase in project reserves from 1.275 billion tonnes @ 0.39% Cu, 0.024% Mo and 0.065 g/t Au to 1.463 billion tonnes @ 0.40% Cu, 0.020% Mo and 0.065 g/t Au, the Sierra Gorda mine’s life was extended by 3 years and the mine is projected to operate for a 23 year period.

Legal basis: art. 56 sec. 1 point 1 of the Act dated 29 July 2005 on public offerings and conditions governing the introduction of financial instruments to organized trading, and on public companies (unified text: Journal of Laws 2013.1382).