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OZ Minerals digs down for $294m loss

Several big mining companies have expressed interest in partnering with OZ Minerals to develop its Carrapateena deposit, and managing director Terry Burgess said the sealing of such a joint venture deal could be one of his final acts at the company.

Mr Burgess' departure from the copper and gold miner was confirmed on Wednesday after it reported a full-year loss of $294 million.

The result was close to $450 million worse than the previous year on the back of lower production at the Prominent Hill mine in South Australia, and was worsened by lower received prices for copper and gold.

But there was enough optimism in the result to prompt strong buying of the stock, which rose 43¢ to $3.83; its highest in almost four months.

After surprising the market with a 10¢ dividend at the half year results, OZ repeated the dose with another 10¢ dividend for shareholders.

Mr Burgess conceded the returns were at odds with the company's dividend policy and would contribute to gradual erosion of its cash balance, but said it was a reflection of the company's confidence in its liquidity and future plans.


''Continuity of dividends is very important to shareholders,'' he said.

Mr Burgess was particularly upbeat about prospects Carrapateena and Khamsin, and said several companies had struck confidentiality agreements to assess internal data about Carrapateena in particular.

The agreements are seen as the first step in bringing in a joint venture partner, and Mr Burgess said some of the world's biggest copper players were involved.

''I've been quite encouraged by the number of people who have contacted us and the scale of some of those companies.''

OZ Minerals will complete a feasibility study into the development of Carrapateena by midyear, and any deal is likely to come after that.

Analysts speculated that Glencore Xstrata and First Quantum Minerals could be the types of companies interested, while BHP Billiton also has significant copper and gold exposure within 150 kilometres of Carrapateena at its Olympic Dam operations.

Mr Burgess said OZ may sell a controlling stake in Carrapateena, to bring in a company with technical expertise in block caving.

OZ paid $US250 million for Carrapateena in 2011. It is one of the largest and most prospective by grade of Australia's undeveloped copper deposits.

UBS analyst Jo Battershill said a joint venture partner on Carrapateena was inevitable. ''OZ was never going to be able to fund Carrapateena themselves,'' he said.

Mr Battershill said the positive market reaction to Wednesday's results was likely to be a combination of the Carrapateena rhetoric, continued dividend flows and the news that Mr Burgess would be handing over the reins.