Antofagasta today confirmed copper production missed the lower end of its target in a fourth-quarter production report.
The FTSE 100-listed miner said copper production in the fourth quarter was up 13.8 per cent to 205,500 tonnes, while copper production for the full-year increased 12.5 per cent to 709,400 tonnes compared with 2015, which was below the company's targets.
Gold production hit 91,100 ounces in the fourth quarter, a 29.7 per cent increase on the previous quarter due to higher grades and throughput at its Centinela mine. Full-year production was up 26.6 per cent at 270,900 ounces.
Shares in the company initially increased as much as six per cent, but have now pared gains to up 2.31 per cent at 843p in afternoon trading.
Mike van Dulken, analyst at Accendo Markets put it down to rising copper prices and cut costs.
"Producing less is not normally good news, but it’s fine when you can produce it for less and sell it for more."
The miner succeeded in cutting costs over the fourth quarter. Pre-credit and post-credit cash costs of $1.54/lb and $1.20/lb were better than analyst expectations.
Group production in 2017 is expected to be in the range of 685,000 to 720,000 tonnes of copper, 185,000 to 205,000 ounces of gold.
Despite saying the fourth quarter was a "strong finish to the year", the Chile-focused miner's chief executive Iván Arriagada said he expects uncertainty to continue despite rising copper prices.
"Looking ahead into 2017 we remain focused on operating and cost efficiencies, and achieving our production targets. Although we believe the industry has passed the low point in this commodity cycle, uncertainty persists and we need to build carefully on the solid foundations of our existing operations," Arriagada said.
The full-year results "disappointed", said Yuen Low, an analyst at Shore Capital. Antofagasta predicted production would be at the lower end of 710,000 to 740,000 tonnes.
Antofagasta previously warned it would be within this range in its half-year results in August. The group suffered under low copper prices, which have increased in recent months on hopes that US President Donald Trump will boost infrastructure spending.