Antofagasta PLC 

Antofagasta PLC (LSE: ANTO) is an FTSE 100 index listed Company engaged in copper mining. It operates four copper mines in Chile. Besides, the Company has a transport division as well in Northern Chile, to serve mining customers.

Key Recommendation Rationale – Sell at GBX 2,116.00

• Resistance near Current levels: ANTO’s stock price crossed the Resistance (R1) which was stated in the previous report on 02 July 2025 therefore, there could be a possibility that the stock might consolidate or decline from the current levels, considering overstretched valuation. Considering the market conditions and the price action, it is prudent to exit from the stock.
• Declining Cathode Production at Centinela: While copper in concentrate production improved, cathode production at Centinela fell by 19% quarter-on-quarter and 28% year-on-year in H1 2025. Lower grades and processing rates contributed to this decline, raising concerns about operational efficiency in the cathode segment. If this trend persists, it could impact overall profitability, particularly if concentrate sales face logistical delays.
• Higher Cash Costs at Antucoya and Zaldívar: Antucoya’s cash costs increased by 9% in Q2 2025 due to rising consumable costs (e.g., diesel, sulphuric acid) and inventory buildup. Similarly, Zaldívar’s cash costs rose by 9% quarter-on-quarter and 8% year-on-year, driven by lower production and higher input costs. These increases highlight cost pressures that could erode margins if commodity prices soften.

Valuation Methodology: Price/ Earnings Approach

Share Price Chart  

One-Year Technical Price Chart (as of August 13, 2025). Source: REFINITIV, Analysis: Kalkine Group

Conclusion

While Antofagasta reported increased copper production and lower net cash costs in Q2 2025, certain operational and financial pressures warrant attention. The decline in cathode production at Centinela, coupled with logistical disruptions in sales, suggests potential inefficiencies in processing and supply chain management. Additionally, rising cash costs at Antucoya and Zaldívar, driven by higher input expenses and lower output, indicate persistent cost inflation that could pressure margins if metal prices weaken.

For conducting the valuation, the following peers have been considered: Ferrexpo PLC (LSE: FXPO), Amaroq Ltd (LSE: AMRQ), etc.  

Hence, a ‘Sell’ recommendation is given on the stock at the Current Market Price of GBX 2,116.00 as of 13 August 2025, 09:52 AM, GMT+1. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 13 August 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’