OZ MINERALS is set to report earnings about 15 per cent lower than the previous year, and the slide may continue into next year as costs rise and copper production slips.
Responding to a share price slump of almost 10 per cent on Wednesday, the copper and gold producer told the stock exchange heavy trading was likely to be the result of analysts updating their evaluations based on previously disclosed information.
"The company is aware that some analysts are updating their modelling and reports for OZ Minerals' 2012 production and costs, and 2013 expected production and costs," the company said in a statement.
OZ has previously said its South Australian operations have moved into lower grades of copper in recent months, and would continue to do so next year.
The company has also increased expenditure on trucks and other fleet, and said a combination of factors was likely to result in earnings for the year ending December 31 to be "more than 15 per cent" lower than last year. The numbers could translate into a net profit after tax of about $150 million for the year.
The combination of lower grades and higher costs will continue next year, with OZ stripping large amounts of waste rock and spending on exploration below its Prominent Hill mine in an attempt to extend the mine's life.
The company said copper production could fall by nearly 10 per cent next year, but was expected to remain above 90,000 tonnes per year.
The explanation helped OZ shares recover 20¢ to close at $6.91 on Thursday.