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http://www.menafn.com/menafn/7dce5012-7f8a-44c9-a84a-af7c5dea0e91/DJ-OZ-Minerals-Slumps-10-on-Concern-Over-Production-Outlook?src=main

Dec 19, 2012 (Dow Jones Commodities News via Comtex) --
By Rhiannon Hoyle

SYDNEY--Shares in Australian mining company OZ Minerals Ltd. (OZL.AU) fell sharply Wednesday, reflecting concern the copper-and-gold producer's output will drop significantly next year, analysts and traders said.

"We are still working on our guidance, but the market is expecting us to be lower than this year," Chief Executive Terry Burgess said in an interview earlier Wednesday in reference to OZ Minerals' anticipated 2013 production.

Mr. Burgess declined to provide a specific output estimate, saying the mining company wouldn't release any further projections until late January.

OZ Minerals is, however, expecting 2013 to be "the peak year for waste removal" at its Prominent Hill mine in South Australia, said Mr. Burgess. Waste removal is a procedure that can take resources away from actual mining.

The focus on removing waste rock next year as Prominent Hill transitions from being an open-pit operation to becoming a combined open-pit-and-underground project is likely to weigh on output and push up costs, market analysts say.

OZ Minerals shares closed down 9.8% at 6.71 Australian dollars (US7.06) on Wednesday. The decline takes the stock closer to its year-to-date low reached in September of A5.97 amid concern over rising output costs.

At the time, Bank of America Merrill Lynch warned clients away from the stock, telling investors to "wait until post-2013" when ongoing work at its Prominent Hill operation would likely be completed.

Mr. Burgess said Wednesday that the mining company remained on track to meet its 2012 production guidance of 100,000-110,000 metric tons of copper and 130,000-150,000 troy ounces of gold.

"There is no production problem at Prominent Hill," a spokeswoman said in an emailed statement after Wednesday's share price falls. "We expect to meet 2012 guidance."

Referring to 2013 output, the spokeswoman said: "We are mining more waste next year, but this is in our long term mine plan."

Write to Rhiannon Hoyle at [email protected]

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(END) Dow Jones Newswires

12-19-12 0217ET

Copyright (c) 2012 Dow Jones & Company, Inc.